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  Jeff Bailey   9/20/200,  7:45:57 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Stopped out of Friday's bearish swing trade short in the QQQ at $36.65 ($-0.19, or -0.54%)

Day trade short Hewlett Packard (HPQ) at $18.55, closed $18.46. ($+0.09, or +0.49%).

 
 
  Jeff Bailey   9/20/200,  7:37:07 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   9/20/200,  7:36:24 PM
Closing Internals at this Link

 
 
  Jim Brown   9/20/200,  4:16:57 PM
ADBE reporting earnings at +.42 cents +3 cents over est, guiding higher.

 
 
  Mark Davis   9/20/200,  4:16:08 PM
Look at the battle that took place for SOX 400... Link

 
 
  Mark Davis   9/20/200,  4:08:37 PM
The SPX 5-min chart shows a completely different picture than the 1-min. It printed a buy signal @ 2:35PM and the signal never aborted. Link

 
 
  Mark Davis   9/20/200,  3:59:59 PM
SPX has just printed a buy signal @ 1122.33 (on the 1-min chart)

 
 
  Mark Davis   9/20/200,  3:56:55 PM
I'm going to take a very speculative long position and hold overnight based on the refusal of the SOX to drop back from the 400 area.
Long SPX @ 1122.02

 
 
  Mark Davis   9/20/200,  3:51:53 PM
Stopped out @ break even... SPX is trying to gather itself again from a higher low. I don't know if I would trust another buy signal but a little bit higher and SPX will print another one.

 
 
  Linda Piazza   9/20/200,  3:49:44 PM
Charts win, guts lose. In my 11:01 post this morning, I noted that the OEX usually tended to spend at least a couple of hours consolidating along the 60-minute 100/130-ema's once they were tested, if not more, and that the OEX was in the process of testing those averages. I speculated that we could be in for at least another hour of consolidation on that basis, if not more. My gut feeling, though, was that a directional move could get started sooner, although I said that I didn't trust my gut due to other developments. We got the "or more" consolidation.

Sometimes a gut feeling isn't just guessing, but results from hours and days and months and sometimes years of watching the same trading vehicle, and gradually picking up small clues that you might not even be able to articulate. It can result from remembering levels that for years have slowed down advances or declines, "sticking points" as Jane and I sometimes term them. My gut instincts about when to exit a trade are usually more on target than my gut instincts about whether to enter one, something I know about myself from lots of journal entries and examination of lots of trades. I also know that those instincts are not to be trusted at all when there are outside diversions in your life, as there are today in mine. That's why I said I didn't trust those instincts and why I tried to watch chart developments instead. The reason that I'm mentioning this today is to point out that there are times to pay attention to your gut instincts, particularly when those instincts are to protect profit you've made, and there are times to ignore them, particularly when you know you're sick or tired or have too many outside diversions to trust them.

 
 
  Jonathan Levinson   9/20/200,  3:42:59 PM
We could be looking at a rising triangle for QQQ, but the prints above 35.45 make it look more like a rising wedge. This is a problem because the former is bullish, the latter bearish. A break above 35.50 for longer than 2 or 3 minutes would invalidate the bearish interpretation, while below 35.38, the impled bear wedge target will be 35.25.

 
 
  Mark Davis   9/20/200,  3:42:39 PM
Stepping away for a few minutes...

 
 
  Mark Davis   9/20/200,  3:40:49 PM
If you're long from 1122.29 make your own decision but personally I'm cinching up my stop to break even... I don't want to get caught in any sudden downdrafts. SPX has not printed a sell signal but CCI almost reached +200 (my trigger point to start looking for a short or protect a long) and that may be close enough for government work. SOX is back below 400 again.

 
 
  Linda Piazza   9/20/200,  3:38:07 PM
Here's the SOX chart from last Wednesday's Wrap, complete with last Wednesday's annotations. I've added most probable version of the neckline for the potential inverse H&S on that chart. Note that the SOX still tests that neckline and hasn't convincingly broken above it yet: Link The formation could still be rejected or confirmed.

 
 
  Linda Piazza   9/20/200,  3:33:48 PM
The OEX is back inside the broadening formation on its 60-minute chart, still below the neckline of its H&S, back testing the 60-minute 100/130-ema's. This is the could-go-either-way zone.

 
 
  Linda Piazza   9/20/200,  3:31:58 PM
The TRAN is rounding up again, possibly into a right shoulder for its continuation-form inverse H&S. However, just under 3250 is considerable Keltner resistance that the TRAN is hitting right now. It's so far pausing at that Keltner resistance. The right shoulder was almost so deep that it undid the significance of that formation, but perhaps not quite. Perhaps we can still consider it significant to watch.

 
 
  Mark Davis   9/20/200,  3:31:49 PM
A clean break of SOX 400 could trigger some short covering. I'm sure more than a few traders shorted at that level.

 
 
  Mark Davis   9/20/200,  3:29:15 PM
If you're long from 1122.29 you may want to consider raising your stop to 1121.29. With a little over 30 minutes of trading left I wouldn't want to be long if we dropped back to that level again. You would also only be risking a -1 point hit that way. If we continue higher I am going to raise my stop to break even as soon as possible.

 
 
  Jonathan Levinson   9/20/200,  3:28:14 PM
35.47 resistance is being tested here.

 
 
  Jonathan Levinson   9/20/200,  3:27:30 PM
The QQQ 30 min cycle oscillators are back to sell signals, while the 30 min proxy channel remains sideways and trendless here. Support is at 35.15, resistance 35.64.

 
 
  Jonathan Levinson   9/20/200,  3:26:28 PM
We've just seen a large sell program on QQQ, with approx 3M shares traded within 100 ticks. The drop is being retraced as I type.

 
 
  Linda Piazza   9/20/200,  3:24:14 PM
We've had bearish MACD crosses on the daily charts of the BIX and Dow, although not on the other indices I typically watch frequently.

 
 
  Linda Piazza   9/20/200,  3:20:50 PM
The Dow is back above 10,200, the SOX above 400, but just barely on each score.

 
 
  Jeff Bailey   9/20/200,  3:20:09 PM
Bearish day trade exit alert .... for Hewlett Packard (HPQ) $18.46.

 
 
  Jim Brown   9/20/200,  3:19:26 PM
Al Zawarhi has posted a video on the Internet of a US hostage being killed.

 
 
  Jonathan Levinson   9/20/200,  3:16:36 PM
True, Jane. The market makers are the big winners in a range like this.

 
 
  Mark Davis   9/20/200,  3:15:22 PM
Another failure at SOX 400 with a big red 1-min candle just printing. I wonder if there will be another showdown at the OK Corral with bulls trying to send it over 400 and bears trying to keep it below. Bulls are pretty scratched up today but haven't given up yet.

 
 
  Jane Fox   9/20/200,  3:12:03 PM
Jonathan I think there may be a few daytraders chopped up from this sideways action also.

 
 
  Jonathan Levinson   9/20/200,  3:11:04 PM
There is little volume behind this 10 cent buy candle, and it's retracting part of the gains as I type. 35.32-35.45 is the current range, and the short cycles are all chopped up from the sideways action over the past 2 hours.

 
 
  Mark Davis   9/20/200,  3:09:10 PM
SPX just printed a buy signal

 
 
  Jeff Bailey   9/20/200,  3:08:38 PM
Buy Program Premium .... SPX 1,121.54 , QQQ $35.45

 
 
  Mark Davis   9/20/200,  3:08:23 PM
SOX just hit 400 again

 
 
  Mark Davis   9/20/200,  3:07:34 PM
SPX is trying to print a buy signal here... CCI is perfectly setup and MACD has turned up but not crossed yet. Do or die time for bulls.

 
 
  Linda Piazza   9/20/200,  3:07:30 PM
Hmm. Potential inverse H&S on the VIX's five-minute chart, neckline at about 14.67.

 
 
  Jeff Bailey   9/20/200,  3:07:25 PM
03:00 Internals at this Link

 
 
  Linda Piazza   9/20/200,  3:06:29 PM
The OEX continues to show fifteen minutes closes beneath the Keltner line currently at 541.85, where bears most want to see those 15-minute closes capped. Keltner support is trying to gather beneath the OEX, but not looking solid just yet, at least.

 
 
  Linda Piazza   9/20/200,  3:04:54 PM
We've got the Dow under 10,200, the SOX under 400 (just barely), but the Nasdaq above 1900 (just barely), but printing a convincing try at a reverse H&S, I think already noted by Jonathan. Confusion. The Nasdaq is headed down now to test that right shoulder level, however, so we may soon get our answer as to whether these indices are ever going to line up going the same direction.

 
 
  Linda Piazza   9/20/200,  3:01:26 PM
The TRIN is certainly not supporting a big washout, is it? The ADVDEC line certainly isn't supporting a big climb, either, is it? If any OEX traders are in bearish plays on the break of that H&S neckline, continue to follow the OEX lower with your stops. Keltner support is trying to flatten under the OEX and support it, but if there's a strong whoosh down soon, it could probably still get through it.

 
 
  Linda Piazza   9/20/200,  2:59:08 PM
Dow dropping toward the low of the day again, but has not hit a new low of the day.

 
 
  Jonathan Levinson   9/20/200,  2:58:19 PM
The higher low at 35.37 is looking like a right shoulder under a reverse head and shoulders for the intraday QQQ below a 35.47 neckline. An upside neckline break carries an implied target of 35.67, but bulls will need to overcome that 35.55 line first. The 30 min cycle chanel is flat, and it will turn back up on a break above 35.45.

 
 
  Mark Davis   9/20/200,  2:56:56 PM
There's a real fight going on to try and recapture SOX 400. If they can accomplish that feat the rest of the markets should follow, but at this point it's still a big IF.

 
 
  Jeff Bailey   9/20/200,  2:54:29 PM
02:50 Market Watch at this Link

 
 
  Linda Piazza   9/20/200,  2:50:38 PM
The Dow hasn't been able to maintain values above 10,200 in this last test. The OEX's bounce from the lower trendline of its broadening formation has disappeared, too, with the OEX back at that trendline.

 
 
  Linda Piazza   9/20/200,  2:43:04 PM
OEX bears want to see continued 15-minute closes below the Keltner line that's now at 542.08.

 
 
  Linda Piazza   9/20/200,  2:40:59 PM
The DOW is attempting a bounce from 10,200, the OEX a bounce from the descending trendline of its broadening formation.

 
 
  Mark Davis   9/20/200,  2:38:08 PM
SPX 1-min MACD has finally turned back up but if it rolls over immediately it will probably be the kiss of death.

 
 
  Linda Piazza   9/20/200,  2:35:56 PM
The BIX has resisted confirming its double-top formation on the daily chart with a drop below 362.02. It's at 326.80 as I type and near the low of the day.

 
 
  Mark Davis   9/20/200,  2:35:51 PM
Jim you just convinced me to leave my stop @ 1120.29. I was tempted to lower it to 1119.29 as I came within 5 cents of being stopped out on that last swoosh down.

 
 
  Jonathan Levinson   9/20/200,  2:29:34 PM
Stepping away for 15 minutes here.

 
 
  Linda Piazza   9/20/200,  2:27:48 PM
This morning and last night, I suggested that those entering bearish OEX plays based on a break of the H&S neckline on the 60-minute chart have plans in place for handling tests of the descending trendline that marks the bottom of the OEX's broadening formation. We're getting another such test, with the OEX having violated that trendline now. The downside target for the H&S is in the 536-537 region, but the OEX has to get through multiple strong support levels to get to that downside target. If not inclined to take automatic partial or full profit, I'd be following the OEX down with my stops. I wouldn't let profit turn to a loss.

 
 
  Jeff Bailey   9/20/200,  2:22:26 PM
02:00 Internals at this Link

 
 
  Mark Davis   9/20/200,  2:20:37 PM
I'm definitely losing confidence in the long play. I have a stop set @ 1120.29, not will to risk any more than the +2 points from earlier today.

 
 
  Linda Piazza   9/20/200,  2:18:53 PM
I show the OEX now dropping below the descending trendline on the broadening formation, but there hasn't yet been even a first five-minute close beneath that support and the OEX is already trying to bounce, so be careful about assumptions. As I said several times last week, any such break drops the OEX straight into a congestion zone that has multiple support layers.

 
 
  Linda Piazza   9/20/200,  2:16:47 PM
The TRAN threatens to drop low enough to undo the potential for a continuation-form inverse H&S on its five-minute chart. It's at 3244.48 as I type, and a drop to or below 3240 would probably undo that potential.

 
 
  Jonathan Levinson   9/20/200,  2:16:28 PM
QQQ is back to now-triple bottom support at 35.32. A break below targets 35.25 and 35.18.

 
 
  Mark Davis   9/20/200,  2:15:44 PM
There's the downside break...

 
 
  Linda Piazza   9/20/200,  2:14:58 PM
Dow 10,200 being tested.

 
 
  Linda Piazza   9/20/200,  2:12:50 PM
The OEX now tests the descending bottom trendline of its broadening formation. Unless it pulls up quickly, with the dip being bought, a downside break of that formation is possible. The OEX is moving higher, attempting that bounce, but it's unclear how high it will take the OEX. The five-minute and fifteen-minute MACD are not turning higher with the bounce . . . and the bounce ended as I typed. The 15-minute Keltner chart shows Keltner support currently being tested, too, but that Keltner support now turns down, unlike its flattened position earlier, so that it's possible that the OEX could just slide down that support.

 
 
  Jeff Bailey   9/20/200,  2:07:11 PM
02:05 Market Watch at this Link

 
 
  Mark Davis   9/20/200,  2:03:29 PM
The bounce stalled right at the bottom of the 11:38 gap-down and SPX has turned sharply lower. Keep that long play on a short leash.

 
 
  Jonathan Levinson   9/20/200,  2:03:27 PM
Volume has slowed since the 1:30-40PM program trades on QQQ. The wavelet oscillator is on a sell signal, but the buyers are stepping up at what is so far a higher low of 34.34. There's an uptick in the short cycle, but it's not yet on a buy signal.

 
 
  Linda Piazza   9/20/200,  1:59:36 PM
The OEX bounced again from the bottom support of the broadening formation on its intraday chart back up toward a retest the neckline of its H&S formation, but hasn't made it there yet. Here's the same 60-minute chart I've posted a couple of times today with the original annotations, but with updated action: Link Truthfully, as long as the OEX is within that broadening formation, I'm trying not to be wedded to any one outlook. The OEX's bounces away from that lower trendline of the broadening formation are taking it into lower highs today, but Keltner-style bullish divergence is showing up, so there are mixed messages. Note: The OEX heads back down to test that broadening formation's lower support again.

 
 
  Mark Davis   9/20/200,  1:51:03 PM
I'm watching the SOX very closely here... as long as it doesn't retrace more than 50% of today's rally I'll feel comfortable with the SPX long from 1122.29. SPX 1-min MACD has turned up sharply... if we can take out the last swing high @ 1123.30 the long play will begin to look a lot better... we're very close to that scenario playing out.

 
 
  Jeff Bailey   9/20/200,  1:47:42 PM
Buy Program Premium ... SPX 1,123.27 , QQQ $35.42.

 
 
  Jeff Bailey   9/20/200,  1:46:03 PM
Day trade bearish cancel setup alert ... for Protein Design Labs (PDLI) $19.95 -2.82% ...

 
 
  Jonathan Levinson   9/20/200,  1:40:26 PM
QQQ is rolling over from a lower high with the wavelet cycle, now on a fresh sell signal. former support at 35.32-.34 is being tested again, a break below which targets the morning's opening levels and the lows of the day. The current support is the downside implied target from the intraday head and shoulders profiled earlier. A break below these levels will suggest more weakness to come. Volume is surging as I type, with bulls and bears fighting for direction here.

 
 
  Linda Piazza   9/20/200,  1:37:01 PM
If the OEX is able to turn around here and climb above its midday high, it will have created Keltner-style bullish divergence. That's a big "if," however.

 
 
  Mark Davis   9/20/200,  1:35:06 PM
Watching the 1-min MACD can be very useful after a bullish cross that confirms a buy signal. What you want to see is a bullish kiss, not a bearish cross back down. A bullish kiss after a buy signal greatly increases the odds for a long play while a bearish cross has just the opposite effect. We're at the crossroads right now and it could still go either way. If we take out the last swing high @ 1123.30 it will probably print the bullish kiss. If we drop much below 1123 it will probably print a bearish cross.

MACD just crossed back down as I typed this post so the prudent thing now is to keep a tight leash on a long play and not let it get away from you. 1-min MACD can still cross back up (and frequently does) but the odds are not as good as they were a few minutes ago.

 
 
  Jane Fox   9/20/200,  1:33:36 PM
Dateline WSJ - NEW YORK -- CBS conceded on Monday that it cannot vouch for the authenticity of documents used to support a "60 Minutes" story that questioned President Bush's Vietnam War-era National Guard service, after several experts denounced them as fakes.

The network said it was wrong to go on the air with a story that it couldn't substantiate.

"Based on what we now know, CBS News cannot prove that the documents are authentic, which is the only acceptable journalistic standard to justify using them in the report. We should not have used them," CBS News President Andrew Heyward said in a prepared statement. "That was a mistake, which we deeply regret."

 
 
  Jonathan Levinson   9/20/200,  1:33:19 PM
Bonds continue to grind higher: TNX now down 5 bps at 4.077%, -1.21% for the day. Gold is up to 407.20, down .40 now. 405 support held again, as did 408 resistance. HUI and XAU are up .77% and 1.06% respectively.

 
 
  Jonathan Levinson   9/20/200,  1:28:03 PM
QQQ just ran into resistance at 35.45, former support after the initial neckline break. The short cycle oscillators are trying to turn up, and if bulls can regain 35.45, they will.

 
 
  Linda Piazza   9/20/200,  1:22:48 PM
The TRAN maintains the possibility that it could be forming a continuation-form inverse H&S with a neckline at the descending trendline off Friday's high, and that will break it above Friday's high if that formation is confirmed and its upside target met.

The problem is that there are all sorts of possibilities on all sorts of charts.

 
 
  Mark Davis   9/20/200,  1:18:48 PM
Jonathan I'm seeing the same thing on the SOX... very oversold CCI readings on the 1-min chart followed by a buy signal. This is either the turnaround point or the start of a trending move down. I stuck a toe in the water (long SPX) on that last buy signal @ 1122.29

 
 
  Jonathan Levinson   9/20/200,  1:14:10 PM
A wavelet upphase is forming here on QQQ. The short cycle dwonphase continues, but the short cycle TRIX and Macd are as oversold as they've been all day. A bounce from this higher intraday low would be a bullish first step, but only if it's followed by a higher high, and 35.55 is looking like stiff resistance from here.

 
 
  Mark Davis   9/20/200,  1:13:46 PM
SOX just printed a buy signal @ 398.00... it's usually SOX that prints the buy signal first.

 
 
  Linda Piazza   9/20/200,  1:12:20 PM
The OEX is trying to bounce up into a slightly higher low on the five-minute chart. Resistance tries to converge near 542.35, but hasn't fully converged yet. The OEX is still testing the 60-minute 130-ema and the descending trendline of the broadening formation on its intraday chart. If the OEX can bounce, bears want to see that bounce stopped quickly, with five-minute closes beneath the Keltner line currently at 542.36.

 
 
  Mark Davis   9/20/200,  1:12:11 PM
SPX has just printed a buy signal @ 1122.29

 
 
  Jeff Bailey   9/20/200,  1:11:32 PM
01:00 Internals at this Link

 
 
  James Brown   9/20/200,  1:05:34 PM
Last Friday Internet empire IACI soared on rumors that Barry Diller may try and take the company private. Today the stock is down 3.9% after Goldman Sachs downgraded the stock to "in line". This looks like a strong failed rally at the simple 40-dma.

 
 
  Linda Piazza   9/20/200,  1:04:20 PM
For the second time today, the OEX tests the 60-minute 130-ema, with that average at 541.75 and with the OEX at 541.87.

 
 
  Jonathan Levinson   9/20/200,  1:04:09 PM
QQQ is now testing 35.34 support- the market is back to its 10AM levels.

 
 
  Linda Piazza   9/20/200,  1:01:09 PM
The BIX, although far from looking bullish today, has not confirmed its double-top formation on its daily chart.

 
 
  James Brown   9/20/200,  1:00:58 PM
Ouch! Maxim Pharmaceuticals (MAXM) is down 48% to $3.09 after reporting that its Ceplene drug trials for liver cancer failed to show any improvement. Several brokers have downgraded the stock on the news.

 
 
  Linda Piazza   9/20/200,  1:00:01 PM
The OEX now heads down again to test the descending trendline of the broadening formation. Bears and bulls probably wish they were getting more direction from the TRIN, though.

 
 
  Linda Piazza   9/20/200,  12:55:31 PM
The TRAN dropped heavily back from its test of the descending trendline off Friday's high. The TRAN's five-minute chart does not preclude the possibility of an inverse H&S developing on that chart with a right shoulder near the 3250 level, however. A pullback to the 3240 level or below would undo that possibility.

 
 
  Jonathan Levinson   9/20/200,  12:54:57 PM
Bonds are still strong, with TNX -4.8 bps at 4.079%, a 1.15% decline.

 
 
  Mark Davis   9/20/200,  12:54:31 PM
We're at a critical juncture here. SOX is trying to print a buy signal in the 400 area. If it does, and if it holds I expect SPX to follow.

 
 
  Jonathan Levinson   9/20/200,  12:54:23 PM
There wasn't the big surge in volume for which I was hoping on that 35.55 neckline break, but the move was enough to turn the 30 min cycle channel back down. Channel support is at 35.45. The short cycle oscillators and channel are pointed down, and this is primetime for the bears. Support below 35.45 is at 35.34, followed by 35.25 and 35.18.

 
 
  Linda Piazza   9/20/200,  12:50:47 PM
SOX tests 400 again, at 400.06 as I type. It's also testing the neckline of its potential inverse H&S on the daily chart.

 
 
  Jeff Bailey   9/20/200,  12:50:32 PM
12:45 Market Watch at this Link

 
 
  Jeff Bailey   9/20/200,  12:44:49 PM
Day trade short alert .... Hewlett Packard (HPQ) $18.55 here, stop $18.65, target $18.20.

 
 
  Linda Piazza   9/20/200,  12:43:10 PM
The OEX turns down below the neckline of that H&S formation again. The bottom support of the broadening formation lies at about 541.50, with the 60-minute 130-ema at 541.76.

 
 
  Jonathan Levinson   9/20/200,  12:42:37 PM
QQQ is back to 35.55, and the current tall bearish engulfing is looking promising for a potential neckline break. The short cycle oscillators are rolling over with the wavelet oscillator just beginning a new downphase from a lower high, confirming the new short cycle downphase.

 
 
  Linda Piazza   9/20/200,  12:41:24 PM
The TRAN turns down from its test of the descending trendline off Friday's high.

 
 
  Linda Piazza   9/20/200,  12:40:19 PM
The OEX still hasn't been able to sustain levels above the 50% retracement of the steep plunge from Friday's last five-minute high to today's low, with that level near 544. I can't say that climb today looks like a bear flag, though. Doesn't look like much of anything, but while the OEX remains within that broadening formation, perhaps we shouldn't be trying to make too much sense out of anything that may not make sense.

 
 
  James Brown   9/20/200,  12:33:52 PM
The LXK put is not looking good. Shares are bouncing higher again. Bulls are not willing to relinquish LXK's long-term rising support where it has bounced three times in the last six weeks. If LXK closes above its exponential 200-dma (at 85.34) I'd probably consider exiting.

 
 
  Linda Piazza   9/20/200,  12:33:03 PM
The TRAN threatens to break out above the descending trendline off Friday's high. The BIX threatens to confirm a double-top formation. The Nasdaq broke above the symmetrical triangle at the top of its climb and the 9/13 high, but is now back below that high again. Is it any wonder the OEX dipped below the neckline of its H&S on its 60-minute chart, bounced back above it and now prints 60-minute candles right along that neckline? None of these is working in concert with each other.

 
 
  James Brown   9/20/200,  12:31:26 PM
United Parcel Service (UPS) is just now edging past its June highs to hit new 4 1/2 year highs (UPS +21 cents to $75.25). Remember that rival FDX reports earnings tomorrow.

 
 
  Mark Davis   9/20/200,  12:30:54 PM
A little too much excitement this morning in my neighborhood. The guy just over my back fence (not the sharpest knife in the drawer) started his car over a pile of dry grass. I was looking out my office window and saw what at first looked like fog drifting through the redwoods, not an uncommon sight around here. Then I heard a crackling sound and the "fog" turned into dark brown smoke. I grabbed the phone and called 911 as I ran outside. Within 30 seconds the flames were shooting 100 feet high and eating up a large oak tree like it was a potato chip. It sounded like Chinese New Year with strings of firecrackers going off. The firemen showed up within 1 minute of my call and had the fire out 5 minutes later. Those guys are good. The whole place reeks of smoke now. Whew! My knees are shakin'!

 
 
  Jeff Bailey   9/20/200,  12:28:45 PM
Amereda Hess (AHC) $84.99 +1.19% Link .... today's trade at $85.00 gets stock's PnF chart back on a buy signal, a triple top. Initial bullish vertical count now back to bullish at $104.

Has given prior triple top in April ($68) and spread triple in June at $75.

 
 
  James Brown   9/20/200,  12:28:12 PM
Good news for our Apollo Group (APOL) put play. UBS downgraded both APOL and rival CECO to "reduce" this morning while cutting their price targets. Shares of APOL gapped down to $75.48 and traded to $74.53 before bouncing back toward $76. APOL is still down 3% today.

 
 
  Jonathan Levinson   9/20/200,  12:26:07 PM
Still on that call. 35.55 is beginning to look like neckline support on an intraday h&s for QQQ. The implied target is 35.33 on a break, but look for an uptick in volume below the line for confirmation.

 
 
  James Brown   9/20/200,  12:24:41 PM
Copper miner Phelps Dodge (PD), another OI call, is up 2.17% to $84.96. We were growing concerned on Friday with the two-day downturn and we still don't like the waning momentum oscillators. PD needs to breakout over the $86 level. Hopefully the rising in copper will help. Copper is up to $1.316 a pound. If it can trade above $1.323 a pound I believe it would be new eight or ten year highs.

 
 
  Linda Piazza   9/20/200,  12:23:30 PM
The TRAN creeps ever closer to a test of the descending trendline off Friday's high, with that trendline at about 3259 and with the TRAN currently at 3257.03.

 
 
  Jeff Bailey   9/20/200,  12:22:45 PM
Day trade short setup alert ..... for Protein Design Labs (PDLI) $20.19 -1.65%. Look to short a bounce to $20.33, stop $20.56 to begin, target $19.75 before the close.

 
 
  James Brown   9/20/200,  12:20:42 PM
Thanks, Linda.

I was starting to worry there for a while when it churned sideways for several days.

 
 
  James Brown   9/20/200,  12:20:03 PM
Newly added OI call play Cummins Inc (CMI) is up another 1.5% to $72.05 after Prudential reiterated their "over weight" rating this morning.

 
 
  Linda Piazza   9/20/200,  12:19:23 PM
Congratulations, James, on the AHC play.

 
 
  Jeff Bailey   9/20/200,  12:18:47 PM
12:00 Internals at this Link

 
 
  James Brown   9/20/200,  12:18:22 PM
Exit Alert! Oil and gas company Amerada Hess (AHC) is up 1.15% to $84.96 after hitting $85.00 earlier in the session. The stock has achieved our initial profit target at $85.00. We are suggesting that short-term traders exit now. If you believe AHC can breakout over resistance at $85.00 then we'd suggest you tighten your stop. An alternative strategy is to only close part of your position and leave a small speculative position open.

 
 
  Jonathan Levinson   9/20/200,  12:07:59 PM
Stuck on a call - back shortly.

 
 
  Linda Piazza   9/20/200,  12:05:31 PM
The TRAN, although appearing to turn down into a lower five-minute high, didn't drift too far down when it turned lower. Now it's attempting to rise again, and at just under 3260, will challenge the descending trendline off Friday's high. It's at 3254.94 as I type. The TRAN did pop above a continuation-form inverse H&S neckline on that chart, with an upside target for that formation at 3267, but the five-minute candles are miniscule now. So far, bulls appear reluctant to drive the TRAN stocks higher.

 
 
  Jeff Bailey   9/20/200,  12:03:52 PM
Biogen Idec (BIIB) $61.27 -0.72% .... after popping to $62.56 earlier this morning.

 
 
  Jeff Bailey   9/20/200,  12:02:55 PM
12:00 Market Watch at this Link

QQQ got a little carried away above WEEKLY R1, while NDX just shy of its WEEKLY R1.

 
 
  Linda Piazza   9/20/200,  11:58:00 AM
Almost an hour ago, in my 11:01 post, I said that the OEX's usual behavior near its 60-minute 100/130-ema's, plus other S/R in region, would suggest that the OEX might spend at least another hour near the then-current level. My gut had been saying something different, but I'd mentioned that I didn't trust my gut. So far, the OEX is following the usual pattern once approaching the 60-minute 100/130-ema's. Those averages are now at 542.74 and 541.72, respectively. Usually after approaching them, the OEX lingers near them at least a couple of hours before moving far away, if not longer. The OEX has now lingered near them the minimal amount of time before making a directional move, but that doesn't mean that it will immediately shoot off in one direction or another, just that it's fulfilled its usual minimal amount of time near those averages.

 
 
  Jonathan Levinson   9/20/200,  11:54:30 AM
QQQ found support on the decline at 35.56. That 35.55 QQQ line is clearly a key watershed between intraday bulls and bears.

 
 
  Jeff Bailey   9/20/200,  11:50:35 AM
Sector Bullish % from www.dorseywright.com at this Link comparison from August expiration to Friday's expiration.

 
 
  Linda Piazza   9/20/200,  11:46:35 AM
The OEX is again testing the neckline of that H&S.

 
 
  Jonathan Levinson   9/20/200,  11:42:53 AM
30 min channel support is at 35.45, while confluence support at 35.55-.59 is just being touched now. The 30 min channel whipsawed to the upside, and the channel is still rising, but a move below 35.55 will flatten it.

 
 
  Jonathan Levinson   9/20/200,  11:38:58 AM
New session high for bonds, TNX -5.1 bps to 4.076%.

 
 
  Jeff Bailey   9/20/200,  11:31:09 AM
11:00 Internals at this Link

 
 
  Mark Davis   9/20/200,  11:29:18 AM
We're starting to see a slow bleed to the downside. If you're long from 1122.47 you may consider 3 possibilities... leave your stop @ 1124.47 to lock in a +2 point gain but take the risk of being stopped out, lower your stop to 1123.97 to allow for a little underthrow below the last swing low @ 1124.66 but still lock in +1 1/2 points, or consider exiting the play if you believe we've topped out... your call. Personally I'm leaving my stop @ 1124.47.

 
 
  Jonathan Levinson   9/20/200,  11:29:01 AM
Speaking of oil, crude is back above 46, up .60 or 1.32% to 46.20.

 
 
  Jonathan Levinson   9/20/200,  11:25:10 AM
The print at 35.75 was two cents shy of the previous QQQ high, which is bearish, but bears need to see 35.58 taken out to provide a lower wavelet low. That would likely kick off a short cycle downphase, but so far there's declining volume on the pullback.

 
 
  Linda Piazza   9/20/200,  11:16:59 AM
Caught on a telephone call.

 
 
  Jonathan Levinson   9/20/200,  11:13:39 AM
Still no weakness in bonds, with TNX down 4.6 bps at 4.081%. Gold has recovered a touch, now down .90 at 406.70, with HUI up .66% at 206.32 adn XAU +.79% at 93.04.

 
 
  Linda Piazza   9/20/200,  11:07:58 AM
The BIX threatens to confirm its double-top formation on its daily chart, with a drop below 362.02 doing so. The BIX is at 363.15 as I type, down from Friday's intraday high at 367.13 and close at 366.10.

 
 
  Mark Davis   9/20/200,  11:06:37 AM
Two astute readers, Tab and Marc, have reminded me that real resistance for the SOX sits at about 403.60, a 38.2% retrace of the decline off the July highs... right where it has stalled twice today. Thanks guys.

 
 
  Jonathan Levinson   9/20/200,  11:06:11 AM
Note that the Dow, S&P and the YM and ES futrues are still negative as the NQ and QQQ challenge last week's highs. Incredible bifurcation between these markets.

 
 
  Linda Piazza   9/20/200,  11:05:53 AM
The OEX comes back to test the 544 level that gave it difficulties earlier. The OEX's five-minute candles pierced that level a couple of times in the last 30 minutes, but the five-minute candles closed below it. As I typed, the OEX is turning down again from that level.

 
 
  Linda Piazza   9/20/200,  11:01:29 AM
Based on the location of the OEX's 60-minute 100/130-ema's plus the neckline of the H&S and the lower trendline of its broadening formation, I wouldn't be surprised to see another hour or so of consolidation or range-bound trading now. The 60-minute 100/130-ema's are at 542.72 and 541.72, respectively, and it's not uncommon for the OEX to consolidate near those averages a couple of hours or more before moving a significant distance away from them.

That's what the chart says. My gut says something different, that it won't be hours or maybe not even another single hour before at least a short-term trend begins. I don't particularly trust my gut this morning, however, because of outside developments and am paying special attention to the charts, so let's watch closely.

 
 
  Jonathan Levinson   9/20/200,  10:59:09 AM
Nasdaq weekly chart at this Link . This is the most bullish side of the coin here, and what I think is causing the weakness in the daily cycle downphase thus far.

 
 
  Jonathan Levinson   9/20/200,  10:56:04 AM
The pullback off the highs is so far on lighter volume. Look for support at former resistance of 35.55 QQQ.

 
 
  Linda Piazza   9/20/200,  10:55:28 AM
The OEX again tests the neckline of that H&S on its 60-minute chart.

 
 
  Linda Piazza   9/20/200,  10:54:50 AM
The TRAN appears to be in the process of making another lower five-minute high, the second since Friday's morning high.

 
 
  Linda Piazza   9/20/200,  10:51:20 AM
Reader Comment: In your 9:36 post, you indicated Samsung projects a 50% decline in demand for chips. Based on the Sox's reaction this morning, you would think a 50% increase was being projected.

Response: Certainly does, doesn't it? Plus, a study of the SMH's chart shows that the buying occurred on strong volume, too. All are trying to gauge whether the bad news is already baked into the semi-related stocks. When bad news circulates and bears aren't successful in driving the semis lower, shorts cover. For a while, I've been noting the potential for an inverse H&S on the SOX, and it appears that the SOX has just inched past the ascending neckline of that formation, although there hasn't yet been even a 60-minute close above that neckline and the SOX is pulling back as I type. That neckline appeared to be at about 400. I'm not counting on any of these formations to confirm or necessarily to meet their targets, but am watching them to measure bullishness or bearishness. However, we know how the semis can overrun targets, so I'd sure like to see the outcome of this test of the neckline before I made any strong predictions. Another reader sent me an interesting article this morning that deals with the "baked in or not" question. Here's a link: Link Thanks, T.G., for the link.

 
 
  Jeff Bailey   9/20/200,  10:49:30 AM
10:45 Market Watch at this Link

 
 
  Jonathan Levinson   9/20/200,  10:47:14 AM
NQ is breaking 1438-40 resistance with barely a pause. QQQ is retesting last week's highs as well. If this move is going to fail, these are the levels from which it should run into trouble. Another surge higher should pave the way to the 36.00 level just on short covering alone.

 
 
  Mark Davis   9/20/200,  10:45:31 AM
If you're long from 1122.47 you can safely move your stops up to 1124.47 and lock in a +2 point gain.

 
 
  Jonathan Levinson   9/20/200,  10:42:48 AM
The wire is reporting a bill pass from the Fed's open market desk, but the website isn't yet updated and there's no quantum as of yet. This is a permanent net add from the Fed, and the amounts are usually no more than 1B, but it's still extra money on top of the 3.25B of temporary money added this morning.

 
 
  Linda Piazza   9/20/200,  10:40:44 AM
The OEX has bounced back above the neckline of the H&S on its 60-minute chart. It has of course had five-minute closes above the levels bears wanted to see hold as resistance and bulls did not want to see hold. This is the reason that I suggested that although the broadening formation appeared to have lost much of its importance, those who might have considered bearish plays on a break of the OEX's neckline should have profit-protecting plans in mind as that lower trendline of the broadening formation was approached. Now, though, the OEX is right back inside that broadening formation, a particularly difficult formation to gauge or trade. Did the OEX just overrun the neckline of that formation, although it will again turn lower, or will it climb from here? I think it's difficult to know while the OEX is within that formation, as its presence and the reiteration of its importance this morning shows that trading is emotion-based and perhaps out of control.

 
 
  Jonathan Levinson   9/20/200,  10:37:45 AM
Note that the 1st two put to call readings were 1.24 and 1.18, at levels that traditionally signal caution for bulls but no doubt under the influence of post-op-ex repositioning- I'm not inclined to put much weight on these readings today.

 
 
  Jeff Bailey   9/20/200,  10:36:37 AM
Bearish swing trade stop alert ..... for the QQQ $35.65 +0.62%

 
 
  Jonathan Levinson   9/20/200,  10:36:11 AM
No weakness for bonds either, with TNX -4.2 bps at 4.085%. ZN futures are testing the 113 level.

 
 
  Mark Davis   9/20/200,  10:34:43 AM
SOX is approaching 400... a very important resistance area. If it can break through it may lead the other markets up.

 
 
  Jonathan Levinson   9/20/200,  10:34:33 AM
NQ and QQQ continue to march higher, even as volatility holds firm with QQV up 5.19% at 18.84. 35.55 resistance is being tested here, with session highs still printing as I type. A move past this level should be good for a retest of last week's highs.

 
 
  Linda Piazza   9/20/200,  10:33:39 AM
The NDX is also inching above its 200-week sma, with that average at 1418.11, and with the NDX at 1429.65. Its 200-day sma is overhead, however, at 1440.65. The NDX is pinned beneath the two.

 
 
  Linda Piazza   9/20/200,  10:31:08 AM
A long time ago, I used GE's monthly chart to snap a Fib bracket on GE's chart, with that bracket beginning at the $7.75-ish level at which GE based for several years in the mid-90s and extending up to GE's 2000 high. The 50% level of that retracement lies at about Friday's and today's high (about because it's a snapped bracket and not precisely calculated numbers). In January, GE pierced that 50% level a couple of days, but then fell back. It needs to pierce it and close above it soon to risk the fear of a double-top formation in the making. That close is going to be made more difficult, but also more significant if it happens, but the presence of the 200-week sma at $34.20, the level GE tests as I type. The intraday high from January was $34.57.

 
 
  Jeff Bailey   9/20/200,  10:30:26 AM
QQQ $35.52 +0.25% ..... big turnaround from morening low of $35.20.

SOX.X 398.29 +2.51% .... Bernstien recommended "overweight" in semis earlier this morning.

 
 
  Mark Davis   9/20/200,  10:28:25 AM
Nasdaq just went green, TRIN has dropped to .82 and SOX is at a new HOD. If you took the long signal @ 1122.47 I would cinch up your stops to 1121.97, just below two little congestion areas in the 1122.20 area. You'll only be risking 1/2 point.

 
 
  Linda Piazza   9/20/200,  10:24:53 AM
OEX bears want to continue to see five-minute closes beneath the Keltner line currently at 542.80, but will accept five-minute closes beneath 543.48. Bulls want to see five-minute closes above the Keltner line currently at 543.47.

 
 
  Jeff Bailey   9/20/200,  10:24:35 AM
Newmont Mining (NEM) $41.89 +0.81% .... update to Yanococha .... company saying the blockade of the access road to the Yanacocha mine in Peru was opened at approximately 04:00 PM local time. NEM saying the temporary blockage will not impact the estimated full year 2004 gold production and sales of approximately 3 million ounces. Recent Sept. 17 downgraded by CIBC to "sector perform" cited the uncertainty of road blockage as primary reason for downgrade/uncertainty.

 
 
  Jonathan Levinson   9/20/200,  10:18:38 AM
Session high for QQQ at 35.41.

 
 
  Linda Piazza   9/20/200,  10:18:22 AM
OEX now comes up to retest the neckline of that H&S formation. Bears don't want to see five-minute closes above that neckline, now at about 543.10 or above the five-minute chart Keltner line currently at 543.45, but I wouldn't be surprised to see some overruns today, too. Still, it's always best to adhere to planned stops.

 
 
  Jonathan Levinson   9/20/200,  10:16:54 AM
QQQ tested rising daily channel trendline support at the lows, and the 35.18 level is set up as critical support on the daily chart: Link . A break above last week's highs sets up a run to 36.00-.05 resistance, followed by 36.40.

 
 
  Jeff Bailey   9/20/200,  10:16:49 AM
Current OPEN MM profiles at this Link

 
 
  Linda Piazza   9/20/200,  10:14:32 AM
When there's been a Keltner breakout signal (to the downside in this case) on the OEX's five-minute chart, I usually suggest that this is a time for bearish traders to follow the OEX lower with their stops rather than necessarily consider switching sides. That may or may not be true this time, as the breakout signal was created during amateur hour on the Monday following an opex Friday. It's less reliable than usual. So far, the OEX is behaving just as to be expected with any breakout signal, finding resistance where bears hope it will find resistance, but pay attention and don't get complacent if in a bearish play. The OEX has been finding support at that broadening channel since 9/15 and has tentatively done so today, too. The SPX nears the bottom of the congestion zone in which it's traded over the last week. The Dow approaches 10,200. The Nasdaq still hasn't broken out of that triangle on its 60-minute chart, in either direction. TRIN has been dropping steadily. Lots of reasons to be suspicious of a bigger bounce coming, but it's not here yet.

 
 
  Mark Davis   9/20/200,  10:10:09 AM
The buy signal never aborted and that little dip below 1122 produced a classic buy signal... higher low CCI reading (the initial drop printed -420 and the second dip printed -220) and a MACD bullish kiss. TRIN has dropped to 1.02 and the SOX is green. We now wait to see if this is the real thing... sure looks like it.

 
 
  Jeff Bailey   9/20/200,  10:10:06 AM
10:00 Internals at this Link

Friday's internals at this Link

 
 
  Jonathan Levinson   9/20/200,  10:07:39 AM
Nymex crude oil is down to 45.975, up .375 for the day but down from its earlier high of 46.375.

 
 
  Linda Piazza   9/20/200,  10:06:21 AM
An OEX bounce is beginning from the broadening formation's bottom support.

 
 
  Linda Piazza   9/20/200,  10:04:59 AM
Here's an update of the 60-minute OEX chart I showed in last night's 21:48 post, complete with the original annotations: Link If there is a bounce here, as does appear to be happening, bears want to see a failure at the neckline, while bulls want to see the OEX zoom right past that neckline again.

 
 
  Jonathan Levinson   9/20/200,  10:03:00 AM
Session high for ten year bodns, with TNX down 4.2 bps at 4.085%.

 
 
  Jeff Bailey   9/20/200,  10:02:50 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   9/20/200,  10:02:23 AM
Now the OEX hits the bottom support of the broadening formation that it's been trading within since 9/15. Again, this is a potential bounce point that I warned about in my 21:48 post. If in a bearish play upon a break of that H&S on the 60-minute chart, have a plan in place for handling this test. On the 15-minute chart, nearest Keltner resistance now gathers just below 542.75, with the neckline of that H&S at about 543.10. Bears of course want to see a failure at that neckline if the OEX bounces now and retests that neckline.

 
 
  Jonathan Levinson   9/20/200,  10:02:16 AM
An 8.5B overnight repo has just been announced by the Fed, which gives the markets a 3.25B net gain against the 5.25B expiring.

 
 
  Jeff Bailey   9/20/200,  9:58:24 AM
VIX.X 14.32 +2.06% .... DAILY Pivot levels as follows .... 13.63, 13.81, P=14.11 , 14.29, 14.59.

 
 
  Linda Piazza   9/20/200,  9:57:21 AM
The markets might not be cheering bulls in general, but the Nasdaq is still within that triangle that many writers have been pointing out at the top of its climb, isn't it? It hasn't yet broken down.

 
 
  Jonathan Levinson   9/20/200,  9:55:02 AM
QQQ is testing the previous high at 35.32, suggesting an upturn in the short cycle. A break above 35.34 for 5 minutes or longer should mark the start of a new upphase.

 
 
  Linda Piazza   9/20/200,  9:54:21 AM
The OEX drop this morning has been so steep that resistance hasn't yet had time to converge on the Keltner charts. I think we can now presume resistance at the location of the neckline for the H&S on the 60-minute chart, at about 543.10. There has been a breakdown signal on the five-minute Keltner charts now, but I don't think we should put undo faith in that on the Monday after an opex Friday. However, to look at evidence from that chart and realizing that the OEX could still do a bit more zooming around before it settles and adheres somewhat better to chart characteristics, bears would most like to see five-minute closes below the Keltner line currently at 542.85, but would find it acceptable to see five-minute closes below the line currently at 543.71. Bulls would most like to see five-minute closes above the Keltner line currently at 544.58, but would accept five-minute closes above the line currently at 543.71.

 
 
  Jeff Bailey   9/20/200,  9:53:39 AM
S&P 500 Index (SPX.X) with WEEKLY/MONTHLY Pivot retracement at this Link

Testing three overlapping 1,122 supports early.

 
 
  Mark Davis   9/20/200,  9:48:49 AM
We're right at Thursday afternoon's swing lows for SPX. I would expect at least an attempt to bounce from these levels. SPX is just now printing a buy signal
Benchmarking... SPX = 1122.45

 
 
  Linda Piazza   9/20/200,  9:48:20 AM
Jonathan may have mentioned this already, but crude is above $46.00, at $46.16, +0.57, as I type.

 
 
  Jonathan Levinson   9/20/200,  9:44:59 AM
Bonds are higher this morning, with TNX currently down 3.2 bps to 4.095%, a .78% decline.

 
 
  Jonathan Levinson   9/20/200,  9:44:30 AM
From Marketwatch:

NEW YORK (CBS.MW) -- Regulators are reportedly set to issue a report that will criticize the accounting of mortgage giant Fannie Mae (FNM: news, chart, profile), The Wall Street Journal reported on Monday. The Office of Federal Housing Enterprise Oversight, or OFHEO, found evidence of a pattern of decisions by Fannie Mae executives aimed at manipulating earnings to present a smoother peformance, the newspaper reported. Bonuses for executives may have been beefed up with the enhanced earnings performance, the newspaper reported. Shares of Fannie Mae fell 1 percent to $76.37 in early action on Monday morning.

 
 
  Linda Piazza   9/20/200,  9:43:51 AM
At about 541.85, the OEX will hit the bottom of last week's broadening formation, another potential bounce spot and another place at which bearish OEX traders should have profit-protecting plans in place as I advised in that first update related to the OEX.

 
 
  Jonathan Levinson   9/20/200,  9:42:52 AM
QQQ spiked to a new low at 35.18. Currently back to 35.21.

 
 
  Linda Piazza   9/20/200,  9:41:51 AM
Careful, QCharts users. I think OEX charts have been running behind this morning.

 
 
  Jonathan Levinson   9/20/200,  9:40:26 AM
Daily chart of the Nasdaq Price:Volatility ratio at this Link suggests that volatility is about to begin rising relative to price on the Nasdaq.

 
 
  Linda Piazza   9/20/200,  9:40:15 AM
The OEX is on the verge of creating a breakdown signal on the 5-minute chart, although it hasn't done so yet. It's also slipping just below the neckline for the potential H&S on its 60-minute chart. However, the OEX also approaches that first reversal of the day, so we should expect at least consolidation if not a bounce attempt.

 
 
  Linda Piazza   9/20/200,  9:37:48 AM
The TRAN retreats slightly to test 3250, at 3247.69 as I type.

 
 
  Linda Piazza   9/20/200,  9:36:31 AM
I don't know if all read my Asia/Europe update in the morning, but I thought I'd mention again for the benefit of those interested in semi-related stocks that Samsung last night warned that global demand for chips could decrease by 50% next year.

 
 
  Jonathan Levinson   9/20/200,  9:35:53 AM
The bounce came from a spike low of 35.23, currently up to 35.32. Resistance is at 35.34 and 35.45.

 
 
  Linda Piazza   9/20/200,  9:34:58 AM
The DOW headed down to the bottom of its recent trading range, to 10,230. It's now attempting a bounce, but not much of one yet.

 
 
  Jonathan Levinson   9/20/200,  9:33:10 AM
QQQ volatility is higher by 2.29% at 18.32.

 
 
  Linda Piazza   9/20/200,  9:32:45 AM
The OEX is hitting the neckline of the potential H&S I displayed on the chart linked to my 21:48 post. This should be a potential bounce point, but not if sentiment is too negative, and a bounce here doesn't mean that all is bullish, either.

 
 
  Jonathan Levinson   9/20/200,  9:32:29 AM
The shape of the 30 min cycle oscillators suggests further weakness, and the markets are all lower so far with no bounce at the cash open. Look for QQQ support at 35.18 and 35.10 if this 35.25 level does not hold.

 
 
  Linda Piazza   9/20/200,  9:31:17 AM
And there goes the OEX punching right through that trying-to-converge Keltner support. That's why I cautioned that an amateur-hour move could undo anything setting up on an opex Friday.

 
 
  Linda Piazza   9/20/200,  9:26:57 AM
The OEX ended Friday in an equilibrium position with regard to its Keltner channels. On the five-minute chart, support was trying to converge just beneath the OEX, from 545.84 down to 544.87, but that support hadn't converged yet, and so it wasn't certain where within that range the OEX might be stopped or even if it would be on a steep during-amateur-hour decline, if one should occur. The 15-minute chart made it look likely that strongest support would be closer to 545 than to the higher part of that range, perhaps somewhere between 544.90-545.16. I wouldn't count too strongly on an opex Friday's chart characteristics following through on the Monday afterwards, however. Bulls do not want to see a drop below 544.76, as that would confirm the lower five-minute high. If one of those support levels holds into the first reversal of the day, bears don't want to see a break above 546.82 as that would undo the possibility of a lower five-minute high.

 
 
  Linda Piazza   9/20/200,  9:21:41 AM
The FTSE 100 and DAX have trimmed their losses this morning, but the CAC 40 kind of skates along just above its low of the day. None are positive.

 
 
  Jonathan Levinson   9/20/200,  9:02:33 AM
The 30 minute cycle downphase in progress at Friday's close is delivering this morning, but the losses are minor so far, continuing last week's range. QQQ remains rangebound above 35.10, while a break below that level will be confirmed on a breach of 34.92. Below 34.92, we should begin to see sell signals on the daily cycle oscillators.

 
 
  Jonathan Levinson   9/20/200,  8:04:06 AM
Equities are lower this morning, with ES down 3.5 to 1125.50, NQ -3 to 1426, YM -28 to 10255 and QQQ -.12 to 35.31. Gold is down 2.10 to 405.50, silver -.023 to 6.255, bonds up .125 to 112.813 and crude oil +.45 to 46.05.

There are no major economic reports scheduled for release today.

 
 
  Linda Piazza   9/20/200,  6:47:55 AM
Good morning. The Nikkei was closed Monday for a holiday, as it will be again on Thursday. Other Asian bourses turned in mixed performances. The Taiwan Weighted gained 0.79%. A report that South Korean prosecutors have begun an investigation into possible accounting problems at Hynix Semiconductor sent that company's stock lower in early trading. Samsung Electronics apparently advised that global demand for chips could decrease by 50% next year, but it wasn't clear when that advice was offered and whether that also affected semis in Asian trading today, although it is being mentioned as a factor sending some European semi-related stocks lower. Higher oil prices helped refiner SK Corporation, however, and LG Electronics rose after its earnings report. The Kospi gained 1.03%. Singapore's Straits Times lost 0.77%, and Hong Kong's Hang Seng was flat, down 0.03%. China's Shanghai Composite benefited from what has been termed the first-ever peaceful transition of power and also from reassuring statements reportedly made by the governor of the central bank. Those statements hinted that rate hikes might not be immediately needed, since price movement appeared to be stable. The Shanghai Composite gained 3.43%, continuing its climb off last week's five-year low.

Currently, almost all European bourses trade lower, with many at or just off their lows of the day. Print articles and television commentators all mention the expected quarter-point hike by the Fed this week as one factor in European trading behavior, but they also mention rising oil prices. Perhaps of some importance is a poll this weekend that showed German Chancellor Schroeder's party's favor slipping. Another factor has been a warning by foods company Unilever that July's and August's sales had fallen below expectations. The company trimmed the year's earnings growth expectations from a double-digit growth to one in the low single digits. The company's stock had plunged more than 6% as this report was prepared. Euro Disney performed well, however, climbing more than 10% at one point after the company's restructuring plan gained the approval of most creditors.

In the U.K., talk centers on a 50/50 merger by radio broadcasters GWR and Capital Radio. In other M&A-related news, the Financial Services Authority will look into Banco Santander's proposed acquisition of Abbey National. Some questions about corporate governance at Santander will likely be explored.

As of this writing, the FTSE 100 trades lower by 26.10 points or 0.57%, at 4,564.90. The CAC 40 trades lower by 36.89 points or 0.99%, at 3,689.33. The DAX trades lower by 31.31 points or 0.79%, at 3,956.76.

 
 
  Linda Piazza   9/19/200,  9:48:56 PM
Early Friday morning, a 60-minute candle shadow pierced the top of the broadening formation on the OEX's intraday charts, but never touched the 200-sma. The candle closed under the rising trendline at the top of that formation, and so did the rest of the day's candles. That top trendline was not pierced again, and the OEX did not move above the 200-sma. It did not manage a breakout above the descending trendline off the year's swing highs. On the daily chart, the MACD histogram values deteriorated and the MACD tipped closer to a bearish cross, but one that has not yet been completed. Stochastics, already having made a bearish kiss, sank toward the signal line, but did not break below it. Still, the OEX remains within upside breakout range above that descending regression channel off the year's swing highs.

Other indices showed some of the same ambiguousness. The Russell 2000 held safely above its converging 10- and 200-sma's, but was stopped by the 80.9% retracement of the decline off the late-June/early-July high. The Dow closed in positive territory, but it couldn't quite manage a close above the 200-sma despite piercing it during the day. MACD histogram values turned slightly negative and stochastics appear closer to pushing through the signal line than on the OEX's chart. The SOX held above its converging 10-, 20- and 30-sma's, preserving the possibility that the current pullback is a bull-flag pullback, but it never rose to challenge the 50-dma as it has been doing most of the week. And so it goes.

Perhaps end-of-week trading was more about closing the Dow for the week as near to its 200-sma as possible and opex maneuvering, making much of the end-of-week action suspect. So, we start again next week. The good news is that markets are so close to key levels that even if one is wrong about the direction on an entry, markets won't have to travel big distances before they prove that entry wrong, if it is.

Here's the formation I'm going to be watching: Link A move below the neckline, currently at just under 543 would be bearish, with a downside target of about 536.40, although traders might be protective of bearish profits as the descending trendline of that former broadening formation is approached. A move above the top of the head, at 548.52, would constitute an upside breakout, with a potential move up to 553-554. With either entry, traders should guard profits carefully, and should hope for corroborating evidence from TRIN, the advdec line, and the volatility indices, although those might be somewhat skewed Monday as new positions are established. Those entering bearish positions on a downside break should be aware of close support, beginning at about 541 and down to 539.50 at least. Those entering bullish positions should be aware of close resistance, beginning at about 549.

 
 
  OI Technical Staff   9/18/200,  6:40:23 PM
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