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  Jeff Bailey   9/30/200,  9:29:54 PM
Per tonight's Index Trader Wrap and comments made regarding tomorrow's trade, which could be volatile.

Stocks that may have been overly bought or sold in today's trade to compensate for MRK's impact on things....

According to HL Camp & Company, stocks that were bought the most in Thursday's trade were SLE, WY, BCC, USB, GM, MEDI, F, IP, DD, NSC, AA, EMC, GE, JPM, MO, RSH, LTD, DOW, BDK, DELL, UIS, TYC, VIA, IBM, WFC, ROK, AXP, FDX, G, CI, AVP.

Stocks that were sold the most during sell programs were MRK, AMGN, JNJ, CL, BUD, VZ, CCU.

After this quick review, it would seem to me that buying was rather broad, so I would ease off my "unraveling" of overbuying a select name. Is there, or was there something being said by institutions ahead of tomorrow's auto/truck sales for September?

Selling appeares to be more concentrated. MRK, AMGN, JNJ have somewhat of a "drug" them to them. If MRK firms or dead cat bounces, could see some gain back from AMGN -2.03%, JNJ -1.22%?

Quick list of buy and sell program stocks from today. I've sorted by today's percentage gain/loss. Link

  Linda Piazza   9/30/200,  9:00:19 PM
Thursday, the OEX broke below the lowest ascending trendline off Tuesday's low, offering a risky new bearish entry. Late in the day, it rose again to retest that trendline, perhaps stopping out some play entrants who were not in for the long-term, but fell below the trendline again. The OEX may be forming a right shoulder for a H&S formation on its daily chart, with the neckline at the midline of the long-term descending regression channel on that daily chart. MACD heads below signal, but the histogram values become less negative. Use rollovers beneath the 10-dma, currently at 537.45, as potential new bearish bounce-and-rollover entries, but be aware that the OEX may need another day or two to complete the top of the right shoulder, even if one is going to firm and if the OEX is going to test the neckline. We'll look for another breakdown entry, if offered, and will stand aside if the OEX breaks above the right-shoulder area. Profit-protecting plans should be in place as 532.50 and 530 are approached, if in a bearish position, perhaps allowing for a break through 530.

  Jeff Bailey   9/30/200,  6:21:54 PM
Pivot Matrix for tomorrow at this Link

New MONTHLY Pivot levels.

  Jeff Bailey   9/30/200,  4:53:36 PM
Closing Internals at this Link

  Jeff Bailey   9/30/200,  4:44:27 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Day trade bullish the Semiconductor HOLDRs (SMH) at $30.35, stopped at $30.20 ($-0.15, or -0.49%)

  Jeff Bailey   9/30/200,  4:20:54 PM
Dow Diamonds (DIA) $100.87 -0.59% ... quick DAILY Pivot levels are $100.31, $100.59, Piv = $100.83, $101.11, $101.35

  Mark Davis   9/30/200,  4:19:35 PM
Cliffhanger anyone? Look at the last two 5-min candles and the retrace off HOD. Link

  Jeff Bailey   9/30/200,  4:10:22 PM
No buy/sell program premiums al_rts after the 04:00 tick. Still trading with SPY $111.77 , QQQ $35.13 and DIA $100.90.

  Mark Davis   9/30/200,  4:02:07 PM
Well it's all up to GW Bushy and John Kerry now. I don't know about you but I'll be glued to the TV tonight. If you're long with me we are +3 (from 1111.26) and holding overnight.

  Jonathan Levinson   9/30/200,  3:59:13 PM
That double bottom bounce just now should cover the bulls, at least until the close. QQQ will not want to simply drift back through it.

  Mark Davis   9/30/200,  3:57:04 PM
There is some serious positioning going on ahead of tonight's debate, not to mention EOQ Window Dressing/Undressing.

  Jeff Bailey   9/30/200,  3:53:43 PM
Swing trade cancel sell call option order alert cancel the order to sell 10 DIA Oct. $101 calls.

  Linda Piazza   9/30/200,  3:53:42 PM
Ditto Mark's 15:42 comment about nervousness with overnight positions, except coming from the bearish side: If you're nervous about holding a bearish OEX position overnight, you might exit now, before the close. You won't make a profit if you entered on today's breakdown, with the OEX currently at the level at which the breakdown below that ascending trendline off the Tuesday low occurred this morning and you have the spread and commissions to consider. Still, the loss shouldn't be big, either, and a good night's sleep is a worthy goal. The OEX's daily candle is not a bullish one, and the OEX looks to be closing well below the 50-dma, but it could still be in a right-shoulder-building process that takes several more days. There's always the possibility that the OEX could reject the formation, too, so adhere to your account-specific stops. I'd feel comfortable, but I'm a position-trade type person, not a day-trade type one. We absolutely have no idea how the Nikkei will react to the Tankan tonight or how U.S. markets will react to the debates.

  Mark Davis   9/30/200,  3:52:27 PM
Nervous longs... you can exit right now for +3... your call. I'm staying put (I mean CALL) @ 1111.26 with a stop @ break even and holding overnight.

  Mark Davis   9/30/200,  3:50:00 PM
I just noticed there was an Evening Star printed right at the top on the 1-min chart. If I would have seen it when it printed I would have closed out the long play and gone short for a scalp.

  Mark Davis   9/30/200,  3:46:32 PM
There's the 1114 level again as resistance. I thought we were past that! Now we have 1115 and then 1116.31 to get through (again). As I said earlier, some serious damage has been done technically in the short-term.

  Jonathan Levinson   9/30/200,  3:46:23 PM
QQQ 2-day chart update at this Link . This is a wavelet bounce, but it's stalling the short cycle rollover.

  Mark Davis   9/30/200,  3:43:36 PM
They are playing hardball today, big time.

  Mark Davis   9/30/200,  3:42:21 PM
If you're nervous about holding overnight you should be able to exit the long for +2 IF we reach 1113.26. Personally I'm holding overnight with a stop @ 1111.26 and break even.

  Linda Piazza   9/30/200,  3:41:37 PM
OEX headed up to test that same 534.25-ish level.

  Mark Davis   9/30/200,  3:39:50 PM
Here comes the bounce (and the buy signal). Now we wait to see how far it goes.

  Mark Davis   9/30/200,  3:34:33 PM
We should be due for a bounce here. "IF" MACD turns back up and crosses SPX will print a buy signal but some serious damage has been done.

  Jonathan Levinson   9/30/200,  3:34:16 PM
The short cycle is rolling over, and given that it's been leading the 30 min cycle around by the nose today, this action is a good sign for bears. Next test is at 34.95 and then 34.90. Conservative bears, if there are any left, should be looking for a move below 34.87 to confirm that the daily cycle trend and the 60 min trend are to the downside- today's relentless bounces have placed the daily cycle in doubt.

  Linda Piazza   9/30/200,  3:32:13 PM
Without the OEX below or at least at 533, I'd think long and hard about whether I wanted to carry a bearish OEX position overnight if it was entered today on a breakdown below the ascending trendline off Tuesday's low. Without a move up toward 538-540, I think I'd be uncomfortable about suggesting a new entry at today's close with the OEX between 538-540 supposed resistance and 530 supposed support.

The problem with today's breakdown entry was one I mentioned early this morning, before that entry presented itself: do you go ahead and take the entry, knowing you may well be whipsawed out, but believing that one of these entries is going to eventually be the right one? Do you pass up the entries? As I mentioned earlier this morning, that depends on account size and trading style, and there's no one right answer. I wish the breakdown entry hadn't been offered and instead we'd seen a bounce this morning before the breakdown, but that's the way things shake out sometimes. I personally believe we had to be willing to be shaken out of a couple of positions or else just pass up the trade entirely, a perfectly suitable choice. There will always be another trade, as long as the account is preserved, and if the account can't take being whipsawed out of several trades, it's best to avoid these risky ones.

  James Brown   9/30/200,  3:30:56 PM
Exit Alert! OI put play LLY is down another 3.36% and under our initial profit target of $60.00. I would suggest short-term traders to exit here for a profit.

  Jonathan Levinson   9/30/200,  3:27:05 PM
Session low for Nymex crude at 49.60 here.

  Jonathan Levinson   9/30/200,  3:26:13 PM
Another wavelet cycle rollover, another short cycle downtick, and another steep drop from just above resistance than breaks back below and then stops dead. 35.11 is now acting as support.

  Mark Davis   9/30/200,  3:25:49 PM
That may be it for the decline off HOD unless there has been a definite trend change. We're still up +2 on our long and I'm planning on holding it overnight unless stopped out at break even.

  Linda Piazza   9/30/200,  3:19:41 PM
The TRAN heads back inside its broadening formation.

  Jeff Bailey   9/30/200,  3:16:11 PM
Swing trade call option close out alert lets stick out the 10 DIA Oct. $101 Calls (DIA-JW) at $0.85 (between bid/offer of $0.75 and $0.90) and see if we get a taker.

  Jonathan Levinson   9/30/200,  3:15:39 PM
QQQ is back below 35.18- another fakeout above the line. Volume is picking up on the downside.

  Linda Piazza   9/30/200,  3:15:00 PM
The OEX heads below 535 again. TRIN still isn't supporting a bearish play, but if any OEX bears are still hanging on, they might hang on a bit longer now.

  Jeff Bailey   9/30/200,  3:14:38 PM
Bullish day trade stop alert .... for the SMH $30.20 here.

  Mark Davis   9/30/200,  3:11:56 PM
Here's a (barely) confirmed 30-min inverse H&S pointing to SPX 1126 with the neckline just above 1115 Link

  Jonathan Levinson   9/30/200,  3:04:52 PM
The short cycle upphase is still climbing, just now approaching overbought territory. The 30 min cycle channel has turned back up within the still-flat 60 min channel. A break of 35.27, particularly if it holds to the close today, will have big repercussions for the 60 min and daily cycles, both of which are currently favoring a close below that level. The daily cycle should have at least a week more downside to go- if it aborts here, it will be a huge victory for the bulls.

  Jeff Bailey   9/30/200,  3:04:49 PM
03:00 Market Watch at this Link

  Jonathan Levinson   9/30/200,  3:02:12 PM
QQQ has finally cleared 35.18. Should be clear sailing to the session high of 35.27.

  Linda Piazza   9/30/200,  3:00:28 PM
VXO is climbing: VXO, dropping.

  Jeff Bailey   9/30/200,  2:59:21 PM
UTX +1.06% ... IBM +1.06% ....

  Mark Davis   9/30/200,  2:59:02 PM
This move is trying to flatten out the SPX daily MACD. Wouldn't that be a poopsie-doodle if it turned back up?

  Linda Piazza   9/30/200,  2:58:03 PM
The ascending trendline off Tuesday's OEX low now crosses near 536, but if the OEX doesn't quickly turn down through 535 again, I'd be exiting a bearish OEX position.

  Jeff Bailey   9/30/200,  2:57:51 PM
Bond market closes in just under 2 minutes.

  Jeff Bailey   9/30/200,  2:56:53 PM
Dow Diamonds (DIA) $100.98 -0.48% ...

  Jonathan Levinson   9/30/200,  2:56:21 PM
QQQ is 6 cents below its session highs. New high here for Dec. euros, up .88% to 1.2432.

  Jeff Bailey   9/30/200,  2:56:01 PM
IBM $85.92 +1.10% ... the second biggest price-weighted Dow component.

  Linda Piazza   9/30/200,  2:55:39 PM
TRAN breaking out higher, and so is the OEX.

  Mark Davis   9/30/200,  2:55:16 PM
New highs across the board... except for SOX

  Jeff Bailey   9/30/200,  2:55:15 PM
United Tech (UTX) $93.60 +1.14% ... this is the biggest price-weighted DOW component. If bulls are trying to paint the tape on INDU back to the highs, this would be the stock they'd start pounding offers on.

  Jonathan Levinson   9/30/200,  2:55:08 PM
Volume is light and getting lighter on QQQ. The current bounce is trying to tick back to 35.18 from a higher low on the brief pullback. This could be a good springboard for another attempt on 35.18 resistance and ultimately the highs of the day.

  Keene Little   9/30/200,  2:54:23 PM
Gold is at an interesting point today. This daily chart shows my EW perspective on where I think the pattern is. After the drop in price from April into May of this year we've been in a corrective pattern for a bounce. I've got it labeled as a somewhat complex double a-b-c type of correction. A fib target for where the two a-b-c's are equal (a common relationship) is at 421. This also coincides with the top trend line across the recent highs in July and August.

There is one other potential fib target at 426.20 but this pattern looks complete as of today's high in gold and if it's the right EW count, we should see gold start back down from here and head to new lows for the year (below May's). A fib projection for the next leg down is to a minimum level of 360 but it could go lower. Link

  Jeff Bailey   9/30/200,  2:53:38 PM
General Motors $42.38 +3.15% ... session highs.

  Mark Davis   9/30/200,  2:52:31 PM
We've had a very strong spike (no, call it it a steady bid) followed by a weak pullback. Bears beware.

  Jeff Bailey   9/30/200,  2:50:18 PM
Ooooo.... there's a battle going on at $35.15 in the QQQ

  Linda Piazza   9/30/200,  2:37:24 PM
So far, that extended trendline that was support for last week's congestion band has again held the OEX back. Except for brief pushes above it, that trendline has held as resistance this week except for yesterday's late-day window-dressing push. This isn't a comfortable position for OEX bears, though, since no one knows if we'll get a similar push today. The OEX now heads down to test 534-534.20-ish support.

  Jonathan Levinson   9/30/200,  2:36:03 PM
For all this bullishness, the 30 min channel is holding firm at 35.18 and the 60 min channel is still flat. If this bounce is only corrective action in the previously oversold short cycle, then a failrure at a lower high- make it 35.18 instead of 35.11, would still keep hope alive for bears wishing for a head and shoulders break through 34.90. On the other hand, hope is a no-no for any trader, and it's better to follow the market. A break below 35.11 or above 35.20 will set up a test of 34.95 to the downside and 35.27 to the up. A most past either of those lines should be directional.

  Linda Piazza   9/30/200,  2:35:02 PM
New, slightly higher day's high for the TRAN. It's now at the bottom of the gap lower from 9/22. The 60-minute pattern is a broadening one, and you know what they're supposed to do, but often fail to do these days--eventually break to the downside when they've formed at the top of a climb.

  Linda Piazza   9/30/200,  2:30:32 PM
The TRAN approaches the day's high.

  Jonathan Levinson   9/30/200,  2:29:44 PM
QQQ 100-tick 2-day chart at this Link.

  Mark Davis   9/30/200,  2:29:33 PM
The market may be princing in a Bush victory in the debates but I'm not sure it has priced in a KO punch. I don't want to get political here other than as it relates to the market and the market clearly wants Bush to be reelected. We might be at strong resistance here but short of a Bush meltdown in the debates (unlikely) I think there may be an underlying bid to the market.

  Jeff Bailey   9/30/200,  2:28:48 PM
Day trade long alert for the Semi HOLDRs (SMH) $30.35 here, stop $30.20, target $30.70.

  Linda Piazza   9/30/200,  2:28:10 PM
The SOX has still not hit its 396-ish upside target from the reverse H&S confirmed this morning (15-minute chart). The five-minute chart shows bearish price/MACD divergence on the last peak up toward 390. Just have to see what's going to happen, but I certainly didn't like the OEX heading down below the breakdown entry this morning before the SOX had achieved that upside target or else shown some sign of rejecting the SOX's formation again. I'm surprised a bit by the OEX's level, though, as the SOX approached 390 earlier. I'd expected the OEX to be approaching 536-537 at that time, not 534.50-535.

  Jeff Bailey   9/30/200,  2:27:54 PM
SOX.X 385.33 +1.23% .... could add 4-points in a hear-beat here.

  Jonathan Levinson   9/30/200,  2:27:15 PM
Euro futures are holding their gains at 1.2426, and I can't remember the last time I saw the Canuck buck above .79. Currently. .7918.

  Jeff Bailey   9/30/200,  2:25:32 PM
VIX.X 13.36 +1.13% ... sits right on WEEKLY S1. Make the tie of VIX.X WEEKLY S1 and SPX.X 1,115.

I have note received any buy/sell program premiums since the opening tick.

  Mark Davis   9/30/200,  2:24:09 PM
We've been walking up the upper b-band on the 1-min chart for over 2 hours now... definitely a trending move but right at pretty strong resistance with stronger resistance just a point above @ 1115.

  Jeff Bailey   9/30/200,  2:23:26 PM
Disk Drive Index (DDX.X) 105.51 +1.22% .... challenges morning higher right here.

  Jeff Bailey   9/30/200,  2:21:54 PM
TRIN 0.94 after it edged back up to 1.01.

I'm noticing that SPX session high this morning was 1,114.95, and pretty close to the Dec. 1,115 put/call actives yesterday.

  Jeff Bailey   9/30/200,  2:20:41 PM
Yield curve steepens at this point of session with 5-year up 3.1 bp, 10-year up 4.7 bp and 30-year up 5.2 bp.

  Jonathan Levinson   9/30/200,  2:18:44 PM
QQQ touched and failed at 35.18. Meanwhile, gold, silver and the miners remain firm. Bonds still holding their losses, TNX up 1.2% or 4.9 bps to 4.139%. Those sub 4.0% prints seem like weeks instead of days ago.

  Jeff Bailey   9/30/200,  2:16:52 PM
02:00 Internals at this Link

  Mark Davis   9/30/200,  2:13:29 PM
Sellers were waiting at 1114 as expected.

  Linda Piazza   9/30/200,  2:13:10 PM
With this climb, VIX has been dropping, but VXO has been staying within its narrow band at the top of its range today.

  Jeff Bailey   9/30/200,  2:12:02 PM
Dow Diamonds (DIA) $100.82 -0.64% .... session high this morning was $101.01.

IBM $85.81 +0.97% .... back from recent session high of $85.98 and 5-MRT BLUE #4. Some correlation at BLUE #5 and WEEKLY R1 $86.17.

  Linda Piazza   9/30/200,  2:11:30 PM
If the TRAN climbs much higher than its current 3238.03, it undoes the possibility of a H&S on its 15-minute chart, a formation that didn't have much potential to form up anyway.

  Jonathan Levinson   9/30/200,  2:11:26 PM
The 30 min cycle downphase has just stalled, but it will take a move back to or above the session highs to kick off a new upphase.

  Linda Piazza   9/30/200,  2:10:41 PM
The OEX tests the 15-minute 130-ema.

  Jeff Bailey   9/30/200,  2:09:54 PM
QQQ $35.15 +0.19% ... tryinig to work back above WEEKLY Pivot.

  Linda Piazza   9/30/200,  2:09:45 PM
So far, this OEX climb constitutes a rise to retest the OEX's broken trendline, but those in bearish OEX plays should be aware that TRIN still isn't supporting a bearish play and is supporting it less than it did earlier. The OEX has now come up to 15-minute Keltner resistance and will soon challenge the extended supporting trendline from last week's congestion band. OEX 535.10 has been resistance all this week except for yesterday's late-day push, soon reversed this morning, so if in a bearish play, I'd set a stop an account-appropriate distance above 535. The rising trendline off Tuesday's low, the trendline it appears to be rising to test, is at about 535.35.

  Mark Davis   9/30/200,  2:09:17 PM
Wow! This is turning into some move, but it hasn't cracked 1114 yet and I would expect a few shorts waiting at that level. 1115 is even tougher, but above there and it's break out the Mumm's Extra Dry for bulls.

  Jeff Bailey   9/30/200,  2:09:13 PM
TRIN 0.90 ... time for a second coat of paint?

  Jeff Bailey   9/30/200,  2:03:07 PM
02:00 Market Watch at this Link

  Jonathan Levinson   9/30/200,  2:02:10 PM
35.11 resistance has just cracked. 30 min channel resistance is now in play at 35.18. A sustained move between the current 35.14 and 35.18 will be enough to turn the 30 min channel back up. The downphase is still intact, but it will stall soon enough. An early abort to the 30 min cycle from here will threaten the daily cycle downphase, which has been the entire basis for bearishness over the past week. In other words, the current bounce, if it succeeds, would be early and very bullish.

  Mark Davis   9/30/200,  2:00:55 PM
I'm showing .92 also Jeff and it looks like the real thing

  Jeff Bailey   9/30/200,  2:00:01 PM
TRIN alert 0.92 .... session low. It looks like a "bad tick" at this morning's open to 0.66 and high 1.54.

  Mark Davis   9/30/200,  1:57:50 PM
Raise your stops to 1111.26 and break even

  Jonathan Levinson   9/30/200,  1:57:09 PM
35.11 resistance is being tested here.

  Mark Davis   9/30/200,  1:55:06 PM
The herd (of shorts) is getting nervous. We have the very early signs of a short-term trend reversal and I don't see much resistance between here and SPX 1114.

  Jeff Bailey   9/30/200,  1:51:59 PM
Stillwater Mining (SWC) $15.50 +9.38% ... trade here gets stock back on a "buy signal."

  Linda Piazza   9/30/200,  1:51:31 PM
Mark, I've been watching the TRAN for a while as I know many others have been, trying to decipher what it's telling us. I know that gains in transports sometimes are a sign of building strength in the economy. Is that why it's ignoring the impact of the rise in crude costs? Jane wrote an article a while ago about how divergences between commodity-related stocks and the commodity itself can signal a turning point in the commodity's prices. Although the TRAN isn't a crude-related commodity index, its composite companies are certainly impacted by crude costs, so is the TRAN's climb telling us that crude's high prices really are transitory, or that investors in TRAN composite stocks believe them to be so? Or is this just a case of a TRAN bubble? I haven't figured it out yet, but I'm certainly aware of the various possibility and keeping a nervous focus on the TRAN's action.

  Jonathan Levinson   9/30/200,  1:51:24 PM
Volume is light on QQQ at 49M so far, which on a volume-driven chart merely drags out the signals. 35.11 has acted as support and resistance over the past few days, and it would be a perfect level from which the short cycle upphase could fail- that would set up a head and shoulders with neckline support at 34.90, a break below which would target the 34.53 level.

  Mark Davis   9/30/200,  1:50:31 PM
At the risk of being accused of "harping" I remind readers of past behavior of the SPX after a "b" distribution pattern. Link
We can be in an overall downtrend and still book some very nice countertrend long plays.

  Linda Piazza   9/30/200,  1:46:09 PM
There's a lot to be seen on this chart, but note the way that the Fib levels of the rally off the August low keep coming into play: Link Tuesday's bounce came off the 61.8% retracement. Today the OEX was sharply repelled as it touched the 38.2% retracement. Now the OEX hovers just above the 50% retracement. Note that this morning's rise also constituted a test of the 60-minute 100/130-ema's, and that the OEX appears to have dropped out of the possible bear flag. I qualify that break out of that formation because the OEX has traded sideways since breaking down and that's always suspect. Sometimes that means that the break was a fake-out move or that another ascending trendline will be established.

  Mark Davis   9/30/200,  1:43:59 PM
Look out above if SPX breaks above (and stays above) 1112.

  Jonathan Levinson   9/30/200,  1:42:54 PM
Gold and silver are holding their gains, slightly off their highs of 420.90 and 6.999. HUI is up 3.18% to 231.1 and XAU is up 2.56% to 101.93 currently. QQQ is holding above 35.02, but just barely, and 7200-tick SMA resistance looms just overhead at 35.08. The 30 min cycle channel remains in a downphase, and the 60 min is flat. Channel resistance is at 35.18 (30 min) and 35.27 (60 min).

  Mark Davis   9/30/200,  1:41:47 PM
Linda I like it when I hear people say "I just can't believe this is happening!" (nothing personal of course). It is sometimes a sign of denial by longs/shorts and when they finally reach their pain threshold the stampede begins. I'm not predicting a stampede here but there is definitely a wall of worry being built, brick by brick.

  Mark Davis   9/30/200,  1:37:47 PM
Jim what I'm afraid of today is Linda's stop running push. That's why I have my stop way down at 1109.26

  Linda Piazza   9/30/200,  1:37:25 PM
Mark, in reference to your 13:26 post, the TRAN doesn't seem to care that crude keeps touching $50.00, so why should longs? (Grin.)

Actually, I'm now watching for the possibility that the TRAN could form a right shoulder and roll down into a H&S formation with a descending neckline. There was bearish divergence as that equalish-slightly-higher last high was made, but that's absolutely the only evidence I have that any such thing could happen. That's not much to go on, so why am I looking at that possibility? I just can't believe that the TRAN keeps climbing, unless it's showing us something about the "transitory" nature of crude's record highs.

  Jonathan Levinson   9/30/200,  1:33:31 PM
QQQ 2-day 100-tick chart update at this Link.

  Linda Piazza   9/30/200,  1:33:10 PM
The OEX tests Keltner resistance just above 534.

  Mark Davis   9/30/200,  1:30:55 PM
stepping outside for a few minutes...

  Mark Davis   9/30/200,  1:28:03 PM
We're above the neckline (barely). Keep pushing on the dashboard... I think it's working.

  Mark Davis   9/30/200,  1:26:48 PM
Stop that Linda!

  Linda Piazza   9/30/200,  1:26:08 PM
Crude at $50.00/barrel.

  Mark Davis   9/30/200,  1:25:05 PM
There is a potential inverse H&S on the SPX 5-min chart with an upside target of 1113.50. The neckline is @ 1111.55. We hit it a few minutes ago, were turned back and are now challenging again... SPX currently printing 1111.47
Everybody push on the dashboard and maybe we can get this car up the hill

  Linda Piazza   9/30/200,  1:19:46 PM
The OEX heads up to test Keltner resistance again, with that resistance still looking strong just above 534. The OEX may be settling into an equilibrium position with regard to its Keltner channels, though. When it does that, it tends to move rather easily through both converged support and converged resistance as it oscillates from one side to another of its smallest channel in a tight range.

  Mark Davis   9/30/200,  1:17:16 PM
We are virutally flat with our long play from 1111.26

  Linda Piazza   9/30/200,  1:16:36 PM
The TRAN again tests the confirmation level from its double-top formation. It just doesn't want to give up on this and head lower. This should make bears nervous . . . the TRAN moved above that confirmation level as I typed.

  Jonathan Levinson   9/30/200,  1:16:29 PM
QQQ has just whipsawed the wavelet downphase with a break back above 35.02. The short cycle oscillators are beginning to turn up. This weak bounce should remain weak within the descending 30 min channel. 30 min resistance is 35.18 QQQ.

  Mark Davis   9/30/200,  1:15:46 PM
SPX has just printed a buy signal @ 1110.80 and it looks like a pretty good one. It should be noted however that if the buy signal aborts early then it will look like a trending move to the downside (numerous aborted buy signals preceeded this one). We do have a very slight MACD bullish divergence and a neutral TRIN in our favor ("our" meaning longs).

  Jonathan Levinson   9/30/200,  1:10:33 PM
Gold has just broken 420, up 5.90 to a session high of 420.40.

  Jeff Bailey   9/30/200,  1:09:03 PM
01:00 Internals at this Link

  Jonathan Levinson   9/30/200,  1:06:13 PM
A wavelet downphase is now in progress on QQQ and the small uptick starting to form in the oversold short cycle oscillators has undrawn. Meanwhile, the 60 min cycle channel is just beginning its rollover- it will take a break below 34.90 to get the ball rolling in that longer timeframe. Support is now 34.95 and 34.90, then 34.87. Eager to stop counting pennies here.

  Linda Piazza   9/30/200,  1:05:25 PM
The OEX's potential reverse H&S, seen on the 3-minute chart, has been rejected, as bears would have hoped. Now they want to see a new low of the day.

  Mark Davis   9/30/200,  1:04:00 PM
This downward action is giving me a case of the heebie-jeebies. I feel like the market has me in it's grasp with bad intentions. Link

  Linda Piazza   9/30/200,  1:02:01 PM
The Keltner resistance held on the OEX, with a test of the day's looking possible according to Keltner evidence. TRIN, VXO, and the ADVDEC line have all flattened.

  Jeff Bailey   9/30/200,  1:00:47 PM
12:57 market watch at this Link

  Linda Piazza   9/30/200,  12:59:43 PM
The OEX is close to rejecting the potential reverse H&S on its 3-minute chart, but perhaps isn't quite there yet.

  Linda Piazza   9/30/200,  12:53:59 PM
Potential reverse H&S on the OEX's 3-minute chart, shoulders at 533.70, head at today's low, neckline at 534.15 (currently), upside target if confirmed at just above 535, level at which it would be rejected at a move much below 533.50.

  Jonathan Levinson   9/30/200,  12:50:17 PM
Session high for Dec gold futures at 419.60 here.

  Jonathan Levinson   9/30/200,  12:49:14 PM
Bulls still haven't cracked 35.02 QQQ after nearly 10 minutes within 1 cent of it. A new wavelet downphase is trying to form- look for a move below 34.97.

  Mark Davis   9/30/200,  12:41:51 PM
I won't feel comfortable with this long play until we're above 1112

  Linda Piazza   9/30/200,  12:41:25 PM
TRIN drops to 1.00.

  Jonathan Levinson   9/30/200,  12:40:59 PM
The wavelet bounce is topping here for QQQ, and this is the spot at which the short cycle upphase needs to start. A failure to break above the 35.02 level for 3-5 minutes should see a retest of the session lows.

  Linda Piazza   9/30/200,  12:40:10 PM
The TRAN has risen to retest the confirmation level of its double-top formation.

  Linda Piazza   9/30/200,  12:39:26 PM
Unless the OEX is turned back soon by the Keltner resistance it's currently testing, it looks capable of rising toward 535 to retest the trendline it broke through this morning. The gathering Keltner resistance just overhead looks strong, but so did the climb up to that Keltner resistance. Bears want to see 15-minute closes below the Keltner line currently at 534.07.

  Mark Davis   9/30/200,  12:36:30 PM
Go long now @ 1111.26, stop 1109.26

  Jeff Bailey   9/30/200,  12:34:43 PM
IBM (IBM) $85.77 +0.92% .... looks to challenge morning high.

DIA $100.70 -0.75% ....

MRK $33.33 -26% ...

  Mark Davis   9/30/200,  12:33:27 PM
Stopped out @ 1111.37, -1
Should have left the 1111.00 trigger in place

  Jonathan Levinson   9/30/200,  12:31:37 PM
So far, the QQQ bounce is just a wavelet upphase. The short cycles are only showing a slight uptick, no buy signal yet. That should change on a print above 35.02.

  Linda Piazza   9/30/200,  12:29:39 PM
The TRAN breaks through the confirmation level of its double-top formation, setting a downside target just below the 3210-3212 S/R zone. Market bears don't want to see a quick reversal here above that confirmation level. They should have profit-protecting plans in place as the TRAN approaches that downside target as the TRAN has sometimes served as a leading indicator for other indices.

  Mark Davis   9/30/200,  12:26:54 PM
Cancel the long trigger @ 1111.00

  Linda Piazza   9/30/200,  12:22:47 PM
The OEX breaks to the upside through the top of the bullish falling wedge. Be careful here as sometimes lately these just morph into a regular descending regression channel. Bulls want to see the OEX do more than widen that wedge into a descending channel while that's exactly what bears want to see happen. On the five-minute chart, resistance near 534-534.25 looks strong and it looks relatively so on the fifteen-minute chart, too, so bears hope to see 15-minute closes beneath that level. Strongest 15-minute resistance appears to be at 534.80, however.

  Jonathan Levinson   9/30/200,  12:19:51 PM
Dec silver is up .229 here at 6.92, +3.42%. Gold is up 4.50 or 1.09% at 419. HUI +6.2 at 230.18, XAU +2.26 at 101.65.

  Mark Davis   9/30/200,  12:19:25 PM
Go long with a touch of SPX 1111.00, stop 1110.00

  Linda Piazza   9/30/200,  12:18:19 PM
Here's where the SPX is with regard to the 191-minute chart I've posted a couple of times over the last few days: Link Note that there's a potential inverse H&S on this chart, too, with the right-shoulder level at the gathering 100/130-ema's. This would look like a potential bounce point, then, while a fall much below those averages would appear to reject the formation. RSI suggests downside risk, but it's a fickle indicator while an early one. MACD looks as if it's going to intertwine its lines, not giving much sense of direction. This is a wait-it-out-and-see test.

  Jane Fox   9/30/200,  12:14:28 PM
Linda, wouldn't it be nice to see the internals in sync? (12:11 post) I don't think that will happen, however, until this window dressing period has completed.

  Jonathan Levinson   9/30/200,  12:14:28 PM
PFE is stepping up to the plate.

Ticker headline: > 12:13pm PFE PFIZER: AFFIRMS CELEBREX SAFETY

  Linda Piazza   9/30/200,  12:11:53 PM
Jane has warned us to watch the flat TRIN, as it's not climbing as bears would hope. I do note that the advdec line has been falling since shortly after 10:00, so its trend is what bears would hope to see. Sure wish everything would get in synchronization, though.

  Jonathan Levinson   9/30/200,  12:11:36 PM
The short cycle downphase appears vulnerable here, hanging on by a thread. Link The longer intraday cycles are much weaker however, and I suspect that a short cycle bounce to fail at a lower high- preferably 35.07-.10- will set QQQ for a more substantial fall. A failure to bounce within the next 5-10 minutes should be enough to start the short cycle trending in oversold.

  Mark Davis   9/30/200,  12:11:25 PM
stepping away for a few...

  Linda Piazza   9/30/200,  12:09:33 PM
VXO at 13.64, up from yesterday's 12.92 close.

  Mark Davis   9/30/200,  12:08:46 PM
Stopped out of long play @ 1109.69, -1

  Jeff Bailey   9/30/200,  12:08:20 PM
12:00 Internals at this Link

  Mark Davis   9/30/200,  12:06:41 PM
Long @ 1110.69, stop 1009.69
Short @ 1110.37, stop 1111.37
We are now set up to let the market decide which way to go. When this logjam breaks it could move quickly, especially if breaks down. We'll be stopped out of one play automatically and the other one will run... starting from a deficit of about -3/4 point. Right now I'm thinking down but you never know.

  Linda Piazza   9/30/200,  12:06:28 PM
The OEX's decline has taken on a distinctly bullish falling wedge shape. As the title of the formation suggests, these usually--or should I say "formerly"--break to the upside. Bears of course would prefer that not happen, but should be aware of the possibility. Wedges haven't seen great follow-through lately, but this one narrows down right at potential Keltner support.

  Jonathan Levinson   9/30/200,  12:05:04 PM
QQQ update at this Link . A small bullish divergence is popping up in the trending wavelet oscillator, but other than that the 30 min channel has decisively rolled over. The 60 min channel appears to be not far behind, and if bulls can't bounce back up to the 7200-tick SMA at 35.09 in the next 20 minutes, that key longer intraday cycle should roll over as well.

  Linda Piazza   9/30/200,  12:03:39 PM
TRAN at the confirmation level for the double-top formation.

  Linda Piazza   9/30/200,  12:00:27 PM
Reader Question: Is it just my eyes seeing this, or is the SOX (and most chip stocks) forming a H&S pattern on a daily chart?

Response: I hate seeing competing H&S and inverse H&S on the same time interval charts, as it almost always guarantees choppy trading while bulls and bears battle, with those competing formation signaling the battle going on. Reader A. is of course right. I've used different-colored trendlines to denote the potential inverse H&S and the potential regular one he points out: Link Thanks, A., for pointing that out. I'd been so focused on the potential for a run-up in the semis to lead other indices higher and ruin a bearish OEX play that I didn't notice the H&S formation. You'd have thought I'd have spotted that one right away. Of course, only one is going to confirm and the other will be rejected, so stay tuned.

  Jeff Bailey   9/30/200,  12:00:24 PM
Chicago Merchantile Exchange (CME) 158.34 -0.07% Link .... (see 11:56:49)

  Mark Davis   9/30/200,  11:57:50 AM
Go long now @ 1110.69, stop 1109.69

  Jeff Bailey   9/30/200,  11:56:49 AM
CRB Index (CRB.X) 284.50 +0.03% Link ... finds technical resistance at prior March highs of 285.28.

  Mark Davis   9/30/200,  11:54:30 AM
Lower your stops to 1111.37

  Jeff Bailey   9/30/200,  11:54:04 AM
Russell 2000 Index (RUT.X) 570.97 -0.01% ... slips negative here. All majors in the red except for the AMEX, which is littered with biotech, energy and mining/metals stocks.

  Linda Piazza   9/30/200,  11:53:26 AM
OEX closes are just where bears want them to be, Keltner-wise, but Keltner support is trying to build near 533.25. The OEX needs to knock that out quickly before it can firm. Resistance near 534.20-534.40 appears to be firming, too, though.

  Jonathan Levinson   9/30/200,  11:53:21 AM
Session low for QQQ here. Next test is 34.85-.87. The short cycles are still downphasing with more room to run. 30 min channel support is 34.90.

  Jeff Bailey   9/30/200,  11:52:58 AM
Wilshire 5000 ($DWC) 10,854 -0.28% .... down 31.4 points. This is a correction to my U.S. Market Watch, where QCharts incorrectly showed a gain at 11:00 AM EDT.

  Linda Piazza   9/30/200,  11:51:48 AM
The TRAN sinks reluctantly toward the confirmation level.

  Jeff Bailey   9/30/200,  11:49:41 AM
State Street (STT) $42.59 +1.04% ... appointed by Illinois board of investment to service $10.4 billion in state's assets.

KBW Bank Index (BKX.X) 97.25 -0.5% ...

  Mark Davis   9/30/200,  11:47:24 AM
Raise your stops to 1112.37

  Mark Davis   9/30/200,  11:44:14 AM
Just in time for a spike... nice

  Jonathan Levinson   9/30/200,  11:42:25 AM
34.95 QQQ has been support since noon yesterday with not a single tick below it.

  Mark Davis   9/30/200,  11:42:18 AM
Go short now @ SPX 1110.37, stop 1111.37

  Linda Piazza   9/30/200,  11:42:10 AM
The TRAN has not yet confirmed its double-top formation.

  Jonathan Levinson   9/30/200,  11:41:38 AM
QQQ cracked the lows there and is now testing 34.95 support.

  Linda Piazza   9/30/200,  11:41:32 AM
The OEX again approaches a Keltner level from which it might attempt a bounce. Bears would prefer instead to see a five-minute close beneath the Keltner line currently at 533.30, setting up a breakdown situation, but if the OEX bounces instead, they want to see five-minute closes beneath the Keltner line currently at 533.87.

  Linda Piazza   9/30/200,  11:39:57 AM
New low on the OEX.

  Mark Davis   9/30/200,  11:39:11 AM
Stopped out @ 1110.40, -1

  Jonathan Levinson   9/30/200,  11:38:50 AM
Session low for NQ and almost for QQQ on a 100-tick bearish engulfing there. The bears are trying to step up.

  Linda Piazza   9/30/200,  11:38:45 AM
The OEX tested the 534.12-534.25 level that Keltner charts predicted it would test, with the outcome of this test important for bears. Bears want to see continued 15-minute closes below the Keltner line currently at 534.42 and would prefer them below the Keltner line currently at 534.17.

  Jonathan Levinson   9/30/200,  11:32:16 AM
The 30 min cycle channel has rolled over, with channel support now down to that magic 34.95 level. A short cycle downphase is in progress as well, and this synchronous setup makes it prime time for bears. Unfortunately, the selling is entirely reticent and uninspired, and feels corrective to me. Until 34.95 fails, the bulls remain in control.

  Linda Piazza   9/30/200,  11:23:15 AM
The OEX is trying to steady at the level from which the Keltner channels suggested that it might attempt a bounce. (See my 11:14 post.) Bears hope to see resistance at 534.15-534.25, although the three-minute chart suggests it may be a little higher, nearer 534.50.

  Linda Piazza   9/30/200,  11:19:31 AM
If the TRAN bounces--hard to predict since the TRAN sometimes overruns targets--look for resistance in the 3230-ish level. An inability to get much higher than that would indicate waning strength.

  Linda Piazza   9/30/200,  11:17:05 AM
The TRAN is less than three points above the 3224.73 confirmation level on its double-top formation, a potential bounce point or failure point for this index, with this index serving as an indicator index for others of late.

  Jeff Bailey   9/30/200,  11:15:13 AM
11:00 Internals at this Link

  Linda Piazza   9/30/200,  11:14:15 AM
Somewhere between the current OEX 533.75 level and 533.40, it may be time for the OEX to bounce up toward 534.13-534.25 to retest resistance.

  Linda Piazza   9/30/200,  11:11:31 AM
The TRAN rolls down toward a test of the confirmation level of its potential double-top formation: Link Market bears should be careful as the confirmation level is approached, as there's the possibility of a bounce instead from that level. Market bulls should of course be careful, too, as a TRAN confirmation of its double-top formation will not be good for the markets in general.

  Mark Davis   9/30/200,  11:07:41 AM
Go long now @ SPX 1111.40, stop 1110.40

  Jeff Bailey   9/30/200,  11:07:11 AM
11:00 Market Watch at this Link

  Jonathan Levinson   9/30/200,  11:07:08 AM
Stepping away for 10 minutes here.

  Linda Piazza   9/30/200,  11:07:03 AM
A 15-minute OEX close below 534.19 suggests the possibility of a move toward 532. For short-term traders, I'd have profit-protecting plans in place on a test of 532-532.50, and then again as 530 is approached, if it is.

  Linda Piazza   9/30/200,  11:05:41 AM
One note about the window-dressing going on. After Jim's astute comments about window-dressing and the bounce that might be seen at the end of each day's trading, I took a look at the Nikkei's five-day chart yesterday. The Nikkei not only faces end-of-quarter, but end-of-half, as their financial year ends in March. Sure enough, I saw that end-of-day bump each day. Until yesterday. Didn't happen yesterday. There was a flattening instead. Then last night, the last 30 minutes saw a more-than-100-point drop in the Nikkei. In his 9:35 post on the Futures side of the Monitor, Keene commented that end-of-quarter buying might already be finished, and that's what the Nikkei's action suggested. However, since there's the possibility that the Nikkei's behavior the last two days had more to do with fear of tomorrow's Tankan survey results, we have to take it with a grain of salt. The possibility exists, though, that Keene is right about end-of-quarter window-dressing already having been completed, and that we won't see the hoped-for bounce-and-rollover entry. That's why this morning's breakdown entry might be the best that's offered today.

  Jonathan Levinson   9/30/200,  11:04:54 AM
QQQ has just broken below 7200-tick SMA support at 35.09.

  Jeff Bailey   9/30/200,  11:02:39 AM
Stillwater Mining (SWC) $15.30 +7.97% .... begin to assess possibility of exercising your right to buy the stock at $15 and then write a covered call at the $17.50 strike.

  Jonathan Levinson   9/30/200,  11:00:58 AM
QQQ is chewing at 7200-tick SMA support again.

  Mark Davis   9/30/200,  10:59:35 AM
Stopped out @ 1112.16, +4

  Mark Davis   9/30/200,  10:56:58 AM
Raise your stops to 1112.16

  Linda Piazza   9/30/200,  10:54:58 AM
If that H&S on the OEX's daily chart is going to be confirmed, there may still be some right-shoulder building going on, which is why I would have preferred to see that bounce this morning hold on a bit longer and then roll down, giving a rollover entry. Depending on trading preferences, a stop on a bearish OEX play entered on the downside trendline break this morning might be placed right above 535.50 or perhaps above this morning's high, using a move above the 10-dma as a stop. This was a risky move all along and an entry I didn't want to see offered. Monday's breakdown entry would have offered short-term players a profit if they'd taken the suggested profit-protecting action as the OEX approached 530, but die-hards would have suffered a significant percentage loss if they'd held until stopped yesterday.

  Jeff Bailey   9/30/200,  10:54:09 AM
Stillwater Mining (SWC) $15.18 +7.12% .... breaks above downward trend on bar chart and bullish wedge.

  Jonathan Levinson   9/30/200,  10:54:03 AM
Gold is currently trading 418.40, with an intraday high of 419.50 just off the 420 resistance level. HUI is above 230 as I type, XAU above 101.

  Mark Davis   9/30/200,  10:51:23 AM
Let's see, if I remember correctly yesterday's electric fences were 1111 and then 1112.50... today it is 1114.50. I'm not saying 1114.50 will give way, only noting that it's the magic number.

  Jeff Bailey   9/30/200,  10:50:17 AM
Merck .... most active options are the Oct. $35 calls 17,738 (oi 190) at $0.45 and Oct. $32.5 puts 10,810 (oi 52) at $0.70.

I think this trade would be from the MRK specialist as he/she buys MRK stock (offers liquidity to market participants selling), then hedges by buying the puts and writing covered calls against his/her buying of stock.

MRK $33.17 here.

  Jonathan Levinson   9/30/200,  10:49:40 AM
QQQ update at this Link . Note how the current bounce kicked off precisely from the 7200-tick SMA line.

  Jonathan Levinson   9/30/200,  10:48:51 AM
Session high for Nymex crude, +.45 at 49.95.

  Mark Davis   9/30/200,  10:46:09 AM
It will be fun to watch if we break above SPX 1115

  Jim Brown   9/30/200,  10:44:46 AM
Capital gives all clear on suspicious package.

  Mark Davis   9/30/200,  10:43:26 AM
If I weren't already long I'd be issuing a long signal right now.

  Jonathan Levinson   9/30/200,  10:38:47 AM
MRK is doing damage control:



  Jeff Bailey   9/30/200,  10:38:12 AM
Merck and DIA thoughts/observations at this Link using your 5-MRT technique.

DIA intra-day note would be that its BLUE #6 is correlative with today's DAILY Pivot.

  Linda Piazza   9/30/200,  10:35:49 AM
Here's the potential H&S I'm watching on the OEX's daily chart, shown here with a line drawing rather than candlesticks because it might be easier to spot: Link The potential right shoulder is forming beneath the 50-dma, shown in blue.

  Jonathan Levinson   9/30/200,  10:35:36 AM
QQQ has broken back below yesterday's high. A move below 34.95 will be needed to confirm that the whole move above 35.18 was merely a throwover for the 30 min cycle.

  Jim Brown   9/30/200,  10:35:18 AM
Alert - U.S. Capital Building being evacuated
Probably nothing but a suspicious package scare.

  Linda Piazza   9/30/200,  10:34:19 AM
The OEX has now broken below the redrawn rising trendline off Tuesday's low. Those who are interested in taking a breakdown entry, aware of its difficulties, could take this entry. Be aware that TRIN does not yet support a bearish play, so there could still be a bounce in the future, perhaps up to test today's high or the 50-dma again.

  Jeff Bailey   9/30/200,  10:32:03 AM
Stillwater Mining (SWC) $14.88 +5.01% .... of late, I've noticed that GM $42 has been somewhat close to SWC $15.

  Jeff Bailey   9/30/200,  10:31:20 AM
Daimler Chrysler (DCX) $41.35 -0.57% ...

  Jeff Bailey   9/30/200,  10:30:48 AM
Ford (F) $13.97 +0.86% ...

  Jeff Bailey   9/30/200,  10:30:05 AM
General Motors (GM) $41.96 +2.11% ....

As GM goes, so goes palladium?

  Jonathan Levinson   9/30/200,  10:27:59 AM
And a session high for silver at 6.859, +2.51%.

  Linda Piazza   9/30/200,  10:27:47 AM
The OEX again tests that ascending trendline off Tuesday's low, with that (redrawn, to incorporate two new candle shadows) trendline now crossing at about 534.45. As I type, the OEX is at 534.70.

  Jeff Bailey   9/30/200,  10:26:55 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Jonathan Levinson   9/30/200,  10:25:59 AM
QQQ has next support at 35.11-.12, yesterday's highs. A wavelet downphase is just reaching oversold as the short cycle oscillators begin to roll over from overbought.

  Linda Piazza   9/30/200,  10:24:38 AM
Wow, VXO, the old VIX, gapped up this morning from yesterday's 12.92 close, up to this morning's 13.55 open. This doesn't entail a reversal exactly yet, but it should be watched. OEX bulls don't want to see the VXO post strong gains today. Currently, the VXO is off that opening level, at 13.41 as I type.

  Mark Davis   9/30/200,  10:24:29 AM
SPX just printed a sell signal @ 1113.80 but it just barely qualified as a bona-fide sell signal

  Jonathan Levinson   9/30/200,  10:23:16 AM
Session high for Dec gold futures at 418 here.

  Jonathan Levinson   9/30/200,  10:21:30 AM
PFE, MRK's competitor, is having a good day, +.38 or 1.32% currently. I'm told that it's drug Celebrex competes with Vioxx.

  Linda Piazza   9/30/200,  10:19:45 AM
The TRAN just reached a slightly higher high. Just slightly.

  Linda Piazza   9/30/200,  10:17:36 AM
I've been talking about a potential inverse H&S on the SOX's daily chart since the 9/15 Wrap, perhaps not destined to be completed or perhaps so destined. However, this morning, an intraday one was confirmed, shown here on the 15-minute chart: Link This has an upside target of just under 397. Sure would like to let that play out and then see the SOX roll down again beneath resistance before we considered a bearish OEX play, but I think I'd have to hold my nose and consider an OEX bearish play on a breakdown, too. Hope that's not what happens, though, because I think the likelihood of being stopped out far greater on that kind of entry.

  Jonathan Levinson   9/30/200,  10:16:08 AM
Euro and CDN dollar futures continue to rise, with the CDN dollar at an 11 year high today at .788. Euros are up to 1.2423 here.

  Jonathan Levinson   9/30/200,  10:14:48 AM
QQQ update at this Link . 35.27 is 127% fib resistance from yesterday's high, as well as short cycle and 60 min channel resistance.

  Mark Davis   9/30/200,  10:14:39 AM
They're jamming it up

  Jeff Bailey   9/30/200,  10:11:09 AM
Stillwater Mining (SWC) $14.70 +3.74% ....

Taser (TASR) $36.76 +0.72% ...

JDS Uniphase (JDSU) $3.30 -0.6% ...

Paychex (PAYX) $29.62 -0.6% ....

Netease.com (NTES) $38.06 +1.11% ....

Lehman 1-3 year iShares (SHY) $81.95 -0.07% ....

Dow Diamonds (DIA) $100.90 -0.57% ...

  Linda Piazza   9/30/200,  10:08:33 AM
The OEX again tests that ascending trendline off Tuesday's low, but I've now redrawn the trendline to incorporate yesterday's late-day piercing and this morning's, the two candle shadows. That brings the trendline down to 534.35 currently.

  Mark Davis   9/30/200,  10:08:10 AM
I'm showing MRK trading 44M shares so far today and the DOW trading 65M... wondering how that is effecting the TRIN

  Jonathan Levinson   9/30/200,  10:06:42 AM
QQQ spiked to the upper 30 min channel bound and failed, currently back to the 35.18 level as I type. That level continues to hold as support despite an earlier move down to 35.15. A 30 min cycle oscillator downphase has actually commenced, but if price doesn't pull below 35.15 within the next 5-10 minutes, it will whipsaw to the upside.

  Linda Piazza   9/30/200,  10:06:32 AM
For reference, the OEX's 50-dma is at 536.21, with the 10-dma at 537.46, just above today's high. If the OEX should continue to rise, watch carefully for resistance at the 50-dma, also near the top of last week's consolidation band.

  Jim Brown   9/30/200,  10:02:26 AM
Help Wanted Index = 37 (last 37)

  Jonathan Levinson   9/30/200,  10:01:10 AM
Session high for QQQ at 35.26.

  Jim Brown   9/30/200,  10:00:06 AM
Alert - Chicago PMI = 61.3, (est 58.5, last 57.3)
Prices Paid 86.4, Employment 68.9

  Linda Piazza   9/30/200,  9:58:20 AM
Market bulls don't want to see the TRAN print under 3224.73, the trough between yesterday morning's highs and yesterday afternoon's equal high, as that would confirm a double-top formation. The TRAN now prints numbers just under yesterday's 3241.28 high, but Keltner resistance gathers just overhead and may stop the TRAN, sending it down for a test of that confirmation level, if not a push through it.

  Jonathan Levinson   9/30/200,  9:57:36 AM
Bonds continue to weaken, with TNX up another 1.32% today or 5.5 bps to 4.145% currently. Nymex crude is down from earlier levels to a .1 gain at 49.60.

  Jonathan Levinson   9/30/200,  9:56:29 AM
A 7B overnight repo has just been announced, which results in a small 250M net drain for the day- close enough to be considered flat.

  Jonathan Levinson   9/30/200,  9:55:24 AM
30 min channel resistance has risen to QQQ 35.27, 60 min resistance to 35.24 (current session high). A new short cycle upphase is in progress from a higher low but is nearly overbought here. 35.18 is now acting as support following the earlier surge.

  Jeff Bailey   9/30/200,  9:55:13 AM
Pharmaceutical Index (DRG.X) 308.98 -2.49% ....

  Tab Gilles   9/30/200,  9:53:56 AM
Sumthins' gonna give here".... either a new low on the VIX or some more downside on the SPX! With window dressing and the debates Thursday, Friday should be pivotal. Link

  Jim Brown   9/30/200,  9:53:49 AM
RJF - Raymond James down on news the SEC is going to file security charges against the company.

  Jeff Bailey   9/30/200,  9:53:21 AM
Dow Industrials components sorted by price at this Link

  Mark Davis   9/30/200,  9:53:11 AM
Raise your stops on the long play to 1111.16, locking in +3
If SPX heads back below LOD (1111.21) we probably don't want to be long anyway.

  Jonathan Levinson   9/30/200,  9:52:36 AM
Don't forget the 10AM data- Help wanted index, est. 38 and Chicago PMI, est. 58.

  Jeff Bailey   9/30/200,  9:48:01 AM
Bullish Swing trade call update alert ... for the 10 Dow Diamonds Oct. $101 calls (DIAJW) $0.75 -34.7%.

I usually don't consider "bad luck" to be part of trading, but today's news out of MRK is just that.

Look to sell/exit these calls on a DIA trade back higher at $101.15. Got to get above DAILY S1 first though. DIA $100.90 here.

  Linda Piazza   9/30/200,  9:47:49 AM
The OEX tries to steady above that trendline off Tuesday's low and move higher again. We now have an established short-term ascending regression channel off that Tuesday low, and can use that to measure action. Still hoping for a bounce-and-rollover bearish entry.

  Jonathan Levinson   9/30/200,  9:46:40 AM
Session high for NQ futures and QQQ at 35.18. Key resistance is now in play.

  Jonathan Levinson   9/30/200,  9:44:38 AM
The Fed has announced a 9B 14-day repo with which to refund the 13B expiring for a net drain of 4B on that long timeframe. There's another 3.25B of overnight money for which I await the 10AM announcement.

  Jim Brown   9/30/200,  9:43:58 AM
Amazing strength in the SOX given the Micron earnings miss and a couple more chip warnings last night.

  Jeff Bailey   9/30/200,  9:43:54 AM
Merck (MRK) falls to 24th most-heavily weight stock for the market-cap weighted OEX 543.83 -0.32%

  Linda Piazza   9/30/200,  9:43:41 AM
The SOX faces the combined 10- and 50-dma's.

  Linda Piazza   9/30/200,  9:41:56 AM
The TRAN is pulling back from the 3940 resistance level where it ended the day yesterday, but it has dropped only to 3233.72 as I type.

  Jeff Bailey   9/30/200,  9:40:46 AM
Dow Diamonds (DIA) $100.75 -0.7% ... Dow breadth positive at 19:11, but MRK provides nearly all the drag.

  Jim Brown   9/30/200,  9:40:41 AM
Economic reports still to come at 10:00:

Chicago PMI (est 58.5, last 57.3)
Help Wanted Index (last 37)

  Linda Piazza   9/30/200,  9:38:19 AM
OEX bouncing again back above that trendline off Tuesday's low. Be careful here. I don't like entering a position first thing in the morning, as options prices are so elevated and markets tend to overrun support and resistance and soon reverse, but sometimes an early entry is all that's offered. Right now, watch to see what happens, perhaps watching now for a rollover below 535 or 535.50, perhaps hoping for a bigger bounce and rollover.

  Jeff Bailey   9/30/200,  9:37:47 AM
Merck (MRK) $32.91 -27% Link ....

DIA $100.79 -0.68% ...

  Jonathan Levinson   9/30/200,  9:35:56 AM
The only thing for QQQ bears to celebrate here is that the toppy 30 min channel has flattened out. 34.95 support hasn't been tickled yet, despite the washout in the Dow, and unfortunately the short cycle downphase has so far been utterly sideways. If not for the positioning of the 30 min cycle in overbought, I'd be seeing this as very bullish action for the QQQ. Bulls need to get above 35.18-.20 to get a shot at a trending move.

  Linda Piazza   9/30/200,  9:34:29 AM
Big drop while I was typing that last post. The OEX has just broken through the ascending trendline off Tuesday's low, or maybe QCharts was just running behind all along.

  Linda Piazza   9/30/200,  9:33:00 AM
The OEX hits 7-minute Keltner resistance and retreats. The 15-minute channels show that as long as the OEX maintains 15-minute closes above the Keltner line currently at 536.11, it maintains the possibility of climbing toward 539.52. Watching carefully.

  Mark Davis   9/30/200,  9:32:26 AM
I was just listening to all the chatter re: Merck on Bloomberg TV and an interesting stat came out. The Dow futures were -65 pts at the time and the weighted negative effect of Merck was -65 points, so in my mind that means without Merck we have a flat opening. What happens after that remains to be seen.

  Linda Piazza   9/30/200,  9:29:47 AM
The OEX appears to have various types of support grouping near 534.70, just above the level of the lowest and latest ascending trendline off Tuesday's low. A break of that trendline would occur on a drop below 534.50, but want-to-be new bears would certainly need to be aware that the OEX pierced that trendline late yesterday only to bounce higher again on the late-day bounce. Could happen again.

What do you do if you think you should be positioned for a fall but keep getting stopped out, as even die-hard OEX bears probably were late yesterday, with shorter-term bears probably opting for the 530-ish exit on Tuesday? Take the entries when offered, hopefully bounce-and-rollover entries because they're safer, but the breakdown ones if offered, too, but you can't ignore stops. That would be ignoring the possibility that indices could instead break out of this year's descending regression channels, a possibility we always have to keep in mind. Unfortunately, there may be some false starts. If your account can't take the whipsawing action--and there's no shame in determining that it can't, but only shame in not admitting it to your account's detriment--then you may be better off to wait for a breakdown, a retest of the breakdown level and then a rollover from there, realizing that entry might not be offered and you may miss a trade. There will always be another trade.

We have the September's Chicago PMI and August's Help-Wanted Index at 10:00, so be careful ahead of those numbers. Want-to-be new bears can hope for a bounce and rollover entry today.

  Jonathan Levinson   9/30/200,  9:13:13 AM
And session low for NQ futures at 1412.50, QQQ -.068 at 35.01. Again, bears should be looking for a break of 34.95 before getting overly excited by the drop. That level held all afternoon yesterday.

  Jonathan Levinson   9/30/200,  9:11:05 AM
Session low for ten year bonds, TNX +2.3 bps to 4.113%.

  Jonathan Levinson   9/30/200,  9:01:25 AM
Yes- Merck has recalled Vioxx worldwide on a voluntary basis following a 3-yr study. I'm on the phone trying to reach... everyone I know, many of whom take the stuff.

  Jonathan Levinson   9/30/200,  8:55:46 AM
Jonathan, I'm searching for an article I read last night about int'l central bankers wanting the US to devalue the dollar by 20%. This would be part of the IMF meeting rumor mill. I'm attaching a James Turk article issued today that alludes to a devaluation of the $, but I'll keep searching for the other reference. Have a good day, CC

That would be this one: Link (NYTimes article, registration reqd).

  Jonathan Levinson   9/30/200,  8:33:17 AM
Equities are lower and bonds are at a session high. QQQ is currently trading 35.13, TNX -3.2 bps at 4.058%.

  Jonathan Levinson   9/30/200,  8:31:14 AM
Headlines coming out now:

> 8:29am U.S. WEEKLY JOBLESS CLAIMS UP 18,000 TO 369,000




8:30am U.S. 4-WK AVG JOBLESS CLAIMS UP 2,250 TO 343,500




  Jonathan Levinson   9/30/200,  8:29:49 AM
Reader Steve points out the very steep move in the dollar this AM. Here's a 30 min delayed refreshable chart for your bookmarks: Link

If anyone's heard anything that caused or correlated with the drop, please email me @ jlevinson@OptionInvestor.com.

  Jonathan Levinson   9/30/200,  8:28:08 AM
Russell2K futures are at a session low. I suspect that the sharp moves we've seen in the last 10 minutes are the result of either an "early selective release" of the data, or at least some traders believing such- we'll find out if equities dive further after the scheduled 8:30 release of the data.

  Jonathan Levinson   9/30/200,  8:20:02 AM
Gold is up to 417.30 here, also a session high. Updated daily chart at this Link . Need to step away for 10 minutes here.

  Jonathan Levinson   9/30/200,  8:16:52 AM
Session high for Nymex crude here at 49.725.

  Jonathan Levinson   9/30/200,  8:05:36 AM
We await the 8:30 release of August personal income, est. +.4%, personal spending, est. +.1%; initial claims est. 340K. At 10AM, we get the Help Wanted Index, est. 38 and the Chicago PMI, est. 58.

  Jonathan Levinson   9/30/200,  7:51:52 AM
Equities are higher, with ES trading 1115.75,NQ 1416.5, YM 10127 and QQQ +.05 at 35.13. Gold is up 2.20 to a session high of 416.70, ditto silver +.089 at 6.78, bonds are up .156 at 112.9375 and Nymex crude is up .15 to 49.65.

  Linda Piazza   9/30/200,  7:09:16 AM
Good morning. Asian markets gained in the overnight session, with Japan breaking a nine-day losing streak. Many Asian markets closed well below their highs of the day, but U.S. futures barely noticed when the Nikkei plunged more than 100 points off its high of the day in the last few minutes of trading. U.S. futures have been drifting slightly higher overnight and continued to do so as European markets opened. Buoyed by easing crude prices and favorable economic data, European markets also gain. As of 7:06 EST, gold was down 0.2 and crude, 0.01. Details of overnight developments can be found in the paragraphs that follow.

Before the Nikkei's open, The Ministry of Economy, Trade and Industry released Japan's August industrial production number, with production increasing by 0.03 percent from July's. The number was in-line with expectations, allowing for a bounce. The Nikkei gapped up more than 80 points and had gained more than 140 points by the late afternoon. Some termed the bounce an oversold bounce after the Nikkei had experienced the most consecutive days of losses since late 2002, and the Nikkei could not sustain most of those gains. It plunged more than 100 points in the last half hour of trade to close up by 37.47 points or 0.35%, at 10,823.57. Fear of the Tankan tomorrow may have been responsible for that late-day plunge.

In stock-specific news, Nikon gained after raising its profit forecast for the current year. Softbank, a fixed-line telecom company, gained after a report that it might buy Cable & Wireless's Japanese unit.

All Asian markets other than China's posted gains but many closed well off their highs of the day. The Taiwan Weighted gained 0.62%, and South Korea's Kospi gained 0.36%. Singapore's Straits Times gained 0.53%, and Hong Kong's Hang Seng gained 1.31%. China's Shanghai Composite lost 1.64%.

Currently, most European bourses post gains. In the U.K., wireless operator Mmo2 gained after it raised its 2004 net service revenue forecast for the U.K., saying it was seeing higher average revenue per user and increasing growth of its customer base. Not all the news was good, as the company still expects service revenue growth to slow in the second half, and notes that customer growth will result in lower margins. Still, the raised forecast helped boost markets also gaining as a result of easing crude prices. Also in the telecom sector, JP Morgan raised its rating of the European telecom stocks to an overweight rating from the previous underweight one. Economic news revealed that September's increase in British housing prices was 0.2%, a slowing from August's growth, revealing that the Bank of England's raising of interest rates is cooling the overheated housing market.

On continental Europe, the easing of crude prices helps autos and airlines gain. France's September business and consumer confidence also rose, improving sentiment. Other economic news pegged the eurozone's inflation rate at 2.2%, a five-month low.

As of 7:06 EST, the FTSE 100 had gained 13.60 points or 0.30%, to trade at 4,601.70. The CAC 40 had gained 19.56 points or 0.53%, to trade at 3,702.23. The DAX had gained 23.450 points or 0.60%, to trade at 3,943.86.

  Jeff Bailey   9/29/200,  12:38:52 AM
Paper/Forest Poducts .... In the September 23, 2004 Index Trader Wrap, I touched on some of the Stock Trader Almanac's notes of sectors that have experienced bullish seasonality beginning in October.

I've been monitoring International Paper (IP) Link at its bullish support trend, but stock is still in a major downward trend on bar chart Link where Tuesday's low was another trade at lower end of a regression channel.

Thinking about a bullish trade on a dip back under $39, maybe a naked put trade. I like the Relative Strength chart vs. the INDU Link , where IP used to be a Dow component and bit of a slow trader.

Weyerhauser (WY) Link has been showing up as an OEX stock that has been getting some action from institutional program trading firms from the buy side.

November Lumber futures (lb04x) $328.40 -2.95% have been falling like a big redwood since their early September high of $413.50 and bearish vertical count of $296 is fast approaching. Hmmmm.... homebuilders use lumber in their products.

Sector is very strong, but also overbought. According to Dorsey/Wright & Associates, their Forest/Paper Bullish % (BPFORE) is "bull confirmed" at 78%.

The "smurf" or Smurfit-Stone Container (SSCC) Link is trading tough.

  Jeff Bailey   9/29/200,  9:45:29 PM
Universal Guardian (BB:UGHO) $1.63 -6.32% Link .... Until yesterday's subscriber e-mail, I did not know this company existed.

Heck, when I first made bullish comments regarding Taser Intl. (TASR) Link at what I think is now about $4.00, I didn't know it existed.

Here's what I'm thinking at this point regarding the TASR Dec. $45 call as it sits bid $2.45.

The likelihood of TASR hitting $55 by December expiration is still there, but that would bring the trade back to break-even at best.

I profiled the 1 call option as rather speculative, and as I see it, UGHO is also highly speculative, but from a risk/reward standpoint, I'm almost willing to sell the TASR call at a loss, that the $245.00 and slap it down on UGHO and see if it doesn't get some type of euphoric wave of bullish enthusiasm, and get our $1,050.00 dollars back.

I rate UGHO as MUCH MORE SPECULATIVE and UNPROVEN than I do TASR, and while I fall into the trap of "UGHO will be the next taser-like stock," by rotating what's left of the TASR Dec. 45 calls ($245) to UGHO stock, a trader isn't risking anymore than they did in the TASR Dec. $45 calls. Heck... if UGHO is fierce competition to TASR, TASR might just buy them out.

  Jeff Bailey   9/29/200,  9:17:31 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   9/29/200,  7:11:13 PM
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