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  Linda Piazza   9/8/2004,  9:05:11 PM
The OEX came close to testing the top of its descending regression channel Wednesday when it rose to test its 200-sma. Like the Russell 2000, the OEX has not managed to move above its 200-sma. A break above that average and then above the top of the channel, currently at about 548, might signal an upside break, although the OEX would soon move into congestion beginning at about 549.50 and extending all the way up to 556. Some charts show potential upside likely to be capped at just over 553 on a first test of that level. Link

How likely is an upside break? The OEX had broken below its ascending trendline off the August 31 low by Wednesday's close, so would need to climb back above that trendline before the intraday bearish sentiment improved. A confirmed H&S Wednesday set a downside target between 541.50-542, at historical support/resistance and near the location of the 100-dma at 541.74. OEX 540.80 is also historical S/R and the location of a longer-term ascending trendline off the August 13 low, so that trendline present strong bounce potential, and any in bearish positions should have plans in place to protect profits if the OEX should test that level. A violation of that trendline sets up the potential for a retest of the converging 50-dma and 200-sma.

The five-minute Keltner chart showed the OEX approaching potential 543-ish support near the close, with near-term resistance at 543.67 and stronger at the 544-ish level. That resistance perhaps looked stronger than support, but the 15-minute chart showed that 542.50-543 support may be as strong as resistance.

With the indices approaching the top of their months-long descending regression channels and with the VIX having touched levels that usually indicate a market top soon to be made if not already made, I'm cautious about long positions. However, I'm not so cautious that I'll ignore a breakout, with the potential that the VIX is settling into an even lower range than that to which we've become accustomed.

  Mark Davis   9/8/2004,  4:42:24 PM
Jane your prediction of SPX exceeding PDL came to pass. SPX closes the day @ LOD... 1116.27. PDL was 1116.40..........NICE CALL! (I'm bowing to you in my mind)... grin.

  Mark Davis   9/8/2004,  4:38:08 PM
INTC, MU, XLNX and TXN are all up in AH trading as TXN beats EPS estimates but misses revenue estimates. TXN is currently trading 19.24, +2.83% (above the HOD) after closing @ 18.71... all in all a positive reaction so far.

  Jim Brown   9/8/2004,  4:08:31 PM
TXN Update = +0.27 to +0.29m revenue $3.1B to $3.24B
(Est was +0.26 cents, revenue $3.3B)

Full text: Link

  James Brown   9/8/2004,  4:05:53 PM
Hmm... just noticing now that semiconductor stock SLAB is down more than 5% and breaking support at the $30.00 mark.

  Mark Davis   9/8/2004,  4:04:43 PM
It's looking like we may end the day at very close to LOD on all the indices. This is not necessarily bad. Most of the indices are trying to make double bottoms and printing oversold readings on their 1-min charts. Whether this will translate into an up day tomorrow is still unknown, but is a possibility. TXN could set the stage with a poor report... then again there has been so much bad semiconductor news that even a poor report could already be "baked in", as they say. Other factors such as resumption of Iraqi oil pumping, the Predidential race, etc. could trump TXN's report. Stay tuned.

  James Brown   9/8/2004,  3:57:02 PM
One stock in desperate need of a stock split (preferably a 4-for-1 or 5-for-1) is Seaboard Corp (SEB). Not only is this $580.00 stock hitting new all-time highs but the volume is absurdly low.

  Linda Piazza   9/8/2004,  3:56:44 PM
I don't know if the OEX will make it there before the close, but Keltner support on the 15-minute chart is trying to converge between 542.50-543.00.

  James Brown   9/8/2004,  3:54:20 PM
Bucking the downtrend today is Whole Foods Market Inc (WFMI). The stock is up 1.69% and pushing past its 40-dma. The next test is near the bottom of its July gap down near $83.00, which could be tough resistance with its converging 50 and 100-dma's.

  Jonathan Levinson   9/8/2004,  3:53:03 PM
QQQ failed at the descending resistance line, but the decline has been on moderate volume and at moderate speed- not noticeably impulsive and not close to challenging the lows yet.

  Linda Piazza   9/8/2004,  3:46:15 PM
So far, this OEX move up has constituted a retest of the ascending trendline off the 8/31 low, and, so far, the OEX is pulling back from that retest. The 15-minute chart suggests that as long as the OEX has 15-minute closes below 544.03, it's likely to slide lower, perhaps to lines that might converge somewhere between 542.50-543.15. The OEX juuust barely had a 15-minute close below the Keltner line needed to preserve that downside target. As I suggested earlier, I think anything can happen now as market participants position accounts in front of TXN's earnings.

  James Brown   9/8/2004,  3:45:05 PM
Intl Game Technology (IGT) is still seeing gains with another 3.13% rise. Today's rally has pushed the stock to a new one-month high and above its simple 50-dma. Yesterday the stock took off after a Barron's article suggested new casinos would drive substantial sales and earnings growth for the slot machine maker.

  Mark Davis   9/8/2004,  3:41:37 PM
Benchmarking MOC orders with a sell side bias... SPX = 1117.93

  James Brown   9/8/2004,  3:41:10 PM
UnitedHealth Group (UNH) has now broken out to new all-time highs over resistance at $68.50.

  Linda Piazza   9/8/2004,  3:39:55 PM
The BIX continues to print an inside-day candle today, not serving as much of an indicator index for us.

  Mark Davis   9/8/2004,  3:39:21 PM
Jane you may be right... we tried to return to the SPX 1119 area again and got slapped back so hard our kids may be born dizzy, but I still have hopes of an upside break of SPX 1125 unless we break the 200sma @ 1113.43

  James Brown   9/8/2004,  3:39:08 PM
Yesterday shares of RIMM broke out over resistance at the $64.00 level and are holding on to those gains today with a measley 40-cent decline.

  Linda Piazza   9/8/2004,  3:39:03 PM
The OEX bumped momentarily above the converging resistance from 544.16-544.20 now up to 544.40), but not on a five-minute closing basis. At least not yet. From this point on, positioning in front of TXN's earnings may take precedence over anything we see on the charts.

  James Brown   9/8/2004,  3:38:06 PM
Ouch! PalmOne (PLMO) is down 12.6% to $30.00 on concerns that RIMM and NOKIA will be introducing new models that further compete with PLMO.

  James Brown   9/8/2004,  3:36:13 PM
During the last couple of sessions I've been mentioning how ImClone Systems (IMCL) looks more and more like a bearish candidate. Shares are down another 2.65% today and nearing support at the $50.00 mark. Watch for the breakdown under round-number support there.

  James Brown   9/8/2004,  3:33:59 PM
The medical device makers have been strong the past several days and St. Jude Medical (STJ) is breaking out over the $70.00 level and its simple 200-dma today.

  James Brown   9/8/2004,  3:32:31 PM
It is interesting that General Electric (GE) is not showing much weakness here.

  Jane Fox   9/8/2004,  3:32:19 PM
Mark (15:28 post) I think we will go up also but only in the short term like in from now to the end of the day. Or we could go sideways. Or we could go down. (grin)

  Jim Brown   9/8/2004,  3:31:11 PM
Jim, this is too much to not mention: the TXN 17.5 strikes are at a whopping .23 p/c ratio and the 20 strike at .45. This stock has no support unitl 15 area. It will have to blow away estimates in order to move up. This contrarian indictaor has worked all year for me, prior to releases. I predict a tumble, especially since evryone thinks otherwise. Marc

I am with you Marc but we may be the only ones.

  Linda Piazza   9/8/2004,  3:30:32 PM
The TRAN actually broke above 3200, but has now slipped back, trading at 3189.85 as I type.

  Jonathan Levinson   9/8/2004,  3:29:53 PM
Bulls need to break 34.32 here in order to defeat the descending trendline connecting the highs of the day for QQQ. A break above that level targets the previous high at 34.42, while a failure sets up a retest of 34.18 on the way to a retest of yesterday's low of 34.12.

  Mark Davis   9/8/2004,  3:28:38 PM
I believe the selling is over for now. Jane you came close enough to PDL to be counted as a good call but I think we go up from here short-term at least (famous last words)

  Linda Piazza   9/8/2004,  3:28:35 PM
I can't tell you how many times I've typed that traders should be "al-rt" to some development or another, but I bet irritated subscribers can!

Now the OEX charges up toward that converging resistance, at about 544.15-544.20. As I type, that resistance looks strong enough to hold the OEX back, but if it moves up quickly enough, it can slam through it, sort of like a hurricane driving a straw through a tree.

  Jonathan Levinson   9/8/2004,  3:27:51 PM
So far, we have a slightly higher low and higher high for the NDX and QQQ, and a slightly lower high/higher low for the Dow and SPX for the day.

  Linda Piazza   9/8/2004,  3:25:56 PM
So far, the OEX hasn't even been able to climb to 544, much less challenge the converging resistance near 544.15. Support converges just above 543, but that support is turning down now and the OEX could just slide down along that support.

  Mark Davis   9/8/2004,  3:24:58 PM
Here we go with the "Greenspeak" analysis. Why doesn't he just speak plain English? It's almost as bad as when we writers say "Up, down or sideways"... (grin)

  Jonathan Levinson   9/8/2004,  3:23:45 PM
HUI has slipped back below 200 and is now fractionally negative, down .07% at 199.18 while XAU remains higher by .09% at 92.24. Gold is holding its gains, +2.10 at 401.60. The US Dollar Index Link remains weak, chopping along at the lows of the day.

  Mark Davis   9/8/2004,  3:20:57 PM
Oops! I said the magic word... sorry about that. I meant to say "A1ert" (grin)

  Mark Davis   9/8/2004,  3:19:55 PM
Linda I guess I can turn off my alert for OEX 546.40 to happen today.

  Mark Davis   9/8/2004,  3:14:30 PM
Linda per my 14:54 post I remain bullish as long as SPX stays above its 200sma... the longer the better. Who would have thought we would be at SPX 1117 last week, when we were below 1100?

  Jonathan Levinson   9/8/2004,  3:14:25 PM
2-day 100-tick update for QQQ at this Link . The largest volume spikes today have all been to the upside, all green. Unfortunately, price is net lower, and is respecting an intraday trend of lower highs. A failure at or below 34.42 would suggest a descending triangle scenario for this afternoon, and a likely break below current triple bottom support at the lows.

  Jonathan Levinson   9/8/2004,  3:11:57 PM
We now have a triple bottom at 34.13-34.16 QQQ for the bulls. All they need to do is hold above it.

  Linda Piazza   9/8/2004,  3:10:21 PM
I know that Jane and Mark have discussed the SPX's 200-sma, but readers need to be aware of it, currently at 1113.42, with the SPX at 1116.40. The DOW could also approach its 200-sma today. These are potential bounce points, but could represent significant change in sentiment if they fail, too.

  Linda Piazza   9/8/2004,  3:07:55 PM
The Russell 2000 is approaching/hitting the neckline of its H&S on its 10-minute chart.

  Linda Piazza   9/8/2004,  3:05:19 PM
The OEX has not produced five-minute closes beneath the Keltner line formerly at 543.38. Because those lines are dynamic, the line has moved down with the OEX, and now the OEX is attempting that bounce I expected, up to resistance just above 544. That resistance has scattered a bit, but perhaps is still stronger than support. Perhaps. If the OEX pauses a bit, resistance will converge again.

  Jim Brown   9/8/2004,  3:02:38 PM
TXN Update tonight after the bell. Est +0.26 cents, revenue $3.3B, TXN reaffirmed this on July-20th.

  Jane Fox   9/8/2004,  3:01:52 PM
Consumer credit is not usually a market mover but that is a huge jump.

  Jonathan Levinson   9/8/2004,  3:01:51 PM
Session lows printing across the board in the futures. QQQ is testing 34.20.

  Mark Davis   9/8/2004,  3:01:39 PM
Yes it is Jane... I consider such "coincidences" to be confirmation of the same view from different TA vantage points.

  Jim Brown   9/8/2004,  3:00:29 PM
Consumer Credit $10.9 billion (est $7.6B, last $6.6B)

  Mark Davis   9/8/2004,  2:59:48 PM
SPX just printed another buy signal @ 1117.34... the previous buy signal was @ LOD 1117.06

  Jane Fox   9/8/2004,  2:56:52 PM
Mark funny how these things come together sometimes isn't it.

  Linda Piazza   9/8/2004,  2:55:56 PM
The Keltner charts prove their worth again. The OEX has hit the 543.50 minimum downside target suggested by the Keltner charts and posted in 14:44 post. Now what? Keltner-wise, that depends to some degree on whether we see five-minute closes beneath the Keltner line currently at 543.38 or not. I suspect that we might see a bounce from that line, up to test Keltner resistance gathering now just above 544 before we see a breakdown below that line, if one eventually occurs, but I'm not certain of that projection. If the OEX does produce five-minute closes beneath that Keltner line currently at 543.38, it may eventually reach the 542 target projected by this morning's H&S on the five-minute chart, but perhaps the OEX intends another test of the neckline first. Right now, resistance looks stronger than support, but be aware that could change.

  Mark Davis   9/8/2004,  2:54:35 PM
Jane SPX 1115 is the downside target for that 5-min H&S on the cash index but as long as we stay above the 200sma (currently 1113.64) I'm going to be in the bullish camp.

  Jonathan Levinson   9/8/2004,  2:51:59 PM
Those downside doji tails have now been covered by the current prints.

  Jonathan Levinson   9/8/2004,  2:47:23 PM
The 2 downside spikes bounced off that lower short cycle channel support at 34.26 leaving doji tails- a bullish sign. This area is indeed a chopzone, if not a blender, full of conflicting signals. The 34.42 highs are a lower high, and unless the bulls get back above it, that gives us a negative bias within this chop zone. But a break of the day lows is would be less than 20 cents away, and bears looking for more than just a scalp should consider waiting to see if the lows, and preferably the 34.05-.10 support zone, want to break.

  Linda Piazza   9/8/2004,  2:44:28 PM
The OEX is now below the rising trendline off the 8/31 low. It's not so far below that trendline that it can't be rescued, but unless it soon produces a five-minute close above 544.21 or preferably above 544.47, it looks as if it might head down toward 543.46 at least.

  Linda Piazza   9/8/2004,  2:41:25 PM
The Russell 2000 is less than a point above a test of its 559.59 low of the day, with the Russell 2000 at 560.19 as I type.

  Linda Piazza   9/8/2004,  2:40:03 PM
Good point, Mark, about the SOX. I'm using a daily close above the 20-dma as a sign that there's been a change in trend, and we haven't seen that yet. That average (or the 21-dma, if one prefers) has been pressuring the SOX lower for quite a while, with touches in late July and early August and again over the last two weeks. The 20-dma is at 374.40.

  Jonathan Levinson   9/8/2004,  2:39:09 PM
QQQ update at this Link . The current decline has broken the rising trendline in place since the 12:40PM low.

  Jonathan Levinson   9/8/2004,  2:38:33 PM
Session high for ten year treasury bond futures here at 113.2656, TNX -6.2 bps at 4.183%, a 1.48% decline for the day.

  Mark Davis   9/8/2004,  2:37:41 PM
Linda I'm beginning to discount the SOX-dicator as a leading indicator since it is so close to a bottom (IMO). That may prove to be an incorrect assumption but for now that is my thinking.

  Mark Davis   9/8/2004,  2:33:16 PM
An impulsive move down... not what I wanted to see but we're still above that 1118 neckline. Keene's earlier comments re: whiplash are proving to be prophetic.

  Linda Piazza   9/8/2004,  2:33:12 PM
The SOX just fell through the rising regression channel off the 12:30 low, suggesting that the formation could indeed have been a bear flag. A new low of the day is needed to confirm that fact, however.

  Linda Piazza   9/8/2004,  2:31:48 PM
The SOX has been moving up since about 12:30, when it hit the double-bottom level on the five-minute chart. We could have expected an automatic bounce from that level, and now it remains to be seen whether the bounce is in the form of a bear flag or something more bullish. As I type, the SOX is touching the ascending trendline forming off the 12:30 low, testing its support.

  Jonathan Levinson   9/8/2004,  2:31:01 PM
Jim has a good point- the Qubes are so far just managing to hold at a considerably lower high below 34.42.

  Mark Davis   9/8/2004,  2:26:40 PM
SPX did print a sell signal just after the Beige Book @ 1119.50 but we're right back at that level... b-bands are rapidly converging so we should have our answer soon. I'm still thinking UP.

  Linda Piazza   9/8/2004,  2:23:46 PM
So far, the OEX has preserved the Keltner-style bearish divergence by turning lower beneath the Keltner line currently at 545.51, but I'm not entirely sure that the OEX has finished challenging that line.

  Mark Davis   9/8/2004,  2:22:58 PM
Not much of a reaction so far but the 1-min chart is indicating we're about to go directional from a very short-term perspective. I'd have to say the failure to tank is encouraging.

  Mark Davis   9/8/2004,  2:21:43 PM
Oops! Thanks Jonathan... your post had disappeared off the bottom of my screen.

  Jonathan Levinson   9/8/2004,  2:20:34 PM
re: VXO: I follow this closely and am amazed at this continued low volitality! It suggests to me that our upside is definitely limited - however we are in new trading conditions and I am cautious about entering to heavily. The strange thing to me is the high 1.18 PC ratio and the low VIX. These are contrarian indications. Very strange. At some point something has to give. If the VIX stays low and the market climbs and the PC drops big time I'll be selling SPX credit Call spreads big time. -Dave

Ordinarily, I'd see the low VXO as a sell signal and the high p/c ratio as a buy signal- but I now deliberately ignore these indicators for directional clues- yesterday's action and today's follow-up is good example of why.

  Jonathan Levinson   9/8/2004,  2:17:55 PM
Here it is: Link

  Jonathan Levinson   9/8/2004,  2:17:19 PM
Mark, I posted the headlines at 2:01PM, but don't have a link to the full doc.

  Mark Davis   9/8/2004,  2:16:11 PM
Where's da Beige Book?

  Mark Davis   9/8/2004,  2:10:22 PM
Shorts were waiting just below 1121 as expected but so far they haven't been able to do serious damage. We now return to the 1119 area for the umpteenth time today and as long as we can hold this level I'd have to give the bulls the edge.

  Linda Piazza   9/8/2004,  2:05:22 PM
If the OEX's Keltner-style bearish divergence is to continue on the OEX's five-minute chart, the OEX will likely get turned back by or before achieving five-minute closes above the Keltner line currently at 545.50. That means that the OEX might pierce that line (which is dynamic and might have moved up a little by then), but probably shouldn't have five-minute closes above it.

  Jonathan Levinson   9/8/2004,  2:05:00 PM
The VXO is holding at 1385, up 1.99%. Did anyone believe that the old VIX would be able to sustain readings this low for longer than a few minutes?

  Linda Piazza   9/8/2004,  2:03:09 PM
As of a few minutes ago, decliners outnumbered advancers by a significant amount on both the NYSE and the Nasdaq, with adv:dec ratios at 14:18 for the NYSE and 13:17 for the Nasdaq. Down volume was ahead on the NYSE; up volume, on the Nasdaq, but only slightly.

  Mark Davis   9/8/2004,  2:02:42 PM
SPX got slapped back hard again but was immediately bought. TRIN is dropping... we're close (but no cigar yet)

  Jonathan Levinson   9/8/2004,  2:01:40 PM




  Jonathan Levinson   9/8/2004,  2:00:18 PM
Session high for GE here at 33.65, +.93%.

  Mark Davis   9/8/2004,  1:58:59 PM
Dow, Nasdaq and OEX just went green... SPX is above 1120. If SPX breaks 1121 we could be looking at a rally.

  Jonathan Levinson   9/8/2004,  1:56:29 PM
QQQ is back above 34.35- the last try failed in a gravestone doji spike. The current attempt looks more sustainable, with the short cycle oscillators beginning to turn up.

  Linda Piazza   9/8/2004,  1:55:41 PM
I wouldn't call this much of an upside "push" as yet on the OEX, but it did pull back to Keltner support and is moving up, so perhaps I could call that confirmation of what I thought might happen. Let's see what the Beige Book does now, as I don't have many predictions about what will happen next. I continue to see Keltner-style bearish divergence. If it's going to continue, the OEX will be turned down at the Keltner line currently at 545.44 or below.

  Mark Davis   9/8/2004,  1:55:28 PM
NDX just went green... Dow and OEX appear poised to do the same.

  Jonathan Levinson   9/8/2004,  1:54:34 PM
Chart of Nymex crude at this Link with current price down .725 at 42.575.

  Linda Piazza   9/8/2004,  1:53:08 PM
In addition to historical resistance from 3200-3212, the TRAN faces 30-minute Keltner resistance gathering from 3200.84-3202.67. Sixty-minute closes above the Keltner line currently at 3202.67 would represent an upside breakout for the TRAN, according to these Keltner charts, while 60-minute closes below the Keltner lines currently at 3182.97 and particularly below the Keltner line currently at 3167.09 would begin turning the TRAN's smallest Keltner channel lower again on that 60-minute chart. The TRAN's trading pattern tracks the 60-minute channels fairly well.

  Mark Davis   9/8/2004,  1:49:53 PM
SPX 1120 is turning into an important area. The previous two attempts to break this area have been slapped back hard and we're approaching another test as we await the release of the Beige Book, which is looking more and more like it will determine direction for the remainder of the day. Since we are rallying into the release I'd have to say that's a positive unless this is just a setup (bull trap).

  Jonathan Levinson   9/8/2004,  1:48:32 PM
Session high for ten year bonds, with TNX down 3.9 bps at 4.207%. Gold and the miners remain in positive territory as well, with silver 2.4 cents below unchanged.

  Mark Davis   9/8/2004,  1:47:29 PM
Trannies making a run at HOD (3199.15), currently printing 3198.62

  Mark Davis   9/8/2004,  1:45:19 PM
Put/call ratio is near the 10:30 HOD (1.29)... last half-hourly print was 1.18

  Linda Piazza   9/8/2004,  1:44:14 PM
The OEX isn't yet behaving as I expected it to do during this stop-running period. Well, to qualify that, it is dropping into the firming-up Keltner support I expected to see, but there's been no bounce as yet. To qualify my earlier expectation for the stop-running push to be the upside, I have to say that I don't necessarily expect that push to succeed. That depends on whether the OEX is immediately slapped lower again or whether it just pauses briefly and then resumes a climb. Each tells big money girls and boys what to expect. If I had to guess right now, I'd still guess for the push to be to the upside and for it likely not to succeed, but perhaps we shouldn't expect any push at all ahead of the release of the Beige Book?

  Mark Davis   9/8/2004,  1:33:53 PM
Stepping away for a few minutes...

  Mark Davis   9/8/2004,  1:30:47 PM
It looks like the Dow wants to go green (as if the Dow had human emotions... lol). Whatever the case, seeing the Dow green would certainly be encouraging to bulls. It's odd to see the trannies leading the charge today but understandable considering Jonathan's 13:23 post

  Jonathan Levinson   9/8/2004,  1:28:22 PM
There was a spike above 34.35, but it blew off in a gravestone doji. A wavelet downphase is starting on that failure in the context of the chopped up and directionless short cycle oscillators.

  Jonathan Levinson   9/8/2004,  1:26:33 PM
To comment on Jim's reader's question, the Fed's 4B drain today alongside the 4-wk and 5-yr treasury auctions suggest that liquidity should remain tight today. If there's going to be a blast, it won't be financed by the Fed or its 23 dealers today. Then again, that leaves a lot of participants with portfolios to protect, and so far the daily cycle downphase for QQQ and NQ has been entirely sideways.

  Linda Piazza   9/8/2004,  1:25:20 PM
Yes, there's no exact time for a stop-running push, is there, but I was thinking that the OEX would dip back toward Keltner support gathering from 543.30-544 and then attempt a bounce from there.

I've told this story before, but I figured out there was a push about this time of day when I was a relatively new trader, still using a traditional broker I called to give buy and sell orders. I kept finding myself having to find another broker with his firm to place a sell order (because, of course, I was only buying calls back then) right at 12:45 my time every day to protect my profit (because, of course, calls were all profitable back then). Then, about five minutes later, I'd be sorry I'd sold and would have to call and look up a substitute broker again and place another buy order. My stops were getting run. I called the broker all day long, but having to look up someone still in the office during lunch hour all the time sort of made me take notice sooner than the 50 stop-runs it might have taken otherwise. Smile.

  Jonathan Levinson   9/8/2004,  1:23:51 PM


Nymex crude is currently trading 42.55, -.75 or -1.73%.

  Jim Brown   9/8/2004,  1:23:20 PM
Do you think DaBoyz may want to have an up market pre-9/11--kind of an "in-your-face" Al Queda?

I had never thought about the "in-your-face" scenario but I could see a potential support scenario to avoid any pre 9/11 event risk selling. However, we did not have any material selling around the other events this summer so that risk may be minimal. Of course, the boyz may have supported the market then as well. The truth is out there but we may never know it.

  Mark Davis   9/8/2004,  1:23:09 PM
It looks like a few shorts were waiting just below 1120, the 12:12 swing high

  Jonathan Levinson   9/8/2004,  1:20:26 PM
The bid-to-cover ratio on the 5-yr t-note auction was 2.72.

  Mark Davis   9/8/2004,  1:20:23 PM
I was thinking the same thing Linda... also wondering if we aren't experiencing the stop-running push right now (a little early)

  Linda Piazza   9/8/2004,  1:18:12 PM
Mark, I might have to alter my view within the next twenty-to-forty minutes, if that push comes during the 1:35-1:55 time period, but as of right this minute, I'd say the push would be up.

  Mark Davis   9/8/2004,  1:16:52 PM
If SPX can get above 1121 I think we may be off to the races, but we have some serious work to do first... 1121 could also be an area where shorts are waiting.

  Jonathan Levinson   9/8/2004,  1:16:24 PM
QQQ update at this Link shows the test of 34.35 from below taking place here. The double bottom above yesterday's low looks good for the bulls, but they need to get above 34.35 for starters, and then back above 34.47. The 30 min channel still points south, but this bounce, if it holds for another 10 minutes or so, will flatten it. Note tht QQQ is net lower by all of 9 cents for the day.

  Mark Davis   9/8/2004,  1:14:21 PM
Before Linda has a chance to preempt my daily query I'm going to slip it in... Which way for the stop-running push today Linda? Link

  Linda Piazza   9/8/2004,  1:09:40 PM
The TRAN did bounce from that 60-minute Keltner support mentioned in my 12:37 post. The 3200 level still looks like tough resistance on that chart, but until the TRAN breaks below 3179.40 on a 60-minute closing basis, it's possible that it will go on challenging that resistance or even break through it.

  Linda Piazza   9/8/2004,  1:06:28 PM
The OEX's five-minute Keltner chart shows resistance converging from 544.07-544.40. Support is gathering undernath, at 543.34-543.61. There's some difficulty evaluating which might be stronger. We'll have to wait for price to tell us.

  Mark Davis   9/8/2004,  1:04:32 PM
This is the kind of action that drives both bulls and bears crazy

  Jonathan Levinson   9/8/2004,  1:01:31 PM
Stepping away for 10 minutes here.

  Jane Fox   9/8/2004,  1:00:34 PM
DAteline WSJ - WASHINGTON -- Federal Reserve Chairman Alan Greenspan said Wednesday the U.S. economy has "regained some traction" after faltering during the second quarter, hinting strongly the central bank will raise interest rates when its top policy makers next meet Sept. 21.

But in testimony to the House Budget Committee, Mr. Greenspan implied the Fed sees no reason to accelerate the pace of "measured" interest-rate increases the Fed has pursued since June. "Despite the rise in oil prices through mid-August, inflation and inflation expectations have eased in recent months," he said in prepared remarks.

  Jonathan Levinson   9/8/2004,  12:59:02 PM
1 hour until the release of the Fed Beige Book.

  Jonathan Levinson   9/8/2004,  12:58:46 PM



  Jonathan Levinson   9/8/2004,  12:55:15 PM
2-day 100-tick QQQ update at this Link.

  Jonathan Levinson   9/8/2004,  12:51:42 PM
Session high for 10-yr bond futures at 113, TNX -3.1 bps at 4.215%.

  Linda Piazza   9/8/2004,  12:51:30 PM
The OEX hovers near the rising trendline off the 8/31 low. It violated that trendline minimally, but is trying to bounce from it. If it does bounce, bears want to see 15-minute closes beneath the Keltner line currently at 544.33.

  Jonathan Levinson   9/8/2004,  12:49:33 PM
Delayed chart of the USD Index at this Link . I suspect that the currency markets weren't too happy about Greenspan's comments regarding our social security and other such commitments.

  Mark Davis   9/8/2004,  12:49:21 PM
SPX has just printed another buy signal on the 1-min chart... whether it will hold or not is in serious question unless we can get back above that broken neckline @ 1118 (and stay there)
Benchmarking buy signal... SPX = 1117.06

  Jonathan Levinson   9/8/2004,  12:47:46 PM
A break above 34.35 should see upside acceleration, while the equivalent level looks like 34.13 QQQ. If 34.35 QQQ was a neckline, then the downside target of a head and shoulders break would have an implied target of 34.05 to within a few cents. A wavelet upphase is trying to kick off here within our 20 cent range.

  Mark Davis   9/8/2004,  12:43:01 PM
SPX just failed an attempt to get back above the broken neckline @ 1118... not a good sign for bulls. The flip side is that TRIN has dropped to .98 and the oscillators appear close to maxed out, unless this becomes a trending move.

  Linda Piazza   9/8/2004,  12:40:37 PM
Yes, great play on SPW, James. It certainly looks as if SPW broke that $36.00 level today, didn't it?

  Jonathan Levinson   9/8/2004,  12:39:38 PM
The short cycle oscillators are catching up to drop in price on QQQ, and yesterday's low remains unchallenged at 34.13. The short cycles should be bottoming by that level, but the shape of the 30 min cycle downphase suggests that there's room for more damage on a break of 34.05 support. So far, 34.20 has held as the low of the day.

  James Brown   9/8/2004,  12:39:16 PM
We've been waiting a while for SPW to break support at $36.00.

  Linda Piazza   9/8/2004,  12:37:26 PM
The TRAN is diving. The 60-minute Keltner chart shows that it's approaching possible support at 3178-3179, but that's possible support and it's possible support on 6-minute closes. The TRAN can and does send some long candle shadows piercing support at times. The TRAN is at 3180.33 as I type.

  Jim Brown   9/8/2004,  12:35:42 PM
James, nice catch on SPW!

  Linda Piazza   9/8/2004,  12:35:14 PM
The OEX is now hitting the rising trendline off the 8/31 low, with this being a possible bounce point. Resistance now begins to gather from 544.11-544.80, but it hasn't quite coalesced yet. If the OEX is going to get through it to the upside, it better do so soon.

Still, although my thoughts have been more bearish (or worried about bullish positions) than bullish, I'm still worried about what will happen with the Q&A session is over and Greenspan perhaps hasn't dropped any bombs. On days like today, technical analysis might not be the best tool, so know where appropriate stops should be, before ever entering a position, and adhere to them, being prepared to be whipsawed a couple of times before finally settling into the right position.

  Jonathan Levinson   9/8/2004,  12:32:38 PM
QQQ is coming in for a test of 34.20 confluence support. Both 30 and 60 min channel bounds line up at 34.16. The short cycle oscillators are not yet oversold, and other than a slight bullish divergence on the short cycle Macd histogram, the picture looks bearish cycle-wise.

  James Brown   9/8/2004,  12:31:44 PM
OI put play SPW is down 7.17% to $33.64 as investors react to news out last night that the company's controller and chief accounting officer has suddenly resigned (effective 9/24). The stock has fallen through the bottom of its recent trading range and broken through support at the $36 and $35 levels. Volume is more than three times the norm and its MACD has produced a new "sell" signal.

  Mark Davis   9/8/2004,  12:29:16 PM
Bulls really need to press here or bears are going to grab the reins. The neckline of the 5-min H&S @ 1118 was briefly violated on an impulsive move down. There was a weak bounce and now sideways movement... much lower and things could start accelerating to the downside. SPX is hanging on by its fingernails but still hanging on, he said, dangling a preposition.

  Jonathan Levinson   9/8/2004,  12:27:53 PM
New session lows for NQ and QQQ, new high for ten year bond futures.

  Linda Piazza   9/8/2004,  12:27:43 PM
On a five-minute Keltner chart basis, the OEX risks falling to 543.46, and then to 541.31 if there are five-minute closes beneath the Keltner line currently at 541.31, but the OEX approaches that trendline off the 8/31 low just before hitting that Keltner line, so there could be at least a bounce attempt from that level.

  Linda Piazza   9/8/2004,  12:26:06 PM
The SOX and the BIX are both near, but not at, their daily lows.

  Linda Piazza   9/8/2004,  12:25:19 PM
The TRAN has definitely broken to the downside out of its neutral triangle

  Linda Piazza   9/8/2004,  12:23:41 PM
The OEX is dropping just below the neckline of the H&S on its three- and five-minute charts, setting up a downside target somewhere near 542. It's hitting five-minute Keltner support, however, and will hit the rising trendline off the 8/31 low at about 543.65. There are multiple possible bounce points, making a downside play just as difficult to gauge as an upside one.

  Jonathan Levinson   9/8/2004,  12:22:11 PM
Session lows for YM and ES futures printing here, ditto MSFT and INTC.

  Linda Piazza   9/8/2004,  12:21:16 PM
The TRAN's five-minute chart shows that the index has settled into a neutral triangle at the top of its climb today. A break out of that triangle should come fairly soon, with the TRAN serving as one of the indicator indices I frequently watch. The TRAN currently tests the lower trendline of that triangle, slipping just beneath it as I type.

  Jonathan Levinson   9/8/2004,  12:21:07 PM
QQQ is below 7200-tick SMA support, currently trading 34.38, just above declining short cycle support at 34.35. Volume has been declining and continues to do so, but in the meantime this move lower has rolled the 30 min Keltner channel, with 30 min channel support down to 34.24. It will take a move above 34.47 to stop what appears to be an imminent 30 min cycle downphase. Link

  Jonathan Levinson   9/8/2004,  12:19:23 PM
Bonds remain firm, with new session highs printing for ZN futures at 112.9375. TNX is down 2.1 bps at 4.225%. Gold and the miners are holding in positive territory, though gold has yet to clear back above 402.

  James Brown   9/8/2004,  12:18:33 PM
News channels are now showing video that the NASA space capsule from the Genesis mission ( to collect solar particles ) has crashed to earth after its parachute failed to deploy.

  Mark Davis   9/8/2004,  12:17:14 PM
TRIN up to 1.13 now from the mid .80s

  James Brown   9/8/2004,  12:15:47 PM
OI put play LXK is seeing an oversold bounce as we suggested it might last night. The $84.00 is holding up as minor resistance.

  James Brown   9/8/2004,  12:14:52 PM
OI put play IVGN is down 1.23% and back under the $50.00 mark. The MACD indicator is getting closer to a new "sell" signal. We're still waiting for IVGN to hit our trigger under $49.

  Mark Davis   9/8/2004,  12:14:36 PM
SPX just flashed another buy signal and once again it was right at 1119.20
I'm also looking at an unconfirmed H&S pattern on the 5-min chart with the neckline @ 1118... if the neckline is violated the downside target is 1115

  James Brown   9/8/2004,  12:13:51 PM
OI put play IRF is still trading in the red, albeit not by very much, but it's under performing the SOX, which is currently in the green.

  James Brown   9/8/2004,  12:12:20 PM
OI call play ZBRA is looking better today. The stock dipped to its simple 10-dma this morning and traders bought the dip. Now shares are up 1.59% to $58.67.

  James Brown   9/8/2004,  12:11:11 PM
OI call play TDS is still slowly climbing higher. Today's gain is minor confirmation that the breakout over $80.00 wasn't a one-day fluke.

  Linda Piazza   9/8/2004,  12:10:49 PM
The OEX is trying to bounce off that neckline for the H&S formation showing up on 3- and 5-minute charts, but it's not making much headway yet. The five-minute chart shows Keltner resistance gathering near 544.70, and bears would like to see five-minute closes beneath that level. Keltner support is gathering just over and under the neckline of that H&S formation.

  James Brown   9/8/2004,  12:09:54 PM
Uh-oh! OI call play Reynolds American (RAI) has slipped through the bottom of its narrow, short-term, rising channel. The stock is only down 31 cents and currently testing support at its 10-dma but we'd like to see it back above the $75.00 mark.

  James Brown   9/8/2004,  12:08:12 PM
OI call play DGX has declined to $84.76 and its simple 10-dma earlier this morning but traders have stepped in to buy the dip. This looks like an entry point with the bounce but more conservative traders may want to wait for DGX to trade back above the $86.00 mark.

  Jonathan Levinson   9/8/2004,  12:02:07 PM
Stepping away for 10 minutes here.

  Mark Davis   9/8/2004,  11:59:18 AM
Keene that's one reason among many why I'm in the short-term bullish camp. In a nutshell I expect the markets to rally to a point where the "all clear" signal is sounded for bulls, maybe with a short squeeze thrown in to cap it off... but at some point I expect the rug to be pulled. I just wish I knew this with certainty and where the top (and following bottom) were.

  Linda Piazza   9/8/2004,  11:55:50 AM
There's a well-formed H&S pattern on the OEX's three-minute chart, with the neckline at about 544.24. If that is confirmed by a move through the neckline, the downside target would be at about 542. Be careful, though, as these patterns sometimes morph into something else when markets are waffling around during times such as this, while Greenspan speaks. Be aware that the OEX could bounce from that neckline, too.

  Jonathan Levinson   9/8/2004,  11:54:03 AM
Session low for INTC here at 19.78.

  Jonathan Levinson   9/8/2004,  11:52:36 AM
A 30 minute cycle upphase is in progress for the NQ futures and QQQ, but the 30 min cycle channel is moving mostly sideways here despite the short cycle upward drift. This week's sideways drift is muddying the cycle picture overall, but it still looks like sideways chop within the daily cycle, which is creating these long intraday ranges. 30 min support is 34.25, resistance 34.75 and a move to either level will bring QQQ close to confluence and hopefully a directional break. QQQ is currently trading 34.45, again testing rising 7200-tick SMA support.

  Mark Davis   9/8/2004,  11:44:20 AM
stepping away for a few minutes...

  Mark Davis   9/8/2004,  11:43:32 AM
SPX just came back up and nicked the 1121 level again (50% retrace of the decline) before dropping back slightly. I would consider an impulsive move down from this area a bearish development but that is not happening yet... as Linda said, still no clear direction, but I remain bullish until proven otherwise.

  Linda Piazza   9/8/2004,  11:42:54 AM
Now I know that markets are moving slowly because I've dialed down to three-minute OEX Keltner charts. They're showing Keltner support down to 544.49 that looks stronger than resistance, suggesting that the OEX could bounce anywhere from 544.50 to the current 545.16 level. If the OEX lingers here too long, however, those three-minute lines are going to scatter rather quickly and support might not look so strong. I'm seeing bearish divergence Keltner-style on the three-minute Keltner chart, too, though, so am not sure whether to trust that support or any bounce that occurs.

  James Brown   9/8/2004,  11:40:24 AM
RSA Security (RSAS) is up big today (+5.4%) to $17.53 and breaking out over its 40 and 200-dma's after JPM upgraded the stock from "under weight" to an "over weight". It may be a coincidence but the recent low in late August was almost a 38.2% Fibonacci retracement of RSAS' 21-month rally that began in October 2002.

  Jonathan Levinson   9/8/2004,  11:38:25 AM
Note that gold is up 2 to 401.50 currently, and HUI is up .14% to 199.58.

  Jonathan Levinson   9/8/2004,  11:37:06 AM
The 4-wk t-bill auction generated a bid-to-cover ratio of 1.87.

  Linda Piazza   9/8/2004,  11:33:25 AM
There's still not a clear direction here. Instead of climbing above the 200-sma, the OEX fell through the short-term trendline off yesterday's low. It has since risen to retest that trendline and is now in the process of falling away from it again. This follows through on the weakness predicted by the continuing Keltner-style bearish divergence on the five- and fifteen-minute Keltner charts. Yet, the OEX maintains the longer-term rising trendline off the 8/31 low, with that trendline now roughly congruent to a Keltner line at 543.39, with that Keltner line usually stopping OEX declines. TRIN is more neutral than anything. The VIX and VXO are both off this morning's lows, but they're not going much of anywhere.

  James Brown   9/8/2004,  11:33:04 AM
RadioShack Corp (RSH) is up almost 4% on big volume and challenging resistance at its simple 200-dma after unveiling a new three-year store growth plan. In doing so the company also raised its fiscal year 2005 outlook by 20 percent.

  Jonathan Levinson   9/8/2004,  11:31:35 AM
QQQ chart update at this Link . 30 min channel support has risen to 34.25.

  James Brown   9/8/2004,  11:31:05 AM
Cosmetics producer Avon Products (AVP) reaffirmed its Q3 outlook this morning. The company said a slow down in U.S. sales is being offset by strong sales overseas. AVP's press release said the "Europe region is again generating exceptional results". Unfortunately, shareholders weren't impressed and the stock is down more than 5% to $43.00.

  Mark Davis   9/8/2004,  11:29:40 AM
On the SPX cash index we are right back at the level where Jim stated in his 9:57 post that (paraphrasing) "We aren't going up but we aren't dropping either"
... and so we wait

  Mark Davis   9/8/2004,  11:24:48 AM
That last swing high to 1121 took us just above a 50% retrace of the decline off the 10:30AM high. Bulls would like to see SPX get back above 1121 and stay there.

  Linda Piazza   9/8/2004,  11:24:17 AM
Thanks, Jonathan, for the information on crude.

  Jonathan Levinson   9/8/2004,  11:23:31 AM
Good point, Linda. I think that the data will be released tomorrow, as I believe I've seen in the past during shortened trading weeks. I haven't been able to find any of their data this AM.

  Linda Piazza   9/8/2004,  11:21:26 AM
Jonathan, in reference to the headline included in your 11:18 post, have you seen API and DOE figures on crude inventories this morning? I have been checking API and DOE sites and haven't found the figures yet, but I'm wondering if that has as much/more to do with with crude price action as Greenspan's testimony.

  Mark Davis   9/8/2004,  11:19:57 AM
The buy signal that printed at SPX 1119.20 is looking good but now we have the exact opposite question re: CCI that we had a short time ago. CCI just printed +275... is that the precursor of a sell signal or a trending move to the upside?
I'm already out on the limb saying SPX 1125 will break to the upside. It doesn't have to happen today but an upside break would look a lot more convincing if it did happen today.

  Jonathan Levinson   9/8/2004,  11:18:50 AM


  Jonathan Levinson   9/8/2004,  11:16:54 AM
You can follow the Greenspan Q&A for free on the web on CSpan3 at www.cspan.com.

  Jonathan Levinson   9/8/2004,  11:14:54 AM
Session high for euro futures here.

  Jonathan Levinson   9/8/2004,  11:13:34 AM
A short cycle downphase has been in progress for the past 30 minutes, but for the past 15, that downphase has been sideways-up, sliding along the rising 720--tick SMA on the chart just posted. The 30 min channel never had a chance to turn down, and if the bulls can hold up near or clear 34.55, the short cycle downphase will abort.

  Mark Davis   9/8/2004,  11:08:38 AM
B-bands are quickly converging... we should have our answer as to up or down pretty soon. My guess is up, but even if we go down I will remain in the bullish camp until we take out yesterday's lows @ 1116.40. Below that there is an area of congestion in the 1115.50 area and then the 200sma which has moved up to 1113.44. I would be very surprised if we get that low.

  Jonathan Levinson   9/8/2004,  11:07:27 AM
QQQ updated 2-day 100-tick chart at this Link.

  Jonathan Levinson   9/8/2004,  11:06:05 AM
Bonds continue their recovery, with TNX now down just .6 bps to 4.252%. ZN bond futures are nearly flat, down .031 at 112.7188. Crude oil spiked up to 43.70 but is currently trading 43.50, +.20 or .46%.

  Mark Davis   9/8/2004,  11:05:13 AM
That dip below SPX 1119 was quickly bought. We're on the verge of a buy signal. It never ceases to amaze me how the market drops just beneath (or just above) your target price before reversing... the buy signal printed as I typed this, now we wait to see if it's a valid signal or just the start of a trending move down.

  Linda Piazza   9/8/2004,  11:03:39 AM
Keltner support now converges between OEX 543.93-544.19, with resistance trying to converge, too, but still strung out at 544.61, 544.88, 545.59, 546, and 546.88. However, that bearish divergence, Keltner style, may be suggesting that one of these resistance levels holds. Bears want to see the OEX continue to show five-minute closes beneath the Keltner line currently at 544.88 or at least the one currently at 545.59.

  Mark Davis   9/8/2004,  10:58:57 AM
MACD is turning up sharply but has not yet crossed... a bearish kiss would be just as bad as a bullish cross would be good... Ouch! there goes the bearish kiss as I type

  Linda Piazza   9/8/2004,  10:58:32 AM
Keltner-style bearish divergence has continued on both the five- and fifteen-minute Keltner charts.

  Jonathan Levinson   9/8/2004,  10:58:27 AM
34.47 is proving more resilient than the initial plunge off the session highs suggested. The bottom of that plunge printed a spike that stopped dead on the now-rising 7200-tick SMA at 34.38 QQQ. Looks like a retest is starting as I type.

  Mark Davis   9/8/2004,  10:51:48 AM
SPX has just printed a CCI reading of -220 and has broken through the area of congestion in the 1120 area. It needs to hold the line at 1119 or risk a trend change. If 1119 holds we could be looking at a good buy signal, but that is still up for grabs.

  Linda Piazza   9/8/2004,  10:48:51 AM
The OEX is falling below the shortest-term ascending trendline, the one off yesterday afternoon's low. It's about to hit five-minute Keltner support at 544.58, but if that support doesn't hold, it looks possible that it could head toward 543.90 or perhaps even to 543.30.

  Jonathan Levinson   9/8/2004,  10:48:36 AM
We have the short cycle oscillators overbought and just beginning to curl lower for QQQ- so far it's just a wavelet downphase, and unless the bulls are going to reverse this 20 cent selloff within the next 5-10 minutes, a short cycle downphase is a certainty. 34.30, and then 34.20 are the supports to watch on a break of 34.47 support.

  Jonathan Levinson   9/8/2004,  10:44:55 AM
QQQ chart at this Link shows a strong drop taking place from the 34.60-.70 confluence. Old resistance should now act as support at 34.47.

  Jonathan Levinson   9/8/2004,  10:43:09 AM
Session high for Nymex crude oil at 43.45 here.

  Linda Piazza   9/8/2004,  10:39:21 AM
The TRAN charged up just underneath 3200 this morning, and is currently at 3195.06. At 3212.45 is the 7/01 high for the TRAN, a major swing high. The closing high was the day before, on 6/30, at 3204.31.

  Jonathan Levinson   9/8/2004,  10:38:56 AM


True, but they've certaintly bounced- TNX is down to a 2.1 bp gain at 4.267%. I'll post a chart in a sec. Link

  Mark Davis   9/8/2004,  10:38:33 AM
I have an alarm set today for when/if the OEX hits its 200sma. I'm wondering if this might be a trigger point for funds to start putting some of that excess cash back into the markets.

  Linda Piazza   9/8/2004,  10:36:52 AM
The TRIN is not supporting a bearish thesis for the day, either in its absolute number or the trend Jane has taught us to watch. However, Keltner-style bearish divergences continue to show up on each OEX swing higher. I can't bring myself to be bullish just yet, although I'd like to be.

  Linda Piazza   9/8/2004,  10:33:26 AM
Marketwatch's bullets on Greenspan's speech include his impression that consumer spending has rebounded and that the outlook for oil prices remains uncertain.

  Linda Piazza   9/8/2004,  10:32:24 AM
OEX next Keltner support is at 545.84 and then again at 545.36. Bulls want to see five-minute closes above those levels, and preferably above the top one.

  Jim Brown   9/8/2004,  10:31:50 AM
Text of Greenspan testimony: Link

  Jim Brown   9/8/2004,  10:30:58 AM
Greenspan comments: Recovery has regained traction

  Linda Piazza   9/8/2004,  10:30:58 AM
There went the Russell 2000's 200-sma. If you're basing trades on a cross of this average, be sure you're ready to jump out if you're proven wrong. The OEX came within five cents of its 200-sma.

  Jonathan Levinson   9/8/2004,  10:30:12 AM
We have a spike to 34.62 here, with QQQ settling back at 34.60. Volume is strong, but this is where the going should get tougher for bulls. Link

  Linda Piazza   9/8/2004,  10:30:04 AM
The Russell 2000 is less than thirty cents below its 200-sma as I type.

  Linda Piazza   9/8/2004,  10:28:40 AM
Yeah, but Mark, just tell me whether these are failure points or points from which the Russell 2000 and OEX might spring higher?

  Linda Piazza   9/8/2004,  10:27:40 AM
The Russell 2000 and OEX have been parked right under the 200-sma's heading into Greenspan's testimony.

  Mark Davis   9/8/2004,  10:27:25 AM
OEX is only 1/2 point below its 200sma... nice pushing Linda!

  Jonathan Levinson   9/8/2004,  10:26:32 AM
Session highs across the board. 60 min channel resistance remains at 34.60, while rising 30 min resistance is up to 34.65. You'll recall that the whole zone from 34.60-.70 is confluence, above which the way is clear to 34.80.

It looks to me like the bulls are going to turn the 30 min cycle up from a higher low. 34.20 was only broken by a few cents yesterday for about 1 hour- but the 1 day cycle downphase continues to be merely sideways. I'm not bullish until 34.80 breaks, and I won't be comfortable until 35.00 is cleared. But it's difficult to be bearish with QQQ above 34.05, much less 33.80, which looks like the prerequisite to confirm the daily cycle downphase.

  Linda Piazza   9/8/2004,  10:26:31 AM
I keep thinking about Jonathan's comment about the Fed's lack of a repo this morning. See his 10:19 post. Is that because they believe that the markets have enough strength to manage on their own, or that they'll be allowed to sink and regroup?

  Linda Piazza   9/8/2004,  10:23:55 AM
The VIX is below 14.00 again, at 13.94 as I type.

  Mark Davis   9/8/2004,  10:23:11 AM
SPX flashed a buy signal at 10:05 on the 1-min chart and has since printed two MACD bullish kisses... usually a good sign for continuation of the trend. Make that three bullish kisses (another one just now).

  Linda Piazza   9/8/2004,  10:21:43 AM
Hey, Mark, I'm doing my best, but there's the Russell 2000, too! I'm not sure what I expect to happen, though, as I really can't give preference to either theory of what might happen with the markets. I can see either a bullish or a bearish outcome, and that worries me.

  Linda Piazza   9/8/2004,  10:19:43 AM
A test of the Russell 2000's 200-sma at 565.68 may be in progress, with the Russell 2000 at 564.22 as I type.

  Jonathan Levinson   9/8/2004,  10:19:07 AM
There has been no overnight repo to supplement the 8-day 4.5B announced earlier, and so it looks like the Fed is content to stand on the 4B net drain for the day. Greenspan speaks shortly.

  Mark Davis   9/8/2004,  10:18:27 AM
New highs across the board... I keep thinking "If OEX can just get above its 200sma"... that seems to be the missing link. Give it a push Linda!

  Linda Piazza   9/8/2004,  10:18:06 AM
The OEX is about to hit converging Keltner resistance on the 15-minute chart, from 545.76-546.02, but that resistance turns higher, so that it's possible that it won't provide the same barrier it would if flattened.

  Jonathan Levinson   9/8/2004,  10:16:52 AM
Session low for ten year bond futures, TNX +3.3 bps at 4.279%, with a session high high for SPY at 112.85.

  Jonathan Levinson   9/8/2004,  10:15:49 AM
Volume is picking up now on the retest of 34.47 resistance. Next stop is 34.60, which is combined 30 and 60 min channel resistance.

  Jonathan Levinson   9/8/2004,  10:14:47 AM
Updated QQQ chart at this Link.

  Jonathan Levinson   9/8/2004,  10:12:55 AM
Session highs printing here with QQQ at last testing 34.47. Volume is still on the decline, however, and it's going to take a spike to confirm any break above 34.47. So far, this is just an upward drift.

  Linda Piazza   9/8/2004,  10:11:39 AM
Keene mentioned the go-nowhere market this morning. That was true of overseas markets, too. That's why I mentioned my caution ahead of the release of Greenspan's text this morning, with his speech occurring at about the same time that crude, gasoline and distillate inventories are announced.

  Linda Piazza   9/8/2004,  10:08:55 AM
There went the Russell 2000, charging above yesterday's high.

  Linda Piazza   9/8/2004,  10:07:41 AM
Is this a rising wedge (usually having a bearish connotation) or a rising regression channel (sometimes bearish, as in a bear flag, and sometimes bullish)? Link That depends partly on the interpretation and your bias when constructing the formation. Either looks valid. If it is just a rising regression channel, it's probably not a bear flag, because it's retraced more than 61.8% of the decline from mid-June to mid-August. However, the OEX needs to continue climbing up toward the top of that regression channel or it risks setting up bearish divergence with respect to its approaches to the upper end of that channel. Through much of August, it traded in the upper half of that channel, but now it's having difficulty sustaining moves into the upper half of the channel. That can be a sign of weakening, but a sign that could be reversed by a climb up toward 550 and above.

  Mark Davis   9/8/2004,  10:04:45 AM
All the major indices have confirmed inverse H&S formations and all are back above their 200smas with the exception of OEX, which is only 1 1/2 points below... the magic number (200sma) for OEX is 546.39

  Mark Davis   9/8/2004,  9:58:46 AM
That's what I keep thinking Jim... this market just seems to have an underlying bid.

  Jonathan Levinson   9/8/2004,  9:57:02 AM
The Fed has 8.5B in overnight repos expiring today, and has just added 4.5B in 8-day repos to replace it, for a net drain of 4B.

  Linda Piazza   9/8/2004,  9:56:04 AM
Whether this is a H&S-ish formation or just part of a regression channel, watch for a Russell 2000 break below the lower trendline or above yesterday's high as a sign of a breakdown or upside breakout: Link

  Jonathan Levinson   9/8/2004,  9:56:00 AM
There's no net movement here for QQQ in the past 10 minutes, and volume is declining from the initial programs that gave us the upward drift off the cash open. 34.47 is shaping up as key resistance, above which we should see some acceleration.

  James Brown   9/8/2004,  9:53:24 AM
I'm surprised to see that the XAL airline index is only down 1% to 46.77. The index is still consolidating lower under its descending 50-dma.

  James Brown   9/8/2004,  9:51:54 AM
JetBlue Airways (JBLU) is down 2.47% to $22.50 after its CEO said the company will see lower-than-expected Q3 earnings.

Here's an excerpt from JBLU's press release this morning:

David Neeleman, Chairman and CEO of JetBlue, stated: "The third quarter has proven challenging as a result of a weak yield environment in late August and September, the effects of two hurricanes in Florida, higher than expected fuel prices as well as weak near-term bookings due to both adverse conditions in Florida and current concerns of a possible new hurricane. While we continue to expect to report a solidly profitable third quarter, we now anticipate that earnings will be significantly lower than our previous estimates."

  Linda Piazza   9/8/2004,  9:49:30 AM
With the Russell 2000's 200-sma at 565.67, the index currently trades at 562.71, near the top of its recent consolidation zone.

  Jonathan Levinson   9/8/2004,  9:48:50 AM
Realtime chart of Nymex crude at this Link.

  James Brown   9/8/2004,  9:48:42 AM
Meanwhile Carmax (KMX) has come out with bad news and warned that revenues will be light and that Q2 same-store sales are down 7% but the stock is up another 4% to $22.18 on top of the previous three days of gains.

  Linda Piazza   9/8/2004,  9:48:23 AM
The BIX opened below yesterday's closing high and has traded down slightly, but only slightly.

  Jonathan Levinson   9/8/2004,  9:47:24 AM
Nymex crude oil dipped to 42.875 but has bounced to its current 43, down .30 or .69%.

  Linda Piazza   9/8/2004,  9:47:19 AM
The TRAN hasn't moved much this morning, perhaps absorbing the impact of Delta's (DAL) announcements this morning (see Jane's Intraday Update this morning). Perhaps the transports also await this morning's data on crude, distillate, and gasoline inventories.

  James Brown   9/8/2004,  9:46:51 AM
There doesn't seem to be any reaction in shares of drug store retailer CVS despite what looks like good sales numbers. The company reported August same-store sales of +6.8% while total sales for August rose 32% to $2.95 Billion.

  Mark Davis   9/8/2004,  9:43:47 AM
I'm going to go out on two limbs this morning...
1) The SOX has either already put in a bottom or will very soon
2) SPX 1125 will give way to the upside

  James Brown   9/8/2004,  9:43:17 AM
Station Casinos (STN) is up 2.7% this morning to $47.90 after raising its Q3 earnings guidance. The company now expects 42-46 cents per share. Wall Street is looking for 42 cents.

Readers can watch the $50.00 level, which has been resistance since April.

  Jonathan Levinson   9/8/2004,  9:43:14 AM
QQQ chart update at this Link . Note that the wavelet oscillator downphase (3rd oscillator pane from the bottom) aborted on the break above 34.37.

  Linda Piazza   9/8/2004,  9:40:28 AM
The trendline off the 8/31 low may be hitting closer to 542.90 than 543, with that lower number also the site of the Keltner line that usually stops the OEX lies at 542.92. The OEX heads down now to test Keltner support at the 543.50-ish region. The first retracement of the day should begin in a few minutes, with Keltner resistance now at 544.20, 544.88, and 545.41.

  Jonathan Levinson   9/8/2004,  9:37:35 AM
There's bad news out on NEM this AM, and the HUI and XAU are both suffering beyond the losses suggested by the decline in gold. I'll dig up the news release.

Here's the first story I've come across- I see nothing on the company's wire yet, and can't vouch for this particular news sources: Link

  Jonathan Levinson   9/8/2004,  9:36:33 AM
Session high for GE printing alongside a session low for YM futures. That's a relationship that can't hold for long.

  Jonathan Levinson   9/8/2004,  9:35:21 AM
In a similar vein, 398-402 is now resistance for gold, which is currently trading 397.70. Next support is 395, below which is a stronger line at 392.

  Jonathan Levinson   9/8/2004,  9:34:16 AM
30 min channel resistance is at 34.47 QQQ- 34.37, which was just broken on rising volume, should now act as support.

  Jonathan Levinson   9/8/2004,  9:33:28 AM
As bonds print a new low, with TNX up 3.1 bps at 4.277%.

  Linda Piazza   9/8/2004,  9:33:24 AM
The OEX is moving down to test first Keltner support near 544. If that fails, the next important test occurs at 543 Keltner support and also the site of the rising trendline.

  Jonathan Levinson   9/8/2004,  9:32:55 AM
QQQ printed 34.29 and bounced to its current 34.34- so far buyers are supporting the lower short cycle channel support, but it's going to take a break above 34.37 to stop the wavelet downphase - being tested as I type.

  Jonathan Levinson   9/8/2004,  9:29:53 AM
QQQ is now resting on 34.30 support with a wavelet downphase just getting started. A break above 34.37 will reverse it.

  James Brown   9/8/2004,  9:28:47 AM
Insurance stocks might be a bit weaker this morning. American Intl Group (AIG), one of the larger insurers, said it was too early to assess the cost of hurricane Frances yet.

  Linda Piazza   9/8/2004,  9:27:55 AM
With SPX futures lower this morning, the OEX might fall back to test Keltner support from the five-minute chart this morning. First support lies at 544-544.25. We should also watch possible support from the rising trendline off the 8/31 low, with that trendline now crossing at about 543. A bounce from that trendline might set up another test of the 200-sma in normal times. A fall through that trendline would normally set up a possible downside target of 541-541.50 and perhaps lower, to the 539.50 area, the site of a rising trendline off the 8/13 low. This morning, markets might not behave in a normal manner, however, with crude inventories and Greenspan's speech possibly impacting the markets at about the same time.

  James Brown   9/8/2004,  9:26:39 AM
It looks like CSFB has turned sour on Hershey Foods (HSY). The firm has downgraded HSY to a "neutral" based on valuation and its target near $49 being hit. HSY does look long-term overbought. The stock has been a big winner this year running from $37 in January to $50 yesterday as traders bought the dips to its simple 50-dma. Bulls may want to watch for another bounce from the 50-dma.

  Jonathan Levinson   9/8/2004,  9:24:25 AM
QQQ 100-tick 2-day chart at this Link.

  James Brown   9/8/2004,  9:23:28 AM
Big 5 Sporting Goods (BGFV) should be a winner today. CSFB upgraded the stock to an "out perform" this morning. Yesterday BGFV broke through the $20.00 level and its 10 and 21-dma's. Look for BGFV to run toward minor resistance at $21.00 and its 40-dma.

  Jonathan Levinson   9/8/2004,  9:22:53 AM
QQQ has slid back below the 7200 tick SMA and is currently testing short cycle channel support at 34.33. There's confluence support at 34.30, 34.20 and 34.05-.10. A break below .20 should set up a quick test of that lower support area. The short cycles are mixed here but they are nowhere near oversold, and this continues to look like a good setup for a drop at the cash open. We'll find out in 8 minutes.

  James Brown   9/8/2004,  9:21:59 AM
Cruise liner Carnival Corp (CCL) says the recent hurricanes will impact Q4 earnings by 3 to 4 cents a share. The stock has been rather strong the last three weeks considering the weather.

  Jonathan Levinson   9/8/2004,  9:16:59 AM
Session low for ten year bonds here, with TNX up 2.1 bps to 4.267%.

  Jonathan Levinson   9/8/2004,  8:25:05 AM
There's a slight uptick in the NQ futures (QQQ premarket proxy) this morning, caused by the absence of a deep retracement of yesterday's closing pop higher. This leaves QQQ sitting on its 7200-tick SMA at 34.37 in a toppy short cycle upphase. I see a good chance of a failure at the open, but if the bulls can hold above the 34.35 level for the first 30 minutes after the cash open, the 30 minute cycle uptick will begin to morph into a full-blown 30 min cycle upphase, giving the bulls another chance at 34.60 resistance.

  Jonathan Levinson   9/8/2004,  8:15:51 AM
We await the Fed's Beige Book at 2PM and Consumer Credit for July at 3PM, est. 7.5B. Greenspan begins speaking at 10:30AM.

  Jonathan Levinson   9/8/2004,  8:07:53 AM
Equities are lower, with ES trading 1120, NQ 1381, YM 10329 and QQQ -.07 at 34.34. Gold is down 1.10 to 398.40, silver -.069 to 6.165, bonds down .125 to 112.625, and crude oil down .325 to 42.975.

  Linda Piazza   9/8/2004,  6:49:12 AM
Good morning. After gains in the U.S. equities market and declines in crude futures, the Nikkei opened higher by about 47 points and climbed above the opening level about midmorning. The Nikkei fell through the rest of the day, however, closing down 19.75 points or 0.17%, at 11,279.19.

One factor leading to the decline was caution ahead of today's Greenspan testimony and Beige Book release. Also, Japanese markets saw profit-taking, especially in chip-related stocks ahead of Tokyo Electron's after-the-close earnings report. Tokyo Electron trimmed sales and FY profit forecasts. In economic news, the Bank of Japan announced August figures showing that bank lending fell by 3.1% on the year.

Other Asian markets turned in mixed performances, but all the ones commonly followed in these early-morning posts declined. The Taiwan Weighted was flat, down 0.01%. In South Korea, Hyundai Motor declined 0.4% after announcing that it will participate in a truck joint venture in China. The Kospi declined 0.36%. Singapore's Straits Times declined 0.12%, and Hong Kong's Hang Seng fell 0.66%. China's Shanghai Composite dropped 1.13%, reaching another new three-year intraday and closing low.

Currently, European bourses also turn in mixed performances, also trading cautiously ahead of Greenspan's testimony and the Beige Book release. Banking stocks and carmakers, including Volkswagen, declined. Stocks on the move mostly reacted to earnings news or other announcements. That included the U.K.'s Amvescap Plc, reacting after its U.S. mutual-fund units, Invesco Funds Group and AIM Investments, reached a settlement with regulators in the mutual fund scandals. The stock dipped in early European trading. Credit Agricole, a French bank, Atos Origin, a French IT services group, and two construction companies, Vinci SA and Bouygues SA, all gained after their earnings report. Bouygues SA, also the owner of France's third-largest mobile-phone network, slightly missed the expected H1 net income expectations, according to Bloomberg. Accor, owner of hotels, fell heavily in early trading after missing estimates and giving a dour outlook on business in the U.S. and France.

As of this writing, the FTSE 100 had gained 2.60 points or 0.06%, to trade at 4,568.20. The CAC 40 had fallen 2.17 points or 0.06%, to trade at 3,679.97. The DAX had gained 0.66 points or 0.02%, to trade at 3,889.70.

  Linda Piazza   9/7/2004,  11:01:21 PM
I always feel guarded in my observations when I wasn't on the MM, watching the action develop minute by minute, but this post includes my thoughts about what I see on the charts. Tuesday, the BIX and the TRAN broke above presumed resistance, but the SOX headed lower again, with these three indicator indices pulling different directions. The OEX rose to within three cents of its 200-sma before falling back Tuesday, briefly violating the neckline of a H&S formation before zooming up again into the close. The Russell 2000 closed at its high, with U.S. indices showing no sign of the big-cap/small-cap performance split that occurred in Japan. There might have been a split in a different direction: tech-heavy indices didn't print the same tall white candles as those printed by some indices.

Climbing into the close, the OEX headed up through the ascending regression channel in which it's traded since August 31. The midline of that regression channel lines near the 200-sma and top Keltner resistance on the five-minute chart, at about 546.20. The OEX hasn't been able to break much above the midline of that ascending regression channel on the last two tries, attempting breakouts but getting turned back, so it may be reasonable to assume strong resistance that could hold once again at that level or lower, particularly as the last five-minute rise Tuesday afternoon was accompanied by bearish divergence, Keltner style. Both 30- and 60-minute charts show price/oscillator bearish divergence on the OEX's high of the day Tuesday, too. RSI formed its own potential H&S, but it hasn't violated the neckline of that formation yet. All of this sounds a potential warning to bulls, but it doesn't yet signal that bears should jump right in.

However, despite the talk of "warnings," daily and weekly Keltner charts point to the possibility that the OEX could rise toward the top of that ascending regression channel, currently at 549 or maybe all the way to 553. The daily chart suggests that keeping that upside target would require the OEX to maintain daily closes above 539.83. Moving up toward the top of that ascending regression channel will require Keltner breakouts on both the five- and fifteen-minute charts. On the five-minute Keltner chart, support looked stronger than resistance at Tuesday's close, but on the fifteen-minute chart, resistance was beginning to converge near 545.38-545.77, too. That 200-sma may be difficult to overcome.

Greenspan speaks Wednesday at 10:30, so I wouldn't be surprised to see volume light ahead of his talk and then perhaps volatile as market participants react to his talking points. I would be cautious ahead of his speech, at least until we get a good look at how the market is behaving. A drop below the ascending trendline off the 8/31 low, with that trendline currently at about 543, might send the OEX down to test the ascending trendline off the 8/13 low, with that trendline currently at about 539.50, although the 541.60 level could provide some tough support. A break above 546.25, resistance since early July, might start a bout of short-covering that would first test the 549 area, and then possibly 553 if that 549 level could be surpassed, but I'd sure like to get past the release of Greenspan's planned comments before I bet too much on any such outcome in either direction.

  OI Technical Staff   9/7/2004,  9:43:55 PM
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