Option Investor
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  Jeff Bailey   12/3/200,  8:11:57 PM
Pivot Matrix for next week at this Link

  Jeff Bailey   12/3/200,  7:04:55 PM
Last 3 weeks pivot matrix at this Link

  Jeff Bailey   12/3/200,  5:43:04 PM
Fascinating interview on CNBC ... Chicago Mercantile looking to possible list a "housing futures" market. You can buy or sell futures on housing. Incredible!

Why didn't I think of that?

  Jeff Bailey   12/3/200,  5:29:44 PM
Closing Internals at this Link

  Jeff Bailey   12/3/200,  4:51:06 PM
U.S. Market Watch at this Link Benchmarking November nonfarm payrolls.

  Jonathan Levinson   12/3/200,  4:14:04 PM
Amazing action. They waited for the cash close. Upside fakeout then apex whipsaw.

  Jeff Bailey   12/3/200,  4:11:38 PM
That sounds good James (03:51:48) ... Morgan Stanley (MWD) looks ready to break out above $54.

  Jeff Bailey   12/3/200,  4:10:29 PM
Current OPEN MM Profiles at this Link

Today's activity ....

No new positions were opened today.

Today's CLOSED trades, as well as this week's trade blotter at this Link

  Linda Piazza   12/3/200,  3:59:43 PM
The OEX likely will end the day positive, but with a small-bodied candle below a long upper shadow. That shadow pierced the November high, but fell back below it again. Daily oscillators flatten, not giving any cluees as to next direction. This felt more bearish than it was, I think, though.

  James Brown   12/3/200,  3:51:48 PM
Lehman Brothers (LEH) looks poised to breakout over resistance in the $85.00-85.50 range.

  Linda Piazza   12/3/200,  3:48:57 PM
The TRAN moves toward the top of its descending regression channel again, with the top of that channel currently at about 3727.60 and with the TRAN now at 3725.89.

  James Brown   12/3/200,  3:47:33 PM
Pfizer (PFE) has been declining for months and shares just failed again near the top of its descending channel at the 50-dma.

  Linda Piazza   12/3/200,  3:35:49 PM
So the view of the OEX's tightening range as a bullish right triangle does hold true and the OEX bumps up, but hold on. On days like these, one formation often morphs into another one, and this could be just broadening into a flag, in this case, a probable bear flag, but that's still to be proven. A zoom up will refute the whole flag idea, of course.

  Jonathan Levinson   12/3/200,  3:33:49 PM
Volume rose on QQQQ's break of 40.22, but it wasn't huge- 40.28 has just held as resistance, and that's the test for bulls right here. If they fail, I'd expect one of those apex reversals we've seen so many times this year. Look for a directional break above 40.28 or below 40.18.

  Linda Piazza   12/3/200,  3:26:36 PM
As Jim mentioned earlier on the futures side, ranges are narrowing. As the OEX's range narrows, it's taking on a bit of a bullish right triangle look (flattish top, rising bottom supporting trendline), but I can't emphasize enough how little I trust the action today. While that formation looks a bit like a bullish right triangle, for example, Keltner resistance appears to be strengthening on the five-minute chart, while mid-channel Keltner support is still beneath the OEX on the seven-minute one.

  Jonathan Levinson   12/3/200,  3:19:29 PM
QQQQ has simply flat lined in the apex of the wedge/pennant/triangle between 40.22 and 40.16. Unless there's a surge in volume in the next few minutes, the price is going to simply drift through the upper line- most likely invalidating the pattern. A high volume pop above either 40.22 or 40.28 will be a breakout.

  Linda Piazza   12/3/200,  3:18:03 PM
Yep. Grin. (See Jeff's 15:16 post.) Fortunately, I also had an automatic profit target set, so I got taken out for a profit before the big spike up, too. Waited for it to hit a Fib target, followed it down again. I just get chicken with currencies, especially as I'm relatively new to them, and cut my gains too quickly.

  Jeff Bailey   12/3/200,  3:16:09 PM
How'd you do after the nonfarm Linda? Were you in there hammering the dollar?

  Jeff Bailey   12/3/200,  3:14:37 PM
03:00 Internals at this Link

  James Brown   12/3/200,  3:12:22 PM
No weakness in software maker Adobe Systems (ADBE) which is up another 1.25% to $63 and hitting new four-year highs.

  James Brown   12/3/200,  3:10:14 PM
semiconductor equipment maker AMAT has been able to push through its exponential 200-dma but is still struggling with resistance at $18.00 and its simple 200-dma.

  Linda Piazza   12/3/200,  3:08:51 PM
The OEX still marches straight out sideways, between support and resistance.

  Linda Piazza   12/3/200,  3:04:11 PM
Currencies, Jeff. USD/JPY, GBP/USD. Since 4:00 this morning.

  Jeff Bailey   12/3/200,  3:03:48 PM
What have you been trading Linda? Tech, retail, transport, banks, oil, gold?

  Jeff Bailey   12/3/200,  3:02:42 PM
03:00 Market Watch at this Link with 1-year highs.

  Linda Piazza   12/3/200,  3:01:49 PM
The TRAN is near the midline of that descending regression channel, between Keltner support and Keltner resistance, not doing much of anything. It's certainly not breaking to the upside or confirming in the inverse H&S, although it hasn't dropped below the right-shoulder level.

  Linda Piazza   12/3/200,  2:59:05 PM
Not me, today, Jeff. (See Jeff's 14:56 post.) I've been trying some in-and-out plays today (not OEX), about even for the day and flat right now.

  Jeff Bailey   12/3/200,  2:56:49 PM
Are you worried Linda?

  Linda Piazza   12/3/200,  2:54:24 PM
Earlier I joked that I had thought it possible that the OEX would be pinned between Keltner support and historical resistance into the end of the day, but then had realized how much day was left. There's not as much day left now, and the OEX is still pinned. Bulls have to be getting worried, though.

  Jonathan Levinson   12/3/200,  2:53:51 PM
Euros continue to charge higher, now 1.3461 at an eye-popping 1.45% gain. That's not much in terms of equities or even bonds, but moves of this magnitude are rare in the huge forex markets. US equities don't seem to know what to make of it, another sign that the intermarket relationships are in flux.

  Linda Piazza   12/3/200,  2:50:22 PM
The BIX attempts another breakout above the bullish falling wedge. Resistance still looks firm near 375.25-375.40, with other resistance near 374.15-374.40 trying to firm.

  Jonathan Levinson   12/3/200,  2:45:40 PM
Session high for euro futures here, up 1.42% to 1.3458.

  Jeff Bailey   12/3/200,  2:41:48 PM
January Crude Oil (cl05f) ... updated 10-minute interval just captured, with my conventional (blue) and fittend 38.2 (pink) at this Link

Until a settlement above $43.60 is found, buyers will be very hesitant. Sellers should be eager at $46.20 for another drive lower to $40.90.

  James Brown   12/3/200,  2:38:47 PM
OI call play QCOM hit our initial profit target at $44.50 this morning. Readers may want to strongly consider doing some profit taking.

  Jonathan Levinson   12/3/200,  2:38:15 PM
QQQQ is testing the lower rising intraday support line at 40.14 for the 4th time today. A break below should hit the session low quickly at 40.08, below which the bears will hopefully be sufficiently emboldened to test yesterday's low.

  James Brown   12/3/200,  2:37:00 PM
News out that IBM plans to exit the maturing personal computer industry has sent the stock higher today. OI call play IBM is up 1.77% to $97.35 and breaking out from its three-week trading range.

This is noteworthy because it puts IBM within striking distance of our $99-100 target and it meets the bullish P&F chart vertical target.

  Linda Piazza   12/3/200,  2:33:20 PM
The BIX attempted the smallest possible upside break out of its bullish falling wedge, but currently sinks back. The current candle's five-minute period has not even closed yet, so anything is possible, and it looks as if the BIX would likely find resistance near 375.50 if it does bounce.

  Jeff Bailey   12/3/200,  2:27:19 PM
Jeff: I'm not asking for stock picking advice altho this may sound like it, but I'm trying to use your recent post. If MMM is a DJ proxy and if I believe there will be an upside, would selling an APR70 put (.65) and buying an APR90 call (.30) be a play consistent with that view Thanks Don

Yes... that is a bullish option strategy on MMM and I'm bullish on MMM.

  Jonathan Levinson   12/3/200,  2:26:33 PM
QQQQ is really coiled up here. The range has narrowed a little further, with the apex now 40.14-40.25-6.

  Jonathan Levinson   12/3/200,  2:24:05 PM
Session high for silver, gold 10 cents off its high, and QQQQ is coming in for a test of lower rising pennant/almost-triangle support.

  Linda Piazza   12/3/200,  2:22:58 PM
The BIX has not broken through that potential bullish falling wedge to the upside or any side. It's still within the formation, currently below the 10-dma and headed down.

  Jeff Bailey   12/3/200,  2:22:50 PM
02:00 Internals at this Link

  Linda Piazza   12/3/200,  2:22:07 PM
The TRAN is beginning a potential rollover from the top of its descending regression channel, a potential bull flag. It did not break through the top of that flag nor did it confirm its potential inverse H&S, at least not yet. It's forming a small symmetrical triangle on its five-minute chart over the last hour and a half.

  Linda Piazza   12/3/200,  2:18:33 PM
The OEX did bounce from the mid-channel support on the seven-minute chart. It's bouncing up again to test the important five-minute 100/130-ema's, with those averages at 567.16 and 566.86, respectively. The OEX is currently between the two. The ascending trendline that had tracked those averages and had also formed the supposed neckline for a series of H&S's that tried to form is now a little higher than those averages, at about 564.35, so it wouldn't be unusual to see the OEX pop a little higher than those averages to test that trendline. Next Keltner resistance extends up to about 567.58. Basically, the OEX is oscillating now between support near 566 and resistance near 567.

  Jonathan Levinson   12/3/200,  2:10:53 PM
Current pennant... or descending triangle for QQQQ Link . A breakout or -down is imminent betweeen 40.27 and 40.14 as I've drawn the trendlines.

  Jim Brown   12/3/200,  2:08:16 PM
Bloomberg now reporting the Supreme Court evacuation was a false alarm.

  Jim Brown   12/3/200,  2:05:01 PM
Alert - Report on the wires saying the U.S. Supreme Court building in Washington being evacuated.

  Linda Piazza   12/3/200,  1:59:59 PM
The BIX's decline on the five-minute chart looks a little like a bullish falling wedge. I've watched some other presumably bullish falling wedges break to the downside today, so we can't go on the formation's shape alone with this any more than we can with anything else without waiting for price confirmation, but that's what it looks like now. Due to today's market behavior, I'm wondering if this current test of the 10-dma might prompt an upside bounce attempt out of the bullish falling wedge, but I'm also wondering whether such a bounce would get far.

  Linda Piazza   12/3/200,  1:48:43 PM
Careful, bears. Curiously enough, the TRAN is actually rather near the top of that descending regression channel (possible bull flag) I mentioned earlier, and it's got a nicely formed potential inverse H&S that's not yet confirmed, but will be on a push up out of that channel. I don't much trust continuation-form inverse H&S as you've heard me say often, but this shouldn't be ignored, either, as the TRAN sometimes leads other indices. A confirmation of that inverse H&S and a move out of the descending regression channel to the upside could signal more optimism returning.

  Linda Piazza   12/3/200,  1:43:53 PM
The OEX has moved back down to test the mid-channel Keltner resistance on the seven-minute chart. I was about to write that with so little time left in the trading day, the OEX might be held between that support and the resistance of the five-minute 100/130-ema's, but wait! There's a lot of time left in the trading day. That support has softened a bit from my earlier post, but still looks as if it might be good for a try at a bounce, anyway, if not much of a bounce.

  Jane Fox   12/3/200,  1:36:35 PM
Here is a little recursive thinking - do you think the NASDAQ will add the QQQQ to the NDX 100?

  Jonathan Levinson   12/3/200,  1:34:32 PM
The failure to break above 40.28 QQQQ makes a 3rd failure below the descending intraday resistance line from the 10AM high.

  Linda Piazza   12/3/200,  1:32:14 PM
The OEX's bounce after the confirmation of the latest H&S-ish formation came via the mid-channel support on the seven-minute Keltner channels, with that support firming up again near 566.50 and then again at 565.95. That support looks firmer than nearby resistance, so the OEX may not yet be through testing that resistance.

  Jonathan Levinson   12/3/200,  1:22:52 PM
Third that, Linda.

  Jeff Bailey   12/3/200,  1:20:56 PM
01:00 Internals at this Link

  Linda Piazza   12/3/200,  1:17:37 PM
The OEX tests that neckline and the five-minute 100/130-ema's once again, from the underside this time, with those averages at 567.29 and 566.89, respectively. As Jane just said on the Futures side, what a day! I feel as if I've been running sprints all day.

  Jonathan Levinson   12/3/200,  1:16:01 PM
QQQ is bungeeing back up to the 40.28 confluence zone. Look for a directional move out of the 40.18-.28 range.

  Jeff Bailey   12/3/200,  1:15:31 PM
VIX.X 12.92 -0.46% ... did just trade WEEKLY Pivot of 13.02.

DAILY R1 12.99. Much above here, could see option-related trade drive the major averages.

I've got to get the 01:00 Update out, but traders might want to view option chains for any unusual action.

  Jonathan Levinson   12/3/200,  1:12:25 PM
Gold continues to climb as QQQ loses 40.20 here.

  Linda Piazza   12/3/200,  1:10:41 PM
Moves are sudden today and still difficult to trade, but the OEX has still confirmed the latest H&S-ish formation (head at today's high, left shoulder at yesterday's right shoulder, right shoulder at today's lower high), come back to test it, and then rolled down again. The downside target should be about 563, depending on where you draw the neckline, but prepared to look like someone from the movie "The Exorcist" if you want to trade today. Your neck is not only going to be whipsawed; it's going to be dislocated.

  Jonathan Levinson   12/3/200,  1:08:08 PM
A new session high for gold here at 458, breaking yesterday's high, and euros just peaked as well at 1.3444. HUI is up 1.55%, XAU up 1.99%, retracing half of yesterday's loss. QQQQ is trying to bounce, not yet letting go of 40.20 support.

  Jeff Bailey   12/3/200,  1:05:52 PM
01:00 Market Watch at this Link

  Jeff Bailey   12/3/200,  1:01:48 PM
Sell Program Premium ... SPX 1,188.29, QQQQ $40.14 (close to $40.11), BIX.X 373.43

  Linda Piazza   12/3/200,  1:00:44 PM
The OEX just gapped below the five-minute 100/130-ema's.

  Jonathan Levinson   12/3/200,  1:00:31 PM
QQQ testing 40.20 now. Volume has picked up- QQQ breaking 40.20 as I type.

  Jeff Bailey   12/3/200,  12:57:04 PM
Pfizer (PFE) $27.98 -1.65% ....

Forest Labs (FRX) $40.25 +0.29% ....

  Linda Piazza   12/3/200,  12:53:46 PM
The OEX tests the necklines for all those H&S's that had been forming, as well as the five-minute 100/130-ema's. It did not bounce from 568, as I had thought it might, but it's attempting a reflexive bounce from the 100-ema as I type.

  Jeff Bailey   12/3/200,  12:52:19 PM
3M (MMM) $81.11 +1.48% ... I've fine tuned by fitted 38.2% to mark that 11/22/04 close of $82.68. I like the way this chart has some historical, yet current significance. Here's the chart with further bias arrows. Link

This stock replaces IBM as my "key stock" for the INDU and SPX/OEX

  Jim Brown   12/3/200,  12:52:19 PM
Explosions being reported in Madrid Spain. A terrorist group threatened bombings this morning and it appears they are following through with their threats. Multiple explosions at multiple locations.

  Jonathan Levinson   12/3/200,  12:43:16 PM
A breakdown below 40.28 will be confirm below 40.20, and should see a quick run from there to the session low, just below 40.10 confluence. The short cycles are on the cusp of a rollover here.

  Linda Piazza   12/3/200,  12:39:12 PM
The OEX keels slowly over, but in a way that I don't quite trust. I wouldn't be surprised to see it find support somewhere near 568, at least temporarily.

  Jonathan Levinson   12/3/200,  12:34:34 PM
Session high for February gold here, up 2.80 at 455.30.

  Jeff Bailey   12/3/200,  12:34:27 PM
Excellent comment from CNBC interview with commodity futures trader when he said .... "traders don't go from long to neutral, they go from long to short." Trader was talking about oil traders.

This is one reason why commodity prices can have very big moves and must be managed/monitored very, very closely.

  Jeff Bailey   12/3/200,  12:22:09 PM
Bullish swing trade raise stop alert ... for the SIRI March $5.00 calls (QXO-CA) to $2.15.

Here's an updated conventional (blue) and fitted 38.2% (pink) at this Link

  Linda Piazza   12/3/200,  12:18:58 PM
Whatever the OEX's particular consolidation pattern might be, MACD has flattened on the 15-minute and under charts, as happens during consolidation so as to keep up as clueless as possible as to ultimate direction. Be careful about making assumptions about that ultimate direction.

  Jeff Bailey   12/3/200,  12:10:24 PM
12:00 Internals at this Link

  Linda Piazza   12/3/200,  12:04:04 PM
I had mentioned earlier today that the BIX was approaching its 10-dma, and it appears that its bounce bean from near that average.

  Jeff Bailey   12/3/200,  12:02:28 PM
12:00 Market Watch at this Link

  Linda Piazza   12/3/200,  11:58:30 AM
I don't have a name for the current consolidation pattern on the OEX or a strong forecast for how it will be resolved. On a five-minute chart it looks vaguely diamond shaped, but when looked at with a closer viewpoint, it's just a lot of churning around within a tight range.

  Jonathan Levinson   12/3/200,  11:53:24 AM
Bonds continue their steep rally, with TNX holding below 4.26% support-turned-resistance at 4.25%, -14.5 bps (a 3.3% drop today). Next support is in the 4.14%-4.16% range.

  Linda Piazza   12/3/200,  11:44:39 AM
The TRAN and BIX both find resistance where Keltner charts suggested they would, but neither is retreating from that resistance. Rather, they're continuing to challenge it.

  Jonathan Levinson   12/3/200,  11:35:55 AM
Gold has recovered its losses and it now up 20 cents at 452.70, on solid volume of 1618 contracts. However, it's got a long way to go to make it to yesterday's nearly 5000 contracts traded. A weak or sideways bounce on light volume will suggest that the bounce is corrective, particularly below today's so-far lower low.

  Jonathan Levinson   12/3/200,  11:29:44 AM
Back, with the dismayed observation that banks have a wide, undeserved reputation for competence.

QQQQ continues to drift, and this drift is compressing the cycle channels back to more normal levels after this morning's expansion. 30 and 60 min channel support are up to 40.00, resistance down to 40.58-.65. 40.10-40.40 is the key confluence range, with the short cycles currently drifting at along the midpoint. A break above 40.40 or below 40.10 should be directional, but I'll be watching the volume closely.

  Linda Piazza   12/3/200,  11:29:06 AM
The TRAN's five-minute pattern has now firmed up into a descending regression channel. Such a regression channel coming after a sharp climb should be considered a likely bull flag. I had been mentioning over the last couple of days as the TRAN approached that May 1999 high, the high just before the steep fall into the bear market decline, that I expected the TRAN to pull back either just before or just after touching that previous high, and it pulled back before. So, although the TRAN's action was not corroborating the climb we were seeing in other indices just after the open, it is nevertheless not particularly bearish at this point. A steep fall out of that channel or a decline that's too deep would be less bullish, of course. In fact, the TRAN is approaching the 38.2% retracement of its climb since its last breakout from a consolidation pattern, Wednesday morning, with that retracement at about 3713. The TRAN pierced that level this morning, but then bounced above it. The 50% retracement is at about 3702, and bulls would like to see an upside break of the TRAN's regression channel before the TRAN retraces deeper than that.

The BIX's decline looks completely different, and it's difficult to put a potentially bullish spin on it just yet.

  Jeff Bailey   12/3/200,  11:18:21 AM
Buy Program Premium ... SPX 1,193.81, QQQQ $40.37, BIX.X 375.06.

  Jeff Bailey   12/3/200,  11:09:45 AM
11:00 Market Watch at this Link

  Linda Piazza   12/3/200,  11:09:15 AM
The OEX rises again, again without first settling into a consolidation pattern, but again rising from the five-minute 100/130-ema's, or from a little above them this time. If you're in this, I hope your scalping skills are good, because you need a quick trigger finger to keep from getting whipsawed out of formerly profitable plays.

  Linda Piazza   12/3/200,  11:03:05 AM
The BIX also bounces, but its bounce is tepid so far. It's likely to find resistance at 574.55 or 575, if not lower, on this bounce, although it may again find support near 574 and attempt another bounce.

  Jeff Bailey   12/3/200,  11:02:25 AM
I think this sharp move in Treasuries, will have equities a bit uncertain right now.

BIX.X 374.39 -0.77% ... not sure what's going on, and bulls probably taking some profits. Good for loan generation, but a 13.4 bp move in the 10-year will squeeze the margins a bit.

  Linda Piazza   12/3/200,  10:57:07 AM
The TRAN is bouncing, but likely to find resistance now near 3722-3725.

  Linda Piazza   12/3/200,  10:51:37 AM
For those who don't read the Futures side, too, and might not follow Jane's commentary on market internals, TRIN is at 1.18, down from the day's high and dropping as I type, but still near the highs from this week.

  Jeff Bailey   12/3/200,  10:45:35 AM
Swing trade bullish call exit alert ... Selling the gwo (2) JUPM May $20 calls (EU-UED) at the bid of $2.80.

JUPM $18.91 -0.10% Link

Didn't really like seeing this one's fall to $16.00, and most likely stalls for a couple of weeks on this rally back into some near-term overhead supply.

Shorts have been building past couple of months, and may be good bullish trader for a squeeze if it can trade $20.

  Jonathan Levinson   12/3/200,  10:45:05 AM
Stepping away for 30 minute here.

  Jeff Bailey   12/3/200,  10:43:20 AM
S&P Banks Index (BIX.X) 373.68 -0.96% ...

  Linda Piazza   12/3/200,  10:41:46 AM
We've seen a lot of zooming around now, and now I'd like to see that carry-through in volatility from the pre-market period settle down and set up some kind of formation that we can watch. The BIX still shows a serious decline seriously, now approaching its 10-dma and the TRAN is doing a fair approximation of the beginning of the third candle for an evening-star formation. These developments this morning haven't encouraged me to put much faith in the long side.

  Jonathan Levinson   12/3/200,  10:38:41 AM
Session high for ten year note shere at 112.3438, with TNX down 3.18% or 14.2 bps at 4.255%.

  Jeff Bailey   12/3/200,  10:37:57 AM
Current OPEN MM Profiles at this Link

  Jonathan Levinson   12/3/200,  10:36:13 AM
QQQ bounced from 40.18, currently up to 40.25. 7200-tick SMA resistance appears to have topped at 40.40 currently, and because it lines up with intraday confluence, I expect that level to hold as resistance should this bounce test it. A short cycle downphase has kicked off.

  Linda Piazza   12/3/200,  10:32:17 AM
That failure to maintain the breakout signal on the OEX's 15-minute chart was telling. Once again, the OEX falls straight toward its five-minute 100/130-ema's, with those averages at 566.61 and 566.14, respectively. I hope you all had your stops in place, with ample time to consider ahead of time where you wanted to place those stops. Both the TRAN and the BIX were warning that the underpinnings were not as strong as we hoped with the rise in the markets. Their lack of participation worried me on behalf of bulls and that worry appeared to be well founded . . . unless there's another bounce from those averages. Bears and bulls both have probably been whipsawed today.

  Jeff Bailey   12/3/200,  10:30:45 AM
Chicago Mer. (CME) ... $209.60 -0.03% ... should be stopped out of the put.

  Jonathan Levinson   12/3/200,  10:26:16 AM
Here's the test of 40.20 QQQQ.

  Jeff Bailey   12/3/200,  10:26:06 AM
Sell Program Premium SPX 1,191.56 , QQQQ $40.22

  Jeff Bailey   12/3/200,  10:24:59 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

  Jeff Bailey   12/3/200,  10:22:17 AM
VIX.X 12.61 -2.85% .... DAILY Pivot levels ... 12.57, 12.70, Piv=12.86, 12.99, 13.14

  Jonathan Levinson   12/3/200,  10:20:23 AM
40.40 QQQQ has just let go, and the steep drop targets 40.20 confluence support.

  Jeff Bailey   12/3/200,  10:19:07 AM
S&P Banks (BIX.X) 375.44 -0.50% ....

  Jeff Bailey   12/3/200,  10:17:22 AM
Sell Program Premium ... SPX 1,193.39, QQQQ $40.36

  Linda Piazza   12/3/200,  10:16:35 AM
The OEX closed that last 15-minute period below the breakout zone after having pierced it, leaving a long upper shadow on that candle. This isn't necessarily the kiss of death to the climb, but I'm worried about several underpinnings to the market, as I've noted in previous posts. The OEX maintains a breakout signal on shorter interval charts, but be careful.

  Linda Piazza   12/3/200,  10:13:56 AM
Careful, OEX bulls. The OEX pierced the 15-minute Keltner channel's upper resistance but now threatens to close this 15-minute period below it, leaving a long upper shadow behind. That line is currently at 569.83, with the OEX at 569.87 as I type. Continue to follow the OEX higher with your stops.

  Jonathan Levinson   12/3/200,  10:13:45 AM
Session low for gold here at 449.80, with HUI down 1.09% and Nymex crude -2.31% at 42.25.

  Linda Piazza   12/3/200,  10:10:55 AM
TRIN dropped, taking away one worry for market bulls. Now the TRAN needs to break to the upside, as this has been one of the indicator indices that has often led other markets higher. The BIX's action, too, is troubling for OEX bulls in particular. I don't like this with the BIX negative for the day. Of course, while I don't like all these things, the OEX keeps chugging higher.

  Linda Piazza   12/3/200,  10:07:04 AM
The TRAN still consolidates beneath yesterday's high. It's forming a rectangular consolidation pattern and is approaching the top of that formation as I type but it hasn't broken through to the upside.

  Jeff Bailey   12/3/200,  10:06:33 AM
Bearish swing trade put stop alert .... CME $112

CME Jan. $200 Puts (CMJ-MT) bid $7.10

  Jonathan Levinson   12/3/200,  10:05:39 AM
A 3.5B 6-day repo results in a 2.75B net drain for the day from the Fed's open market desk.

  Jeff Bailey   12/3/200,  10:04:41 AM
10:00 Market Watch at this Link

  Jonathan Levinson   12/3/200,  10:04:17 AM
Back. 60 min channel resistance is rising with the price and is up to 40.60, while 30 min resistance has held at 40.70. I expect the going to get tougher for the bulls here, but if the price can hold even flat at these levels, then the 30 min channel will begin to turn up as well and the new 30 min cycle upphase will confirm.

  Linda Piazza   12/3/200,  10:04:05 AM
So will we see Jeff's OEX 571 today (from a post a couple of days ago)? Could be. Those hoping for such action want to see the OEX close the current 15-minute period above 569.79, but the OEX could reach 571 at this rate before the close of the current 15-minute period, couldn't it? Continue following the OEX higher with your stops.

  Jeff Bailey   12/3/200,  10:01:26 AM
Buy Program Premium .... SPX 1,195.87 , QQQQ $40.51

  Jeff Bailey   12/3/200,  10:00:54 AM
Swing trade stop adjustement alert .... for the one (1) CME Jan. $200 put (CMJ-MT)

With CME trading $210.51 +0.39% .... Let's use $212.00 as the stop.

I'm showing these options traded $7.50 at 09:54 AM, with the CME at $210.44.

  Linda Piazza   12/3/200,  10:00:33 AM
The OEX broke through that one-minute formation to the upside again and this time, it's not getting knocked back. Unfortunately, that momentary touch of the five-minute 100/130-ema's was the place to enter long today. Hope some of you caught it. Continue following the OEX higher with your stops and watch the TRAN. It approached a May 1999 high yesterday and now it's not showing comparable strength to the other indices, although it's climbing as I type.

  Jim Brown   12/3/200,  10:00:08 AM
Alert - ISM Services = 61.3, (est 59.0, last 59.8)

  Jonathan Levinson   12/3/200,  9:58:46 AM
Stepping away for 5 minutes.

  Linda Piazza   12/3/200,  9:57:26 AM
You have to go to a one-minute chart to find it, but the OEX is now forming a triangle at the top of its climb. The one-minute Keltner chart shows fairly strong support at 568-568.30, so if the OEX drops through the bottom, I would just expect the formation to broaden into a rectangular formation or a bearish right triangle. Note: The OEX broke through to the top as I typed, but then immediately moved down again, so the rectangular consolidation pattern may be what we see form.

  Jeff Bailey   12/3/200,  9:55:01 AM
3M (MMM) $81.00 +1.43% ...

  Jeff Bailey   12/3/200,  9:52:12 AM
Chicago Mer. (CME) $210.12 +0.2% .... session high has been $211.86.

  Jeff Bailey   12/3/200,  9:51:04 AM
SanDisk (SNDK) $24.37 +1.88% .... session high has been $24.75.

  Jeff Bailey   12/3/200,  9:50:23 AM
Hewlett Packard (HPQ) $20.85 +1.31% ...

  Jeff Bailey   12/3/200,  9:49:59 AM
IBM (IBM) $97.26 +1.57% ...

  Jeff Bailey   12/3/200,  9:49:34 AM
Computer Tech. Index (XCI.X) 730 +1.61% ...

  Linda Piazza   12/3/200,  9:49:18 AM
TRIN moves up again. This and TRAN's failure to follow other indices to or above yesterday's high worries me on behalf of bulls. Guard your profits, bulls. Follow the OEX higher with your stops. Don't let a profitable play become unprofitable.

  Jonathan Levinson   12/3/200,  9:47:43 AM
QQQQ stalled at the 60 min cycle channel line, but bears need to see the south side of 40.40 to avoid the short cycles trending back up. The widened keltner channels so far have been correct in predicting a wild open.

  Linda Piazza   12/3/200,  9:47:36 AM
The SOX has just approached the 450-454 S/R zone, at 450.28 as I type.

  Linda Piazza   12/3/200,  9:46:23 AM
The TRAN is not following through with some other indices. It is not approaching yesterday's high. Danger?

  Linda Piazza   12/3/200,  9:44:22 AM
No consolidation pattern first. If you bought on faith on a touch of the OEX's five-minute 100/130-ema's again, you're doing great, but the OEX approaches yesterday's high at 568.93 with Keltner resistance just above that. Bulls need to have profit-protecting plans in place.

  Jeff Bailey   12/3/200,  9:43:32 AM
Buy Program Premium SPX 1,193.33, QQQQ $40.48

  Jonathan Levinson   12/3/200,  9:41:47 AM
The Fed has 6.25B in overnight repos expiring today. We await the 10AM announcement to see if there will be a net drain or net add for the markets.

  Linda Piazza   12/3/200,  9:39:28 AM
Yep. The OEX shot right back up again, as I thought it might do. (See my 9:36 post.) We're seeing the volatility that I had hoped might be worked out pre-market, but didn't really think would be. (See 8:57 post.) What we hope to see now is for the OEX to settle into some kind of consolidation pattern, a triangle or something similar, so that we can watch for a breakdown or upside break out of that pattern, with internals supporting that play, in whatever direction.

  Jeff Bailey   12/3/200,  9:39:09 AM
Chicago Mer. (CME) $211.71 +0.96%

  Jonathan Levinson   12/3/200,  9:38:11 AM
QQQQ's cycle channels got bombed by the sharp INTC spike yesterday, and for that reason they're currently saying "anything can happen" with 30 min resistance up at 40.65 and support at 39.88. 60 min channel resistance is at 40.45, support also at 39.88. The oscillators have upticked but have not confirmed a new upphase, and based on this morning's action, the bias should remain uncertainly to the downside. Below 40.20, the bears should see that downphase reassert itself.

  Jeff Bailey   12/3/200,  9:36:17 AM
Chicago Merc. (CME) ... delayed opening. Stock looks to be indicated higher. I would want to wait at least 30-minutes to get a feel for things on this one, as it will be close to my profiled stop on the one (1) put profiled yesterday.

  Linda Piazza   12/3/200,  9:36:15 AM
The OEX has just about filled that gap from this morning. A bearish entrance at the open perhaps looks like a good idea in retrospect, but let's see whether the OEX bounces again from the five-minute 100/130-ema's. They're at 566.07 and 565.65. I mentioned premarket that I expected to see some volatility, and I think we're seeing it. I can imagine the OEX shooting right back up again . . . and it's bouncing a little as I type.

  Linda Piazza   12/3/200,  9:33:43 AM
I'll be interested to see what TRIN does after it settles down today, as it gapped higher, too.

  Linda Piazza   12/3/200,  9:32:34 AM
The OEX gaps higher and heads down into the gap, with the gap effectively negating the smaller of the H&S's forming along the five-minute 100/130-ema's, the one that was the right shoulder for the larger formation. That larger formation has not yet been negated, but we'll have to see how the OEX behaves toward that gap, too, and whether it tries to fill it or just climbs.

  Mark Davis   12/3/200,  9:08:11 AM
I was just looking at QM Jonathan... it is challenging the September lows

  Jonathan Levinson   12/3/200,  9:05:10 AM
Session low for Nymex crude here at 42.625. Gold has fallen as well, now down 1.70 at 450.80.

  Jonathan Levinson   12/3/200,  8:58:41 AM
I wonder if Bernanke wasn't referring to wage inflation when he made his "inflation is tame" comment yesterday.

  Linda Piazza   12/3/200,  8:57:12 AM
There was volatile action in futures, treasuries and currencies after the 8:30 numbers. I hope it gets sorted out before the cash open, but it's possible that we'll see some carry-through to that volatility. I'll be watching the chart linked to my 22:05 post, but if you're trading this morning, be prepared for that carry-through in volatility. Tighten your stops or widen them, as is appropriate for your trading style, the options expiration cycle you're chosing, and other parameters, and understand beforehand that you could get whipsawed, no matter how wide your stops. Depending on how internals set up, it might be best for conservative traders to step aside and let the volatility (and inflated options prices) subside, but let's see how the internals look. With futures whipping around the last thirty minutes, it's difficult to tell where markets will open from this vantage point.

  Jonathan Levinson   12/3/200,  8:45:35 AM
Hourly earnings was also light, rising by .1% vs. .3% expected, and average workweek was 33.7 vs. 33.8 expected.

  Jonathan Levinson   12/3/200,  8:38:58 AM
Equities continue to decline, with ES and YM futures both negative while QQQQ continues to chip away at yesterday's INTC gain.

  Jonathan Levinson   12/3/200,  8:33:40 AM
Equities dived, with QQQQ down to 40.34, gold up 1.80 to 454.30, ten year notes way up to 112.06, with TNX down 2.48% or 10.9 bps at 4.291%.

  Jonathan Levinson   12/3/200,  8:32:45 AM
Nonfarm payrolls came in very light at 112K, unemployment rate as expected at 5.4%.

  Jonathan Levinson   12/3/200,  8:14:40 AM
We await the 8:30 employment report, with nonfarm payrolls est. 200K, the unemployment rate est. 5.4%, hourly earnings .3%, average workweek 33.8 and, at 10AM, ISM services est. 58.5.

  Jonathan Levinson   12/3/200,  8:05:53 AM
Equities are holding their gains, ES at 1195.25, NQ 1626.5, YM 10629, QQQQ 40.41. Gold is down .3 to 452.20, silver -.028 to 7.932, ten year notes flat at 111.2344 and Nymex crude down .1 at 43.15.

  Tab Gilles   12/3/200,  8:05:14 AM
Good news from INTC, this will give the rally further fuel. The SOX/SMH was lagging the GHA and GSO sector. I'm looking for INTC to break over $25 and that GAP, targeting $27. Link

The government reports on job growth and unemployment at 8:30 a.m. ET If that news is positive along with the INTC, that should boost stocks Friday. Link

  Linda Piazza   12/3/200,  6:30:54 AM
Good morning. Across the globe, semi-related stocks tended to gain while miners tended to decline in overnight trading. The Nikkei closed above 11,000, but other Asian and European markets turned in mixed performances. Our futures gapped higher at their open post-Intel last night and haven't yet closed that gap as of this report. As of 6:19 EST, gold was down $0.60 and crude, down $0.22. More detail about Asian and European markets follows in succeeding paragraphs.

Buoyed by Intel's higher-than-predicted sales forecast, techs led the Nikkei to higher levels. The Nikkei gapped above 11,000 and spent Friday morning testing 11,100. It closed below that level, but above 11,000, at 11,074.89, up 101.82 points or 0.93%. Electronics company NEC received an upgrade to an outperform rating by Goldman Sachs after having detailed restructuring plans yesterday.

Other Asian markets turned in mixed performances, with techs generally performing well, and miners and other commodity-related stocks tending to decline. The Taiwan Weighted gained 0.43%. South Korea's steel manufacturers headed down in early trading while its Hynix Semiconductor gained. The Kospi lost 0.18%, and Singapore's Straits Times eased 0.06%. Hong Kong's Hang Seng dropped 0.35%, but China's Shanghai Composite climbed 0.31%.

European markets turn in mixed performances, but the three commonly followed in these posts trade in positive territory. Semi-related stocks tend to perform well while miners decline, as happened in Asia. Even Infineon gained after being battered in the last several sessions when it garnered two downgrades in as many days. In the U.K., November housing prices declined 0.4% month-over-month, although housing prices are still 16.8% ahead of the year-ago levels according to U.K. bank Halifax. The bank forecasts that housing prices will decline 2% next year, their first yearly decline in ten years. The weak dollar encourages Volkswagen to consider building a U.S. plant in North America, following the example of another car manufacturer announcing similar plans earlier this week. In other stock-specific news, Nokia saw further shakeups in its executive lineup and was easing in early European trading.

As of 6:19 EST, the FTSE 100 posted gains of 11.30 points or 0.24%, trading at 4,762.50. The CAC 40 posted gains of 6.41 points or 0.17%, trading at 3,817.86. The DAX posted gains of 12.28 points or 0.29%, trading at 4,228.68.

  Jeff Bailey   12/2/200,  11:33:39 PM
Disk Drive Index (DDX.X) Remember this chart from the 09/29/04 Index Trader Wrap? Link

Is this retracement "in play?"

Here's the same chart up to tonight's close. Link two "right shoulders" now.

But look at the chart. Is there a tool/technique you know of to "explain" why the DDX.X didn't rally to 118.22 in early October and stopped dead at 115.66? Who is trading that level?

Let's do this....

DDX.X with conventional (blue) and "fitted 38.2%" in pink. "zones" in yellow.Link

I've expanded on the reverse h/s pattern identified back in September, with more information from the MARKET. A "conservative" pattern objective would be 135, and more aggressive objective would be 141.

Remember... IBM easily surpassed its similar reverse head/shoulder objective. IBM chart from the same 09/29/04 Index Trader Wrap at this Link

  Jeff Bailey   12/2/200,  11:23:48 PM
Hewlett Packard (HPQ) Daily bar chart with conventional use of retracement a this Link

  Linda Piazza   12/2/200,  10:05:28 PM
Here's what I'm watching on the OEX: Link

  Jeff Bailey   12/2/200,  9:58:55 PM
Sector Bellcurve comparison from 10/29/04 close to today's close at this Link

I also show my current OPEN MM Profiles, along with the sector bullish % that Dorsey/Wright and Associates has associated each stock belonging to.

  Jeff Bailey   12/2/200,  9:31:33 PM
Just now looking at a PnF chart of the QQQQ. Trade at $40.00 was a spread triple-top buy signal. Link

Has anyone solved the QCharts problem of only showing two days of QQQQ bars on the bar chart?

  Jeff Bailey   12/2/200,  9:27:48 PM
Pivot Matrix for tomorrow at this Link

Semi HOLDRs (SMH) ... last tick tonight was $34.90. As it might relate to the SOX.X and its WEEKLY Pivot levels, the SMH WEEKLY Pivot levels are $32.59, $32.94, Piv= $33.41 , $33.76, $34.23.

  OI Technical Staff   12/2/200,  8:33:12 PM
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