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  Jeff Bailey   10/4/200,  5:10:55 PM
Pulte Homes (PHM) $56.33 -8.59% Link .... lower at $55.00 after saying it expects Q3 EPS between $1.95-$2.05, which is at low end of prior guidance of $2.00-$2.10 per share. For full year, see EPS from continuing operations to be between $7.40-$7.70, also below prior guidance of $7.80-$8.00.

Company saying lowered guidance primarily on lower than expected pricing and unit volume from operations in Las Vegas.

Additional news at this Link

 
 
  Jeff Bailey   10/4/200,  4:31:47 PM
Closing Internals at this Link

 
 
  Mark Davis   10/4/200,  4:27:06 PM
Gravestone dojis everywhere (as on ALL the major indices)... Link
This is a low to moderate reversal candlestick pattern but since it printed on all the major indices I'd say odds are good for further downside tomorrow, however this may be just a pause before heading higher again as all the indices are also showing bullish patterns. In the light of that I'll be looking to take profits on the short play tomorrow and get long again (or stay long if not stopped out of the long play from 1135)... pretty much the same thinking as Keene's EW analysis. If we can scalp +5 on the short play I'll consider it a good trade, but as always, things can look very different at the opening bell. At least we have +3 1/2 points locked in and that is probably enough to keep us in the black no matter what the market decides to do tomorrow. See you then...

 
 
  Linda Piazza   10/4/200,  4:22:14 PM
I'd mentioned this morning that OEX bulls could consider entering bullish positions if the OEX opened near 544, but should have profit-protecting plans in place as the 200-sma was tested as that test was likely to produce a pullback or consolidation. The OEX broke above the descending trendline off the 9/13 high and rose to test its 200-sma, the 9/13 high, and the top of its descending regression channel. It fell back from that test, producing a shooting-star candle at resistance, a potential reversal signal. This urges caution on the part of bulls, but bears should remain aware that the OEX did remain above the breakout level.

Volatility indices rose off recent lows. The SOX pushed above one version of the neckline of its inverse H&S, but dropped back below it, also producing a shooting star, but also ending the day above important support.

Those who might have entered bearish positions today on a test of the 200-sma should have profit-protecting plans in mind from 544 all the way down to 541.40, with a break below that level suggesting a deeper fall. Those seeking new bullish positions should hope for a steadying near 542.40-543.50 and a bounce from there. Let's take a look tomorrow when we see how various intermarket relationships line up.

 
 
  Jeff Bailey   10/4/200,  4:19:29 PM
Current OPEN MM Profiles at this Link

Today's Activity....

Closed out all 6 of the SWC Oct. $15 calls (SWC-JC) at $0.55 bid. 3 ($-1.25 per contract, or $-375.00), 3 ($-1.00, or $-300.00). (see 12:44:42 chart/comments for decision to just close out ahead of 10/15/04 expiration)

 
 
  Jim Brown   10/4/200,  4:00:31 PM
NATI is warning

 
 
  Linda Piazza   10/4/200,  3:56:57 PM
It's time for late-day decisions. Without a strong push higher into the close, it looks possible that the OEX could end the day with a shooting star candle, a potential reversal signal that can be particularly important when it comes at resistance, as this one certainly did. Several other indices could present the same type of candle on their daily charts, with the SOX's gravestone doji or shooting star looking particularly ominous. While a "reversal" can signal nothing more than consolidation and must be confirmed by the next day's action, this doesn't inspire bullish hopes for a strong gains tomorrow. The OEX looks as if it will close the day above this morning's breakout point, however, and above the trendline off the 9/13 high. If I'd entered a bullish play at the open and hadn't yet been stopped, I think I'd consider my risk profile before holding overnight as the OEX is between resistance and support and there's the threat of a further pullback, even if it's never realized. If in a long-term bullish position, perhaps on a push above 537.25, you have a little more wiggle room, but your risk profile should be assessed, too, including your blood pressure risks. If I'd entered a bearish play as the 200-sma was tested today, I think I'd hold on overnight, but perhaps one's risk profile ought to be considered there, too.

 
 
  Jonathan Levinson   10/4/200,  3:55:09 PM
QQQ bounced from 36.25, right on the 30 and 60 min channel supports. A wavelet bounce is trying to form, but it will take a break above 36.38 to get the short cycles to participate.

 
 
  Mark Davis   10/4/200,  3:53:46 PM
Now long @ SPX 1135.00, stop 1134.00
We have the market bracketed with puts (@ 1138.50) and calls (@ 1135.00), locking in +3 1/2 pts... hold overnight.
Long @ 1135.00, stop 1134.00
Short @ 1138.50, stop 1138.50 and break even

 
 
  Jonathan Levinson   10/4/200,  3:48:46 PM
QQQ is now into the morning gap, trapping all buyers since the cash open. Gap support is at 36.14, below current 30 and 60 min channel support.

 
 
  Mark Davis   10/4/200,  3:47:57 PM
Go long again with a touch of SPX 1135...

 
 
  Linda Piazza   10/4/200,  3:44:27 PM
If the retest of the mid-channel level on the OEX's five-minute chart is going to happen, the OEX should continue to see five-minute closes beneath the Keltner line currently at 545.33. The Mid-channel level is now at 544.12, and is still rising, but only slightly now.

 
 
  Jonathan Levinson   10/4/200,  3:43:43 PM
30 and 60 min channel support are both lined up at 36.25 QQQ.

 
 
  Linda Piazza   10/4/200,  3:42:16 PM
TRIN is heading up, but I think Jane would remind us that it's still in bullish (for the equities) territory.

 
 
  Mark Davis   10/4/200,  3:39:41 PM
stepping outside for a few...

 
 
  Linda Piazza   10/4/200,  3:39:35 PM
The OEX has now dropped below a 50% retracement of today's range and just tested the 61.8% retracement at about 544.75. Standard technical analysis suggests that a drop of more than 2/3 suggests the whole range will be retraced, but bulls don't like to see a more than 50% retracement. So far, the OEX is attempting to steady on the 61.8% retracement level, however. The "whole range" would bring the OEX back to retest the descending trendline off the 9/13 high.

The SOX has retraced far more than 50% of the day's range, dropping below that version of the inverse H&S neckline that I've been posting today. The SOX needs a late-day surge.

 
 
  Jonathan Levinson   10/4/200,  3:35:07 PM
QQQ testing 36.38 support here.

 
 
  Mark Davis   10/4/200,  3:34:25 PM
I didn't expect my prayers to be answered so quickly... thank you Lord.

 
 
  Linda Piazza   10/4/200,  3:34:02 PM
Keltner style bearish divergence is now showing up on the 5- and 10-minute OEX charts. On the five-minute chart, the mid-channel level has now risen to 544.09, and it still looks as if the OEX is dropping toward an eventual test of that still-rising Keltner level. Below that, lower Keltner support is at 541.67.

 
 
  Mark Davis   10/4/200,  3:32:59 PM
It's looking more and more like the 1135.97 swing low is going to hold and I'm wishing I had entered long again just above 1136 but the market has worn me out today... too many trades already and if it weren't for the long play held over the weekend we would need a neck brace (and a loan). As it stands we're up for the day and that's always better than down, but our short play from 1138.50 needs SPX to roll over, as in right now.
Benchmarking... SPX = 1137.33 (and hoping for a rollover into the close)

 
 
  Linda Piazza   10/4/200,  3:28:48 PM
Wouldn't you think bulls would do all in their power to close the OEX, Nasdaq, and Dow above their 200-dma's today? If they don't, and especially if those three indices and others fall into the close, leaving long upper shadows, bears may attempt to drive indices lower again. On the OEX, that may mean a retest of 541.50-543 support to see if it holds.

 
 
  Jonathan Levinson   10/4/200,  3:25:51 PM
QQQ update at this Link , but don't bother looking at it. The same razor-thin range continues, with little progress worth noting. Presumably the market will decide to move after hours on in the early morning hours, as it did earlier today.

 
 
  Mark Davis   10/4/200,  3:25:49 PM
Here come the buybots

 
 
  Linda Piazza   10/4/200,  3:20:31 PM
The OEX and Nasdaq have risen to test their 200-sma's today and have both pulled back. The SOX has risen to test the neckline of its inverse H&S, or one version of it, and is currently pulling back. Those OEX traders who adhere to the "it's going to rollover" theory would find this a likely spot upon which to place a bet on that direction with an easy place to put a stop, on an account-specific amount above the September high. However, I can't find definitive evidence yet to say that the OEX is doing anything other than just pulling back ahead of likely strong resistance. TRIN is neither bearish nor so terribly bullish that it sends out contrarian signals. If I were looking only at the OEX's chart, I'd be suggesting that short positions were definitely the way to go, but then we've seen so many other indices zoom past the resistance the OEX faces today, such as the 200-sma.

This may be a good place to open a new bearish position if risk (up to an account-specific amount above the September high) versus possible reward is considered, but that would be going on blind faith and a bit akin to catching soaring knives. I don't believe this 545-ish level is a good place to consider new bullish positions, however, as it's squarely between this morning's breakout level and the 200-sma. The pullback hasn't been deep enough to give breathing room and there's been no breakout above the 200-sma or other types of resistance near 548, either.

What about those who opened new bullish positions near today's open? I continue to suggest that profit-protecting measures be in place, as I have been all day.

 
 
  Jonathan Levinson   10/4/200,  3:19:16 PM
TNX held onto closing losses, down 1.8 bp to 4.173%, a .43% loss for the day. The cash bond market is now closed.

 
 
  Mark Davis   10/4/200,  3:07:15 PM
Another Evening Star formation just printed on the SPX 1-min chart... we're very close to a good directional move but need to take out that swing low @ 1135.97

 
 
  Linda Piazza   10/4/200,  3:05:37 PM
As I thought in my 14:52 post, down was the more likely direction in the short-term on the OEX. The OEX drops toward the confirmation level for a lower high on its five-minute chart, with that level at 545. It's trying to steady at Keltner support just above that level, however, but it looks as if the OEX may now be pressing down toward an eventual test of the mid-channel level, at 543.94 but still climbing higher.

 
 
  Jeff Bailey   10/4/200,  3:04:02 PM
03:00 Market Watch at this Link

 
 
  Mark Davis   10/4/200,  3:03:19 PM
If we break below the 1135.97 swing low we'll be sitting on a good short from 1138.50, no risk with the stop set @ break even.

 
 
  Linda Piazza   10/4/200,  3:01:53 PM
The BIX rose high enough today to test 363 level that was support through most of September and has now dropped below that level, to 363.40.

 
 
  Mark Davis   10/4/200,  3:01:18 PM
Stopped out of long play @ 1136.26, -1
Short play is now up over +2

 
 
  Linda Piazza   10/4/200,  2:58:51 PM
Some have perhaps already mentioned this, but the cash Russell 2000 has pulled back below the June 30/July 1 highs after piercing them earlier. Bulls want to see the Russell 2000 push to a new daily high.

 
 
  Jonathan Levinson   10/4/200,  2:57:47 PM
The 30 min cycle oscillators for QQQ have been in a downphase for the past several hours, with very little price traction. The cycle channel is now back to flat, with support at 36.34 and resistance 36.62- close enough to confluence support and resistance for government work. The 60 min cycle channel is flattening from its upphase, which may be preceding some weakness to come- but it will take a break below 36.38 before anything more meaningful can be expected.

 
 
  Linda Piazza   10/4/200,  2:53:26 PM
The SOX is still pulling back to test the neckline, or at least one version of it, of its inverse H&S.

 
 
  Mark Davis   10/4/200,  2:52:53 PM
stepping outside for some fresh air... maybe I'll say Hi to Jonathan when I'm out there, if I can yell loud enough... he's only about 3,500 miles away but I know he was outside a minute ago.

 
 
  Linda Piazza   10/4/200,  2:52:00 PM
Some Keltner-style bearish divergence is beginning to show up on the OEX's five-minute chart, too, but as with any type of divergence, it warns to protect profits without saying a turnaround will occur at any moment. However, as I type, short-term resistance looks somewhat stronger than short-term support, so that down or sideways looks more likely over the very short-term than a move up past 546.45 does.

 
 
  Jeff Bailey   10/4/200,  2:51:05 PM
S&P 500 Index (SPX.X) with WEEKLY and MONTHLY Pivot retracement at this Link

Looking to sell some NAKED out-the-money SPX October 1,150 Calls (SPT-JJ), current $3.40-$3.80, on a trade just above 1,142.

 
 
  Jonathan Levinson   10/4/200,  2:50:25 PM
QQQ 100-tick 2-day chart update at this Link.

 
 
  Mark Davis   10/4/200,  2:49:57 PM
We now have the market bracketed with puts and calls and about +1 1/4 points locked in. Considering the conditions I think that's about the best we can do and no matter which way it goes we will start off with +1 1/4 points in the bank. Let's just hope it goes directional and not flat.

 
 
  Mark Davis   10/4/200,  2:45:28 PM
Go long now @ SPX 1137.26, stop 1136.26

 
 
  Linda Piazza   10/4/200,  2:42:12 PM
An OEX move below 545.00 will confirm the lower high on the OEX's five-minute chart, suggesting a pullback to the mid-channel level, now risen to 543.83 and still rising. If that's violated, bottom support is not found at 541.49, but that support is still rising, too.

 
 
  Linda Piazza   10/4/200,  2:39:51 PM
Although the SOX moved above this neckline version for its inverse H&S, it hasn't closed above it and threatens to pull back below it as I type: Link It's still within rollover territory beneath this neckline or within "test and bounce territory." Both bulls and bears should be watching this test, among others.

 
 
  Mark Davis   10/4/200,  2:39:15 PM
Three consecutive Evening Star formations on the 1-min chart... not good for a long play.

 
 
  Mark Davis   10/4/200,  2:36:05 PM
Short @ 1138.50, raise stop to 1138.50 and break even

 
 
  Jonathan Levinson   10/4/200,  2:35:19 PM
Bonds are hitting session highs, TNX now down 1.2 bps, and QQQ has dropped a quick 6 cents to 36.46.

 
 
  Mark Davis   10/4/200,  2:35:07 PM
Stopped out @ 1137.92, -1

 
 
  Mark Davis   10/4/200,  2:34:16 PM
Raise stop on long play to 1137.92

 
 
  Mark Davis   10/4/200,  2:32:48 PM
Now short @ 1138.50, stop 1139.50

 
 
  Mark Davis   10/4/200,  2:31:08 PM
Go short again with a touch of SPX 1138.50, stop 1139.50

 
 
  Linda Piazza   10/4/200,  2:30:22 PM
I'm back, finding that the OEX met the downside target of the H&S on the three-minute chart (see my 10:56 post) and is now headed up to test the high of the day again, a test that bulls don't want to see result in a lower high. Earlier I had speculated that the mid-channel level on the 5-minute Keltner chart would have likely moved up toward 543.50-544 before the OEX retested it, and it's now at 543.72, so that even a drop back to the mid-channel level to reestablish support there would not be as much of a drop as it would have been earlier. Bulls still need to have profit-protecting stops in place, however, in the current climate.

 
 
  Mark Davis   10/4/200,  2:19:10 PM
Unless this is a good headfake SPX 1135.97 was it for the decline off HOD and we should continue higher for the remainder of the session. Our long play from 1138.92 is now only 1/2 pt underwater and looking much better.

 
 
  Jonathan Levinson   10/4/200,  2:17:48 PM
The anticipated short cycle upphase launched from the persistence of 36.38 QQQ support, but the bounce has been entirely listless and nothing like the pre-market moves that drove the indices to their current ranges. Link This is a phenomenon we've see frequently in the past, when the bulk of the move occurs outside of regular trading hours, effectively trapping the majority of cash-market participants in a range. The rectangle remains narrow at 36.38-36.62.

 
 
  Jeff Bailey   10/4/200,  2:15:45 PM
02:00 Internals at this Link

 
 
  Mark Davis   10/4/200,  2:15:34 PM
Stopped out of short @ 1137.90, -1/2 pt

 
 
  Mark Davis   10/4/200,  2:09:16 PM
Raise stop on long play to 1136.92

 
 
  Jane Fox   10/4/200,  2:01:26 PM
Dateline WSJ WASHINGTON -- The Supreme Court turned away a challenge Monday to the federal do-not-call registry, ending telemarketers' bid to invoke free-speech arguments to get the popular ban on unwanted phone solicitations thrown out.

In the do-not-call case, the court, without comment, let stand a 10th U.S. Circuit Court of Appeals decision that upheld the registry of more than 57 million phone numbers as a reasonable government attempt to safeguard personal privacy and reduce telemarketing abuse.

Under the 2003 federal law, businesses face fines of up to $11,000 if they call people who sign up for the registry -- unless they have recently done business with them. Charities, pollsters and callers on behalf of politicians, however, are exempt.

Telemarketing groups had filed the appeal, arguing in filings that the registry violated First Amendment rights because it singled businesses out while exempting other groups. They also said two million of their 6.5 million workers will lose their jobs within two years if the do-not-call rules stand.

 
 
  Jim Brown   10/4/200,  2:00:08 PM
Based on reader email I have received today the unanimous expectation is for another dip over the next two weeks. Most think it will be later this week. Because it is unanimous it suggests we may move higher. Many readers have explained their short positions and why. Multiply this by the hundreds of thousands of active traders that make up a market and it sounds like everyone is short and that creates a dangerous situation. The potential for more short squeezes is very strong. These cycles tend to take on a life of their own and could run for weeks.

Personally I continue to think we should move lower but I am not convinced enough to act on it. ES 1140 is strong resistance with 1150 even stronger. I think we are seeing the impact of the end of quarter cash from retirement funds. I believe we will see volatility return once this cash slows. Regardless of the market cycles and investor sentiment we are still in October and this is year end for most mutual funds. They will shuffle the deck and rebalance their portfolio. If I was a fund manager I would want to do it early in the month to avoid any pre election ramp. I could be completely wrong about this and maybe funds shuffled early in late September to avoid the October ramp completely and the current bounce is funds putting the money back to work.

Another confusing point is the statistical dead heat in the election surveys with Kerry pulling ahead in several. We have yet to see the Bush premium removed and the impact of drug price controls, removal of tax cuts, etc, will be short term negative for the market. Have investors refused to accept the change in leaders?

The bottom line to this essay is don't get married to your positions or your bias. Anything is possible.

 
 
  Jeff Bailey   10/4/200,  2:00:02 PM
March Fed Funds futures (ff05h) 97.64 -0.01% .... now predicts a greater than 40% chance of 75 basis point rate hike, to 2.5% between now and March 2005.

 
 
  Mark Davis   10/4/200,  1:54:51 PM
Go short now... SPX 1137.40, stop 1137.90
This is for insurance purposes only. If we break down again it could be big. If we head higher, great... we only risk 1/2 pt and commissions

 
 
  Mark Davis   10/4/200,  1:49:36 PM
The DOW and OEX are really screwing things up today. We need them to get on board this rally train or we're not going to get far. Jeff's "inchworm" is getting stretched today. Will the "head" (SOX and tech stocks) or the "tail" (DOW and OEX) win the battle? We're at a critical juncture right now.
Benchmarking... SPX = 1137.56

 
 
  Jonathan Levinson   10/4/200,  1:44:13 PM
Ten year notes are recovering as well, with TNX down to unchanged at 4.191% here.

 
 
  Mark Davis   10/4/200,  1:38:26 PM
The bar has been lowered for a short-term trend change... all we have to do is get above 1137 and it will look like the bottom was 1135.97.

 
 
  Jonathan Levinson   10/4/200,  1:31:45 PM
Stepping away for a few minutes to get some air. I've been sick in bed all weekend and am still a little out of it.

 
 
  Jane Fox   10/4/200,  1:30:41 PM
Jonathan have you noticed that the web cam really updates every 15 minutes and not every 5 minutes?

 
 
  Jonathan Levinson   10/4/200,  1:22:29 PM
The 30 min cycle channel has rolled over and is now declining in a so-far weak 30 min cycle downphase. Upper channel resistance is 36.60 QQQ, lower support is 36.26, lined up at the bottom with still-rising 60 min support. Link

 
 
  Jonathan Levinson   10/4/200,  1:17:50 PM
The most recent 5-min update of Jane's volcano link shows a larger belch of smoke in the air- a big change from the previous 5-min "candle".

 
 
  Mark Davis   10/4/200,  1:15:48 PM
SPX has just printed another buy signal @ 1136.25... this time with 1 1/2 hours of MACD bullish divergence behind it. That last little dip to 1135.97 may have been it for the decline off HOD (just a guess)

 
 
  Mark Davis   10/4/200,  1:07:20 PM
Lower stop to 1135.42... this is just too close for comfort.

 
 
  Jeff Bailey   10/4/200,  1:06:45 PM
01:00 Internals at this Link

 
 
  Jonathan Levinson   10/4/200,  1:04:51 PM
QQQ trading 36.38 here.

 
 
  Jonathan Levinson   10/4/200,  1:03:02 PM
I'd guess that an eruption would guarantee a colder winter than we might otherwise expect. This could be one bullish component for the price of crude oil- Nymex crude is currently trading 49.825. Natgas should also benefit.

 
 
  Mark Davis   10/4/200,  1:02:59 PM
I think we're about to get the cane around the neck

 
 
  Jane Fox   10/4/200,  12:59:16 PM
Take a look at the Mt. St. Helens web cam. It is smoking. Link

 
 
  Mark Davis   10/4/200,  12:57:40 PM
Looks like a little buy program just saved us (for now)

 
 
  Jonathan Levinson   10/4/200,  12:55:40 PM
Session low for GE and MSFT here. QQQ still hanging 1 cent above 36.38.

 
 
  Jeff Bailey   10/4/200,  12:54:29 PM
12:50 Market Watch at this Link

 
 
  Mark Davis   10/4/200,  12:53:33 PM
SPX breaking out of the last 1 1/2 hr range to the downside... currently only 1/2 pt above our stop... make that 1/4 pt.

 
 
  Mark Davis   10/4/200,  12:51:49 PM
CNBC showing live pics of Mt. St. Helens... beginning to clear her throat with a small eruption. It will be interesting to see it show up on Jonathan's link from the Futures Monitor... Link
The Webcam updates every 5 minutes

 
 
  Jonathan Levinson   10/4/200,  12:45:48 PM
No progress in the small h&s I've been watching, with price stalled 3 cents above the neckline. The short cycle downphase is looking nearly oversold as a small wavelet downphase gets set to kick off. 36.38 should be tested within the next 10 minutes or so, failing which I'll be looking for signs of an early abort to the short cycle downphase on QQQ.

 
 
  Jeff Bailey   10/4/200,  12:44:42 PM
Stillwater Mining (SWC) $15.13 (unch) ... updated bar chart with two fitted retracement, and thoughts regarding decision to close out the Oct. $15 calls at this Link

 
 
  Mark Davis   10/4/200,  12:35:09 PM
I'm tempted to go short again from a lower level but as soon as I do a buy program will kick in. If I don't go short then SPX will certainly tank... ever get that feeling? The only good thing about the last hour's sideways action is that energy is being stored up for the next move. Let's just hope it is to the upside.
Benchmarking... SPX = 1137.38

 
 
  Mark Davis   10/4/200,  12:32:24 PM
Another little push higher (about +1/2 pt) will take us over 1138 and take out the last swing high. IF that happens it may be an early sign the slow bleed downward has stopped. I don't know if Jane's 12:18 post re: ES making a 6 time bottom is good or bad. Stabilizing 6 times could also be interpreted as knocking on the door 6 times. I'd like to see SPX back over 1138 again but my screen looks like the feed has stopped. Talk about the doldrums... Wouldn't it be nice to have that short back from 1138.64 so we could set the stop to break even and not worry about direction?

 
 
  Jonathan Levinson   10/4/200,  12:13:09 PM
It's looking like a small head and shoulders intraday above 36.38 neckline support for QQQ. If so, a break will only imply a target as low as gap support at 36.14. Link However, given how toppy the 30 min cycle is, there's the potential for more followthrough in the event that this small bearish pattern does pan out, coming as it would at the top of a 30 and 60 min cycle move. That said, the short cycle downphase is getting long in the tooth, and while it's a cycle that trends easily at either extreme, I'm expecting to see support begin to firm up a bit as the intraday bears become extended.

 
 
  Jeff Bailey   10/4/200,  12:11:36 PM
12:00 Internals at this Link

 
 
  Jeff Bailey   10/4/200,  11:58:12 AM
Google (GOOG) $134.41 +1.38% Link ... holds onto morning gains after trading all-time high of 136.87. Earlier this morning Jefferies cut GOOG to "hold" from "buy" on valuation and 57% rise since IPO. However, firm ups price target to $135 from $120 with revenue estimates raised to $9.9 billion from $9.4 billion this year. Also ups 2005 revenue and EPS to $2.5 billion and $2.32 per share from $2.4 billion and $2.23 per share. Firm sees some risk out of Microsoft search competition and November lock-up expiration of roughly 40 million shares.

Yahoo! Inc. (YHOO) $34.96 -0.17% Link ... also downgraded by Jefferies to "hold" from "buy" based on valuation.

 
 
  Jane Fox   10/4/200,  11:57:33 AM
For anyone who wants to watch what is going on with Mt. St. Helens here is a web cam that will update every 5 minutes. Link

 
 
  Jonathan Levinson   10/4/200,  11:57:21 AM
NDX volatility (QQV) is up 3.19% to 17.8 currently. VXO is down 4.10% to 12.85.

 
 
  Mark Davis   10/4/200,  11:55:08 AM
I have to leave for an errand... about 20 minutes
Long @ 1138.92, stop 1135.92

 
 
  Jonathan Levinson   10/4/200,  11:54:34 AM
The Fed has added another 1.19B in liquidity via coupon pass, which is a permanent open market operation. This brings the drain for the day down to 1.06B.

 
 
  Mark Davis   10/4/200,  11:48:16 AM
1-min MACD has just crossed up from below the zero line, printing a buy signal @ 1137.50. Our long play is about 1 1/2 points underwater @ 1138.92

 
 
  Mark Davis   10/4/200,  11:41:27 AM
Lower stop on long play to 1135.92

 
 
  Jonathan Levinson   10/4/200,  11:40:53 AM
QQQ 2-day 100-tick chart at this Link.

 
 
  Jonathan Levinson   10/4/200,  11:37:33 AM
Nymex crude currently -.45 to 49.675.

 
 
  Jonathan Levinson   10/4/200,  11:33:46 AM
QQQ has broken 36.48 support and is now testing rising 7200-tick SMA support at 36.44.

 
 
  Mark Davis   10/4/200,  11:33:25 AM
On the 1-min chart CCI is perfectly set up for a long play. MACD has turned up twice from below the zero line but it didn't result in any traction to the upside. Maybe the third time will be the charm. I'll let you know when (if) it crosses back up.

 
 
  Jonathan Levinson   10/4/200,  11:31:02 AM
QQQ is testing 36.48 in what has been a very lacklustre short cycle downphase for the past hour.

 
 
  Mark Davis   10/4/200,  11:28:17 AM
I'm going to be disappointed in myself if I exited that short play too early and it turns out to be the right play. I broke my own rule of never ignoring an Evening Star formation (especially on a 15-min chart) but there was just no downside traction and I have to think Keene's analysis that we're headed higher at some point today is correct. That was also the reason for lowering the stop on the long play to 1136.92, risking 2 points. I'm committed long now and will just wait it out.

 
 
  Mark Davis   10/4/200,  11:21:00 AM
Stopped out of short play @ 1139.14, -1/2 pt

 
 
  Mark Davis   10/4/200,  11:20:23 AM
Long @ 1138.92, lower stop to 1136.92
Short @ 1138.64, lower stop to 1139.14 (exit now if you want)

 
 
  Mark Davis   10/4/200,  11:08:49 AM
Lower stops on short play to 1139.64... no downside traction (yet)

 
 
  Mark Davis   10/4/200,  11:07:01 AM
Go long again... SPX 1138.92, stop 1137.92

 
 
  Jonathan Levinson   10/4/200,  11:06:31 AM
Stepping away for 10 minutes here.

 
 
  Jonathan Levinson   10/4/200,  11:05:43 AM
Traders can treat the current range as a rectangle between 36.48 and 36.62. I would expect a break of either line on expanding volume to yield a directional move.

 
 
  Jeff Bailey   10/4/200,  11:05:10 AM
11:00 Market Watch at this Link

 
 
  Jonathan Levinson   10/4/200,  11:01:35 AM
Sweet relief for CDN exporters as CDN dollar futures decline off Friday's 11+ year high, currently down .91% at .7841.

 
 
  Jonathan Levinson   10/4/200,  10:59:33 AM
QQQ 2-day 100-tick chart Link.

 
 
  Linda Piazza   10/4/200,  10:58:16 AM
I'm about to leave for an appointment. As I said earlier today, in this climate, I wouldn't allow bullish gains to turn into losses, so continue to protect positions. Remember that if the OEX retreats to this morning's breakout level and then bounces, new entries could always be made, so you don't have to let a winning position turn into a losing one. Set account-appropriate stops. If the OEX retreats to this morning's breakout position and then continues diving, you'll be glad you stepped aside.

 
 
  Jonathan Levinson   10/4/200,  10:56:37 AM
Nymex crude has risen to 49.875 here, down .25 currently.

 
 
  Linda Piazza   10/4/200,  10:56:14 AM
The OEX may have just confirmed a H&S on the three-minute chart (depending on where you place the neckline) with a downside target near 545.12, just above a 50% retracement of the day's climb. Bulls want to see the OEX stay above that 50% retracement level and would prefer that the H&S not even meet its downside target, stopping instead nearer 545.60.

 
 
  Jonathan Levinson   10/4/200,  10:55:55 AM
Session low for MSFT here, down 2 cents. QQQ is holding at 36.50, having just made a lower high below 36.60.

 
 
  Mark Davis   10/4/200,  10:52:41 AM
Stopped out of long play @ 1138.27, +10

 
 
  Linda Piazza   10/4/200,  10:50:54 AM
The mid-channel level on the 5-minute Keltner chart has now risen to 541.58, and is still rising steeply. By the time the OEX tests that mid-channel line, I wouldn't be surprised to see it having risen to 543.50-544.

 
 
  Jeff Bailey   10/4/200,  10:50:14 AM
Western Digital (WDC) $9.47 +3.83% ... probing its trending lower 200-day SMA.

 
 
  Mark Davis   10/4/200,  10:48:00 AM
stepping away for a few minutes...

 
 
  Jeff Bailey   10/4/200,  10:43:24 AM
Disk Drive Index (DDX.X) 115.53 +4.5% ... sector winner with Hutchinson Tech (HTCH) $33.97 +20.7% Link surging after raising Q4 EPS to $0.15-$0.20 versus consensus of $0.10. HTCH looks for revenues of $122 million versus consensus of $105 million. Company said demand growth resumed in its Q4, reversing 2 quarters of declines.

 
 
  Mark Davis   10/4/200,  10:42:30 AM
The short play and cinching up stops on the long are the result of Linda's nice catch... the Evening Star formation on the 15-min chart. That's a pattern I NEVER mess with.

 
 
  Mark Davis   10/4/200,  10:39:52 AM
Raise stop on long play to 1138.27

 
 
  Jonathan Levinson   10/4/200,  10:39:39 AM
This dip stopped at the highest visible intraday support for QQQ at 36.48, which is the 138.2% fib line extended from Friday's high. Look for a break below that level to target 34.36 support. A break above the high at 36.62 should cause another short covering spike if it occurs.

 
 
  Mark Davis   10/4/200,  10:38:06 AM
Go short SPX now... 1138.64, stop 1140.64

 
 
  Linda Piazza   10/4/200,  10:36:06 AM
I'll be leaving for an appointment about 11:00, hopefully to return again within a couple of hours.

 
 
  Mark Davis   10/4/200,  10:35:47 AM
It's nice to see OEX marching in lock-step with SPX today. The Dow is still lagging though. If OEX and the Dow can get into gear and play some "catch up" with the other indices it would really help the bullish scenario.

 
 
  Linda Piazza   10/4/200,  10:35:08 AM
That OEX 15-minute doji from about 30 minutes ago was followed by a red candle during the next 15-minute period, a confirmed evening-star reversal signal at the top of the climb on the 15-minute chart. However, the OEX currently tests first 15-minute Keltner support, at 546.33. Bulls would prefer to see 15-minute closes above that Keltner line or the one lower, currently at 545.19, but strongest support exists back at the breakout level from this morning, near 543.25.

 
 
  Jonathan Levinson   10/4/200,  10:33:56 AM
Gold is trading a new low at 413.50. The 414-415 confluence didn't hold for long. Next support is at 412.

 
 
  Jeff Bailey   10/4/200,  10:33:06 AM
10:30 Market Watch at this Link

 
 
  Mark Davis   10/4/200,  10:31:32 AM
Nervous longs may consider raising your stops to 1138.27 to lock in +10. You can always go long again if you're stopped out and think things are going higher. Personally I'm leaving my stop @ 1135.27 for now and if we get above 1140 I'll be raising the stop to 1138.27... oops! Too late... SPX = 1138.08

 
 
  Mark Davis   10/4/200,  10:26:05 AM
This one may be a bit scary for bears... Link

 
 
  Linda Piazza   10/4/200,  10:19:50 AM
Those who might have entered a bullish OEX position at the open, when the OEX did open under 544, need to continue to follow the OEX higher with their stops. A measured accumulation pullback under the 200-sma, the 9/13 high, and the top of the descending regression channel that has governed OEX trading since January is only to be expected, but bulls don't want to see profits turn to losses in this environment, either. Set account-appropriate stops.

 
 
  Jonathan Levinson   10/4/200,  10:17:15 AM
QQQ 100-tick 2-day chart at this Link.

 
 
  Linda Piazza   10/4/200,  10:15:39 AM
The OEX's 15-minute candle looks as if it might close this fifteen-minute period as a doji sitting on top of a steep climb. That's a danger signal for bulls, but may signal nothing more than a brief consolidation or a measured accumulation pullback such as a bull flag. Bulls would like to see a retracement, if any, stop above 50% of the day's climb, so above 545.25 or so.

 
 
  Jonathan Levinson   10/4/200,  10:10:18 AM
The top of the morning gap is at 36.36, with 36.14 support next below it. A wavelet downphase is nearly complete, and as we saw on Friday, it's been getting zero price traction.

 
 
  Jeff Bailey   10/4/200,  10:08:25 AM
10:00 Internals at this Link

Friday's internals at this Link

 
 
  Linda Piazza   10/4/200,  10:06:10 AM
The OEX five-minute chart shows bearish price/MACD divergence this morning. That can be erased if the MACD continues climbing to a new high, but it's there as a warning to protect profits this morning. We've all seen days lately when bullish or bearish divergence is shown all day with an index just continuing to climb or fall despite that divergence, so use it as a warning to assess risk and not necessarily as a sign that markets are going to suddenly reverse course.

 
 
  Linda Piazza   10/4/200,  10:04:07 AM
The ADVDEC line keeps climbing, something bulls want to see happen. The trouble is that it's reaching extremes again, moving up toward 3,000 again.

 
 
  Jonathan Levinson   10/4/200,  10:02:38 AM
Nymex crude -.50 at 49.625.

 
 
  Jonathan Levinson   10/4/200,  10:01:31 AM
The market loves the downside surprise in the Factory Orders data- new highs across the board.

 
 
  Jonathan Levinson   10/4/200,  10:00:55 AM
Headlines:

10:00am U.S. AUG. FACTORY ORDERS DOWN 0.1% VS FORECAST UP 0.1%

10:00am U.S. AUG. FACTORY ORDER FALL IS FIRST DROP SINCE APRIL

 
 
  Jeff Bailey   10/4/200,  9:59:14 AM
VIX.X 13.21 +3.6% .... Daily Pivot levels as follows.... 12.37, 12.54, Piv = 12.76 , 12.93, 13.15.

 
 
  Linda Piazza   10/4/200,  9:58:52 AM
The TRAN continues to post gains this morning. It's moving into a S/R zone from the late 90's.

 
 
  Jonathan Levinson   10/4/200,  9:58:27 AM
The Fed's open market desk has announced a 4B overnight repo against 6.5B expiring, for a net drain of 2.5B.

 
 
  Jonathan Levinson   10/4/200,  9:57:14 AM
Session low for gold at 414.10, silver at 6.76.

 
 
  Linda Piazza   10/4/200,  9:56:52 AM
The SOX has now inched above one neckline version of the inverse H&S, depicted on an earlier chart, but of course we have not yet seen a 382-minute close above that version, so being protective of long gains remains a needed tactic.

 
 
  Jonathan Levinson   10/4/200,  9:56:18 AM
30 min channel resistance rises to 36.45 here, 60 min resistnce to 36.34 QQQ. Readers who recall the incredibly overdone TRINQ readings on the bounce off the Oct 2002 lows should be making the connection. Back then, the low TRINQ readings (low .20s) would have ordinarily consituted screaming sell signals, except that they were sustained for hours instead of for seconds and minutes. Here, these sustained Keltner breaks are of the same variety. That's not to say that we're watching the beginning of a multi-month rally- the data doesn't support or deny such a conclusion. But these sustained extreme short term indicator readings are indicating a longer-timeframe force at work.

 
 
  Jeff Bailey   10/4/200,  9:56:17 AM
Bullish swing trade call exit alert .... running out of time until October expiration. Will close out all six (6) of the Stillwater Mining (SWC) $15.10 -0.19% .... Oct. $15 calls (SWC-JC) here at the bid of $0.55.

 
 
  Mark Davis   10/4/200,  9:55:43 AM
Raise stop on SPX long play to 1135.27

 
 
  Linda Piazza   10/4/200,  9:49:45 AM
The OEX does hold near the high of the day long enough for first Keltner support to move up under it. Continue to move stops higher with the OEX as it approaches the 200-sma, the 9/13 high, and the top of the descending regression channel in which it's traded since the first of the year. This should be good for consolidation if not for a pullback.

 
 
  Jeff Bailey   10/4/200,  9:49:13 AM
NYSE Composite (NYA.X) 6,687.15 +0.35% ... enters an upper "zone" from 6,686-6,735 from fitted retracement. See 09/21/04 Index Wrap at this Link

 
 
  Jonathan Levinson   10/4/200,  9:48:40 AM
Volume is actually declining on the rise here.

 
 
  Jonathan Levinson   10/4/200,  9:47:43 AM
QQV is actually higher at 17.61, +2.09%, while VXO is down 4.78% at 12.76.

 
 
  Linda Piazza   10/4/200,  9:47:40 AM
The SOX is still at one version of the supposed neckline for the reverse H&S. See my 9:31 post for a chart.

 
 
  Jonathan Levinson   10/4/200,  9:47:05 AM
Session high for NQ here at 1472.5, QQQ at 36.51.

 
 
  Mark Davis   10/4/200,  9:44:31 AM
I just took a look at the Yahoo World Indices page. It is ALL green. Link
I have been watching this page since the mid-1990s and have never seen that happen before. If this rally is some kind of mistake then the whole world is making the same mistake... Oops! OK there is one market down, the Chech. The Shanghai reading (also red) is from last Thursday.

 
 
  Jonathan Levinson   10/4/200,  9:42:54 AM
The short cycle oscillators for QQQ are maxxed out to the upside, which is entirely unsurprising. If QQQ doesn't drop in the next 5 minutes or so, we'll be looking at a renewed upside trending move in the short cycles. The ongoing 30 min cycle upphase is also trending at this point.

 
 
  Linda Piazza   10/4/200,  9:42:44 AM
The OEX has had another extreme breakout on the five-minute Keltner channels, without much Keltner support below it. The OEX needs to hold near the high of the day to allow Keltner support to catch up. Next five-minute Keltner support is at 545.37, but that's thin and stronger support is at 544-544.24. Risks build with an extreme breakout, so bulls should follow the OEX higher with their stops. At some point or another, the OEX will need to retrace to the mid-channel level, with that level now at 540.23, but climbing fast.

 
 
  Jeff Bailey   10/4/200,  9:41:42 AM
Lehman iShares 1-3 year (SHY) $81.80 -0.06% ...

 
 
  Jeff Bailey   10/4/200,  9:41:08 AM
Netease.com (NTES) $39.24 +2.56% ....

 
 
  Jonathan Levinson   10/4/200,  9:41:06 AM
Gold is holding its losses, but it bounced from higher support at 414.60, currently sitting at 415. HUI is down 2.61% at 223.41, XAU - 2.11% at 98.93.

 
 
  Jeff Bailey   10/4/200,  9:40:45 AM
JDS Uniphase (JDSU) $3.48 +1.45% ....

 
 
  Jeff Bailey   10/4/200,  9:40:25 AM
Taser Intl. (TASR) $38.95 +1.9% ...

 
 
  Jeff Bailey   10/4/200,  9:39:59 AM
Stillwater Mining (SWC) $15.22 +.59% ....

 
 
  Jeff Bailey   10/4/200,  9:38:47 AM
Paychex (PAYX $30.28 -1.3% .... Company announced that B. Thomas Galisano its turning over his position as president and CEO to his newly named successor Jonathan J. Judge, a longtime IBM executive (25-years).

 
 
  Jonathan Levinson   10/4/200,  9:37:49 AM
The current price move is well above upper channel bands for QQQ, with 60 min resistance at 36.27 and 30 min resistance at 36.35, making the current price move a strong trending move. Generally, a Keltner channel break is based on a "deviant" move that has a high probability of reversing... except when it doesn't, in which case it's based on a trending move that is significant in a longer timeframe. The outlook is bullish above 36.10. It will take a move below 35.90 to suggest that a reversal might be in play.

 
 
  Mark Davis   10/4/200,  9:36:14 AM
Long @ 1128.27 (from Friday), raise stop to 1133.27

 
 
  Linda Piazza   10/4/200,  9:33:23 AM
The SOX tests the neckline of the inverse H&S.

 
 
  Linda Piazza   10/4/200,  9:32:45 AM
The OEX opens at 543.11. Those who might have entered long on a breakout above Friday's high or those already in a bullish play should have profit-protecting plans in place at the 200-sma at 547.87 and the 9/13 high at 548.52 are approached.

 
 
  Mark Davis   10/4/200,  9:32:03 AM
Stopped out of short play on the gap up open @ 1133.16, -1.89

 
 
  Linda Piazza   10/4/200,  9:31:08 AM
Here's a SOX chart I'll be watching today for a breakout or rollover move: Link SOX moving up toward the red trendline as I type.

 
 
  Jonathan Levinson   10/4/200,  9:30:52 AM
Headlines:

9:29am BERNANKE: U.S. ECONOMY CAN ADJUST TO HIGHER OIL PRICES

lue> 9:29am FED'S BERNANKE HOPES OIL PRICES WILL DECLINE GRADUALLY

 
 
  Jeff Bailey   10/4/200,  9:28:40 AM
Siebel Systems (SEBL) $8.19 .... jumps to $9.66 in pre-market trade and is atop this morning's most actively traded after saying Q3 revenues will exceed Wall Street estimates.

SEBL now expects total revenue for Q3 to be between $315-$31.7 million, which would be a 5% increase over Q2. Consensus was at $305.9 million.

 
 
  Mark Davis   10/4/200,  9:23:13 AM
Good morning...
Nasdaq Short Interest for September was 5,248,399,985... the highest level this year. Some of that short interest may have been unwound on Friday but if we head much higher we could see some SERIOUS short covering. Here's another update of the last 3 "b" distribution patterns on the SPX daily chart... more importantly what happened after the last 3 "b" distribution patterns. I've been watching these particular chart patterns for several months now. The similarities in the behavior of SPX after it bounces off the bottom of the bulb are uncanny but this time there are several differences that suggest further upside, although not necessarily in a straight line. Link

A few things I didn’t note on the chart...
1) The first two "b" distribution patterns occurred ABOVE the 200sma, with the second one bottoming out right at the 200sma before bouncing.
2) This last "b" distribution pattern occurred BELOW the 200sma. SPX then bounced back above the 200sma, retraced to the 50sma and bounced like a superball off the 50 and back above the 200. An upside break of the 200sma (especially a strong one) is a buy signal trigger for many funds and Friday it looked like they jumped in with both feet.
3) Also note during the first two cycles the 50sma was sliced through to the downside like it wasn't there. This time SPX bounced strongly off the 50.
4) The neckline of the last confirmed inverse H&S pattern (upside target = SPX 1159) currently sits @ 1112 so I would watch this number very carefully. Bulls want SPX to stay above 1112 but it's possible SPX could retrace slightly below 1112, as long as it doesn't drop much below that level. A drop below 1100 would call the bullish scenario into question.
5) The primary keys to the entire bullish scenario IMO are the semis and the beaten down tech stocks. If the semis and tech stocks continue to be accumulated the market will be fine. Even a pause or retrace is OK but if the semis and tech stocks melt down it will drag the tech-heavy Nasdaq down first, then all the other indices will follow like dominoes.
6) Additional factors are the laggard Dow and OEX indices. If they can do some "catch up" it will go a long way in keeping the rally alive.
7) Finally, IF we continue just a little higher, and it looks like we will, SPX will convincingly penetrate the downtrend line since the March highs. Unless the move through that line is immediately reversed it will appear a long-term downtrend has been reversed, the bottom is in, etc, etc. Bulls will pile on and shorts will be forced to cover adding further fuel to the rally. It could very well be that this has already started but we’ll have to wait a little longer before we know for sure.

 
 
  Jonathan Levinson   10/4/200,  9:14:44 AM
Add euros and gold to the list of new lows. Gold is now down 6.20 to 414.90.

 
 
  Jonathan Levinson   10/4/200,  9:11:53 AM
Session lows for CDN dollars and silver futures here. Bonds have weakened as well, TNX +3.5 bps at 4.226% currently.

 
 
  Linda Piazza   10/4/200,  9:03:10 AM
Update to My 21:19 Post: Futures are up so strongly that they actually present a danger to those wanting to open new bullish positions. If futures remain at their current high levels into the open and if markets open in accordance with those futures levels, the OEX is likely to open just under its 200-sma and September high, and the SPX and Dow at or just under important resistance. Obviously, entering a new bullish play near the open, at or just under the 200-sma presents the potential danger that the move would soon get reversed. Taking such action would not have hurt bullish Nikkei traders last night near the end of the morning session and that might be true for OEX traders, too, but I'm reluctant to suggest a bullish entry on a gap-open move this morning. I'd much rather see a pullback and see how it behaves before making a suggestion. Cash opens are not always in accordance with the futures' behavior, of course, and an OEX open near 544 might present a buying opportunity, with profit-protecting plans in place as the 200-sma is approached. However, I'd certainly be reluctant to enter a new bullish play at the open if the OEX were to gap up much higher. If that happens, I'd be waiting on the sidelines for a pullback, to see how deep it goes. Remember that options are inflated at the open, that a zoom higher is likely going to deflate volatility indices further, and you have spreads and commissions to pay. An OEX options player could see the OEX move two or three points and their options prices not move accordingly, so that the risk accepted might not be met by acceptable gains.

 
 
  Linda Piazza   10/4/200,  8:58:51 AM
European markets have been treading water for the last four or five hours, perhaps coiling for a breakout one direction or the other.

 
 
  Jonathan Levinson   10/4/200,  8:23:15 AM
Amazingly, the current move is still on a 30 min cycle sell signal, though the Macd is whipsawing. This is a rare 30 min cycle trending move in progress. Link

 
 
  Jonathan Levinson   10/4/200,  8:15:38 AM
The US Dollar Index is up sharply overnight, up to 88.35 on my 30 min delayed chart: Link

 
 
  Jonathan Levinson   10/4/200,  8:01:40 AM
Equities have blasted higher, ES to 1139, NQ 1469, YM 10252 and QQQ +.32 to 36.42. Gold is down 4.60 to 416.50, silver -.128 to 6.81, ten year bonds -.26 to 111.89 and Nymex crude -.575 to 49.55.

We await the 10AM release of Aug. factory orders, est. .1%.

 
 
  Linda Piazza   10/4/200,  6:53:38 AM
Good morning. In overnight trading, the Nikkei surged almost 2.7%, and other Asian markets closed higher, too. European bourses post strong gains, with chip-related stocks helping as they did in Asia. Automakers have benefited from lower crude prices. As of 6:47 EST, crude had dropped $0.51 and gold, $3.20. Our futures climbed strongly all night, but are currently just below their overnight highs. More detail about the performance of Asian and European markets follows.

Monday morning, the Nikkei gapped above 11,000, the 50-dma and 11,100 and kept climbing. By the close of the morning session, it had already climbed above the 200-sma at 11,160, too, and it closed at 11,279.62, higher by 294.46 points or 2.68%.

With a J.P. Morgan analyst raising ratings on several U.S. chip stocks, some Asian chip-related stocks surged, joined by other tech stocks. Sony and Matsushita Electric Industrial also benefited from a Twentieth Century Fox Film Corp decision to employ Blu-Ray Disc technology for the next generation of DVD players. Nippon Telegraph and Telephone did not join the gains, however, closing flat after announcing Friday after the close that competitive pressures would force it to lower charges for fixed-line services. Banks posted gains.

Other Asian markets gained, too. The Taiwan Weighted climbed 2.23%. With South Korea's Hyundai Motor gaining 5.7% after announcing that it would begin mass production of its first hybrid car by 2006, the Kospi rose 4.12%. Singapore's Straits Times climbed 1.65%, and Hong Kong's Hang Seng gained 1.82%. China's Shanghai Composite remained closed for a holiday.

Currently, European bourses trade in positive territory, too. In the U.K., BP gave an update on its third quarter, gaining after it announced a rise in production over the year-ago level but a decrease over the previous quarter's level due to planned maintenance and the effect of Hurricane Ivan. Other oil majors rose, too. M&A talk sent some telecommunications and banking stocks higher. In Continental Europe, chip-related stocks gained. A dip in crude prices below $50/barrel helped auto stocks improve.

As of 6:47 EST, the FTSE 100 had climbed 28.60 points or 0.61%, to trade at 4,688.20. The CAC 40 had gained 38.74 point or 1.04%, to trade at 3,768.90. The DAX traded 54.04 points or 1.35% higher, at 4,049.00.

 
 
  Mark Davis   10/3/200,  12:16:55 AM
The Nikkei is currently off its highs but still screaming higher (currently +245.20), pulling SPX futures up with it (currently 1136.30, +3.10). If this continues into the opening bell we will be stopped out of our short play right out of the gate and the long play from 1128.27 will run substantially higher, making it well worth holding over the weekend. If SPX futures hold at current levels it should cause significant short covering as we will have convincingly penetrated the downtrend line from the March highs. See you at the bell...

 
 
  Jeff Bailey   10/3/200,  9:23:47 PM
This week's CLOSED MM Profiles at this Link

 
 
  Jeff Bailey   10/3/200,  9:19:21 PM
Pivot Matrix for next week at this Link

Please note that I'm calculating the Market Volatility Index (VIX.X) in the WEEKLY Pivot.

 
 
  Linda Piazza   10/3/200,  9:19:15 PM
Early Friday, I fit a retracement bracket to the OEX's trading pattern since its rise off Tuesday's low, trying to project the OEX's upside target. I fit one retracement level at 535.10, where the OEX had seen resistance Tuesday through Wednesday, another at the top of the candle body from the first 15 minutes of trade on Thursday. Double-checking that fit to see if it seemed plausible, I noted that one retracement bracket was falling between 540.80 and 541, a known S/R level. It seemed to make sense and the upside target it suggested was just under 543.50. Friday's high was 543.35. Now that the upside target was met, is that all there is?

The Russell 2000 broke above its descending regression channel Friday, a tall white candle sitting on top of that channel and with the Russell 2000 now approaching the 591.53 swing high from 6/30 and 7/01. The TRAN is breaking to new daily and weekly closing levels not seen since August 1999, but closed just under 3300. The SOX showed strong gains but closed right at/just underneath the neckline of an inverse H&S, with that neckline appearing to be at about 406-408, depending on how its drawn.

So what happens with the OEX may depend on some of these other indices on Monday morning. The OEX also ended the day just below the descending trendline off the September 13 high. A push above that trendline, signaled by a move above Friday's high and accompanied by falling crude prices, appropriate breadth measures, and a concurrent SOX push above the inverse H&S neckline, Russell 2000 push above 592 and a TRAN push above 3300 would . . . well, that would be great, to have that much corroboration, wouldn't it? And too much to expect. We're unlikely to see all that, but if at least some of that corroboration should occur on an OEX breakout, that would suggest a test of the top of the descending regression channel and the 200-sma at 547.81, with bullish traders needing a profit-protecting plan in place as that resistance is approached. A roll down below that trendline, especially if accompanied by rising crude and appropriate breadth measures, and a SOX, Russell 2000 and TRAN rollovers beneath resistance might suggest an OEX retest of 536-537.25, where bearish traders would need to have a plan in place for protecting profits. Bearish traders should be aware that 540.50-541 might provide support.

 
 
  Jeff Bailey   10/3/200,  8:46:05 PM
Closing Internals for Friday at this Link

 
 
  OI Technical Staff   10/2/200,  4:14:18 AM
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Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

 
 

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