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  OI Technical Staff   1/3/2005,  7:17:39 PM

Click here for bonus info: Link

  Jeff Bailey   1/3/2005,  7:17:30 PM
Dec. 2003, Jan. 2004, Feb. 2004 MONTHLY Pivot Matrix and levels traded at this Link

  Linda Piazza   1/3/2005,  6:51:03 PM
The OEX began the day showing every promise of completing the fifth candle of a bullish mat hold pattern. It pushed to a new high on strong volume, but that was before the ISM number. As the time for that release approached, I began warning OEX traders to make plans to protect bullish profits for two reasons. OEX 580-581 showed up as significant resistance on Keltner charts, and rumors were that the ISM would disappoint. Although the headline number did not disappoint, the employment component did and there was a sell-the-fact reaction. Those profit-protecting plans were going to be needed. I had warned that bulls did not want to see the OEX close in negative territory after pushing to a new relative high early in the session and that's exactly what happened. The OEX pushed to an intraday high not seen since April 2002 and closed negative, presenting the specter of a key reversal day.

What do intraday charts show? First, the OEX broke below a four-point-wide rectangular consolidation zone in which it had traded since about 12/22, and it also broke below the midline of the OEX's rising regression channel. That break set up a downside target somewhere between 568-570. On any bounce, we should watch to see if the former support serves now as resistance. The two types mentioned above converge near 574. Five-minute 100/130-ema's, now also potentially a source of resistance, are above that at 574.47 and 574.82, respectively.

Is the OEX ready to bounce? A short-covering bounce began just before the close, but didn't really progress after the close, so we'll need to see what happens after-hours. The fifteen-minute Keltner chart showed potential support just above 571, but that support looked weak. Unless the OEX can produce 60-minute closes above a Keltner line currently at 572.41, it looks vulnerable down to 568-570 and maybe even lower. Short-term bearish traders should have profit-protecting plans in place near 568-570 as there should be at least a tepid bounce attempt in that zone, if reached. I'd have to see how internals looked at that test before I suggested a long play on a bounce from 568.

  Jim Brown   1/3/2005,  4:06:37 PM
Thank you Linda. The Dow came within 10 points of our exit target at 10700. Hopefully those traders not wanting to wait for a second shot at tomorrows open took the exit at 10710 when the drop stalled.

  Jeff Bailey   1/3/2005,  4:06:22 PM
Current OPEN MM Profiles that I (Jeff Bailey) profile and track at this Link

Today's Activity .... there were no new opening or closing transactions.

  Mark Davis   1/3/2005,  4:00:06 PM
Not to mention the MACD bearish divergence on the daily charts Jonathan. MACD made a nasty bearish kiss today after a long period of bearish divergence.

  Jonathan Levinson   1/3/2005,  3:57:27 PM
Very ugly candles on the daily charts for the Dow, SPX and Nasdaq, breaking out of bear wedges. Read all about it in tonight's Market Wrap.

  Linda Piazza   1/3/2005,  3:55:41 PM
The SOX is less than a point below its 50-dma so could possibly still stage a late-day rally that closes it at or above that average. If not, this will be the first close below it since mid-October.

  Linda Piazza   1/3/2005,  3:54:33 PM
Jim's Editor's Play continues to perform well. Congratulations, Jim. The Dow's lower Keltner support (15-minute chart) has slid down to 10,705.84, but now points down and doesn't look like much support at all.

  Linda Piazza   1/3/2005,  3:52:43 PM
The lower boundary on the OEX's 15-minute Keltner chart (see my 15:35 post) has now slid down to 571.20, meaning the OEX's next support and potential downside target have slid down to that level, too.

  Linda Piazza   1/3/2005,  3:50:05 PM
Barring some sort of miracle, the OEX will not be closing in positive territory. Because it dropped below the 12/28 open (and low), it will not be completing the bullish mat hold formation, either, even if such miracle were to occur. Something much more bearish has occurred. The SPX, OEX and Nasdaq all pushed to new highs today and then look to be closing in negative territory. Whether that qualifies as a key reversal day is a little more in doubt than it was earlier, because of volume considerations. Was the volume really high enough to meet the volume requirements for a key reversal day (explosion of volume as a big advance is made early in the day, etc.)? I've seen other instances when volume requirements weren't met and the bearish implications of a key reversal day were never realized, either. It marked a pullback and not an interim or long-term high. I think we're going to have to see how the OEX acts as it tests the bottom of its ascending regression channel (60-minute chart) and 30-sma, with the average at 568.31, before we make too many decisions. A bounce there means that the OEX has done nothing more than cycle through to the bottom of a rising channel.

  Jonathan Levinson   1/3/2005,  3:35:32 PM
That failure at 39.53 QQQQ from below is rich with bearish implications. A break below 39.37, the current day low, is the next goal for bears, below which 39.25 and 39.10-.15 support come into view.

  Linda Piazza   1/3/2005,  3:35:31 PM
The OEX keeps sliding down the Keltner lines on the 15-minute chart. Here's a chart with some annotations: Link

  Jonathan Levinson   1/3/2005,  3:30:15 PM
QQQQ has dropped through and is now testing 39.53 from below.

  Jane Fox   1/3/2005,  3:28:57 PM
Linda (15:15 post) it is hard to make a comment on the AD line's absolute numbers because Esignal's AD numbers are different from Qcharts so I usually try to stick to trends in the AD line and if it is breaking to new daily highs or lows, like it is doing now. I also see the TRIN to new daily highs and the VIX to new daily highs so all the internals are in sync and are all bearish.

  Linda Piazza   1/3/2005,  3:25:25 PM
Jim might hit his downside target for the Dow on the Editor's Play, although the last forty minutes of the trading day switches from being about technicals to being about who wants to get out or get in the worst. The 15-minute Keltner chart shows that unless the Dow can produce 15-minute closes above the Keltner line currently at 10,750.96, it's vulnerable to 10,709.52. Doesn't suggest which order (testing resistance, testing support) that would happen, though.

  Linda Piazza   1/3/2005,  3:21:45 PM
The OEX still looks vulnerable to 571.36 unless it can begin showing 15-minute closes above the Keltner line currently at 573.36.

  Linda Piazza   1/3/2005,  3:20:30 PM
Yes, that chocolate might be a little on the expensive side.

  Jonathan Levinson   1/3/2005,  3:18:36 PM
The short cycle cycle oscillators are pointed south from their neutral/sideways readings over the past few hours. No clues there.

  Jonathan Levinson   1/3/2005,  3:17:44 PM
Volume remains light, and QQQQ is net unchanged fgrom its 11AM levels. The 30 and 60 min cycle oscillators are still not pointing up, with the current corrective chop looking more like an intraday cycle bottom than top. However, the price action feels like a corrective bounce. Out of this ambiguity, I'm inclined to follow price either above 39.72 or below 39.53.

  Linda Piazza   1/3/2005,  3:15:32 PM
The advdec line still isn't rebounding. I'm watching this particularly because it's not all that far away from levels that can sometimes mark excessive selling. For example, it's approaching levels last seen on 12/07 and 12/09, with 12/07 being a day of strong selling and 12/09 a day in which we saw a punch to a new low and then a rebound. However, that's not a foolproof contrarian sign of a rebound. It's already below levels seen 12/16, when it was actually the next day, 12/17, that saw a deep decline instead of a bounce. Maybe Jane has other observations to add.

  Jeff Bailey   1/3/2005,  3:12:08 PM
03:00 Internals at this Link

  Jonathan Levinson   1/3/2005,  3:05:45 PM
QQQQ intraday update at this Link.

  Jeff Bailey   1/3/2005,  3:03:27 PM
03:00 Market Watch at this Link

  Linda Piazza   1/3/2005,  2:55:01 PM
Swinging out to a 15-minute view on the OEX's Keltner chart shows again that the resistance attempts to firm below the OEX, down to 572.84, but that it looks tenuous as yet. So far, the OEX has been producing 15-minute closes beneath a Keltner line currently at 573.76, and until that changes, the OEX looks vulnerable to at least 571.56. Remember that Keltner lines are dynamic and so the location of that line will vary as the OEX's price does.

  Linda Piazza   1/3/2005,  2:48:59 PM
The advdec line still flattens near the day's low.

  Jeff Bailey   1/3/2005,  2:47:22 PM
NASDAQ-100 Tracker (QQQQ) $39.64 -0.66% ... updated daily bar chart with WEEKLY/MONTHLY Pivot retracement at this Link

Probably as "strong" as I thought the QQQQ might be when I profiled a bullish trade in the QQQQ from $39.74 on 12/22/04 (target $40.25), but was was stopped at $39.50 on 12/27/04.

  Linda Piazza   1/3/2005,  2:46:04 PM
The OEX ran into the three-minute Keltner line that has been stopping the OEX's advance attempts since this morning's first plummet. That line is currently at 573.88 and the OEX continues to show three-minute closes beneath it. Support continues to attempt to firm just above 573, however, with both nearby resistance and nearby support looking about equally weighted at the current time.

  Linda Piazza   1/3/2005,  2:35:32 PM
Jeff and I were carrying on a friendly debate about inside-day trades last week. Maybe I've repeated once too often my comments about how I distrust them. Last week's inside-day setup on the OEX is another example of why I dislike them. There was a fakeout move above the 12/29 inside-day high and then a reversal. I've just seen that happen way too may times on the OEX at least. Perhaps it works better on individual stocks, as I haven't watched them.

  Jonathan Levinson   1/3/2005,  2:33:46 PM
QQQQ is taking a move higher here, breaking the previous high. 39.70-.72 is key support to be tested.

  Linda Piazza   1/3/2005,  2:22:12 PM
Remember that broadening formation that the OEX broke through in early December? The OEX has today fallen through the top rising trendline of that broadening formation. It needs to bounce back above 574.35 or so to avoid closing back inside the formation. Actually, it needs to bounce higher than that before the close to avoid a possible key reversal day.

  Jonathan Levinson   1/3/2005,  2:15:23 PM
Still watching the 39.53-39.70 QQQQ range. Volume is picking up slightly, but the short cycle oscillators are very chopped up and the 30/60 min channels drifting sideways.

  Linda Piazza   1/3/2005,  2:15:22 PM
The TRAN continues keeling over, perhaps still looking vulnerable to a test of support just above 3750. So far, the TRAN hasn't done anything so very bearish, though, not even falling out of its rising regression channel, with bottom support of that channel running near the 30-dma at 3722.28.

  Jeff Bailey   1/3/2005,  2:12:22 PM
02:00 Internals at this Link

  Linda Piazza   1/3/2005,  2:11:17 PM
The OEX's three-minute chart shows that the OEX hasn't been entirely successful in firming up that support just underneath its current position or in climbing toward resistance.

  Jeff Bailey   1/3/2005,  2:05:10 PM
02:00 Market Watch at this Link

  Jeff Bailey   1/3/2005,  2:04:05 PM
Cendant (CD) $23.19 -0.81% ...

  Jeff Bailey   1/3/2005,  2:03:33 PM
Pulte Home (PHM) $63.82 +0.03% ....

  Jeff Bailey   1/3/2005,  2:03:04 PM
Pfizer (PFE) $26.67 -0.81% ....

  Jeff Bailey   1/3/2005,  2:02:43 PM
SBC Communications (SBC) $25.63 -0.54% ...

  Jeff Bailey   1/3/2005,  2:02:18 PM
3M (MMM) $82.16 +0.10% ...

  Jeff Bailey   1/3/2005,  2:01:50 PM
Buy Program Premium ... SPX 1,205.15 , QQQQ $39.64

  Linda Piazza   1/3/2005,  1:58:26 PM
The OEX's three-minute Keltner chart shows that the OEX is trying to firm up support just underneath the current position and attempt a climb toward the mid-channel level, currently near 575. In between is a Keltner line currently at 574.28, however, and that may prove to be tough resistance.

  Marc Eckelberry   1/3/2005,  1:52:46 PM
QQQQ Feb 40 put, long at 1.00, lower stop to .80. Now trading at 1.25.

  Jonathan Levinson   1/3/2005,  1:49:11 PM
The previous dip low held for QQQQ, and I'm expecting a directional move on a break of either 39.70 to the upside or 39.53 below. Beyond that, 39.44 is 60 min channel support, while 39.76 is resistance.

  Linda Piazza   1/3/2005,  1:40:24 PM
The RLX struggled not to dip into negative territory today, but it has. RLX 458.30 looks like critical support that market bulls want to see hold, since that's the descending trendline off the November high. The OEX gained recently at least partially on the backs of the retailers it shared with the RLX, so it's important to watch the RLX, too.

  Linda Piazza   1/3/2005,  1:30:47 PM
The OEX drops below the support of its rectangular trading pattern and below the midline of its rising regression channel. Expect potential support near 572, with a bounce attempt possible from just below that level. A 60-minute close below 573.80-574 suggests that the OEX might have a downside target, at about 570. This comes from the target predicted by the downside break of the rising regression channel. I mention the close, however, because this action comes during the typical stop-running time of day and could be reversed if dip-buyers are waiting. Bears do not want to see the current 60-minute candle spring back inside that rectangular pattern, leaving only a long shadow below it. If the OEX doesn't bounce, the lower boundary of the rising regression channel is at 568, suggesting an even lower potential downside boundary.

  Linda Piazza   1/3/2005,  1:25:37 PM
I noted last week that the TRAN had a fairly predictable pattern when it printed a doji after a tall white candle. It tended to print other small-bodied candles in a straight row or actually decline. Since that first doji after Tuesday's tall climb, the TRAN has been doing both--printing small-bodied candle, and then actually declining. The TRAN's trading pattern does have some relevance to its 30-dma and that average is now at 3722.78, so that might be a first place to look for possible support if the TRAN should drop below the 3750-ish potential horizontal support. The TRAN is at 3780.03 as I type.

  Jeff Bailey   1/3/2005,  1:25:29 PM
Sell Program Premium ... SPX 1,205.38 , QQQQ $39.58

  Jonathan Levinson   1/3/2005,  1:25:24 PM
Session lows for ES and YM futures here as QQQQ comes in for a test of the previous intraday low of 39.53.

  Jeff Bailey   1/3/2005,  1:13:52 PM
01:00 Internals at this Link

  Linda Piazza   1/3/2005,  1:07:41 PM
So far, the OEX hasn't been able to mount much of a bounce, turning back now to retest the midline of the regression channel and the bottom support on the rectangular formation depicted in the chart linked to my 12:54 post.

  Jeff Bailey   1/3/2005,  1:06:01 PM
01:00 Market Watch at this Link

  Jonathan Levinson   1/3/2005,  1:03:00 PM
QQQQ isn't rising, but it holding persistently below the 39.70 line. Bears will want to see a break south of 39.52 to establish that the current low-volume drift isn't building "cause" for a break above 39.70-.72 resistance. The short cycle upphase is getting long in the tooth, but with the 30 and 60 min channels no longer declining, bears will want to see lower support broken before betting on further downside for today.

  Linda Piazza   1/3/2005,  12:54:17 PM
Some formations I'm watching on the OEX's 60-minute chart: Link

  Linda Piazza   1/3/2005,  12:30:11 PM
Caught on the phone for a few minutes.

  Jeff Bailey   1/3/2005,  12:29:36 PM
12:00 Internals at this Link

  Jonathan Levinson   1/3/2005,  12:21:03 PM
QQQQ chart update at this Link . 60 min channel resistance is down to 39.72, 30 min channel resistance up to 39.80.

  Linda Piazza   1/3/2005,  12:20:50 PM
The 200-ema turned the SOX lower again, and it's now testing the 50-dma again. The SOX has not closed below the 50-dma since mid-October.

  Linda Piazza   1/3/2005,  12:18:46 PM
Once again, be watchful for OEX potential support in the 573.80 level.

  Linda Piazza   1/3/2005,  12:10:17 PM
The ascending line off the 12/09 low turned back the OEX, at least this time.

  Jeff Bailey   1/3/2005,  12:09:08 PM
12:00 Market Watch at this Link

  Linda Piazza   1/3/2005,  12:02:50 PM
The OEX now rises into the mid-channel resistance zone on the 15-minute Keltner chart. While Keltner lines were being scattered earlier today, so were the oscillators, but 15-minute MACD turns down still, indicating that the OEX might have difficulty pushing through that resistance.

  Linda Piazza   1/3/2005,  11:55:10 AM
The SOX still tests the 200-ema after bouncing from the 50-sma.

  Jonathan Levinson   1/3/2005,  11:44:41 AM
Descending 60 minute channel resistance meets rising 30 min channel resistance at 39.77, which also lines up with price confluence from previous support. Bulls should have a very tough time clearing that level.

  Linda Piazza   1/3/2005,  11:41:15 AM
Jim just mentioned on the Futures side that volume has been heavy. It goes without saying that having indices break out to the upside on heavy volume and then fall back into negative territory is not a bullish event. Bulls do not want to see the SPX, OEX and Nasdaq, all indices that broke higher, close in the red today, bringing up the specter of key reversal days. The Dow tested an equal high. Already today we've seen two possibilities for the OEX based on intraday developments (bullish mat hold being one), so we have to keep in mind that we have the entire rest of the day in which to sort this out, and matters might look very different by the close. As I type, resistance for the OEX tries to firm from 575.72-577.10.

  Marc Eckelberry   1/3/2005,  11:40:59 AM
Profiled QQQQ Feb 40 put, entered at 1.00, raise stop to .85. Now trading at 1.20/1.25.

  Jonathan Levinson   1/3/2005,  11:37:47 AM
QQQQ is reaching for strong resistance at 39.72-.77 here in a short cycle upphase, confirmed by the higher low at 39.46 on the last dip. Look for minor support at 39.57 for any pullback. Above 39.77, 39.81 and 39.92 are next resistance. However, the 60 min channel top is at 39.80, and the current bounce has yet to reverse the negative slope of the 60 min channel.

  Jeff Bailey   1/3/2005,  11:34:02 AM
Current OPEN MM Profiles at this Link

  Jeff Bailey   1/3/2005,  11:28:04 AM
11:00 Internals at this Link

  Linda Piazza   1/3/2005,  11:23:12 AM
The TRAN's 15-minute Keltner chart shows Keltner resistance gathering as expected at 3800. More resistance tries to firm below that level, at 3782-3789, with the TRAN at 3781.01 as I type.

  Linda Piazza   1/3/2005,  11:17:54 AM
So far, the OEX isn't mounting much of a bounce at all. The SOX attempts once, testing its 200-ema from the underside as I type.

  Linda Piazza   1/3/2005,  11:12:24 AM
The advdec line hasn't begun an upward trend just yet, although it's trying to steady.

  Linda Piazza   1/3/2005,  11:02:30 AM
To clarify my 10:56 post, I don't feel bullish about bounce potential, feeling that resistance is likely to hold.

  Jonathan Levinson   1/3/2005,  11:00:40 AM
Session low for gold here at 429.20. HUI and XAU are down 2.63% and 2.42% respectively.

  Linda Piazza   1/3/2005,  10:56:08 AM
Bounce time? Lots of indices are hitting possible support, and the SOX is one, having hit its 50-sma and lower Keltner support on the 15-minute chart. Gathering resistance on that Keltner chart suggests that 430 may be firmed up as resistance before the SOX could hit it, if the SOX bounces in a measured-distribution type bounce that gives that resistance time to firm. Other resistance (on a 15-minute closing basis) lines show up near 426.60 and 428.40. If the SOX zooms up as quickly as it zoomed down, then that resistance isn't going to have time to firm. The SOX has been leading other indices downward today, so is probably important to watch.

  Jonathan Levinson   1/3/2005,  10:53:42 AM
39.60 QQQQ is first weak resistance, followed by a stronger line at 39.72. A short cycle upphase is trying to gather, but it will take a break and hold above 39.60 at minimum.

  Jim Brown   1/3/2005,  10:51:52 AM
Yes Linda, last week we were looking for 10975 for an entry all week and never got it. This week I lowered it to 10850 on reduced expectations. Now we just need to get the follow through to 10650 and flush all the calendar sellers. Then the January liquidity rally can begin.

  Linda Piazza   1/3/2005,  10:49:56 AM
Wow, Jim, that Editor's Play got triggered near the top of the day, didn't it? Who knows, at the rate things are going, the downside target could be met today, too! (Not a serious prediction, readers, not just yet. I'm just commenting on how quickly Jim's play has turned profitable.)

  Linda Piazza   1/3/2005,  10:43:35 AM
The zooming around this morning leaves Keltner lines scattered, but resistance is now trying to firm near 576.30-576.60. Support is more difficult to determine on a Keltner basis as 15-minute Keltner lines turn down, but the 7-minute chart shows support trying to firm near 575.00. The OEX of course tried to bounce from this intraday double-bottom level. If the bounce continues (doesn't appear likely as I type), look for possible resistance in that above denoted region.

  Jim Brown   1/3/2005,  10:40:58 AM
The Editors Play from Sunday was triggered this morning when the Dow hit 10850. The DIA Jan-$108 puts DIA-MD were $0.96 when triggered. The target is Dow 10700 or below.

  Jonathan Levinson   1/3/2005,  10:38:46 AM
39.40 QQQQ support is now in play, below which there's light support at 39.33 and 39.25, followed by stronger support at 39.10-.15. Currently this is a trending move for both the 30 and 60 minute cycles, and a break of 39.10 should see QQQQ enter the airball zone.

  Linda Piazza   1/3/2005,  10:38:14 AM
The TRAN is at 3776.94, having given up the fight for 3800, at least temporarily. Horizontal support is just above 3750.00.

  Linda Piazza   1/3/2005,  10:36:37 AM
The SOX is not looking good at all, now dropping below the 200-ema after having breached the 200-sma. It's got the bottom-of-the-channel support converging with the 50-sma at 424.48, and markets bulls don't want to see that support broken. Below that is the 100-ema at 420.04, and that's last-ditch support, but a break of the 50-sma would be considered important.

  Jonathan Levinson   1/3/2005,  10:36:08 AM
QQQQ and R2K futures are now down 1.16% and 1.61% respectively.

  Jeff Bailey   1/3/2005,  10:34:46 AM
Russell 2000 Growth iShares (IWO) $66.49 -1.20% .... after popping higher to $67.97 in first 10-minutes of trade.

Could think some longer-term profit takers as calendar turns.

  Jonathan Levinson   1/3/2005,  10:32:47 AM
39.72-.77 QQQQ should now act as resistance. Wake up time for the bear? Link

  Linda Piazza   1/3/2005,  10:32:01 AM
The OEX tests the ascending trendline off the 12/09 low, with a break of that trendline to be confirmed by a move below Friday's 575.02 low.

  Jeff Bailey   1/3/2005,  10:29:54 AM
S&P 500 (SPX.X) 1,209.78 -0.17% with updated WEEKLY/MONTHLY Pivot retracement at this Link

  Linda Piazza   1/3/2005,  10:27:04 AM
The GSO last week extended that possible right shoulder on the potential H&S on the daily chart a bit too long for the formation to look valid any longer, but the GSO was an index that pushed into positive territory and now is negative.

  Jonathan Levinson   1/3/2005,  10:26:58 AM
There goes Friday's low. 39.72 QQQQ being tested now.

  Linda Piazza   1/3/2005,  10:25:39 AM
The GHA still has a bearish right triangle look to it (horizontal support line, descending top trendline off a series of lower highs). Today, the GHA is negative.

  Jeff Bailey   1/3/2005,  10:23:28 AM
Buy Program Premium SPX 1,211.29

  Linda Piazza   1/3/2005,  10:21:45 AM
The OEX is slipping down to retest the trendline off the 12/09 low. That long, long upper shadow on the first 60-minute candle (still forming) can not be encouraging to bulls. A turn into negative territory would do even more damage to sentiment. The midline of the OEX's rising regression channel is at about 573.50, and a break through Friday's low would suggest that the midline is tested, if not the lower support of that two-months-in-the-making rising regression channel, with that lower support at about 567.50.

  Jonathan Levinson   1/3/2005,  10:21:00 AM
Friday's low of 39.76 is today's support, below which old support at 39.72, then 39.60 and 39.40 are in play.

  Linda Piazza   1/3/2005,  10:18:35 AM
The TRAN is back below 3800.

  Jonathan Levinson   1/3/2005,  10:17:40 AM
Session low for QQQQ here at 39.81. Bulls should start to push back here, as 30 and 60 min channel support is now in play.

  Linda Piazza   1/3/2005,  10:17:39 AM
The VIX is at its highest value since 12/09, rising to test the 13.74 high reached on 12/07. The VIX is at 13.65 as I type.

  Linda Piazza   1/3/2005,  10:15:39 AM
The SIA information after Friday's close (see my 6:57 post for more information) is not helping the SOX, and the SOX is not helping market sentiment. At 430.43 as I type, it's slipping back below the 200-sma at 430.96.

  Linda Piazza   1/3/2005,  10:13:36 AM
The TRAN plunged all the way down below Friday's low, but now tests 3800 from the underside again. It's at 3800.94 as I type.

  Linda Piazza   1/3/2005,  10:10:13 AM
I'm coming around to Jane's view of the TRIN as less than helpful lately. VIX and advdec action corroborate each other, showing a greater likelihood of weakness than strength. TRIN rises, but doesn't look anywhere near a bearish level yet. Maybe it is helpful and warning of that underlying buy-the-dip mentality that Jim mentioned a few minutes earlier on the Futures side?

  Jonathan Levinson   1/3/2005,  10:10:08 AM
Session low for crude oil at 41.825 just now.

  Jeff Bailey   1/3/2005,  10:08:27 AM
10:00 Internals at this Link

Friday's Internals at this Link

  Linda Piazza   1/3/2005,  10:05:29 AM
Bullish traders had time to set stops ahead of the ISM number, and now it's time to adhere to them if they're hit. The OEX has pulled back below the 577.50-578 S/R level, but so far remains above the ascending trendline off the 12/09 high, with that trendline at about 575.50.

  Jeff Bailey   1/3/2005,  10:02:39 AM
10:00 Market Watch at this Link

  Tab Gilles   1/3/2005,  10:02:12 AM
As I indicated on 12/31 MM 12:53PM post, watch the SMH $33.65 level. Link

  Jim Brown   1/3/2005,  10:00:16 AM
Construction Spending = -0.4%, (est 0.3%, last 0.0%)
ISM Index = 58.6, (est 58.0, last 57.8)

  Linda Piazza   1/3/2005,  9:57:53 AM
I wanted to reiterate my cautions about protecting profits going into the ISM number, perhaps just by following the OEX higher with stops. Some fear that the number might disappoint. When I look at the OEX's 60-minute chart, I see bearish divergence developing from about mid-December into the current period, with the OEX having hit Keltner resistance this morning. A swoosh higher today will undo that Keltner-style divergence, but it exists now. Remember that the bullish mat hold will not be confirmed until this afternoon's close. A push to a new relative high today and a negative close today would have a very different outlook.

  Jeff Bailey   1/3/2005,  9:57:37 AM
3M (MMM) $83.30 +1.49% ... decent move higher last 5-minutes.

  Jeff Bailey   1/3/2005,  9:56:42 AM
Current OPEN MM Profiles at this Link

  Jonathan Levinson   1/3/2005,  9:56:37 AM
The break of 40.15-.17 QQQQ sets up a test of 40.02 as next confluence, below which 30 min channel support of 39.96 comes into play. 10 minutes below 40.02 should be enough to kick off a 30 minute cycle downphase.

  Linda Piazza   1/3/2005,  9:54:01 AM
December's ISM Manufacturing due out in a few minutes. Careful ahead of that. if you're sitting on bullish gains, make plans to protect them.

  Jonathan Levinson   1/3/2005,  9:49:35 AM
Gold is up to 431.40 here, down 7.40 for the day. HUI is down 1.82% at 211.41, XAU -2% at 97.37.

  Jeff Bailey   1/3/2005,  9:48:39 AM
VIX.X 13.31 +0.15% .... Daily Pivot Levels ... 12.41, 12.75, Piv = 12.92, 13.26, 13.43

  Linda Piazza   1/3/2005,  9:48:34 AM
Friday and then again last night in my 8:18 post, I commented that the three small red candles declining off last Tuesday's high could actually be part of a bullish pattern called a mat hold. That would require a tall white candle today that broke to a new high. The bounce from the ascending trendline off the 12/09 high was the clue this morning, and so, far, the OEX fulfills the parameters of that bullish continuation pattern. Those who are currently in bullish plays should continue to follow the OEX higher with their stops, as daily and weekly Keltner charts do show some perhaps significant resistance in the 580-581 area.

  Jonathan Levinson   1/3/2005,  9:38:33 AM
QQQQ is plowing higher within a 30 minute cycle upphase. 40.17 is current short cycle support, with 30 minute channel resistnace is at 40.30.

  Jonathan Levinson   1/3/2005,  9:36:48 AM
Thanks, Mark!

  Jonathan Levinson   1/3/2005,  9:36:25 AM
Gold has just been slammed to a low of 429.70. 433 should now act as resistance. Bonds are also selling, TNX up 4.5 bps (a 1.07% move) to 4.261%.

  Mark Davis   1/3/2005,  8:14:36 AM
Welcome back Jonathan!

  Jonathan Levinson   1/3/2005,  8:13:07 AM
Happy New Year!

Equities are higher, ES trading 1218.75, NQ 1638, YM 10832 and QQQQ +.24 at 40.16. Gold is down 2.10 to 436.70, silver -.092 to 6.75, ten year notes -.25 to 111.6875 and crude oil down .975 to 42.475.

We await the 10AM releases of construction spending for Nov., est. .5%, and the Dec. ISM, est. 58.5.

  Linda Piazza   1/3/2005,  6:57:54 AM
Good morning. The Nikkei, Shanghai Composite and FTSE 100 remained closed for holidays Monday. Other Asian markets were mixed, but most European markets are higher and some, strongly higher. Of mixed support to semi-related stocks was a Semiconductor Industry Association report after the bell Friday that said that November's worldwide sales of semiconductors grew 18% over the same period the previous year. The SIA pointed to strong sales of flash memory products, microprocessors and digital signal processors. Our futures have bounced strongly, although at the time of this writing, rough potential H&S's stood at the top of the overnight climb. As of 6:36 EST, gold was down $1.50, and crude, down $0.80. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei remained closed Monday for the New Year's holiday as did many other Asian markets. Those that opened showed mixed reaction to a dip in crude prices on the Singapore market, with some bourses benefiting and others not. South Korea did not, for several reasons. The monthly business survey index slid from December's 80.9 to January's 77.8, with that index serving as a measure of corporate optimism. Another reason for the Kospi's negative performance related to LG Card. Creditors decided to dump hefty portions of their stakes on the market, sending that stock plunging. Also perhaps of interest to U.S. drivers, news circulated last night that the man who brought the Yugo and Subura to the United States planned to import Chinese cars to the U.S. within two years.

The Taiwan Weighted gained 0.06%, but South Korea's Kospi dropped 0.25%. Singapore's Straits Times gained 0.19%, and Hong Kong's Hang Seng climbed 0.05%. China's Shanghai Composite remained closed.

The FTSE 100 also remains closed today. Most other European markets trade in the green. December's European purchasing manager's index showed a greater-than-expected gain to 51.4 from November's 14-month low of 50.4. The drop in crude prices was tapped as being responsible for the climb. In addition, employment in Germany increased. Semiconductors showed mixed performances after the SIA figures released Friday after the bell. In stock-specific news, the Deutsche Boerse continues reorganization plans that will help it compete for or benefit from the acquisition of the London Stock Exchange. Van der Moolen made changes in its executive lineup and also completed the sales of its Chicago Board of Options Exchange activities. French building materials supplier Lafarge bought a German company that owns a majority interest in an Ecuadorian cement company. Adidas was gaining after its CEO detailed its plans for revenue growth in China and throughout Asia.

As of 6:51 EST, the CAC 40 had climbed 55.51 points or 1.45%, to 3,876.67. The DAX had climbed 47.38 points or 1.11%, to 4,303.46.

  Linda Piazza   1/2/2005,  8:18:29 PM
Surprisingly, the OEX's candlestick pattern on the daily chart--Tuesday's tall white candle, followed by the three sinking-lower small-bodied candles--could be part of a bullish candlestick pattern known as a mat hold. The three small-bodied candles must stay within the range of the first day that produced the tall white candle, and that's happened. This is a continuation pattern as investors consolidate recent gains, and it's completed by a tall white candle the fifth day--Monday, in this case--that breaks to a new high. Those hoping for a bullish resolution to the current consolidation pattern will want to see that tall white candle that breaks to a new high tomorrow. As with all candlestick patterns, you can't assume it's going to be confirmed before it is, but what looks bearish and feels bearish sometimes isn't all that bearish.

What may tell the tale is what happens with respect to the ascending trendline off the 12/09 low, with that trendline at about 575.25 as of Friday's close and with the late-day sell-off sending the OEX just below that trendline. A continued rollover beneath that trendline suggests a decline down toward the midline of the OEX's rising regression channel on the 60-minute chart, now at about 573.50 or perhaps even to the bottom of that channel, now at just below 568. A bounce from the trendline suggests another test of 577-578 resistance and then the top of the channel, now at about 580.

  OI Technical Staff   1/2/2005,  5:03:54 PM
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