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  Marc Eckelberry   12/6/200,  12:18:47 AM
That Jeff, is the final word. But as Buffet said: Be very brave when everyone is afraid and be very afraid when everyone is brave...or something like that.

  Jeff Bailey   12/6/200,  12:12:29 AM
Keene... that's the best comment (in my opinion) that you, or I, could have made for traders/investors tonight. (see 12:04:38)

... so I'll continue to just trade what the market gives me and change my opinion in a heartbeat (I hope) when the market tells me I'm wrong."

Seriously Keene.... that's Stock Trader's Almanac material.

"A good trader has to have three things: a chronic inability to accept things at face value, to feel continuously unsettled, and to have humility. - Michael Steinhardt

  Keene Little   12/6/200,  12:04:38 AM
Sorry Jeff, stepped away. Per your question (11:32), we pay the rent like we always do--trade the market for what it gives us (which hasn't been much the past few days, at least not in the equity futures). My guess that we'll have a hard down year in 2005/2006 is based strictly on my own analysis, primarily based on Elliott Wave. Lord knows I've been wrong a lot this year in my EW analysis so I'll continue to just trade what the market gives me and change my opinion in a heartbeat (I hope) when the market tells me I'm wrong. The market will always go up and down and if next year becomes more volatile as I expect (the VIX should finally start to climb significantly), then we'll just continue to trade the movements, and have greater movements to make some money. It's just that I think the general trend will be down for the whole year.

  Jeff Bailey   12/6/200,  12:02:59 AM
Marc ... good point regarding the mass of investors, but we already know that roughly 80% is "buy side" anyway.

I'm comforted in knowing that it isn't our subscribers (or analysts) that are taking everything a Cohen, Fleckenstein, Tice, Buffett, or Acompora says, as being the carved in stone truth.

  Marc Eckelberry   12/6/200,  11:53:36 PM
God no, Jeff. Readers of this monitor are in the upper echelon of investors/traders. The level of sophistication you bring is uncanny (I have read your columns even as far back as in the 90's ). I was again referring to the mass of invesors who only read the Sunday paper and what some analyst says in bold letters and takes that as the Bible. Those analyst commenst that hit the masses do not come with stop loss orders, trust me.

  Jeff Bailey   12/6/200,  11:49:13 PM
No Marc .... I was thinking you were talking about most traders/investors (including me) reading our conversation and Mr. Acompora's targets for the next six months, Mr. Buffett's thought's on valuations, Mr. Tice's gloomy outlooks, etc. etc..

  Marc Eckelberry   12/6/200,  11:47:16 PM
Jeff, I wasn't talking about you. You are the most educated investor here. I think you misread me. I was saying how the average investor does not use stops. Please, I hope you are not taking any of this as anyting but a discourse on something no one knows for sure what the outcome will be anyway.

  Marc Eckelberry   12/6/200,  11:45:58 PM
Actually, the semis will see the cyclical curve turn around in their favor again summer 2005, and it will be anicipated, so I think the second half of 2005 will be bullish indeed. Some say we keep climbing until March, I say the climbing is done sooner, if not this month. We will see what Q4 brings, but so far it's looking pretty lame, so January could be a hangoover. Just my thoughts and why I mention February or March for better prices. But I am bullish second half 2005, also based on cyclical rotation out of speculative real-estate into equities.

  Jeff Bailey   12/6/200,  11:42:30 PM
We're not average investors Marc. We're educated. We've been around the block a time or two.

  Marc Eckelberry   12/6/200,  11:39:05 PM
Jeff, I wasn't kidding about Intel...(margins, margns) As for stops, you are right again, but the average investor has no clue and never uses them, hence they need to buy low and not be told to dive in at Christmas for a buy and hold.

  Jeff Bailey   12/6/200,  11:32:59 PM
Hmmm... looks like Keene found a buyer in Marc.

In the meantime Keene (between now and February), what do we do to pay the rent?

  Keene Little   12/6/200,  11:30:56 PM
BTW guys, I'll go on record and state you won't want to buy this market come February or beyond, except for perhaps a counter-trend play. I think we'll top no later than February (if not sooner) and 2005 is going to be an ugly year for the bulls. And 2006 may not be much better.

  Jeff Bailey   12/6/200,  11:28:35 PM
(Grin).... OK Marc .... I'll issue a "swing trade short" on Intel (INTC) tomorrow morning, no stop, target $22.71.

I'm kidding of course. I'm sure all analysts (bullish/bearish) use stops. I know Fleckenstein does, and why he still has some followers.

  Marc Eckelberry   12/6/200,  11:24:15 PM
Jeff, you ar right, the bears don't get laughed at enough and they definitely abound, so mea culpa there (Tobias Levkovich is a good examople this year). In fact, Buffet missed out the whole bubble, and those were 100% returns. However, yes I am on record as saying there will be better prices in February or March. Absolutely. And Intel will retrace all the gains it made post guidance as well, and that could even happen this week. By the way, you know how many analysts were pumping Intel at 70? A price that stock will probably never see again. Y2K is gone and so are those margins. The big new game has yet to fully emerge (biotechs 80's, tech 90's) but I suspect it will be energy.

  Jeff Bailey   12/6/200,  11:16:19 PM
Marc .... I'm aware that "overstatements" are made by many people. That's part of my point. But why is it that that the "buy side" are usually the ones that receive the most criticism, or finger pointing?

Do you have any comment regarding David Tice? He's an investor and runs the Prudent Bear Fund.

Ms. Cohen always a bull? How about Bill Fleckenstein. He gets mentioned as one of the "smart money" guys on Intel. Trouble for me is that "Fleck" was bearish on Intel all the way from $20 to $75.81, but some give him great credit for his bearish calls on Intel. As you say.... always bearish, so where is the skill in that?

Marc... are you going on record saying that "you are late at the game if you didn't get in early November. Wait, and you will get your chance in February or March. There is no rush?"

I received some e-mail in early November regarding being "late to the game" on the IWO.

  Marc Eckelberry   12/6/200,  10:51:53 PM
Jeff you are 100% correct, and I made an overstatement to further my point. They do come in at bottoms with recommendations, but that is usually because they are recommending all the way down, so at one point there is a bottom. Abbey Joseh Cohen is alway bullish, so where is the skill in that? Markets will always go up in the long run, it is the timing of the entry or the exit that makes money. I guess my point was traders versus investors, and these analysts are supposedly addressing investors, and not doing a good job for the most part. They always seem to come out of the woodworks at extremes, or at least the media fires them up then. It's all a game of musical chairs, somebody has to lose in order for someoene else to cash in. If no one buys the top, who can you sell it to? Once they sold the top, watch how fast the downgrades come out. You and I get out, but the average dude is told to hang in, it will bounce back. They didn't even know the word stop loss until the Martha Stewart case. And now, they are being told to take equity loans on the only asset they have and shove it in stocks now, not in August, but now, just before tax selling and other assorted goodies in a market that in some ways could be more overvalued than in 1999/2000. No one is telling them to wait, you are late at the game if you didn't get in early November. Wait, you will get your chance in February or March. No, they are uniformly saying buy, and buy now because they need buyers to offload their inventory in a high liquidity environment so as not to create too rapid price drops. This is great for momentum traders, but investors are going to get burned if they step in today, I think. (speaking mostly for techs, for I believe energy has corrected to a level that warrants accumulation).

  Jeff Bailey   12/6/200,  9:36:05 PM
Pivot Matrix for tomorrow at this Link

  Linda Piazza   12/6/200,  9:26:17 PM
Broadening formations typically form at the top of a climb. They're also typically resolved to the downside, although don't tell that to anyone watching them over the last two years. They're notoriously difficult to trade. This difficulty comes from two reasons. First, they're formed when trading becomes emotion-based, such as it probably is now when bulls see indices overcoming some important bear-market levels and believe markets will ultimately go higher, and bears see some signature developments in sentiment indices and other factors that lead them to believe that markets should break down. Emotion-based trading is not particularly amenable to technical analysis, and the competing bullish and bearish formations we've been seeing, the confirmations followed by sideways trading, and the quick reversals lately are all typical. The second reason that broadening formations are so difficult is that each breakout to a new high or a new low is met by a reversal as the formation broadens: Link

Traders are left with a difficult decision. Do they not trade until there's a clear breakout or breakdown, or enter risky plays? Those willing to accept the risk could enter at bounces away from the upper or lower trendline, continuing such tactics until there's a clear breakout. The trouble with that tactic is that by the time the trendlines are clearly established, you may be seeing the last touch before such a breakout. Even if a trader is right about direction and entry, trading can be choppy within these formations.

The OEX appears to be moving down through the formation again after Friday's touch to establish the top trendline. If it's moving down, it may find at least temporary support near 565.45 or again at 564, if the OEX drops below the first level. I could point out a number of potential formations (new H&S on the three-minute chart, neckline now a penny or two below Monday's close; new potential H&S on the 15-minute chart, neckline at about 564 with the three-minute version forming the top of the right shoulder; potential inverse H&S, neckline at about 567.90), but you get the picture. It's a mixed-up picture that provides enough information to confirm any bias or to refute it. What are you going to trust? If you've got a bias, you're going to trust the formation that fits it, but if you're sincerely just trying to look at the charts without bias, it's clear that bears and bulls still battle it out with no clear winner as yet.

Tomorrow, I'll continue to post my observations, but be aware that each pattern confirmation can be followed by a reversal. I want to see how overseas markets behave and how our futures react before I attempt even a tentative guess as to likely direction or non-direction. I'd like to see a breakout or breakdown in overseas market, futures markets and/or currency markets before I even believe we'll see a directional movement. As I type, that's not happening, with the Nikkei lower, but not much lower.

  Jeff Bailey   12/6/200,  9:13:05 PM
Marc .... I, and perhaps Jonathan and Keene might disagree with "they ALWAYS are bullish at the top and bearish at the bottom...." i.e. Ms. Cohen's views from a couple of months ago.

I respect Mr. Buffett's views on valuation, but really... its ALWAYS the MARKET that has it right in the end.

P.S. I did call GEICO (per Mr. Buffett's suggestion Link ), but their auto insurance premiums were much higher than those offered by Unitrin (NYSE:UTR) $46.83 -1.9% .

  Marc Eckelberry   12/6/200,  7:09:50 PM
Jeff, that is absolutey correct. It goes both ways, but the sage of Omaha is the one that has it right in the end. Valuation. For traders it's a different world, their profits can swell at tops and bottoms with the trend because they are nimble, but Ralph is talking to investors and that I think is where the crime lies. There is no compelling reason to raise the current p/e of S&P way over 20. That is not to say overbought can go on forever, after all there are no absolutes. But the amount of capital put to work should be directly proportional to risk/reward considerations. And these guys only have one job: get your money in the market. That is why they still have a job, even after being so wrong. They always are bullish at the top and bearish at the bottom: they are not on the side of the masses. That is the game.

  Jim Brown   12/6/200,  6:27:40 PM
I am with you on that Jeff. I also expected a deeper dip early in 2004.

  Jeff Bailey   12/6/200,  6:00:13 PM
As always Jim.... "point your finger" to profits. Don't let Ralph being wrong in the past, skew convictions for the future. I think we've all been wrong at least once.

I was way too bearish in this year's End of Year (2003) update. SPX pullback to 995-1020?

  Jim Brown   12/6/200,  5:46:09 PM
The following is presented for entertainment value only:

Ralph has been quiet for several years after predicting Dow 14,000 in 2000. Link

His next prediction was Nasdaq 6000 by June-2001. He also claimed a new bull market began in January 2001. When both of those predictions failed he reversed back to a bear.

In mid 2003 he claimed the current bear market was still in place BUT a new bull market could appear at any time and last up to a year. Link

Fast forward to today: Now that we are two years into a new bull market he has "claimed it" as starting in Oct-2002 and could continue for another six months, one year before he said we were locked in a bear but a new bull could appear soon and last up to a year. Link

  Jim Brown   12/6/200,  5:19:38 PM
Ralph Acompora Targets for first six months of 2005

Dow 13,264
S&P 1473
Nasdaq 2796
S&P Small Cap +20%
S&P MidCap +23.7%

His theory was the current cyclical bull market has six months left to run and bigcaps will lead. He is comparing today's market with the 1970-1973 bull market.

  Jim Brown   12/6/200,  5:16:57 PM
Jeff, I would be extremely happy to see 12,300. Sure hope you are right.

  Jeff Bailey   12/6/200,  5:04:54 PM
Closing Internals at this Link

Brisk volume at the NASDAQ continues. With just 5 days of trade in December, NASDAQ volume up 24% from November's 1.87 billion average daily volume.

NYSE volume light today. Currently running 1.62 billion per day, up 8% from November's 1.50 billion.

  Jeff Bailey   12/6/200,  4:31:03 PM
Is that all Jim? ... Dow Diamonds (DIA) Pnf Chart at this Link (Currently building a bullish vertical count to $123, approx. INDU 12,300)

As I remember it, Ralph was criticized by bears with prior prediction of 10,200.

  Jim Brown   12/6/200,  4:19:41 PM
Ralph "Make em poorer" wil be on CNBC in a minute with a forcast for Dow 13,000.

  Jeff Bailey   12/6/200,  4:11:02 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Raised bullish stop for the two (2) SIRI Mar. $5 calls (QCO-CA) to $2.40, from $2.15. Approximately $7.40 in the underlying.

Swing trade rounded to 3/4 bullish position for the SNDK April $22.50 calls (SWQ-DX) by adding one (1) call at the offer of $4.20.

  Jeff Bailey   12/6/200,  3:58:47 PM
Sirius (SIRI) $8.08 +7.04% Link ... goes into "orbit" as we approach the close.

"Eclipses" the $8.00 barrier.

Bullish traders seem "moonstruck"

  Linda Piazza   12/6/200,  3:54:42 PM
Currently, the OEX is trapped between seven-minute Keltner support near 566.40 and resistance near 567.75. It's not strong enough to break out of that range for long, but I wouldn't be surprised to see the OEX take a trip down to 565.70 or so at one point, either this afternoon or tomorrow morning. That's the top of the descending regression channel from which it broke out this morning, and it hasn't been able to make much progress since breaking out. Unless the OEX can successfully move higher instead of trade sideways, that might require a trip down to retest support.

  Linda Piazza   12/6/200,  3:46:49 PM
The TRAN is rising into a possible right shoulder to go with the rest of the potential H&S, with the head formed when the TRAN broke above a neckline for an inverse H&S and then moved down again. Confused? So are the markets. Let the big-money people fight it out and save your money for the time when there's a clearer play.

  Linda Piazza   12/6/200,  3:39:21 PM
After confirming an inverse H&S, the TRAN rose to a new high of the day and now sinks down again toward the former right-shoulder level, which is now looking a lot like a potential neckline for a new H&S, with the right shoulder still to be formed. We're still competing formations, as I was worried might happen today (9:22 post). I still haven't changed my mind and am glad I had that scenario in mind for today so I never got seduced into believing any of the so-called confirmations of either bullish or bearish formations that we were seeing. Now we're nearing the end of the day, and we could get a big movement one direction or the other that could change the outlook, as has often happened at the end of the day over the last couple of years, but darned if I know which direction it will be.

  Jonathan Levinson   12/6/200,  3:34:14 PM
Euros are pulling back, following the CAD down. From the Canadians with whom I've spoken over the past year, it will take approximately 20% more decline before their businesses stop hurting from the CAD rally. Only Canada's central bank appears content with the stronger loonie.

  Linda Piazza   12/6/200,  3:32:10 PM
The OEX is approaching Keltner support near 566.40. From this vantage point, that support looks strong enough to hold the OEX at least temporarily, especially since that is also near the converging five-minute 100/130-ema's. Keltner resistance is not far overhead, either, however.

  Linda Piazza   12/6/200,  3:17:31 PM
The BIX never quite touched 375, much less confirmed a neckline break with a move above 375.12 (see my 14:24 post). Its high has been 374.97. It's now turning down below the neckline of its supposed inverse H&S.

  Jonathan Levinson   12/6/200,  3:16:40 PM
QQQQ has just broken the prior low- next challenge for bears is a break of 40.28.

  Jeff Bailey   12/6/200,  3:14:32 PM
03:00 Internals at this Link

  Linda Piazza   12/6/200,  3:13:09 PM
The TRAN has still not broken out of its descending regression channel to the upside. It's currently turning down within its channel again, but as usual, support is likely near 3700.

  Linda Piazza   12/6/200,  3:07:00 PM
Since climbing out of its descending regression channel, the OEX has been climbing within an ascending one. It's currently turning down within that channel, with bottom channel support at a little below 567.

  Jeff Bailey   12/6/200,  3:05:53 PM
03:00 Market Watch at this Link

  Jeff Bailey   12/6/200,  2:59:32 PM
Jupitermedia (JUPM) $19.61 +2.02% .... hmmmmm.....

  Jonathan Levinson   12/6/200,  2:58:52 PM
The morning highs have been nominally breached but continue to attract the price, which is struggling below 40.40. With volume as light as it is, today's gains are far less secure than they would be on even average volume. Nonetheless, until the sellers step up, the price will continue to rise. The lack of a test of even 30 min channel support this morning, despite the synchronous 30 and 60 min cycle downphases, suggests that bulls remain fully in control of the situation. Until 39.80 has been broken at the very least, this remains the bulls' show. The light volume suggests that their strength is waning, but a gain's a gain, and the price should have fallen further this morning based on the then-current cycle setup.

  Linda Piazza   12/6/200,  2:53:57 PM
I forgot to mention another interpretation of that daily OEX chart, one that makes a lot of sense to me: an orthodox broadening formation or megaphone shape. These are usually indicative of emotion-based trading and are difficult to trade because it's difficult to pinpoint the breakout or breakdown levels.

  Jeff Bailey   12/6/200,  2:52:19 PM
TRIN 0.99 -29.28% ....

  Jeff Bailey   12/6/200,  2:50:17 PM
QQQQ $40.34 +0.52% ... was thinking same thing this morning Jonathan (02:33:11). Just not many sellers are there?

  Linda Piazza   12/6/200,  2:49:42 PM
So far, today's daily OEX candle shows a small-bodied candle with a long shadow springing up from support. The OEX hasn't breached 570, much less the January high, however, and it's still possible to look at that daily chart and come away with two interpretations. Bullish: the OEX broke above a bull flag and consolidates above it without even dipping all the way to the bull flag's former top trendline. Bearish: The OEX moved above November's high but immediately fell back, its candle body forming near those of mid-November, suggesting a possible double-top-ish formation. Oscillators were at lower highs while those higher intraday highs were formed, suggesting bearish divergence. Each move toward 570 has been met with strong selling, at least so far.

  Jonathan Levinson   12/6/200,  2:33:11 PM
Despite the bullish price action above QQQQ 40.22, volume remains extremely light, with only 54.2M shares traded so far today. We haven't made it to half of Friday's volume with a little over an hour and a half left to the session.

  Linda Piazza   12/6/200,  2:24:28 PM
While the OEX broke out of its descending regression channel, the TRAN has not done so, again showing divergence by this measure at least. The BIX can't make much upward progress today, either, despite having its own inverse H&S at the bottom of its decline off Thursday's high. It hasn't yet confirmed its inverse H&S and the right shoulder is becoming a bit elongated when compared to the left. A move above 375 would appear to confirm the formation, but I would wait for a move above Friday's last 15-minute high at 375.12 before I considered the confirmation confirmed, if that makes sense.

  Linda Piazza   12/6/200,  2:14:52 PM
The OEX's 15-minute chart now shows a potential for a reversal signal to be completed, although it doesn't look as if that signal will be completed during the current 15-minute period. I still haven't changed my mind about the markets since 9:22 this morning, which is why I'm reporting on what I see but not giving much of a prognosis of what I think will happen next. I'm not sure that bulls and bears have yet sorted it out and I'm seeing just the sort of day I thought I would see.

  Jeff Bailey   12/6/200,  2:13:48 PM
02:00 Internals at this Link

  Linda Piazza   12/6/200,  2:07:22 PM
The TRAN has moved above the neckline for its inverse H&S. Although the TRAN traded more sideways than up afterwards, it's rising now to challenge the five-minute 100/130-ema's and then the 3717-3718 supposed resistance after that. The TRAN is at 3714.32 as I type.

  Jeff Bailey   12/6/200,  2:06:48 PM
02:00 Market Watch at this Link

  Jeff Bailey   12/6/200,  2:03:27 PM
Swing trade round to 3/4 bullish call alert .... will add one (1) SNDK April $22.50 call (SWQ-DX) to MM profiles here at the offer of $4.20.

SNDK $24.67 +2.57% ...

  Jonathan Levinson   12/6/200,  2:00:37 PM
The 30 min cycle upphase for QQQQ is nearly half done, while the 60 min cycle is just completing its upturn now. If there is no weakness/break below 40.22 for the next 15-30 minutes, we could see another meltup to or beyond Friday's 40.59 high as the 60 min cycle comes into sync with the ongoing 30 min upphase.

  Jeff Bailey   12/6/200,  1:56:48 PM
e-mini S&P 500 (es04z) 1,191.75 +0.21% .... 10-minute delayed, but an upside alert here at "zone of resistance" from 1,191.75-1,202.75.

see 12/05/04 07:31:05 PM EST post at bottom of today's MM.

  Linda Piazza   12/6/200,  1:55:57 PM
The OEX has broken above its descending regression channel off Friday's early-morning high, but now pauses just under Keltner resistance at about 567.30. The advdec line has continued to climb off this morning's low.

  Linda Piazza   12/6/200,  1:51:34 PM
The SOX's climb had taken on a bit of a bearish-rising-wedge look, but broke to the upside as many of these wedges have been doing over the last year. In fact, I think they ought to be renamed bullish rising wedges.

  Jeff Bailey   12/6/200,  1:50:54 PM
SanDisk (SNDK) $24.54 +2.03% .... a little stronger than I would have thought today. Probing Friday morning's high.

  Linda Piazza   12/6/200,  1:50:20 PM
The TRAN tests the neckline for its inverse H&S on its five-minute chart. If confirmed, the TRAN's 3726 upside target would take it up to test the descending regression channel visible on the 15-minute chart. TRAN 3717-3718 is presumed historical S/R, however, that would come between the confirmation level and the upside target.

  Linda Piazza   12/6/200,  1:36:17 PM
Another look at the TRAN's pattern shows that it could be forming an inverse H&S on the five-minute chart, neckline near its own five-minute 100/130-ema's. This is what I meant early this morning in my 9:22 post when I said that I was afraid we'd see competing bullish and bearish patterns today, with resultant choppy trading conditions. If the TRAN should drop much lower than 3705, we could probably consider that inverse H&S negated. As I typed, the TRAN began a rounding-up process into a right-shoulder formation, but let's see if the climb holds and the formation is confirmed.

  Jonathan Levinson   12/6/200,  1:32:30 PM
QQQQ continues to chop along above 40.22 support, but the highs and lows are descending one step at a time. If this is a distribution zone, then it's occurring at a lower high from last week's levels and should suggest that the daily cycle downphases are kicking back in.

  Linda Piazza   12/6/200,  1:28:55 PM
The TRAN could not make it past the midline of its descending regression channel and has turned down again, at 3707.18 as I type. It's usually a sign of weakness when an index trades only in the lower half of a regression channel.

  Linda Piazza   12/6/200,  1:17:20 PM
Here's a chart that shows how the 15-minute 100/130-ema's functioned to keep the OEX from meeting its downside target after confirming a H&S today: Link Now the OEX does battle with the five-minute versions (not shown), both near 566.25. Will those versions help hold the OEX within the descending regression channel? So far today, neither bulls nor bears will have been satisfied with the trading patterns.

  Jonathan Levinson   12/6/200,  1:11:23 PM
QQQQ bears need to crack 40.22 to kick off a move that projects to 40.12 on a small intraday h&s pattern.

  Jeff Bailey   12/6/200,  1:10:54 PM
01:00 Internals at this Link

  Linda Piazza   12/6/200,  1:05:31 PM
For many days, the OEX's five-minute 100/130-ema's appeared to govern its trading pattern, with the OEX never moving far from those averages. After resting the 15-minute versions, the OEX has now risen to test the five-minute versions, at 566.25 and 566.27, respectively.

  Jonathan Levinson   12/6/200,  1:03:59 PM
QQQQ failed below 40.33 resistance at 40.31, but the dip has been shallow so far. 30 min channel resistance has risen to 40.35 as the 30 and 60 min channels continue to rise.

  Jeff Bailey   12/6/200,  1:03:57 PM
01:00 Market Watch at this Link

  Jonathan Levinson   12/6/200,  12:57:35 PM
Session high for 10-year bonds here, TNX -3.6 bps at 4.234%. Gold has recovered to 456.40 here, -1.30 for the day.

  Linda Piazza   12/6/200,  12:54:15 PM
At least temporarily, the OEX is turning down again from the descending regression channel displayed in the chart linked to my 12:22 post. So far, OEX bulls must be feeling about as frustrated as OEX bears have been. So far, too, this fits my idea of what might happen today as per my earlier posts.

  Marc Eckelberry   12/6/200,  12:48:25 PM
Thanks Linda, the whole 445/446 level takes on even more significance. The ultimate prize for bulls is 455 (50% year high/low) and that was soundly rejected on Friday.

  Linda Piazza   12/6/200,  12:43:37 PM
I think Marc on the Futures side may have already mentioned some of these Fib levels for the SOX, but here's a chart showing a Fib bracket from Thursday's close into Friday's high, with that representing the last short-term rally: Link Note the potential bear flag. Bears would prefer to see the SOX stopped at the 50% retracement level or top of the gap.

  Jeff Bailey   12/6/200,  12:42:15 PM
Current OPEN MM Profiles at this Link

  Jonathan Levinson   12/6/200,  12:37:48 PM
QQQQ ran up to the upper 30/60 min and short cycle channel resistance lines and then stalled. Because the 30 min cycle oscillators were oversold and turning up, anything less than a strong pullback to south of 40.05 will suggest a new 30 min cycle upphase. Confirmation will come on an upside break of 40.33.

  Linda Piazza   12/6/200,  12:37:46 PM
The TRAN is rising from the 3700 level up to test resitsance. The five-minute chart suggests that it may find next firm resistance near 3718, a level of historical S/R, too.

  James Brown   12/6/200,  12:36:23 PM
Rival Merrill Lynch (MER) is looking bullish with a 1% rise toward resistance at the top of its trading range near $58.00.

  James Brown   12/6/200,  12:35:36 PM
Recently added call play LEH has hit our trigger to go long this morning with today's 1.09% gain to $85.93.

  James Brown   12/6/200,  12:34:23 PM
OI call play IBM is showing some follow through on last Friday's breakout from its trading range. Shares are up another 0.78% and nearing the $98 level. Again, readers can prepare to exit as IBM nears our target in the $99-100 range.

In the news both the WSJ and Barron's applauded IBM's recent announcement that it is seeking to exit the PC business.

  Jeff Bailey   12/6/200,  12:32:38 PM
Swing trade raise bullish call alert .... Let's continue to edge up our bullish stop in the SIRI March $5 calls (QXO-CA) from $2.15 to $2.40.

SIRI $7.87 +4.2% .... today's high has been $7.99. Getting close to current bullish vertical count of $8.50.

  James Brown   12/6/200,  12:31:11 PM
OI call play FDX is up 0.73% and out performing its peers in the Transports. The stock is bouncing from the $96 level, which was resistance earlier in the month. Readers can prepare to exit as FDX nears our year-end target in the $99-100 range.

  Jeff Bailey   12/6/200,  12:28:02 PM
SanDisk (SNDK) $24.16 +0.45% ... bids green

  Jeff Bailey   12/6/200,  12:25:28 PM
Disk Drive Index (DDX.X) 120.02 +0.92% .... X gets the square

  Jeff Bailey   12/6/200,  12:24:14 PM
Hewlett Packard (HPQ) $21.25 +1.23% ... session high.

Computer Technology Index (XCI.X) 731.80 +0.65% ... session high (732.91 was "bad tick")

  Linda Piazza   12/6/200,  12:22:34 PM
Here's another, more bullish chart interpretation of the OEX action since Friday, with this being a potential bull flag: Link

  Jeff Bailey   12/6/200,  12:22:02 PM
Jeff: Could you give your short term (next 30 days) thoughts on MMM? I was holding Jan calls and sold them on Friday....am now thinking I might get back in on a pullback

I'm looking for near-term support to be firm at $79.75 and believe the stock could trade $84.50 before month's end.

Was thinking we might see the majors pull back to WEEKLY S1s early this week, then begin bounce into year's end, making higher highs.

MMM WEEKLY Pivot levels .... $78.29, $79.69, Piv= $80.75, $82.15, $83.21.

December "Max Pain" theory for MMM is $80.00 ($5 increments)

January "Max Pain" theory currently at $75.00.

  Linda Piazza   12/6/200,  12:14:50 PM
Now the continuation-form H&S on the five-minute chart has been negated with this rise. The OEX now faces mid-channel Keltner resistance as well as historical resistance.

  Jeff Bailey   12/6/200,  12:12:44 PM
12:00 Internals at this Link

  Linda Piazza   12/6/200,  12:10:42 PM
Both bulls and bears remain stymied, with neither able to make progress. The day's formations look more bearish than bullish, and the VXO hovers around 14.00, but countering that is the action of the OEX with respect to its 15-minute 100/130-ema's. It's now beginning to spend more time above the 15-minute 100-ema than below it, the last three candles showing only candle shadows spiking below that average. Also countering those formations is the tendency that Jane and Mark have already mentioned on the futures side for the H&S formations from this morning to now have right shoulders that are far too elongated, time-wise. While this isn't necessarily evidence that bears are in trouble, it certainly is evidence that not all is going as bears would hope.

  Jonathan Levinson   12/6/200,  12:05:23 PM
QQQQ has fallen into a sideways range between rectangle support of 40.06 and resistance of 40.13. A surge in volume on a break of either level should run quickly to next suport of 39.96 or 40.18, beyond which we might even get something directional.

  Jeff Bailey   12/6/200,  12:02:23 PM
12:00 Market Watch at this Link

  Jonathan Levinson   12/6/200,  11:57:47 AM
Volume is light today for QQQQ, with just 36.4M shares traded just ahead of noon compared with Friday's 114.3M shares for the day.

  Linda Piazza   12/6/200,  11:57:05 AM
The OEX still hugs the 15-minute 100/130-ema's, with those averages currently at 565.38 and 564.89, respectively.

  Jane Fox   12/6/200,  11:55:34 AM
Dateline WSJ - Even as oil prices tumble from a yearlong surge, easing pressure on the global economy, OPEC is considering a move to stem the slide: an informal attempt to keep minimum prices near $40 a barrel, a sharp increase from the cartel's current target.

A growing number of players inside the Organization of Petroleum Exporting Countries is seeking to establish a floor price of $30 for a basket of crude-oil varieties sold by the cartel, according to several oil officials from member nations. The higher floor would be equal to roughly $40 a barrel for the more-prized U.S. light, sweet benchmark crude, and represent an increase of more than one-third over the current target range of $22 to $28 for the basket of OPEC crudes.

Such a move would mark OPEC's attempt to keep prices at recent levels, as the OPEC basket of crudes currently is within the potential new price range. It also would mark a reversal for the cartel, which pumps more than a third of the world's oil. As oil marched upward this year, OPEC members tried to talk it down. Now, "there is a feeling that prices should be between $30 a barrel and $40 a barrel" for the OPEC crude basket, said an oil official from a key OPEC member country.

  Jeff Bailey   12/6/200,  11:47:04 AM
HL Camp & Company has their computers set for program buying at $1.58 and set for program selling at $-0.98.

Other than the sell program premium at the open, I don't see any other buy/sell program premium levels being traded.

  Linda Piazza   12/6/200,  11:45:05 AM
The TRAN currently attempts another bounce.

  Jonathan Levinson   12/6/200,  11:43:26 AM
TOKYO (AP) - A strong earthquake shook northern Japan late Monday, slightly injuring two people, but causing no serious damage.

Japan's Meteorological Agency said the magnitude-7.0 quake, which struck off the coast of Japan's northernmost main island of Hokkaido at 11:15 p.m. (6:15 a.m. EST), was centered about 31 miles beneath the ocean floor.

The agency quickly issued a tsunami warning for the eastern shores of Hokkaido's Pacific coastal area, but later lifted it after determining that any waves were unlikely to cause damage. Tsunami are potentially dangerous waves triggered by seismic or volcanic activity.


  Linda Piazza   12/6/200,  11:34:59 AM
The SOX has a continuation-form H&S on its three-minute chart with a neckline at about 436.68, depending on how you draw the neckline. Currently, the SOX is at 443.08.

  Linda Piazza   12/6/200,  11:32:18 AM
The TRAN's low of the day has been 3701.47, touching the 50% retracement of the zoom higher Wednesday, up to Thursday's high. The TRAN now attempts a bounce from this important S/R area (also round-number support), but isn't managing much of a bounce so far. The outcome of this action and the test of the bottom of the descending regression channel, a possible bull flag, may be key to watch. That channel support has now descended to just below 3700. Market bulls hoping for a bounce among other indices don't want to see the TRAN keel over. That's exactly what bears do want to see.

  Jeff Bailey   12/6/200,  11:29:47 AM
Hewlett Packard (HPQ) $21.19 +0.95% ... probing its quarterly earnings highs here.

  Jonathan Levinson   12/6/200,  11:27:59 AM
The 30 and 60 min cycle channels remain opposed and are flattening as price trades net sideways from this morning's levels. Support is at 39.88-.92, resistance lined up at 40.22 QQQQ.

  Linda Piazza   12/6/200,  11:23:48 AM
It really is that kind of day. During the last 15-minute period, the OEX did reach a lower low, but then bounced right back between the 15-minute 100- and 130-ema's where it is now. The formation still appears to be a potential "b" distribution pattern forming after a breakdown below a H&S neckline, with a closer look inside that "b" formation showing a potential continuation-form H&S on the three-minute chart, neckline at the day's low. It all still looks bearish, but bears sure can't muster much follow-through as yet on each of these patterns. The advdec line isn't climbing, and that may be the best evidence in the favor of the bears, but bears really do need to muster some follow-through to the downside before bulls decide this is a dip-buying opportunity after all.

  Jeff Bailey   12/6/200,  11:16:59 AM
11:00 Internals at this Link

  Jonathan Levinson   12/6/200,  11:13:27 AM
Gold has cracked its previous low, currently down 3.80 to 453.90 off a low of 452.70. HUI and XAU remain weak, -2.39% at 221.82 and -2.15% at 101.61 respectively.

  Linda Piazza   12/6/200,  11:08:01 AM
The OEX threatens to roll down again beneath the 15-minute 100/130-ema's. Actually, it is already beneath both but has not yet dropped below the low of the day, confirming the move. Until then, we're seeing a possible "b" distribution pattern, with about as many of those breaking to the upside as to the downside, with that downside break normally expected in this typically bearish formation, over the previous few months.

  Jonathan Levinson   12/6/200,  11:06:06 AM
30 min channel support has risen to 39.92 QQQQ. If QQQQ can hold below 40 for another 10 minutes, the upturn will whipsaw back to the downside.

  Jeff Bailey   12/6/200,  11:05:38 AM
11:00 Market Watch at this Link

  Linda Piazza   12/6/200,  11:03:49 AM
The BIX moved below Friday's close but hasn't yet dropped below Friday's low of the day. The TRAN's and BIX's behavior Friday morning warned me that all might not be well on the bullish front, so this should be watched. The BIX is currently edging just below its 10-dma again, with the BIX at 373.84 and Friday's low at 373.38.

  Jonathan Levinson   12/6/200,  11:02:55 AM
The largest volume I see in the QQQQ near-month option chain is in the QQQMM Jan 39 puts. Based on the foregoing discussion of QQV, my inference is that the high QQV readings are based on someone buying QQQQ puts aggressively.

  Jeff Bailey   12/6/200,  10:54:35 AM
Astrazeneca (AZN) $40.05 -0.57% ... said it has dropped Credit Suisse and Merrill Lynch (MER) $57.71 +0.75% as its corporate brokers and replaced them with Deutsche Bank (DB) $87.65 -0.38% and Goldman Sachs (NYSE:GS) $107.13 +0.61%.

It is the first FTSE-100 client Merrill Lynch has lost since Morgan Stanley (NYSE:MWD) $53.48 +0.77% poached a team of brokers from MER earlier this year.

  Jonathan Levinson   12/6/200,  10:54:27 AM
Nymex crude is holdings its gains, up 2 at 43.40 currently.

  Jonathan Levinson   12/6/200,  10:51:45 AM
Jonathan, what's going on with the huge explosion in QQV? Even VXN is much higher, but QQV is up about twice as much. Dave

Good eye, Dave. QQV is up 11.49% as I type, with QQQQ flat at 40.13. The QQV measures option volatility derived from the premium paid for QQQQ options- and so someone is buying QQQQ contracts and paying a fat premium for them. The CBOE total put to call ratio opened at .45 for the first half hour but then rose to .82. In the first half hour, it would have been safe to say that QQQQ calls were being bought, but that .82 reading is far less extreme than the .45, and suggests more neutral activity. I'll go take a look at the option chains for more clues. For now, all I can infer is that option volatility is on the rise, which usually accompanies a decline in price.

  Jeff Bailey   12/6/200,  10:50:29 AM
Sirius Satellite Radio (SIRI) $7.91 +4.9% ... new 52-weeker today. Fulcrum downgraded to "neutral" from "buy" earlier this morning.

  Jeff Bailey   12/6/200,  10:48:38 AM
January Crude Oil futures (cl05f) $43.15 +1.43% .... WEEKLY Pivot levels as follows ... $36.55, $39.50, Piv= $45.00, $48.00, $53.45.

  Jeff Bailey   12/6/200,  10:42:02 AM
Hewlett Packard (HPQ) $21.08 +0.42% .... edges above Friday's high.

  Linda Piazza   12/6/200,  10:40:10 AM
The advdec line hasn't climb much, but TRIN plummeted. Mixed evidence. The TRAN continues its bounce attempt from just above 3700, at 3714.61 as I type, but below 3718 possible resistance.

I still believe, as I did earlier, that markets are trying to sort out various bearish and bullish characteristics and trading patterns, with the patterns so far leaning toward the bearish, but with action far from conclusive with strong support just below some indices (TRAN's 3700, the SOX's 200-sma, etc.).

  Jeff Bailey   12/6/200,  10:39:07 AM
SanDisk (SNDK) $24.01 -0.16% Link ... By Friday, I would think a bull wants to see something similar to that found in mid-September, with SNDK closing above its trending lower 200-day SMA. With MACD moving above signal, prospects look favorable.

Disk Drive Index (DDX.X) 119.05 +0.10% ... holding above its near-term "zone of support" from 115.66-118.22.

  Jeff Bailey   12/6/200,  10:35:37 AM
NASDAQ-100 Index (NDX.X) with updated WEEKLY/MONTHLY Pivot retracement at this Link

Morning low finds buyers at WEEKLY Pivot.

Computer Tech (XCI.X) 729.28 +0.3% and Morg. Stanley High Tech-35 (MSH.X) 504.76 +0.10% ... just bid to green.

  Linda Piazza   12/6/200,  10:33:50 AM
The OEX did break above the 15-minute 100/130-ema's as I was typing that last post. It's broken back above the neckline of the H&S and heads up to test 566.70-567 resistance. It's one of those days.

  Jonathan Levinson   12/6/200,  10:32:55 AM
QQQQ made only a nominally lower low, never hitting the lower 30 min support line before the current bounce, which has just cleared 7200-tick SMA resistance (lower) at 40.10. 30 min channel resistannce is 40.17, and a sustained move above that level for 10 minutes or longer will turn the channel back up.

  Linda Piazza   12/6/200,  10:31:46 AM
The OEX's current consolidation pattern is forming at the 15-minute 100/130-ema's, with those averages at 565.38 and 564.86, respectively, and with most 15-minute candle bodies forming between the averages, with candle shadows piercing them. The OEX is currently trying to push above and maintain levels above the 100-ema.

  Jeff Bailey   12/6/200,  10:28:37 AM
AMEX Gold Bugs ($HUI.X) 220.97 -2.75% .... probing 2-month lows/support at 220.

Equity-side continues to DIVERGE from the commodity itself.

  Linda Piazza   12/6/200,  10:21:01 AM
Again the OEX tests its neckline and again this proves itself to be the kind of day that I feared it would be. Even with breadth indicators supporting a downside play and even with the OEX having broken through the neckline of its H&S, it just refuses to do what it should do under these circumstances and head down toward the downside target. This may be just a sorting out process that will be resolved and see the OEX eventually hit that target, but if the OEX can hold up too long, bulls will become emboldened.

  Jeff Bailey   12/6/200,  10:19:19 AM
Current OPEN MM Profiles at this Link

  Linda Piazza   12/6/200,  10:14:35 AM
New day's low for the OEX as it finishes its test of the H&S neckline and heads down again.

  Jeff Bailey   12/6/200,  10:14:04 AM
10:00 Internals at this Link

Friday's internals at this Link

  Linda Piazza   12/6/200,  10:12:30 AM
On a five-minute chart, the SOX's rise off its low of the day looks like a potential bear flag, rising from gap support from Friday's gap up off Thursday's close. If that's all it is, bears would like to see the SOX find resistance neat 445.50-446 or below and break out of that potential bear flag to the downside.

  Jonathan Levinson   12/6/200,  10:09:39 AM
Gotta type fast in this market. Session lows for QQQQ, gold and silver futures here, QQQQ breaking the prior low on a sharp drop.

  Jonathan Levinson   12/6/200,  10:06:12 AM
QQQQ bounced from a low of 39.98, 3 cents shy of the lower 30 min channel band. 1st resistance on the bounce is at 7200 tick SMA resistance of 40.14. A failure there will target the session low, below which the 30 min channel has fallen to 39.85.

  Linda Piazza   12/6/200,  10:04:28 AM
The OEX still pauses at its neckline test.

  Jeff Bailey   12/6/200,  10:02:04 AM
10:00 Market Watch at this Link

  Linda Piazza   12/6/200,  10:00:57 AM
The OEX has come right back up to retest that neckline for its H&S. This is exactly the kind of behavior that I did not want to see this morning and which I warned against. Absolute TRIN and advdec numbers support the bearish side, but traders will have to watch their trends, too, as well as this test of the neckline. Watch TRAN 3700 and the SOX's 200-sma, if tested, too.

  Jonathan Levinson   12/6/200,  9:57:18 AM
The Fed's open market desk has just rolled over the 6.25B overnight repo expiring today with a new 6.25B overnight repo- no net change for the day.

  Linda Piazza   12/6/200,  9:54:52 AM
The SOX also may be headed down for a retest of its 200-sma at 437.14, with the SOX at 441.05 as I type. The SOX's test of its 200-sma, if it occurs, is obviously important to watch. The SOX's daily candlestick pattern looks ugly, with Friday's long upper shadow, today's open near Friday's close and low of the day, and a move down from there, but a strong bounce from the 200-sma could change that pattern or at least confuse it.

  Linda Piazza   12/6/200,  9:51:46 AM
The TRAN slightly exceeded Friday's low and has attempted a bounce, but the bounce may be failing. The TRAN has not yet hit the bottom of the descending regression channel that forms a possible bull flag on its 60-minute chart. That bottom-of-the-channel level occurs at about 3700, also the site of a 50% retracement of its zoom higher on Wednesday, into Thursday's high. TRAN 3700 is a key level to watch for a potential bounce or breakdown out of what has until now appeared to be a possible bull flag.

  Jeff Bailey   12/6/200,  9:50:52 AM
VIX.X 12.75 +0.46% ... DAILY Pivot levels ... 12.09, 12.44, Piv= 12.75, 13.10, 13.41.

  Linda Piazza   12/6/200,  9:47:34 AM
So far, the OEX "bounce" couldn't make it up to the neckline. New low.

  Jonathan Levinson   12/6/200,  9:46:23 AM
Gold is holding steady near its lows, down 2.1 at 455.60. Despite the news of the GG/WHT buyout today, HUI and XAU are both solidly lower, HUI -2.05% at 229.59 and XAU -1.82% at 101.96.

  Linda Piazza   12/6/200,  9:45:18 AM
The OEX has reached three-minute Keltner support and may bounce. First Keltner resistance on that chart is at the neckline of the H&S, showing good correlation and then at 565.87-566.07, but firming more strongly near 566.60-567.00.

  Linda Piazza   12/6/200,  9:42:48 AM
We now have a 560.50-ish downside target identified for the OEX, due to the break of the H&S neckline. The five-minute chart suggests that support may be found near 562.60-563.70, however, at least for a first bounce attempt. Don't trust too strongly in the downside this morning and be prepared to protect profits in that area, if it's reached, keeping that potential 560.50(-561?) downside target in mind. I think bulls are still probably confused about whether any dip is a buying opportunity or not and bears are probably confused and will be quick to take profits, both of which could make for choppy trading conditions.

  Jonathan Levinson   12/6/200,  9:42:17 AM
The 30 min cycle downphase continues from Friday, but it's in oversold territory. While this suggests that the bears are running out of racetrack for this downphase, the 60 min cycle, also pointed south, has plenty of room to run. This could result in weak sideways chop for a few hours as the two cycles fight it out. But if 39.88 and 39.80 can be broken, we'll have a bearish trending move that could take QQQQ much lower for this run.

  Jonathan Levinson   12/6/200,  9:40:06 AM
Session lows across the board, with QQQQ reaching for lower 30 min channel support at 39.95.

  Linda Piazza   12/6/200,  9:39:07 AM
The OEX edges ever so slowly beneath what I think is the appropriate neckline for a H&S, with a bearish MACD cross at signal on the five-minute chart. Fake-out move? Could be, this early in the morning. The OEX dropped quickly after opening beneath the bear flag from Friday on the five-minute chart, however.

  Linda Piazza   12/6/200,  9:36:17 AM
TRIN is zooming around a bit this morning, currently at 1.38. Jane has taught us to let it settle down before we give too much credence to its level, so we'll need to wait out that volatility.

  Linda Piazza   12/6/200,  9:34:31 AM
It's possible to detect another potential H&S-ish formation on the OEX's five-minute chart, but since we've seen a series of these possible formations set up, some confirmed and some rejected, it's difficult to give too much credence to it. The potential neckline is somewhere around 565.45, perhaps a little higher if you draw an ascending neckline. The OEX heads toward that level as I type.

  Jeff Bailey   12/6/200,  9:33:50 AM
Research in Mortion (RIMM) $92.60 +0.69% .... Piper Jaffray saying its monthly channel checks suggest continued strong sales of BlackBerry 7100t handsets at T-Mobile, thinks RIMM will post upside guidance in its Dec. 21 earnings report. Piper raising their Nov. quarter rev/EPS estimates to $370 million/$0.57 from $361 million/$0.54 (consensus $361.4 million/$0.54), and raises fiscal 2005 rev/EPS estimates to $1.4 billion/$2.09 from $1.3 billion/$1.96 (consensus $1.35 billion/$1.98).

  Linda Piazza   12/6/200,  9:29:15 AM
This chart is 30-minutes delayed, but crude prices are actually about the same level as depicted on this chart, having bounced from the long-term red trendline I had drawn some time ago: Link Crude prices will presumably find first resistance at about $43.75 and then again from $45.00 up to the 100-dma, now at $46.06. A move above the 100-dma and especially the 50-dma would be troublesome indeed to equity bulls.

  Linda Piazza   12/6/200,  9:22:41 AM
As I mentioned in my 19:52 post and in the chart linked to that post, both bulls and bears can find evidence for their cases and against their cases. I'm wondering if that won't produce some choppy trading conditions, the type of conditions that I'm already seeing develop in the currency markets since their open last night. To some extent, futures showed the same choppy pattern. Be careful with positions until we can get as much evidence for one case or the other, as I'm afraid we'll see trades triggered, the OEX begin to move in the direction of the trigger and then reverse and move back into a consolidation pattern again. I'm afraid that today we'll have another of those competing bullish and bearish formations days. Crude is up $0.68 to $43.22 as I type, having bounced from a long-term (January-present) ascending trendline on my charts, and any continued gain might prove troublesome to bulls. Let's see what develops as markets open. That 19:52 post lists possible bullish and bearish entries, but I'd sure want as much evidence on my side as possible before I entered too early this morning.

  Jonathan Levinson   12/6/200,  9:11:29 AM
COMS has just warned, increasing its expected loss to 12-14 cents on revenue of 149M-153M, well below expectations of 7 cents on revenue of 174M.

  Jonathan Levinson   12/6/200,  9:05:12 AM
Bonds are up, TNX -3 bps at 4.24% and just below the 4.26% confluence line. The move is being credited to the Saudi Arabian consulate attack, for what it's worth.

  Jonathan Levinson   12/6/200,  8:56:19 AM
Gold is down 2.40 to a session low of 455.30, but euros remain firm at 1.3434.

  Jonathan Levinson   12/6/200,  7:46:14 AM
Equities are higher, ES 11895, NQ 1614, YM 10584 and QQQ 40.12. Gold is down 40 cents at 457.30, silver up .037 at 8.075, ten year notes at a session high of 112.3125 and Nymex crude +.475 at 43.025.

There are no major economic reports scheduled for today.

  Linda Piazza   12/6/200,  7:26:02 AM
Good morning. At about 4:30 EST, news beginning hitting the airwaves that the U.S. consulate in Jeddah, Saudi Arabia was under attack. That attack has now apparently ended, with preliminary information suggesting that rescuers had accounted for all U.S. personnel inside at the time of the attack and that all were safe. Three gunmen apparently penetrated all three security perimeters, however, getting inside the compound and raising questions about security measures.

Last night the Nikkei declined, reacting to our U.S. jobs report on Friday. Other Asian markets turned in mixed performances. Many European markets decline this morning, too. Our futures had eased along with the Nikkei, climbed slightly into the European open, but then fell back again. They recovered again and are now all near the flat-line level. As of 7:04 EST, gold was down $1.10 and crude, up $0.41. More detail about Asian and European markets follows in succeeding paragraphs.

In its first opportunity to react to the U.S. jobs report on Friday, the Nikkei gapped lower Monday morning with exporters declining. The Nikkei fell into the early afternoon session, but then climbed laboriously off its lows without reclaiming 11,000. It closed down 92.93 points or 0.84%, at 10,981.96. Still, some techs gained and banks performed relatively well after Fitch Ratings raised long-term ratings on six banks under the three of the top four banking groups in Japan. Honda declined after revealing plans for a new vehicle planned for its global market, and Softbank Corp. fell after filing an application that was the first step in beginning mobile phone services.

Other Asian markets turned in mixed performances. The Taiwan Weighted gained 0.44%, but South Korea's Kospi lost 1.34%. Singapore's Straits Times declined 1.42%, but Hong Kong's Hang Seng climbed 0.32%. At the conclusion of a yearly meeting among China's leaders, a commitment was made to continue to cool China's economy and maintain a stable yuan policy. Some guess that China will reach for a 8-8.5% expansion of the economy next year, down from this year's growth but still robust. The goal is to curb inflation while keeping growth steady, with some market watchers still doubting whether China will be able to engineer the soft landing that China wants. China has been under pressure by other countries to revalue its currency, with the yuan currently pegged to the dollar. China's Shanghai Composite gained 0.18%.

Many European markets trade in negative territory this morning. Autos have been one focus, with Volkswagen being a leading decliner. As a result of the declining dollar, CSFB has lowered price targets or earnings estimates for Volkswagen, DaimlerChrysler and BMW. It reiterated its ratings on all three. Morgan Stanley spoke out on European pharmaceuticals calling them "a steal," according to a Marketwatch.com article. The firm named Roche, Sanofi-Aventis and Schering as companies whose stocks should be overweighted. Novartis was easing in early trading, however, after a report on the data presented at a Chicago conference.

As of 7:04 EST, the FTSE 100 had declined 25.00 points or 0.53%, to 4,722.90. The CAC 40 had fallen 13.75 points or 0.36%, to 3,769.76. The DAX had fallen 8.90 points or 0.21%, to 4,199.97.

  Linda Piazza   12/5/200,  7:52:23 PM
Here's what I see on the OEX's daily chart: Link As you can tell, it's possible to view this chart and come away with either a bullish (broke above bull flag) or bearish (possible double-top, potential reversal signal) conclusion. I've listed possible bearish and bullish entries, but with such confusion on the charts, trading patterns may be confused, too. Try to have as much supporting information, such as breadth patterns, on your side before considering any play.

  Jeff Bailey   12/5/200,  7:31:05 PM
S&P 500 Index (SPX.X) with WEEKLY/MONTHLY Pivot retracement at this Link

e-mini S&P500 with two 38.2% fitted retracement at this Link

  OI Technical Staff   12/4/200,  8:37:29 PM
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Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.


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