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  James Brown   10/5/200,  9:09:35 PM
"I can't get no respect"-comic Rodney Dangerfield has died this evening (Tuesday) at age 82.

  Linda Piazza   10/5/200,  9:01:20 PM
The OEX produced a doji just beneath resistance Tuesday: Link This continues the indecision and the possibility of a reversal. A break above the 200-sma and 9/13 high would constitute an upside breakout. The possibility of such a breakout would be signaled first by a break above the descending regression channel off Monday's high, while a downside break would first be signaled by a downside break out of the descending regression channel and then by a break below the descending trendline off the 9/13 high: Link Current bears should have profit-protecting plans in place on a test of the 541.50-543 region as there's strong bounce potential in that area, with aggressive bears perhaps including plans to participate in further gains if the OEX should drop further. Bulls looking for a new entry could watch for a bounce from that level. Without a strong drop in crude costs, that's not an entry I'd suggest for any but scalpers, however.

  Jeff Bailey   10/5/200,  7:42:22 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   10/5/200,  4:27:02 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Day trade short the QQQ at $36.40, stop $36.56, target $35.05. Carrying this one over to tomorrow.

  Jeff Bailey   10/5/200,  4:22:24 PM
Closing Internals at this Link

  Jeff Bailey   10/5/200,  4:09:36 PM
Buy Program Premium .... SPY $113.89 , QQQ $36.38, DIA $101.95

  Linda Piazza   10/5/200,  3:55:55 PM
It's decision time again for OEX traders. The OEX remains within a descending regression channel off yesterday's high, although it's trying for a push out of that channel to the upside before the end of the day. It's likely to produce a doji or near doji beneath the daily resistance that's formed from the top of its descending regression channel, the 9/13 high and the 200-sma, with that average at 547.91. The OEX looks likely to close the day between support and resistance, with neither bulls nor bears winning the day. I would not suggest any new positions with the OEX between that resistance and the support at its breakout point yesterday, with the descending trendline off the 9/13 high now descended toward 542. Tomorrow's 10:30 report on crude inventories should prove important, but I don't see other market-moving reports before that. Overseas markets showed some hesitation overnight. Both bulls and bears accept risk when deciding whether to hold overnight, as nothing that's happened today has clarified the eventual outcome, except to corroborate that the current index levels are important and that bulls and bears have different opinions about where markets will go next. With no clarity today, bulls and bears must make blind decisions, unfortunately, and should base decisions about holding overnight on their own risk parameters. Frankly, I'm discounting what's happening in the last few minutes of trading, as that might be positioning ahead of tonight's debate.

  Jeff Bailey   10/5/200,  3:47:33 PM
Bearish day trade carryover alert ... will carryover the QQQ day trade short unless we trade target or stop prior to 04:15 close.

QQQ $36.32 +0.01% here.

Should we close at this price, given today's high and low then tomorrow's DAILY Pivot levels as follows .... $35.99, $36.16, Piv = $36.32 , $36.49, $36.65.

  Linda Piazza   10/5/200,  3:44:11 PM
Since dropping below its five-minute 100/130-ema's and then below the ascending trendline off the early morning low, the Dow dropped heavily, but now tries to form an inverse H&S with a neckline near 10,180. A drop to a new low would negate that potential formation and show that bulls couldn't muster the needed strength.

  Linda Piazza   10/5/200,  3:41:51 PM
The OEX's five-minute 100/130-ema's held as resistance again, and the OEX again drops toward the bottom of its descending regression channel.

  Linda Piazza   10/5/200,  3:36:54 PM
Here's what I'm watching on the OEX's descending regression channel and five-minute 100/130-ema's: Link

  Linda Piazza   10/5/200,  3:28:34 PM
Another bounce from the bottom of the descending regression channel on the OEX's five-minute chart, up to test the 100/130-ema's on that chart, with those averages at 544.56 and 544.37, respectively.

  Mark Davis   10/5/200,  3:27:57 PM
I was afraid of this... a slight underthrow of the triple bottom and the start of a bounce. Hopefully if will abort early and we will drop to 1125 where we can consider going long again but until 1131.50 is broken to the downside this remains a very risky short play. I would consider going long again if 1131.50 is approached but at this moment in time it looks like 1132.03 may have been it for the short-term. If we get stopped out of our short play @ 1133.65 I'm done for the day.... oops! Just happened.

Stopped out of short play @ 1133.65, -1

  Linda Piazza   10/5/200,  3:17:22 PM
The TRAN perhaps rounds into a lower high on the five-minute chart, perhaps a right shoulder for a H&S? The neckline is somewhat difficult to define, but I'd want to see the TRAN below the five-minute 100/130-ema's at 3323.80 and 3319.94, respectively, before I considered that formation confirmed anyway. The TRAN is at 3330.97 as I type. If the TRAN zooms much past 3335, that potential formation is probably negated.

  Jeff Bailey   10/5/200,  3:13:13 PM
QQQ $36.23 -0.22% ... looks to follow, but still above morning low of $36.16 and DAILY S1.

  Linda Piazza   10/5/200,  3:13:05 PM
As I noted earlier today, an OEX test of yesterday's breakout level appears likely if not probable. The descending trendline off the 9/13 high is now at about 542, with 15-minute Keltner support trying to converge near 541.60-542.60, so near that trendline, too. As I warned earlier, bulls should already long ago have assessed their willingness to wait out a retest of that support and if they're still in bullish positions, be watching carefully to see if that zone holds as support. Those wanting new bullish positions should be watching carefully for a retest and hoped-for bounce from that region, but that's not a entry I'd suggest with crude costs where they are. Bears should have a profit-protecting plan in place as yesterday's breakout level is tested, with aggressive bulls' plans perhaps including measures that would allow them to participate in further gains if the OEX should drop further.

  Jeff Bailey   10/5/200,  3:12:33 PM
Dow Industrials (INDU) 10,159 -0.56% ... moves to session lows.

  Jonathan Levinson   10/5/200,  3:12:00 PM
Session low for ES futures and YM here.

  Mark Davis   10/5/200,  3:11:59 PM
Stopped out of long play @ 1132.55 and break even
Now short @ 1132.55, stop 1133.55

  Mark Davis   10/5/200,  3:10:07 PM
Long @ 1132.55, raise stop to 1132.55 and break even
Go short with a touch of 1132.55, stop 1133.55
TRIN really stinks and this isn't much of a bounce off a triple bottom.

  Linda Piazza   10/5/200,  3:07:12 PM
As Jane has probably already warned, the TRIN is at 1.65. The VIX, VXO, and VXN have seen gains today. The ADVDEC line has tried levels both below and above the flatline and is currently below.

  Jonathan Levinson   10/5/200,  3:06:18 PM
Volume has again dropped off, this time on the bounce, and the drop to the 36.18 level was enough to restore the 30 and 60 min cycles to downphases. Note that the previous 30 min upphase was perfectly sideways, despite the brief vertical spikes. This is the first indication of daily cycle weakness, but it's going to take a move back below 36 to retore the daily cycle downphase for QQQ. Current resistance at 36.30 has held so far.

  Jeff Bailey   10/5/200,  3:04:34 PM
03:00 Market Watch at this Link

  Linda Piazza   10/5/200,  3:02:26 PM
Remember when the last tightening cycle was going on and we used to all wait for the closing of the bond market to see what would happen to equities? Lately, we've all been paying a lot of attention to the closing of the market for Nymex crude. I, at least, haven't been paying as much attention to the changes in equity performance after the 3:00 close of the bond market. As I look back over the last week or two, though, I notice that on the days when equities declined into the close, the declines started or accelerated at about the time of the closing of the bond market. The picture is a little more mixed on days when we saw climbs into the close, as those climbs sometimes appeared to begin as Nymex crude closed. This was just a cursory look and might be wrong, but this is my immediate impression.

  Mark Davis   10/5/200,  2:53:16 PM
Go long now @ 1132.55, stop 1131.55

  Jeff Bailey   10/5/200,  2:53:07 PM
Dow Industrials (INDU) 10,163 -0.52% ... session low but still within 10-points of DAILY S2.

  Jeff Bailey   10/5/200,  2:52:21 PM
Wal-Mart (WMT) $52.98 -0.6% .... lows of the session after reiterating Q3 earnings will be at low end of $0.52-$0.54 per share.

  Mark Davis   10/5/200,  2:47:56 PM
Stand by for a possible long play if we make a double bottom...

  Linda Piazza   10/5/200,  2:41:39 PM
The OEX rose toward a retest of the 5-minute 100/130-ema's and now drops toward the bottom support of its descending regression channel again. That channel's support is at about 433.20 now.

  Mark Davis   10/5/200,  2:41:02 PM
The bounce occurred right where I thought it might @ 1132.50... people frontrunning the obvious 1131.50 support area. Hopefully we will get another chance to enter long at a lower level. Why didn't somebody tell me not to sit on my hands and go ahead and short @ 1137.50? I'm VERY disappointed in you people. Link

  Jonathan Levinson   10/5/200,  2:35:15 PM
Stepping away for 10 minutes.

  Mark Davis   10/5/200,  2:34:19 PM
Stopped out @ 1134.50 while I was away, +1

  Linda Piazza   10/5/200,  2:34:11 PM
GE, MER, and CSCO continue to test their 200-week sma's, GE slightly below and MER and CSO slightly above their respective 200-week sma's.

  Jonathan Levinson   10/5/200,  2:34:08 PM
Look for resistance at 36.30 on this bounce. The short cycle downphase is still in progress, but the wavelet is picking up strength to the upside.

  Linda Piazza   10/5/200,  2:32:58 PM
Remember that the GSO's 200-sma is also at 147.80, lending its more considerable support to that of the five-minute 100/130-ema's.

  Linda Piazza   10/5/200,  2:30:15 PM
The GSO has dropped down to test its five-minute 100/130-ema's, but it hasn't violated them yet, showing more strength than many other indices. Both the NDX and Nasdaq have dropped below these averages after finding support at them earlier today.

  Linda Piazza   10/5/200,  2:26:43 PM
The OEX now tests the bottom of its descending regression channel again. For the last half hour, it's traded below the 5-minute 100/130-ema's, the first time today it's been below them for more than a couple of minutes. Bears of course want to see a breakdown here below that descending regression channel and bulls of course want to see a zoom up through it again. This time, though, the OEX will face those five-minute 100/130-ema's as potential resistance, at 544.71 and 544.50, respectively.

  Linda Piazza   10/5/200,  2:24:16 PM
Indecision reigned on the European markets, too, although it took different forms on each of the three markets we watch most commonly there. The FTSE 100 ended the day today up 25.30 points or 0.54%, just over 4,700 at 4,707.10. It was perhaps rounding over into a lower high on the intraday chart, however. The CAC ended the day up 3.18 points after bouncing around within a 30-point range all day, bouncing from negative to positive territory and then negative to positive again. The DAX coiled all day, closing about 30 points off its high and about 25 points off its low.

  Jonathan Levinson   10/5/200,  2:14:25 PM
QQQ has just printed a retest of 36.22 support, but the bounce isn't sticking. Look for a retest of teh session lows if 36.20 breaks, and below 36.14, I expect to see acceleration to the low 36.00 area.

  Linda Piazza   10/5/200,  2:06:37 PM
The OEX has now dropped below the 5-minute 100/130-ema's at 544.90 and 544.56, respectively. Bulls want to see a quick reversal here, or the OEX risks dropping first to today's low and then toward 542.50-543.30.

  Jeff Bailey   10/5/200,  2:06:00 PM
02:00 Internals at this Link

  Linda Piazza   10/5/200,  2:02:34 PM
After inching just above the top of its descending regression channel off yesterday's high, the OEX dropped into it again without ever confirming that upside break by climbing above yesterday's last five-minute high. There's still no conclusive answer for bulls or bears as the OEX remains within that channel, currently again testing the five-minute 100/130-ema's. So far, today's trading pattern indicates indecision about sending the indices higher, and both bulls and bears who held overnight are left in a state of indecision. Those who might have entered new bearish positions yesterday on a test of the 200-sma want to see the OEX break down below the 5-minute 100/130-ema's and then below the bottom of the descending regression channel, dropping into a test of 542.50-543.00. Bears should have a profit-protecting plan in mind as that level is approached. Aggressive bears might construct profit-protecting plans that allow them to participate in a further drop, if offered, risking a bounce instead. Bulls should assess their willingness to stay in for a test of that level, as is at least possible if not probable. Those wanting new bullish positions should hope for a test of and then strong bounce from the 542.50-ish level, although I can't recommend such a play with crude where it is, no matter what chart characteristics say.

  Jonathan Levinson   10/5/200,  1:59:09 PM
New high for Nymex crude at 51.25.

  Jonathan Levinson   10/5/200,  1:58:38 PM
QQQ update at this Link.

  Linda Piazza   10/5/200,  1:53:13 PM
The GSO drops toward a test of its 5-minute 100/130-ema's, averages from which it bounce this morning. Those averages are at 147.96 and 147.61, respectively. Other indices drop toward a retest of these averages, too, including the SPX and OEX (testing them now). These indices need to bounce from these averages if bulls are to gain the upper hand again.

  Linda Piazza   10/5/200,  1:51:30 PM
The TRAN hasn't served as much of a guidepost after all, as it's the Dow's drop below the ascending trendline off this morning's low and below the five-minute 100/130-ema's that appeared to get this drop started.

  Jonathan Levinson   10/5/200,  1:50:06 PM
I've got crude oil on the Nymex at 51.125, off a high of 51.175.

  Linda Piazza   10/5/200,  1:49:50 PM
The SOX has pulled back from its last test of the neckline of its H&S formation.

  Linda Piazza   10/5/200,  1:49:05 PM
The Dow dips juuust below the ascending trendline off this morning's low. Unless it's quickly reversed, this is a sign that it's dropping out of the potential bear flag off this morning's low.

  Linda Piazza   10/5/200,  1:48:12 PM
Crude at $50.99.

  Jonathan Levinson   10/5/200,  1:43:29 PM
Almost a perfect stall for QQQ on this wavelet downphase. Nevertheless, the 30 min cycle upphase has also stalled, somewhat flattened from its previous steep climb. Somehow, QQQ volatility is up 2.23% at 18.8. 36.37-36.47 appears to be the operative range here. Looking for some direction on either an upside or downside break.

  Mark Davis   10/5/200,  1:42:32 PM
Leaving for an errand... back in 30 min

  Linda Piazza   10/5/200,  1:40:56 PM
The DOW has now slipped below the five-minute 100/130-ema's again, but remains above the ascending trendline off this morning's low. It's soon going to be above one or below the other, though, as the Dow is getting pressured between the two. That ascending trendline now crosses at about 10,195.

  James Brown   10/5/200,  1:40:20 PM
Keep an eye on Station Casinos (STN). Yesterday the stock broke out over round-number resistance at $50 but failed to push past its all-time high near $50.94 from this past June. Now the stock is down 2% and under the $50 mark again. I'm watching it for a new high over $51.00.

  Mark Davis   10/5/200,  1:38:10 PM
The Dow 1-min chart has just printed a fresh buy signal @ 10,203 but keep in mind the 1-min chart produces the earliest (and sometimes erroneous) signals.

  James Brown   10/5/200,  1:38:07 PM
Yesterday United States Steel (X) broke out above major resistance at the $40.00 level to hit new six-year highs. This may be a bullish entry point on the stock.

  James Brown   10/5/200,  1:36:52 PM
Yesterday Royal Caribbean Cruises (RCL) broke out above its seven-month trendline of lower highs on above average volume. Today the stock us up another 2% and nearing four-year highs.

  James Brown   10/5/200,  1:35:19 PM
Bulls and bears can keep an eye on Ingersoll-Rand (IR). The stock has been churning sideways between $62 and $70 for the last few months and currently the stock is trading just under resistance at $70.

  Mark Davis   10/5/200,  1:33:14 PM
It appears the stop running push is to the downside today but it is stalling right @ Dow 10200 and the Dow 1-min chart MACD is trying to turn back up. If Dow 10200 holds we could see a "successful" test to the downside, if not the bears may grab the ball and run... Stay tuned.

  Linda Piazza   10/5/200,  1:29:34 PM
The GSO turns down from its latest test of yesterday's high, this time not able to approach 149. So far, the pullback is minor, though, with the GSO at 148.68. Tech bulls don't want to see the GSO fall below 147, the trough between the two exactly equal peaks.

  James Brown   10/5/200,  1:27:37 PM
Oil giant COP is up another 2.3% and hitting new all-time highs as it stretches the rally into its sixth straight week.

  Linda Piazza   10/5/200,  1:27:12 PM
The TRAN may be one clue to direction today. It's zoomed ahead of the other indices, and TRAN investors must be pausing about now to see if the other indices are going to follow. Using Jeff's old snake or worm analogy (can't remember which it was), the head of that critter must be turning around to see what the heck is stepping on its tail.

  Jonathan Levinson   10/5/200,  1:24:45 PM
A fresh round of short cycle sell signals are brewing, with the wavelet oscillator in a downphase. It will take a break below 36.37 at a minimum to get the ball rolling.

  Linda Piazza   10/5/200,  1:24:10 PM
The Dow tests the five-minute 100/130-ema's after breaking above those averages at about 12:30. The Dow had lagged the other major indices by this measure as most had traded above these averages today and had found support early this morning on a dip toward those averages. Bulls do not want to see the Dow dip back below these averages again and then and fall out of the possible bear flag on its five-minute chart, while bears want those actions to occur, of course. If all five-minute candle shadows are included, too, the ascending trendline off this morning's low crosses now at about 10,194.

  Mark Davis   10/5/200,  1:23:58 PM
B-bands are pinched as tight as I've ever seen them @ SPX 1137 (1-min chart)... we're about to make a move and it could be a biggie, right at the stop running push.

  Linda Piazza   10/5/200,  1:19:44 PM
The GSO is trying to make another run at yesterday's 149.10 high, with the GSO currently at 148.81.

  James Brown   10/5/200,  1:16:25 PM
Thanks, Jon!

  James Brown   10/5/200,  1:15:58 PM
Internet conglomerate InterActiveCorp (IACI) is down more than 3% after CEO Barry Diller cools speculation that he has plans to take the company private.

  Jonathan Levinson   10/5/200,  1:15:24 PM
Re: James' 13:11:47, here's a chart from Stockcharts. It would probably look better on a weekly view, but I'm throwing it in just the same: Link

  Jonathan Levinson   10/5/200,  1:13:58 PM
My problem with the reverse head and shoulders scenarios I've been discussing for QQQ is that reverse h&s patterns occur at the bottom, and not at the top of a move. There's not been enough weakness to set up the kind of long cyclical overlap for a reverse h&s- thinking it through, I expect to see confluence from 36.55-36.62 hold for an upside test. I, and, I expect, a large number of shorts will likely change their minds in a hurry if 36.62 gets broken.

  James Brown   10/5/200,  1:11:47 PM
I don't know (or more likely don't remember) if there is much research and/or market sentiment analysis involving new highs and news lows but I noted yesterday that there seemed to be a HUGE number of new 52-week highs.

looking at my notes there were 491 new highs on the NYSE and NASDAQ.

  Linda Piazza   10/5/200,  1:10:19 PM
The VIX has been testing 14.00 again today, at 13.93 as I type. Interestingly (at least to some of us technical-analysis geeks), it completed an inverse H&S on the 30-minute chart with today's gap higher. I hesitate to set an upside target for the VIX based on such a chart formation, or rather to give too much credence to such an upside target, but it would be about 14.60 if the neckline I've used is valid.

  Mark Davis   10/5/200,  1:08:57 PM
Yesterday I mentioned the Dow and OEX needed to get on board the rally train or we would advance with difficulty, if at all. Today OEX seems to be on board... now if the Dow would just cooperate we could see some real fireworks to the upside.

  Jonathan Levinson   10/5/200,  1:07:46 PM
Careful bears: volume is declining on this sideways pullback on QQQ, making it look like a bull flag to me.

  Jeff Bailey   10/5/200,  1:06:43 PM
01:00 Internals at this Link

  James Brown   10/5/200,  1:05:22 PM
The CHIR news has sent shares of MedImmune (MEDI) up 4.4% to $25.45 today. MEDI makes a competing flu vaccine in their Flu-Mist product. MEDI has been stuck in a trading range between $22 and $26 almost the entire year. (At least one Wall Street analyst doesn't expect the CHIR news to have any material impact on MEDI's sales)

  Linda Piazza   10/5/200,  1:05:11 PM
TRAN charging higher, but it's doing it without its sister index, the Dow.

  Linda Piazza   10/5/200,  1:03:55 PM
I said earlier that it felt like 1:46 instead of 12:46 because the action felt like the usual stop-running action that we often see about 1:45. The result of that stop-running action--a quick slapping back or strong gains after the stops are run--tell us much about likely afternoon action, but if that was the stop-running action an hour early, it didn't tell us much. The TRAN certainly ran away after breaking higher, but the BIX, GSO, SPX, OEX, Dow, NDX, and Nasdaq have just hesitated, not really dropping much but not running away with gains, either.

  Linda Piazza   10/5/200,  12:59:40 PM
The BIX tested and headed down from a neckline for a possible inverse H&S seen on the five-minute chart, but it's hasn't turned back far, yet. It's now back below yesterday's high, however.

  Mark Davis   10/5/200,  12:57:37 PM
I'm having to sit on my hands to keep from shorting here @ 1137.50... hope I don't regret it.

  Linda Piazza   10/5/200,  12:56:53 PM
The SOX is back to test one version of the neckline for its possible inverse H&S. Jim draws his SOX inverse H&S much differently than I do, so be aware that there can be more than one possibility here.

  James Brown   10/5/200,  12:54:00 PM
Fortune Brands (FO) is reversing yesterday's bullish breakout over resistance at $75.00 although volume today is pretty light.

  Jonathan Levinson   10/5/200,  12:53:57 PM
The 30 min cycle upphase has support up to 36.18 QQQ and resistance up to 36.55. I expect it to take roughly 20 minutes at current levels to turn the 60 min cycle up as well, while a break above 36.55 would accomplish the task sooner.

  Jeff Bailey   10/5/200,  12:53:47 PM
12:50 Market Watch at this Link

  Linda Piazza   10/5/200,  12:51:18 PM
The Dow tests the flat-line level.

  James Brown   10/5/200,  12:50:52 PM
We've also had Veritas (VRTS) on the radar screen for a bullish breakout over resistance at $20.00, which is also near the bottom of its July gap down. The stock's recent rally has been pushing higher on rising volume. Today shares are breaking out over $20 although volume isn't that impressive for today's session. The P&F chart is now bullish with a $27 target, which coincidentally is near the top of the gap.

  Mark Davis   10/5/200,  12:49:51 PM
This is WAY premature but imagine the short covering frenzy should SPX break above 1140. The only reason I mention it is because I'm sure more than a few bears are already thinking ahead to that possibility... in fact, I'd call it a probability, but not necessarily today. Further upside may be squelched by "Fear of Friday"

  James Brown   10/5/200,  12:48:01 PM
HSIC has been a frequent candidate on our nightly watch list for a couple of weeks. We've been waiting for a breakdown under major support at $60.00. Shares broke down under this level on major volume this morning. The stock is currently off its lows of the session but remains under the $60 mark.

  Linda Piazza   10/5/200,  12:47:03 PM
Doesn't this feel like 1:46 instead of 12:46?

  Linda Piazza   10/5/200,  12:46:38 PM
The DOW heads right back for a retest of the five-minute 100/130-ema's.

  Linda Piazza   10/5/200,  12:45:29 PM
The TRAN just charges ever high, but the five-minute MACD doesn't do so along with the TRAN's prices. We've been seeing bearish divergence with each TRAN move higher since Friday, at least.

  Linda Piazza   10/5/200,  12:44:19 PM
The GSO hit yesterday's high exactly and now pulls back slightly. Watch this carefully as the GSO might be also be important in recent trading behaviors.

  Linda Piazza   10/5/200,  12:43:29 PM
The OEX hesitates after inching above the descending trendline off yesterday's high.

  Linda Piazza   10/5/200,  12:42:40 PM
Now the OEX tests the descending trendline off yesterday's high. Some fast moving indices, such as the TRAN and GSO, have already broken higher. Unless the OEX and other indices are soon slapped down, bears with new entries from yesterday's test of the 200-sma should be assessing their willingness to stick around for another test. Current bulls should have profit-protecting plans in place for a test of yesterday's high, if the OEX does succeed in breaking above that descending trendline and if that level is tested.

  Mark Davis   10/5/200,  12:42:02 PM
This market continues to amaze me with its ability to climb the Wall of Worry

  Mark Davis   10/5/200,  12:40:16 PM
Long @ 1133.50, raise stop to 1134.50
That's just below the 11:28AM swing low and we also lock in +1, making up for the ill-advised short play. We were lucky to get +5 on the previous short and our long play is now +4 so we're net +8 for the day... not bad for a "rangebound" day.

  Jonathan Levinson   10/5/200,  12:39:26 PM
There's a volume surge on break above QQQ 36.45. This qualifies as a hunchback head and shoulders breakout- on a horizontal neckline, that line should be at 36.55, lined up with channel resistance. Link

  Jonathan Levinson   10/5/200,  12:37:51 PM
Session high for QQQ at 36.49.

  Jeff Bailey   10/5/200,  12:37:33 PM
Similar feel to Thursday's trade ....

  Linda Piazza   10/5/200,  12:37:30 PM
The Dow is breaking above the five-minute 100/130-ema's as I type, but unlike the other indices, it's climb looks like a possible bear-flag formation climbing off support.

  Linda Piazza   10/5/200,  12:35:57 PM
The BIX still struggles to remain above yesterday's high, at 363.33 as I type and yesterday's high at 363.38.

  Jonathan Levinson   10/5/200,  12:35:37 PM
30 min and 60 min channel resistance currently line up at 36.55. The 30 min channel is rising, 60 min channel just beginning to flatten out from its upphase.

  Linda Piazza   10/5/200,  12:35:09 PM
The TRAN broke out of its descending regression channel off yesterday's high about twenty minutes ago and now has charged above yesterday's high.

  Linda Piazza   10/5/200,  12:34:17 PM
The GSO appears to have broken above its descending regression channel off yesterday's high and now reaches toward that 149.10 high, with the GSO at 148.74 as I type. The supposed round-number resistance at 150 and the weekly 200-sma at 152.10 wait just above, too.

  Jonathan Levinson   10/5/200,  12:34:05 PM
Nymex crude is down to 50.625 here, with gold steady at 421, silver down to 7.10. HUI is up 3%, XAU +2.25%. QQQ has just broken above 36.40, now testing 36.45.

  Mark Davis   10/5/200,  12:33:18 PM
Stopped out of short play @ 1136.36, -1

  Linda Piazza   10/5/200,  12:32:18 PM
This time, the 100/130-ema's (five-minute) appear to be winning out over the Keltner resistance, supporting the OEX long enough for those resistance lines to separate and allow the OEX to rise toward the top of the descending regression channel rather than toward the bottom.

  Jeff Bailey   10/5/200,  12:30:08 PM
Chiron (CHIR) $37.40 -17.6% ... most active options are Oct. $37.50 puts (CIQ-VU) at 1,672 (oi 579) at $1.35, and Nov. $35 puts (CIQ-WG) 836 (oi 0) at $0.95.

  Jonathan Levinson   10/5/200,  12:27:53 PM
Make that +5.2% to 7.115 for Dec. silver.

  Mark Davis   10/5/200,  12:23:29 PM
The SPX 30-min chart shows we have barely flinched off the highs after ramping from 1101.29 to 1140.19. That's a +39 point rally and a -7 point retrace (18.6%). We could drop to 1125 and that would still only be a minimal 38.2% retrace. There's no other word to describe this action except bullish. Keep in mind also the previous double top @ 1131.50 which should now be strong support. Link

  Jonathan Levinson   10/5/200,  12:23:25 PM
Silver is breaking out here, up to a session high of 7.092, +4.86%.

  Jeff Bailey   10/5/200,  12:20:20 PM
Biotech HOLDRs (BBH) $145.07 -1.92% .... session low on CHIR was 144.00.

  Jonathan Levinson   10/5/200,  12:20:00 PM
QQQ 2-day chart update at this Link . First resistance at 36.40 in the crosshairs.

  Jeff Bailey   10/5/200,  12:19:23 PM
Biotech Index (BTK.X) 528.47 -1.44% .... did trade WEEKLY Pivot of 525.52 on CHIR release for trade.

  Jane Fox   10/5/200,  12:19:06 PM
Mt. St. Helen's is smoking again. WebCam here. Link

  Jonathan Levinson   10/5/200,  12:18:11 PM
Session high for gold at 421 here, euros and CDN dollar futures.

  Jeff Bailey   10/5/200,  12:16:39 PM
QQQ $36.32 +0.01% .....

  Jeff Bailey   10/5/200,  12:15:45 PM
Chiron (CHIR) $37.02 -18% .... released for trade alert

  Linda Piazza   10/5/200,  12:15:13 PM
Although some OEX Keltner evidence suggests a decline toward 543.80-544 (see my 11:59 post), the five-minute 100/130-ema's are at 544.67 and 544.25, respectively, so the OEX would have to push below them to drop to that Keltner target. This morning, the test of the five-minute 130-ema prompted the OEX's bounce, so the OEX is squeezed between possible strong resistance and possible strong support. That's what the tight descending regression channel has been telling us all along, though. There's no consensus.

  Jeff Bailey   10/5/200,  12:14:42 PM
Netease.com (NTES) $39.33 +0.58% ....

  Jeff Bailey   10/5/200,  12:14:18 PM
Paychex (PAYX) $30.98 +0.91% ....

  Jeff Bailey   10/5/200,  12:13:48 PM
JDS Uniphase (JDSU) $3.35 -1.64% ....

  Jeff Bailey   10/5/200,  12:13:27 PM
Taser Intl. (TASR) $38.74 -0.66% ....

  Jonathan Levinson   10/5/200,  12:12:09 PM
The good news for bears is that the short cycle upphase has been very weak. The potential bull flag is still in play, but it looks extended and uninspiring overall.

  Jeff Bailey   10/5/200,  12:07:15 PM
12:00 Internals at this Link

  Jim Brown   10/5/200,  12:05:56 PM
FR Board: Speech by Chairman Greenspan Link

  Jonathan Levinson   10/5/200,  12:03:17 PM
Another 20 minutes, another 2 cent change in price for QQQ.

  Linda Piazza   10/5/200,  11:59:35 AM
On some time intervals, OEX nearest Keltner resistance appears much stronger than support, suggesting that the OEX might decline toward 543.80-544.00.

  Mark Davis   10/5/200,  11:58:37 AM
Go short again... 1135.36 , stop 1136.36

  Jeff Bailey   10/5/200,  11:57:14 AM
Biotech HOLDRs (BBH) $144.51 -2.29% ... session low.

WEEKLY Pivot levels as follows .... 140.17, 143.51, Piv = 145.18 148.52, 150.19.

  Linda Piazza   10/5/200,  11:56:51 AM
The TRAN, SPX, OEX, NDX, and Nasdaq all remain inside their descending regression channels off yesterday's highs. The GSO currently tests the top of its channel, trying to break to the upside. The BIX appears to have done so already, and it's now again attempting to rise into a test of yesterday's high at 363.38, with the BIX currently at 363.12. The BIX hasn't yet been able to confirm that upside breakout with a move above yesterday's high, but it's attempting to form and confirm a continuation-form inverse H&S on that chart. The neckline has now risen just above yesterday's high and is at about 363.45.

  Jeff Bailey   10/5/200,  11:56:24 AM
QQQ $36.33 +0.04% .... I would have to think that any QQQ hedge against a CHIR decline is now fully implemented by market participants.

  Jeff Bailey   10/5/200,  11:52:25 AM
Chiron (CHIR) ... still halted ... company releases follow new item at this Link . Saying it will not release an flu vaccine this season (2004-2005).

  Jonathan Levinson   10/5/200,  11:47:18 AM
After an earlier pullback, HUI is up 1.35% at 228.82 with gold now up 2 at 417.60. Session high was 418.20. 414-418 is the current range.

  Jeff Bailey   10/5/200,  11:46:18 AM
Chiron (CHIR) .... CNBC reporting that company will hold a 02:00 PM EDT news conference. Stock will not open for trade until after 02:00 PM EDT.

  Jonathan Levinson   10/5/200,  11:46:08 AM
Nymex crude is steady near the highs at 50.725 currently. High print for the day was 51.

  Jeff Bailey   10/5/200,  11:42:56 AM
Chiron (CHIR) .... still halted

QQQ $36.32 +0.01% ....

  Jeff Bailey   10/5/200,  11:39:42 AM
11:00 Internals at this Link

  Linda Piazza   10/5/200,  11:37:34 AM
Is this a H&S building on the OEX's 10-minute chart? Link As Jane mentioned earlier on the Futures side of the Monitor, these aren't reliable for intraday trading, but they can help us to measure the strength or weakness of bulls and bears. We can watch now for a confirmation by a breakdown below the descending regression channel the OEX has been building off yesterday's high or we can watch for an invalidation of the formation by a move above the head level. For now, this somewhat argues against making too many bullish assumptions about the breakout direction of that descending regression channel.

  Jonathan Levinson   10/5/200,  11:35:59 AM
Back. The bull flag pattern I noted earlier is still in effect. If this an a-b-c up, it could constitute the right shoulder of a reverse head and shoulders pattern below either 36.40 or 36.45 necklines as illustated at this Link . However, a break below 36.25 will invalidate this pattern, and bulls will want to see an upper resistance break soon as the 60 min cycle downphase continues. My bias is for a downward break, but within the current range it can go either way.

  Jane Fox   10/5/200,  11:34:13 AM
Dateline WSJ - LONDON -- British health authorities blocked flu-vaccine shipments by the company that produces half the vaccine used in the U.S. just ahead of the flu season.

Chiron Corp.'s manufacturing license was suspended immediately for three months because of manufacturing problems, the Medicines and Healthcare products Regulatory Agency said. The Health Department didn't elaborate on the reason.

Chiron, which produces the Fluvirin vaccine, said earlier that factory tests revealed that some batches of vaccine failed sterility testing -- suggesting contamination -- and that all 50 million doses that the company was producing would be held up for additional tests.

Under the suspension -- which comes just ahead of the vaccine season in the U.S. -- the company won't be able to supply any influenza vaccines to any market, health officials said. Chiron is based in Emeryville, Calif., but manufactures the Fluvirin vaccine in the U.K., having acquired the product in its purchase of PowerJect Pharmaceuticals last year.

  Linda Piazza   10/5/200,  11:25:27 AM
Fifteen-minute OEX Keltner resistance appears to be firming near 545.80, pressuring the OEX downward, perhaps toward another test of the bottom of its descending regression channel. There's 15-minute support at 544.05, too.

  Linda Piazza   10/5/200,  11:22:48 AM
The Dow can't make it above the five-minute 100/130-ema's, with the 100-ema at 102.09. The TRAN, GSO, SPX, OEX, NDX, and Nasdaq still stay within their descending regression channels off yesterday's high. Although none have been able to break to the upside, they remain within the upper half of those channels. The BIX appears to have broken out, but can't confirm by remaining above yesterday's high. We just have to wait to see what develops. Charts are telling us that markets haven't decided yet, so you shouldn't be too wedded to any one opinion, either.

  Mark Davis   10/5/200,  11:22:40 AM
Let's just hope this keeps going now. We need to take out 1136.50 (just above the last swing high) before I'll feel comfortable with the long from 1133.50. I agonized over whether or not to widen the stops by one point on both, giving us a 4 point spread to bounce around in rather than just two points. I was still agonizing when we were stopped out.

  Mark Davis   10/5/200,  11:17:46 AM
Stopped out of short play @ 1135.63 and break even

  Linda Piazza   10/5/200,  11:10:17 AM
The BIX, however, appears to have broken through its descending regression channel off yesterday's high (see my 11:07 post) and then to have retested the channel and to be rising from that retest. The BIX has not been able to maintain values above yesterday's 363.38 high, however, with the BIX currently at 362.85.

  Jonathan Levinson   10/5/200,  11:08:06 AM
Session high for silver at 6.886, +1.82%. Nymex crude is up .80 at 50.70 currently. Now, dashing off for those 20 minutes.

  Linda Piazza   10/5/200,  11:07:34 AM
The SPX, OEX, NDX, Nasdaq, and TRAN all remain within their descending regression channels off yesterday's high, with no breakout either direction.

  Jeff Bailey   10/5/200,  11:07:22 AM
11:02 Market Watch at this Link

  Jonathan Levinson   10/5/200,  11:06:55 AM
QQQ is running gradually lower in what could be a bull flag, or a complex top intraday. The picture is muddled by the juxtaposition of the 30 and 60 min cycles, which continue to be opposed. 36.45 is immediate resistance, the level of the prior top.

  Linda Piazza   10/5/200,  11:06:06 AM
The TRAN is printing a number of red candles along the upper boundary of the descending regression channel off yesterday's high. Still no clear answer there: no breakthrough either direction.

  Linda Piazza   10/5/200,  11:02:26 AM
Perhaps we shouldn't be ignoring the GSO? Link Currently, the five-minute chart shows it still trading within the descending regression channel off yesterday's high. I wouldn't consider an upside breakout confirmed until there was also a breakout above yesterday's high. I have not checked to see which GSO components might be reporting soon, so this could be a pre-earnings runup or other earnings-related development. I'm using this only to help me gauge likely strength or weakness in the tech-related indices, and not as a trading vehicle. Even if the GSO should break above yesterday's high, it then faces round-number resistance at 150 and the 200-week sma at 152.09.

  Jonathan Levinson   10/5/200,  11:00:39 AM
Need to step away for a meeting - back in 20 minutes.

  Jeff Bailey   10/5/200,  10:54:08 AM
Chiron (CHIR) ... still halted.

QQQ $36.33 +0.04% ...

  Jeff Bailey   10/5/200,  10:53:09 AM
Texas Roadhouse (TXRH) $21.56 +23.2% ... IPO today. Couldn't get in the place Friday night as line was quite long.

  Mark Davis   10/5/200,  10:53:07 AM
Long @ 1133.50, stop 1133.50 and break even
Short @ 1135.63, lower stop to 1135.63 and break even
Two points isn't much of a range but a free trade is a free trade. TRIN is rising and the market looks weak here.

  Jonathan Levinson   10/5/200,  10:51:31 AM
Bonds have reversed to negative territory, TNX up .2 bps to 4.175%.

  Linda Piazza   10/5/200,  10:48:58 AM
Lately, the GSO has been a strong performer, helping to lead the tech-related indices higher. The GSO today tests its 200-sma, at 147.80 and with the GSO currently at 148.02, but caught within a descending regression channel that may or may not be a bull flag. Yesterday, the GSO pierced its 200-sma but fell back by the end of the day. Should we be watching the GSO in addition to the SOX, perhaps?

  Jonathan Levinson   10/5/200,  10:46:48 AM
A short cycle upphase has at last kicked off, and it has turned the 30 min cycle channel tentatively higher. So long as the 60 min channel continues to point south (which it should if QQQ stays below 36.52), 30 min cycle bulls should have a tough go of it.

  Linda Piazza   10/5/200,  10:45:31 AM
The SOX is also below its five-minute 100-ema, with that average at 405.66.

  Linda Piazza   10/5/200,  10:43:53 AM
I've been scanning charts of 5-minute 100/130-ema's and note that the Dow is the only major index that's below those averages. Most dipped to test this at this morning's lows and have risen above them again, but not far above. The tests looked almost like automatic dip-buying on tests of those averages. Now we have to see if the bounces hold and if the Dow can get back above those averages.

  Jeff Bailey   10/5/200,  10:42:19 AM
Day trade short alert for the QQQ $36.40 here, stop $36.56, target $36.05.

  Linda Piazza   10/5/200,  10:41:06 AM
The Russell 2000 hovers near the top of its descending regression channel off yesterday's high.

  Jonathan Levinson   10/5/200,  10:40:55 AM
QQQ 100-tick 2-day chart at this Link.

  Linda Piazza   10/5/200,  10:39:20 AM
The TRAN currently tests the top of its descending regression channel off yesterday's high. It hasn't broken out either direction. Many indices show these potential bull flags pulling back from resistance, but there's been no breakout either direction in the ones I've scanned, and the trend of the TRIN this morning doesn't particularly support the bullish case.

  Jonathan Levinson   10/5/200,  10:39:10 AM
QQQ is now finding support on declining 7200-tick SMA support at 36.34.

  Jeff Bailey   10/5/200,  10:35:57 AM
Chiron (CHIR) $45.42 Link .... has been halted since 08:53 AM EDT with news pending.

News is that Britain has suspended company's drug mfg. license

CHIR is a component of the NASDAQ-100 with 1% weighting.

  Mark Davis   10/5/200,  10:35:03 AM
Go short now @ 1135.63, stop 1136.63

  Jonathan Levinson   10/5/200,  10:34:49 AM
QQQ has cleared declining 7200-tick SMA support and is now working on 36.45 resistance. The huge volume instant buy candle drove price vertical, as the buyer again apparently "had to have it". This move has not turned up the 30 min cycle channel, but has widened it instead. Upper resistance has climbed to 36.50, with declining 60 min resistance at 36.57. The buy program that brought us this move was on 2.6M QQQ shares within a mere 100 ticks.

  Linda Piazza   10/5/200,  10:32:04 AM
The descending trendline off yesterday's OEX high is currently at about 546.25, and bears want to see the OEX find resistance there, while bulls want to see a breakout, confirmed by a move above yesterday's high. Current bulls need to have profit-protecting plans in place as the 200-sma, 9/13 high, and top of the long-term descending regression channel are approached, if there's such a breakout. The 200-sma is at 547.91 and the 9/13 high is at 548.52, with the descending regression channel a bit lower than both, depending on how QCharts takes it upon itself to draw it on any given day.

  Linda Piazza   10/5/200,  10:26:45 AM
OEX Keltner support has dropped lower now on the five-minute chart, down to 543.97. The OEX still struggles with its attempt to maintain five-minute closes above the Keltner line currently at 544.50. It's just produced a five-minute close above this line and the support looks strong enough to send the OEX higher over the short-term, but it looks as if the OEX could get stopped either by the Keltner line currently at 544.88 (with 15-minute closes below it) or by the resistance currently converging near 545.50-545.92 (with 15-minute closes beneath that).

  Mark Davis   10/5/200,  10:26:28 AM
stepping outside for a few...

  Linda Piazza   10/5/200,  10:23:11 AM
The Russell 2000 is currently bouncing from the bottom of its descending regression channel established off yesterday's high, rising up through that channel again. Top resistance is at about 589.60 now, with the Russell 2000 currently at 587.69.

  Jeff Bailey   10/5/200,  10:22:56 AM
10:20 Market Watch at this Link

  Mark Davis   10/5/200,  10:22:22 AM
Raise stop on long play to 1133.50 and break even

  Linda Piazza   10/5/200,  10:14:18 AM
GE, MER, and CSCO currently test their 200-week sma's, at 34.00, 50.53 and 18.94, respectively. GE has not been able to manage a weekly close above that average.

  Jonathan Levinson   10/5/200,  10:13:42 AM
J., do you have that number? Regards. Alex

Here's all the detail you could want: Link

  Jonathan Levinson   10/5/200,  10:11:14 AM
The current bounce started from 36.16, 2 cents above the start of 36.14 confluence. 36.25 is next weaker confluence resistance, the first challenge for short cycle bulls.

  Linda Piazza   10/5/200,  10:08:45 AM
The SOX bounces from 400, at 401.87 as I type.

  Mark Davis   10/5/200,  10:08:42 AM
Stopped out of short play @ 1133.50, +5
Now long @ 1133.50, stop 1131.50

  Linda Piazza   10/5/200,  10:08:10 AM
The advdec line continues lower.

  Mark Davis   10/5/200,  10:07:32 AM
Lower stop on short to 1133.50
Go long with a touch of 1133.50

  Linda Piazza   10/5/200,  10:07:26 AM
Without a quick reversal here, the OEX's five-minute Keltner channels suggest that the OEX could test the 541.80-ish level. The 15-minute chart shows one last hurdle to get through, however, with a needed 15-minute close beneath a Keltner line currently at 543.90, so that the quick reversal might yet be possible.

  Jeff Bailey   10/5/200,  10:07:09 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   10/5/200,  10:05:26 AM
The OEX again tests 544-544.25-ish Keltner support, still having difficulty maintaining five-minute closes above the Keltner line currently at 544.73. The OEX has not yet broken out of the descending regression channel off yesterday's high in either direction, however, although it currently tests the bottom support. Five-minute closes beneath the lines currently at 544.13 suggest a test of 542.50 if not 541.70. Bears should have profit-protecting plans in place as that support is tested, if it is.

  Mark Davis   10/5/200,  10:04:54 AM
Lower stop on short to 1134.50

  Jonathan Levinson   10/5/200,  10:03:45 AM
QQQ has so far generated one of those intraday double bottoms that the 'bots so love to buy. So far, however, volume is skewed to the sell side, and the short cycle upphase is a no show. Next significant test of support below current levels should be at 36.14.

  Jonathan Levinson   10/5/200,  10:01:20 AM

10:00 ET ISM Services 56.7 vs 59.0 consensus

  Linda Piazza   10/5/200,  10:00:48 AM
The SOX dropped back below one neckline version for its potential inverse H&S yesterday and then dropped further this morning, back to test 400 support and the 382-minute 100/130-ema's. That right shoulder level is now becoming a bit extended and the SOX needs to go ahead and confirm the formation or it may become invalid. Interestingly, though, the right shoulder itself is perhaps composing a new and smaller inverse H&S with the head at the 9/28 low. The completion of the right shoulder for this new formation would suggest a pullback toward 390-394.

  Jeff Bailey   10/5/200,  9:58:59 AM
VIX.X 13.77 +2.68% .... Daily Pivot levels as follows ... 12.82, 13.10, Piv = 13.27 13.55, 13.72.

  Jonathan Levinson   10/5/200,  9:56:41 AM
ISM due in 4 minutes, est. 59, prior 58.2.

  Jonathan Levinson   10/5/200,  9:54:40 AM
The Fed's open market desk has announced a 2.5B overnight repo, for a net 1.5B drain against the 4B expiring today.

  Jonathan Levinson   10/5/200,  9:54:07 AM
Gold is holding its 1.30 gain at 416.90, but HUI is up 1.09% to 228.25, XAU +.66 at 100.45.

  Linda Piazza   10/5/200,  9:53:49 AM
The TRAN bounced from the bottom of the descending regression channel it formed off yesterday's high, all the way back to the top of that channel, and now turns down again.

  Linda Piazza   10/5/200,  9:51:47 AM
OEX still tests 544-544.25-ish Keltner support. So far, it hasn't been able to produce five-minute closes above nearest Keltner resistance, at a line currently at 544.78, although it's tested that Keltner resistance a couple of times and has risen as high as 545.02. It may be attempting again now to test that 545.30-ish resistance level.

  Jonathan Levinson   10/5/200,  9:50:44 AM
QQQ is trying to bounce from a higher low above 36.20. The short cycles came close, but failed to kick off an upphase. If it holds, this higher low will help get it started. Don't forget the ISM data due at 10AM.

  Jonathan Levinson   10/5/200,  9:47:06 AM
There are 4B in overnight repos expiring today. We await the 10AM announcement with respect thereto.

  Mark Davis   10/5/200,  9:42:02 AM
Too late on that last post... out @ 1134.44, -0.56

  Linda Piazza   10/5/200,  9:39:59 AM
The OEX still isn't through testing that 544-544.25-ish Keltner support.

  Mark Davis   10/5/200,  9:39:50 AM
Exit long play with a touch of 1134.50

  Linda Piazza   10/5/200,  9:39:13 AM
I'm interested in seeing what Jonathan has to report today in reference to repos, with a debate tonight. Will an effort be made to make the markets a non-issue?

  Jeff Bailey   10/5/200,  9:38:57 AM
FileNet (FILE) $22.60 +18.2% Link ... higher after company said its new FileNet Records Manager suite has been certified compliant with the U.S. Department of Defense 5015.2-Standard for records management systems.

  Jonathan Levinson   10/5/200,  9:37:28 AM
7200-tick SMA resistance is just above at 36.40. A short cycle upphase is in the process of commencing here- a break above the 36.40 level for 3-5 minutes should be enough to do it.

  Linda Piazza   10/5/200,  9:36:14 AM
Keltner chart evidence, not always reliable this early during amateur hour, shows a possibility that the OEX will bounce from above 544, but then a possibility that it will find resistance at 545.30 or so. Bounce began as I typed.

  Mark Davis   10/5/200,  9:34:33 AM
Lower stop on short play to 1135.50

  Linda Piazza   10/5/200,  9:34:04 AM
The TRAN is now headed down through a possible bull flag, currently testing the flag's bottom support.

  Jonathan Levinson   10/5/200,  9:32:52 AM
Session high for ZN bond futures are 112.3438, TNX -.5 bps to 4.166%. QQQ made a cash-session high of 36.29 at the same time.

  Linda Piazza   10/5/200,  9:32:28 AM
The OEX tries to steady at that massed 544-544.25-ish Keltner support, but the OEX looks as if it's not through testing it, and as if the final outcome hasn't yet been decided.

  Jonathan Levinson   10/5/200,  9:30:45 AM
QQV just spiked to sub-15 for a few seconds, currently down 2.34% at 17.96.

  Tab Gilles   10/5/200,  9:29:58 AM
Here's a look at divergences on the VIX & SPX. Link

  Mark Davis   10/5/200,  9:27:54 AM
Good morning...
Here are the trades we held overnight
long @ 1135.00, stop 1134.00
short @ 1138.50, stop 1138.50 and break even

  Linda Piazza   10/5/200,  9:22:31 AM
If you opened a bearish OEX position as the OEX tested and then fell back from the 200-sma yesterday and then carried that position overnight, AMD's warning and rising crude prices may give you a helping hand today, although that's still to be proven. Be careful of making any strong assumptions ahead of the ISM number, however, particularly as futures have emulated the Nikkei and zoomed around during overnight trading. The cash open could do the same. I'm not being ambiguous here, but offering a warning based on overnight action.

As the OEX ended the day yesterday, it looked to be settling on Keltner support just above 544. If that support holds at the open and the OEX begins a bounce, bears want to see the descending trendline off yesterday's morning's high hold as resistance. If the OEX should gap below that 544-544.25-ish support this morning and produce a five-minute close beneath it, watch for a possible test of the 542.50-543 level. Bears should be sure to have profit-protecting measures in place as that level is tested, as it could have strong bounce potential. The Nikkei's performance last night offers a warning to bulls and bears alike, as the Nikkei zoomed around all night.

If you carried a bullish position overnight, your risk tolerance of course relates to your trading style, your account size, and to the point at which you entered such a trade. I suggested late yesterday that those who might have entered near the open yesterday give serious consideration to closing out their positions due to the possible reversal signal being produced, but that those who had entered at a much lower level might have more wiggle room and should make decisions based on their risk tolerance. Bullish traders want to see that 544-544.25-ish support hold, but those who entered in the 530-534 area and especially those who plan longer-range holds might have more risk tolerance. Those traders might watch for a retest of the descending trendline off the 9/13 high, with that descending trendline now at about 542.45, depending on how it's drawn. It's that retest, if it occurs, that's going to tell us about strength or weakness, so I'm not going to make a prediction about what the OEX is going to do ahead of such a retest, but will wait to see how the breadth and other indicators shake out this morning.

  Jonathan Levinson   10/5/200,  9:15:15 AM
Nymex crude has stabilized at 50.75 for the time being. The session high printed at 50.95.

  Jonathan Levinson   10/5/200,  9:13:21 AM
The 60 and 30 min cycles are in a synchronous downphase for NQ futures (premarket QQQ proxy). 30 min channel support is down to 36.18, while 60 min channel support is just above it, lined up with the current price at 36.22. If QQQ doesn bounce above 36.35 within the 1st 15 minutes of trading, we should see those downphases steepen considerably. Next major confluence support is at 36.14. Neither the 30 nor 60 min cycle oscillators are oversold yet.

  Linda Piazza   10/5/200,  9:08:30 AM
Since my 7:00 post, European markets have turned lower, with the CAC 40 in negative territory and the DAX diving, now more than 43 points off its high of the day and only 1.96 points above the flat-line level.

  Jonathan Levinson   10/5/200,  9:00:36 AM
Nymex crude is up to 50.925 here, +2.05%. Gold is up 1.50 to 417.50, as Russell2K futures make a session low- NQ joining in as I type.

  Jonathan Levinson   10/5/200,  8:31:37 AM
Session high for Nymex crude oil here at 50.65, +1.5%. Bonds remain lightly negative, TNX +.6 bps at 4.179%. QQQ is now down .03 at 36.28.

  Jonathan Levinson   10/5/200,  8:10:56 AM
We await ISM services for Sept. at 10AM, est. 59.

  Jonathan Levinson   10/5/200,  7:57:29 AM
Equities are higher, ES trading 1136.75, NQ 1466, YM 10218 and QQQ +.02 at 36.33. Gold is up .70 to 416.30, silver +.02 to 6.79, ten year notes down .03 at 112.23 and Nymex crude +.675 to 50.575.

  Linda Piazza   10/5/200,  7:00:05 AM
Good morning. Last night, the Nikkei chopped around mostly in negative territory but eked out a small gain at the last minute. AMD's warning pressured semi-related companies in Asia and may be capping some tech gains in Europe, where gains are characterized as being led by defensive stocks and chemical stocks. Despite economic numbers that disappointed and crude priced over $50.00 again, European stocks all traded in the green as this report was prepared. As of 6:57 EST, gold was up $0.30 and crude up $0.49 to $50.40. More detail about Asian and European markets follows in the succeeding paragraphs.

The Nikkei spent Tuesday zigging and zagging, trying to maintain positive values, but able to maintain those positive values for only a few minutes at a time. In the last few minutes of trading, the Nikkei managed a climb 2.20 points or 0.02% into positive territory, closing at 11,281.83.

AMD's warning that third-quarter results would not match the second quarter's sent chip stocks lower across Asia. Nintendo missed its forecast. Honda Motor Company, Toyota Motor Corp, and Nissan Motor Company will cooperatively develop software that operates electronics parts for autos.

Other Asian markets turned in mixed performances. The Taiwan Weighted gained 0.05%, and South Korea's Kospi gained 0.45%. Singapore's Straits Times lost 0.11%. Hong Kong's Hutchison Whampoa's mobile unit, Hutchison Telecommunications, has for the second time in two weeks lowered share prices for its IPO. The Hang Seng lost 0.21%. China's Shanghai Composite remains closed for a holiday.

Currently, all European bourses trade in positive territory, although many began in negative territory. In Germany, September's number of unemployed rose more than expected, suggesting that the unemployment rate will also rise more than had been previously expected. The U.K.'s and eurozone's September services PMI dropped from the previous month's, although both remained above 50. In the U.K., oil majors gained as oil prices rose above $50.00 again in the overnight market. A U.K. energy regulator warns that winter gas supplies have fallen below expected supply, cautioning that more expensive supplies will be needed to augment inventories. European chip stocks have shown uneven performances after AMD's warning.

In stock-specific news, Roche eased lower after unit Genentech admitted being subpoenaed in an investigation into its promotion of Rituxan for treatment for non-Hodgkin's lymphoma. Credit Suisse gained after it reportedly sought offers for its Winterthur insurance unit. An Adidas-Saloman executive called for apparel industry companies to raise prices, while giving an encouraging talk about the company's prospects.

As of 6:57 EST, the FTSE 100 was up 30.30 points or 0.65%, to 4,712.10. The CAC 40 was up 5.15 points or 0.14%, to 3,772.21. The DAX was up 32.23 points or 0.80%, to 4,065.51.

  OI Technical Staff   10/4/200,  11:54:15 PM
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