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  OI Technical Staff   12/8/200,  6:09:52 PM

Click here for bonus info: Link

 
 
  Jeff Bailey   12/8/200,  5:02:20 PM
Closing Internals at this Link

Will discuss further in tonight's Wrap, but we didn't really see "marginal weakness to the close" despite the narrowing spread as bonds closed at 03:00 PM. Will see if there's weakness at the open, which might take place if longer-dated maturities aren't seeing some selling.

 
 
  Jim Brown   12/8/200,  4:47:35 PM
ALTR cut its fourth-quarter revenue targets citing more severe weakness in its communications business, especially in Japan and Europe, and higher-than-expected levels of unsold chips.

Altera said it now expects sales to fall 9 percent to 12 percent from the third quarter, compared to an earlier target of a 1 percent to 5 percent decline. It also said inventories, both at the company and distributors, will rise higher than its forecasts and to the high end of a "normal" range.

 
 
  Jim Brown   12/8/200,  4:40:30 PM
CYMI on Wednesday said revenue and gross margins for the fourth quarter will fall below what it forecast in mid-October, on declining demand for consumables and services.

Cymer said it now expects revenue to fall 12 percent to 13 percent from the third quarter, worse than its prior 10 percent-decline forecast. It forecast gross margin of 34 percent to 36 percent, down from a prior estimate of 37 percent to 39 percent.

 
 
  Jim Brown   12/8/200,  4:39:32 PM
ALTR update is out on some wires and is negative but I can't find any hard numbers.

 
 
  Jim Brown   12/8/200,  4:30:43 PM
CYMI cutting quidance for the current quarter

 
 
  Jim Brown   12/8/200,  4:22:03 PM
XLNX Mid quarter update:
Revenue expected to be down -5% to -8%, inventory days up to 170 days from 150 days in prior guidance.

 
 
  Jim Brown   12/8/200,  4:19:20 PM
EAT affirming its guidance

 
 
  Jeff Bailey   12/8/200,  4:17:55 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Stopped out of the day trade carryover short in Merck (MRK) at $28.25 ($-0.19, or -0.68%)

Stopped out of the swing trade long in the SIRI March $5 Calls (QXO-CA) at $3.10. ($2.10, or +210%)

Swing trade SOLD NAKED PUTS on the SMH Dec. $32.50 puts (SMH-XZ) at the bid of $0.40, when the SMH was trading $33.10. Note: NO STOP PROFILED. Don't sell'em if you don't want them.

 
 
  Jim Brown   12/8/200,  4:16:17 PM
RSAS affirming guidance for the quarter.

 
 
  Jim Brown   12/8/200,  4:15:56 PM
CDWC saying sales were up +9.5% to +11% in November.

 
 
  Jim Brown   12/8/200,  4:05:41 PM
Earnings after the close
DWA est +0.16, actual = + 0.18, rev $2421M

 
 
  Jim Brown   12/8/200,  3:59:53 PM
Earnings after the close

DWA est +0.16

Mid quarter updates today:

MXO est -0.20, rev $935M
ALTR est +0.15, rev $258M
XLNX est +0.22, rev $387M

 
 
  Linda Piazza   12/8/200,  3:51:59 PM
The midpoint of yesterday's long red candle (not the midpoint of the total decline) on the OEX is at 564.38. It appears that the OEX will close below that midpoint, so in the "bearish" half of that candle. In addition, the candle looks as if it will be a harami, and inside-day setup.

 
 
  Jonathan Levinson   12/8/200,  3:50:08 PM
The 30 min cycle upphase discussed in last night's Futures Wrap was, as expected corrective, and it's finally topping out now for QQQQ at a lower price and oscillator high. All things being equal, the downphase to kick off at tomorrow's opening should at least test today's low, and my own guess based on the corrective weakness of today's upphase is that it will break it. The daily cycles are pointing south, and a weak oversold intraday bounce is just ending.

 
 
  Linda Piazza   12/8/200,  3:45:28 PM
I agree with Jim's 15:38 comments on the Futures side of the Monitor. I've been trying to comment sparely today and to always reiterate my concern about the choppiness of the markets when I do comment. I'm hesitant to say anything that might be construed as enticing readers into plays that are not likely to perform well, but want to provide information for those who might be in plays already. This is just chop and perhaps to be expected after yesterday's drop. There will be better days. Great days. Conserve your money.

 
 
  Linda Piazza   12/8/200,  3:30:03 PM
And the OEX immediately turns around and moves back to test the neckline of its H&S. What else should we have expected?

 
 
  Linda Piazza   12/8/200,  3:26:08 PM
Down volume continues to outstrip up volume on the Nasdaq, although advancing issues remain ahead of decliners.

 
 
  Linda Piazza   12/8/200,  3:24:05 PM
The OEX's H&S has now been confirmed, with a downside target of about 561.50.

 
 
  Jeff Bailey   12/8/200,  3:22:14 PM
CNBC's Dylan Ratigan has got it! At least I think he does. Oil, dollar and gold and eventual impact on economy.

 
 
  Mark Davis   12/8/200,  3:20:57 PM
That's a wimpy looking bull Jonathan but maybe they slipped some Viagra into his feedbag... Link

 
 
  Linda Piazza   12/8/200,  3:19:55 PM
I wonder if that impending announcement about Snow is what cratered the dollar today after its overnight gains. Well, cratered is too strong a word, but caused a big retracement, let's say.

 
 
  Jeff Bailey   12/8/200,  3:19:20 PM
03:00 Internals at this Link

Test... might look for some marginal weakness in equities toward the close, as "spread" narrowed.

 
 
  Jonathan Levinson   12/8/200,  3:15:21 PM
39.72-.75 QQQQ being tested here, below which 39.65, 39.50 and 39.40 come into view.

 
 
  Jeff Bailey   12/8/200,  3:12:59 PM
Alert! CNBC reporting that President Bush has asked Treasury Secretary Snow to stay as part of Cabinet.

 
 
  Jonathan Levinson   12/8/200,  3:09:24 PM
There's an uptick here in euros, CAD, gold and the miners following the close of the cash bond market. Equities continue sideways, with QQQQ's 30 min cycle oscillators still pointing north as the channels continue sideways. So far, that cycle continues to show very poor price traction, making it look corrective.

 
 
  Linda Piazza   12/8/200,  3:05:49 PM
OEX 563 appears to be the neckline level for the H&S building on the OEX's five-minute chart. The downside target is not large, only about 1.5 points, but it would be enough to break the OEX below the ascending trendline off this morning's low, if the downside target was met.

 
 
  Jeff Bailey   12/8/200,  3:04:16 PM
03:00 Market Watch at this Link

 
 
  Linda Piazza   12/8/200,  3:00:30 PM
The TRAN has now turned lower again, but hasn't yet violated its last five-minute low. It may be forming another and larger H&S on its five-minute chart, with the confirmation level just below that previous five-minute low.

 
 
  Jeff Bailey   12/8/200,  2:52:16 PM
CMGI Inc. (CMGI) $2.43 -9.32% .... narrowing range since the opening decline to $2.23. That building volume prior three sessions still had my bullish interest. Thought it worth 1,000 shares yesterday to test the waters. Was "hopeful" at the open for some squeeze action, but never really challenged $3.00.

 
 
  Linda Piazza   12/8/200,  2:39:24 PM
The advdec line still generally climbs. TRIN sort of does, too, since about 12:30-1:00. VXO broke its climb about fifteen minutes ago, but now attempts to climb again. Mixed evidence. The BIX and SOX each refuse to go along with any bounce attempts although both consolidate near their lows of the day, perhaps basing? The TRAN did confirm that H&S at the top of its climb, just under yesterday's high and 3730 resistance, but hasn't yet met its downside target, and the TRAN usually does that quite promptly. Mixed up stuff.

 
 
  Jeff Bailey   12/8/200,  2:38:58 PM
Without using "spread" or yield curve... where might a trader set an upside and downside alert on the benchmark bond? Better take a look at the pivot matrix for that.

 
 
  Linda Piazza   12/8/200,  2:35:46 PM
Now that the OEX has broken back below the five-minute 100/130-ema's, it may be forming a H&S with the head formed from that attempt to break over these averages and the left shoulder at the 100-ema. The OEX comes up now to retest the 100-ema, again gapping higher as I type. More chop.

 
 
  Jeff Bailey   12/8/200,  2:33:28 PM
SPX.X) 1,181.68 +0.39% ... most actives at the December expiration are the 1,180 puts and calls. puts (5,042 : 24,906) calls (4,913 : 22,245)

With VIX.X 13.28 -2.85% .... taking note that the Dec. 1,175 PUTS (4,750 : 71.337) are third-most active and those Dec. 1,200 calls are $2.80 and fourth-most active at (4,720 : 65,858)

 
 
  Jonathan Levinson   12/8/200,  2:31:40 PM
The 30 min cycle upphase is still intact, but it's gone nowhere pricewise in the past 3 hours. This suggests that today's move is a consolidation at the lows- possibly a broad flag or "b" distribution pattern, as Linda calls them. QQQ needs to get above that 40.0 line and avoid breaking 39.72 and 39.65 support to avoid an abort to this so-far corrective 30 min upphase.

 
 
  Jeff Bailey   12/8/200,  2:23:10 PM
02:00 Internals at this Link

Per today's 01:00 PM intra-day update, I did add the 5-year yield, as well as a "Yld Spread" measure.

 
 
  Linda Piazza   12/8/200,  2:15:56 PM
The advdec line still climbs, but TRIN and VXO have both had a slight upward trajectory, too, since about 1:00-1:30. Thanks, Jane, for suggesting we watch the two in conjunction to confirm each other. I don't know what Jane believes about the slight rise, but it is slight so far and may not yet be significant. I noticed it because I was watching the TRIN to see if that bullish falling wedge was resolved to the upside, as it appeared that the TRIN was trying to flatten.

 
 
  Linda Piazza   12/8/200,  2:10:13 PM
While advancers are solidly ahead of decliners on both exchanges, the down volume on the Nasdaq far exceeds up volume.

 
 
  Linda Piazza   12/8/200,  2:08:47 PM
Successful OEX retest of the five-minute 100/130-ema's? Maybe, maybe not. Now the OEX keeps hanging up at the 50% retracement of the decline from Monday's last five-minute high into this morning's low, with that Fib level at about 564.36. Ominously, the rise into this resistance now begins to take on a bit of a rising bearish wedge look. Of course, that's ominous only if you believe that such formations will resume their traditional resolution to the downside, something that happens with less and less frequency, it seems. This resistance is joined by 15-minute Keltner mid-channel resistance.

 
 
  Jonathan Levinson   12/8/200,  2:08:23 PM
The 15B 5-year treasury note auction generated a strong bid-to-cover ratio of 2.6, but a high 65.8% of that demand was from "indirect" bidders, generally made up of foreign central banks as I understand it.

 
 
  Linda Piazza   12/8/200,  1:47:23 PM
The OEX did fill that gap, erasing the bullishness from the supposed breakaway gap. The OEX currently retests the five-minute 100-ema after falling back below the 130-ema. The TRIN attempts to rise again. The TRAN is back retesting the descending trendline off the 12/02 high after punching above it, but stopping short of yesterday's high and 3730 resistance. The BIX was never convinced to climb, and the SOX couldn't be, either. Chop, chop.

 
 
  James Brown   12/8/200,  1:35:56 PM
Semiconductor stock ADI has been downgraded to a "sell" by BAC and shares are falling 3.2% to $36.48.

 
 
  James Brown   12/8/200,  1:34:59 PM
Exit alert! - OI call play FLR continues to rally. The stock is up 5.5% to $54.69. That's pretty close to our target at $55.00 (the high today is $54.77). We would strongly consider exiting now and the newsletter will close the play if shares can tag $55.

 
 
  Linda Piazza   12/8/200,  1:34:28 PM
The OEX now comes down to retest the breakaway gap, which questions whether that's what it was or not. They're often not filled.

 
 
  James Brown   12/8/200,  1:32:45 PM
Meanwhile Whole Foods Market Inc (WFMI) is bouncing sharply from the $90.00 level up 3.5%. Short-term technicals are turning bullish. This could be a new bullish entry point. A move over $94 would produce a new P&F buy signal but there is resistance in the $96-97 range.

 
 
  Linda Piazza   12/8/200,  1:32:33 PM
Again, although I don't always know how much relevance we should give to chart formations on indicators such as TRIN, does the TRIN's decline look like a possible bullish descending wedge to anyone else but me? And does it look as if it's trying to put in a bottom at 1.15 to anyone else? Bulls don't want to see the TRIN suddenly start climbing.

 
 
  James Brown   12/8/200,  1:31:12 PM
Safeway (SWY) has guided below analysts' estimates for FY2005 but the company did announce plans to open 30-35 new stores. The stock is rebounding from its early morning weakness and is almost back into positive territory.

 
 
  Jonathan Levinson   12/8/200,  1:30:33 PM
QQQ couldn't get north of 40.00 and is now back below 39.95. This isn't much of a 30 minute cycle upphase considering how powerful the downphase that preceded it was, and I agree with Keene's comment to the effect that there should be another impulsive downmove to follow- if this is upphase, the next down should be a doozy. A break of 39.40 would kick it off, with the first sign of trouble a break below 39.65.

 
 
  Linda Piazza   12/8/200,  1:28:07 PM
On this Monitor, it was Jim who first taught us to watch the 100/130-ema's on a variety of time frames. Sometimes the five-minutes appear more important to the OEX's behavior, and sometimes, it's other time frames, but these averages have proven invaluable to watch. Here's the OEX's breakaway gap above the 100/130-ema's: Link

 
 
  James Brown   12/8/200,  1:27:55 PM
Toro Co (TTC) is up big (+8.3%) following its earnings announcement this morning where the company beat estimates by 7 cents. Shares are breaking out over the $75 level to hit new all-time highs.

 
 
  Jeff Bailey   12/8/200,  1:27:06 PM
01:00 Internals at this Link

 
 
  James Brown   12/8/200,  1:25:53 PM
Amazon.com (AMZN) is bouncing from the $38.00 level, +1.8% to $38.89, in spite of yesterday's new MACD sell signal.

 
 
  Linda Piazza   12/8/200,  1:25:44 PM
The OEX has immediately turned around to retest the five-minute 100/130-ema's, but it has not closed or even yet tested the gap when the OEX gapped above those averages in what was probably a breakaway gap. Chart to follow.

 
 
  James Brown   12/8/200,  1:24:31 PM
Smith Barney has started coverage on video game makers ERTS and ATVI with a "buy" this morning while WR Hambrecht is downgrading ERTS and TTWO to a "hold" (SB also rates TTWO a hold).

The affect is a 1.5% gain for ERTS, a 1% gain for ATVI, and a 0.3% gain for TTWO.

 
 
  Jonathan Levinson   12/8/200,  1:22:50 PM
New session for ten year bonds, TNX down 9.2 bps at 4.134%, breezing through 4.14% support. QQQQ is testing 39.95 from above now.

 
 
  Linda Piazza   12/8/200,  1:17:49 PM
As Jane has probably already noted on the Futures side, the advdec line has now settled into an upward trajectory.

 
 
  Linda Piazza   12/8/200,  1:15:47 PM
The OEX just gapped above the five-minute 100/130-ema's, a probable breakaway gap, with this gap adding to the bullishness of the move . . . unless it's reversed.

Remember that the OEX is still inside that broadening formation and expect the unexpected.

 
 
  Linda Piazza   12/8/200,  1:14:00 PM
The TRAN is breaking above that descending trendline off the 12/02 high, but hasn't yet topped yesterday's high or the 3730 resistance zone.

 
 
  Jonathan Levinson   12/8/200,  1:10:26 PM
QQQQ breaking its previous high here by a penny- 30 min channel resistance is dead ahead at 40.00, followed by confluence resistance at 40.12-.15.

 
 
  Jeff Bailey   12/8/200,  1:07:52 PM
01:00 Market Watch at this Link

Notes: dollar up, stocks up. Oil inventories decline, oil up. Now we monitor for YIELD curve flattening to abate, then start to steepen.

Banks are firming!

 
 
  Jonathan Levinson   12/8/200,  1:04:19 PM
The short cycle stochastic is showing a slight bearish divergence here on the QQQQ prints above 39.85- a break north of 39.95 would invalidate it and reignite the upphase.

 
 
  James Brown   12/8/200,  1:03:41 PM
Roxio Inc (ROXI) is down 12.3% to $8.70 and breaking down through its sharp, rising channel after one firm downgraded the stock to a "sell" on valuation. Shares of ROXI had risen from $3.50 to $10.00 from its September lows.

 
 
  Linda Piazza   12/8/200,  1:01:09 PM
The TRAN rushes up toward yesterday's high. Already, it is challenging a descending trendline drawn off the 12/02 high, through yesterday's. Yesterday's high was 3730.07, and the TRAN is currently at 3723.80.

 
 
  James Brown   12/8/200,  1:01:02 PM
Advertising company Gannett Co (GCI) is down 0.68% to $81.31 after reporting that it not only needs to see ads pick up to meet their Q4 goals but they see a "challenging" 2005 ad environment.

The stock is suffering under a three-month trend of lower highs.

 
 
  Jeff Bailey   12/8/200,  12:50:42 PM
Swing trade sell December naked put alert .... Let's sell three (3) of the Semiconductor HOLDR SMH Dec. $32.50 puts (SMH-XZ) at the bid of $0.40.

SMH $33.10 -1.86% here.

 
 
  Linda Piazza   12/8/200,  12:49:45 PM
The OEX has also been testing its five-minute 100/130-ema's, with those at 563.56 and 563.94. In fact, candles have been lining up right underneath the flattening 100-ema on that chart. There's now also a rough inverse H&S with a neckline in the region of these averages. It looks as if a move above 564 should confirm the formation, with a predicted 2.5-point upside. That's not much upside in this environment, when the OEX is within this choppy broadening formation, but for those who would like to make a bet on the bullish side, those averages could be used as benchmarks. Currently, the five-minute MACD makes a tentative bearish cross, but from above signal. A fall much below 562 would tend to negate the inverse H&S thesis and instead call back the possibility of a bear flag forming. If the TRIN were trending differently, I'd say that those averages could be used as benchmarks for bears, too, with new entries at tests of and rollovers from those averages. TRIN is still above its levels from yesterday except for the last few minutes of trading, but its trend has been undeniably down. My examination of other indices still has me feeling that they ought to be pulling together a bit more before we know too much of what we might expect.

 
 
  Linda Piazza   12/8/200,  12:40:04 PM
Minimal new LOD for the SOX. BIX still not getting any upward traction. TRAN still climbing. OEX still finding resistance at the 38.2% retracement of the decline. Still a mess.

 
 
  Jonathan Levinson   12/8/200,  12:36:06 PM
The 30 minute cycle upphase for QQQQ is approximately half-way done based on the position of the oscillators, but price needs to continue advancing or at least hold constant to avoid it aborting early. QQQQ has support at 39.72-.75, resistance at 39.95. A break of either level should provide at least intraday followthrough, but the middle of the range has so far been a chop zone.

 
 
  Linda Piazza   12/8/200,  12:31:27 PM
The BIX still can't get an upward traction going. Danger signal to bulls?

 
 
  Linda Piazza   12/8/200,  12:30:49 PM
Back. The OEX still tests that 38.2% decline retracement at about 563.55.

 
 
  Jonathan Levinson   12/8/200,  12:26:02 PM
Session high for ten year bonds here, TNX now -6.2 bps to 4.164%. 4.14%-4.16% confluence support is now being tested.

 
 
  Linda Piazza   12/8/200,  12:23:35 PM
Stepping away for a few minutes.

 
 
  Linda Piazza   12/8/200,  12:19:54 PM
The SOX creeps oh-so-slowly toward its previous low of the day.

How can we have confidence in any direction when the SOX heads lower (but perhaps into support), the TRAN zooms higher, the BIX pokes along, and the OEX tests the 38.2% retracement of its decline for the second time? We need these indices to pull together before we're confident of anything more than chop.

 
 
  James Brown   12/8/200,  12:16:32 PM
OI call play United Technology (UTX) is bouncing strongly with a 2% gain to $98.65. The stock is reversing the previous two sessions of declines.

 
 
  Linda Piazza   12/8/200,  12:16:22 PM
If the interpretation of the BIX's pattern as a symmetrical triangle was correct, the BIX has broken above the top trendline, finally mustering some bounce potential after other indices have long-ago done so. If the correct interpretation is an inverse H&S, the BIX has not yet broken above the neckline, and will need to rise to 372.50-373.00 to do so, with the BIX currently at 371.87.

 
 
  James Brown   12/8/200,  12:15:02 PM
OI call play Fluor (FLR) is up 4.18% to $53.97 and nearing our target region at $55.00.

We don't see any news responsible for today's big move but the stock has been coiling for a breakout for days. Volume is very strong.

 
 
  James Brown   12/8/200,  12:12:57 PM
OI call play FDX is up 2.2% to $98.39 and hitting new all-time highs over the $98 level. Remember that our target has been the $99-100 range.

The rally this morning is due to an upgrade from CSFB. The firm raised their outlook on FDX from "neutral" to "outperform" and raised their price target from $85 to $130.

 
 
  James Brown   12/8/200,  12:10:24 PM
OI call play ARLP is once again bouncing from its rising simple 50-dma. This could be an entry point but I'd prefer to see a bit more follow through.

 
 
  James Brown   12/8/200,  12:07:50 PM
January light sweet crude contracts are bouncing from $40.45 and its simple 200-dma this morning. The contract is up 1.66% to $42.15.

 
 
  Linda Piazza   12/8/200,  12:04:38 PM
The BIX is perhaps settling into a triangle now, the SOX perhaps headed down toward a double-bottom, although Keltner evidence suggests that it could head lower still. The SOX is now below its 200-sma, of course, with the 200-ema below at 426.50. The OEX zoomed higher out of its potential bear flag, but got turned back at the 38.2% retracement of the decline. The TRAN is now between 3700 support and 3718 resistance. Choppy, choppy.

 
 
  Jonathan Levinson   12/8/200,  11:59:40 AM
QQQQ 39.85 is failing, taking the cup & handle interpretation off the table. This remains a hesitant 30 min cycle upphase for QQQQ.

 
 
  Jonathan Levinson   12/8/200,  11:56:48 AM
A bounce from the higher 39.85 low would have a cup and handle feel to it intraday on QQQQ, and would suggest a strong blast higher to follow- I'm guessing to target the 39.12-.15 confluence area.

 
 
  Linda Piazza   12/8/200,  11:56:14 AM
The OEX sits at the 38.2% retracement of the decline. It's not retreating from it, but not zooming past it, either.

 
 
  Jonathan Levinson   12/8/200,  11:54:16 AM
QQQQ busted the previous high and made it 39.91 before the current pullback. Former resistance is now support at 39.85.

 
 
  Jeff Bailey   12/8/200,  11:50:42 AM
I have to leave for about an hour. Will return.

 
 
  Linda Piazza   12/8/200,  11:49:42 AM
The TRAN has come all the way back to test that 3717-3718 S/R zone, breaking to the upside out of the H&S it had looked to be forming. Bulls have the power over the short-term anyway.

 
 
  Jeff Bailey   12/8/200,  11:46:54 AM
Continuous Gold ($GOLD) at this Link on $2 box size.

First sign of weakness would be trade at $448.

Those that have Dorsey/Wright's point and figure charts will be viewing February gold on $2 box. Contract gave a triple-top buy signal at $458, but the "quick reversal lower" and triple bottom sell signal at $448 is the classic "bull trap" pattern. Bullish support trend is at $428.

 
 
  Linda Piazza   12/8/200,  11:46:53 AM
The OEX is now headed straight up to test its five-minute 100/130-ema's at 563.66 and 564.08, respectively. It will also be testing the 38.2% retracement of the decline at the same time--pulling back as I type.

As it headed up, it broke to the upside out of that bear flag it had looked to be forming.

 
 
  Jeff Bailey   12/8/200,  11:41:46 AM
Continuous Oil ($WTIC) Pnf chart at this Link which would only be updated through yesterday's trade. With January Crude having traded $40.45 earlier this morning, would chart O down to $40.50 at this point. $45.50 should build resistance.

Continuous gold is next.

 
 
  Jonathan Levinson   12/8/200,  11:41:03 AM
Stepping away for 10 minutes.

 
 
  Jonathan Levinson   12/8/200,  11:40:50 AM
QQQ held the higher 39.64 low and has drifted back above 39.75. Next resistance is 39.85, the site of the session high, above which the 39.88 level from yesterday, then 39.95 levels come into view. The short cycles are neutral currently and flipping back to the upside within the so-far timid 30 minute cycle upphase. 30 min channel support is at 39.55, resistance 39.88.

 
 
  Linda Piazza   12/8/200,  11:36:13 AM
The OEX still appears to be settling into a potential bear flag.

 
 
  Linda Piazza   12/8/200,  11:25:54 AM
I'm stepping away for a few minutes.

 
 
  Linda Piazza   12/8/200,  11:24:37 AM
The advdec line dropped, but not into negative territory and it's trying to climb again. I've been watching the trend of the advdec line fairly closely this morning, trying to determine the trend, but so far, there's not one I can determine.

 
 
  Jeff Bailey   12/8/200,  11:23:33 AM
Buy Program Premium .... SPX 1,179.92 , QQQQ $39.75, BIX.X 371.30

 
 
  Jonathan Levinson   12/8/200,  11:19:59 AM
Session low for gold at 435.20, -18.50 or 4.08%.

 
 
  Linda Piazza   12/8/200,  11:14:09 AM
The BIX has the same potential diamond shape at the bottom of its decline as the OEX appeared to have earlier. In the BIX's case, this could be read as a potential inverse H&S, but the right shoulder is growing a little out of proportion to the left shoulder, so it needs to round up soon if it's going to do so. There's some doubt about whether this formation is valid, I believe.

 
 
  Jeff Bailey   12/8/200,  11:13:03 AM
11:00 Internals at this Link

 
 
  Linda Piazza   12/8/200,  11:09:05 AM
While the OEX has been sitting still, the TRAN has done a bit of zooming around today, and it may be getting ready to do some more. It's perhaps forming a H&S at the top of its climb today, with the left shoulder and head formed.

 
 
  Jeff Bailey   12/8/200,  11:03:32 AM
11:00 Market Watch at this Link

 
 
  Linda Piazza   12/8/200,  11:02:51 AM
The OEX threatens to fall into that double-bottom territory. Of course, a further decline would see that 559-ish downside target back in play.

 
 
  Jonathan Levinson   12/8/200,  11:02:35 AM
QQQQ's just sunk back below 39.72, which was good for a pause but failed as new support. The prior wavelet low of 39.64 is in play now, below which bears will have a shot at the session low of 39.50. The 30 min cycle upphase is young, and because it launched from oversold territory, a bounce from or above the 39.50 would still be bullish. Below 39.40, it will prove to have been a whipsaw/bull trap, if 39.50 fails.

 
 
  Tab Gilles   12/8/200,  10:58:13 AM
MUR - Murphy Oil looks like a decent long candidate once again. Oil may be about ready to cycle again and MUR has been a good stock to play these cycles.

MUR Chart: Link
WTIC Chart: Link

 
 
  Jeff Bailey   12/8/200,  10:53:45 AM
Sirius Satellite Radi (SIRI) $7.21 -20% .... will be looking long on any pullback into $5-$6. This one is going higher again. Would like to "time" the next expiration for the summer of 2005 though. I think most brokers are negative now, but they should build positions further into Stern-o-phoria.

 
 
  Linda Piazza   12/8/200,  10:53:21 AM
Once again, the OEX is stopped by resistance. The back-and-forth action is now firming up into a possible bear flag, so I'm now tentatively snapping a Fib bracket on the move from yesterday's noon-ish five-minute high into this morning's low. A 38.2% retracement occurs at about 563.54 and a 50% retracement at 564.36, near mid-channel Keltner resistance. Bears of course want to see the OEX break down out of that bear flag before retracing more than 50% of the decline. I say "tentatively" because it's still possible that the OEX could break down relatively soon, before the flag had firmed up enough and come down to create a double-bottom formation.

 
 
  Jeff Bailey   12/8/200,  10:50:51 AM
Yield curve still flattening .... 5-year down 3.5 bp, 30-year down 5.6 bp.

Equities "shouldn't be" as strong as they are, thus the bear's worry.

Should get a yield curve correction next day or so, with steepening.

 
 
  Jonathan Levinson   12/8/200,  10:44:03 AM
QQQQ finally cleared the 39.72-.75 zone, which should now be support. The short cycle upphase found its footing, with 30 min channel resistance rising to 39.90. The 30 minute cycle upphase has kicked off earlier than the oscillators at yesterday's close suggested, and it should be good for approximately 3-5 hours of strength. Anything less will suggest that yesterday's drop was impulsive. In the meantime, next resistance at 39.80 is being challenged now, above which 39.88-.90 is the next test for the bulls.

 
 
  Jeff Bailey   12/8/200,  10:40:12 AM
QQQQ $39.82 .... yesterday's "$39.75 resistance" looks to be challenged by bulls. Now it's a bears chance to be worried.

 
 
  Linda Piazza   12/8/200,  10:39:28 AM
The OEX Keltner support did prove stronger than the resistance, allowing the OEX to rise. Its formation now looks as if it's setting up a measured distribution form, possibly a bear flag, but too much of a zoom higher is going to undo that measured-distribution look. Next resistance is from 563.30-564.

 
 
  Jeff Bailey   12/8/200,  10:38:54 AM
SanDisk (SNDK) $23.53 -0.12% .... cutting morning losses quickly.

 
 
  Jeff Bailey   12/8/200,  10:38:14 AM
Disk Drive Index (DDX.X) 119.50 +1.62% .... sector winner early. Bullish action from "zone of support" from 115-118

 
 
  Linda Piazza   12/8/200,  10:33:41 AM
The TRAN's move has been minimal after the release of inventories numbers.

 
 
  Jeff Bailey   12/8/200,  10:31:09 AM
Buy Program Premium ... SPX 1,179.83, QQQQ $39.73, BIX.X 371.52.

 
 
  Linda Piazza   12/8/200,  10:30:30 AM
The OEX's hesitation has allowed Keltner support to snake beneath it on the seven-minute chart, with that support now near the 561.23 level that's an important Fib level. As the chart is configured right now, that support looks stronger than resistance, suggesting that the OEX might attempt to rise, but it's going to slam right into the 562-562.50 zone, now backed up by Keltner resistance. There's too little evidence here to make a judgment call.

 
 
  Jim Brown   12/8/200,  10:30:19 AM
Alert - Oil and Gas Inventories = crude +600,000 B, distillate +1.4 mb, gas +2.4 mb (last 293.3 mb)

 
 
  Linda Piazza   12/8/200,  10:27:03 AM
The TRAN rises for another test of 3698-3703, at 3698.67 as I type.

 
 
  Jeff Bailey   12/8/200,  10:22:18 AM
10:00 Internals at this Link

Will try and show some updated NH/NL charts later today.

 
 
  Linda Piazza   12/8/200,  10:16:32 AM
The TRAN pulls back from its test of 3698-3703, but I wouldn't exactly call the action a rollover just yet.

 
 
  Jonathan Levinson   12/8/200,  10:16:17 AM
QQQQ is holding just below 39.72 resistance as the short cycle upphase begins to pause. If this is a sideways consolidation/flag within that small upphase, then we'll see a blast above the current high to kick off the 30 minute cycle upphase. If QQQQ cannot regain 39.72, however, then the day lows should be retested on a break below 39.64, the level of the previous wavelet low.

 
 
  Linda Piazza   12/8/200,  10:14:51 AM
The OEX now has a vaguely diamond-shaped pattern at the bottom of its decline now. I suppose it could also be termed a two-headed possible inverse H&S, but that just seems to be stretching things. Diamond patterns are more often seen as topping formations than bottoming ones, so I'm not sure what to make of this one other than it shows that others aren't sure what to do with the OEX.

 
 
  Linda Piazza   12/8/200,  10:04:01 AM
The TRAN is at 3701.78, testing the 50% retracement of its 12/01-12/02 rally.

 
 
  Jeff Bailey   12/8/200,  10:03:31 AM
QQQQ $39.75 +0.45% ....

 
 
  Jeff Bailey   12/8/200,  10:02:36 AM
10:00 Market Watch at this Link

 
 
  Jonathan Levinson   12/8/200,  10:02:08 AM
The Fed has announced a 5B overnight repo, which is a net add of 1B against the 4B expiring from yesterday. QQQQ is testing 39.72 resistance now, and the 30 min cycle oscillators are upticking from oversold. The followthrough from yesterday's selloff was weak this morning, and above 39.72, I'm guessing that the bulls will run the 30 min cycle back up.

 
 
  Linda Piazza   12/8/200,  9:59:45 AM
As Jane has probably mentioned, TRIN supports a bearish case more than a bullish one, but so far, the OEX holds mostly between the 560.80-ish (old historical) support and the 562.50-ish resistance. Some formations and Keltner setups we saw yesterday suggested a downside target near 559, but the OEX so far resists falling further. As I mentioned in my post about the OEX, it's still within that broadening formation and so we can still expect possible choppy trading conditions. Traders should want everything they can have on their sides of the trade, and so far, TRIN definitely isn't on the side of longs. We should watch the trend, however, for any change.

 
 
  Jonathan Levinson   12/8/200,  9:55:44 AM
30 min channel resistance is above at 39.86 QQQQ, while channel support is at 39.38 currently. A break above 39.72 confluence, also the session high, should see a move to the upper channel band, which, if it holds for 10 minutes, will kick off the new 30 min cycle upphase.

 
 
  Jeff Bailey   12/8/200,  9:54:16 AM
Bullish swing trade stop alert .... for CMGI Inc. (CMGI) at $2.43

 
 
  Jeff Bailey   12/8/200,  9:51:19 AM
Current OPEN MM Profiles at this Link

 
 
  Linda Piazza   12/8/200,  9:47:28 AM
The TRAN is at 3695.95 as I type, headed for a test of 3700, with several types of resistance gathering from 3699-3704. The TRAN often leads other indices, so should be watched, but it's actions are probably somewhat suspect this morning ahead of the inventories numbers. The TRAN can overrun targets.

 
 
  Jeff Bailey   12/8/200,  9:43:52 AM
VIX.X 13.67 (unch)... QCharts' DAILY Pivot levels ... 12.69, 13.20, Piv= 13.47 13.98, 14.25.

 
 
  Jonathan Levinson   12/8/200,  9:42:10 AM
Session low for QQQQ here at 39.50. Next support is 10 cents away at the rising 30 min support line from the past month.

 
 
  Linda Piazza   12/8/200,  9:41:31 AM
You have to dial down to a one- or two-minute chart to see it, but the OEX is attempting to form an inverse H&S at the bottom of its descent. A new low will negate that formation, of course, and in fact, a decline much past 561.50 will do it, too. Remember that we're dealing with the 561.23 level that is the 38.2% retracement of the entire bear-market decline, so it's natural to have some hesitation getting through this level, if the OEX is going to continue declining toward that 559-560 goal.

 
 
  Linda Piazza   12/8/200,  9:38:07 AM
So far, 562.00-562.50 resistance has held on the OEX.

 
 
  Jonathan Levinson   12/8/200,  9:37:17 AM
The miners have opened lower, HUI currently -2.58% at 212.97 and XAU -2.55% at 97.69. Gold is currently down 15 at 438.70, while bonds continue to rise, TNX -5 bps at 4.176%.

 
 
  Linda Piazza   12/8/200,  9:36:57 AM
The BIX attempts a to-be-expected bounce from 370, just ahead of a confirmation of its potential double-top formation.

 
 
  Linda Piazza   12/8/200,  9:34:48 AM
The TRAN zooms up this morning, perhaps headed for a test of 3700-3703, although the 3691.50-ish potential resistance could cause a pause.

 
 
  Jeff Bailey   12/8/200,  9:33:45 AM
Bearish day trade stop alert .... for Merck (MRK) $28.25 +1.14% .... at the open.

 
 
  Linda Piazza   12/8/200,  9:33:43 AM
The OEX still tests the 562.00-562.50-ish S/R zone.

 
 
  Linda Piazza   12/8/200,  9:32:48 AM
So far, there's no follow through on yesterday's decline on the OEX, and no move down toward 559-560, a possible downside target. Let's see what happens on the first retracement of the day. The OEX will face historical resistance at just over 563 from a trendline it broke through yesterday, but it's already into and testing the 562.00-562.50 S/R zone.

 
 
  Jeff Bailey   12/8/200,  9:32:11 AM
Bullish swing trade stop alert ... for the SIRI March $5 Calls (QXO-CA) $3.10

SIRI $8.00.

 
 
  Jeff Bailey   12/8/200,  9:23:23 AM
Sirius Satellite (SIRI) $8.22 .... will be looking to exit the March $5 calls at the open.

"Zone of support" from $8.21-$8.50, which was broken to the upside yesterday.

 
 
  Jonathan Levinson   12/8/200,  9:14:02 AM
30-min delayed USD Index chart at this Link.

 
 
  Linda Piazza   12/8/200,  9:13:04 AM
We haven't seen much of a bounce in the futures in overnight trading, but neither have we seen a continuation of yesterday's decline. Here's my OEX post from last night for those who didn't have an opportunity to read it:

Several times today, the OEX challenged the top of a rectangular consolidation pattern in which it had traded since noon Monday. It never broke through the top of that formation, however, so never triggered an upside play even if there had been those traders brave enough to risk such a play. Instead, the OEX broke through the bottom.

When the OEX broke below 563.50 today, it also confirmed a H&S on its 15-minute chart. That set up a potential downside target in the 559.50 area, a target that was corroborated by a 559.50-ish downside target set up by the 15-minute Keltner channels. The OEX has already negated a potential inverse H&S and confirmed and met the target of a smaller regular H&S. Still, the previous choppy trading since Monday's open and all those competing formations created much doubt about whether the OEX could meet that downside target. Those who plunged in with bearish entries on the break were doing so with closed eyes and faith that the OEX would go lower, but they better have entered quickly or the opportunity was gone. The precipitous drop showed something different was occurring this time, instead of the minimal confirmation, immediate halt and test of the broken trendline and then sideways trading that had characterized other formation breaks. There may be some follow-through tomorrow morning down toward that downside target, but we'll look at how overseas markets perform and how our futures react to their performance before we make too many decisions.

What then, though, if that downside target is met? The OEX remains within its broadening formation on the daily chart, and those formations are notorious for producing choppy trading conditions. Typically these formations establish the top trendline with two higher highs, but the third approach generally does not reach the top trendline before prices roll down again and eventually break through the lower trendline. These formations have performed in anything but the typical manner for almost two years, though, breaking to the upside as often as they do to the downside, or seeming to do so. The OEX won't break out of that formation until it moves below 555 to the downside or about 571.20 to the upside, but even those numbers remain suspect because the whole idea is that the formation broadens.

Several chart characteristics point to bounce potential from 559-561.25, with the OEX already within that zone, so a bounce is possible at any time. There's a possibility that, if the formation is going to behave as it traditionally did, the OEX will not see 571.20 or higher, but instead would roll down short of that attempt. Today's testing of the 567.75-568 zone could have qualified as a failed test, but I'm not certain, keeping that notoriously choppy behavior of this normally topping formation in mind. Because of the precipitous nature of the decline today and because these were traditionally topping formations, the tendency is to decide ahead of time that OEX 555 is going to break. However, last Wednesday's climb would have counted as precipitous, too. That's the way these formations work, and trading can become even more volatile prior to a breakout one direction or the other. Because of that precipitousness, the bearish divergence on the last swing high on the daily chart, the traditional patterns of broadening formations, and other evidence, the preponderance of evidence still has to go toward a sell-the-rallies approach, I think, but let's see what develops overnight. When the OEX stops declining and rises into some sort of measured distribution pattern such as a bear flag, we'll snap Fib levels and compare them to other known S/R levels and see where a rollover might occur.

 
 
  Jonathan Levinson   12/8/200,  9:00:46 AM
Bonds are firm as the dollar rises, TNX down 3.8 bps at 4.188%. That's "firm" but not "rallying", just a .9% decline compared to the washouts in currencies and metals. Equities are holding their light gains near unchanged, and the markets appear to be trading in dramatically different dimensions for the time being.

 
 
  Jonathan Levinson   12/8/200,  8:32:49 AM
Make that a 9.56% loss for silver at 7.13, down .744. Gold is down to 440.50 after breaking 443 support.

 
 
  Jonathan Levinson   12/8/200,  8:23:56 AM
New lows for silver, -.404 at 7.48, a huge 5.12% markdown this session. Gold is down 2.14%.

 
 
  Jonathan Levinson   12/8/200,  8:18:27 AM
CAD and euro futures are down big, with CAD -1.47% at .816 and euros -.94% at 1.3303. These are huge moves for the forex markets, bullish for the USD.

 
 
  Jonathan Levinson   12/8/200,  8:14:51 AM
The 30 min cycle still points south for NQ as QQQ and Feb. gold print new session lows. While the short cycles are obviously deeply oversold, the 30 and 60 min cycles continue suggest weakness well into the morning. A bounce could come from anywhere at these readings, but I'm still guessing that the wind will remain at the bears' backs on an intraday basis until well into the morning.

 
 
  Jonathan Levinson   12/8/200,  7:42:35 AM
Equities are higher, ES trading 1178.25, NQ 1595.5, YM 10458 and QQQ 39.66. Feb. gold is down 7.70 at 446, silver .334 at 7.56, ten year notes -.078 at 112.2031 and Nymex crude is down .275 at 41.175.

There are no major economic reports scheduled for today.

 
 
  Linda Piazza   12/8/200,  5:35:06 AM
Good morning. Last night, the Nikkei broke through a short-term ascending trendline and climbed, perhaps on relief that the country's GDP number, disappointing as it might have been, was not worse. Other Asian markets turned in mixed performances, and European markets are mostly lower in earliest trading. The dollar rebounded against many currencies, helping Japan's exporters. Metals declined across Asia and Europe, and that included gold. As of 5:22 EST, gold had dived $5.90, and crude was up $0.10. So far, our futures have been stalwart through all the developments, showing small gains as this report was prepared. More detail about Asian and European markets follows in succeeding paragraphs.

As had been feared, Japan's first GDP number calculated by the new chain-linked method disappointed, showing a 0.2% annual growth for the economy against an expected 1.1% growth. Using the new calculation method, Q2's GDP was revised downward, too. Consumer spending rose 0.9%, but had been expected to gain 3.7%. Still, investors appeared relieved that there was expansion of the economy and sent the Nikkei higher on a buy-the-fact action. With the dollar climbing against the yen and also helping sentiment, the Nikkei broke a declining trendline that had been building since Friday and rose above 10,900 again, closing higher by 67.74 points or 0.62%, at 10,941.37. Commodity-related stocks fell throughout Asia, including the steelmakers. In Japan, the weaker yen helped send exporters higher, and most banking stock ended higher, too. After the Industrial Revitalization Corporation, the state-backed IRC, detailed its latest plans for restructuring of retailer Daiei, and other retailers indicated their interest in sponsoring the company, the retailer's stock soared.

Other Asian markets turned in mixed performances. The Taiwan Weighted declined 0.55%, but South Korea's Kospi climbed 1.24%. Singapore's Straits Times climbed 0.22%, but Hong Kong's Hang Seng fell 1.50%. China's Shanghai Composite climbed 0.20%.

Most European markets decline in early trading, with Tuesday's performance on U.S. bourses weighing heavily on sentiment. Germany's Chancellor Schroeder, no fan of ECB policies, spoke in China, affirming his belief that the ECB would behave responsibly and enact interest rate and currency intervention policies that would encourage European growth. Chip stocks declined in early European trading. As had happened in Asia, many commodity-related stocks also fell in early trading. Many telecoms moved lower, despite a Nomura Securities upgrade of Deutsche Telekom to a buy rating. Two telecoms bucking that trend were Telecom Italia and Telecom Italia Mobile, both climbing strongly after the revelation of Telecom Italia's acquisition plans for the other company. A newsmaker from earlier in the year, Royal Ahold, was in the news again after an Argentine court said that it broke Argentine antitrust laws. Royal Ahold will appeal the ruling.

As of 5:22 EST, the FTSE 100 had declined 27.50 points or 0.58%, to 4,701.20. The CAC 40 had declined 26.41 points or 0.70%, to 3,761.04. The DAX had fallen 13.57 points or 0.32%, to 4,199.05.

 
 
  Jeff Bailey   12/7/200,  12:31:51 AM
I was talking with my father last weekend about Ronald Reagan. Do you remember when President Reagan started the "Buy American" theme? Encouraging Americans to "buy American." Heck... not long after, Colorado started an "ABC, or Always Buy Colorado" products when you could, to help stimulate this state's economy.

Now we hear of European's trying to stage "boycott American products." I don't think they are really anti-American, but they know what the strong euro's impact can/is having on their economy. They may not know it, but if they took a different approach to "boycot American" and turned it to "Buy European," it might actually draw greater support.

What's the saying.... "You can catch more bees with honey, than youc an vinegar?"

Ronald Reagan.... he was ahead of his time for sure. In my book anyway.

 
 
  Jeff Bailey   12/7/200,  12:23:49 AM
Linda ... (per 11:38:53) .... You've got it! I like your thought process regarding "why" the dollar isn't a constant for calling the major averages. As some analysts have alluded to (not you).

But never mind that, I just don't want trader going off and thinking "dollar down, equities higher," or "dollar higher, equities down."

Now... you (Linda) bring up the case of "economics," and while you think you might be "weak" in the area of economics, you've got a pretty darned good way of at least thinking logically about the relationship of BOTH the positives/negatives of OIL prices.

There is always a "give and take" isn't there? Some analysts/trader/investors think it is just black and white. It isn't.

BIG NUMBER COMING for Thursday Linda. Can you guess what it is?

EXPORT PRICES .... Why could this be a "big number." What SHOULD (and I stress should) the falling dollar be doing of US exporters? It SHOULD be making US exports more attractive to foreigners, as their currencies are stronger against the dollar.

Let's imagine that this SHOULD be true (I can't figure out why MMM isn't more bullish though). If EXPORT prices (ex agriculture) were to RISE, would this be a negative, or a positive? Think about it. Don't just think "inflation." What if export prices fall? Positive or negative?

My prediction.... if EXPORT PRICES rise, it should be BULLISH. Can you imagine selling MORE exports at a HIGHER PRICE? That would be good for the bottom line wouldn't it? Last night, Marc Eckelberry was thinking there was "no compelling reason to raise the current P/E of the S&P way over 20." I'm (Jeff Bailey) not sure who did raise the current P/E way over 20, but maybe it was some economists that do see extra US growth from the weaker dollar. Maybe not, but I hope "they" didn't just pull the number out of their keesters.

With weaker dollar, what do you think IMPORT PRICES (ex-energy) will be doing? If you're a EuroZone EXPORTER and your currency is STRONG, you might well be cutting PRICE a little, to make your product price-attractive to US consumers, and other country's consumers that might decide to purchase a US-made product.

 
 
  Jeff Bailey   12/7/200,  12:04:30 AM
Follow up to my 12/07/04 06:26:16 post regarding "Najarian brothers... trying to spoil the MRK Short.

That comment was via CNBC interview, where the topic of year-end tax loss/gain selling came up. Najarian's message was "NEVER let tax issues be the PRIMARY decision maker for buy/sell decisions."

Najarian mentioned MRK as a stock that he thought everyone was going to be selling as a "tax loss," and then in January, buyers would be back in droves and buying it.

For me (Jeff Bailey), MRK has too many downside risks, or uncertainties at this point. But... I'd be willing to bet that Najarian brothers have some naked put positions on MRK, probably into January expiration. Their thought being that relief from tax loss selling has the stock bouncing, puts expiring worthless. Link

 
 
  Linda Piazza   12/7/200,  11:38:53 PM
Jeff, in reference to your 23:01 post, I, too, have noticed and commented lately that there has at times been an undoing of the 2003-type opposing relationship of the dollar's action to that of the equities. As I noted in some comments and in one Wrap, there's been a lot of talk overseas about how the weakening dollar might be hurting foreign exporters, but might be helping foreign economies deal with rising crude prices. To turn that around, a weakening dollar might hamper the U.S.'s ability to deal with those rising prices while helping our exporters. Therefore, I think we have to factor in crude/commodity costs to the whole yields/dollar/equity discussion, too. Trouble is, representing the self-taught trader on this board and feeling my weaknesses in the area of economics, I don't feel I have enough experience to give proper weight to all these relationships. I'm still learning, and here am merely reporting what I've read.

 
 
  Tab Gilles   12/7/200,  11:30:30 PM
Recall about a week ago my observation on the $NASI? Link Link Link

Glad I got out of MUR. $42 oil is a 61.8% fib pullback. I still believe that depending on this winter's weather that oil will eventually will get down to $33 on a H&S completion. Link

 
 
  Jeff Bailey   12/7/200,  11:28:04 PM
Why didn't Jumpitermedia (JUPM) $19.04 -2.9% get crushed today? I sold this one into strength (the calls) on fears that any market weakness would have it falling back toward $16.00.

Take a conventional retracement from the $22.46 high to recent $15.58 low. Use as a "pulse" stock for strength/weakness from here.

 
 
  Jeff Bailey   12/7/200,  11:21:33 PM
Question for you Jeff--could today's selling seem like the big boys were unwinding their December S&Ps to roll them into the ES05Hs?? Do they roll them over into next months contracts fairly simultaneously? I'm not sure but it seems like the number of contract held by the commercials is relatively high according to the CFTC report, both long and short, so maybe some unwinding caused the drop.

I'm hoping for SPX 1168 so I can buy calls....

Yes! See comments/observations below, in addition with Tuesday evening's Index Trader Wrap, as well as prior comments/observations from the 11/23/04 Index Trader Wrap.

Believe me folks. This trader is also looking at 1,168. I'm not sure if other analysts in the Market Monitor, or Futures Monitor have also discussed 1,168, but the above is a late-night e-mail from a trader.

 
 
  Jeff Bailey   12/7/200,  11:01:23 PM
In a nutshell .... If I see the 10-year YIELD, or 30-year yield ($TYX.X) rising, and get some steadiness in the YIELD curve, then I've got to be thinking "sell the DEC SPX 1,165 puts for premium" and rely on the March high and MONTHLY Pivot for my support.

If the dollar is bidding green, then even better.

Why would an EQUITY BULL want the dollar to bid green with a RISING YIELD?

One "fear" among equity investors is that China, Japan will SELL US ASSETS (Treasuries) under a falling dollar.

This is why I think it imortant for EQUITY traders to not "assu-me" a rise in the dollar is NEGATIVE for equities.

Remember where the dollar is, RELATIVE to where it has been the past two MONTHS.

Did anyone notice my WEEKLY Pivot Retracement comparisons from Friday evening? Did anyone notice that the DOLLAR FELL the week of 11/15-11/19, and other than QQQ/SOX, the MAJOR AVERAGES FELL? Here's that three week comparison. Link

 
 
  Jeff Bailey   12/7/200,  10:16:15 PM
VIX.X ... 13.67 +3.67% ... Tomorrow's DAILY Pivot levels are 12.68, 13.17, Piv = 13.46, 13.95, 14.24

There it is! .... VIX.X DAILY R2 (14.24) will be darned close to WEEKLY R2 (14.31).

A VIX.X reading of 14.30, could trigger some type of institutional computer trade. A trader might be smart to be alert to any unison (VIX.X) and buy/sell program premium al_erts.

I do think BULLS need to have VIX.X reverse LOWER from the 14.30 area, should SPX.X look to the 80.9% WEEKLY Retracement of 1,171.50, and DAILY S1 1,172.50.

Then see how a potential rebound back to CURRENT WEEKLY Pivot (1,187.00) will have the BEARISH trader thinking "head and shoulder top."

 
 
  Jeff Bailey   12/7/200,  10:02:33 PM
S&P 500 Index Chart (SPX.X) at this Link

Use with Tuesday evening's Index Trader Wrap

Here's the e-mini S&P futures (es04z) chart with the "fitted" retracement technique. Make the tie. Link

Trader's should be able to use the VIX.X, and I'll have an UPSIDE aler set at VIX.X WEEKLY R2 (14.31).

An intra-day observation (just now being made) did have the SPX falling to its DAILY S1, just as the VIX.X was RISING to its DAILY R1.

Tuesday's SPX Most active options at this Link

In PINK are my 11/23/04 observations (1,200 call) and (1,175 put).

In BLUE is a "new" observation. Take either the "Last" or "Avg. OHLC", pretend that 1,165 is going to be "max pain."

What strikes me a bit is if I ADD $5.10 to 1,165.00, I come up with 1,170.10.

If we have any "naked put sellers" into an expiration, then I would think the SPX 1,165 puts would be the "safest" ones to sell against right now. SUBTRACT $5.10 from 1,165 to get 1,160. That's darned close to MONTHLY PIVOT/WEEKLY S2. Also he March high.

In fact, these may have been "active" today, should a PRIOR 1,175 put seller have wanted a downside "hedge" if he/she was uncertain about 1,175.

If we have any "naked call sellers" into an expiration, then I would think the SPX 1,200 calls would be the "safest" ones to sell against, but only on a bounce back near WEEKLY Pivot.

 
 
  OI Technical Staff   12/7/200,  10:02:23 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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