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  Jeff Bailey   9/1/2004,  6:08:45 PM
Yahoo! Inc. (YHOO) $28.99 +1.64% ... quiet in after-hours with last tick at $29.00.

 
 
  Jeff Bailey   9/1/2004,  6:07:38 PM
Paychex (PAYX) $29.73 +0.2% .... quiet in after-hours with last tick at $29.73.

 
 
  Jeff Bailey   9/1/2004,  6:05:53 PM
Monster Worldwide (MNST) $20.70 +2.32% .... quiet in after-hours at $20.69.

 
 
  Jeff Bailey   9/1/2004,  5:59:41 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   9/1/2004,  4:54:38 PM
Closing Internals at this Link

 
 
  Jeff Bailey   9/1/2004,  4:18:49 PM
Current OPEN MM Profiles at this Link

Today's Activity

Closed out the carryover day trade long from Tuesday in Bema Gold (BGO) at $2.60 ($0.04, or +1.56%).

Day trade short the Semiconductor HOLDRs (SMH) at $29.87, closed at $29.38 ($0.49, or +1.64%).

Day trade short the Semiconductor HOLDRs (SMH) at $29.60, holding overnight with stop at $29.80, targeting $29.20.

Sold 3 "covered calls" with the Stillwater Mining (SWC) Sep. $15 calls (SWC-IC) for $0.40 per contract.

 
 
  Mark Davis   9/1/2004,  4:07:07 PM
They bought the close... if you entered long @ 1104.20 you'd be up a whopping 1.72 points, just enough to cover the cost of a large bottle of Maalox.

 
 
  Jeff Bailey   9/1/2004,  3:56:12 PM
Bearish day trade update alert for the Semiconductor HOLDRs (SMH) $29.57 +0.85% ....

For those that don't mind the overnight risk, I'm going to continue to hold this bearish trade overnight. Stop and target will remain.

 
 
  Mark Davis   9/1/2004,  3:55:28 PM
Since I first mentioned the 1103.60-1105.89 "range" for a bullish or bearish bias we've experienced an overthrow, then an underthrow and now another overthrow. Jim's decision to remain flat has proven to be the right one. He's not the big cheese around here for nuttin' (wish I had a pic of Spongebob Squarepants... he kinda looks like a cheese with legs). Here you go... Link

 
 
  Linda Piazza   9/1/2004,  3:54:14 PM
It looks as if the OEX may end the day with a doji printed just under resistance. This is an example of the reason that I don't try to force a conclusion when I have one of those confusing sessions when I'm examining charts after the close or before the open. When I can't determine a likely direction and when other technicians using other disciplines, such as Keene's EW studies, are puzzled, too, we often see days in which the day's trading is choppy and unpredictable and produces a candle indicative of indecision.

 
 
  Jeff Bailey   9/1/2004,  3:53:58 PM
October Crude Oil futures (cl04v) Wednesday's settlement was $44.00. After session high of $44.40, settled right back under the WEEKLY Pivot of $44.23.

 
 
  Jonathan Levinson   9/1/2004,  3:46:05 PM
Once again, this bounce is trying to take the choppy short cycle oscillators with it. Once again, 34.27 needs to break for starters on the way to a test of 34.33 QQQ confluence. Below that, it's just more chop.

 
 
  Linda Piazza   9/1/2004,  3:44:16 PM
Note that the OEX's five-minute pattern could be an inverse H&S with a steeply descending neckline, now at about 538.50. It would be a continuation-form inverse H&S, and there are several reasons not to give full trust in this formation, even if confirmed, but I should mention it. Note that the BIX showed promise earlier of forming and then confirming a bottoming-type inverse H&S, but instead fell to a new low, so don't count on this confirming or meeting any targets, but watch it for the possibility that it could be showing something about underlying bullishness or bearishness.

 
 
  Mark Davis   9/1/2004,  3:42:53 PM
Crunch time... b-bands are getting very tight and MACD is attempting a bullish kiss. We should know in a matter of minutes but it's so close to EOD that we're running out of time for a meaningful trade (unless you have the guts to hold overnight)... my bias remains UP but not by much.

 
 
  James Brown   9/1/2004,  3:41:13 PM
Whole Foods Market Inc (WFMI) is bouncing from its simple and exponential 200-dma's. Bulls can look for a new relative high over $80.45.

 
 
  James Brown   9/1/2004,  3:39:08 PM
Keep an eye on homebuilder Lennar (LEN). The stock is pushing through its recent trading range and challenging resistance at the simple 200-dma. A move past the $47.00 level would produce a new triple-top breakout "buy" signal on its P&F chart.

 
 
  James Brown   9/1/2004,  3:37:50 PM
For anyone following the premierinvestor.net candidates... we're going to close the SWIR short today for a 31% drop.

 
 
  Jonathan Levinson   9/1/2004,  3:36:14 PM
Bonds finished the day slightly higher, with TNX -.9 bps at 4.123%- no key outside reversal for the yield, though the doji bottom made this morning held. Gold is down 1.50 at 410.70, crude oil finished higher though has kicked off the evening session slightly lower, and equities are mixed. Even the daily and intraday cycles on QQQ are opposed- all in all, a confusing day so far.

 
 
  Linda Piazza   9/1/2004,  3:35:49 PM
The OEX shows Keltner support down to 537 on the five-minute chart, but it's not particularly firm support. Resistance is trying to converge between 538-538.30.

 
 
  James Brown   9/1/2004,  3:35:33 PM
LLL continues to climb with today's rally over the $63.00 level confirming the breakout. The stock could be a bullish candidate for a run toward overhead resistance at $67.00.

 
 
  James Brown   9/1/2004,  3:29:23 PM
ZBRA, another OI call play, is hitting new relative highs today.

 
 
  Mark Davis   9/1/2004,  3:29:22 PM
Microanalysis update... Link

 
 
  James Brown   9/1/2004,  3:28:52 PM
Hmm... I don't see any catalyst for the move but TDS is up 2.5% to $79.00 and pushing through the top of its recent trading range.

 
 
  James Brown   9/1/2004,  3:27:42 PM
OI call MHK is pushing to another new four-month high.

 
 
  Linda Piazza   9/1/2004,  3:27:32 PM
The OEX's candle body today has formed between the 240-minute 100 and 130-ema's, with a short candle shadow piercing the 130-ema.

 
 
  James Brown   9/1/2004,  3:27:01 PM
I'm not very enthusiastic about the sideways consolidation in OI call play AET. We will probably close it tonight.

 
 
  James Brown   9/1/2004,  3:26:05 PM
DGX, which was added last night, is also seeing some follow through on its breakout over the $85.00 level.

 
 
  James Brown   9/1/2004,  3:25:33 PM
We have been triggered in the BOL call play as it breaks out over resistance in the $66.00-66.50 range.

 
 
  Jonathan Levinson   9/1/2004,  3:25:16 PM
The 30 min cycle continues in a weak downphase for QQQ, while the daily cycle oscillators are unchanged from yesterday, with the 10-day stochastic still on a bearish cross verging on a bearish kiss. This is a very ambiguous setup, but so far the 30 min cycle high came from a lower high under the previous one above 34.60, which is bearish on a daily cycle basis.

 
 
  James Brown   9/1/2004,  3:25:03 PM
I see that newly added OI call AHC is seeing some follow through on yesterday's breakout over the $80.00 level.

 
 
  Mark Davis   9/1/2004,  3:22:50 PM
Next level to watch is SPX 1102.50 which looks like a potential bounce point if it gets that low. My bias remains bullish for the remainder of the week and an opportunity to go long @ SPX 1102.50 might be a gift. I'm showing a pretty strong buy signal right now @ 1103.36

 
 
  Jonathan Levinson   9/1/2004,  3:17:51 PM
Crude oil is trading again for the evening session, down to 43.85 here.

 
 
  Mark Davis   9/1/2004,  3:16:58 PM
We just broke below the lower band of the previously discussed bullish/bearish "range" of 1105.89-1103.60... currently printing 1103.20. I'd have to say the rest of the day looks bearish to me, especially considering the unresolved Russian terrorist incident and rising oil prices. Having said that, we did break above 1105.89 briefly before declining below 1103.60 so the range may still be intact, although internals are weakening. The SOX has reversed earlier gains and is now at the lower end of today's range.

 
 
  Jonathan Levinson   9/1/2004,  3:16:41 PM
QQQ is finding volume for the first time since the big bounce this afternoon, breaking below the prior lowat 33.10. Bulls want to doji this one back up, because that volume spike and lower low bode ill for the remainder of the session.

 
 
  Linda Piazza   9/1/2004,  3:16:14 PM
Nearby Keltner resistance held, and nearby support did not on the OEX. As I mentioned when we had that downward spike, I'm always watchful when we had a news-related spike or decline, because I think where they go and where they stop sometimes tell us something about possible vulnerabilities. Ever since this morning, I've thought the OEX vulnerable to another test of the 535-537 support zone. I don't know that it will get all the way down to that 535 level again, though. The Keltner charts are still somewhat skewed, so I'm watching moving averages across several time frames, and I'm noticing that the OEX is right back to the 240-minute 100-ema I've been watching for a while, with that average at 537.15.

 
 
  Jeff Bailey   9/1/2004,  3:05:21 PM
03:00 Internals at this Link

 
 
  Linda Piazza   9/1/2004,  3:05:00 PM
While the SPX still attempts its sideways trade from beneath the descending trendline off the day's high, the OEX hasn't made it above that trendline yet. The five-minute chart shows Keltner support converging near 538, but resistance converging just above the OEX's current position, at about 538.50.

 
 
  Linda Piazza   9/1/2004,  3:01:55 PM
For anyone interested, here's a link to a history of hurricanes hitting the U.S. Link

 
 
  Jonathan Levinson   9/1/2004,  2:57:23 PM
Agreed, Mark. Same here.

 
 
  Jeff Bailey   9/1/2004,  2:56:37 PM
02:50 Market Watch at this Link

 
 
  Mark Davis   9/1/2004,  2:55:19 PM
Jonathan I just sent an email to my friend. I don't know if she is evacuating or not but I would guess so... will probably call her before the power and phones go down. It sounds like your friend has the right idea. Our thoughs and prayers go out to everyone either living in Florida or with friends/family there. I can't remember an area ever getting hit with two category 4 hurricanes back to back. Let's hope Frances doesn't increase in intensity.

 
 
  Jonathan Levinson   9/1/2004,  2:55:11 PM
The current bounce to QQQ 34.21, still on very light volume, has QQQ testing the flattened 7200-tick SMA at that level. A break above it targets 34.27, 34.33 and then strong resistance in the 34.45 area. The short cycles are still mixed, but will resolve their chop to the upside if this drift can retake the 34.30 area.

 
 
  Linda Piazza   9/1/2004,  2:46:29 PM
The SPX is trying to trade sideways out from that descending trendline off the day's high. Not the strongest way to achieve an "upside" break, but, hey, maybe it's trying to sneak out before anyone notices.

 
 
  Jonathan Levinson   9/1/2004,  2:46:20 PM
Mark, my friend was boarding up his windows this morning and has just lit out for Georgia.

 
 
  Mark Davis   9/1/2004,  2:45:21 PM
Hurricane Frances... Here's an update of the link Jonathan posted yesterday. Link
I have a friend in the North Keys who escaped Charley "relatively" unscathed, just some minor roof damage, lots of downed trees and no power for about a week. It's hard to believe another one is taking aim at Florida... this time right at my friend's house. I'm hearing the damage from Frances in dollar terms could even exceed Charley.

 
 
  Linda Piazza   9/1/2004,  2:40:42 PM
The TRAN remains above 3100, but only barely. It's at 3102.39 as I type.

 
 
  Linda Piazza   9/1/2004,  2:38:42 PM
Nope, the SPX breakout above the descending trendline off the high of the day did not last. The SPX is back under that descending trendline, but isn't far under. It might not be ready to give up the fight.

 
 
  Jonathan Levinson   9/1/2004,  2:38:24 PM
Second that. Volume remains very low.

 
 
  Jonathan Levinson   9/1/2004,  2:32:53 PM
Crude oil closed at 44.025, off its high of 44.35 printed minutes before.

 
 
  Linda Piazza   9/1/2004,  2:31:04 PM
The SPX just bumped above the descending trendline off the day's high. Now let's see if that holds.

 
 
  Jonathan Levinson   9/1/2004,  2:29:31 PM
More automobile headlines. So far, August is looking net dismal:

2:26pm DE:675700 AUDI OF AMERICA AUG. U.S. SALES DOWN 22% TO 6,473 UNITS

2:24pm DE:519000 MINI-BRAND AUG. U.S. SALES DOWN 17% TO 2,334 UNITS

2:23pm DE:519000 BMW-BRAND AUG. U.S. SALES UP 9.4% TO 22,167 UNITS

2:22pm DE:519000 BMW GROUP AUG. U.S. SALES UP 6.2% TO 24,501 UNITS

 
 
  Mark Davis   9/1/2004,  2:29:21 PM
We now have a confirmed buy signal on the shortest-term chart (1-min) and a clear "range" that we either need to break above or below. Above 1105.89 is the magic number for a bullish bias and below 1103.60 for a bearish bias. Link

 
 
  Jeff Bailey   9/1/2004,  2:25:00 PM
Semiconductor HOLDRs (SMH) $29.51 +0.61% ....

 
 
  Linda Piazza   9/1/2004,  2:24:02 PM
I'm noting any of the indices yet over their descending trendline off the day's high, but I am noting a potential inverse H&S on the BIX's 5-minute chart. It looks as if the neckline would be at about 360.00 if I'm drawing it correctly. Might be a good thing to watch for a confirmation or rejection at that neckline.

 
 
  Jonathan Levinson   9/1/2004,  2:22:27 PM
Bonds are rising again, with TNX now down 2.1 bps at 4.111%. Crude is holding all of its gains, but QQQ has held 34.10 support and is up to 34.15 currently, with the wavelet oscillator in the process of making a higher low. This is turning out to be a wild day across the markets.

 
 
  Linda Piazza   9/1/2004,  2:20:49 PM
The TRAN has slipped back beneath 3100 again. The 50-dma is at 3092.15, with the TRAN at 3098.56 as I type.

 
 
  Jeff Bailey   9/1/2004,  2:20:28 PM
Current OPEN MM Profiles at this Link

Ooops! Forgot to turn "multiplier" on for the covered calls for SWC. Should be a "cost" or credit of $120.00.

 
 
  Mark Davis   9/1/2004,  2:15:19 PM
MACD is now turning up but has not yet crossed.

 
 
  Jonathan Levinson   9/1/2004,  2:12:29 PM
2-day chart of crude oil at this Link.

 
 
  Jeff Bailey   9/1/2004,  2:12:01 PM
U.S. Dollar Index (dx00y) 88.84 -0.11% (30-minute delayed) ... the post-pepper spray low was 88.70.

Per decision to sell some covered calls on SWC, my thought here is that there might not be an overly "sell bias" on the dollar if that's all the dollar did on the initial "news" reaction.

 
 
  Mark Davis   9/1/2004,  2:11:41 PM
We're approaching that 1104.20 area I mentioned earlier as a possible target price for a long entry and CCI just printed a -260 reading. MACD however has printed several bearish kisses so a buy signal here is premature. Still, the 1104.20 area is worth watching, especially if MACD suddenly turns up.
Benchmarking... SPX = 1104.20

 
 
  Jeff Bailey   9/1/2004,  2:06:10 PM
Swing trade sell covered call alert .... I want to sell 3 Stillwater Mining (SWC) September 15 calls (SWC-IC) at the bid of $0.40 right here.

 
 
  Jonathan Levinson   9/1/2004,  2:04:33 PM
QQQ has just taken a tumble on low volume, back to 34.10 support here as crude oil hits the 44.10 level for a new session high. The short cycle oscillators are mixed, and the 30 min channel is flat with a slight negative bias and support down at 33.80.

 
 
  Jeff Bailey   9/1/2004,  2:03:59 PM
SMH $29.42 +0.3% ...

 
 
  Linda Piazza   9/1/2004,  2:01:29 PM
I'm still afraid to trust the Keltner chart lines, but the OEX has again turned down below the base of that bearish right triangle it had formed this morning. It also has not been able to break above the descending trendline off the morning's high, with that trendline at about 539 now, too. The SPX appears closer to challenging the analogous trendline on its chart, with that trendline at about 1105.80 and with the SPX at 1105.18 as I type.

 
 
  Jeff Bailey   9/1/2004,  2:01:11 PM
Semiconductor HOLDRs (SMH) $29.50 +0.57% .... thinking this is either the mid-session low, or another shot at the DAILY Pivot.

 
 
  Jeff Bailey   9/1/2004,  1:59:58 PM
Mark Thanks Mark. There was some bad/good "luck" involved in that one. To tell the truth, when the alert went off at $29.50 and SMH was falling sharply, I had no idea what was going on, but felt fortunate to get what we did.

Might be able to skim another 40 cents, but time will tell.

 
 
  Jonathan Levinson   9/1/2004,  1:59:30 PM
Crude is up 4.57% at 44.05 now, feeling like a short squeeze approaching the end of the session. Equities are ignoring it for now. Link

 
 
  Mark Davis   9/1/2004,  1:56:50 PM
Nice trade Jeff!

 
 
  Jonathan Levinson   9/1/2004,  1:55:33 PM
Headlines:

1:50pm GM BUICK-BRAND AUG. U.S. SALES DOWN 13% TO 28,840 UNITS

1:50pm GM GMC-BRAND AUG. U.S. SALES DOWN 8% TO 50,581 UNITS

1:50pm GM HUMMER-BRAND AUG. U.S. SALES DOWN 13% TO 2,404 UNITS

1:50pm GM OLDSMOBILE-BRAND AUG. U.S. SALES DOWN 89% TO 894 UNITS

 
 
  Jonathan Levinson   9/1/2004,  1:55:06 PM
Crude oil is still rising, now up to 43.95.

 
 
  Jeff Bailey   9/1/2004,  1:55:05 PM
Adjust day trade bearish target alert for the Semiconductor HOLDRs (SMH) $29.57 +0.81% ... raise target to $29.20 from $29.15.

Buggers pegged the DAILY Pivot didn't they?

 
 
  Jonathan Levinson   9/1/2004,  1:51:54 PM
More headlines- Honda US sales are down 7% for August, GM's Chevy division sales are up 26%, while GM's overall August sales were down 7%. Volkswagen's Aug. sales were down 30%.

 
 
  Jonathan Levinson   9/1/2004,  1:50:55 PM
Session high for Nymex crude here at 43.875 just printed. This is a better than 4% gain for the session- while equities are mostly flat-to-higher for the day. This is an interesting disconnect as the intermarket relationships seek their next (brief) equilibrium.

 
 
  Jonathan Levinson   9/1/2004,  1:43:29 PM
Note the surge in the put to call ratio for the past 2 readings: Link . The rush to puts is easily understandable, though at 1.07 and 1.08, this is a very high level that generally mandates caution for bears.

 
 
  Linda Piazza   9/1/2004,  1:43:13 PM
The OEX came back up to retest the former support from its bearish right triangle and may be turning down from that former support. Even the five-minute Keltner charts are still skewed, but at least short-term support might perhaps be found at the 50-dma, currently at 537.84, if the OEX should continue declining.

 
 
  Jeff Bailey   9/1/2004,  1:43:06 PM
Semiconductor HOLDRs (SMH) $29.58 +0.81% ... here updated intra-day chart with DAILY/WEEKLY Pivots as well as today's upper 5-MRT. Link

 
 
  Mark Davis   9/1/2004,  1:42:53 PM
Now I'm hearing 20-30 people are being treated for eye irritation due to pepper spray being realeased inside a building. This just goes to show how jittery the market is about a successful attack on our homeland. Imagine what would have happened to the indices had it been the real thing, like a Serin gas attack.

 
 
  Jonathan Levinson   9/1/2004,  1:36:40 PM
Bonds and the miners strengthened slightly on the move, with TNX now down 1 bp at 4.122% and HUI down .37% at 206.63, XAU -.18% at 94.62. Silver is at a session high of 6.79 and crude oil is up 1.60, +.38% at 43.725.

 
 
  Mark Davis   9/1/2004,  1:36:35 PM
I wonder if Al Roker was inside the building where the "gas leak" occurred. Link

 
 
  Mark Davis   9/1/2004,  1:33:50 PM
This just in from reader Mark...
AP reports several people were taken to hospital from a building. Was a gas leak. That was released when bounced back up.
Thanks Mark!

 
 
  Jonathan Levinson   9/1/2004,  1:32:36 PM
The dive created a 30 min cycle top that is in the process of whipsawing back up on the bounce from a higher low above yesterday's low. The 30 min channel has widened but remains flat following the bounce back up. In the meantime, event risk is back, as if the picture wasn't complicated enough. Volume has picked up, and the confluence range is settling in between 34.10 and 34.23.

 
 
  Linda Piazza   9/1/2004,  1:29:18 PM
Although we saw the markets drop precipitously on a rumor, I always feel that even rumor-driven moves show us where the vulnerabilities are. We saw the OEX drop right into the 535-537 support zone, for example. Also, although the drop was ostensibly caused by that rumor, the OEX had already been setting up a bearish right triangle. The drop was perhaps just a little deeper into that support zone than it would have been otherwise, but the OEX was already setting up for a drop toward 537. Now we need to start watching the descending trendline off this morning's high to see if it continues to serve as resistance.

 
 
  Mark Davis   9/1/2004,  1:28:30 PM
Very nice trade Jim. You would have needed a 10 second chart and 20 fingers to get a much better entry.

 
 
  Mark Davis   9/1/2004,  1:25:30 PM
Oops Jane! I was searching the news channels for confirmation of the DC report but heard nothing except the Russian tragedy... thought it was new. Pardon me for temporarily slipping into "girly-man" mode (grin)

 
 
  Jane Fox   9/1/2004,  1:21:48 PM
Mark that news came out this morning.

 
 
  Jeff Bailey   9/1/2004,  1:21:27 PM
Bearish day trade entry point ... for the Semiconductor HOLDRs (SMH) $29.60 +0.95%.

 
 
  Mark Davis   9/1/2004,  1:20:15 PM
Fox news reporting that rebels have taken 400 school children hostage in Russia and are threatening to kill 50 children for every rebel killed.

 
 
  Linda Piazza   9/1/2004,  1:16:39 PM
I obviously wouldn't have been laughing about "guessing" direction after the movement had already begun if I'd known the precipitating cause. Now, traders should be particularly careful, as a news-driven spike lower could be reversed just as quickly if the news is not proven correct. Such spikes can also skew indicators so that we'll all be trading a bit in the blind for a while.

 
 
  Mark Davis   9/1/2004,  1:13:42 PM
Holy smokes! Something serious must have happened... either that or traders are selling first and asking questions later. A successful homeland attack could undo the bullishness in a heartbeat. If this is a false alarm Jim has a great trade going.

 
 
  Jeff Bailey   9/1/2004,  1:12:29 PM
Day trade short setup alert .... for the Semiconductor HOLDRs (SMH) $29.22 -0.37% .... on a bounce back to $29.60, stop $29.80, target $29.15.

 
 
  Jim Brown   9/1/2004,  1:12:07 PM
Fox news saying now that the problem in DC could be food poisoning with several dozen people stricken at the Senate office building.

 
 
  Jeff Bailey   9/1/2004,  1:10:46 PM
Bearish day trade close out alert .... close out the Semiconductor HOLDRs (SMH) short at the offer of $29.38.

 
 
  Linda Piazza   9/1/2004,  1:10:30 PM
Looks as if the OEX is going to barrel right down to that downside target.

 
 
  Linda Piazza   9/1/2004,  1:09:37 PM
Okay, the downside target for the bearish right triangle on the OEX is about $537.10 if I snapped that Fib bracket right.

 
 
  Jim Brown   9/1/2004,  1:08:57 PM
FOX news is saying there has been a problem in DC. Several dozen people may be casualties. Unknown what is the cause.

 
 
  Mark Davis   9/1/2004,  1:07:38 PM
Nevermind Linda... I think we just got our answer Link

 
 
  Jeff Bailey   9/1/2004,  1:07:34 PM
Sell Program Premium ... SPX 1,105.00 , QQQ $34.16

 
 
  Linda Piazza   9/1/2004,  1:07:15 PM
Hey, Mark. I say down! Laughing. I just saw your post now, but that's what I would have said anyway, because of the bearish right triangle.

 
 
  Linda Piazza   9/1/2004,  1:06:26 PM
If that's a bearish right triangle the OEX is forming, it's about to test horizontal support at about 539, but with a violation to be confirmed by a drop below 538.84. This would have only about a one-point downside target, though, so don't plan on big bearish gains from this possibly bearish formation alone.

 
 
  Jeff Bailey   9/1/2004,  1:04:58 PM
GSTI Software (GSO.X) 132.34 (unch) ... edges below mid-morning horizontal support of 132.52.

DAILY Pivot 132.15 in play, if not WEEKLY S2 131.28.

MSFT $27.39 +0.29% .... breaks back below its DAILY R1 $27.40.

 
 
  Mark Davis   9/1/2004,  1:03:33 PM
Test time Linda... stop run to the upside or downside today? I'll give you another animated .gif as a consolation prize for putting you on the spot again. Link

 
 
  Jeff Bailey   9/1/2004,  1:03:28 PM
12:55 Market Watch at this Link

Except for the Russell-2000 (RUT.X) where an errant trading desk buy program was generated, the majors all found their session highs right at 10:30 AM EDT and today's crude oil inventory report.

 
 
  Mark Davis   9/1/2004,  1:00:34 PM
We're really flatlining here with another sell signal confirming (barely) but SPX refusing to drop much (yet). New highs are still in the picture and with each passing candle the odds get better as we slowly drift higher. We have been in this slow drift higher for over an hour now, since the 11:42 swing low. This may be resolved with Linda's stop-running push in the next half hour or so.

 
 
  Jonathan Levinson   9/1/2004,  12:59:45 PM
The bull/bear dilemma for Sept. is summed up for me with the juxtaposition of the weekly and daily cycles- the daily was rolling over from overbought as of yesterday, while on the weekly there's that bull flag pattern that has yet to be invalidated, with the weekly cycles only 1 breakout away from reversing to the upside. The bull wedge trendlines and the daily/weekly discussion were covered in Monday's Market Wrap. My bias will be to the downside if the daily cycle fails to take out the 34.80 QQQ level before breaking yesterday's low. If it breaks higher, then bulls will have a chance at breaking above weekly bull flag resistance, in which case the door is open to a test of the year highs and beyond within a new weekly cycle upphase.

 
 
  Linda Piazza   9/1/2004,  12:54:16 PM
Back. The OEX is still caught between 15-minute Keltner support and resistance, about midway between the two, with support near 538-538.40 and resistance near 540. They both look equally weighted on that chart, so there's no indication which will hold and which will collapse. The five-minute chart shows a sort of symmetrical triangle-ish formation, although it looks as if it could resolve into a bearish right triangle.

I'm still about as confused about direction as I was earlier.

 
 
  Jeff Bailey   9/1/2004,  12:47:19 PM
Semiconductor HOLDRs (SMH) $29.70 +1.26% .... its DAILY R2 is $30.01 (sessiion high $30.04) and DAILY R1 $29.66.

WEEKLY S1 $29.49 is day trader's bearish target. As well as the upper 5-MRT BLUE #1 of $29.45.

Creates little "zone" from $29.45-$29.49.

 
 
  Jonathan Levinson   9/1/2004,  12:46:21 PM
Volume has really dropped off here- the wavelet bounce, which cycle usually takes 10-20 minutes to complete, is still forming its upphase an hour after I began discussing it. The 30 min cycle channel remains flat and trying to roll over while the short cycle channel is trying to turn up within it- this is a great recipe for still more sideways chop.

 
 
  Jeff Bailey   9/1/2004,  12:44:50 PM
Semiconductor Index (SOX.X) 375.70 +1.26% .... second test of DAILY R1 support since morning high of 379.62 and DAILY R2.

 
 
  Mark Davis   9/1/2004,  12:43:20 PM
If we can just get above the small area of congestion @ 1107.50 we could see new highs (emphasis on "if"). SPX is right at the expected failure point with negative CCI divergence and the index sitting right at the upper b-band). We should know in the next 5 minutes whether it will be up or down.

 
 
  Jonathan Levinson   9/1/2004,  12:37:52 PM
The August auto numbers are coming out, with F showing sales falling 13%, DaimlerChrysler -6%, Mazda -25.9%, while Porsche sales were up 13%, Nissan +7.3%. I expect more results to follow throughout the day.

 
 
  Mark Davis   9/1/2004,  12:34:38 PM
CCI is printing high (overbought) readings on the 1-min chart but MACD is printing bullish kisses. This usually results in a move up as MACD trumps the fickle CCI.

 
 
  Jeff Bailey   9/1/2004,  12:32:00 PM
Current OPEN MM Profiles at this Link

Update alert: the Sohu.com (SOHU) call option has not been serving as any type of hedge to the Netease.com (NTES) put options. I will hold the SOHU call until Friday's nonfarm data, but unless we get a big upside surprise, I plan on closing that call out for a loss.

 
 
  Linda Piazza   9/1/2004,  12:30:44 PM
I'm caught on a telephone call.

 
 
  Mark Davis   9/1/2004,  12:29:05 PM
That buy signal @ 1106 did was confirmed by a bullish MACD cross but it was immediately sold into and CCI printed a reading over +300. The buy signal is trying to abort early but isn't quite there. Here's a chart of what might happen if the buy signal aborts and SPX drops below 1105.00 Link

 
 
  Jonathan Levinson   9/1/2004,  12:27:02 PM
The current spike failed at 34.33, which was support under the prior leg of this flagpole range before 11:30AM. A break above that targets 34.40 next.

 
 
  Linda Piazza   9/1/2004,  12:25:01 PM
Here's where the OEX is today in relationship to its daily 100/130-ema's: Link Not all indices have traded in such an apparent relationship to the daily 100/130-ema's, so this action could be coincidental to some degree, just a sign of these averages converging with the historical S/R, but the Dow appears to be doing so, too, hovering now near these averages.

 
 
  Jeff Bailey   9/1/2004,  12:22:34 PM
Bearish day trade lower stop alert .... for the Semiconductor HOLDRs (SMH) $29.75 +1.43% .... to $29.96 from $30.10.

 
 
  Mark Davis   9/1/2004,  12:17:58 PM
SPX is currently trying to flash a buy signal in the 1106 area. MACD has turned up but has not crossed yet. If the potential buy signal aborts then I can see it dropping to the previously mentioned 1104.20 area for a possible long entry, although there is no telling what the oscillators will look like when/if it gets there... just a "heads up" for a potential long play at this point.

 
 
  Linda Piazza   9/1/2004,  12:16:39 PM
The BIX is back below 360 again, at 359.91 as I type.

 
 
  Jeff Bailey   9/1/2004,  12:16:35 PM
12:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Jonathan Levinson   9/1/2004,  12:12:15 PM
The lack of upward momentum has the 30 min cycle channel now flat, and the lower support has come down 2 cents to 34.10, lining up with the rising 7200-tick SMA on QQQ. The short cycle downphase feels corrective so far.

 
 
  Jeff Bailey   9/1/2004,  12:04:39 PM
12:00 market watch at this Link

Note: Wilshire point/percentage gain is incorrect. I forgot to black it out. Current quote is correct.

Financials weak.

 
 
  Linda Piazza   9/1/2004,  11:58:50 AM
On the OEX's five- and fifteen-minute charts, resistance from 539.66-540.20 looks fairly firm. On the 15-minute chart, so does support from 537.65-538.03.

 
 
  Mark Davis   9/1/2004,  11:57:03 AM
That third sell signal was the one that stuck as we see the first real break of the day. If we drop much further there is a small gap @ 1103.50-1104.20 that could possibly be filled to the downside. Immediately below that is an area of congestion from 1102.50-1103.50. If SPX drops as low as 1102.50 (which is right where it opened... @ 1102.43) that may be a good area to try a scalp long, however I would be surprised to see it drop to that level. It's more likely that small gap was a breakaway gap and if so then a long play at the top of the gap (1104.20) would be the more likely entry target for a long play.

 
 
  Jonathan Levinson   9/1/2004,  11:56:07 AM
The wavelet upphase discussed earlier on QQQ is just getting started here, and the reason it's taking so long is the light volume, generating few ticks with which to draw the oscillator signals. A break above 34.33 will set up a test of 34.40 resistance, above which I expect the short cycle upphase to revive.

 
 
  Linda Piazza   9/1/2004,  11:48:20 AM
The TRAN has less than 5 points to go and it will have retraced all of today's gains after having first punched above the 8/26 high.

 
 
  Linda Piazza   9/1/2004,  11:43:54 AM
Support is thin now under the OEX on the five-minute Keltner chart, with resistance now looking stronger. That resistance is near 539.50-539.60. Next support is at 538.39, but the mid-channel support is near 537.56, and that's where the OEX could be headed if it doesn't pull up above that next Keltner resistance.

 
 
  Jonathan Levinson   9/1/2004,  11:40:57 AM
A short cycle downphase is in progress here within the still-rising 30 min channel on QQQ. The shortest cycle, the wavelet, looks very oversold and, if it doesn't begin an oversold trending move here, should begin asserting support above that 34.26 level mentioned earlier. A move below 34.26 will target 30 min channel support at 34.12, which would stall the 30 min cycle upphase still in progress.

 
 
  Linda Piazza   9/1/2004,  11:37:16 AM
This drop could still be part of a bull flag formation on the OEX's 15-minute chart, but if the OEX drops much further, that's not how it will look. Bulls want to see 15-minute closes above the channel line currently at 539.15, but stronger support appears down at 537.80-538.00.

 
 
  Jonathan Levinson   9/1/2004,  11:28:40 AM
Session high for Nymex crude here, +1.475 or 3.38% at 43.60.

 
 
  Jonathan Levinson   9/1/2004,  11:26:20 AM
30 min challe resistance has risen to 34.53, support to 34.10. The upside confluence zones are 34.45 and then 34.60-.64 QQQ.

 
 
  Linda Piazza   9/1/2004,  11:26:06 AM
I'm seeing bearish divergence, Keltner style, on the OEX's 15-minute chart. That can be erased, but it exists now. As the OEX approached the top of the middle channel today, that approach can be compared to the last time the OEX approached the top of that channel. That was last week. On that approach, the top of the middle channel was closer to the top of the widest channel than it is now. That's bearish divergence, Keltner style. As always, bearish divergence warns bulls to be watchful, but doesn't guarantee a turnaround.

 
 
  Linda Piazza   9/1/2004,  11:22:57 AM
So far, with one minor exception, bulls are seeing five-minute closes above the Keltner line where they'd like to see them, with that line currently at 539.80. Now, however, bulls need to see a higher high. The OEX has produced a breakout on the five-minute chart, so that risk shifts to bullish shoulders. Bulls should be following the OEX higher with their stops. Normally, this is not necessarily a time to consider shifting sides or pulling out of trades until stopped out. After all, Keltner charts were designed to pinpoint breakouts so that they could be traded. However, by design, the trading vehicle has been running a while before a breakout signal can be produced. I'm particularly worried about this breakout, since it's coming just under strong resistance, just after disappointing economic news and just before the crude inventories figure. I don't particularly trust this one.

 
 
  Jonathan Levinson   9/1/2004,  11:19:43 AM
The action today is reminiscent of the 2003 flagpole rallies- a vertical move in a short space, and then a sideways narrow range. The current range low has been between 34.30 and 34.32, while I see confluence support to 34.26.

 
 
  Linda Piazza   9/1/2004,  11:17:45 AM
Mark, I've wondered about a possibility for a buy-the-fact reaction after Intel's update, too. (See Mark's 11:10 post.)

 
 
  Jeff Bailey   9/1/2004,  11:16:54 AM
Day trade short alert ... for the Semiconductor HOLDRs (SMH) $29.87 here, stop $30.10, target $29.51.

 
 
  Mark Davis   9/1/2004,  11:15:46 AM
The third sell signal of the day on the SPX 1-min chart is on the verge of aborting. We should know within the next 5 min or so. I'd give it a 50/50 chance. If successful we could be headed for new highs. In any case I don't see this market retreating very far.

 
 
  Linda Piazza   9/1/2004,  11:14:03 AM
As might be expected, the TRAN's drop began at 10:30, when the Department of Energy and API were about to/had released inventories numbers.

 
 
  Linda Piazza   9/1/2004,  11:13:02 AM
The TRAN did climb above the 8/26 high by a couple of points before dropping back 12 points to its current 3118.67.

 
 
  Mark Davis   9/1/2004,  11:10:30 AM
Linda re: your 10:44 post on the SOX... FWIW I believe the SOX bottomed out at 360.61 on Aug 13th. That number exceeded the downside targets of both the daily H&S (390) and the daily Diamond (375) formations. There has been so much negative press lately about INTC that it may already be priced in. I'm thinking we may witness one of those "buy the rumor, sell the news" events, or in this case "sell the rumor, buy the news". I'm looking for the SOX to challenge 400 round number resistance and if successful then rapidly move up to challenge the 50sma @ 412.90. It appears the buying has already begun and if the SOX stabilizes/reverses this should buoy the entire market.

 
 
  Jonathan Levinson   9/1/2004,  11:10:06 AM
Gold is holding at 410, -2.20 for the day, with HUI and XAU up slightly from prior levels, -.57% at 206.21 and -.46% at 94.35 respectively. TNX is up 1.5 bps now at 4.138%, and while a daily cycle upphase has been due since last Friday, it's possible that today's strength following the morning plunge is marking a bounce off the weekly cycle low. A break above yesterday's high in the 4.18% area would be a convincing first step.

 
 
  Jeff Bailey   9/1/2004,  11:09:00 AM
11:00 Internals at this Link

 
 
  Linda Piazza   9/1/2004,  11:07:25 AM
Nearest Keltner resistance for the OEX is at 539.90-540.07, while nearest support is at 539.17-539.25. The OEX sits on one Keltner line at 539.62. Bears want five-minute closes beneath that line or preferably beneath the lower support zone. Bulls want five-minute closes above that line or preferably above the upper resistance zone.

 
 
  Jeff Bailey   9/1/2004,  11:02:12 AM
Bullish day trade cancel alert ... for Taser Intl. (TASR) $27.99 +1.48% .... (from 10:29:08)

 
 
  Jeff Bailey   9/1/2004,  11:00:21 AM
10:55 Market Watch at this Link

 
 
  Jonathan Levinson   9/1/2004,  10:56:46 AM
I agree with Linda on both comments re: her 10:52.

 
 
  Linda Piazza   9/1/2004,  10:53:20 AM
Reader T.G. has been reporting for a couple of days on an abrupt rise in MUR, wondering if the tendency for commodity-related stocks to move ahead of the commodity suggested higher oil prices ahead. Perhaps so.

 
 
  Linda Piazza   9/1/2004,  10:52:05 AM
Wow, that's a big drop in crude inventories that Jonathan just reported. That should have a negative impact on equities, although the inverse relationship in crude futures and equities has uncoupled some days recently.

 
 
  Jonathan Levinson   9/1/2004,  10:49:46 AM
SAN FRANCISCO (CBS.MW) -- The American Petroleum Institute said crude inventories for the week ended August 27 fell by 8.1 million barrels to total 281.4 million. The Energy Department reported a 4.2 million-barrel drop. Gasoline stocks rose 2.2 million barrels to total 210.6 million.

October Nymex crude oil is now up .675 or 1.6% at 42.825.

 
 
  James Brown   9/1/2004,  10:46:51 AM
Corinthian Colleges (COCO) is up 15% to $13.07 as investors react to its earnings report this morning.

This is rubbing off on CECO +4.2%, APOL +2.17%, and EDMC +1.44%.

 
 
  Linda Piazza   9/1/2004,  10:44:46 AM
For more than two months, the SOX has been pressured lower by the 20-dma. On 8/23 and 8/24, it actually pierced that average, but then closed below it both days. That average is at 380.98 today. The problem is that to register a change in trend, we'd have to see a daily close above that average and not just an intraday piercing of it, but that average should perhaps be watched, too. Today's high has been 379.62.

 
 
  Jim Brown   9/1/2004,  10:40:11 AM
Considering the Editors Play last Sunday was puts on Google at $106 I am very pleased to see it crack $100. I think we will see $75 before year end.

 
 
  Linda Piazza   9/1/2004,  10:39:58 AM
So far, the SPX has not yet hit its 200-sma, stopping just short of the 8/27 high and pulling back from that level. The OEX is also pulling back. In the OEX's case, it's now testing the Keltner channel line that bulls hope it will maintain on 15-minute closes in order to keep that 542-ish upside target a possibility. That channel line is at 539.54. While that could support the OEX on 15-minute closes, stronger support appears lower, nearer 536.75-537.50.

 
 
  James Brown   9/1/2004,  10:37:19 AM
For those of you without a 2004 Stock Traders Almanac...the beginning of September is typically strong. The month has opened bullish 7 out of the last 8 years and the day after Labor Day has been up 7 out of the last 9 years.

 
 
  Mark Davis   9/1/2004,  10:35:58 AM
GOOG is going against the grain today, cracking the $100 mark for the first time, dropping as low as 99.84... currently printing 100.29. Cracks in the dam?

 
 
  Jonathan Levinson   9/1/2004,  10:35:02 AM
We recall 34.45 QQQ from last week's highs, and above this resistance level, 34.65-.70 is the next significant confluence. The 30 min cycle oscillators are trailing the fast move, which sets up the potential for a sharp reversal. The short cycle oscillators are overbought and looking to roll back down- bulls want to see 34.25-.28 support hold on any weakness.

 
 
  James Brown   9/1/2004,  10:34:03 AM
The BTK biotech index is in the second day of its bounce from its simple 50-dma. The index is now challenging overhead resistance at its simple 100 and 200-dma's near the 500 level.

 
 
  James Brown   9/1/2004,  10:32:45 AM
For the car buffs out there the first Porsche rolled out today, September 1st, back in 1950.

 
 
  Mark Davis   9/1/2004,  10:30:48 AM
Shorts are running around with their hair on fire right now. Ouch!

 
 
  Linda Piazza   9/1/2004,  10:29:14 AM
Also watch the SPX with relationship to its 200-sma, at 1111.94, with the SPX at 1108.25. I'd guess that market participants are trying to drive it up to and then above that average. Don't know whether they'll be successful with the "above" part.

 
 
  Jeff Bailey   9/1/2004,  10:29:08 AM
Day trade bullish setup alert .... for Taser Intl. (TASR) $27.93 +1.23% .... for pullback entry at $27.56, stop $27.22, target $28.32.

 
 
  Linda Piazza   9/1/2004,  10:27:33 AM
The TRAN is now at 3127.34, approaching the 8/26 high of 3130.51 and possible resistance in the 3130 range. The TRAN has been a decent indicator index for us lately, so watching it for a possible breakout or rollover might be helpful. Before that 8/26 intraday high, the previous swing high had been the 8/03 high of 3147.23.

 
 
  Mark Davis   9/1/2004,  10:25:40 AM
Considering the strength of yesterday's flagpole rally and the strong continuation today, not to mention it is supported by TRIN, SOX-dicator and just about everything else I can see, I would be very careful shorting this market. It could easily have last Friday's 1109.70 high in it's sights. The character of the market has changed considerably in the last 24 hours.

 
 
  Jeff Bailey   9/1/2004,  10:25:23 AM
TRIN 0.75 ... session low.

 
 
  Jane Fox   9/1/2004,  10:24:58 AM
James - "Giving her all she's got Captain" sure sums up the market today.

 
 
  Jeff Bailey   9/1/2004,  10:24:58 AM
Taser Intl. (TASR) $27.94 +1.12% .... pretty good move up in last 10-minutes.

 
 
  James Brown   9/1/2004,  10:22:25 AM
"I'm giving her all she's got, Captain!"

Off topic, actor James Doohan, famous for playing Scotty in the original Star Trek series, has received a star on the Hollywood Walk of Fame.

This is expected to be the 84-year old's last public appearance. He is suffering from Alzheimer's, Parkinson's and diabetes.

Co-stars George Takei (Sulu), Nichelle Nichols (Uhura), and Walter Koenig (Chekov) were there to celebrate.

 
 
  Jonathan Levinson   9/1/2004,  10:20:42 AM
Ten year yields have just gone positive, with TNX up .8 bps at 4.104% here. So far, if the TNX closes here, we'll have a key reversal with a bullish doji hammer for the day. Of course, the session's still young.

 
 
  Linda Piazza   9/1/2004,  10:19:27 AM
The OEX now heads into the daily 100/130-ema's, both at 540.30. Be careful. These averages stopped the OEX advance on 8/26.

 
 
  Mark Davis   9/1/2004,  10:18:50 AM
That didn't take long! SPX is already into the middle of the 1106.50-1107.50 gap, currently printing 1107.18

 
 
  Linda Piazza   9/1/2004,  10:17:52 AM
The OEX now breaks out above the 15-minute Keltner channel line that usually turns it back. That sets a possible upside target of 542.06 on the breakout signal, but the OEX needs to maintain 15-minute closes above the Keltner channel line currently at 539.22 to maintain that upside target, and I sure would be careful as that target was approached because of resistance near the 8/27 high.

 
 
  Jim Brown   9/1/2004,  10:16:45 AM
I think traders are relieved that the ISM was not as bad as expected. I heard whisper numbers down to 56-57 and after the PMI and NAPM it could easily have happened. 59 is barely a dip and the prices paid was well below the June so traders should be encouraged. The prices paid hit the 86-88 range and a 25 year high in March-May. Today's 81.5 is tame compared to those numbers.

 
 
  James Brown   9/1/2004,  10:16:12 AM
Kimberly Clark (KMB) is also breaking out over resistance at the $67.00 level. This will produce a new triple-top breakout "buy" signal on its P&F chart, which currently points to a $100 target.

 
 
  Jonathan Levinson   9/1/2004,  10:14:37 AM
Session low for ten year bond futures, TNX now down .8 bps at 4.124%.

 
 
  James Brown   9/1/2004,  10:14:33 AM
FAST still looking bullish here as it creeps toward new highs above resistance near $63.00.

 
 
  Jonathan Levinson   9/1/2004,  10:14:15 AM
On a cycle basis, the trade to 34.15-.20 QQQ sets up an interesting scenario. The daily cycle sell signals that were printed preliminarily on yesterday's close will be threatened by a daily close above that resistance zone, but the daily cycle top can take days to print. Only a break above the high for the move, call it 34.70, can restore the daily cycle upphase and undo the damage caused by this week's selling.

 
 
  Jeff Bailey   9/1/2004,  10:13:45 AM
10:00 Internals at this Link

 
 
  Mark Davis   9/1/2004,  10:13:30 AM
SPX now faces it's next challege to the upside, an area of congestion in the 1105 area. If it can break through 1105 I would expect Monday's gap down from 1107.50 to 1106.50 to be easily filled. It may or may not happen today but I expect that gap to be filled. Link

 
 
  Linda Piazza   9/1/2004,  10:13:13 AM
The BIX opened in the bottom half of yesterday's tall white candle (with 360.69 marking the midpoint of that candle), in the half that's considered the bearish half. At 360.79 as I type, the BIX attempts to sustain a just-made move into the top 50% of that candle. This is important because yesterday, the BIX attempted an assault on the 3/05 intraday high of 362.64, not quite making that, but actually achieving a higher close than was achieved during that major swing high in the spring. Bulls want to see some follow-through.

 
 
  Jonathan Levinson   9/1/2004,  10:11:51 AM
Jim was all over that bad trade as it happened. A fat-finger indeed. Good call!

 
 
  James Brown   9/1/2004,  10:10:56 AM
CNBC talking about how Hurricane Frances may become the most expensive storm ever. It is expected to hit Florida by the end of the week.

Insurer HIG is rolling over. After spending days consolidating under resistance at $61.50 HIG is dropping back to the $60.00 level and looks ready to break down through it.

Allstate (ALL) is one of the biggest insurers in Florida and probably has the most to lose. Shares of ALL are down four out of the last five days and nearing support at $46.00 and its simple 100-dma.

More insurers to watch: ACE, AIG, CB, CNA, PGR, RNR, XL, SAFC, and STA

 
 
  Linda Piazza   9/1/2004,  10:09:18 AM
The TRAN has been climbing and is at 3118.39 as I type. For reference, the 8/26 intraday high was 3130.51.

 
 
  Linda Piazza   9/1/2004,  10:06:39 AM
Well, that was "soon." (See my 10:03 post.) Next 15-minute Keltner resistance is at the line that usually stops the OEX, with that line currently at 539.05, but still rising.

 
 
  Jonathan Levinson   9/1/2004,  10:04:53 AM
Session highs for QQQ and INTC here.

 
 
  Jonathan Levinson   9/1/2004,  10:04:11 AM
Session low for gold at 409.60, HUI -.67% and XAU -.63%. Looks like the 412-414 resistance zone wants to hold for the time being.

 
 
  Jeff Bailey   9/1/2004,  10:04:11 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   9/1/2004,  10:03:47 AM
It looks as if the OEX could head down to test the Keltner support gathering in the 537-537.40 region on the 15-minute chart unless it can manage five-minute closes above 537.82 soon.

 
 
  Jonathan Levinson   9/1/2004,  10:03:12 AM
Barely any reaction from the futures. Gold is down 1.50 now at 410.70, and bonds have pulled back, TNX now down 1 bp at 4.122%.

 
 
  Jeff Bailey   9/1/2004,  10:02:22 AM
Buy Program Premium ... SPX 1,102.48 , QQQ $34.01.

 
 
  Jonathan Levinson   9/1/2004,  10:01:47 AM
Headlines:

10:00am U.S. JULY CONSTRUCTION SPENDING UP 0.4% AS EXPECTED

10:00am U.S. JULY PUBLIC CONSTRUCTION SPENDING UP 0.6%

10:00am U.S. JULY PRIVATE CONSTRUCTION SPENDING UP 0.4%

10:00am U.S. JULY RESIDENTIAL CONSTRUCTION SPENDING UP 0.3%

10:00am U.S. JUNE CONSTRUCTION OUTLAYS REVISED TO 0% FROM -0.3%

 
 
  Jim Brown   9/1/2004,  10:01:12 AM
Alert - ISM Index = 59.0 , (est 60.3, last 62.0)
Prices paid = 81.5 ,(est 79.0, last 77.0)

The headline number at 59.0 is the lowest level since Oct-2003 posted a 57.0

 
 
  Jonathan Levinson   9/1/2004,  10:00:46 AM
Construction spending up .4%

ISM 59.

 
 
  Jonathan Levinson   9/1/2004,  10:00:16 AM
The Fed has just announced an overnight repo of 4.25B, which gives us a net add of 250M for the day, very slight.

 
 
  James Brown   9/1/2004,  9:59:59 AM
Air Products Chemicals (APD) is breaking out to the upside this morning. The move through resistance at $53.00 has also produced a new P&F buy signal with a $66 price target.

 
 
  Linda Piazza   9/1/2004,  9:57:28 AM
The 15-minute OEX Keltner chart shows a slightly different outlook, including the possibility that the OEX will pull back to 537-537.40 before finding support.

 
 
  Jeff Bailey   9/1/2004,  9:57:13 AM
U.S. Dollar Index (dx00y) 88.92 -0.02% (30-minute delayed) .... overnight high was 89.09 with overnight low of 88.80.

 
 
  Mark Davis   9/1/2004,  9:57:01 AM
I'm not surprised to see SPX pausing at the 1103 area this morning. There is an area of congestion from yesterday just below and even though there is a developing short signal on the 1-min chart it could easily abort considering the strong bounce off the 1095 area. Link

 
 
  Jonathan Levinson   9/1/2004,  9:56:00 AM
Gold has pulled back to 411.10, -1.10, and HUI and XAU are now fractionally negative. I believe that the data due in 5 mins should shake things up a bit, but the issue here is gold's resistance level in the 412-414 range. Recall that the last high that clipped the then-current daily cycle upphase came on a throwover to 415.

 
 
  Linda Piazza   9/1/2004,  9:55:03 AM
Here's the Keltner picture on the OEX's five-minute chart: the OEX attempts to steady at Keltner support near 537.72-537.82. If it can steady there and rise, next Keltner resistance is at 538.55 and then at 539.16, but those lines are dynamic and will change. If the OEX drops beneath that Keltner support, support then thins out, but support tries to gather near 536.50 or so. Bears want to see five-minute closes beneath 537.10, but will take closes beneath 537.72, and bulls want to see five-minute closes above 538.58, but will take closes above 537.72, which they're getting so far.

 
 
  Jeff Bailey   9/1/2004,  9:54:05 AM
Buy Program Premium .... SPX 1,103.24 , QQQ $34.04

 
 
  Jeff Bailey   9/1/2004,  9:52:37 AM
Bullish day trade stop alert .... for Bema Gold (BGO) $2.60 at the bid.

 
 
  Jeff Bailey   9/1/2004,  9:51:52 AM
VIX.X 15.30 +0.06% ... DAILY S1 15.19, Pivot= 15.52, R1 15.69.

 
 
  Jeff Bailey   9/1/2004,  9:50:55 AM
TRIN 0.94 .... Can't figure out what it wants to do.

INDU -0.16%, SPX -0.09%, OEX -0.13%, NDX -0.09% .... BIX.X -0.52%, SOX.X +0.37%.

 
 
  Linda Piazza   9/1/2004,  9:47:24 AM
Despite a rise in crude futures in the overnight session, the TRAN opened above 3100 and remains above it as I type, at 3104.30, and dropping.

 
 
  Jeff Bailey   9/1/2004,  9:45:59 AM
TRIN 1.02

 
 
  Keene Little   9/1/2004,  9:44:05 AM
Linda, I like your "Linda-confusion" factor. I believe women make better traders than men because they have a better ability to listen to that inner voice that says "I'm confused here and I think I'll lay low until I'm not so confused." Men on the other hand, macho people that we are, never give into such emotional factors and prove we can handle it. Consequently we hurt ourselves and then admit we're confused (maybe).

 
 
  Jonathan Levinson   9/1/2004,  9:42:44 AM
Don't forget the 10AM data due- construction spending est. .4% and ISM Index est. 60.

 
 
  Linda Piazza   9/1/2004,  9:40:37 AM
Keene's EW-based suggestion that today might be difficult to trade (see his 9:36 post) fits with my own very scientific analysis: the Linda-confusion factor. That's predicated on the number of hours I spend staring at charts, trying to decide what to say about my expectations and the number of times I moan, "I can't decide." In all seriousness, as you've heard me say here before, I've learned not to force a decision on those days when it just seems impossible to make one. Many times those days turn out to be particularly difficult to trade. Not always, of course, and today's pattern could sort itself out as we start getting some economic numbers. This morning--based solely on our slightly negative futures in the face of green bourses across the globe--I moved a little from the any-direction-is-equally-possible stance to a perhaps-markets-will-round-down one, but that's not an official scenario, and I still wouldn't have an opinion about rounding down from yesterday's high or from the 539.50-540.80 region.

 
 
  Jeff Bailey   9/1/2004,  9:38:37 AM
TRIN 0.78

 
 
  Jeff Bailey   9/1/2004,  9:35:50 AM
Bullish day trade raise stop alert ... for Bema Gold (BGO) $2.62 +0.38% .... to $2.60 from $2.52.

Continue to target $2.65. WEEKLY R1 $2.65 with today's DAILY R1 $2.66. DAILY Pivot is $2.57.

 
 
  Linda Piazza   9/1/2004,  9:34:29 AM
Okay, here's what Keltner charts show so far for the OEX, but take this with a grain of salt ahead of the 10:00 numbers: They show that the OEX might find first support between 534.30-537.50 and attempt a rise from there, although they don't suggest how successful that rise would be. If the OEX falls through that support, next somewhat firm support is near 536.60.

 
 
  Mark Davis   9/1/2004,  9:33:23 AM
Actually he said "Don't be economic girly-man"... I added the "an" for him

 
 
  Linda Piazza   9/1/2004,  9:30:57 AM
Is that what he said, Mark? I couldn't understand him!

 
 
  Mark Davis   9/1/2004,  9:30:02 AM
I'm actually surprised to see futures lower this morning. After Arnold Schwarzenegger's warning last night at the Republican Convention, "Don't be an economic girly-man", I expected to wake up to see the futures limit up.

 
 
  Jeff Bailey   9/1/2004,  9:29:46 AM
SuperGen (SUPG) $6.43 Link ... most active and trading higher at $7.43 after MGI Pharma (MOGN) said it would take a $40 million stake in the company as part of a drug license deal.

 
 
  Jonathan Levinson   9/1/2004,  9:27:51 AM
Yesterday gave QQQ bears their first 10-day stochastic bearish cross, while the end of session ramp up left the indices on a 30 min cycle upphase. So long as that upphase ends from a lower price high, which looks easily do-able today, bears should be in business. Unfortunately, my power woes of yesterday afternoon left me with a hole in my tick-keltner charts, and so my channel projections won't be reliable for approximately 1 hour.

 
 
  Linda Piazza   9/1/2004,  9:24:42 AM
The OEX ended Tuesday up against the Keltner channel resistance line that usually turns it back, so this would be a natural place from which a pullback might begin. A climb much higher than Tuesday's close would negate the potential for the OEX to be forming a regular H&S with a neckline roughly congruent with the 120-minute 100-ema. A climb up toward 539.50-541.80 and a rollover from that zone would not, however, negate the potential that the OEX could be rolling down into another right shoulder for a potential inverse H&S, as seen on the daily chart. It looks as if a pullback to the 530-532 zone could be part of a ultimately bullish development, as long as the OEX didn't drift too much lower than that and then pushed back up through 542. That's not all going to happen today, of course, but just points out that even a pullback now, in the typical September fashion, could be part of an ultimately bullish outcome. For today, however, be cautious ahead of this morning's 10:00 numbers. Unfortunately, as perfect as this morning's lightly lower futures fits into a pullback scenario, we can't count on those futures to be divining the entire day's direction.

 
 
  Keene Little   9/1/2004,  9:19:33 AM
Thanks Jonathan. There are several ways to short the bonds, play an increase in yields and I think we have a nice opportunity here to try it.

 
 
  Jonathan Levinson   9/1/2004,  9:18:41 AM
Thanks, Jane. TLT is the one I was think of.

 
 
  Jonathan Levinson   9/1/2004,  9:02:02 AM
Keene, there's a more liquid tracking stock for bonds that has options, but I've forgotten the symbol. Searching now. There's also Profunds Rising Rates Opportunities Fund (RRPIX).

 
 
  Jonathan Levinson   9/1/2004,  8:52:20 AM
Bonds are rising again, with TNX down 4.6 bps to 4.086%, a 1.11% decline this morning.

 
 
  Jane Fox   9/1/2004,  8:49:04 AM
DAteline WSJ - MOSCOW -- Attackers wearing suicide-bomb belts seized a school in a Russian region bordering Chechnya and took hundreds of hostages, reportedly including 200 children. The assault came a day after a suicide bomber killed 10 people in Moscow.

The hostage-takers released 15 children several hours later, the ITAR-Tass news agency reported. But Ruslan Ayamov, spokesman for North Ossetia's Interior Ministry, denied that the attackers had freed anyone, telling the Associated Press that 12 children and one adult managed to escape after hiding in the building's boiler room....

Terrorism fears in Russia had risen markedly after the plane crashes and the suicide bombing outside a suicide bombing outside a Moscow subway station last night that killed 10 people and wounded more than 50.

A militant Muslim Web site published a statement claiming responsibility for the bombing on behalf of the "Islambouli Brigades," a group that also claimed responsibility for the airliner crashes. The veracity of the statements couldn't immediately be confirmed.

 
 
  Jonathan Levinson   9/1/2004,  8:05:38 AM
Equities are lower with ES trading 1096.75, NQ 1358.5, YM 10095 and QQQ -.22 at 33.77. Gold is up 2.50 at 412.40, silver +.067 at 6.778, ten year bonds +.437 at 113.5312, and crude oil -.20 at 42.075.

We await the 10AM release of construction spending for July, est. .4%, and the August ISM index, est. 60.

 
 
  Linda Piazza   9/1/2004,  7:09:55 AM
Good morning. The Nikkei spent Wednesday's session coiling around 11,140. It closed up 45.56 points or 0.41%, at 11,127.36. Banks and some auto stocks headed higher in the morning session, while many tech stocks were hit with the fallout from Tuesday's disappointing Japanese industrial output number and worries ahead of Intel's update. Morgan Stanley was one of many firms lowering their outlook for Intel ahead of that update. Probing underneath the headline industrial output data revealed that inventories rose in the tech sector while some tech companies reduced production.

News out of Japan included Toyota Motor's decision to repurchase 31 million common shares as well as an agreement by Toshiba, Hitachi, and Matsushita Electric Industrial to jointly build and sell LCD panels. Toyota closed higher by 0.9%. Out of the three companies in the joint agreement, only Matsushita Electric closed higher.

Most other Asian markets closed in the green, with some semi-related stocks rebounding from early losses to close in the green, too. The Taiwan Weighted gained 1.61%, and South Korea's Kospi climbed 1.72%. Singapore's Straits Times closed higher by 0.58%, and Hong Kong's Hang Seng climbed 1.35%. China's Shanghai Composite was one of the declining bourses, closing lower by 1.53%, again closing just off its three-year low.

Currently, all European bourses are in positive territory, although a Reuters article notes that 17 armed men and women have seized a school in Southern Russia, taking 400 students and adults hostage. Estimates of the number of hostages have varied. From inside the building, where all hostages have been herded into a gymnasium that was subsequently mined, according to the Reuters article, schoolchildren have been calling out to their parents, telling them that some people have been injured or killed. At least some bodies can be seen. Some speculate that some teachers may have been killed.

One positive in European trading was Germany's July retail sales, rising a better-than-expected 0.9%. Cosmetics retailer L'Oreal and supermarket group Carrefour both gave encouraging assessments, with both climbing and helping to create positive sentiment in the region. French television station Tf1 also mentioned increasing net advertising revenue. France Telecom was suspended from trading earlier today, however, as the government sold up to 299 million shares to trim the government's debt. That stake may be as high as 9.6%.

As of this writing, the FTSE 100 has climbed 31.50 points or 0.71%, to 4,490.80. The CAC 40 has climbed 19.13 points or 0.53%, to 3,613.41. The DAX has climbed 24.42 points or 0.65%, to 3,809.63.

 
 
  Linda Piazza   8/31/200,  10:53:18 PM
Tuesday, I'd expected a day in which the OEX opened near Monday's close, dropped close to 534 and then rebounded and closed somewhere about a point either side of the open, producing either a spinning-top or doji type candle. The open was right, but a few of the other particulars were just a little off. Instead of dipping near 534, the OEX dipped to 533.79 and instead of closing about a point either side of its open, it closed slightly more than two points above its open. While I'm just glad that Keltner charts allowed even that close of an approximation of what might happen Tuesday, being only about $0.25 or so off the possible low of the day and a little more than a point off on the close, those slight differences still altered the character of the day's candle. That candle was a bullish one that sprang up from rather than one that might indicate indecision. The move off the low was big enough that even OEX option players could have benefited, but there was always the potential of the OEX getting stopped anywhere in that 535-537 range.

Still, that candle closed only a little above the 50-dma, an average that could have gotten overrun in the usual end-of-day volatility, especially if that end-of-day action was mostly window dressing. The close didn't undo the possibility of the 539.50-541.50 resistance holding as the OEX possibly rounds down into another shoulder on its potential inverse H&S. So, where do we stand? We've been talking about a possible inverse H&S on the daily chart, but let's dial down a little and look at the 240-minute chart. I've been pointing out how important the 240-minute 100/130-ema's have been lately. Here's where the OEX ended with respect to those averages: Link As is apparent on this chart, the OEX had moved just above those 100/130-ema's at the close, perhaps just overrunning the 130-ema, too. However, that last candle was an obviously bullish one, so there's reason for bears to be cautious and bulls to be gladdened here, even if I'm still worried about any long positions just here. I'd like to show the 120-minute version of these averages, too, though, but first would like to offer some explanation of what I'm showing. Lately, I've been noticing a tendency for H&S's to form with either a neckline at or just above the 100-ema on various time frames or the head or shoulders at or under the 100-ema. On the 240-minute chart, the shoulders are roughly at the 100/130-ema's. Here's what shows up on the 120-minute chart: Link While this certainly is far from a classic H&S, we have to keep in mind the tendency of the OEX to overrun targets in the last few minutes and first few minutes of trading. If the OEX is to round over into a right shoulder for a H&S formation on the intraday charts, however, it should probably do so from near Tuesday's close or near the 240-minute 130-ema. Then it has to negotiate a fall beneath the 120-minute versions and then below Tuesday's low to confirm the formation, however, so it's not going to be an easy task. In fact, if you look back at that 120-minute chart, you'll note that the candle bodies on Tuesday were forming at 240-minute 100-ema although the shadows had spiked lower. That reinforces that average's importance. This is complicated, so be patient with the explanation, but a rollover and then confirmation of this H&S on the intraday chart would tend to confirm the possibility that the OEX was dropping into another shoulder for a possible inverse H&S on the daily chart, with the bottom of that shoulder possibly in the 530-532 range. The confirmed H&S would actually have a lower target, near 525.50, but plans should be in place to protect bearish profits in that 530-532 range, if that should be reached.

We shouldn't assume the H&S will be confirmed, of course. A push above 540 would tend to negate that formation, with that negation confirmed by a move above the 8/27 high of 541.89. A move above the 8/27 high would also tend to suggest that the OEX was forgoing its pullback into a right shoulder for an inverse H&S on the daily chart and just moving up instead, perhaps toward a test of the 200-sma, currently at 545.73, but I sure am worried about the possibility of a little stop-run suckering in bulls before the index rolls down again.

Neither the five- nor the fifteen-minute Keltner charts give many clues as to which option is most likely, nor do other charts. The OEX ended the day near upper channel resistance on the five-minute chart, but has not yet created a breakout signal. It ended the day against the Keltner channel line that usually stops it on the 15-minute chart, but has not created a breakout signal to the next Keltner channel level at 541.84 on that chart, either. I don't have a bias for up or down and feel I could make a valid argument for either one, although I definitely think that bulls have more risk here with the OEX up against that Keltner resistance. I've long since learned that when I study and study and can't come up with a scenario for the day, it's best not to force a decision pre-market. Those days often show choppy trading conditions with little direction. That's not always true, of course, and my scenarios don't always work out as I expect them to anyway. Wouldn't that be nice for us all if they did? For now, the OEX is moving into a possible turnaround zone as it approaches the 539.50-541.84 zone, so it's difficult to suggest new bullish entries until there's a breakout above that zone or a pullback and bounce. Depending on how futures react before the 10:00 economic numbers Wednesday morning, it's possible that there could be some follow-through on Tuesday's gains before we see how that zone is tested, so it's difficult to assess the possibility for a new bearish entry, too, until we see those 10:00 numbers tomorrow morning and assess the markets' reaction to them. Sometimes there's a run up to next resistance or a roll down to next support to await important numbers.

 
 
  OI Technical Staff   8/31/200,  9:53:26 PM
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