Option Investor
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  Jeff Bailey   10/1/200,  4:20:58 PM
Nigeria's President says rebel group disbanding.

  Mark Davis   10/1/200,  4:17:19 PM
Oil closes the day above $50 for the first time. Is this a case of "Sell the rumor, buy the news"?

  Mark Davis   10/1/200,  4:07:53 PM
SPX closes the day @ 1131.50... that's the Sep 21st swing high to the penny.

  Jane Fox   10/1/200,  4:07:26 PM
Is it a stampede Jim :)

  Jonathan Levinson   10/1/200,  4:07:25 PM
Session high NQ.

  Jim Brown   10/1/200,  4:06:24 PM
ELK warning

  Jim Brown   10/1/200,  4:03:52 PM
XMSR saying it passed 2.5 million subscribers in Q3 by adding a whopping +415,000 subscribers in the quarter.

  Jonathan Levinson   10/1/200,  4:03:30 PM
Looking over the charts, today is a stunning session. 1440 NQ, 1115, 1120 and 1125 ES were cleared without even a pause. These were levels that had previously taken days and weeks to clear in both directions.

  Jim Brown   10/1/200,  4:02:08 PM
MCRL warning

  Mark Davis   10/1/200,  4:01:51 PM
Long @ 1128.27, stop 1128.27 and break even
Short @ 1131.27, stop 1132.27
We have +3 points locked in to hold over the weekend. That should be enough cushion to have us in the black Monday morning when we can let the market once again decide which position is the winner.

  Linda Piazza   10/1/200,  3:59:41 PM
The OEX is closing right underneath that descending trendline off the 9/13 high.

  Linda Piazza   10/1/200,  3:57:46 PM
The OEX will end the week above the 200-week sma at 539.41 and also above the 539-ish weekly Keltner line that it needed to close above in order to avoid showing the same weakness it did last week, by closing below that same line. This could begin to flatten the downward slant of that smallest channel on that chart, but it won't have turned it higher again. It's still turned down.

Doing my just-checking scan of GE, MER, and CSCO, I see that today's climb brought each up to challenge its 200-week sma, with only MER looking as it it will close over that average. Risky place according to those 200-sma's on those often-watched big caps, at least.

  Mark Davis   10/1/200,  3:56:16 PM
Go short SPX now @ 1131.27

  Mark Davis   10/1/200,  3:52:21 PM

  Linda Piazza   10/1/200,  3:47:58 PM
The OEX never even dropped down far enough to finish forming a head for the potential H&S on its five-minute chart. We may see that 543.50-ish level yet, an even closer approach than the 543.31 already reached. Careful, though, as bearish divergences continue on the five-minute chart. If you're going to close out a bullish position today, don't wait too long. SOX bulls just can't push the SOX higher and may decide to bail.

  Jonathan Levinson   10/1/200,  3:47:58 PM
Session high for YM here.

  Mark Davis   10/1/200,  3:46:55 PM
I'm thinking of taking a counter short position near the close. I wonder how many others are pondering that decision.

  Mark Davis   10/1/200,  3:45:20 PM
SPX just printed another buy signal @ 1129.50... TRIN is "way up there" @ .50!

  Mark Davis   10/1/200,  3:41:53 PM
Let's rake up that old chestnut... the SPX daily chart of the past 3 "b" distribution patterns and what has transpired immediately after the bounce off the bottom of the bulb. At first glance it would appear things are playing out exactly as expected, but take a closer look... note the current position of the oscillators as opposed to the previous two times the index topped out from a lower high. They don't look as bearish as the last two times, do they (especially MACD trying to cross up)? Link

  Linda Piazza   10/1/200,  3:37:55 PM
Watch for a possibility that the OEX will pull back to 541-541.40 and then make another push higher, into a lower five-minute high. (This is predicated upon the possibility that the OEX could be attempting to form another, bigger H&S on the five-minute chart, with the former H&S, soon reversed, now being the left shoulder.) Others can see this pattern as well as I can, however, and if there are longs making the decision about when to close out positions this afternoon, ahead of the weekend, they might decide to do it before that thing confirms, resulting in a fall without forming the right shoulder.

So far, the OEX hit a high of 543.31, not too far from the 543.50-ish target that the fitted Fib bracket suggested might be the upside target. Good tool today.

  Linda Piazza   10/1/200,  3:31:21 PM
The TRAN hit 3300 and has since pulled back, but is still within striking distance.

  Jonathan Levinson   10/1/200,  3:21:32 PM
A note of caution for bulls: the 30 min cycle never rolled over, and it is looking very, very toppy here. Provided that 35.84 holds as support, that shouldn't be a problem as the daily cycle will carry it with its own upphase. But for the moment, barring an overbought trending move on the 30 min cycle, a pullback looks like the most likely intraday move from here for QQQ.

  Linda Piazza   10/1/200,  3:20:11 PM
What would the VIX and VXO look like if I were studying them on a Keltner-chart basis? The VIX is in breakout (to the downside) status on the 15-minute chart, but not the VXO. The 60-minute VXO chart suggests that the VIX is approaching its likely low, near 12.54 on a 60-minute closing basis. I had to scroll back to the middle of April 2003 to find a time when the VIX violated that channel line for more than a couple of hours. However, does anybody remember the middle of April 2003? By coincidence, I had been earlier today scrolling through archived Market Monitors for April 22 and thereabout, because I wanted to see if we were all talking about the VIX as much as we are now (we were) and if we were all so worried about the possibility of a downturn. Surprising me, I found that we were a bit more bullish than we are now, as I'd erroneously thought we were a lot more bearish then than now.

However, all this is complicated by the fact that I'm comparing apples and oranges here, since I'm looking at a chart that combines the old VIX (now VXO) with the new VIX. The new VIX has never violated that particular channel.

  Jeff Bailey   10/1/200,  3:15:58 PM
03:00 Internals at this Link

  James Brown   10/1/200,  3:12:50 PM
EMC is up more than 4% and cracking resistance at the $12.00 mark. Watch the simple 200-dma directly overhead.

  James Brown   10/1/200,  3:12:02 PM
Mt. St. Helens is erupting with a "steam" eruption...

  James Brown   10/1/200,  3:11:24 PM
I'm noticing that Copper prices are now trading at $1.40 a lb. This could be an all-time high.

  Jonathan Levinson   10/1/200,  3:09:53 PM
Heading into the last hour, it appears that the binary dollar trade is back in force: weak dollar, strong equities and gold. The big reversal in treasuries this week is the exception, possibly suggesting sector rotation or larger forces at work.

  Jeff Bailey   10/1/200,  3:04:47 PM
03:00 Market Watch at this Link

  Jonathan Levinson   10/1/200,  3:03:10 PM
The cash bond market has closed, with TNX up 7.2 bps or 1.75% at 4.191%.

  Jonathan Levinson   10/1/200,  3:02:26 PM
Session high for gold on the E-cbot, +1.20 at 421.70.

  Mark Davis   10/1/200,  3:01:16 PM
We just took out the Sept 21st swing high on the SPX daily chart (1131.50) before dropping back slightly... currently printing 1131.22. This has to make shorts more than a little nervous. With an hour left to trade and TRIN back @ .39 I would have to think shorts are making decisions right now and the cards seem to be stacked against them. It's going to take more than a small pullback to embolden all but the most aggressive shorts. You can talk all day about the many reasons this shouldn't be happening but it is.

  Linda Piazza   10/1/200,  2:58:38 PM
Maybe that 543.50-ish upside target (see my 13:31 post) wasn't so far off after all? Note that the 30-minute Keltner channels suggest an upside target of 544.76.

  Linda Piazza   10/1/200,  2:56:58 PM
I'm studying the NDX, Nasdaq, and SOX charts on the 382-minute chart. (See my 10:42 post for a look at the SOX's 382-minute chart and its significance.) Wednesday, the NDX and Nasdaq both punched above the 100/130-ema's on that time interval's chart, averages that had looked significant in their trading patterns. I'm puzzled as to the sustainability of this rally when the SOX is not showing the same ability, however. While the SOX has pulled above the 100/130-ema's on the 382-minute chart, it's only barely done so, and appears to be pulled higher by the Nasdaq rather than the other way around. It's still within a range in which it could fall back this afternoon and leave only a shadow above the 382-minute 130-ema at 400.46 while an analogous action appears impossible on the NDX and Nasdaq. The SOX needs to join the party, I think, or perhaps we ought to look at other tech sectors for leadership and stop watching the SOX so much. For example, the GSTI, the software index, tested the 382-minute 100/130-ema's on Tuesday and shot above them Wednesday, seeming to lead the tech indices and continuing to zoom higher today. Is it possible that the Nasdaq can sustain gains without the SOX?

  Mark Davis   10/1/200,  2:53:03 PM
Raise stops on the long play to 1128.27 and break even

  Jonathan Levinson   10/1/200,  2:52:04 PM
Session high for NQ here- QQQ a few cents away.

  Mark Davis   10/1/200,  2:51:29 PM
If you're long with current month contracts you need to start thinking about whether or not you want to hold over the weekend. If we close the day with +2 or more in the bag (that would be SPX 1130.27) that would give you a little cushion for time decay. If you're following the current long play using ES futures or November contracts then you have a little more leeway.

  Linda Piazza   10/1/200,  2:47:23 PM
The OEX is trying for another test of the descending trendline off the 9/13 high.

  Linda Piazza   10/1/200,  2:45:45 PM
Looking at the TRAN's monthly chart, there does appear to be some resistance in the 3300 level and I would imagine that a round-number level might have some relevance after such a strong climb, but the upside target from the TRAN's cup-and-handle formation on its 60-minute chart is somewhere near 3317. The TRAN seems determined to reach that today, doesn't it?

  Mark Davis   10/1/200,  2:42:07 PM
If SPX doesn't roll over again pretty soon we may see shorts begin to cover ahead of the weekend.

  Linda Piazza   10/1/200,  2:39:28 PM
The TRAN continues higher and is now only a little more than 6 points away from 3300.

  Jonathan Levinson   10/1/200,  2:35:53 PM
So far, this QQQ bounce is just a strong wavelet upphase that is reaching overbought territory now. A short cycle upphase hasn't kicked off yet, but unless this bounce reverses in the next 5 minutes, it will from a higher low. The 30 min cycle is very toppy and is looking for a downphase, and so it will be a battle between short cycle bulls gunning the close vs. 30 min cycle bears.

  Jonathan Levinson   10/1/200,  2:34:07 PM
Nymex crude went out at 50.15, +1.01% ot .50.

  Jeff Bailey   10/1/200,  2:33:08 PM
02:00 Internals at this Link

  Jonathan Levinson   10/1/200,  2:32:43 PM
QQQ is coming for a retest of the highs. Hours of selling have been reversed in a few short ticks.

  James Brown   10/1/200,  2:30:56 PM
An upgrade from Goldman Sachs is sending semiconductor maker QLGC up 5.6% to $31.41.

  Linda Piazza   10/1/200,  2:27:50 PM
After confirming the miniature H&S on the OEX's five-minute chart, the OEX ran right back up above the neckline again. Five-minute Keltner resistance is now at 542.16. If that doesn't hold on five-minute closes, we'll be looking at another test of the descending trendline off the 9/13 low and possibly of the 543.50-ish level that my little exercise in fitting a Fib bracket showed might be an upside target. (See my 13:31 post for an explanation.)

  Mark Davis   10/1/200,  2:23:49 PM
Exit short now @ 1128.50, +1.75

  Mark Davis   10/1/200,  2:21:35 PM
Go long now @ SPX 1128.27 , stop 1127.27

  Linda Piazza   10/1/200,  2:19:57 PM
I'll be away for about twenty minutes. Watch Mark's posts about the SPX for a guidepost to the OEX's behavior, too, although the SPX and OEX of course are not completely analogous.

  Linda Piazza   10/1/200,  2:16:33 PM
The OEX's five-minute H&S has confirmed. There's only a small downside target, however.

  Jonathan Levinson   10/1/200,  2:13:36 PM
Seeing the first downticks of the day in the 30 min cycle channel for QQQ here. The oversold wavelet oscillator is starting to trend.

  Mark Davis   10/1/200,  2:13:10 PM
I'm looking to bracket the SPX again with another long play in the 1127.50 area... stand by

  James Brown   10/1/200,  2:12:40 PM
The following is an excerpt from a Reuters article discussing Google's next challenge, which is keeping its workers. Here's a link to the whole article: Link

Based on Google's share price of around $130, Salary.com senior vice president Bill Coleman estimated that around 60 percent of the 1,900 Google employees with the company at the end of March each now hold stock options worth at least $1 million.

While some workers may choose to go back to school, start a new company, or join the ranks of high-tech early retirees, analysts also note that $1 million is not what it used to be.

"If you live in Mountain View, California, and someone gives you $1 million, you might be able to pay off your mortgage, but you can't retire," said Coleman, referring to Silicon Valley's sky-high home costs.

On the other hand, Coleman estimates that 400 to 500 of Google's longer-term employees will have stock options worth $5 million or more. "Are they flight risks? Absolutely."

Jackson and others caution that post-IPO workers may struggle with boredom, burnout and a lack of purpose after the big push to go public. To be sure, Google -- which has vowed to remain unconventional -- is seen as a very employee-friendly company. It has even promised to beef up perks, which already include an in-house masseuse and free lunches prepared by the former chef to the Grateful Dead.

While such extras are nice, if Google fails to instill a continued sense of mission among employees, "they're crossing their fingers and just hoping that good people will stay," said Vince Poscente, a management strategist and author.

  Jeff Bailey   10/1/200,  2:08:58 PM
Daimler Chrysler (DCX) $42.50 +2.5% .... said sales rose 13% in September to 186,189 units.

  James Brown   10/1/200,  2:05:33 PM
Cooper Industries (CBE) is also in breakout mode and trading above the $60.00 mark. It's a bit hard to tell if shares are pushing through the top of is wide, slowing-rising channel or if it's still stuck in the range.

  Jeff Bailey   10/1/200,  2:05:05 PM
General Motors (GM) $42.91 +1.01% .... said September sales jumped 20% versus September of last year, where sales were boosted by new incentives.

GM sold 458,799 vehicles.

However, GM said it was cutting targeted production for Q4 by 10,000 units.

  James Brown   10/1/200,  2:04:19 PM
Chicago Mercantile Exchange (CME) is seeing some follow through on yesterday's breakout over $160. The stock is up another 2%.

  James Brown   10/1/200,  2:03:09 PM
I don't see any specific news but Lexmark (LXK) is breaking out from its recent trading range and resistance at $85.00 and its exponential 200-dma.

  Jonathan Levinson   10/1/200,  2:02:16 PM
Session high for Nymex crude here at 50.15. QQQ is down to 35.98, which, given the reticence with which QQQ has been shedding individual pennies, feels like a major victory for bears. Unfortunately, it's too little to do more than keep the 30 min cycle channel stalled, and lower support is currently lined up with 7200-tick SMA support at 35.90. It will take a sustained move to that level to turn this key channel down. 35.84-.74 remains key confluence support, but note that the short cycle downphase is expending energy on this weak decline- in other words, the bears are wasting time with a corrective short cycle downphase, trying to get the longer intraday cycles to roll over. A move to or below 35.90 should get the ball rolling, if it happens soon.

  Mark Davis   10/1/200,  1:59:38 PM
Stopped out of long play @ 1128.60, -1
Short play from 1130.25 is +1.5 at this point.

  Mark Davis   10/1/200,  1:56:05 PM
Short @ 1130.15, leave stop @ 1130.15 and break even
Long @ 1129.60, raise stop to 1128.60

  Linda Piazza   10/1/200,  1:51:24 PM
Marc on the Futures side is noting that crude hit $50. So far, the TRAN stays steady, but I'd sure keep an eye on it. It can move fast.

  Mark Davis   10/1/200,  1:45:11 PM
Lower stop on short play to 1130.25 and break even.

  Jonathan Levinson   10/1/200,  1:44:29 PM
Stepping away for a few minutes.

  Linda Piazza   10/1/200,  1:42:49 PM
I've got two pictures in my head and I'm honestly having difficulty reconciling which I feel most likely. One is of a day in which each minor dip is met by scared shorts trying to cover their positions, driving the OEX and other indices higher right into the close, with perhaps a slight let-up in the last few minutes. That would see that 543.50-ish (subjective) projected upside Fib target met. The other is a picture from a couple of days ago on the Nikkei, when the last thirty minutes of trading saw a precipitous more than 100-point loss in the last 30 minutes of trading. I think I could make a good point for shorting the OEX right here. I also think I could make a good point for going long if it breaks above that descending trendline off the 9/13 high.

  Linda Piazza   10/1/200,  1:39:15 PM
Miniature H&S developing on the OEX's five-minute chart. Projects down to about 540.70 if confirmed.

  Jonathan Levinson   10/1/200,  1:36:48 PM
Bears are looking for a lower QQQ high to support the ongoing short cycle downphase.

  Mark Davis   10/1/200,  1:36:07 PM
It's funny to see TRIN @ .42 and think "It's rising!"

  Linda Piazza   10/1/200,  1:31:57 PM
Do you ever notice after a big climb or big decline that when you snap on Fib brackets, they seem to fit the previous movement as if they were there all along? Happens a lot, doesn't it? Jeff has sometimes talked about fitting Fib brackets to a movement, and his articles gave me the idea during a climb or decline to try to fit Fib brackets to the consolidation levels and then try to predict where the upside or downside target might be. I've been doing that today with the latest climb, and I come up with a possible upside target near 543.50 according to that method. This is a subjective tool and one that has to be constantly readjusted, but here's my idea for this climb, placing the 38.2% retracement at just over 535, where the OEX found resistance for a few days, the 50% level at 536.64, and the 19.1% level at 540.80, a known level of historical S/R: Link Don't use this information to trade upon, with bulls counting on a move up toward 543.37. There's every possibility that the OEX will turn down below that descending trendline off the 9/13 high. However, consider using it as a tool in your own trading, seeing if it works for you.

  Jonathan Levinson   10/1/200,  1:29:38 PM
The wavelet oscillator is trying to bottom here after a sideways pullback. This drift could be the weightless area within the rounding 30 min cycle channel, but bears will want to see some actual selling before getting excited about downside prospects here. Gold is up 1 to 421.40, silver flat at 6.94, while HUI is down 1.13% to 228.77 and XAU -.98% at 100.95.

  Mark Davis   10/1/200,  1:29:37 PM
Uh-oh! Big green candle from just below the last swing low... could it be they are going to jam it above HOD again or will it roll over? (Have any Twilight Zone music Jim?)

  Linda Piazza   10/1/200,  1:27:45 PM
Keltner support gathers near 541.13, above 540.80-541.00 historical support. A first task of bears would be to push the OEX below that. So far, though, the OEX maintains its breakout signal on that 15-minute chart but showing 15-minute closes above the Keltner line currently at 541.29. MACD makes a bearish cross, but from above signal.

  Linda Piazza   10/1/200,  1:14:28 PM
OEX 540.80 has been a level of historical S/R. Bulls would like to see that hold.

  Jonathan Levinson   10/1/200,  1:12:57 PM
This is looking good for a rollover. Key confluence is at 35.84-35.74. The short cycles are at the very beginning of a downphase, printing preliminary sell signals in overbought. The flattened 30 min channel is showing a weak downtick- price needs to cooperate in order to make good on these bearish hints.

  Mark Davis   10/1/200,  1:10:14 PM
Long @ 1129.60, lower stop to 1127.60
Short @ 1130.25, raise stop to 1132.25
We are essentially flat the market with these plays (we have about a 3/4 point advantage eigher way) so my thinking in widening the stops a bit is this...
1) We decrease the odds of being stopped out and then reversed
2) Any move above or below our 2 point stops should have some momentum behind it and thus increase the odds of a directional move
3) Linda's stop running push is dead ahead so volatility may increase and again we don't want to get stopped out and then reversed.

  Jeff Bailey   10/1/200,  1:09:47 PM
01:00 Internals at this Link

  Jonathan Levinson   10/1/200,  1:07:05 PM
The 30 min cycle channel on QQQ is taking a slow motion roll at the top of its run, currently flattening below a channel high of 36.20, channel support 35.84.

  Jonathan Levinson   10/1/200,  1:05:20 PM
Session high for Nymex crude at 49.75.

  Linda Piazza   10/1/200,  1:03:48 PM
The OEX still has not made it above that trendline off the 9/13 high and 60-minute candles are beginning to show some upper shadows. The thirty-minute Keltner chart (moving up a time interval each time a breakout signal is created on the lower interval's chart) shows a possible upside target of 544.49, however. Bulls should continue following the OEX higher with their stops, snapping new Fib brackets on the climb with each jot higher and deciding how deep of a pullback they can handle.

  Jeff Bailey   10/1/200,  1:00:49 PM
12:50 Market Watch at this Link

52-week and All-time highs marked. CYC.X and DJUSHB levels also marked.

  Linda Piazza   10/1/200,  12:57:43 PM
In Wednesday's Wrap, I advised that traders should watch the Russell 2000 and TRAN carefully for signs that the presumed rollovers in other indices would not occur, as both were closest to upside breakouts. I've been mentioning that I've been watching the TRAN closely as an indicator index because it's so often led the other indices lately. It's sometimes taken on the role that the SOX used to have. I've also been trying to figure out what it's telling us about the economy, since the TRAN's performance is so important in a growing economy. Today's gap higher and strong move since confirmed a cup-and-handle formation: Link These are continuation formations, and they have some parameters. A strong trendline should have been in place before the cup-and-handle's formation. Check. The pullback into the cup shouldn't retrace more than 1/3 of the previous climb. Check. There are other parameters, too, you can read about here: Link

The TRAN has a habit of wildly overrunning targets, but if it holds above the cup-and-handle's lip, it may be telling us that it's not through running higher yet.

So, if I was advising that these be watched as early as Wednesday and if they've broken out, why was I suggesting bounce-and-rollover plays? Neither of the breakouts on these two indices occurred until today. Let's see how today and this week ends and then reassess. OEX bulls don't want to see a weekly close beneath 539. (See my 10:57 post.)

  Jonathan Levinson   10/1/200,  12:51:06 PM
QQQ 100-tick 2-day chart at this Link.

  Mark Davis   10/1/200,  12:48:47 PM
SPX has just printed a sell signal and the MACD divergence has pretty much resolved itself with all the sideways action, but again we see no traction to the downside (yet).

  Jeff Bailey   10/1/200,  12:43:01 PM
Lehman iShare 1-3 year (SHY) $81.85 -0.23% .... Link

  Jeff Bailey   10/1/200,  12:40:33 PM
Netease.com (NTES) $38.65 +1.73% Link

  Jeff Bailey   10/1/200,  12:37:55 PM
All-time high alert .... for the S&P Retail Index (RLX.X) 413.58 +1.38% ...

  Jeff Bailey   10/1/200,  12:36:46 PM
Paychex (PAYX) $30.39 +0.79% Link

  Jeff Bailey   10/1/200,  12:36:00 PM
JDS Uniphase (JDSU) $3.47 +3.05% Link

  Mark Davis   10/1/200,  12:35:58 PM
stepping away for a fresh air break...

  Jeff Bailey   10/1/200,  12:35:05 PM
Taser Intl. (TASR) $38.20 +1.73% Link

  Jeff Bailey   10/1/200,  12:34:04 PM
Stillwater Mining (SWC) $15.39 -0.7% Link.

  Mark Davis   10/1/200,  12:34:03 PM
Long @ 1129.60, stop 1128.60
Short @ 1130.25, stop 1131.25
I keep doing this because I see the potential for a big move but I don't know which way it will be. I'm leaning towards more upside and a break of 1131.50 could really light the afterburners. It seems impossible but I'm trying to ignore what is possible or impossible and just follow price.

  Jeff Bailey   10/1/200,  12:30:40 PM
Morgan Stanley Cyclical Index (CYC.X) Link ... Now ther's a nasty looking reverse head/shoulder pattern. I think we discussed this in an Index Trader Wrap several weeks ago, but getting close the the potential neckline.

  Mark Davis   10/1/200,  12:28:24 PM
Go short again @ 1130.25, stop 1131.25

  Linda Piazza   10/1/200,  12:27:39 PM
I mentioned in my 9:41 post that the OEX's trading behavior had shown some correlation with the Fib levels snapped on the rally off the August low (to the 9/13 high). This Tuesday's low hit the 61.8% retracement and bounced from there. In addition to hitting the descending trendline off the 9/13 high, the OEX is also hitting this Fib level: Link Might be good for consolidation at least, if not a pullback.

  Jonathan Levinson   10/1/200,  12:27:14 PM
QQQ is retesting the high here.

  Mark Davis   10/1/200,  12:24:58 PM
Stopped out of short @ 1130.15 and break even

  Jeff Bailey   10/1/200,  12:24:41 PM
TRIN 0.36 -61.7% .... sitting on QCharts' derived WEEKLY S1 of 0.35 the last hour.

My Pivot Matrix TRIN WEEKLY S1 at 0.29 pretty close, but QCharts' is really trading better.

This too gives me the impression that there's a lot of option unwinding. Could tie in with the buy program scramble early this morning as traders rushed to futures to get long and hedge their naked calls.

  Jeff Bailey   10/1/200,  12:21:04 PM
S&P Retail Index (RLX.X approaching all-time highs Link as the majors follow the retailers, note action from RLX.X as it moved above its 200-day SMA.

Here's list of RLX.X components, where I've sorted them by their 52-week highs from QCharts. Should RLX.X break out further, supply becomes limited and would look for stocks with some nice bullish vertical counts. Link

  Jonathan Levinson   10/1/200,  12:20:35 PM
On the phone with my cycle guru who called to tell me that he couldn't believe the force of the move. Our guess was that these moves have created triple tops on the 30 min charts (see my earlier NQ 30 min chart connecting the 3 major highs over the past 3 weeks). The stall at the current session highs supports that interpretation, but if we see a move above the current highs, then the last remaining shorts playing those resistance lines will likely throw in the towel, resulting in a renewed upside blast.

  Mark Davis   10/1/200,  12:17:47 PM
Go long again @ SPX 1129.60, stop, 1128.60

  Linda Piazza   10/1/200,  12:15:52 PM
For the first time this morning, the OEX closed a 10-minute period below a Keltner line currently at 542.28.

  Mark Davis   10/1/200,  12:15:30 PM
Cinch up stop on short play to 1130.15 and break even.

  Jeff Bailey   10/1/200,  12:11:02 PM
12:00 Internals at this Link

NYSE new highs is largest since April 5 when NYSE reported 252 NH and 39 NL. Was juuuuust starting to roll lower then after showing 343:27 NH/NL the day prior.

  Jonathan Levinson   10/1/200,  12:10:46 PM
QQQ 2-day 100-tick chart update at this Link . I've adjusted the fib grid and it looks like a perfect fit here.

  Mark Davis   10/1/200,  12:09:07 PM
Stopped out of long play @ 1129.26, +18

  Jeff Bailey   10/1/200,  12:01:21 PM
NASDAQ-100 Tracker (QQQ) $36.02 +2.5% .... I was overwhelmed with various upside al_rts this morning. QQQ broke above its 200-day SMA ($35.81), and convention 61.8% retracement ($35.78).

Did get a trade at MONTHLY R1 $36.05 today.

  Linda Piazza   10/1/200,  12:01:05 PM
The SOX still hasn't been able to push much above the 130-ema depicted in my 10:42 post.

  Jonathan Levinson   10/1/200,  12:00:26 PM
Nymex crude currently -.15 at 49.50. TNX is down to a 5.3 bp gain at 4.172%, +1.29% for the day.

  Linda Piazza   10/1/200,  11:59:07 AM
The OEX's 15-minute candles grow smaller, but it inches ever closer to a test of the descending trendline off the 9/13 high.

  Mark Davis   10/1/200,  11:57:31 AM
Here come the b-bands again, converging on SPX 1130. We now have 2 hours of bearish MACD divergence on the 1-min chart and are at strong resistance on the SOX (400), NDX (1450) and SPX (1130). The problem is that TRIN is printing .38 again. This is a very logical place to roll over but how many other market technicians are thinking the same thing and going short, only to provide the fuel for the next leg up?

BTW, the last swing high on the SPX daily chart was 1131.50. If that number is taken out decisively it will cause the daily MACD to make a bullish cross... unthinkable a couple of days ago.

  Jeff Bailey   10/1/200,  11:57:26 AM
11:55 Market Watch at this Link

  Jonathan Levinson   10/1/200,  11:56:07 AM
The move above 1440 NQ could be a reverse h&s neckline break on the daily candles: Link . If so, the implied target could be as high as 1570.

  Jonathan Levinson   10/1/200,  11:51:38 AM
The 30 min NQ chart is a site to behold. Link Other than the early abort to yesterday's 30 min cycle downphase within the context of the then-ongoing daily cycle downphase, this incredible move came with very little warning.

  Linda Piazza   10/1/200,  11:44:06 AM
Here's an update of where the OEX is with respect to that descending trendline off the 9/13 high: Link It will likely be party all day if the OEX can break above that trendline and not get slapped back, but this is a dangerous spot for longs as well as for shorts. This climb is obviously not supported on a 60-minute basis and the OEX will eventually need to do a 38.2-50% retracement to establish support, even if it's going to perform strongly, so decide ahead of time how much of a retracement you can stand. That retracement could come as the OEX approaches this line or after zooming through it. If the OEX does zoom through it, then retrace to find support on that line again and rise from there, that's when bulls can begin to feel more confidence that this is real, at least in my opinion. Like Keene on the Futures side, I like to see the original move and then a retest, if that's offered.

  Mark Davis   10/1/200,  11:43:00 AM
Go short again @ 1130.15, stop 1131.15

  Jeff Bailey   10/1/200,  11:42:54 AM
VIX.X 12.72 -4.64% .... partial explanation for today's VIX.X action in my opinion could be best understood as bears chase some naked calls sold in prior weeks. Check out those SPX Oct. 1,135 calls (SPT-JG) we sold naked at $4.90, closed two days too soon at $3.60. Bid/offer $6.40-$7.10 here with SPX 1,130.15.

  Mark Davis   10/1/200,  11:41:18 AM
We have been walking up the upper B-band since the opening bell with price only dropping below the median twice. Amazing.

  Jeff Bailey   10/1/200,  11:37:42 AM
S&P 500 Index (SPX.X) 1,130.97 +1.41% ... testing "cheater's trend" here.

  Mark Davis   10/1/200,  11:37:06 AM
Stopped out by a penny... man I'm going to be ticked if that was the top.

  Linda Piazza   10/1/200,  11:36:41 AM
Congratulations, Mark! (Not on just getting stopped out of the hedging short play, but on the performance of the long one!)

  Mark Davis   10/1/200,  11:36:20 AM
Stopped out of short @ 1130.96, -2

  Linda Piazza   10/1/200,  11:35:50 AM
The OEX is less than a point away from a test of that descending trendline off the 9/13 high.

  Mark Davis   10/1/200,  11:35:17 AM
Long @ 1111.26, raise stop to 1129.26

  Mark Davis   10/1/200,  11:32:04 AM
B-bands are pinched very tight again... we should see the next move soon
I can't believe I just went short with TRIN @ .39, but again, we have the long play to counter the short so we are essentially flat the market with +18 locked in. Let's let the uni-directional folks sweat out the next move.

  Jonathan Levinson   10/1/200,  11:29:54 AM
There's a 10 cent confluence range from 35.84-35.74, and despite the bearish oscillator divergences on the short cycle oscillators, I'd be looking for a break below that range to get excited about possible downside. The 30 min cycle upphase is still in progress, and it will stall at that level, below which we'll look for 10 minutes of sustained prints to kick off a 30 min channel downphase.

  Jonathan Levinson   10/1/200,  11:26:45 AM
Gold is down 1.10 here at 419.40, with HUI -3.92 or 1.69% at 227.46.

  Linda Piazza   10/1/200,  11:26:14 AM
The ADVDEC line is flattening, but perhaps just pulling back a little as it did at about 10:15 before thrusting higher again.

  Mark Davis   10/1/200,  11:23:06 AM
Go short again... SPX 1128.96, stop 1130.96

  Mark Davis   10/1/200,  11:20:53 AM
Jeff have you ever tracked the buy/sell programs over time? I'm wondering if they could be correlated to anything.

  Linda Piazza   10/1/200,  11:20:45 AM
Those in bullish OEX positions have been doing great this morning, but should be cinching up stops continuously or making other efforts to protect profits. Some might want those profit-protecting measures to allow them to participate in future gains, if offered, while allowing them to collect partial profits or might want to set stops that will take them out at a certain profit level if the OEX retreats.

The TRIN is dropping to levels that have been recent lows for that measure, but please do not use this as a direct contrarian signal, because as my earlier post suggested, it shouldn't be used in this manner. Strong gains can continue all day as the TRIN hits relatively low values and into the open of the next day before equities reverse. Even then, they might not reverse so much as pull back. Still, it's a potential danger signal for long positions that does suggest profit-protecting measures would be wise, even if it doesn't scream that sides should be switched. The OEX soon faces resistance from a descending trendline off the 9/13 high, with that resistance at about 543. The SOX does battle with 400 and then will soon battle 406-409 if it gets through 400. Fifteen-minute OEX candles are beginning to show some upper shadows and the OEX's 20-minute candles are all forming underneath the 20-minute upper Keltner resistance with only the shadows piercing that resistance.

In addition, the SPX tests the top of its descending regression channel on the daily chart. Bolstering the long's confidence is a Russell 2000 move out of its descending regression channel.

  Linda Piazza   10/1/200,  11:18:20 AM
The SPX tests the top of its descending regression channel from this year.

  Jonathan Levinson   10/1/200,  11:17:48 AM
QQQ is showing a bearish divergence on the short cycle Macd and TRIX oscillators on this latest high, but with the stochastics all trending in overbought, it's difficult to trust the signals until a clear price break occurs. I'd look for a move below 35.84 to get the ball rolling on a new short cycle downphase. Meanwhile the 30 min cycle continues to runhigher, with channel resistance at 36.04.

  Mark Davis   10/1/200,  11:14:40 AM
We have 1 hour of bearish MACD divergence on the SPX 1-min chart. This is getting really interesting. SOX and SPX have stopped right at very obvious resistance levels. Will bears pile on or are they too afraid to pull the trigger? A case could be made for almost any type of action here. Pullback at obvious resistance? one more push higher (a last stop run) to take out the SOX 400 and SPX 1130 shorts? Blow right through SOX 400 and SPX 1130??? I'm wishing I had shorted the obvious levels now as we could again set stops to break even on the short play but I was too scared to pull the trigger on a short with TRIN @ .42

  Jonathan Levinson   10/1/200,  11:11:12 AM
Jon, Do you have the link to the CBOE put-to-call ratio page? They have apparently changed it on me.

Here's the new link, John:


  Jeff Bailey   10/1/200,  11:09:21 AM
11:00 Internals at this Link

Yesterday's Internals at this Link

  Mark Davis   10/1/200,  11:06:29 AM
SPX HOD is 1129.94... again, if they jam it higher there will be serious pain for shorts. You have to wonder how much higher they can take it though. SOX 400 and SPX 1130 "should" be a good entry point for a short. I'm sure more than a few will try.

  Linda Piazza   10/1/200,  11:04:05 AM
The SOX touches the 382-minute 130-ema, shown in my 10:42 post.

  Mark Davis   10/1/200,  11:02:43 AM
SOX above 400... if they jam it higher from here there will be much pain in the short camp

  Jeff Bailey   10/1/200,  11:02:38 AM
Semiconductor Index (SOX.X) 400.27 +4.18% ...

  Mark Davis   10/1/200,  11:02:02 AM
Long @ 1111.26, raise stop to 1127.26

  Linda Piazza   10/1/200,  11:02:00 AM
Here's OEX resistance from a trendline on the 60-minute chart that should be watched today by both bulls and bears: Link Current OEX bulls should snug up stops as this resistance is approached, while bears could watch here for signs of a rollover, too. Note that the OEX is also testing the 542-ish horizontal trendline of the H&S from the middle of September.

  Jonathan Levinson   10/1/200,  11:00:59 AM
Session high for QQQ here after a very shallow corrective short cycle downphase. That downphase isn't over yet, but it will be within 5 minutes with price at or above current levels.

  Mark Davis   10/1/200,  10:59:33 AM
I wonder how many traders are beginning to short right now, frontrunning SOX 400

  Linda Piazza   10/1/200,  10:57:08 AM
On a weekly Keltner basis, an OEX close today under the Keltner line currently at 539.05 would continue the Keltner-style weakness seen last week with a weekly close under that same Keltner line. That would continue the possibility that the OEX's smallest weekly channel could continue heading down, as it's doing now. The jury would remain out, however, until the OEX saw a weekly close under the Keltner line currently at 531.79, something that appears highly unlikely this week. An OEX weekly close above the Keltner line currently at 539.05 would help to flatten the smallest Keltner channel, currently headed lower.

  Jeff Bailey   10/1/200,  10:55:11 AM
SanDisk (SNDK) $30.50 +4.73% ...

  Jeff Bailey   10/1/200,  10:54:32 AM
EMC $11.96 +3.63% ... they're storage too.

  Mark Davis   10/1/200,  10:53:52 AM
Stopped out of short play @ 1128.46 and break even

  Jeff Bailey   10/1/200,  10:53:41 AM
Updated of yesterday's most bought/sold program trading stocks at this Link

  Mark Davis   10/1/200,  10:52:15 AM
Who is going to blink first? Link

  Jonathan Levinson   10/1/200,  10:50:31 AM
Nymex crude 49.35 here.

  Jeff Bailey   10/1/200,  10:48:21 AM
10:45 Market Watch at this Link

  Mark Davis   10/1/200,  10:43:48 AM
B-bands are pinched VERY tight here... look for another move soon

  Linda Piazza   10/1/200,  10:42:44 AM
Mark mentioned the SOX's old resistance near 400. Here's new resistance near that level, coming from these MA's: Link I've posted charts of the NDX and Nasdaq on the same time interval this last week, and it was Tuesday's push above these averages on the NDX and Nasdaq that first signaled a change in trend, but one I didn't heed because these are charts I haven't followed long and because the SOX was following rather than leading by this measure. The neckline for the SOX's potential inverse H&S on the daily chart appears to be in the 406-408 range, depending on how it's drawn, so if the SOX should pop above 400, watch for potential resistance in that range, too.

The 191-minute chart appears to have more relevance for the OEX, and the OEX pushed above those 100/130-ema's on that chart this morning, with those averages at 538.38 and 538.56. Bulls want to see that level maintained.

  Jonathan Levinson   10/1/200,  10:39:51 AM
I believe that the current VXO levels are a 9-year low, for what it's worth.

  Jonathan Levinson   10/1/200,  10:39:11 AM
That was a lower high just printed as I typed- an encouraging sign for bears looking for that short cycle downphase. Target 35.53 as next significant support.

  Jonathan Levinson   10/1/200,  10:38:18 AM
The daily cycle oscillators are taking the first steps of a new upphase in the NQ futures, which, as Tab notes, leaves them open to a bearish divergence on the higher price high. That is true, and bulls need to hold today's gains- a reversal into the red would be extremely bearish, setting up a key outside reversal day from a lower oscillator high. However, that hasn't happened so far and unless it does, we have a bullish, very early abort to the daily cycle downphase. Benefit of the doubt has to go to the bulls, at least until today's low has been broken.

  Mark Davis   10/1/200,  10:35:12 AM
stepping outside for a few minutes...

  Jonathan Levinson   10/1/200,  10:34:11 AM
Bears just got a gradual 15 cent pullback off the highs, and the wavelet oscillator is now turning up on a preliminary buy signal. A lower high could signal a break in the vertical bullish pattern today, but so far there's very little selling even on the pullbacks.

  Linda Piazza   10/1/200,  10:31:03 AM
The OEX climbed right up to the bottom of the H&S formation from the middle of September and is now testing that resistance. Support appears to exist near 539.80 and then again just under 538, with the just-under 538 the strongest looking of the two. When an index is performing strongly on a Keltner-chart basis, it will find support at the first available level, however, rather than retreating to strong support.

  Jonathan Levinson   10/1/200,  10:28:21 AM
Volume has dropped off on the pullback.

  Jonathan Levinson   10/1/200,  10:27:24 AM
The session high is a few pennies above the 200% retracement connecting yesterday's low to today's premarket gap up open at 35.35 QQQ. The short cycle oscillators are very overbought, nearly maxxed out but not quite as the wavelet oscillator rolls over. Next fib support is at 34.64, followed by 35.59 and 35.53. The .53 level looks much stronger than the .59 level, but so far today none of the dips have lasted longer than a couple of minutes.

  Linda Piazza   10/1/200,  10:26:55 AM
I can't see the specific reason that I had the al_rt set for a TRIN below 0.46, and suspect that I'd set it one day when Jane gave us levels to watch and that one was never hit, but the TRIN is reaching levels that appear to have some significance on a contrarian level. TRIN hit a low of 0.25 on 9/17, a low of 0.40 on 9/07, and a low of 0.42 on 9/02. A caution is that some of those days were days that saw strong gains all day, sometimes with follow-through early the next morning, but then that declines began. Sometimes those declines weren't steep: the one that began 9/03 wasn't, for example. After 9/17, the SPX did decline on 9/20, but then climbed to a new high on 9/21 before beginning the steep descent. Not great market-timing apparently, but a sign that buyers are getting a little carried away. It's also perhaps a sign that they'll stay that way all day, but that can't always be assured. Be careful.

  Mark Davis   10/1/200,  10:25:37 AM
Long @ 1111.26, raise stop to 1126.26
Short @ 1128.46, stop 1128.46 and break even

  Jeff Bailey   10/1/200,  10:24:49 AM
Yahoo! Inc. (YHOO) $34.81 +2.65% .... breaks from "handle" consolidation. 52-week high just ahead at $36.51.

  Jonathan Levinson   10/1/200,  10:24:41 AM
Session low for Nymex crude here at 49.20. Bonds continue to sink, TNX +7.4 bps or 1.8% at 4.193%.

  Linda Piazza   10/1/200,  10:19:40 AM
I just had a QCharts al_rt going off when the TRIN hit 0.46. Checking now to see why I had that set.

  Mark Davis   10/1/200,  10:19:17 AM
Go short again... 1128.46, stop 1129.46

  Linda Piazza   10/1/200,  10:19:03 AM
I've added the chart to my 10:17 post.

  Mark Davis   10/1/200,  10:17:20 AM
Stopped out of short, -1
Shorting the market when you have a concurrent long play is much less painful because if you get stopped out of the short then your long play continues to appreciate. Essentially we just lost commissions, nothing more.

  Linda Piazza   10/1/200,  10:17:13 AM
The OEX has exceeded the 537.75 upside target suggested by this H&S. Should the neckline perhaps have been a horizontal one instead, in which case the OEX is now only a little above the neckline? Link

  Jeff Bailey   10/1/200,  10:17:09 AM
Bullish swing trade call option exit alert sell the 10 DIA 101 calls here at $1.30 bid.

  Jane Fox   10/1/200,  10:14:19 AM
The chart Tab showed makes my point exactly. I have been saying for ages now that the VIX could be moving into a pre-1996 range and no one knows what too low is. Betting on the VIX is usually not a good move.

  Tab Gilles   10/1/200,  10:11:54 AM
A long-term VXN chart: Link

  Mark Davis   10/1/200,  10:11:26 AM
Go short SPX now... 1126.27, stop 1127.27

  Jeff Bailey   10/1/200,  10:11:03 AM
Wilshire 5000 (DWC) 11,000 +1.04% ... psychological number here.

  Linda Piazza   10/1/200,  10:10:46 AM
The TRAN is above the 9/21 high.

  Tab Gilles   10/1/200,  10:09:37 AM
I'd be extremely cautious with the VIX so low. But is it really low? Sure it's down to April's low, but look at it on a longterm chart. Link

  Linda Piazza   10/1/200,  10:07:22 AM
The OEX is hitting 15-minute upper Keltner resistance at 540.15. The last time the OEX broke through this level was September 2-3, and then it stayed above this resistance only a couple of hours, printing candles with upper shadows all the while. Some Keltner measures show bearish divergence with this last touch of this channel, but that can be erased if the OEX stays above that Keltner line long enough for other channel lines to catch up. Bulls want to see 15-minute closes above that Keltner line instead of candles that form below it while only shadows pierce it.

  Jeff Bailey   10/1/200,  10:07:01 AM
Treasuries unwinding .... may be seeing continuation of quarterly rebalancing taking place. MRK may have really messed things up yesterday.

  Jeff Bailey   10/1/200,  10:05:54 AM
Buy Program Premium

  Jonathan Levinson   10/1/200,  10:05:16 AM
Support has risen to 35.45 and .55 here.

  Jonathan Levinson   10/1/200,  10:04:20 AM
QQQ to a new session high. No pullacks for longer than a few seconds.

  Linda Piazza   10/1/200,  10:02:48 AM
The OEX found support above the 538 level, not even needing to retrace to that level. After a Keltner breakout, bulls should continue to follow the OEX higher with their stops. I'd suggest profit-protecting plans in this area, up to 541, as it's a likely area of resistance. Those profit-protecting plans could include everything from an automatic profit-taking somewhere through here to some of the many steps that could be taken to collect partial profits and still allow for participation if the OEX should instead break through this resistance.

  Jeff Bailey   10/1/200,  10:02:27 AM
Dow Diamonds (DIA) $101.60 +0.72% .... just above MONTHLY Pivot here.

  Jonathan Levinson   10/1/200,  10:01:32 AM
VXO 12.73, QQV 18.14.

  Mark Davis   10/1/200,  10:01:30 AM
Cinch up your stops to 1121.26

  Jonathan Levinson   10/1/200,  10:01:10 AM
Session high for QQQ at 35.61 here.

  Jeff Bailey   10/1/200,  10:01:03 AM
Buy Program Premium

  Jim Brown   10/1/200,  10:00:18 AM
ISM Index = 58.5

  Jeff Bailey   10/1/200,  10:00:13 AM
Buy Program Premium .... SPX 1,123 , QQQ $35.55.

  Linda Piazza   10/1/200,  9:59:51 AM
The TRAN is charging toward the 9/21 high of 3271.13, with the TRAN at 3271.04 as I type. Market bulls want to see the TRAN charge right past that high rather than get turned back into a potential double-top on the daily chart. Yesterday, it dealt handily with a confirmed double-top on an intraday chart, reversing after confirming it, but this is a danger point for both bulls and bears.

  Jeff Bailey   10/1/200,  9:59:43 AM
IBM (IBM) $86.39 +0.75% ....

  Jeff Bailey   10/1/200,  9:59:19 AM
Disk Drive Index (DDX.X) 107.91 +2.18% ....

  Jonathan Levinson   10/1/200,  9:58:42 AM
Correction- there was 10.25B expiring, and so today's net drain is 3.75B.

  Jonathan Levinson   10/1/200,  9:57:09 AM
The pullback came with the announcement of a 6.5B weekend repo, which results in a net drain of 4B from the Fed.

  Jeff Bailey   10/1/200,  9:56:21 AM
Buy Program Premium .... SPX 1,121.21, QQQ $35.51.

  Jonathan Levinson   10/1/200,  9:55:55 AM
The rollover at 35.55 QQQ gives us a preliminary range within which to work- watching 35.35-35.55 here.

  Jeff Bailey   10/1/200,  9:55:50 AM
VIX.X .... 12.97 -2.77% ... Daily Pivots as follows 12.94, 13.15, Piv=13.41, 13.62, 13.87.

  Jeff Bailey   10/1/200,  9:53:18 AM
General Motors (GM) $42.61 +0.3% ....

Ford (F) $14.13 +0.56% ....

Daimler Chrysler (DCX) $42.12 +1.69% ...

  Linda Piazza   10/1/200,  9:53:07 AM
Keltner charts show some OEX support gathering just under 538. Bulls want to see that support hold.

  Jeff Bailey   10/1/200,  9:51:24 AM
One thing I see from the NASDAQ-100 cash MONTHLY Pivot analysis is a tie in with recent e-mini NASDAQ-100 futures chart I've shown and potential upside target to 1,448. Might be a bullish target early next week (Monday or Tuesday).

  Jonathan Levinson   10/1/200,  9:50:07 AM
The upper 30 min Keltner channel resistance line has caught up to the price, now up to 35.49, and this is looking like the real deal, an upside trending move. The short cycle oscillators continue to rise, but it's a weaker rise than I'd expect, still open to a bearish divergence if the price doesn't at least hold above 35.40 long enough for them to become maxxed out in overbought. 35.36 is higher support above 35.27, and the last dip reversed from above it.

  Linda Piazza   10/1/200,  9:48:58 AM
Longs, be careful until you see how the markets react to economic releases.

  Jim Brown   10/1/200,  9:47:22 AM
Michigan Sentiment = 94.2

  Linda Piazza   10/1/200,  9:47:06 AM
Breakout to the upside on the OEX's five-minute Keltner channels. Turning to the 15-minute channels to set an upside target, I see that 539.98 appears to be the current target, with the OEX near that target now. I'm skeptical of breakouts during the first five minutes of trading, as this one was, but Keltners were designed to identify breakout plays, and here's one. I wouldn't suggest a new long with the OEX where it is, volatility indices where they are, and economic numbers just being released. However, if long, follow OEX climbs with your stops. This is normally not a signal to switch sides, but stay tuned for signals that it is time.

  Jeff Bailey   10/1/200,  9:43:58 AM
Dow Diamonds (DIA) $101.49 +0.61% ... challenge Wednesday's highs, and above today's DAILY R2. Dow breadth positive at 26 to 4.

  Jonathan Levinson   10/1/200,  9:42:14 AM
Bonds are returning to the lows after an initial bounce, TNX +6.2 bps here at 4.181%. It will be interesting to see what the Fed does in 15 minutes with its repo funds. Anything less than a net add will give the Fed's blessing to the recent action in the bond market.

  Jeff Bailey   10/1/200,  9:42:01 AM
S&P Banks Index (BIX.X) 357.66 +0.49% .... nice move going here at WEEKLY Pivot.

  Linda Piazza   10/1/200,  9:41:24 AM
The Fib levels snapped from the OEX rally off August lows have proven important in recent trading. The OEX this morning zoomed past the 38.2% retracement after bouncing Tuesday from the 61.8% retracement, steadying at the 50% level and then climbing. Watch the trend of the TRIN today, though, because the OEX approaches the 538-540 level that I'd been hoping to see since last week, as a rollover there would have made the best entry into a bearish play, while a break up through this zone, perhaps up to 541, would say something else was going on. The daily chart shows us that a H&S could be building on that daily chart. Unfortunately, the OEX broke below an ascending trendline off Tuesday's low before it gave us that bounce-and-rollover entry. So far, the TRIN is not telling us that it's time for bearish entries, but if the OEX rolls back down through that 38.2% retracement just above 537, I'd pay special attention to what was happening with the TRIN, too.

  Jeff Bailey   10/1/200,  9:40:55 AM
Buy Program Premium .... SPX 1120.52 , QQQ $34.45

  Mark Davis   10/1/200,  9:40:53 AM
Linda I have to admit I wasn't hopeful when I turned out the lights last night. Like Jim I watched the debates and the futures simultaneously. We went into the debates with SPX futures up +0.10 and ended the debates down -0.10. I thought everything was OK and put on a movie. After the movie I looked again and they were down -2.40. I thought for sure we would open down this morning.

  Jeff Bailey   10/1/200,  9:40:05 AM
HMO Index (HMO.X) 1,000.00 +0.54% ...

  Mark Davis   10/1/200,  9:36:35 AM
My main screen is a sea of green this morning. The only red I see is NEM, SWC, TLT and TRIN.

  Linda Piazza   10/1/200,  9:35:54 AM
Congratulations on that long, Mark. And congratulations to the readers who took it, too.

  Jonathan Levinson   10/1/200,  9:34:58 AM
QQQ is dropping now, down to 35.41, but there's a long way to go before testing 35.27. The short cycles are a bit of a mess, lagging the steep bounce so far. That sets up a potential bearish divergence, but again only if bears can drive the price down enough to generate a sell signal from a lower high- 35.27 looks like the key level in this respect as well.

  Mark Davis   10/1/200,  9:34:00 AM
Long @ 1111.26, raise stops to 1116.26

  Mark Davis   10/1/200,  9:31:59 AM
Short covering is undoubtedly helping the markets this morning.

  Linda Piazza   10/1/200,  9:30:48 AM
As anticipated due to the futures action, the OEX opens and climbs up to the 10 and 50-dma's. It's approaches yesterday's high. A breakout above that should start short-covering unless it's quickly slapped back.

  Jonathan Levinson   10/1/200,  9:29:01 AM
30 min channel resistance is lined up with short cycle resistance at QQQ 35.40. Price is above these levels, and Keltner violations are rare except in the strongest trending moves. This sets up a potential gap and crap of at least a few cents, and if it doesn't occur, then we'll have our first indication that the morning gap up is the head of a very strong upward move. 1 minute to the cash open.

  Mark Davis   10/1/200,  9:28:31 AM
I'll be raising the stops on our long play as soon as I see where the market opens. If you want to exit the play you can very likely get +6-7 points right out of the gate, maybe more. The point is if you want out then do it early (in the first hour) while volatility premiums are high. If you wait until the market settles down you will get less for your calls, even if market price remains steady.

  Jonathan Levinson   10/1/200,  9:10:21 AM
I see 10.25B in expiring repos from the Fed's open market desk today. We await the 10AM announcement to determine whether the Fed will be adding or draining reserves for the day.

  Linda Piazza   10/1/200,  9:07:29 AM
European bourses continue to add to their gains.

  Linda Piazza   10/1/200,  9:05:36 AM
Futures have climbed sharply off the midnight lows, threatening anyone in bearish plays. That futures activity in the ES contract does not always carry through in the cash open and translate directly into a certain number of OEX points. If futures continue at their current level, we could be seeing an OEX follow-through of yesterday's last five-minute gain, with a challenge of the OEX 10- and 50-dma's at 536.25 and 536.36, respectively, not out of the question. Depending on the point at which a bearish play was entered, the pain threshold of the trader's account or mental status, or the strike and expiration cycle chosen, OEX bears might use a move above yesterday's mid-afternoon high at 535.63 or those averages as stops. The problem is that we'll also be looking for a possibility of a rollover at those averages as a possible new entry. If the OEX gaps above those averages and isn't quickly slapped back, as it was yesterday, then a test of 539-541 might be in store, and we'll look for either a rollover there or a push above those averages, then suggesting a move up toward the 200-sma. I don't see a favorable risk vs. reward play on a long play at this point, unfortunately, although oversold pressure could take the indices higher. We just don't know where sellers are lurking, and the OEX is currently between supposed resistance and supposed support.

  Jonathan Levinson   10/1/200,  8:44:41 AM
Session low for bonds, with TNX up 6.8 bps here or 1.65% to 4.187%. Gold is down 70 cents, QQQ up .31 to 35.45.

  Jonathan Levinson   10/1/200,  8:26:01 AM
Bonds have not recovered at all, and TNX is currently quoted higher by 3.7 bps at 4.156% just ahead of the cash open.

  Jonathan Levinson   10/1/200,  8:19:04 AM
Daily chart of the USD Index futures (DX4Z) at this Link . This is the bullish side of the coin for gold: if the pattern playing out here is a descending triangle, then a move through the year's low should coincide with a breakout for gold.

  Jonathan Levinson   10/1/200,  8:17:07 AM
USD Index (30 min delayed refreshable chart) at this Link . Still rising from yesterday's lows.

  Jonathan Levinson   10/1/200,  8:11:14 AM
Session high for NQ futures here at 1429, QQQ trading 35.42.

  Jonathan Levinson   10/1/200,  8:05:14 AM
The daily cycle for gold is reaching the top of its range, with the 10-day stochastic in overbought territory and edging toward a bearish kiss. Link Meanwhile, the daily cycle for Dow futures is looking similar but in reverse, with the 10 day stochastic in oversold territory verging on a bullish kiss. The daily NQ is nowhere near oversold but is also verging on a buy signal, which would be very bullish for the daily QQQ, setting up the entire decline as a potential bull trap. Yesterday's highs are violated by the premarket action in QQQ, with 35.27 and 35.18 now set up as support. Bears will want to see the price get back below those levels in a hurry this morning to preserve what's left of the daily cycle downphasee.

  Jonathan Levinson   10/1/200,  7:47:57 AM
Equities are up, with ES trading 1117.75, NQ 1425, YM 10093 and QQQ +.19 at 35.33. Gold is down 20 cents at 420.30, silver flat at 6.931 and ten year notes down .312 to 112.3125. Nymex crude is down .225 to 49.425.

We await the 9:45AM release of Michigan Sentiment for Sept., est. 96, and at 10AM, construction spending for August, est. .4% and ISM, est. 58.3.

  Linda Piazza   10/1/200,  7:04:27 AM
Good morning. Asian bourses turned higher, as have European bourses. Japan had reason to celebrate, with a survey showing business sentiment higher, but U.K. and eurozone manufacturing surveys showed disappointing results. After the presidential debate, our futures dipped slightly but then began climbing into and after the European open. More detail can be found in the following paragraphs.

Although many had feared that Japan's Tankan survey of business sentiment would deliver bad news, it actually rose to 26 from the previous quarter's 22, above expectations for a rise to 23 and a 13-year-high. In addition, the IMF earlier this week raised its forecast for Japan, despite companies noting decreasing demand for some of Japan's semi-related products. The Japan Electronics and Information Technology Industries Association noted increasing demand for DVD players, flat-panel televisions, and other digital electronics.

The Nikkei gapped up and charged toward 11,000, continuing to challenge that level all day but never able to climb above that resistance. The Nikkei closed higher by 161.60 points or 1.49%, at 10,985.17. Large manufacturers moved higher as a result of the Tankan.

Most other Asian bourses turned higher, too. Seeing higher crude and commodity prices as adding to inflationary pressures, Taiwan's central bank raised its rate by a quarter-point, with rates now higher than had been anticipated. The Taiwan Weighted gained 1.70%. South Korea's Kospi gained 1.31%, but Singapore's Straits Times was one of only two Asian bourses closing in the red, down 0.18%. Hong Kong's Hang Seng and China's Shanghai Composite were closed for a holiday, with the Shanghai Composite closed until next Thursday.

Most European bourses turn higher, with the FTSE at an intraday high not seen since July, 2002. Investors were seemingly not troubled by the overnight announcement that Prime Minister Blair will be hospitalized to treat heart palpitations or by the news that manufacturing appears to be slowing. September's British manufacturing survey fell to a weaker-than-expected 52.2 from August's 52.8. Markets had expected a rise. Banks gained after one affirmed that it would meet full year forecasts if not beat them. European gains occur despite a survey of eurozone purchasing manufacturers that was also disappointing. That eurozone survey slipped to 53.1 in September, down from August's 53.9, and below expectations.

In stock-specific news, Commerzbank announced a reorganization plan and moved slightly higher. Goldman Sachs upgraded Nokia to an in-line rating, sending that stock higher. Insurer Swiss Life plans to sell most of its private equity holdings to Pantheon Ventures. The company cited a need to reduce illiquid investments that tied up risk capital.

As of 7:00 EST, the FTSE 100 had climbed 49.60 points or 1.09%, to 4,620.40. The CAC 40 had climbed 43.38 points or 1.19%, to 3,683.99. The DAX had climbed 44.33 points or 1.14%, to 3,937.23.

  Jeff Bailey   9/30/200,  12:46:54 AM
I'm going to bed. I was busy making sure I got the "Beetles Balanced" re-balanced at the end of the quarter.

Rebalancing really paid off at end of Q2!

  Jeff Bailey   9/30/200,  12:46:36 AM
e-mini NASDAQ (nq04z) 1,414.00 -3.5 points

e-mini Dow (ym04z) 10,048 -17 points

  Jeff Bailey   9/30/200,  12:42:21 AM
e-mini S&P futures (ex04z) 12:26 PM tick is 1,112.75. Decline from 1,115 looks to have come after Bank of Japan's tankan quarterly survey rose to highest reading in 13 years, but the outlook indicator for the coming months declined.

Reuters news at this Link

  Jeff Bailey   9/30/200,  11:13:27 PM
U.S. Dollar Index (dx00y) 10:42 PM EDT tick (12-minutes after debate ended) was 87.48.

  Jeff Bailey   9/30/200,  11:11:26 PM
Limited Brands (LTD) $22.29 -0.08% Link .... was the lone stock among those OEX "buy program" stocks that traded lower. Could be a "bull trap"

Dorsey/Wright classifies as belonging to retail. Retail Bullish % (BPRETA) currently "bear alert" status at 53.47%. Would take a reversal lower reading of 48% to turn back to "bear confirmed" status and a higher reading of 78% to achieve "bull confirmed" status.

  Jeff Bailey   9/30/200,  11:01:19 PM
Was curious as to why Clear Channel (CCU) $31.17 +0.54% Link traded higher by the close, despite being the lone stock of OEX components listed among the "most sold" during Thursday's sell programs. Stock has exceeded its bearish vertical count of $36.00 and resides at some major longer-term horizontal support.

IF I were short/put (and I'm not) might look to take some profits down here.

Dorsey/Wright and Associates classifies CCE as belonging to its Media group. Media Bullish % (BPMEDI) reversed up to "bull alert" status after a low reading of 30%. Currently at 43.15% and would currently take an 86% reading to reach "bull confirmed" status.

  Jeff Bailey   9/30/200,  10:48:07 PM
Spot Gold trades $418.30. Link

  Jeff Bailey   9/30/200,  10:45:17 PM
e-mini S&P futures (es04z) 10:33 PM EDT tick is 1,115.00. Futures flatlined through tonight debate.

  OI Technical Staff   9/30/200,  10:35:05 PM
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