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  Jeff Bailey   9/3/2004,  4:30:47 PM
Recap of this week's market monitor profiles that were opened or closed at this Link

  Jeff Bailey   9/3/2004,  4:25:59 PM
Current OPEN MM Profiles at this Link

Orders I would place with broker while on vacation next week....

I would be a willing seller of the SWC Oct. $15 calls bought on 06/16 if the underlying stock traded $20.

I would be a willing seller of the OSTK Sep. $40 calls bought on 06/23/05 if those calls traded $0.50 as expiration nears.

Taser is coming to life but I'd sell a covered call and the Sep $45 calls (QURII) if the stock traded $45 while I'm gone.

I'd be a willing seller of the JDSU Dec. $3 calls if the stock trades $4.25. (Verizon VZ is perking up, and this can't hurt some of the fiber stocks)

I'd be a willing seller of the PAYX December $30 puts (PQXXF) if the stock trades $25.

I'd be a willing seller of the 2 NTES Dec. $30 puts (NQGXF) bought on 08/13 if the stock trades $28 while I'm gone.

I would close out the SOHU Dec. $15 call if the stock traded $13.50, giving another double bottom sell signal.

  Mark Davis   9/3/2004,  3:45:52 PM
I have to leave for an appt. Everybody have a great Labor Day weekend

  Jeff Bailey   9/3/2004,  3:41:56 PM
Bullish day trade exit alert .... for Intel (INTC) $20.02

  Jeff Bailey   9/3/2004,  3:28:34 PM
S&P Banks (BIX.X) 363.66 +0.37% ... moves to session high. Maybe bulls are going to press stock back higher to the close.

  Mark Davis   9/3/2004,  3:24:22 PM
Bullish kiss it is... now if we can just get SPX to close over 1116.50

  Jeff Bailey   9/3/2004,  3:24:21 PM
Bearish day trade stop alert for McDonald's (MCD) $27.83.

  Mark Davis   9/3/2004,  3:21:31 PM
SPX is at a critical juncture here... a little bit higher and MACD will print a bullish kiss, a little bit lower and it will make a bearish cross.

  Jeff Bailey   9/3/2004,  3:17:51 PM
MCD $27.81 x $27.82

  Mark Davis   9/3/2004,  3:17:36 PM
There's plenty of time left in the day... if we can move back up over SPX 1116.50 the bulls will have retaken the flag, but that's still only a possibility.

  Jeff Bailey   9/3/2004,  3:17:22 PM
TRIN 0.98

  Jeff Bailey   9/3/2004,  3:14:35 PM
Bullish day trade raise stop alert .... for Intel (INTC) $20.02 ... to $19.94.

  Jeff Bailey   9/3/2004,  3:11:21 PM
03:05 Market Watch at this Link

  Mark Davis   9/3/2004,  3:10:10 PM
As Keene would say... that was an impulsive looking bounce off the lows

  Jeff Bailey   9/3/2004,  3:09:35 PM
Intel (INTC) $20.04 ....

  Jeff Bailey   9/3/2004,  3:08:39 PM
McDonald's (MCD) $27.80 +1.09% .... moment of truth here. Stochs back to "overbought" and it is going to be close.

  Jeff Bailey   9/3/2004,  2:57:43 PM
McDonald's (MCD) $29.76 .... intra-day chart at this Link

  Jeff Bailey   9/3/2004,  2:47:11 PM
Day trade short alert .... for McDonald's (MCD) $27.71 at the bid, stop $27.83, target $27.51.

  Jeff Bailey   9/3/2004,  2:46:14 PM
TRIN 1.02

  Mark Davis   9/3/2004,  2:46:13 PM
New lows across the board

  Jeff Bailey   9/3/2004,  2:44:58 PM
I'm seeing the same kind of thing Jim.

  Mark Davis   9/3/2004,  2:31:27 PM
Bullhorn wedge time... dramatically increased volatility in the last 15 minutes. At this point in time it looks like down will prevail over up. If SPX can't turn up in the next 5 minutes we may be looking at a new LOD.

  Jeff Bailey   9/3/2004,  2:25:01 PM
Gold Bugs ($HUI.X) 201.80 -1.92% Link .... did find some buyers at the 200.00 level today.

  Jeff Bailey   9/3/2004,  2:23:34 PM
Stillwater Mining (SWC) $14.86 +1.08% .... best this week.

  Mark Davis   9/3/2004,  2:19:15 PM
Considering yesterday's flagpole rally and today's very negative SOX-dicator, if this is all they can do to take things down before a long weekend, my short-term bias remains to the upside, tempered by the low volume.
Those index daily chart inverse H&S patterns I highlighted earlier should not be ignored, especially when you consider the SPX 30-min inverse H&S pattern from yesterday. It seemed ridiculously bullish at the time but it played out with a shocking move to the upside. SPX is currently making a nice move to the upside on the 1-min chart but is also printing a second CCI reading over +200. This will either mark a short-term top or turn into a trending move to the upside... we should know within the next few minutes.

  Jeff Bailey   9/3/2004,  2:19:11 PM
Bullish day trade raise stop alert for Intel (INTC) $20.07 -7.21% ... to $19.90 from $19.80.

  Linda Piazza   9/3/2004,  2:11:08 PM
I'm going to have to leave for an appointment, and likely won't be back before the end of trading today. I've been studying the OEX's chart, trying to come up with some definitive if/then statements to leave, but unfortunately, the Keltner charts are not cooperating. The five-minute chart still shows a likelihood that the OEX will soon break out one direction or the other, but there's 541.50-ish support beneath and 543.10-ish resistance ahead, and not much guidance as to which might be stronger. I had expected another test of that Keltner line now at 543.11, setting up possible Keltner-style bearish divergence if the OEX didn't break through that and then through 543.79, but I'm not sure whether that's going to happen or not. If I get a chance to check back in before I leave, I will, but make careful decisions about initiating new positions or carrying over any into the weekend.

  Jeff Bailey   9/3/2004,  2:09:32 PM
Intel (INTC) $20.07 -7.21% .... decent volume spike here.

  Linda Piazza   9/3/2004,  1:58:52 PM
Careful, OEX traders, if the OEX should drop below the 11:15 low of 541.64. That would tend to support the theory that the formation displayed on the chart linked to my 13:14 was a bearish right triangle and not a symmetrical one. That would also tend to support the belief that the upside break of the triangle was indeed a stop-running move. It came at the right time of day. However, none of that has happened as yet. The OEX may be drifting reluctantly lower, but it certainly hasn't yet been slapped back.

  Jeff Bailey   9/3/2004,  1:54:14 PM
Current OPEN MM Profiles at this Link

  Mark Davis   9/3/2004,  1:52:18 PM
I need to qualify my 13:21 post. It reads like a bullish prediction... it is not. I only wanted to point out some possibilities. Market predictions are like weather predictions... the further out you go, the less likely you are to be correct. Stay tuned to the Market Monitor, keep your bias short-term, listen to the writer's analyses (and tell your friends about OI... grin). Just as the year 2000 was an anomaly and should be thrown out, I'm the new guy here and my analysis should probably be thrown out in favor of other more experienced writers.

  Linda Piazza   9/3/2004,  1:51:45 PM
Keltner chart lines no longer give much information about the OEX's likely direction. They've tightened on the five-minute chart, with a breakout predicted, but not the direction. Support may be lightly stronger than resistance on that five-minute chart, but it's not particularly close on a five-minute-chart basis, down at 541.44-541.61, so that it's not close enough to be exerting much upward pressure. The Keltner line that usually stops the OEX is up at 543.17, about the same distance away. MACD has of course flattened. On the 15-minute chart, the OEX is in the middle of separating lines, so there's no great amount of information to be gleaned there, either.

  Mark Davis   9/3/2004,  1:44:32 PM
Reader Lynne just emailed me this tidbit...

Mark, the stock trader's almanac reports that only 3 Septembers in the last ten election years were down. So, since this year the STA has been a contrary indicator of sorts (e.g. last week of August "horrible") maybe this will be a down Sept (unlike most election years)! Who knows?

I appreciate your B bulb chart, and believe it is more valid.

Thanks for your insite. I've learned a lot.


Thanks for the information Lynne!

  Linda Piazza   9/3/2004,  1:41:08 PM
The OEX is breaking to the upside out of the formation depicted in the chart linked to my 13:14 post, so unless this is quickly reversed--always a possibility in this stop-running time of day--we'll call that a symmetrical triangle with the expected upside break.

  Mark Davis   9/3/2004,  1:21:30 PM
I just went back and checked the last 3 Presidential election year Sept-Oct time periods and how SPX performed. You might be surprised.
1992... SPX +4 pts
1996... SPX +61 pts
2000... SPX -205 pts
Since 2000 was the year the bubble popped I would throw that out as an anomaly, but the previous 2 Presidential election years saw SPX rise, 1996 in particular. I would not just assume we are headed lower from here, especially in the light of the inverse H&S formations and the fact that this is a Presidential election year. The crowd is making that assumption IMO but I also believe the market wants Bush to be reelected and his chances are looking better lately. Sept-Oct 2004 may surprise to the upside. That would certainly fit the market's habit of doing exactly the opposite of what the herd believes it will do.

  Linda Piazza   9/3/2004,  1:14:07 PM
Is this a symmetrical triangle building on the OEX (probably bullish) or a right triangle (probably bearish)? There's some evidence to support the interpretation of the horizontal trendline as the correct one, since tracking it back further than this chart does shows multiple contact points with this horizontal trendline. Price will tell, though.

  Jeff Bailey   9/3/2004,  1:06:26 PM
01:00 Internals at this Link

  Linda Piazza   9/3/2004,  1:01:18 PM
The OEX's 15-minute Keltner chart shows that resistance still looks stronger than support, with that resistance near 543.30-543.40. The OEX also does battle now with a single resistance line currently at 542.57. Bears want to see 15-minute closes beneath that line. Nearest support on that chart is at 541.76, but it appears that lines may soon converge somewhat lower, perhaps nearer 541.50, although that's a guess at this point. The bottom of the ascending regression channel in which the OEX trades is at about 540.80, and the mid-channel support is near 539-539.50, so it's certainly possible that a bounce could begin in the 539.50-541.50 range if the OEX should decline that far. There's historical S/R in that range, too, so that I've typed those numbers many times over the last few weeks. Bears should have a plan in mind for how they will handle a test of that range, if it should come.

  Jeff Bailey   9/3/2004,  12:57:25 PM
01:00 Market Watch at this Link

  Mark Davis   9/3/2004,  12:55:29 PM
Revisiting the SPX daily chart... comparing the past two "b" distribution patterns (and the associated rise off the bottom of the bulb) to the current rally. Link
The rise off the bottom of the bulb could be considered complete as of yesterday with two major differences.
1) The last two "b" distribution patterns occurred above the 200sma while this last one occurred below the 200sma with the index rising to just above it on the rally.
2) The last two "b" distribution patterns occured in March and May while this last one is rallying into September, a historically bad month for stocks.

  Linda Piazza   9/3/2004,  12:49:02 PM
We've had our Dow test of the 200-sma and a pretty close test of the SPX's 200-sma, too, but have those tests concluded yet? TRIN has been generally dropping although it may be trying to break higher now. I mentioned the sub-14 level for the VIX earlier today (see my 10:21 and 10:52 posts), but also cautioned that this can't be used as an exact market-timing tool, so I certainly wouldn't use it as a daytrading tool today. Markets can and sometimes do continue going up a day or two after a VIX sub-14 level has been hit, and, as I mentioned earlier, we could be setting a new VIX range, although that seems unlikely. For today, then, bears should be paying some attention to market behaviors around the Dow and SPX 200-sma's, with a special watch on that TRIN level. I've been thinking that bounce would result in a lower high, and we may have gotten that lower high, but I'm still thinking that depends on the Dow and SPX's reaction in relationship to those 200-sma's. I had expected that last bounce to be up toward 543.20, and the OEX did bounce, but not quite that high--only to 543.09. Next Keltner support now appears to be 541.25-541.40.

  Jeff Bailey   9/3/2004,  12:46:21 PM
VIX.X 14.02 .... back at DAILY S1 after low of 13.79.

  Jim Brown   9/3/2004,  12:45:12 PM
For those readers who would like to have a 2004 almanac and an OptionInvestor Option Expiration Calendar Mousepad I have about 20 sets available that were left over from our last promotion. The Almanac sells for $39.95 and the Mousepad for $5. I will sell the sets I have left for $14.95. Trust me this is still a bargin. If you would like one just click here to use PayPal.

Buy Almanac and Mousepad for $14.95: Link This includes shipping.

  Jeff Bailey   9/3/2004,  12:39:49 PM
NYSE NH/NL chart at this Link .... where we've been and where we are. I'll be deleting the "f"ive day data on the next reversal lower, which might come next week as we reach more extended levels.

The ability of the NYSE 10-day NH/NL indications to achieve a "buy signal" at 84% would suggest the May/August lows were the lows for this market.

  Jeff Bailey   9/3/2004,  12:26:49 PM
12:00 Internals at this Link

  Jim Brown   9/3/2004,  12:24:10 PM
What does the market typically do after Labor Day according to the Almanac? Thanks

According to the Almanac the day after Labor Day the Dow has been up 7 of the last 9 years. Unfortunately the rest of September is normally down. Sept is the worst month of the year according to the Almanac with Oct second.

  Linda Piazza   9/3/2004,  12:22:32 PM
The OEX five- and fifteen-minute Keltner charts are giving slightly different pictures, with the five-minute chart indicating that nearby support, at about 542.30, is stronger than nearby resistance. The fifteen-minute chart's more widely spaced Keltner lines show resistance stronger, with that resistance near 543.20-543.56. Perhaps, taken together, they suggest that the OEX might climb up to the 543.20 area or perhaps a little above and then might find resistance there. When charts are scrambled, though, it's dangerous to depend on an interpretation that mixes up elements of the two.

  Mark Davis   9/3/2004,  12:18:43 PM
Just hearing on Bloomberg TV that Bill Clinton has checked into the hospital for quadruple bypass surgery.

  Linda Piazza   9/3/2004,  12:14:24 PM
The TRAN dropped just below its 50% retracement of yesterday's tall white candle. (See my 11:11 post.) I had thought that the TRAN might be the first of the major indices I watch to hit the 50% retracement mark, as it's a big mover and has served as a sound indicator index lately. After dropping about 6 points below that 50% retracement, it has now bounced back above it. That bounce is hard to characterize, though, as seen on the five-minute chart. It has neither the back-and-forth characteristics of a bear flag, nor the tall candles indicative of a more impulsive climb, to use that term loosely. I'm stumped as to its sustainability.

  Jeff Bailey   9/3/2004,  12:12:58 PM
Per Mark's 11:53:20 I think we're ready for a pullback too. I can't remember the last time I went on vacation in early September that the markets didn't decline.

  Jeff Bailey   9/3/2004,  12:10:04 PM
QQQ $34.18 -1.69% ... here's an updated 30-minute chart of the QQQ Link per Wednesday's wrap chart. Link

  Jeff Bailey   9/3/2004,  11:59:30 AM
VIX.X intra-day chart with QCharts' DAILY and WEEKLY Pivot levels. Link

  Jeff Bailey   9/3/2004,  11:56:13 AM
QQQ $34.22 -1.60% ... QQQ should get a little pop to $34.35 here.

  Linda Piazza   9/3/2004,  11:55:28 AM
After yesterday's big-range day, we should perhaps expect a smaller-range day today with markets testing the newly crossed 200-sma's on the Dow and SPX, seeing if they're going to hold, with both bulls and bears a little cautious. I just wasn't sure that we'd get that typical reaction today, however, and still am not sure. I can't help thinking that all it would take was for one stop-run to go a little too far one direction or the other and scare either bulls or bears, and get a bigger move started.

  Mark Davis   9/3/2004,  11:53:20 AM
Reader Marc emailed me with a warning re: the VIX dropping below 14 today and how that has preceeded pullbacks going clear back to 1994. Here is my response.

I agree totally Marc, that's why I'm not calling any long plays. The skeptical side of me has been thinking for several weeks that the indices might rise to levels just high enough for the "all clear" signal to be flashed for bulls, then the rug gets pulled. That may have happened yesterday or we may have further upside. It's hard to tell. The season is certainly right for a nasty pullback through Sept and Oct but the market has a nasty habit of doing exactly the opposite of what most investors think it should do. Those H&S charts weren't meant to be predictions, only possibilities... I much prefer playing things day by day but since those H&S formations did confirm I had to report it. They could very easily reverse back down and then we would all be talking about the great headfake or bull trap.

  Jeff Bailey   9/3/2004,  11:53:19 AM
TRIN 0.78 ... session low. SPX.X 1,116.42. QQQ $34.20.

Hey... it has move a bit higher from 11:31:38 benchmark.

  Jeff Bailey   9/3/2004,  11:50:41 AM
Bidder up alert .... Pacholder High Yield (PHF) $9.50 x $9.60.

  Jeff Bailey   9/3/2004,  11:49:51 AM
Shorter-dated 5-year yield ($FVX.X) 3.493% surging higher. Up 12.1 bp.

  Mark Davis   9/3/2004,  11:48:29 AM
Note to readers: I'm apparently having technical difficulties with my OptionInvestor.com email address (on my end).... working on it now

  Linda Piazza   9/3/2004,  11:41:33 AM
Resistance lines are separating on the OEX's five-minute chart, so that it now looks easier for the OEX to rise, consistent with the theory that what we've seen on the OEX's five-minute chart is a bullish falling wedge. Resistance still groups strongly enough near 543.70-543.80 that it may be able to stop the OEX, though.

  Jeff Bailey   9/3/2004,  11:31:38 AM
TRIN 0.83 ... session low. SPX 1,115.31 -0.26%, QQQ $34.16.

Let's see if it makes any difference.

  Linda Piazza   9/3/2004,  11:22:45 AM
This OEX decline has begun taking on a bit of a falling wedge look on the five-minute chart. That may be predicting that the bounce will finally get started, although the OEX instead looks as if it's going to drop out of the bottom of the wedge as I type. If so, next support liest at 540.85. Bulls need to be aware of the possibility that the OEX could bounce into a lower high, while bears need to be aware of the bounce potential. First Keltner resistance lies at 542.34-542.44, with next resistance at 543.08. Bulls want to see five-minute closes above that line currently at 543.08. The OEX will soon run into firmer resistance at the top of the Keltner charts, near 543.75, however. Usually after a drop back inside the Keltner channels, the OEX rises at least into a test of the top of the channel again, even if it doesn't breach it again, so perhaps a test of the lines currently at 543.75 could occur, but be aware that they're not descending.

  Linda Piazza   9/3/2004,  11:14:35 AM
The OEX met the first part of the rollover requirements in my 10:52 post, finding resistance at 543.60, but it isn't falling through 542 yet . . . oops, just did. But it's in a possible bounce zone, particularly as it's just above the 50% retracement of yesterday's tall white candle. It will find first resistance near 542.35, and bears hope to see five-minute closes beneath that or the line currently at 542.58.

  Jeff Bailey   9/3/2004,  11:12:32 AM
11:00 Internals at this Link

Yesterday's Internals at this Link

  Linda Piazza   9/3/2004,  11:11:52 AM
Some benchmarks to note: The TRAN has dropped below the midpoint of yesterday's tall white candle. The SOX has dropped below the 8/13 low. The Dow is testing its 200-dma, though, with the SPX not quite there, and with those tests also capable of producing a bounce.

  Mark Davis   9/3/2004,  11:09:40 AM
I'm looking at a sea of red this morning on my watchlists, with a couple of notable exceptions...
ASE +6.61%
LNG +13.67%

  Jeff Bailey   9/3/2004,  11:08:34 AM
11:00 Market Watch at this Link

  Mark Davis   9/3/2004,  11:00:23 AM
Tab your email address is still getting kicked back as invalid... I'm not sure why.

  Jeff Bailey   9/3/2004,  10:59:44 AM
Semiconductor Index (SOX.X) 360.43 -4.54% ... 52-week lows here.

Intel (INTC) $20.00

  Linda Piazza   9/3/2004,  10:52:38 AM
If the OEX is in the process of turning over, what we expect to see here is for the OEX to find resistance at 543.60-543.80 and then to roll down through 542, toward a test of 540.92. Remember that the SPX and Dow tests of their 200-sma's will intervene, though, and might provide market bounces despite what we're seeing on an OEX chart. Remember, too, the SOX approach to the 8/13 low and a possible bounce point. While you're remembering, keep that sub-14 VIX level in mind, though, as bulls should be very cautious in a low-VIX environment.

  Jeff Bailey   9/3/2004,  10:51:31 AM
TRIN 0.88 .... above DAILY Pivot of 0.65, but below 1.00. Session low has been 0.84, but for most part, finds support at DAILY R1.

  Jeff Bailey   9/3/2004,  10:50:38 AM
VIX.X 13.91 -2.59% .... today's DAILY Pivot is 14.51.

  Mark Davis   9/3/2004,  10:48:39 AM
SPX printed a buy signal right at the LOD... 1115.50
I must sound like a stock salesman this morning with all the bullish comments but I'm only reporting what I see on the charts.

  Jeff Bailey   9/3/2004,  10:48:33 AM
Intel (INTC) $20.02 -7.44% .... day trader's intra-day 5-minute interval chart I've set up at this Link

  Mark Davis   9/3/2004,  10:43:53 AM
An astute reader, Tab, pointed out a downtrending channel on the Nasdaq daily chart so I drew in the upper downtrend line Link
Tab I tried to reply to your email but it was kicked back as an invalid address. Please try again.

  Linda Piazza   9/3/2004,  10:41:48 AM
The BIX has exceeded the 3/05 high of 362.64 by almost a point, at 363.00 as I type. That was a major swing high. Bulls don't want to see the BIX drop, setting up a potential double-top formation. The weekly chart shows bearish price/MACD divergence as those two tops were hit, but oscillators can still make new highs.

  Linda Piazza   9/3/2004,  10:37:21 AM
The SOX approaches that 8/13 low of 360.61, with the SOX currently at 362.27 and dropping.

  Linda Piazza   9/3/2004,  10:35:45 AM
The midpoint of the TRAN's tall white candle from yesterday lies at 3133.46. I'm thinking that if that midpoint support is violated or else provides a bounce point, we might see it happen first on the TRAN, serving often as an indicator index lately.

  Linda Piazza   9/3/2004,  10:33:04 AM
Yesterday's OEX candle spanned a range from 538.35-544.54. The midpoint of that range is at 541.45. Candlestick theory suggests that when we see a larger-than-normal candlestick, support or resistance might be found at the midpoint of that candle, depending on whether it was a bullish or bearish candle.

The OEX is approaching Keltner support near 542.20-542.30, and might bounce. If so, bears want to see five-minute closes on the Keltner line currently at 543.04, but will accept five-minute closes beneath the Keltner support gathering now from 543.48-543.88.

  Jeff Bailey   9/3/2004,  10:32:49 AM
Semiconductor Index (SOX.X) 362.80 -3.95% .... moves to session low.

Intel (INTC) $20.00 -7.5%.

  Jeff Bailey   9/3/2004,  10:25:31 AM
Current OPEN MM Profiles at this Link

  Mark Davis   9/3/2004,  10:21:52 AM
I'm also noticing inverse H&S patterns on the other major indices and unlike the Nasdaq these patterns confirmed by breaking their necklines to the upside yesterday. Upside targets are...
Dow 10622
OEX 555
SPX 1156
I know that sounds crazy but the patterns are there and to invalidate them the Dow and SPX would have to move back below their 200smas and then some. The OEX came within a point of its 200sma this morning before dropping back, now 3 points under.

  Linda Piazza   9/3/2004,  10:21:50 AM
I'm worried about the VIX level on the behalf of bulls. The markets can continue to go higher, certainly for a number of hours and maybe even for a number of days after the VIX has dipped to and below 14.00, so it's not a signal for daytraders to pile into bearish positions, but for all this summer, that's been a danger signal to the markets. Guard any bullish profits you might have. Of course, we could be entering a new range for the VIX, too--it's happened before, but that seems less likely than the other interpretation.

  Jeff Bailey   9/3/2004,  10:18:13 AM
10:15 Market Watch at this Link

  Linda Piazza   9/3/2004,  10:17:15 AM
The OEX may bounce from 542.10-542.45, but if so, it will likely find resistance near 543.30-543.60.

  Linda Piazza   9/3/2004,  10:15:26 AM
Careful, bulls, the VIX has dropped into the sub-14 level, at least minimally, this morning. Although the VIX can't be used for market timing, sub-14 levels have generally not been good for bullish positions.

  Jeff Bailey   9/3/2004,  10:12:54 AM
Bullish day trade entry point alert ... for Intel (INTC) $20.00 -7.53%.

  Linda Piazza   9/3/2004,  10:11:55 AM
I said earlier that the TRAN can sometimes move fast, and it has, dropping almost 20 points off its high of the day. It has not yet retraced more than 50% of yesterday's tall white candle, however.

  Linda Piazza   9/3/2004,  10:07:21 AM
I wouldn't be surprised to see an OEX bounce begin either from its current level (542.50-ish) or from 542. If so, it faces resistance near 543.60 and even some a little lower.

  Linda Piazza   9/3/2004,  10:05:42 AM
Jonathan, I expected a net drain today (see Jonathan's 9:53 post), as I suspect you did, too, now that the convention has finished. Bulls should be aware of the possibility that some of that money has gone to work supporting equities lately and that the support perhaps has been withdrawn, at least temporarily.

  Linda Piazza   9/3/2004,  10:03:42 AM
The OEX almost hit the top of the latest ascending regression channel, a point from which we could expect a retreat, and it's outstripped its mid-channel Keltner support, now near 539 on the 15-minute chart, at the approximate level of the bottom of that channel, but anyone considering a bearish entry here should be aware of the SPX and Dow 200-sma's below to perhaps provide support for those indices.

  Jim Brown   9/3/2004,  10:00:05 AM
Alert - August ISM Services = 58.2, (est 62.0, last 64.8)

  Mark Davis   9/3/2004,  9:58:40 AM
Here's the Nasdaq daily chart showing a potential inverse H&S formation that points to a target price of Nasdaq 2030 Link
Note the neckline sits @ 1875... only about 12 pts above current levels. At the recent HOD we came within 7 1/2 pts of the neckline.

  Jim Brown   9/3/2004,  9:56:34 AM
Intel LEAPs - We were triggered on the LEAP entry on Intel this morning with the touch of $20.

2006 $22 LEAP Call WNL-AX $2.35
2006 $25 LEAP Call WNL-AE $1.55

  Jonathan Levinson   9/3/2004,  9:53:57 AM
The Fed has given its dealers a 5.5B repo that it calls "overnight" but lists as maturing on Sept. 09. In any event, this effects a 4B net drain for the day.

  Linda Piazza   9/3/2004,  9:53:02 AM
The OEX's 200-sma approaches just about a point above the current level. That average did not stop the SPX or Dow yesterday, but the OEX will also be facing the top of its new ascending regression channel as well as soon afterwards facing the top of its all-year-long descending regression channel. All this is happening just ahead of the ISM number. As is usual, markets are being driven up to a break-out-or-failure point, and we don't know which it is. Those bullish players who did not elect to take full or partial profits yesterday afternoon might consider whether they want to take partial profit now, ahead of that number. The risk is that greater gains will be lost, but a profit makes one's heart beat calmer.

  Jonathan Levinson   9/3/2004,  9:52:39 AM
QQQ updated chart at this Link with 30 min support at 34.30 and the current wavelet upphase trying to turn both the short and 30 min cycles back up. A break above 34.75 will do it for the short cycle, while above 34.80-.85 for longer than 5 minutes should do it for the 30 min. Below 34.40, the downphases will reassert themselves. I'll post the repo update in a minute and then see you at the cash close.

  Linda Piazza   9/3/2004,  9:49:51 AM
The SOX opened just below the 20-dma today and then dropped. No breach of the 20-dma yet. I'm sure others have warned to watch the 8/13 low of 360.61 for a possible automatic double-bottom type bounce. If it bounces, a double-bottom would not be confirmed unless the SOX moved above the peak between the two bottom levels before dropping to a new low, of course, but some might expect the bounce, might then buy the dip, and in effect create the bounce.

  Jeff Bailey   9/3/2004,  9:49:21 AM
Argh..... Couldn't get the Intel long alert typed quick enough. Will still keep an buy order open for $20.00, stop $19.80, target $20.50.

  Jeff Bailey   9/3/2004,  9:47:49 AM
Day trade long alert for Intel (INTC) $20.00 here, stop $19.80, target $20.50.

  Mark Davis   9/3/2004,  9:47:26 AM
Things are beginning to look bullish. The Nasdaq is at its HOD... somebody is buying. There is a potential inverse H&S on the daily chart pointing to 2030. Chart coming soon

  Jeff Bailey   9/3/2004,  9:46:37 AM
SOX.X 364.59 -3.44% .... WEEKLY S2 here.

Intel (INTC) $19.99 -7.58%.

  Linda Piazza   9/3/2004,  9:46:08 AM
If this ascending regression channel is valid, then the OEX should soon be hitting the top, probably at about the same time or just before it hits the 200-sma at 546.04: Link

  Jeff Bailey   9/3/2004,  9:44:28 AM
Dow Diamonds (DIA) $103.25 +0.20% ... gets a trade at WEEKLY R2.

  Linda Piazza   9/3/2004,  9:42:15 AM
The TRAN is flat this morning, down less than 2 points, which isn't a lot for a sometimes-big-mover like the TRAN.

  Linda Piazza   9/3/2004,  9:38:17 AM
The OEX dropped beneath first Keltner support on the 15-minute chart, and now climbs right back toward that first Keltner level, now at 543.75-543.95. Those lines should be resistance now, except that they're pointed straight up, and so might not be indicating that they'll be strong resistance. On the five-minute chart, the OEX has so far preserved its breakout, with strong support appearing to gather from 542.55-542.79, but the breakout has been so extreme that bulls are accepting a lot of risk at these levels, too. If in a play carried overnight, be careful if that 542.50 level should be breached, as support thins below that, and is at 541.48 and then at 540.18, according to the five-minute chart.

  Jeff Bailey   9/3/2004,  9:36:47 AM
Taser Intl. (TASR) $33.80 +6.7% .... hot again this morning and breaking above downward trend on bar chart as well as its flat 50-day SMA.

Haven't found any news on the stock to explain yesterday's and this morning's move.

  Jonathan Levinson   9/3/2004,  9:36:35 AM
Bonds continue to weaken, with TNX now up 6.2 bps at 4.256%, a 1.48% rise so far. Gold bounce from a low of 402, which is the next support below 408, and is currently hanging at 403.30. HUI is -1.58% at 202.5, XAU -1.59% at 93.01. Silver is down .112 at 6.665.

  Mark Davis   9/3/2004,  9:36:24 AM
$BIX is quietly taking out the March highs this morning

  Linda Piazza   9/3/2004,  9:34:03 AM
As expected, the SPX opened above the 200-sma, and, as also was expected, it's headed down as we move toward the ISM. Will the SPX and Dow bounce from their 200-sma's or dive below them? I'm waiting to get more information, because that could impact the OEX, too.

  Jonathan Levinson   9/3/2004,  9:33:45 AM
The Nasdaq TRIN is printing 3.69 and hit 4.67 there at the open. INTC is back below 20 here.

  Jonathan Levinson   9/3/2004,  9:32:55 AM
There's a 9.5B overnight repo expiring today. We await the 10AM announcement to see whether the Fed's open market desk will be adding or draining today.

  Jonathan Levinson   9/3/2004,  9:30:05 AM
Recall that the 1115-1135 ES/SPX is a chop zone that dominated the markets for what seemed like an interminable time, and its now that same confluence being tested from below.

  Jonathan Levinson   9/3/2004,  9:20:50 AM
I will be absent for most of the day today, as I have to leave at 10AM for an appointment. I will be back toward the cash close and will see you in this weekend's Futures Wrap.

  Jonathan Levinson   9/3/2004,  9:17:07 AM
Session lows for gold at 403.80, -4.10 and crude oil, -.225 at 43.825.

  Jonathan Levinson   9/3/2004,  9:03:18 AM
A 30 min cycle downphase is in progress on NQ (QQQ proxy using premarket data) Link with NQ currently testing wedge support, trading 1389 as I type. A break of this rising wedge support implies a downside target at Tuesday's low, which, if reached, will decisively roll over the daily cycle and confirm the downphase.

  Jonathan Levinson   9/3/2004,  8:57:00 AM
Happy almost-Anniversary, Linda. That's an inspiring accomplishment.

  Linda Piazza   9/3/2004,  8:54:59 AM
Remember when making decisions about options positions that markets are closed Monday, so holding those options over the weekend entails an extra day's loss of time value.

Nice of markets to close on my 35th wedding anniversary, isn't it? (I was a baby when married. Not really, but close enough. Nineteen.)

  Linda Piazza   9/3/2004,  8:52:14 AM
We don't get ISM until 10:00. I'm watching to see how the Dow and SPX open with relationship to their 200-sma's (probably above) and trade in relationship to them into the ISM before I make up my mind about direction today.

  Jonathan Levinson   9/3/2004,  8:45:33 AM
Gold is down 1.80 to 406.10, silver flat.

  Jonathan Levinson   9/3/2004,  8:41:02 AM
A phone call from my friend from Florida, now in Georgia, reporting that the highways were every bit as jammed as reported in the news, with cars running out of fuel on the roads and service stations running dry.

  Jonathan Levinson   9/3/2004,  8:38:57 AM
Equities are slightly stronger after the data but still negative, with QQQ down .34 at 34.44. Lower descending 30 min channel support is at 34.40 currently, and once again it's the 34.40-.45 confluence zone in play.

  Jonathan Levinson   9/3/2004,  8:36:59 AM
TNX is up 3.6 bps currently at 4.23%, a 86% move.

  Jonathan Levinson   9/3/2004,  8:35:50 AM






8:30am U.S. AUG. FACTORY JOBS UP 22,000; SERVICES UP 108,000


  Jonathan Levinson   9/3/2004,  8:13:33 AM
INTC's bunker buster has ES trading 1114.75, NQ 1385, YM 10265 and QQQ 34.44. Gold is up 40 cents to 408.30, silver flat at 6.774, ten year bonds up .11 to 113.2812 and crude oil up a dime to 44.15.

We await the 8:30 August employment report, with nonfarm payrolls est. 150K, the unemployment rate est. 5.5%, hourly earnings est. .2%, average workweek est. 33.7 and ISM services est. 62.2.

  Linda Piazza   9/3/2004,  7:05:38 AM
Good morning. The Nikkei dropped throughout the day, with techs hit by disappointment over Intel's mid-quarter update. The Nikkei closed lower by 130.26 points or 1.17%, at 11,022.49.

Thinking that anything Intel might have to say was already priced into the chip-related stocks, market participants had bounced those stocks in Japan on Thursday, but they tumbled again in Friday's trading. They fell throughout Asia, even though the rest of Asia's semi-related companies hadn't taken part in Thursday's bounce. Sony was a tech bright spot, gaining after announcing plans to sell more products to major discount retailers. Most banks were weak, although Shinsei Bank gained in anticipation of an announcement that it would acquire UFJ Holding's consumer credit company Aplus as a subsidiary, with that announcement made after the close.

Other Asian markets were mixed, although the ones we typically watch declined. The Taiwan Weighted lost 1.57%, and South Korea's Kospi declined 0.38%. Singapore's Chartered Semiconductor was one Asian semi-related stock bucking the weakness and gaining, with that company having kept to its Q3 forecast. The Straits Times still lost 0.22%. Hong Kong's Hang Seng declined 0.39%, and China's Shanghai Composite was nearly flat, down 0.06%.

Currently, European bourses are mixed, with many trading near the flat-line level. Chip-related stocks decline, some steeply. Other than techs, most stocks trade steady. One article discussing European developments notes that a Reuters/NTC Research PMI for the manufacturing and services sector declined in August, but the article doesn't specify the region covered. The article noted that both the manufacturing and services components declined. In the U.K., Lehman Brothers and J.P. Morgan Chase are thought to be pursuing a possible joint venture with British broker Cazenove. Drinks and food group Allied Domecq was trading higher after reiterating its outlook for profit growth. The Rank Group (RANKY), owners of Hard Rock Cafe, gained sharply after announcing the possibility that it might split off the film and film processing units.

As of this writing, the FTSE 100 is down 2.90 points or 0.06%, at 4,515.70. The CAC 40 has declined 2.40 points or 0.07%, to 3,630.98. The DAX has gained 1.55 points or 0.04%, to 3,835.00.

  Jeff Bailey   9/2/2004,  1:14:42 AM
Nikkei-225 ($NIKK) 11,019.86 -1.19% ... down 133 points.

Hang Seng ($HIS) 12,954.50 -0.34% ... down 44.5 points.

Taiwan Weighted 5,778.60 -1.27% ... down 74.25 points.

e-mini NASDAQ (nq04u) 1,384.00 -1.00% ... down 14.00 points.

  Linda Piazza   9/2/2004,  11:39:35 PM
The OEX broke out of a symmetrical triangle on its 60-minute channel yesterday afternoon and ran. Although I had been worried about going long on an OEX breakout when the SPX was just about to or currently challenging its 200-sma, the play would have been a profitable one after all. Shorts got squeezed in a vise before the close. Both the Dow and the SPX closed above their 200-sma's. The TRAN closed at its highest closing high since July 1. Will it last?

The Nasdaq's daily candle, a doji at the top of the recent climb, throws some doubt on the climb's sustainability. So do the extreme Keltner channel breakouts. The SOX never made it high enough to challenge its 20-dma. By now, all know that Intel's mid-quarter update disappointed, so there's plenty of reason to suspect that Thursday's closing high should have been shorted. But hold on: tomorrow morning, we have an important economic number, and it could either disappoint or surprise to the upside, or maybe even just not be any worse than the whisper numbers. Here's a daily chart with some ideas: Link Note that if the OEX should continue to climb, it will hit the converging resistance of the 200-sma and the top of the descending regression channel at 545.91-548, and that should be enough to cause consolidation, if not a pullback. While the extreme breakout on the Keltner charts nearly guarantees a pullback tomorrow morning to regroup, it certainly doesn't guarantee how much of a pullback and whether there might be a bounce after such a pullback. Much might depend on how the markets open tomorrow and that depends on tomorrow's numbers. If the SPX and Dow gap below their 200-sma's at the open, for example, matters would look far different than if they were to drift down and pause there long enough to scare more shorts into covering and produce a Dow and SPX bounce from their 200-sma's.

Recent SPX breakouts on the 30-minute Keltner chart (well, not too recent, since there have been only two since April) have seen a pullback deep enough to stop out most bullish players and then another push higher over many hours, sometimes for an entire day, usually for about six SPX points from the original breakout point. OEX traders would expect less than six if the SPX were to follow a similar pattern this time and the OEX were to roughly follow it.

During the convention this week, Jonathan has been mentioning that the Fed has been maintaining or expanding the repo pool every day. If that action stops tomorrow with the convention at an end, markets might fall deeper than would be expected with a mere pullback and they might fail to bounce after such a pullback. There's much that's unknowable at this point. Here's the little we do know. Keltner charts show that the OEX has left firm Keltner support far behind. The 15-minute chart shows the nearest Keltner support in the 543.50 region. Fifteen-minute closes beneath that level would find next Keltner support on that chart near 542.40. Bulls hope to see 15-minute closes above the line at that 542.40-ish level. If that fails, nearest Keltner support on that 15-minute chart tries to converge near 541.80 or so. The OEX is now vulnerable to a pullback to the mid-channel level, but if the OEX climbs long enough, that mid-channel level will climb, too, and meet the OEX, perhaps in the breakout zone just under 540 or perhaps higher, nearer 541. A fall much below 540.50 or so would look like a failure of the breakout, but the key may be watching the SPX and Dow with respect to their 200-sma's, rather than the OEX only.

  Jeff Bailey   9/2/2004,  11:22:39 PM
NASDAQ-100 Index (NDX.X) Link ... today's trade at 1,400.00 gets the tech-heavy NASDAQ-100 back on a "buy singal" with bullish vertical count hinting at 1,490 longer-term. First sign of renewed weakness is trade at 1,350.

Here's updated NASDAQ-100 Bullish % ($BPNDX) Link

  Jeff Bailey   9/2/2004,  11:16:52 PM
Taiwan Weighted ($TWII) 5,792.82 -1.03% Link ... down 60 in early trade.

Very "chip sensitive" and electronic component. First test of bearish trend can be painful for the bulls.

  Jeff Bailey   9/2/2004,  11:11:34 PM
Nikkei-225 ($NIKK) 11,123 -0.27% Link ... down 30 in early trade.

  Jeff Bailey   9/2/2004,  11:09:49 PM
Hong Kong's Hang Seng ($HSI) 13,067.39 +0.53% Link up 68 in early trade.

  Jeff Bailey   9/2/2004,  11:04:59 PM
e-mini NASDAQ 1,385.00 -0.92% (10-minute delayed) .... chart with WEEKLY Pivots at this Link

  OI Technical Staff   9/2/2004,  9:56:11 PM
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