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  Jeff Bailey   9/17/200,  7:01:41 PM
Pivot Analysis Matrix for next week at this Link

  Jeff Bailey   9/17/200,  6:57:01 PM
Third-quarter Expiration Market Watch at this Link

  Jeff Bailey   9/17/200,  6:31:42 PM
Current OPEN MM Profiles at this Link

Today's Activity ...

Sold 3 in the money covered calls and the SWC Oct. $12.5 for $1.70. (If Fed does not hike on Tuesday, dollar might fall and may have to buy these back, but SWC right in the middle of wedge) Link HUI.X having trouble below 200-day SMA Link and provides a drag righ now.

Swing trade shorted the QQQ at $35.46, tight stop at $35.65, targeting $34.85.

Expired .... the 3 SWC Sept. $15 calls (SWCIC) sold on 09/01/04 for $0.40 per contract expired worthless ($120.00, or +100%) NOT recorded in trade blotter, but reduce COST in the previously purchased SWC Oct. $15 Calls (SWCJC) on 05/27/04 by $0.40 per contact.

Expired .... the 2 OSTK Sept. $40 calls (QKTIH) purchased on 06/23/04 for $2.60, expired worthless. ($-520.00, or 100%).

Trade blotter of this week's CLOSED trades at this Link the winning streak came to an abrupt end.

  Jeff Bailey   9/17/200,  4:34:15 PM
Closing Internals at this Link

  Jeff Bailey   9/17/200,  4:24:26 PM
DIA .... $103.01 +0.25% .... up 26 cents.

  Jeff Bailey   9/17/200,  4:23:50 PM
SPY $113.15 (unch) .... up a penny.

  Jeff Bailey   9/17/200,  4:22:46 PM
QQQ goes out at $35.43.

  Jeff Bailey   9/17/200,  4:19:46 PM
October Crude Oil futures (cl04v) .... updated point and figure chart with today's action. Red column of "O" is Thursday's trade, today's trade is green column of "X". Link

I like to project a potential bearish resistance trend, "potential" as it would only become the trend should the bullish support trend (rising at $41.00) get broken to the downside.

  Mark Davis   9/17/200,  4:08:14 PM
Have a great weekend everybody... cya_Monday

  Mark Davis   9/17/200,  4:07:23 PM
Looking at the weekly chart for SPX... up six weeks in a row (maybe pushing it?). The last time it did that was late Nov '03-early Jan '04 when it was up nine weeks in a row.

  Linda Piazza   9/17/200,  4:03:12 PM
Not sure if we've gotten the final settlement on the Dow, but if we have, bulls weren't able to drive it above the 200-sma. Mom-and-pop investor will be reading the bad news this weekend. We had a fall beneath that important average on Wednesday, a climb to retest it yesterday and today, but a failure to close above it. So far, that's not encouraging, but the Dow still trades within a possible bull flag and still is within striking distance of an upside breakout.

  Mark Davis   9/17/200,  4:00:27 PM
That long signal from SPX 1127.77 is looking better by the minute. I didn't take it ahead of the weekend but will be watching closely on Monday to see if I need to congratulate myself or kick myself. We have a nice little symmetrical triangle going into the close.

  Jeff Bailey   9/17/200,  4:00:12 PM
04:00 tick on the QQQ is $35.47 ... still 15-minutes to go. Mid-point of today's range is $35.34, and that's the DAILY Pivot.

  Linda Piazza   9/17/200,  4:00:10 PM
The Nikkei will be closed for a holiday Monday, so I wouldn't be surprised to see overnight markets drift without the Nikkei and with an indecisive close on our markets. That means that we'll be on our own Monday morning, with our markets likely setting the tone for the others Monday morning. I'm not sure how much tone-setting we'll do ahead of the FOMC meeting, though.

Have a great weekend, everyone!

  Linda Piazza   9/17/200,  3:55:01 PM
The TRAN hasn't done much of anything since about 11:00 this morning. The one thing that it has done, though, it to hold above 3252.

  Linda Piazza   9/17/200,  3:46:03 PM
It's going to come down to the wire on the Dow close, isn't it? I just keep imagining that all efforts will be made it close the week above that average.

  Linda Piazza   9/17/200,  3:44:24 PM
The Dow is inching back above its 200-sma again, still testing it.

  Mark Davis   9/17/200,  3:43:51 PM
Here comes the short covering

  Mark Davis   9/17/200,  3:38:45 PM
SPX just printed another buy signal @ 1127.77... it will be interesting to see what the market does with this next week. I'm still thinking bullish.

  Linda Piazza   9/17/200,  3:37:37 PM
Same formation (as shown in my 15:35 post) on the Dow, and same question: Link Will the formation be rejected or confirmed?

  Linda Piazza   9/17/200,  3:35:09 PM
Is this OEX formation about to confirm or is the first tentative bounce a sign that the bulls will drive the OEX higher now, rejecting the formation? Link

  Mark Davis   9/17/200,  3:32:48 PM
Reeeeeeeeeee-jected! (running out of time anyway)

  Mark Davis   9/17/200,  3:30:34 PM
SPX is close to printing another buy signal... just waiting for MACD to confirm or reject

  Jonathan Levinson   9/17/200,  3:24:23 PM
QQQ chart update at this Link.

  Linda Piazza   9/17/200,  3:16:08 PM
Since yesterday morning, I've been mentioning the difficulty of trading a broadening formation, and today's OEX trading pattern has displayed that difficulty. Except for 60-minute candle shadow that pierced the upper trendline but never touched the 200-sma on the daily chart, the OEX stayed within that broadening formation today. If you've been watching, you've probably alternately formed bullish or bearish opinions of the market's action. Those vacillations were just what you'd expect under these market conditions, since the presence of a broadening formation is a visual indication of the emotion-based, out-of-control trading that doesn't follow the rules and behave as expected according to technical analysis.

  Mark Davis   9/17/200,  3:14:20 PM
There goes my stop @ 1128.50

  Jeff Bailey   9/17/200,  3:12:11 PM
03:00 Internals at this Link

  Linda Piazza   9/17/200,  3:10:18 PM
Here's a formation on the Dow's five-minute chart, to watch for bearishness (move through neckline) or bullishness (move above appropriate right-shoulder level or a spring up from a test of the neckline): Link Note that there was no bearish divergence as the head was formed.

  Linda Piazza   9/17/200,  3:05:11 PM
The Dow is just below its 200-dma, less than a point as I type, but it can't seem to produce five-minute closes above it. It's still trying, though. I don't want to oversimplify today's trading, but I've thought since yesterday that it was going to kind of be all about the Dow and its 200-sma today.

  Jeff Bailey   9/17/200,  3:03:33 PM
03:00 Market Watch at this Link

  Mark Davis   9/17/200,  3:02:24 PM
Shorts must be scratching their heads in dismay here but we still haven't taken out SPX 1130. Until then they will probably not start covering en masse but as we approach 1130 with time running out we could see an underlying bid as the weak hands begin to get wobbly knees... it's still up for grabs.

  Linda Piazza   9/17/200,  2:55:26 PM
OEX bulls don't want to see the OEX turn over here, and want to see continued five-minute closes above 546.25 (just slipped below) or at least 545.85.

  Jeff Bailey   9/17/200,  2:51:49 PM
Somebody paid up at $0.55 for the QQQ Sep. $35 calls. I didn't see the size, but had an alert there.

  Jeff Bailey   9/17/200,  2:51:06 PM
QQQ $35.47 +0.41% .... kissed $35.50.

  Jeff Bailey   9/17/200,  2:50:39 PM
Intel (INTC) $20.40 +1.44% ... takes the SOX.X to a session high at 388.18.

  Mark Davis   9/17/200,  2:49:27 PM
If you took the long signal @ 1126.50 I would cinch up your stops to 1128.50 to lock in a +2 point gain. There is plenty of time left and I will follow this one up with stops.

  Jonathan Levinson   9/17/200,  2:48:54 PM
Session highs for GE and INTC here, with QQQ trading 35.48, 4 cents await from session high. The choppy short cycle oscillators are turning up, nowhere near overbought with plenty of room to run higher.

  Linda Piazza   9/17/200,  2:46:37 PM
The OEX broke out of the possible bull flag to the upside. It's possible it's headed up to test the top trendline of the broadening formation again. This time, that test would mark a closer approach to the 200-sma at 547.29, since the trendline has now climbed to just above 547.

  Jeff Bailey   9/17/200,  2:43:46 PM
SOX.X 387.08 +1.47% ... challenges morning highs here.

  Jonathan Levinson   9/17/200,  2:42:58 PM
There are more than 2.5M shares' behind this move up on QQQ in the past 300 ticks. 35.45 resistance is being tested.

  Jeff Bailey   9/17/200,  2:42:52 PM
VIX.X 14.10 .... if this bugger goes under 14.00 .....

  Jonathan Levinson   9/17/200,  2:39:46 PM
Session low for ten year bond futures here, with TNX up 5.2 bps or 1.28% at 4.121%.

  Linda Piazza   9/17/200,  2:38:33 PM
The OEX turned lower again beneath the upper trendline of the potential bull flag in which it's traded since this morning's high. Bulls would really like to see a higher low or at least an equal low with bullish divergence on the five-minute chart. Me? I'm just trying to keep an unbiased view. I see the potential bull flag, with a breakout, if it should happen, likely again testing the top trendline of the broadening formation, if not breaking above it and testing the 200-sma. But I also see the difficulty the Dow is having holding onto its 200-sma, despite my strong feeling that there would have been a real push to hold it there into today's close. I see the way indices have been turning down again from the tops of their this-year-long descending regression channels, with the Dow, SPX, OEX, and Russell 2000 among those indices. They're all still close enough to push above them, too. Activity in the volatility indices and often-seen action in September and October have to be weighed in, as does the uncertainty building over the outcome of the presidential race, if one poll is to be believed. So, I'm just trying to keep that unbiased view. The OEX is back in the middle of that broadening formation, so right now, it's just a wait-and-see action, although I do note that the bulls have perhaps been getting that higher five-minute low as I type. No bullish divergence, though, as the upper trendline of that potential bull flag is tested again.

  Mark Davis   9/17/200,  2:37:29 PM
The next few minutes should determine whether the buy signal @ SPX 1126.50 was valid. We've made a higher low and MACD is close to crossing up again. Lee did you take the buy signal? (grin) Lee and I are two voices crying in the wilderness today.

  Jeff Bailey   9/17/200,  2:35:06 PM
Semiconductor Bullish % (BPSEMI) 19.62 ... chart at this Link

If a chip bull can't buy LEAPs on INTC Link down here, then they can't buy a chip stock in my opinion.

  Jim Brown   9/17/200,  2:32:42 PM
Yes, Jeff I did. We entered on Sept 3rd on the initial drop to $20. Now that INTC has retraced last weeks gains everyone gets another chance.

  Jonathan Levinson   9/17/200,  2:32:41 PM
Nymex crude went out at 45.55, +1.675 or 3.82%.

  Jeff Bailey   9/17/200,  2:28:26 PM
Intel (INTC) $20.31 +1.04% ... Jim... didn't you profile a LEAPs call on INTC the other day at $20?

  Mark Davis   9/17/200,  2:25:47 PM
It's about time for the big boys to start taking their positions going into the weekend.

  Jonathan Levinson   9/17/200,  2:24:41 PM
Bearish stochastic divergence on the daily QQQ chart at this Link.

  Mark Davis   9/17/200,  2:23:41 PM
Here's a chart of the last buy signal @ SPX 1126.50 and what has happened since... Link

  Jonathan Levinson   9/17/200,  2:23:03 PM
Lee's checklist is excellent. However, I would caution that, particularly when using time-sensitive leveraged instruments such as, for example, options, it's important to use price-based indicators for timing one's trades. Record low volatility indices or fundamental factors such as the book to bill ratio or earnings outlooks can grow even more extreme before they revert to the mean. That's not to say that a market dump isn't possible from here- in fact, looking at the daily cycle oscillators, my feeling is that the next extended move (ie for 2 weeks or so) should be to the downside. But if, somehow and for whatever reason, QQQ gets back above 36.00, then bears will probably have to wait.

  Jim Brown   9/17/200,  2:17:51 PM
In light of the following events:

- Several earning warnings and negative outlooks

- The first time in five qtrs earnings will be under 20%

- Lower Book-to-Bill ratio for semiconductors

- Investment advisor downgrades of major companies

- Record high energy prices

- Record low VIX, VXO, and VXN

- Potential terrorist attacks between now and the election

Why aren't you and your staff giving us buy recommendations to take advantage of this market run-up? Lee

Dang Lee you caught us. With all those "bullish" reasons I guess we should be giving strong buys on everthing. (grin)

For those traders that have been around a while it sure looks like a check off list for the naxt major crash but everybody is ignoring the signals.

  Jeff Bailey   9/17/200,  2:16:05 PM
QQQ options chain .... most activ is the SEP $35 call $0.40 and Oct. $35 Put $0.60.

With VXN.X 20.04 just about unchanged, difficult to tell if call selling and put buying, or opposite, but I'd have to lean toward call selling, as QQQ offers enough liquidity to just buy the underlying.

Thought is a Friday peg of either $35.25 at this point.

  Linda Piazza   9/17/200,  2:15:17 PM
On that stop-running push, the OEX moved down low enough to retrace slightly more than 50% of the rally that immediately preceded it: the rally off yesterday's last 15-minute low. However, that was during a stop-running push, so I think we ought to give it a little leeway. Although that stretched the regression channel or potential flag in which the OEX had been trading a bit out of shape, I think we should probably still consider it a potential bull flag.

When there's a stop-running push to the downside, bears don't want to see an immediate bounce, as we've seen now. Bulls shouldn't exactly be cheering yet, either, though, as the OEX hasn't broken out of that potential flag to the upside. The OEX is so far finding resistance at the former supporting 15-minute Keltner line, now at 545.54. Bulls first want to see 15-minute closes above this Keltner line and then a break and at least a five-minute close above 545.75, the top boundary of the possible bull flag. They want to see the Dow back above its 200-sma, too.

  Jonathan Levinson   9/17/200,  2:14:08 PM
QQQ is testing the descending resistance line in place since the 10:55AM high. A move above 35.40 for longer than 2 minutes should be enough to do it. This is tractorbeam trading here. Above 35.40, there a reistance line immediately above at 35.45 then at 35.50-.55. This whole range is a congestion zone- a break above 35.60 or below 35.10 as mentioned this morning would be significant. The rest in the middle still feels like a washing machine.

  Jeff Bailey   9/17/200,  2:10:13 PM
02:00 Internals at this Link

  Linda Piazza   9/17/200,  2:08:01 PM
Okay, I'm getting as tired of mentioning these formations as you are probably tired of hearing me mention them, but here's a potential H&S on the 60-minute OEX chart, complete with bearish divergence as the head was formed: Link In the "olden" days, these were so reliable that you could start a bearish trade the moment you saw prices start rounding over into a right shoulder, but we know better than that now, don't we? Now, I mostly use them to gauge bearish or bullish sentiment rather than counting on them to confirm or to meet their targets if they do.

  Mark Davis   9/17/200,  2:07:46 PM
MACD is attempting a bullish kiss. If it plays out the buy signal could be a good one. Chart coming...

  Jonathan Levinson   9/17/200,  2:07:39 PM
Gold is back to positive territory, up 1.1 to 407.70, while HUI and XAU have both settled into the red, with HUI -.66% at 205.12 and XAU -.89% at 92.34. Bonds have recovered from their lows, TNX +2.9 bps or .71% at 4.098%.

  Jim Brown   9/17/200,  2:05:49 PM
Oil at its highs for the day at $45.65

  Linda Piazza   9/17/200,  2:02:47 PM
The BIX has been testing a double-top level today on its 60-minute chart, or almost a double-top level. There's no bearish price/MACD divergence on that chart: slightly lower price and lower MACD, so no divergence. If the BIX continues to turn down from here, pushing below 364, there is definite Keltner-style bearish divergence, though.

  Jeff Bailey   9/17/200,  1:58:19 PM
VIX.X 14.19 -1.38% ... day trader's VIX.X at this Link

  Jim Brown   9/17/200,  1:56:54 PM
SEBL - rumor making the rounds on the NYSE that SEBL may warn.

  Mark Davis   9/17/200,  1:54:12 PM
SPX has just printed a buy signal @ 1126.50 and this time the MACD cross was at a steep angle. Whether it will hold or not is still up for grabs.

  Linda Piazza   9/17/200,  1:51:09 PM
The TRAN has dropped back toward a test of 3250, at 3253.91 as I type, down from the day's 3263.48 high.

  Mark Davis   9/17/200,  1:51:04 PM
I can't seem to shake off the bullish feeling I have today, even with that swoosh to the downside. I'm looking for a MACD bullish cross for the next buy signal... it's very close.

  Jonathan Levinson   9/17/200,  1:51:00 PM
QQQ 100-tick chart update at this Link.

  Linda Piazza   9/17/200,  1:48:32 PM
The OEX is hitting Keltner support on both the 5- and 15-minute charts, with that support down to 544.75. A 15-minute close beneath that level suggests that the OEX is headed back down toward 543.20. This should be strong enough support for at least a tepid bounce, but I've been mentioning all day the importance I attach to the sentiment surrounding Dow tests of the 200-sma. If sentiment is damaged enough now, that bounce might not come.

  Jonathan Levinson   9/17/200,  1:48:18 PM
Note the big move in crude oil, now up 1.60 or 3.65% to 45.475.

  Mark Davis   9/17/200,  1:45:49 PM
Jonathan, Linda's stop running push is an amazing thing. You never can tell what those guys are going to do when they get back from lunch, but it's usually something.

  Jonathan Levinson   9/17/200,  1:43:27 PM
As soon as I posted my last comment about the market feeling aimless, the rollover from descending trendline resistance kicked off a break below 35.34. 35.25 is the next support line, and with volume no significantly higher yet for QQQ, the next gauntlet for bears will take QQQ to that .25 level. Descending resistance is now at 35.39- a break above that will invalidate the current decline.

  Jeff Bailey   9/17/200,  1:41:28 PM
VIX.X alert 14.12 .... 2-hour high. It's option expiration!

  Jeff Bailey   9/17/200,  1:40:33 PM
Sell Program Premium ... SPX 1,126.79 , QQQ $35.31

  Linda Piazza   9/17/200,  1:40:24 PM
And here's the push to the downside. If there's a five-minute close beneath that Keltner line mentioned in my last post, the next target for the OEX should be near 544.94 . . . no need to wait for the close, as the OEX is headed straight there as I type.

  Mark Davis   9/17/200,  1:38:26 PM
There's the break... down.

  Linda Piazza   9/17/200,  1:38:10 PM
No five-minute Keltner close above the Keltner line mentioned in my 13:29 post, then at 545.83, now at 545.79. A five-minute close above that trendline suggests that the stop-running push will be to the upside. Now the OEX comes down to test that supporting trendline I mentioned, now at 545.54. A five-minute close beneath that line suggests that the stop-running push will be the downside.

  Linda Piazza   9/17/200,  1:35:27 PM
The Dow is dropping below its 200-sma again. I've dutifully got my TRIN al_rts set where Jane suggested we do so, and I'm watching for one or the other to sound, with TRIN climbing again as I type.

  Jonathan Levinson   9/17/200,  1:33:39 PM
QQQ drifted south, and is now back north to the pennant apex. Volume is light, and the market is starting to feel aimless.

  Mark Davis   9/17/200,  1:30:38 PM
SPX just printed a buy signal @ 1128.39 but the MACD cross was at a very shallow angle and no upside traction yet.

  Linda Piazza   9/17/200,  1:29:57 PM
In reference to Mark's 13:19 post, I usually can't pass up a challenge, but I've been studying the five- and fifteen-minute Keltner charts and find the OEX poised between nearest support and nearest resistance on both. Maybe the situation will clarify within the next few minutes and I can hazard a guess (that will probably be wrong anyway). Right now, the best I can do is say that if there is a five-minute close beneath the Keltner line currently at 545.52, then it's possible that the OEX will reach down toward 544.90, but if there's a five-minute close above the Keltner line currently at 545.83, then it's likely to push toward 546 or even 546.21.

  Linda Piazza   9/17/200,  1:26:09 PM
The OEX has so far avoided confirming that lower high on the five-minute chart, but it did close the last 15-minute period a mere 4 cents below the Keltner line that's currently at 545.76, but a cent above that at the time. The OEX is trying to rise again and I don't consider the 15-minute close just a few cents below that line to be particularly significant. I will, though, if the OEX continues closing five-minute periods below the Keltner line at 545.85. It's testing the top of the regression channel in which it traded the last few days, and it needs to bounce from that support and climb again. This is its second test of that top line and after the first test, it bounced into that lower high.

  Mark Davis   9/17/200,  1:23:17 PM
CCI has just printed a third consecutive reading of -200 or greater yet we haven't taken out the 1127.82 swing low. MACD has flattened out but has not yet turned up. This could still go either way but a MACD bullish cross would print a strong buy signal.

  Mark Davis   9/17/200,  1:19:24 PM
It's beginning to look like Linda's stop running push may break the logjam today. I won't put her on the spot by asking which way.

  Mark Davis   9/17/200,  1:16:05 PM
Keene I was just measuring the depth of leaf litter. I hope the forest isn't on fire while we inspect the minutae.

  Jeff Bailey   9/17/200,  1:09:09 PM
01:00 Internals at this Link

  Mark Davis   9/17/200,  1:08:10 PM
stepping away for a few minutes...

  Mark Davis   9/17/200,  1:07:31 PM
The last swing low was 1127.82 and the last swing high was 1129.41. I would keep a close eye on those numbers for hints of a directional move.

  Mark Davis   9/17/200,  1:04:40 PM
That little move down sent CCI to -283, cancelling out the earlier +300 reading. It doesn't take much price movement today to send CCI through roof (or the floor). CCI spiked back up then down again to currently -250. We could be setting up a buy signal or starting a downtrending move. I'm leaning toward setting up for a buy signal... still no real traction to the downside.

  Linda Piazza   9/17/200,  1:04:36 PM
OEX bulls don't want to see the OEX drop below 545.38 as that would confirm the lower high on the five-minute chart. They also don't want to see a 15-minute close beneath the Keltner line currently at 545.79, as that would be the first 15-minute close since the 10:00 climb began beneath that particular Keltner line. Such a close might suggest a move down to test 545.23 or even the 544.75-ish level. Keltner charts have "suggested" much today, with some moves occurring just as suggested and some not. That's to be expected on an opex Friday, though, when predictions about movements may not adhere particularly well to the actual price movements. Personally, I think today may be all about closing the Dow above its 200-sma, if possible, combined with opex machinations. If keeping the Dow above its 200-sma should become obviously impossible, then I believe market sentiment could be damaged.

  Jonathan Levinson   9/17/200,  1:03:29 PM
WASHINGTON -- Fraud is running rampant in the nation's mortgage industry, with nearly three times as many reports of suspicious activity so far this year compared with 2001, a top FBI official said Friday. "It has the potential to be an epidemic," said Chris Swecker, FBI assistant director for criminal investigations.


  Jonathan Levinson   9/17/200,  1:01:48 PM
It's looking like a downward break is forming here, with a slight uptick in negative volume as price prints its 1st 100 tick candle below the lower line. Could easily whipsaw though- need to get below 35.34.

  Jeff Bailey   9/17/200,  12:59:42 PM
tight, tight, tight.... something's got to give.

  Jonathan Levinson   9/17/200,  12:59:38 PM
Volume is declining with price now at the pennant apex Link for QQQ.

  Jeff Bailey   9/17/200,  12:58:21 PM
12:50 market watch at this Link

  Mark Davis   9/17/200,  12:53:03 PM
SPX is showing a potential sell signal but MACD has not yet crossed down. A bullish kiss (rather than a bearish cross) would be very bullish IMO, and it could propel SPX over 1130. The markets have been going sideways for over 1 1/2 hours now so there is some energy stored up for the next move. If it's up it could be very strong. I have to think there are more than a few traders short at the very obvious SPX 1130 level...

While I was typing SPX completed a weak sell signal with a bearish MACD cross but again not much downside traction. I don't know why I'm feeling so bullish today... maybe I should be used as a contrarian indicator because I'm getting that excited feeling that many times results in disappointment.

  Jonathan Levinson   9/17/200,  12:49:34 PM
The short cycles for QQQ are drifting lower in that chart just posted, but it doesn't feel like much of a downphase. I suspect that the short cycles will simply follow price in the direction of the pennant break, particularly if there's any volume on the move. Look for confirmation below 35.34 and above 35.52.

  Linda Piazza   9/17/200,  12:47:00 PM
Running through P&F charts for the indices, I see that the OEX has a sell signal with a 495 bearish objective, but with a bullish support line 10 points above that. The SPX also has a sell signal and has a bearish downside objective of 1000. The Dow has a buy signal with an upside objective of 10,500. The Nasdaq has an upside objective of 2100 but a bearish resistance line at 1960, so that upside objective might be difficult to meet. The NDX has a buy signal with an upside objective of 1580 but with a bearish resistance line that it's about to hit at 1450. The SOX has a buy signal with an upside objective of 488, but a bearish resistance line at 420. These signals are as mixed up as the markets appear to be by other measures.

  Jonathan Levinson   9/17/200,  12:44:34 PM
QQQ update at this Link with the last move narrowed into a pennant as highlighted. Hopefully the apex break will give us some directional action.

  Jeff Bailey   9/17/200,  12:37:53 PM
Taser Intl. (TASR) $41.06 +2.93% .... 30-minute chart with QCharts' WEEKLY Pivot turned on at this Link

  Mark Davis   9/17/200,  12:31:51 PM
That looks like a little bull flag after the 1 point spike.

  Mark Davis   9/17/200,  12:29:17 PM
SPX printed a weak buy signal on that 1 point spike but the move sent CCI readings through the roof... +360, yikes! This market is very difficult to call today but as long as we don't see an impulsive move down I'm favoring a break of SPX 1130 to the upside.

  Linda Piazza   9/17/200,  12:29:05 PM
The Dow is back above the 200-sma.

The OEX is testing upper resistance on its possible bull flag pullback. It's also testing five-minute Keltner resistance near 546.10 at the same time, though. If this is a bull flag, prices probably shouldn't drop below 545.29 before the OEX breaks out of that flag to the upside.

  Jeff Bailey   9/17/200,  12:24:19 PM
talking about China's markets on CNBC. Traders will note the Hang Seng ($HSI.X) getting close to that bullish vertical count of 13,300 Link , which was generated after that triple-top buy signal in July. I believe I pointed that out back in July.

Can always exceed, sometimes never reach the bullish count, but HSI.X has traded very nicely on it supply/demand chart.

In the last week, has anyone noticed that the weaker SOHU and started to "outperform" NTES a bit? This might be due to traders starting to take some profits on the NTES long, but rotating some cash to SOHU, thinking it will play catch up.

I'll monitor the HSI.X closely as it nears 13,300. If I can get a SOHU near $20, its gone, and prior 2 NTES puts that were close out for loss a little less damaging. Then if HSI will cooperate, give a sell signal and pull back to 12,500, then close out the remaining 1 NTES put.

  Jonathan Levinson   9/17/200,  12:24:10 PM
Stepping away for a few minutes here.

  Keene Little   9/17/200,  12:24:10 PM
Jeff, re: your 12:16 comment I've had the same problem with my MM not refreshing once I installed a new Netgear router. The only way I can get the MM and FM to refresh is to have two separate browser windows open, one for each Monitor. No matter what Randy and I have tried, no luck. So if anyone else is experiencing similar problems, use the browser version.

  Mark Davis   9/17/200,  12:22:29 PM
Keene I was just looking at the Russell. I can't remember seeing any market with such a flatline for over an hour. The b-bands have almost merged into one line. Considering this action comes on the heels of a nice ramp I would call it bullish. The other indices have been doing a slow bleed since HOD. CCI readings are just reaching -200 so I would expect a strong directional move soon, either failure or a nice bounce.

  Jeff Bailey   9/17/200,  12:16:35 PM
I have a heck of a time with the MM refreshing. Randy tells me it is my wireless network firewall that creates the trouble. I'm trying the browser version today.

  Jane Fox   9/17/200,  12:16:02 PM
DAteline WSJ - TOKYO -- The severe penalties against Citigroup Inc. in Japan are likely to deal a huge blow to the world's biggest bank, exacerbating its established reputation for pushing the limits of acceptable banking behavior.

In one of the harshest penalties ever handed down against a bank operating in Japan, the Financial Services Agency on Friday it would revoke subsidiary Citibank N.A.'s effective license to serve high net-worth customers. In a strongly worded statement, the financial regulatory body criticized the unit for not having properly functioning internal controls, adding that it found a long list of "serious violations of laws and regulations" and "extremely inappropriate transactions."

The order shuts down one Tokyo branch, as well as satellite offices in three major cities.

The FSA said that over a three-year period, Citibank employees misled customers about the risk involved in some products, tied loans to the purchase of specific investments, allowed transactions that looked like money laundering and extended loans that would later be used to manipulate publicly traded stock, it said. Regulators also said Citibank's Japanese operations had ignored warnings from Citibank branches in other countries about problems with some clients.

  Jeff Bailey   9/17/200,  12:15:40 PM
Linda .... just seeing your 10:54:26 post. Nope, and that may well have created the additional "buy program premiums" this morning!!!!

One reason I turned on my premium alerts today. Just in case there was a 25% chance things didn't go according to plan. (grin).

  Linda Piazza   9/17/200,  12:13:17 PM
The Dow has dipped back below its 200-sma.

  Jeff Bailey   9/17/200,  12:12:12 PM
12:00 Internals at this Link

  Linda Piazza   9/17/200,  12:12:08 PM
Based on the OEX's current position inside the broadening formation, the 60-minute OEX chart I linked to my 11:58 post, and on the OEX's failure to confirm by moving above the 200-sma, I would not yet say that there's been an upside breakout out of the broadening formation on the OEX's intraday charts. Last night, I said if aggressive, have-to-trade traders were considering entering a trade on a break above the narrowing triangle inside the broadening formation, they needed to have a profit-protecting plan in place as the top of that broadening formation was approached, and those traders should be considering where appropriate stops should be set, if they haven't done so already. I also said that I wouldn't consider entering a long play on an upside break of the broadening formation unless the 200-sma were also being broken, and that just hasn't happened yet. Under conditions like today's, with TRIN not bearish and advdec not-so-bullish and Dow investors not so certain they want to pile in over the 200-sma, I might be leery of entering any trade for the rest of the afternoon, unless conditions change.

  Mark Davis   9/17/200,  12:11:05 PM
Jim per your 11:47 post re: TrimTabs Fund Flows... that would go a long way in explaining the underlying bid in the markets.

  Mark Davis   9/17/200,  12:06:55 PM
For you "fibonacci fan" fans... on the SPX 1-min chart a 38.2% retrace of the 6 point ramp from 1124-1130.48 is SPX 1128.06. We have dropped to within a few pennies of that level twice now. SPX printed a weak sell signal @ 1129 but so far not much traction to the downside. It could still go either way and it could be sudden.

  Linda Piazza   9/17/200,  12:05:05 PM
VIX and VXO are still moving in a tight range. No breakout either direction yet.

  Jonathan Levinson   9/17/200,  12:04:25 PM
Nymex crude hit a high of 45.10 intraday, currently back to 45.05, +2.68%.

  Jeff Bailey   9/17/200,  12:03:18 PM
12:00 Market Watch at this Link

  Jonathan Levinson   9/17/200,  12:01:19 PM
A break below 35.34 will abort this so-far weak wavelet upphase for QQQ and roll over the short cycle into a new downphase.

  Jeff Bailey   9/17/200,  12:00:37 PM
VIX.X 14.07 -2.22% .... here's a 30-min interval chart with QCharts' WEEKLY Pivot levels at this Link

  Linda Piazza   9/17/200,  11:59:35 AM
The Dow is now less than 2 points above its 200-sma.

  Linda Piazza   9/17/200,  11:58:18 AM
Although the OEX did break out of the broadening formation on the 15-minute chart, here's how it looks on the 60-minute chart: Link Only the candle shadow on this chart pierced this resistance.

  Jonathan Levinson   9/17/200,  11:54:51 AM
QQQ update at this Link . A wavelet cycle upphase is just getting started here. Look for a retest of 35.50-.52 resistance.

  Linda Piazza   9/17/200,  11:51:24 AM
I'm not seeing any bearish divergence yet on the five- and fifteen-minute OEX charts to let me know the rise is finished yet, and the OEX is so far producing fifteen-minute closes above the Keltner line currently at 545.54 and above the rising regression channel in which it had traded over the last couple of days. The move back inside the broadening formation could be taking on the form of a bull flag, although that's a bit iffy now. Yet the OEX will soon again face Keltner resistance near the top of that broadening formation, at about 546.40 when it tries to rise, with the 200-sma about a point above that.

  Jonathan Levinson   9/17/200,  11:50:57 AM
Bonds remain weak, with TNX now up 4.5 bps or 1.11% to 4.114%. Gold is down a dime at 406.50, with HUI up fractionally and XAU down fractionally. QQQ contunues to slide sideways above 35.40, with QQV down 5.12% at 17.59.

  Jim Brown   9/17/200,  11:47:23 AM
TrimTabs Fund Flows - Equity funds saw their biggest inflows since early July, taking in $2.6 billion for the week ended Sept. 15, according to TrimTabs. The prior week saw inflows of $1.7 billion.

  Jeff Bailey   9/17/200,  11:46:53 AM
Semiconductor Index (SOX.X) 386.06 +1.2% .... 30-minute interval chart with recent QCharts' WEEKLY Pivot levels at this Link

  Mark Davis   9/17/200,  11:45:52 AM
stepping away for a few minutes...

  Mark Davis   9/17/200,  11:44:32 AM
MACD has just crossed (barely)... we are flatlining and b-bands are pinched very tight. It wouldn't take much to get the ball rolling either way but I'm still leaning toward the upside.

  Jeff Bailey   9/17/200,  11:41:59 AM
Looking at a 30-minute interval chart of the SOX.X and turning it upside down looks JUST LIKE THE VIX.X (21-pd, 50-pd, 200-pd SMAs)

  Mark Davis   9/17/200,  11:40:17 AM
CCI and MACD levels are a mirror image of where they were just before the +6 point ramp from 1124-1130. MACD is attempting a bullish cross but is only touching so far, not crossing. It's probably too much to hope for lightning to strike twice in the same place but it sure looks possible. A MACD bearish kiss would obviously change the whole scenario... stay tuned

  Linda Piazza   9/17/200,  11:37:00 AM
The OEX approaches the top of the ascending regression channel that could also be drawn across the last few days' trading pattern, as well as potential 15-minute Keltner support from a line now at 545.37. If the OEX is strong, that support will hold on a 15-minute closing basis, which will mean that the OEX might again head up to test its 200-sma. However, as I type, the Dow is in danger of slipping beneath its 200-sma again and that event might damage market sentiment.

  Jonathan Levinson   9/17/200,  11:36:19 AM
Nymex crude is now up .95 at 44.825, +2.17%.

  Linda Piazza   9/17/200,  11:29:46 AM
Jim, your reader might take a look at individual transport stocks, too, to see if any of them might look good for a short/put position. Here's a list of component stocks of the TRAN for the reader's use, as I know Jim knows this information (grin): Link

  Linda Piazza   9/17/200,  11:26:17 AM
The Russell 2000 continues to struggle with a Fib level on the daily chart. The 80.9% retracement of the decline from the late June/early July highs to the August low lies at about 574.67 (a snapped level and not a calculated one). Since 9/13, the Russell 2000 has been challenging that Fib level. Standard technical analysis suggests that if more than 61.8% of a decline is retraced, then the whole decline is likely to be retraced, but even that truism doesn't always hold true and doesn't suggest that the climb will be straight up when it does hold true. If the Russell 2000 can't push past that level, it's likely to eventually fall back and at least retest the 200-sma.

  Jim Brown   9/17/200,  11:26:09 AM
How can we short/play puts on the transports, are there any index plays ?? And your thoughts here. TIA

My thoughts exactly. The Dow Transports are hitting new highs again today and are apparently completely disconnected from the price of oil, currently nearing $45 once again. The only two ways I know to play the transports are the Ishares (IYT) currently at 58.85. There are no options.

The second way is the CBOE Transportation Index ($DTX.X) currently 326.06 and there are options but volume is very thin.

It would seem the Transports would be a prime index to trade because of the volatile movements but I have never found a way to do it successfully. Considering the options I would probably opt for the DTX and a December put.

  Mark Davis   9/17/200,  11:24:55 AM
Keene "one last" Little "push higher"... (grin)

  Jonathan Levinson   9/17/200,  11:24:15 AM
A break below 35.39 would exceed the last dip, but the wavelet cycle oscillator is getting bottomy on QQQ. A wavelet upphase from above 35.39 would confirm the short cycle upphase and suggest another attempt on the session highs.

  Mark Davis   9/17/200,  11:22:06 AM
Linda I pilfered that line from Art Cashin... the King of funny metaphors.

  Mark Davis   9/17/200,  11:15:58 AM
SPX printed a sell signal at 1130, just after HOD @ 1130.48, however the pullback so far has been shallow and definitely not impulsive. Unless bears can press here I believe bulls will remain in control. We never got through "overthrow" territory, which IMO is probably SPX 1131-1131.50. That's all that stands in the way of an explosive rally as shorts begin to cover en masse. It hasn't happened yet but all signs are pointing up. Whatever happens will probably happen suddenly so keep your finger on the trigger whether long or short.

  Linda Piazza   9/17/200,  11:13:52 AM
Laughing at Mark's 11:03 post.

The OEX zoomed up toward the 200-sma, but was pushed back and has now come back to retest the former resistance of the broadening channel. It has actually dropped below that top trendline, falling back inside the broadening formation and below Keltner resistance, but it has not had a 15-minute close within that formation yet, and so might have just overrun the supposed support. As I said last night, though, I wouldn't have been considering going long on a breakout of that formation if a breakout above the 200-sma didn't occur at the same time, though. The Dow is dipping back for a retest of its 200-sma. The SOX came right up to test the 386-387 level that marks the 50% retracement of the rally off the October 2002 low and fell back from that test, although only slightly. This is a mixed-up market, as Jim has been saying. If all the ducks were in a row, I'd say sure, a breakout is a breakout, but those ducks are scattering every which way.

  Jeff Bailey   9/17/200,  11:09:29 AM
11:00 Internals at this Link

  Jonathan Levinson   9/17/200,  11:09:17 AM
QQQ failed at 35.52, and the short cycle oscillators are showing some downticks within the weak uptick that developed within the past half hour. A break below 35.32 should kick off a new short cycle downphase.

  Mark Davis   9/17/200,  11:03:49 AM
Here we are again on the front porch all dressed up for the prom. I see headlights rounding the corner. Will it be the limo or a garbage truck?

  Jonathan Levinson   9/17/200,  11:00:39 AM
A 30 min cycle oscillator upphase rising from the chop here, but it comes face to face with confluence resistance in the 35.50-.55 area, then at 35.65-.70. Above that, I would expect the bulls to break into a victory sprint.

  Mark Davis   9/17/200,  11:00:19 AM
So far today this is looking like a trending market so even if SPX prints a sell signal (it hasn't yet) I would consider it suspect until we saw some impulsive downside action... not likely considering TRIN is @ .53 and we're getting that small pullback I mentioned earlier rather than a hard slap back downward.

  Linda Piazza   9/17/200,  10:59:46 AM
The OEX pulls back for a retest of Keltner lines and the top of that broadening formation. This is an expected test. Bulls want the resistance to now serve as support, of course, while bears want the opposite.

  Jeff Bailey   9/17/200,  10:59:14 AM
Swing trade short alert .... for the QQQ $35.46 here, stop $35.65, target $34.85.

  Linda Piazza   9/17/200,  10:57:49 AM
The OEX has broken above the top of the broadening formation, but now has to test the 200-sma. This is the problem I mentioned yesterday with regard to these broadening formations and the difficulty trading them. By the time a breakout has been identified, much of the movement might be completed. The 15-minute Keltner chart suggests now that as long as there are 15-minute closes above the Keltner line currently at 546.24, the OEX has a chance of reaching 549, but there's that 200-sma in the way. This chart doesn't currently show resistance in that zone, as if the OEX will be able to zoom right past it, but sometimes as the OEX ebbs and flows as it's generally climbing, the Keltner lines will then cycle up to show resistance in that area.

  Jeff Bailey   9/17/200,  10:57:38 AM
VIX.X 14.06 -2.29% .... session low and QCharts' DAILY S2.

QQQ $35.50 +0.5%

  Jeff Bailey   9/17/200,  10:55:25 AM
10:50 Market Watch at this Link

  Mark Davis   9/17/200,  10:55:19 AM
I'm going to go out on a limb and say 1130 will give way... if it does all we need to get through is "overthrow" territory and we could be off to the races.

  Jonathan Levinson   9/17/200,  10:54:28 AM
Session highs across the board here.

  Linda Piazza   9/17/200,  10:54:26 AM
Hey, Jeff, I guess those OEX put buyers aren't faring too well this morning, are they? If some missed Jeff's intriguing information on opex machinations related to the OEX in last night's newsletter, here's the link: Link It's interesting stuff.

  Jonathan Levinson   9/17/200,  10:53:35 AM
Session low just printed for gold here at 405.60, with HUI and XAU fractionally negative. QQQ is trying the opening high level at 35.44 resistance, a break above which should set up a retest of 35.52-.55 resistance.

  Mark Davis   9/17/200,  10:52:48 AM
Recent swing highs on SPX were 1129.78, 1129.41 and 1129.46... we are headed for a test in a big hurry. Above 1130 could see some serious short covering. If 1130 doesn't act like an electric fence I'd say it will probably give way to the upside. Watch for a small pullback or a flattening rather than a hard slap back. Right now all things are pointing to an upside break of 1130. Stay tuned... we should find out very soon.

  Linda Piazza   9/17/200,  10:52:10 AM
Here's where the OEX is with respect to that broadening channel: Link

  Linda Piazza   9/17/200,  10:50:12 AM
The OEX just hit the upper boundary of the broadening formation on its five- and fifteen-minute charts. It's also either hitting or approaching Keltner resistance on both charts. The 200-sma is about a point above the current level, too, so a breakout will be meaningful, but a pullback also possible.

  Jeff Bailey   9/17/200,  10:49:11 AM
OEX.X 546.16 +0.51% ....

  Linda Piazza   9/17/200,  10:48:39 AM
The Dow has moved above its 200-sma. I thought yesterday that there would likely be a concerted drive to get the Dow above that average. No one wants mom-and-pop investor to read that the Dow closed the week below its 200-sma. No one except those short the market, of course. As I typed, the Dow pushed toward next resistance and is now above 10,300. The TRAN broke out first this morning. That's why I watch it. It often leads the Dow the way the SOX leads the Nasdaq.

  Jeff Bailey   9/17/200,  10:48:28 AM
Buy Program Premium SPX 1,129.11 , QQQ $35.42

  James Brown   9/17/200,  10:48:04 AM
Interesting... a CNN article reports that Executive search firm Heidrick & Struggles with some of its top management have sold all 1.2 million shares of Google that they bought for 30 cents a share less than a month ago. Profits were $128.8 million.

  Linda Piazza   9/17/200,  10:46:19 AM
The OEX is now at the top of that regression channel I displayed on the chart linked to my 10:26 post. As I typed, the OEX attempted a breakout above that channel, but it's not clear whether that breakout is going to be successful or not. The OEX is not yet at the top of the broadening formation or at upper Keltner resistance, both near 546.30 and about a point under the 200-sma, so gains should be more difficult from this point on.

  Jeff Bailey   9/17/200,  10:46:08 AM
Newmont Mining (NEM) $42.35 -1% .... testing its flat-to-lower 200-day SMA after being downgraded by CIBC World Markets to "sector perform" from "sector outperform"

  Mark Davis   9/17/200,  10:44:54 AM
The potential sell signal just failed to confirm with that buy program producing a MACD bullish kiss... looks like we're headed higher.

  James Brown   9/17/200,  10:43:25 AM
The HMO.X healthcare index is currently in the sixth week of its rally but we're starting to see some weakness here. Oscillators all look overbought and are beginning to turn lower with the current two-day reversal.

  Linda Piazza   9/17/200,  10:42:22 AM
The Dow is now only a little more than a point below its 200-sma. This could be a breakout or pullback point.

  Jeff Bailey   9/17/200,  10:42:19 AM
Buy Program Premium ... SPX 1,127.73 , QQQ $35.36

  Jonathan Levinson   9/17/200,  10:41:48 AM
Bonds are continuing lower, with ZN to a new session low of 112.78 and TNX up 3.5 bps at 4.108%, while crude oil pulls back off its highs, now up .70 at 44.575. Equities are returning to the morning highs, but QQQ reamins within the chop zone, now up .05 at 35.37.

  James Brown   9/17/200,  10:41:34 AM
The DFI defense index is also hitting new all-time highs as it breaks out over the 800 level.

General Dynamics (GD) is creeping back toward the $100 level.

Northrop Grumman (NOC) is up five days in a row and breaking out through resistance at $52.50 and its simple 50-dma.

Boeing (BA) is creeping higher toward new three-year highs at $55.

  Mark Davis   9/17/200,  10:41:19 AM
SPX printed a sell signal @ 1127 and although the index turned back up @ 1124 (there's that number again) it did not turn back up on a buy signal. SPX is currently trying to print a weak sell signal but MACD has not yet crossed down. All things considered I would say as long as we stay above 1125 my very short-term bias would be for further upside. Qualcomm is probably making the Russell and the Nasdaq look weaker than they really are.

  Jeff Bailey   9/17/200,  10:40:59 AM
Current OPEN MM Profiles at this Link

  Linda Piazza   9/17/200,  10:40:09 AM
Dow is headed up again to retest its converging 10- and 200-sma's, with the Dow at 10,279.52 and the 200-sma at 10,289.62.

  James Brown   9/17/200,  10:39:26 AM
The OIX oil index is also showing strength today up 1.03% and hitting new all-time highs. The OIX is up six weeks in a row.

  James Brown   9/17/200,  10:38:31 AM
The BTK biotech index is one of the strongest sectors today. The BTK is up another 1.05% and extending its rally that began in early August.

  James Brown   9/17/200,  10:37:06 AM
I know Linda has been following the Dow Jones Transportation Average (TRAN) but I'm amazed that it's hitting 5-year highs. That's definitely a positive for the market.

  Linda Piazza   9/17/200,  10:33:55 AM
Futures writers have been mentioning the Russell 2000. At 572.14 as I type, it's less than 6 points away from its converging 10- and 200-sma's. We've got battling important levels, though. On broad market dips, if they should occur, a Russell 2000 test of its 200-sma could produce a bounce, with that test possibly coming ahead of an SPX test of its 200-sma at 1,115.94. On broad market climbs, a Dow test of its 200-sma could produce a pullback.

  Linda Piazza   9/17/200,  10:30:55 AM
The Dow rose again this morning to test is 200-sma, at 10,289.59 according to QCharts, with the Dow's high a little more than two points below that. Currently, the Dow measures 10,272.51.

  Jonathan Levinson   9/17/200,  10:26:33 AM
QQQ update at this Link . Note that the short cycle oscillators are still a choppy mess, while the short cycle channel continues to point uncertainly lower. 35.31 is short cycle channel resistance, while 30 min channel resistance has made it to the range of yesterday's price highs.

  Linda Piazza   9/17/200,  10:26:13 AM
It's possible to redraw that OEX broadening formation as an ascending regression channel now: Link It doesn't appear to be a bear flag because the channel is too broad with respect to the trading pattern that preceded it, but still a violation of the channel's lower support would not be a bullish result. So, which pattern should we give more credence now, the regression channel (in which case long positions on touches of the lower support might be okay to consider) or the broadening formation, which suggests that only the most aggressive have-to-trade traders should be considering any kind of position within the formation? Haven't got a clue. TRIN has been rising all day today, which certainly should make bulls wary about initiating new positions, but its empirical level is far from bearish. Until the current five-minute bar, the advdec line had been dropping all day, not a bullish event, either. Crude has been rising, but the TRAN has certainly been handling that rise okay so far today, hasn't it? The SOX isn't doing much of anything, establishing a tight trading range. It's opex Friday.

  James Brown   9/17/200,  10:25:27 AM
Here's a relative strength play in the oil services sector... Diamond Offshore (DO), a 54% subsidiary of LTR, is up six weeks in a row and just now breaking out over round-number resistance at the $30.00 level. Volume has been very strong on the current up trend. Yet I wouldn't chase it here. It looks too extended. Smith Barney has upgraded the stock to a "hold" this morning.

  James Brown   9/17/200,  10:21:57 AM
A few downgrades today....

Lehman Brothers had cut CSCO to an "equal weight".

Goldman Sachs has cut NT to an "in line".

Wachovia has cut CRM to a "market perform".

CSCO is down 2.19% to $19.16. NT is down another 2.5% to $3.51 on top of yesterday's losses. CRM is down 5.16% to $15.42.

  Jeff Bailey   9/17/200,  10:19:10 AM
Swing trade sell covered call alert .... sell 3 of the Stillwater Mining October $12.50 calls (SWCJV) for $1.70 CBOE bid.

SWC $13.89 -1.2% here.

  James Brown   9/17/200,  10:18:18 AM
Circuit City Stores (CC) is up 3.8% to $14.66 and breaking out over resistance to hit new two-year highs after reporting earnings this morning. Wall Street was expecting a loss of 11 cents a share. CC turned in a loss of 6 cents.

The company is following in BBY's shadow, which also traded higher after its earnings report this week.

  James Brown   9/17/200,  10:16:02 AM
EBAY is down about 90 cents to $91.44 and testing its simple 10-dma after Legg Mason cut the stock to a "hold" this morning.

  Jonathan Levinson   9/17/200,  10:15:13 AM
QQQ volatility (QQV) is down 1,83% to 18.2 here. OEX volatility (VXO) is up 10.9% to 14.86.

  Linda Piazza   9/17/200,  10:14:44 AM
TRIN continues to rise; ADVDEC continues to fall.

  Linda Piazza   9/17/200,  10:13:23 AM
The OEX has now fallen back inside the narrowing symmetrical triangle that had formed inside the broadening formation. That negates the importance of that narrowing triangle. That also produces a cause for bulls to worry, because by some measures, this morning's action could be seen as a failed test of the upper boundary of the broadening formation. For the first time since Wednesday morning, a five-minute high failed to touch that trendline, a form of bearish divergence.

Try to keep an open mind about what you see happening this morning, however. The OEX is still inside the broadening formation, a formation that's known for being difficult to trade. The formation shows that trading is emotion-based and out of control, and not particularly amenable to technical analysis. It's opex Friday. The OEX is back at the mid-channel level on the five-minute Keltner charts, trying to reestablish equilibrium. Lots of reasons not to be wedded to any one bias or even the thought of entering a position.

  Jeff Bailey   9/17/200,  10:13:11 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

  James Brown   9/17/200,  10:10:59 AM
QCOM is down more than 6% to $37.88 on above average volume despite raising its fourth quarter and fiscal year 2004 earnings guidance. Investors seem concerned over comments by QCOM that it is reviewing how royalties are reported and may change its accounting practices. Technical traders will note that QCOM's MACD indicator has now produced a new "sell" signal from overbought levels.

  Jonathan Levinson   9/17/200,  10:07:30 AM
100-tick 2-day QQQ chart at this Link.

  Jonathan Levinson   9/17/200,  10:05:54 AM
Session high for Nymex crude here at 44.775.

  Linda Piazza   9/17/200,  10:02:55 AM
Scanning charts, I see that so far, the SOX holds above the converging 10-, 20-, and 30-sma's, but it's near its low of the day. The TRAN broke out and headed up to 3350, but pulls back from that level now and measures 3238.03. The BIX rose to test the 9/07 intraday high, but is below its high of the day, too. Not much yet to be gleaned from all of this.

  Jeff Bailey   9/17/200,  10:01:47 AM
10:00 Market Watch at this Link

  James Brown   9/17/200,  10:00:31 AM
Newly added put KSS is seeing some follow through on yesterday's breakdown. The stock is down 0.7% and trading near its lows for the session.

  Linda Piazza   9/17/200,  9:59:15 AM
The OEX came right back down to test the 15-minute Keltner resistance to see if it holds as support now. On the five-minute chart, it could not maintain the breakout level, but bulls will be almost as happy if it maintains five-minute closes above the Keltner line currently at 544.47, as it has been doing so far. This will avoid turning the smallest Keltner channel lower again. However, now it must press again through that overhead resistance on the five-minute chart and do so without that first overdone reaction that we often see in the first few five-minute bars, before the first reversal of the day. That resistance is at 545-545.14. Market participants should keep a watch on the TRIN, rising off the morning's low and the advdec, dropping heavily from the opening level. Those aren't helping market participants cherish those bullish thoughts.

  James Brown   9/17/200,  9:58:58 AM
Once again OI put play APOL has climbed toward resistance at $80.00 and rolled over.

  James Brown   9/17/200,  9:57:19 AM
OI call play AHC managed to breakout through the top of its current trading range this morning but gains are fading.

  Jonathan Levinson   9/17/200,  9:56:49 AM
Bonds are printing new lows, with TNX up 2.6 bps now and QQQ back to the previous low at 35.22. Next significant support is at 35.13.

  Jonathan Levinson   9/17/200,  9:54:20 AM
The Fed's open market desk has 8.25B in overnight repos expiring today. They've just announced a weekend repo of 5.25B, for a net drain of 3B for the day.

  Jeff Bailey   9/17/200,  9:51:58 AM
VIX.X 14.24 -1.04% .... QCharts' DAILY Pivot levels as follows .... 14.06, 14.21, P= 14.43, 14.58, 14.80.

  Jonathan Levinson   9/17/200,  9:50:33 AM
QQQ has come down to 35.275, still comfortably within the morning range Bonds have firmed slightly within negative territory, while gold continues to chip away at 408 resistance.

  Jim Brown   9/17/200,  9:48:18 AM
Alert - Consumer Sentiment = 95.8 (est 96.8, last 95.9)

  Jonathan Levinson   9/17/200,  9:46:24 AM
Gold has firmed, with Dec. emini contracts up 2.10 to 408.70, HUI and XAU both green. Michigan sentiment due now.

  Jonathan Levinson   9/17/200,  9:45:41 AM
Standing by my earlier assessment, the current level for QQQ is very difficult to read. Unless you have a strong view about direction from here, this chop zone looks treacherous, and prudence would dictate following a break below 35.10 or above 35.60, an admittedly wide range. The daily cycle is looking toppy after an extended run, and while we could see a bullish upside break to trend that cycle, I'm guessing that it rolls over. Again, confirmation will come on a downward break- below 34.92 would confirm it. If 35.60 breaks, then the chances of that bullish resolution will increase greatly, particularly if on a closing basis.

  Linda Piazza   9/17/200,  9:44:24 AM
The OEX is balancing on one Keltner breakout level. If it can maintain five-minute closes above the Keltner line currently at 544.80, it preserves the possibility of moving up toward the upper channel line of its broadening formation and toward next Keltner resistance, both just over 546. Currently, TRIN support this possibility, but remember that this is opex Friday and much of the movement is often over by the time amateur hour is.

  Linda Piazza   9/17/200,  9:35:50 AM
The OEX is easily brushing past Keltner resistance on the fifteen-minute chart, although we of course have not have a fifteen-minute close above that resistance. However, a 15-minute close above that Keltner resistance near 544.50 would certainly change the "testing the lower broadening trendline before testing the upper one" scenario. By the end of the first fifteen minutes of trading, though, the OEX could be all the way up at that top trendline. It has already broken above the "narrowing to a symmetrical triangle" top trendline. The first retracement of the day should begin in a few minutes.

  Jonathan Levinson   9/17/200,  9:34:41 AM
QQQ is bouncing off a low just printed at 35.22, currently trading 35.31. This looks like more of yesterday's churning as we kick off op-ex Friday. The 30 min cycle channel has widened in both direction on the QCOM move, with resistance up to 35.47 and support down to 35.05. The short cycle oscillators are also mixed in this chop zone.

  Jonathan Levinson   9/17/200,  9:29:08 AM
Ten year bonds are at session lows, with ZN futures breaking back below 113 to 112.95 currently, TNX up 2 bps at 4.089%. As discussed in Monday's Market Wrap, the weekly cycle for the ten year yield is in a potential bottoming zone. Churning above 4.02% support should see that bottom continue to build.

  Linda Piazza   9/17/200,  9:27:47 AM
As the OEX ended the day yesterday, it was near the middle of the broadening formation that has been forming since Wednesday morning. It was in an equilibrium position with regard to its Keltner channels on both the 5- and 15-minute charts, with that equilibrium position sometimes meaning that the OEX travels freely across Keltner support and resistance as it oscillates around the mid-channel levels. Therefore, any Keltner resistance or support should not be completely trusted. Closest Keltner resistance lay near 543.80 with closest Keltner support near 543, with both looking about equal in strength. The 15-minute chart suggests that resistance is stronger than support, however. The interpretation is that although the OEX could move slightly higher this morning as easily as it could move slightly lower in the earliest trading, it's more likely to test the bottom trendline of the broadening formation first than it is to test the top one first. We'll see how that outlook changes as the market opens, however.

One key may be the action in the semis. We had bad news last night, and semis traded accordingly in overseas markets. However, many claim that the semis are oversold now, engaged in a bottoming process, and there's a hint of a possible inverse H&S on the SOX. If the SOX steadies above its converging 10-, 20- and 30-sma's, dip-buyers may appear on the SOX, and maybe even on other indices cheered by the thought that markets may be nearer a low than a high. If the SOX dives instead, market participants may feel otherwise.

  Jonathan Levinson   9/17/200,  9:17:00 AM
The drop coincides with the release of QCOM's Q4 earnings forecast. Trader chatter is focused on a royalty accounting issue. Full details from the company's wire release are available at this Link.

  Jonathan Levinson   9/17/200,  9:14:33 AM
NQ is printing a session low here at 1423. QQQ is down to 35.27, approaching 35.25 support. There's light support at 35.20, and then at yesterday's lows from 35.13-35.15.

  Jonathan Levinson   9/17/200,  9:10:43 AM
A sudden reversal of the morning's gains has QQQ down .023 to 35.29 and NQ down 1.50 to 1424 currrently, off its overnight high of 1430.50.

  Linda Piazza   9/17/200,  9:06:59 AM
Other articles this morning discuss differing results from two political polls. One suggests that Bush is losing his lead, while a Gallup poll says he retains it. Whatever your political persuasions, we know that markets do not like indecision, so an unpredictable outcome might impact markets over the next weeks.

  Jonathan Levinson   9/17/200,  8:59:38 AM
Crude oil continues to advance, currently up .70 at 44.575 for a 1.6% gain here.

  Linda Piazza   9/17/200,  8:58:43 AM
An article on msnbc.msn.com questions the ability of U.S. refiners to bump up production. Here's the Link The article suggests that U.S. refiners are already operating at 98 percent capacity. Growing up in a refinery town myself (Port Arthur), with my father and neighbors all working at refineries, I know that can't be kept up forever. Shutdowns for maintenance have to occur.

  Jonathan Levinson   9/17/200,  8:56:07 AM
QQQ has 30 min channel resistance at 35.44, support at 35.10. While the cycle channel is still declining, any failure of price to fall back below the 35.30 level at the cash open will see the channel begin to turn up. Confluence support is at 35.25.

  Jonathan Levinson   9/17/200,  8:38:41 AM
Bonds have reversed their morning gains, with TNX now up .2 bps, nearly flat at 4.07%. Equities continue to rise, with QQQ now up .07 to 35.39.

  Linda Piazza   9/17/200,  8:38:01 AM
Remember that shortly after the market opens--at 9:45 according to one source and 9:50 according to another--we get September's Preliminary University of Michigan Consumer Confidence. I've seen expectations ranging from 96.7-98.00, with the prior number at 95.9.

  Jonathan Levinson   9/17/200,  8:20:40 AM
Equities are higher, with ES trading 1126.75, NQ 1427, YM 10264 and QQQ +.022 at 35.342. Gold is down 20 cents to 406.40, silver -.012 to 6.305, and ten year bonds +.14 to 113.20.

We await preliminary Michigan sentiment for Sept. at 9:45, est. 96.7, prior 95.9.

  Linda Piazza   9/17/200,  7:05:59 AM
Good morning. The semi book-to-bill number hit the Nikkei Friday. Shipments fell for the first time in more than a year. Although some expected the weakening data, chip stocks tumbled across Asia. In addition, Japanese investors had been expected to be cautious ahead of two market holidays next week, one Monday and one Thursday. The Nikkei opened near the flat-line level and fell to its 11,046.10 low by the open of the afternoon session. The Nikkei managed to trim its losses, however, climbing through much of the afternoon session. It closed down by 56.87 points or 0.51%, at 11,082.49.

Sony closed lower after the company advised Thursday that declining prices for flat-panel TVs and decreasing demand for audio products would keep profit from home electronics products flat for the quarter ending December 31. Retailer Ito-Yokado and broadband Internet provider Softbank had been mentioned as early gainers, with mixed results by the close. The retailer had gained ahead of its earnings report, but erased those gains by the close, closing down 0.8%. Softbank announced plans to raise cash, and closed higher by 1.5%. Goldman Sachs Group has reportedly offered to acquire a partial stake in Japanese consumer finance firm Takefuji, with that company's stock dropping 1.5%.

Other Asian markets turned in mixed performances. The Taiwan Weighted dropped 1.23%. South Korea's Samsung Electronics and its competitor Hynix Semiconductor have agreed to cooperate with investigations into a price-fixing conspiracy being conducted by the U.S. German competitor Infineon Technologies has already paid fines in the same investigation. In addition, the Korea Stock Exchange has reportedly opened an investigation of possible insider trading by Samsung. The Kospi dropped 0.85%. Singapore's Straits Times gained 0.32%, and Hong Kong's Hang Seng climbed 0.11%. China's Shanghai Composite soared another 3.17%, gaining strongly for the third day in a row and so far climbing in a "V" shape from the low reached Monday. It climbed into the resistance surrounding 1400, however, with the SSE now at 1,414.70. It has been climbing on strong volume the last several days.

Currently, European bourses post gains. In the U.K., Big Foods Group is a big winner after the company admitted that it is in talks to be acquired. Another supermarkets group, Tesco, gains after a newspaper speculated on the company's plans to increase their mortgage offerings. Mining stocks also gain. Investors don't like telecommunications group Cable & Wireless's spending plans, however, and that stock trades lower. Of special interest to U.S. investors is the anticipated announcement sometime today by Ford (F) of its plans for the Jaguar factory in Coventry, England. Expectations are that Ford will close the factory.

On Continental Europe, the book-to-bill number sends semi-related stocks lower. STMicroelectronics was also downgraded, according to one article. Also receiving a downgrade were the European auto manufacturers, with CSFB downgrading the sector to an underweight rating from its previous market-weight one. Telecoms gain after Goldman Sachs made positive comments about Deutsche Telekom and after Alcatel's announcement of plans to acquire privately held Spacial Wireless and eDial. Both are U.S. companies. One telecom-related company not sharing in the gains was Versatel Telecom, dropping more than 5% at one point in early trading after it announced plans to raise 100 million euros by selling convertible bonds. In other stock-specific news, German insurer Allianz made aggressive plans to stop market share losses in the car insurance department, deciding to cut prices by up to 30%.

As of 7:03 EST, the FTSE 100 traded higher by 32.40 points or 0.71%, at 4,588.90. The CAC 40 traded higher by 26.53 points or 0.72%, at 26.53. The DAX traded higher by 10.04 points or 0.25%, at 3,973.69. All have flattened in the last couple of hours, perhaps awaiting economic numbers from the U.S.

  Jeff Bailey   9/16/200,  9:47:44 PM
10-year YIELD ($TNX.X) Chart and WEEKLY intervals at this Link

Simple usage of conventional retracement from relative peak highs and lows.

For those still testing, or following a scenario laid out in the 05/06/04 Index Trader Wrap Link

then here's the 0.50 box scale of the 10-year yield ($TNX.X).... now testing the bullish support trend. Link

As well as the Continuous Gold ($GOLD) chart with 5-box scale. Link

  Linda Piazza   9/16/200,  9:22:37 PM
In my Wrap last night, I detailed several reasons that we might expect a difficult-to-trade consolidation-day Thursday. One was the usual tendency to see a smaller-range day after a big-range day. Another was the usual tendency on an opex Thursday to clamp down on prices after about midday. That's just the type of day that occurred: Link

Volume patterns were positive, but price action didn't follow through. Soon after the open, when the OEX turned down from its high of the day, it was already apparent that there was another reason to believe that the day might be a difficult one to trade. The OEX had formed a broadening formation. These are so difficult for a couple of reasons. One is that they're formed when trading is emotion based or even out of control, as Murphy terms it. It's always difficult to trade under those conditions, when price developments are not always amenable to technical analysis. Another reason for the difficulty results from the broadening formation. Where is the breakout? Only when there's a sound break above or below one of the two expanding trendlines can a breakout be determined, and by then, much of the movement may have been lost. As the day progressed, the OEX's pattern narrowed into a more-standard symmetrical triangle within the broadening formation: Link

Brave bulls and bears could act on a break of the narrowing trendlines of the symmetrical triangle, but should have profit-protecting plans in mind as the broadening trendlines are approached. It would also take some bravery to buy a breakout or breakdown, too, in the current environment, although both Murphy and Pring state the movement after a breakout is usually big. Be especially careful with breakouts above that upper broadening trendline, making sure that it has met up with the 200-sma, currently at 547.16, before any such breakout is entered with a long position. You don't want to enter a long position at 546, for example, with the 200-sma at just over 547. A breakdown below the lowest trendline of the broadening formation will also be an entry just ahead of or at the 540.80-541 potential support zone. As of Thursday's close, Keltner chart characteristics suggested that there would at least be a test of the bottom trendline of the expanding formation before a test of the top one, without necessarily saying the bottom would be violated. Trade carefully.

  OI Technical Staff   9/16/200,  9:21:58 PM
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