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  Jeff Bailey   9/14/200,  9:39:44 PM
December e-mini S&P futures (es04z) settled at 1,130.00. Trade down 1.25 points at 1,128.75.

  Jeff Bailey   9/14/200,  9:36:22 PM
Pivot Matrix for tomorrow at this Link

  Jim Brown   9/14/200,  6:08:08 PM
ALERT - Possible terrorist attack in California. Fifteen postal workers complained of blistering skin, sore throats and metallic taste in their mouth. Medical officials suspect cyanide poisoning. One post office was shutdown after a white powder was detected on mail. 20 employees at Franklin Templeton Funds are being examined for poisoning after a white powder was found on mail in their mailroom.

  Linda Piazza   9/14/200,  4:57:26 PM
This intraday chart of the Dow Jones Transportation Index sums up the kind of trading we had Tuesday: Link Was the day bearish or bullish? The TRAN confirmed a bearish formation and then met the downside target. That's definitely bearish. Then it formed and confirmed an inverse H&S, the head at the exact downside target of the regular H&S. That formation was bigger and has a bigger upside target, which may or may not be met. The confirmation was bullish. The outcome may or may not be bullish, but we certainly can't qualify it as bearish just yet.

The day was similar on other indices. The BIX headed up, but headed up into the head of a potential H&S on its 30- and 60-minute charts, not yet confirmed. It kept piercing the downside support of its potential bear flag, but then bouncing. Bullish or bearish? And then there's the OEX, closing exactly on its 200-sma, creating a small-bodied candle with a longer upper than lower shadow. Is that bullish or bearish?

As you know, the low VIX level makes me cautious of long positions, but I'm also aware of other research that readers have performed into VIX futures and aware of my own observations during the spring of 2003, when the former VIX/equity correlations did not hold and VIX moved lower while equities moved higher. I'm aware of fund inflows. Therefore, I'd have to hold my nose and suggest that upside breakouts were occurring on another move above Monday's high, but I sure wouldn't like it with the VIX having touched levels that for months have indicated market tops in the making. I'd sure have tight stops ready and I'd want confirmation that the SPX was also breaking out of its descending regression channel. I would have to suggest that a change in the upside trend was occurring on a break of the rising trendline off the 8/13 high, with that trendline currently at about 545.70 as of Tuesday's close.

Because the OEX was settling into equilibrium positions on the five- and fifteen-minute Keltner charts as of Tuesday afternoon, they do not give strong evidence as to how the OEX will behave in earliest trading Wednesday. Support near 546.70 perhaps looked slightly stronger than resistance on the five-minute chart, but when the OEX is in an equilibrium level, it tends to move within the smallest channel rather freely, crossing both support and resistance lines fairly easily.

  Mark Davis   9/14/200,  4:35:23 PM
For those of you interested in charting option prices for specific strikes... I know of only one place you can do it (Bigcharts.com). It's free and will work with any option. To chart the activity of an option (over any timeframe) you have to use a backdoor trick... in this case the chart is a 1-min chart of SPTIF (SPX Sept 1130 call). The trick is to type in SPT=IF for your ticker symbol. Nothing else will work. I discovered this trick from a buddy at Schwab. Here's an example... Link
BTW... click on "Java Chart" and you will be able to move your cursor over the chart and see how many contracts were traded at what times.

  Jim Brown   9/14/200,  4:24:01 PM
Alert - Oracle earnings = +0.10, rev $2.22b
(est +0.09, Rev $2.23B, prior next Qtr forecast +0.14, rev $2.66B)

  Mark Davis   9/14/200,  4:21:11 PM
Here's the problem with using 1-min charts... false sell (or buy) signals in a trending market. You have to learn when to ignore the noise and when to pay attention and that only comes with lots of practice... I recommend LOTS of paper trading before trying this at home. Link

  Jim Brown   9/14/200,  4:20:54 PM
ALERT - XLNX warning

  Jeff Bailey   9/14/200,  4:08:25 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Closed out 2 (1/2 bearish position) of the Netease.com December $30 puts (NQGXF) at the bid of $1.40 as stock traded above $37.65. These were profiled on 08/13/04 at $5.50 per contract. ($-4.05, or -73.64%).

  Linda Piazza   9/14/200,  3:58:39 PM
The TRAN is now inching above the neckline of the inverse H&S, but I sure don't trust these developments in the last few minutes of trading, when targets can just get overrun.

  Linda Piazza   9/14/200,  3:56:28 PM
The TRAN keeps testing the neckline of its potential inverse H&S, but it hasn't been able to move above it yet.

  Linda Piazza   9/14/200,  3:55:27 PM
The BIX bounced from the probable neckline of its potential H&S.

  Linda Piazza   9/14/200,  3:54:43 PM
The OEX is still stuck in an equilibrium position with regard to its five-minute Keltner channels--no breakout either direction, although there have been a couple of false single five-minute closes above the first breakout level.

  Jonathan Levinson   9/14/200,  3:51:10 PM
Session high for GE, +.01 to 33.76. Note that the Dow futures are negative, down 9, and ES is up all of .5 at 1128.50.

  Linda Piazza   9/14/200,  3:49:43 PM
As the BIX turns down, so does the OEX. There was bearish price/MACD divergence on the five-minute chart as the OEX was hitting that last higher high. The OEX is now below its 200-sma again, but barely. It's spent another day piercing that average and then (perhaps) closing beneath it again. All those candle shadows spiking above the candle bodies usually precede a weakening, but this thing just keeps climbing, doesn't it? Still, if the OEX closes near the current level, we will have had two days in a row with candles indicative of indecision.

  Jonathan Levinson   9/14/200,  3:47:51 PM
"No followthrough" would appear to be the theme for the day on QQQ.

  Linda Piazza   9/14/200,  3:45:15 PM
The BIX moves down further into the right shoulder of its potential H&S within the potential bear flag. The last 30-minute low at 363.61 should be used as the confirming level of a neckline break and a flag break, although I actually think that neckline is a little higher. I'm watching this because the stocks shared by the BIX and the OEX can impact the OEX's behavior. While some indices or sectors headed down today, the BIX headed up, and it seemed unlikely that a steep descent would occur in the OEX until the BIX turned down, too. The BIX is now at 363.84.

  Jonathan Levinson   9/14/200,  3:44:59 PM
Another steep sell candle just trimmed 9 cents off the QQQ within 100 ticks on volume of just over 1M shares within those 100 ticks.

  Jeff Bailey   9/14/200,  3:43:59 PM
Netease.com (NTES) $39.28 +9.17% Link .... This afternoon's trade at $39 also a reversing higher double top buy signal, which comes just under bearish resistance trend. Vertical count turns bullish here to $60.00.

  Jonathan Levinson   9/14/200,  3:42:59 PM
QQQ chart update at this Link.

  Linda Piazza   9/14/200,  3:42:52 PM
The TRAN is close to confirming an inverse H&S on its five-minute chart, complete with bullish divergence as the head was formed. The neckline is at about 3225.25. The head formed exactly at the target for the regular H&S that was confirmed about 2:00 yesterday afternoon. I hate these times when markets flip-flop back and forth from bullishness to bearishness and back again, when formations compete against each other, and you can pick out a formation that fits your bias, whatever your bias might be. I'm just trying to see it all, but it feels a bit ridiculous to be commenting on all these formations, appearing to flip-flop along with the formations.

  Jeff Bailey   9/14/200,  3:41:46 PM
Sohu.com (SOHU) $17.00 +11.5% Link ... double top buy signal here. This had intitial bullish vertical count to $22.50.

  Mark Davis   9/14/200,  3:40:09 PM
The SOX has quietly returned to its HOD... that's one fly out of the ointment for now.

  Linda Piazza   9/14/200,  3:37:52 PM
The BIX maintains the possibility that it's turning down into a right shoulder for a possible H&S formation, with a break of the neckline, if that should occur, also constituting a break of its flag's support. It was the BIX's climb this morning that first warned me (see my 9:58 and 10:18 posts), along with the TRIN's level, that something might be amiss in my thesis for the day, which had included a test of the rising trendline off the 8/13 low, something that didn't happen. Or at least hasn't happen yet.

  Jonathan Levinson   9/14/200,  3:37:39 PM
The current session high is 35.73 QQQ. The short cycle oscillators are all at the midpoints of their ranges, still heading up, and the bulls appear to be one program buy away from a break to new highs.

  Linda Piazza   9/14/200,  3:33:54 PM
The NDX is at 1434.92, with the 200-sma at 1440.82.

  Mark Davis   9/14/200,  3:33:15 PM
Only one trade today Jim and that was @ SPX 1126.60 with SPTIF (SPX Sept 1130 call)... As far as being the bat or ball I'm thoroughly enjoying the bleachers (grin)

  Linda Piazza   9/14/200,  3:32:50 PM
Different indices are battling different moving averages. For the Nasdaq, it's the 100-sma at 1917.45 and with the Nasdaq at 1915.51 as I type. The Nasdaq has perhaps been finding support, however, on the 200-ema, with that average at 1904.46.

  Jim Brown   9/14/200,  3:31:00 PM
Mark, if you have been trading contrary to me today you should be doing good. Somedays your the bat, somedays the ball.

  Mark Davis   9/14/200,  3:29:23 PM
Here come the buybots.

  Mark Davis   9/14/200,  3:25:46 PM
It always makes me very nervous when Jim takes a position opposite mine... the guy is just too good (raising my stops now due to Jimophobia)

  Linda Piazza   9/14/200,  3:24:58 PM
Hmm. As I was scanning charts after my return, I pulled up that chart of the BIX's possible bear flag that I've been posting. I note that the BIX has a nicely forming H&S on that chart, and that a break of the neckline on that H&S will also constitute a break of the bear flag's support: Link

  Jonathan Levinson   9/14/200,  3:22:57 PM
This last push is ticking lower from a lower high on QQQ, but it won't be a done deal unless/until QQQ is back below 35.59.

  Mark Davis   9/14/200,  3:21:49 PM
We're at yet another critical juncture. SPX MACD has turned down and CCI is set up perfectly for a sell signal if MACD crosses down. On the other hand a bullish kiss here could catapult us over critical resistance... stay tuned.

  Linda Piazza   9/14/200,  3:13:58 PM
At the time I'd left this morning, I'd noted that I'd be leery of making any recommendations for bearish plays because of the tendency for bearish formations not to pan out and because of the TRIN's level and pattern. That is all continuing, but the OEX is again approaching Keltner resistance on the five-minute chart, with that resistance at about 547.67. Five-minute closes above the Keltner line at 547.67 would set up the possibility of a test of 548.79, but we haven't had that happen yet.

  Jonathan Levinson   9/14/200,  3:12:29 PM
This break back above 35.59 is lining up with an upturn in the first short cycle oscillators, but because of the extended churning within a 20 cent range for the past 3 hours, those oscillators are getting pretty chopped up. 35.70 is a much closer target than 35.34, and the 30 min cycle oscillator can go either way from its current flatline. It's in the bulls' court here, but they need to break 35.70 this time to avoid a rollover in the 30 min cycle channel.

  Mark Davis   9/14/200,  3:10:27 PM
stepping away for a few minutes... I don't want to jinx this move by watching too closely... ;>)

  Mark Davis   9/14/200,  3:06:53 PM
It appears the sellers are still waiting at the top, but if bulls can overcome the selling we could see a very nice move to the upside (emphasis on IF)... I'm encouraged that this move is occurring with an hour of trading left and not right at the bell.

  Linda Piazza   9/14/200,  3:06:41 PM
I'm back. As I return, I see that the OEX did break above the 200-sma and run up to test the 547.50-549 level. It has settled into an equilibrium position with regard to its Keltner channels on the five-minute chart. It's also possible to qualify the high of the day as the head of a potential continuation-form H&S on the five-minute chart, larger than the one seen earlier today. However, a move much above the OEX's current 547.23 value would undo the possibility of the current formation being part of a shoulder for a H&S formation. I also note that there's not a thing bearish about the TRIN's value.

Keltner support looks stronger than resistance on the five-minute chart, too, with that support trying to converge near 546.60, if not higher. That suggests that it might be easier for the OEX to rise than decline, but when the OEX is in an equilibrium position, sometimes nothing much matters until there's a real breakout or breakdown.

  Jeff Bailey   9/14/200,  3:06:22 PM
03:00 Internals at this Link

  Jonathan Levinson   9/14/200,  3:01:37 PM
There's a sharp bounce in progress from 35.49 support, and 35.59 QQQ is now being tested as resistance. The short cycle downphase is still in progress and the 30 min channel upphase is currently stalled. Looks like more of the same chop to me, but a move above 35.70 or below 34.34 would change that.

  Mark Davis   9/14/200,  2:59:02 PM
Wheeeeeee... here we go

  Jeff Bailey   9/14/200,  2:58:51 PM
TRIN alert 0.75

SPX 1,127.75 , QQQ $35.58

  Jeff Bailey   9/14/200,  2:44:33 PM
Oshkosh Truck Corp. (OSK) $56.94 +1.86% Link ... rather quick reclaiming of recent quarterly earnings warning.

  Jonathan Levinson   9/14/200,  2:43:23 PM
QQQ chart update at this Link.

  Jonathan Levinson   9/14/200,  2:33:49 PM
Gold is holding at 408, with HUI and XAU advancing, HUI now +2.35% at 208.85 and XAU +1.72% at 94.62.

  Mark Davis   9/14/200,  2:30:03 PM
Jim per your 14:10 post... I was as convinced as anybody that a big move was at hand yesterday or today and then nothing happens. Just about the time we dismiss the idea the big move will probably occur. It's for that reason I wanted to at least have a toe in the water. I'm long SPTIF (SPX Sept 1130 call) from the last buy signal @ SPX 1026.60 and going nowhere fast.

  James Brown   9/14/200,  2:29:30 PM
OI put play LXK is finally seeing the oversold bounce begin to fade. Shares were testing resistance at the $86.00 level and its exponential 200-dma yesterday. Today LXK is down 1.4% to $83.55.

  James Brown   9/14/200,  2:28:17 PM
Aggressive OI call TDS is not showing any weakness and seeing a +2% follow through on the recent breakout over the $80.00 mark.

  James Brown   9/14/200,  2:27:27 PM
OI call RAI is a more defensive play and shares are up 0.85% and back above the $75.00 level, which is good news.

  James Brown   9/14/200,  2:26:26 PM
Heads up! We're probably going to drop BOL and FMC as call plays tonight. The momentum is really dying and the MACD indicators are looking pretty dangerous here. Considering the levels in the VIX/VXO I'd rather be cautious on longs.

  James Brown   9/14/200,  2:24:25 PM
News of a $9.8 million fine paid by University of Phoenix (a division of APOL) to the Department of Education is pressuring education stocks. APOL's UOPX paid the $9.8 million fine over its enrollment and recruitment practices but by doing so did not have to admit any wrongdoing. It is the largest fine ever paid to the Dept. of Education.

Shares of APOL gapped down this morning under support at $80.00 and its exponential 200-dma. In doing so it triggered our put play.

  James Brown   9/14/200,  2:19:53 PM
Chicago Mercantile Exchange (CME) is providing a decent bounce from round-number support/resistance at the $140 level. This looks like an entry point with the simple 10-dma boosting support. Unfortunately, volume isn't very strong today and CME does have overhead resistance in the $147-148 range.

  Jonathan Levinson   9/14/200,  2:17:12 PM
Jane's NQ head and shoulders has sloping neckline support at 35.56 QQQ, just above the rising 7200-tick SMA at 35.55.

  Mark Davis   9/14/200,  2:14:51 PM
stepping away for a few minutes...

  Jonathan Levinson   9/14/200,  2:12:53 PM
For fans of veteran precious metals investor John Embry, here's an article detailing his latest comments: Link

  Mark Davis   9/14/200,  2:11:26 PM
A second MACD bullish kiss and the buy signal is still alive, albeit not in football shape yet. SPX is one point higher than when the buy signal printed... not much to write home about, nevertheless a kiss is a kiss. Link

  Jonathan Levinson   9/14/200,  2:10:24 PM
Declining short cycle channel resistance is at 35.65 now, down from 35.67 earlier. The wavelet cycle upphase should top out at that level, but these are all very short cycles that trend easily in either direction. The short cycle remains in a so-far weak downphase, within the rising 30 min cycle channel whose lower support line is up to 35.42.

  Jeff Bailey   9/14/200,  2:10:01 PM
Travelzoo (TZOO) $66.69 +4.04% ... was in the red earlier this morning. New all-timer here.

  Jeff Bailey   9/14/200,  2:05:33 PM
02:00 Internals at this Link

  Jonathan Levinson   9/14/200,  2:00:43 PM
Agreed, Mark- I recall noting back then how the move just kept going and going instead of flatlining.

  Mark Davis   9/14/200,  1:59:20 PM
Jonathan I was just thinking how very different this opex week is, as compared to the last one.

  Mark Davis   9/14/200,  1:58:03 PM
The buy signal is trying to abort early but it's also producing another CCI reading of -200, leaving us guessing. We "should" see either a continuation of the downtrend or a reversal very soon. I don't see us staying flat much longer as the 2PM turn approaches.

  Jonathan Levinson   9/14/200,  1:53:02 PM
You've gotta love op-ex week. Bottles of Rolaids and Tums later, and QQQ is right back to yesterday's 1:30PM price levels again. Tons of drama, no net progress.

  James Brown   9/14/200,  1:48:35 PM
AMZN is also turning higher. Yesterday shares broke its short-term downtrend of lower highs and its simple 40-dma. Today AMZN is breaking through the $40.00 level and its simple 50-dma.

  Jonathan Levinson   9/14/200,  1:47:48 PM
This bounce from just south of QQQ 35.58 lines up with a wavelet cycle bottom, but that bottom is nested within a now-downphasing short cycle channel. Resistance on the bounce, if it makes it that far, should be seen at 35.67, and a failure at or below that high will confirm the new short cycle downphase that kicked off on the 35.73 session high.

  James Brown   9/14/200,  1:46:49 PM
Speaking of Internet stocks, EBAY managed to hit a new all-time high today at $94.37 (above the late June high) and has stretched its winning streak to six weeks in a row.

  Mark Davis   9/14/200,  1:43:55 PM
There's the buy signal @ SPX 1126.60. Now let's see if it holds... Link

  Jonathan Levinson   9/14/200,  1:41:13 PM
Nymex crude has given up the bulk of its gains, currently up .125 at 44.00.

  Mark Davis   9/14/200,  1:41:08 PM
I'm surprised we aren't dropping more quickly here. Just a little bit higher and MACD will confirm a buy signal... just a little lower and MACD will print a second bearish kiss. This is a critical point for bulls to hold if that decline off the highs was the stop running push.

  James Brown   9/14/200,  1:40:50 PM
I know that Jeff has commented on the rise in the INX Internet index. Currently the INX is up four days in a row and today it is testing overhead resistance at its simple 100 and 200-dma's.

  James Brown   9/14/200,  1:39:06 PM
The XAU gold and silver index is testing the simple 200-dma as overhead resistance for the third or fourth time in less than four weeks. The current month-long trend almost looks like a bull flag.

  Jonathan Levinson   9/14/200,  1:31:34 PM
The short cycle oscillators are just beginning to roll over here. A break below 35.58 for 2 minutes should be enough to start a short cycle downphase for QQQ.

  Mark Davis   9/14/200,  1:28:55 PM
CCI is perfectly set up for a buy signal to develop... all we need is for MACD to turn back up. Currently it is trying to flatten off as SPX bounces weakly off the 12:08 swing low @ 1127 and still looking bearish.

  James Brown   9/14/200,  1:28:39 PM
Wow! Ask Jeeves (ASKJ) is up more than 11.2% and breaking out over its simple 50-dma, exponential 200-dma, simple 200-dma and the $30.00 mark (in that order) on above average volume.

Yesterday I read a note about how Internet search stocks were all trading higher after word hit that Fidelity had taken a big position in Google.

  Jonathan Levinson   9/14/200,  1:27:49 PM
35.58 QQQ support has held on the first touch, but the bounce is weak so far.

  Mark Davis   9/14/200,  1:23:53 PM
Is it too late to change my prediction of the stop running push being to the upside?

  Jonathan Levinson   9/14/200,  1:18:21 PM
The last 100 tick candle is a bearish engulfing key reversal candle, having matched the previous 100 tick high and breaking below the prior 100 tick low. This sub-atomic view of the NQ suggests a retest of 35.58 support, but the view on these ultra-short timeframe candles is less than reliable. 35.70 resistance remains firm, but bears need to regain the 35.58 level before they can breathe easier.

  Mark Davis   9/14/200,  1:14:57 PM
It's hard to believe the $TRAN is positive again today. I heard a piece on Bloomberg TV last night saying Shell and others had already evacuated the "roughnecks" from their drilling platforms. Then I heard another piece this morning quoting one of the OPEC members saying he was worried about the current "oil glut" and the possibility that it could cause a crash similar to 1998 when oil dropped to $10/bbl. Even Paul Prudhomme would have trouble swallowing that one.

  Mark Davis   9/14/200,  1:06:31 PM
I think Linda slipped out the back door today just so she wouldn't have to answer my daily query about the stop running push (grin). FWIW, unless we fail here pretty soon I'm guessing the stop run will be to the upside.

  Jonathan Levinson   9/14/200,  1:04:13 PM
Here's the retest of 35.70 QQQ.

  Jeff Bailey   9/14/200,  1:03:57 PM
Internet Bullish % (BPINET) .... just reversed up to "bull alert" status yesterday at 24% and current reading is 24.7%. Would take a reading of 38% to achieve "bull confirmed" but bears look to be moving in as risk becomes known.

  Mark Davis   9/14/200,  1:01:41 PM
We're right on the verge of a nice breakout... I just hope we don't get dope slapped Link

  Jeff Bailey   9/14/200,  1:01:28 PM
Yahoo! Inc. (YHOO) $33.35 +4.58% Link .... strong move here and little overhead supply to 52-weeker of $36.51.

Today's trade at $32 gets stock back on a "buy signal" with initial bullish vertical count hinting at $48.

  Jonathan Levinson   9/14/200,  1:00:43 PM
The 35.70 QQQ line is so far a double top Link , but the higher low on the pullback to 35.58 is looking bullish. The 30 min cycle channel has turned up, prematurely aborting a downphase from a higher price and oscillator low, and a break of 35.70 implies a move to 36.05 to follow.

  Jeff Bailey   9/14/200,  12:57:53 PM
CBOE Internet Index (INX.X) 177.84 +1.42% .... session high and approaching its QCharts WEEKLY R2 178.13 here.

  Jeff Bailey   9/14/200,  12:51:11 PM
Swing Trade Put exit alert .... on the 2 Netease.com Dec. $30 puts (NQGXF) at the bid of $1.45.

NTES trades $37.85 here.

  Jeff Bailey   9/14/200,  12:33:11 PM
AMEX Gold Bugs ($HUI.X) 207.87 +1.88% .... after strong move higher from the open, has be tentative at downward trend (208.25).

I'd have to associate HUI.X 210 with Stillwater Mining (SWC) $14.78 -0.47% $15.00.

After achieving "bull confirmed" status at 30%, Dorsey/Wright's Precious Metals Bullish % (BPPREC) now at 41.67%.

After falling to 50%, Dorsey's Non Ferrous Metals Bullish % (BPMETA) reversed up to "bear correction" status at 56% in mid-May and currently "bear correction" status at 68.85%.

  Jonathan Levinson   9/14/200,  12:33:10 PM
Stepping away for 15 minutes here.

  Jonathan Levinson   9/14/200,  12:30:26 PM
The spike high printed 35.70, but 30 and 60 min channel resistance have held for the moment. The short cycle oscillators are toppy but not yet maxxed out. A move below 35.55 should bring some acceleration to the downside and the short cycle upphase stalls out.

  Jonathan Levinson   9/14/200,  12:24:41 PM
I agree, Mark, though I suppose it still beats "old fashioned" bullets.

  Mark Davis   9/14/200,  12:23:17 PM
Taser to begin selling to the public tomorrow, Sept 15th... Link
I find this difficult to believe. Talk about opening Pandora's Box. I'm picturing a purse snatcher jumping for joy at this news. Just zap the little old ladies and walk off with their purses... no more pesky wrestling and screaming.

  Jeff Bailey   9/14/200,  12:18:05 PM
October Crude (cl04v) $44.72 +1.93% (30-min delayed) Link .... really pegging that $44.75 level of late.

  Jeff Bailey   9/14/200,  12:16:19 PM
TRIN 0.81 -7.95% ... just off session low of 0.77 and DAILY Pivot of 0.76.

I see Jim's in with a short, probably a tight stop.

  Mark Davis   9/14/200,  12:16:11 PM
SOX is right back at the 393 neckline. Let's see if it gets slapped back again or if it can make a decisive break. Remember the upside target for the inverse H&S is yesterday's HOD @ 398 and change. If the SOX can make it to that level then 400 comes into play again and a break of 400 should light the afterburners.... however there's a lot of work to do first.

  Jonathan Levinson   9/14/200,  12:12:35 PM
The 30 minute cycle channel has turned up, but price is just now colliding with 30 and 60 min channel resistance at 35.65. A move through this level here will take a great deal of commitment from bulls, but would also be a sign of great underlying strength in the market.

  Mark Davis   9/14/200,  12:10:40 PM
This is starting to look like the real deal.

  Jonathan Levinson   9/14/200,  12:09:28 PM
There's a tall volume candle printing now on QQQ.

  Jonathan Levinson   9/14/200,  12:07:38 PM
Volume is picking up but there have been no divergent buy programs yet on QQQ. 35.59 is now broken, with QQQ heading for next confluence resistance at 35.65.

  Mark Davis   9/14/200,  12:05:50 PM
There's the limo... now let's hope we don't have a drunk driver (that would be the headfake Keene mentioned in his 11:50 post)

  Jonathan Levinson   9/14/200,  12:05:20 PM
Session high at 35.59 QQQ.

  Jeff Bailey   9/14/200,  12:05:08 PM
12:00 Internals at this Link

  Jonathan Levinson   9/14/200,  12:04:09 PM
Lining up for that retest of 35.59 resistance here.

  Mark Davis   9/14/200,  12:02:05 PM
These "waiting game" days are more emotionally taxing than days where there is a clear trend. It's very tempting (and dangerous) to try and force a trade... kind of like being all dressed up for the prom and waiting on your front porch for the limo. You see the lights coming... it may be the limo but it also may be the garbage truck.

  Jonathan Levinson   9/14/200,  12:00:33 PM
And Nymex crude oil is up .825 at 44.70.

  Jonathan Levinson   9/14/200,  12:00:10 PM
Gold is up 2.20 at 408.30, holding its gains, and the miners are up strongly, with HUI +1.92% at 207.95 and XAU +1.61% at 94.52. Bonds have reversed their losses, with TNX now down .4 bps at 4.147%.

  Jonathan Levinson   9/14/200,  11:58:03 AM
There has been no progress on even the wavelet upphase, which remains stalled in oversold with a preliminary bullish cross. This occurs on tick/volume-driven charts when volume falls off. Anemic indeed.

  Jim Brown   9/14/200,  11:57:47 AM
Max Pain for the SPX is currently 1105. This is one strike higher than it was last Thursday at 1100. However, there is little difference today between all the strikes from 1095-1120. The constant movement through this range appears to have cleared much of the support/resistance and has produced a neutral zone of about 25 point where we can move freely without any material hindrance.

  Mark Davis   9/14/200,  11:47:29 AM
B-bands are extremely tight on the SPX 1-min chart... we could be getting ready to finally break the logjam. SPX is giving very few clues as to direction other than the 1-min chart is beginning to look like a 2 hour long ascending triangle with SPX 1126.50 at the apex.

  Jonathan Levinson   9/14/200,  11:44:52 AM
There's another higher low shaping up here at what looks to be a likely wavelet bottom inside the slowly rising short cycle channel for QQQ. This reconfirms the short cycle upphase still in progress, and suggests another stronger attempt on 35.58 next. But, this is very listless action overall- not much volume either.

  Jeff Bailey   9/14/200,  11:34:15 AM
Sohu.com (SOHU) $16.15 +6.11% ... notable volume spike in past 30-minutes.

Netease.com (NTES) $37.15 +3.33% ... just off session high of $37.59.

  Mark Davis   9/14/200,  11:26:54 AM
The SOX was firmly slapped back from the neckline (393) of that inverse H&S pattern, currently printing 391.12. If the SOX is true to its nature of being a leading indicator this action would have to be interpreted as bearish in the short-term.

  Jonathan Levinson   9/14/200,  11:20:41 AM
The current move is at the level of the previous QQQ high of 35.55, and yesterday's end of session high of 35.59 is next resistance, above which I expect to see short covering come in. 35.70 is the last line in the sand for intraday bears, above which the current chop is going to be a higher low within the ongoing daily march higher. The overhead target would move to 36.05.

  Linda Piazza   9/14/200,  11:15:41 AM
I'm going to have to leave for an appointment, but hope to return within two to three hours.

The OEX has just moved up to retest the 200-sma and Keltner resistance near 546.50-546.60. Resistance on that three-minute Keltner chart still looks stronger than support, but the 15-minute picture is less clear. Lines are scattered more until the support near the rising trendline off the 8/13 low.

Nothing has happened yet to refute the possible rollover from near the 200-sma and the test of the rising trendline off the 8/13 low, and then consolidation or a bounce attempt, but TRIN sure doesn't support that scenario yet. Be watchful. I'm especially leery because every drop beneath a short-term trendline gets bought and sends the OEX back above that trendline, as is happening now with the neckline of the continuation-form H&S. Somebody--somebody with more money than you and I have--doesn't intend for this to drop and so it may not even test that rising trendline. Be careful.

  Mark Davis   9/14/200,  11:14:22 AM
There's an inverse H&S on the SOX 5-min chart and we just broke through the neckline @ 393. The upside target is ... you guessed it ... 398 and change (yesterday's HOD). If the SOX can regain its footing that could change the tenor of the market to bullish. Bulls want the SOX to stay above 393 because a rejection of the inverse H&S could be just as telling as a confirmation (except in the opposite direction).

  Jeff Bailey   9/14/200,  11:05:03 AM
11:00 Market Watch at this Link

  Jonathan Levinson   9/14/200,  11:04:29 AM
This is classic op-ex stuff. QQQ is unchanged from yesterday's 1:30PM levels, with plenty of false breaks and sudden reversals. Still watching the 35.34-35.58 range.

  Linda Piazza   9/14/200,  10:58:38 AM
Hmm. After a retest of the neckline of the continuation-form H&S, the OEX actually appears to be turning down again instead of climbing back above the trendline.

  Mark Davis   9/14/200,  10:58:00 AM
Conolog Corp. (CNLG) is tacking on another +10% today. The stock has risen from $1.69 to $5.22 in the last 6 trading days due to regaining compliance for Nasdaq listing on Aug 26th and then reporting a $7M 5 year contract with a "major" West Coast Utility on Sept 7th.

  Linda Piazza   9/14/200,  10:56:03 AM
The OEX is approaching Keltner resistance massing from 546.28-546.61. That resistance looks strong enough to hold the OEX back and looks stronger that support beneath it, suggesting the rollover scenario is still in play, with the rollover expected to take the OEX down toward 544.50. However, be watchful if you're participating in a bearish play because of that buy-the-breakdown action we've been seeing, accompanied by a TRIN at .88.

  Linda Piazza   9/14/200,  10:53:02 AM
And it's happening again. The OEX dropped below the neckline of a continuation-form H&S and it's heading right back up to test that trendline. If it's true to form to today's short-term action, it will climb above that trendline again. I'm not usually a conspiracy-theory type person, but why would someone buy when something had just broken through a bearish formation? We can all figure the downside targets. Even if one believed markets would climb again, why not wait until it approached closer to that downside target? This kind of action, though, makes me extremely wary of suggesting anything bearish might happen. This is typical of what we would see happening in March 2003.

  Linda Piazza   9/14/200,  10:49:41 AM
The TRAN continues the possibility that it could be forming the third candle of an evening-star formation, but it hasn't moved much yet since hitting the 3111-ish downside target from the H&S it confirmed yesterday on intraday charts. It's currently at 3210.67.

  Linda Piazza   9/14/200,  10:47:47 AM
The OEX's formation on its five-minute chart continues to morph, now transforming itself into a possible continuation-form H&S on that five-minute chart, with the neckline now being tested at about 546.20 . . . with the OEX dropping below that neckline as I type. I want to warn readers, though, that every drop beneath a short-term trendline has been immediately bought on the OEX. Watch for the possibility that could happen again. Someone doesn't want this thing to drop.

  Jonathan Levinson   9/14/200,  10:47:45 AM
QQQ rolled over at 35.55 with a wavelet downphase now underway. The short cycle oscillators are mixed, no clear direction within this chop zone. Note that this week's options expiry will be compounded by anticipated light volume on Thursday as Jewish traders observe Rosh Hashanah.

  Jeff Bailey   9/14/200,  10:43:00 AM
Trimble Navigation (TRMB) $29.82 -1.19% Link ... stock hit a 52-week high while I was out.

Fellow GPS'r Garmin Ltd. (GRMN) $40.54 +1.35% Link .... showing some life of late.

  Linda Piazza   9/14/200,  10:38:36 AM
Here's where the BIX is with respect to that possible bear flag on its 30- and 60-minute charts, with this chart containing the original annotation from yesterday: Link The BIX appears to be struggling with the midline level of that channel, although it's still near its high of the day. Weakening issues will trade in the bottom half of a channel, so OEX and market bears would prefer it to stay in that bottom half.

  Mark Davis   9/14/200,  10:37:00 AM
The only good thing about these sideways moves is they store up energy for when the markets finally go directional. All we have to do is guess which direction (grin)

  Jeff Bailey   9/14/200,  10:35:29 AM
Mercury Interactive (MERQ) $38.00 +2.15% Link ... triple top buy signal.

  Jane Fox   9/14/200,  10:35:00 AM
Dateline WSJ - BAGHDAD, Iraq -- A car bomb ripped through a busy market near a Baghdad police headquarters where Iraqis were waiting to apply for jobs on the force, killing at least 47 people total and wounding at least 114.

A group headed by Jordanian militant Abu Musab al-Zarqawi claimed responsibility for the attack in a statement posted online.

"Thanks to God alone, a lion from the Brigades of Those Seeking Martyrdom succeeded in attacking the center of volunteers for the renegade police apparatus," said the statement, which was signed by Mr. Zarqawi's Tawhid and Jihad group. It provided no details on the attack.

  Jonathan Levinson   9/14/200,  10:33:07 AM
QQQ is running toward 35.58 resistance here, the high of yesterday's closing runup. The short cycles are mixed but are running up here as the wavelet upphase is reaching overbought territory. The 30 min cycle channel remains flat, but is showing the first uptick- it will turn up on a break of 35.58 that lasts longer than 5 minutes.

  Linda Piazza   9/14/200,  10:28:43 AM
The five-minute formation on the OEX's chart, the one that formerly looked like a bear flag, has now morphed into a possible bullish right triangle, with a horizontal top at about 546.75. Of course, if one were bearish enough, it might be possible to draw the lines a bit differently and describe that as a bearish rising wedge, too, but bears should be aware of this possible bullish interpretation. A break above the 200-sma would confirm the bullish interpretation. I don't see much good to come of jumping into a bullish trade just ahead of a test of yesterday's high and the top of the descending regression channel in which the OEX has traded most of this year, though. If the OEX and other indices are going to break out of those channels to the upside and continue moving higher, there's plenty of opportunity to get in after such a breakout. If they're going to roll over at that resistance, you don't want to have entered a bullish trade just ahead of that rollover.

  Jeff Bailey   9/14/200,  10:26:54 AM
Current OPEN MM Profiles at this Link

After review, I don't see any of my September 3 orders being filled.

Alert! Cancel all September 3 orders except for the stop on the 2 Netease.com Dec. $30 puts (NQGXF) bought on 08/13/2004 should the stock trade $37.65.

  Jonathan Levinson   9/14/200,  10:22:17 AM
QQQ update at this Link . The 30 min channel remains flat, and direction remains up for grabs. A break below 35.34 or above 35.58 should give us some followthrough- watch for a burst of volume on the move for confirmation.

  Mark Davis   9/14/200,  10:19:22 AM
SPX is hanging on to 1125 by it's fingernails. We've tested that level 3 times already and we're only 45 minutes into the trading day... not very encouraging for bulls so far.

  Linda Piazza   9/14/200,  10:18:08 AM
I see a couple of arguments against the scenario I built for the early trading today--with that scenario being a test of the 200-sma, a rollover toward the ascending trendline from the 8/13 low, and a probable bounce attempt or at least consolidation there, somewhere near 544.50. One is the BIX's behavior, bouncing off the support of its possible bear flag on the 60-minute chart. Another is the OEX's behavior, constantly bouncing right up to retest the bear flag on its five-minute chart every time it breaks below it, as if someone out there is buying each break. The third--I know, I said a couple--is the TRIN's refusal to climb. These three observations make me wonder if that scenario will pan out. The trajectory of the advdec line supports the idea that there will yet be a deeper drop, but we'd like to see more evidence.

  Jonathan Levinson   9/14/200,  10:17:54 AM
Session high for gold futures here, up 2 at 408.10 and testing key 408 resistance. Above this level, next resistance is in the 414-15 confluence.

  Linda Piazza   9/14/200,  10:13:46 AM
The TRAN has not quite hit the downside target of yesterday's H&S on its five-minute chart, with that downside target at about 3211 and with the TRAN now at its low of the day at . . . oops, the TRAN just hit that downside target. That hitting of the target confirms the bearishness. This is a potential bounce point for the TRAN, though, with resistance not yet firmed up above the TRAN, so that it's unclear where it might get stopped if it bounces now and bounces quickly. It looks as if resistance is trying to converge near 3216-3117.

  Jeff Bailey   9/14/200,  10:13:09 AM
10:00 Internals at this Link

Bullish leadership has been impressive while I was gone.

  Linda Piazza   9/14/200,  10:08:28 AM
According to the trendline I've drawn, the OEX just dropped below the support of the flag-ish shape in which it's been rising since late yesterday afternoon, but now it rises immediately to test it.

  Linda Piazza   9/14/200,  10:07:34 AM
The OEX still moves within its flag-ish shape, now challenging the bottom support. The advdec line keeps dropping, suggesting that if volume is leading the markets anywhere, it's leading down, but TRIN isn't doing much of anything.

  Linda Piazza   9/14/200,  10:04:29 AM
The VIX gapped up this morning. Although it's not yet above yesterday's high of the day, it's rising toward a test of that 13.78 high, with the VIX currently at 13.65 and well off yesterday's 13.17 close. The VXO is also above yesterday's close, but has moved down from its opening level rather than up.

  Jim Brown   9/14/200,  10:04:17 AM
The Richmond Fed Manufacturing Survey rose to +18 in August from +6 in July.

  Jeff Bailey   9/14/200,  10:04:07 AM
10:00 Market Watch at this Link

  Jonathan Levinson   9/14/200,  10:03:03 AM
QQQ 2-day 100-tick chart update at this Link . The current chop appears ambiguous to me, but the 30 min cycle channel (Keltner35 orange bands) are flattening from yesterday's downphase, which suggests a 30 min cycle bottom trying to form here. So long as the 35.28 lower band doesn't get violated, preferably with 35.34 support holding, that should prove to be the case. If those levels break, then yesterday's closing bounce will have been a bull trap.

  Jonathan Levinson   9/14/200,  10:01:44 AM
Nymex crude is up .65 or 1.48% here at 44.525- holding the bulk of its morning gains.

  Mark Davis   9/14/200,  10:00:28 AM
The sell signal printed this morning was not nearly as strong as the buy signal printed @ 3:35PM yesterday afternoon... not sure if that means much but if it means anything at all it would tilt things a bit to the bullish side, all other factors being equal.
Bulls want to see first 1127 and then 1128 taken out
Bears want just the opposite... first 1125 and then 1123

  Linda Piazza   9/14/200,  9:58:49 AM
The BIX is still holding near the high of the day, only about 3 cents off that high of the day. A 50% retracement of the recent decline is near 363.61, so that market bears would prefer to see the BIX turn down before retracing more than that 50%. Friday's high was slightly higher than that, at 364.67, before the BIX turned down within its channel again, but not enough higher to refute the possibility that this is a bear flag.

  Linda Piazza   9/14/200,  9:55:50 AM
The OEX is rising again to test the 200-sma and Keltner resistance. That Keltner resistance is firming up near 546.48-546.72 on the three-minute chart and looks somewhat firmer than nearby support, at 545.64-545.79, but we'll see.

  Mark Davis   9/14/200,  9:54:13 AM
Here we are at SPX 1125 again. Failure to hold that level should result in downside acceleration, especially if we take out yesterday's LOD @ 1123.30. On the bullish side there is a mini inverse H&S formation on the SPX 1-min chart with the neckline at about 1127... an upside break of the neckline would point to SPX 1130.70, but any chart pattern on a 1-min chart has to be taken in proper context. The 1-min chart produces many false patterns.

  Linda Piazza   9/14/200,  9:53:51 AM
The TRAN's open and subsequent action fits perfectly with the potential for an evening-star formation to be completed today--open below yesterday's close and move down from there--but the TRAN hasn't moved much lower yet. It could still zoom higher, refuting that possibility. It's reacting to higher crude prices, among other pressures. The concerns about Ivan are temporary, of course, and any rise in crude prices attributable to Ivan probably wouldn't strongly affect the TRAN, but those related to continuing attacks on pipeline supplies in Iraq, such as we're having today, might not be as temporary. OPEC meets this week, so expect some volatility as we get various statements out of OPEC meetings, beginning tomorrow, I believe.

  Jonathan Levinson   9/14/200,  9:53:38 AM
The Fed has announced a 6.75B overnight repo to replace the 6B expiring, for a net add of 750M for the day. Yesterday's repo effected a 3B net add, and so the Fed continues to add liquidity from last week's levels.

  Jeff Bailey   9/14/200,  9:52:35 AM
S&P 500 (SPX.X) with updated WEEKLY pivot retracement at this Link

Should find support above 1,120 especially on a light volume pullback, but 1,133 will most likely be a formidable near-term resistance after impressive rally from the 1,060 relative low.

September "Max Pain" Theory value is 1,105.

  Jonathan Levinson   9/14/200,  9:52:28 AM
New session lows for NQ and QQQ here. 35.34 QQQ is next support, below which 35.27 and 35.15 come into view.

  Linda Piazza   9/14/200,  9:50:06 AM
I note that the BIX is bouncing strongly from the bottom support of its flag-ish formation as it moved off the 9/09 high. It's at its high of the day. Hmm. OEX bears, be careful of making too many assumptions. Don't want to see financial-related stocks performing too well, there, if a bearish scenario is to play out.

  Linda Piazza   9/14/200,  9:48:16 AM
Perhaps here comes the expected OEX break of the bear flag and rollover beneath the 200-sma, sometime during this first retracement of the day. TRIN dropped from its high of the day, too, though, so I'm still watchful. Expectations may not be met. So far, so good for that scenario I've had in mind, though. That scenario suggests that if there is a rollover from somewhere near the 200-sma, that bears have a plan in mind for how they'll handle a test of that ascending trendline off the 8/13 low, though, a potential bounce point, with that trendline near 544.50.

  Mark Davis   9/14/200,  9:45:05 AM
SPX is trying to print a sell signal just below yesterdays 3:03 swing high @ 1127... MACD has turned down sharply and is about to cross. Considering the steepness of the downturn I don't see any way that MACD will not cross.

  Jonathan Levinson   9/14/200,  9:43:43 AM
A break above 35.70 would set that level up as a potential reverse h&s neckline on the 2 day 100-tick chart, with an implied target as high as 36.05. Link

  Jeff Bailey   9/14/200,  9:43:18 AM
It is good to be back .... after a somewhat cold and snowy vacation. Elk are bugling and it will be tough for a QCharts alert to match that. Grouse are plentiful this year as are bears, which were out in force eating berries as they fatten up ahead of hibernation.

Looks like some SOX.X bears took some profits while I was away.

  Linda Piazza   9/14/200,  9:43:14 AM
The OEX is actually climbing a little higher than I expected it to climb and its climb looks a little less bear-flag-ish than I expected it to look. It's up against Keltner resistance on the five-minute chart and also the 200-sma, of course, and it's almost time for the first reversal of the day to begin, but if the OEX breaks above the 200-sma and can sustain values above it, it's possible that it could bounce all the way up toward the 547.50-549.00 level. So far, all is going according to plan, but just not looking quite as I'd expected it to look, so I'm watchful.

  Jonathan Levinson   9/14/200,  9:40:09 AM
A break of yesterday's closing peak at 35.59 QQQ would set up a move to 35.65, which is confluence and 30 min channel resistance.

  Linda Piazza   9/14/200,  9:40:04 AM
For reference, the OEX's 200-sma is at 546.93, with the OEX currently at 546.68. Depending on how you draw that descending regression channel in which the OEX has been trading most of the year, the upper descending support may be as high as 548.65-549 or as low as the 200-sma.

  Linda Piazza   9/14/200,  9:38:06 AM
The BIX again tested the lower support of its flag off the 9/09 low, and is attempting a bounce from it. The bounces have lately not been getting even as high as the midline of that rising regression channel, making it look more and more like a potential bear flag, but the BIX has not broken the support on a 60-minute closing basis, although it's pierced it. That means we can't assume it will be broken on a 60-minute closing basis.

  Jonathan Levinson   9/14/200,  9:37:33 AM
Session low for ten year bond futures, with TNX up 1.3 bps to 4.165%. Gold is higher by 1.30 at 407.40.

  Jonathan Levinson   9/14/200,  9:35:28 AM
Bonds have weakened slightly, with TNX up 1 bp at 4.161%. Equities are holding near their opening lows, but volume is light and the selling uninspired. For QQQ, bears need to see yesterday's low above 35.34 broken as a first step- so far the selling has a corrective feel this morning.

  Linda Piazza   9/14/200,  9:34:29 AM
The OEX does continue the flag-ish rise, rising straight toward the Keltner resistance on the five-minute chart as well as the 200-sma. Perhaps this flag-ish behavior will continue for a few minutes, into the first reversal of the day, usually beginning in about 10 minutes, but the flag could violate its support at any time, too. The most likely event would be a rollover beneath the 200-sma and a trip down to test that rising trendline off the 8/13 low, and then some kind of consolidation or at-least-tepid bounce attempt from there, perhaps previous to another rollover. Still, it's far too early in the day to be sure that scenario will play out, but it's my trial scenario against which I'll measure the action this morning.

  Jeff Bailey   9/14/200,  9:33:18 AM
Taser Intl. (TASR) $35.38 +5.6% Link .... said it had received orders totaling more than $1 million.

Recent double top buy signal at $30 and resulting column of "X" from $27 to $37 has established a bullish vertical count to $60.

  Mark Davis   9/14/200,  9:31:33 AM
Welcome back from me also Jeff.

  Jonathan Levinson   9/14/200,  9:31:10 AM
QQQ is down 12 cents at 35.46, which is confluence support from yesterday afternoon. 30 min channel support is down to 35.27, with the short cycle upphase stalling from yesterday's ending bounce.

  Linda Piazza   9/14/200,  9:28:47 AM
Nearest support on the OEX is 545.49-545.79. Nearest resistance is 546.38-546.83, with resistance looking stronger than support based on yesterday's close. A bear-flag-ish bounce had started late yesterday, but I'm not sure if it will continue or just abort. Futures are lower, but only slightly, and sometimes there's not great correlation between what the ES contract is doing pre-market and what happens with the OEX after the open. If the flag-ish rise continues, I'd expect resistance near the 200-sma. If it aborts, I'd expect support near the ascending trendline off the 8/13 low and Keltner support on the 15-minute chart, at 544.32-544.71. If there is such a bounce, I'd expect a rollover underneath the 200-sma, but these are all pre-market scenarios that may have little relevance to what we see on the open. The OEX could drop like a stone through that ascending trendline off the 8/13 low or could zoom right up through the 200-sma and the top of the descending regression channel in which the OEX has traded this year.

  Jane Fox   9/14/200,  9:12:50 AM
Welcome back Jeff.

  Jonathan Levinson   9/14/200,  8:58:07 AM
Updated satellite photo of Hurricane Ivan at this Link.

  Jonathan Levinson   9/14/200,  8:34:06 AM
The futures have weakened only slightly on the news, and bonds have come down to unchanged. Gold is up slightly but still in the red. The markets so far are greeting the data with a yawn.

  Jonathan Levinson   9/14/200,  8:31:30 AM






8:30am U.S. Q2 NET CAPITAL INFLOWS $146.8B VS. $138.6B



  Jonathan Levinson   9/14/200,  8:06:38 AM
We await the 8:30 release of the Q2 current account, est. -158.6B; retail sales for August, est. -.1%; and retail sales ex-auto, est. +.2%.

  Jonathan Levinson   9/14/200,  7:57:21 AM
Equities are slightly lower this morning, with ES trading 1127.75, NQ 1435, YM 10325 and QQQ -.04 at 35.54. Gold is down .90 at 405.20, silver +.012 at 6.229, ten year treasuries up .156 at 112.64 and Nymex crude +.675 at 44.55.

  Linda Piazza   9/14/200,  6:57:14 AM
Good morning. The Nikkei gapped up by more than 50 points in Tuesday's trading, with semi-related stocks leading the early gains. Japan's Semiconductor Equipment Association and the U.S.'s Semiconductor Equipment & Material's International announced that July's sales of chip-manufacturing equipment rose 86.4% globally from the year-ago levels. In addition, Broadcom trimmed its sales forecast, but trimmed it by less than some had expected. After moving up to the high of the day about mid-morning, the Nikkei plunged almost 80 points off that high of the day and then spent the afternoon coiling around 11,300. It closed higher by 42.47 points or 0.38%, at 11,295.58.

Techs continued to perform well throughout the day and also throughout Asia. Sony was not one of those stocks performing well, however, with the stock dropping 1.5% after an announcement that it was leading a consortium to purchase MGM and assume MGM's debt. Investors didn't like the price tag for the deal and neither did Standard & Poor's, revealing that as a result of the deal the company and its subsidiaries would be on credit watch with negative implications.

Other Asian markets turned in mixed performances. The Taiwan Weighted fell 0.14%, and South Korea's Kospi fell 0.06%. Singapore's Straits Times climbed 0.42%, and Hong Kong's Hang Seng climbed 0.06%. China's Shanghai Composite bounced strongly after yesterday hitting a five-year low, closing higher by 3.18%, at 1,300.357.

Currently, European bourses are mixed, but more trade in the red than in the green. Auto registration figures for the last two months showed a 5.5% drop in July and a 1.3% drop in August in Western Europe. Some of the declines in bourses are attributed to those figures, considered to have highlighted again the problem with domestic demand. Stocks in the news included Vivendi and Deutsche Bank, with both making announcements related to reorganizations or shake-ups. Vivendi raised its 2004 outlook and revealed a 7% gain in operating income in Q2, with the chief executive noting that its reorganization after the sale of its film business to NBC was almost complete. Deutsche Bank announced job cuts and changes in leadership in its investment banking division. Vivendi was steady in early trading, but Deutsche Bank traded higher. In the U.K., supermarkets group J. Sainsbury had benefited from deal speculations but declined today after Target's CFO said at a conference that it was not considering deals with any overseas groups.

As of 6:55 EST, the FTSE 100 had dropped 12.80 points or 0.28%, to 4,545.70. The CAC 40 had dropped 14.21 points or 0.38%, to 3,711.19. The DAX had dropped 3.03 points or 0.08%, to 3,950.28.

  Jeff Bailey   9/13/200,  12:56:08 AM
Pivot Matrix for Tuesday at this Link

  Linda Piazza   9/13/200,  12:09:53 AM
Mark said it earlier: Like other indices, the OEX has completed two-third of an evening star pattern by yesterday's close. Link A classic evening-star formation requires that the opens beneath Monday's close and moves down from there, retracing most of Friday's gains.

Is that likely to happen? That may depend on how the OEX behaves with respect to the rising trendline off the 8/13 high, with that trendline crossing now at about 544.50. At Monday's close, the OEX was trying to bounce up toward Keltner resistance gathering from 546.38-546.83. That resistance is perhaps strong enough to stop the OEX and turn it back toward that trendline, perhaps even turning it lower from Monday's close. Fifteen-minute Keltner support converges with the trendline. That convergence suggests that there could be a bounce attempt of some sort from that Keltner support and/or trendline, with that 15-minute Keltner support at 544.32-544.71. Those currently in bearish positions should have a profit-protecting plan in place as that level is approached.

The bounce-or-no-bounce theory may be influenced by what's happening with the Dow, SPX and Russell 2000. If they're hitting their 200-sma's and bouncing from them about the same time that the OEX is hitting that trendline, then the bounce may be seen. If they've fallen through their 200-sma's, then it's possible that the OEX could fall through that support, too. For now, a bounce attempt seems the most logical expectation, however.

Bears should watch for a rollover beneath the 200-sma or perhaps from the 547.50-548.50 level while bulls want to see a push above that 200-sma, and a breakout above Monday's high and the top of the descending regression channel. If the OEX should break through that trendline, watch for possible support at or near the 10-dma, now at 542.35. Although the OEX has pierced that support twice over the last month, it has not closed beneath it since 8/16, and it has often bounced from it. Also watch potential support from 540.80-541.

Although I've received lots of information about the VIX from readers and other writers suggesting that low VIX levels in and of themselves don't necessarily suggest an immediate market top, and although I have my own memories of the spring of 2003 to back up those impressions and was already reminding readers before I began getting that corroborating information, I'm going to be cautious about upside breakouts. We have to trade the trend if an ascending one continues to develop, but I'd sure be following with tight stops, especially since some chart studies cap potential upside at 553-554 before a pullback. I'd sure like to see an equal low or higher low or even bullish divergence on the weekly chart before I started believing too strongly in upside breakouts. We haven't seen any of that yet, so I'm going to remain cautious about upside breaks, holding my nose before plunging in.

To summarize (in my uniquely long-winded way), I see the potential for the OEX to move down and hit Keltner support and the descending trendline off the 8/13 high, at about 544.30-544.71, either dropping straight from Monday's close or from another test of the 200-sma. As the OEX ended the day Monday, it looked likely that the OEX would consolidate there or else mount at least a tepid bounce from that trendline and Keltner support. The height of that bounce will tell us the rest of what we want to know. A fall straight through the trendline would tell us, too. Bears should have profit-protecting plans in place on a test of the trendline and as the OEX heads toward 543 and then through multiple support levels. Bulls should have profit-protecting plans in place as the 200-sma is tested and then as yesterday's high is approached and as the OEX moves into the multiple resistance levels beginning at about 548.30, too.

Some aggressive bulls might enter on a bounce from that trendline, but I wouldn't. Not just below the 200-sma. Aggressive bears might enter a new position on a rollover under the 200-sma or under 547.50-548.20, but they also need to know what they're risking, as that would be a bearish entry while the SPX, Dow, and likely the Russell 2000 are still above their 200-sma's. I'd sure want a whole lot of corroboration from volume patterns and volatility indices before I entered such a play, although it does present an entry near the get-out spot on an upside breakout, minimizing risk by that measure. Such a rollover would need corroboration such as a lower 15-minute high or bearish divergence, too. A break of the rising trendline off the 8/13 low might present another bearish entry if the SPX and Dow and hopefully the Russell 2000 have also broken below their 200-sma's, but new bears from that level would need to be aware of close support, beginning as closely as 543. They should definitely have profit protecting plans in mind as 540.80-541 was approached, if it is, and as 539.50-539.75 is approached, if it is.

  OI Technical Staff   9/13/200,  12:09:44 AM
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