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  OI Technical Staff   1/4/2005,  8:31:29 PM

Lock in your subscription rate NOW! Link

 
 
  Jeff Bailey   1/4/2005,  5:18:21 PM
Closing Internals at this Link

 
 
  Jeff Bailey   1/4/2005,  4:33:46 PM
LSI Logic (LSI) $5.02 ... higher at $5.69 after warning that it expects Q4 net loss of $0.53-$0.55 per share, on revenue in a range between $415-$420 million. Previously, LSI had estimated it would lose between $0.54-$0.57 on revenue of $360-$390 million.

 
 
  Jim Brown   1/4/2005,  4:30:56 PM
MCRL - warning on Q4

 
 
  Jeff Bailey   1/4/2005,  4:30:46 PM
Current OPEN MM Profiles at this Link

Today's activity ...

Stopped on the swing trade long in SBC Communications (SBC) at $25.50. ($-0.54, or -2.07%)

Stopped on the remaining one (1) IWO May $63 calls (IWO-EK) at the bid of $4.70. ($0.10, or +2.17%)

 
 
  Jim Brown   1/4/2005,  4:27:44 PM
FRX - raising guidance for Q4

 
 
  Linda Piazza   1/4/2005,  3:58:25 PM
So far, the OEX's pattern on the three-minute chart looks like a possible bear flag, suggesting that the OEX might not yet be quite through with declines, perhaps after a continued rise inside the bear flag. It has not yet been able to produce a three-minute close above the Keltner line currently at 568.00, so hasn't yet shown even the first smallest sign of recovery. The 60-minute chart still suggests vulnerablity to lower prices, perhaps to 561.81, the lower Keltner boundary on the 60-minute chart. A 60-minute close above 570.10 would change the picture somewhat but the OEX would still face significant resistance near 572.15. I think I'd be inclined to hold off on long entries until I saw what happened tomorrow morning. What about bears with profits? Depends on your profits. Taking at least partial profits might not be a bad idea. Depending on your trading style and how much cushion you have, allowing partial profits to run on the possibility of a further dip early tomorrow morning might not be a terrible idea, either, although with the advdec line so low today there's a risk of a gap higher tomorrow morning. That's not what intraday charts suggests as most likely, but it could happen. Remember services ISM is tomorrow morning, at 10:00.

 
 
  Jeff Bailey   1/4/2005,  3:51:24 PM
e-mini S&P (es05h) 1,191.50 -1.22% (30-minute delayed) ... a settlement below 1,192.75 become more bearish in my opinion.

These thoughts are from previously discussed chart and fitted retracement. "zone of support" from 1,192.75-1,200.75 violated today.

 
 
  Marc Eckelberry   1/4/2005,  3:48:11 PM
Linda, re your excellent SOX post, I would add that 404/406 area is a triple bottom on the daily in November. A drop below 404 would have dire consequences.

 
 
  Jeff Bailey   1/4/2005,  3:47:58 PM
Friday's nonfarm becomes that much more interesting at this point.

Too cool and Treasuries find buying, yields sharply back lower ....

 
 
  Jeff Bailey   1/4/2005,  3:44:44 PM
NYSE Composite ($NYA.X) 7,097.01 -1.15% ... updated bar chart with fitted 38.2% (pink) and "stacked" conventional (blue) at this Link

QQQQ $38.84 -1.66%...

IWO $64.79 -2.27% .... seasonal zone from $64.78-$65.00

 
 
  Linda Piazza   1/4/2005,  3:43:08 PM
Reader Question: What support does 406-408 rep on the Sox? Since it has blown throught the 20, 50 and 200, what support should one look at next?

Response: This is a question in response to my earlier comments today that the SOX was entering a 406-408-ish support zone. Perhaps Jonathan, Marc and Mark and some of the others watching the SOX have different ideas and different explanations, but 406-408 has been a zone from which we've seen innumerable opens, closes, day's highs and day's lows over the summer months especially. If you draw horizontal lines at these levels across the summer month's trading patterns, you'll see that it appears to have some significance. For me, I speculated that perhaps it served as a lip of a saucer-like rounding bottom formation. I don't know why it began to have some significance, but when a horizontal line drawn through a zone shows that kind of relevance for months, I pay attention to it. I haven't seen a Fib level that hits there, such as an important Fib level off the bear market-decline.

Other support? Round-number support at 400 should be considered, but there's another 400-404-ish congestion band, so there's just going to be a whole lot of congestion between here and a further drop, suggesting that trading will get choppier and S/R more difficult to identify. The daily Keltner chart suggests that the SOX currently has vulnerability down to 395.33 until it begins producing daily closes above 425.80 again.

 
 
  Jonathan Levinson   1/4/2005,  3:39:05 PM
QQQQ's made it back north of 38.80, and the short cycle oscillators have confirmed a new upphase, but that stray spike to 39.71 has chopped up my shorter channels. Next key resistance is at 39.00, with a weak line at 38.90. A pause or slight pullback from 38.90 could print a flat reverse head and shoulders intraday, but 39.00 will remain the neckline/key resistance above it. Above that level, the 30 min channel should finally turn up.

 
 
  Linda Piazza   1/4/2005,  3:31:08 PM
Still watching to see how the OEX will perform will relationship to the Keltner line currently at 568.24, with the OEX not so far able to show three-minute closes above that Keltner line. Doing so would be a short-term change in trend, a first tiny sign of abating selling.

 
 
  Linda Piazza   1/4/2005,  3:20:07 PM
The OEX is running into first significant Keltner resistance on the three-minute chart now. So far, the OEX turns back, but that may be temporary. A break above the Keltner line currently at 568.56, sustained on a three-minute closing basis, is needed to change the pattern of today's trading. The OEX has produced only two three-minute closes above that particular Keltner line since about 11:45 this morning, just before the long tumble began.

 
 
  Jeff Bailey   1/4/2005,  3:17:39 PM
03:00 Internals at this Link

 
 
  Jeff Bailey   1/4/2005,  3:08:52 PM
Swing trade bullish call stop alert .... Russell 2000 iShares (IWO) $65.75 -2.33% ....

Stopped on the remaining one (1) IWO May $63 Call (IWO-EK) at the bid of $4.70.

 
 
  Jeff Bailey   1/4/2005,  3:06:37 PM
03:00 Market Watch at this Link

Looks like a "fear of inflation" trade, or still tightening Fed, yet gold not responding as such.

 
 
  Linda Piazza   1/4/2005,  3:05:10 PM
The TRAN has come within a few points of its target predicted by its 60-minute Keltner channels. That downside target was 3668.71 and the TRAN's low was 3675.00. It's attempting a bounce now, as are many other indices, including the OEX. The advdec line isn't really, however, so be careful, if you're attempting to a pick-the-bottom play. Logic suggests that we're near the short-term bottom with a likely consolidation day of some type tomorrow, including the possibility of a bounce, but "near" can be damaging to your trading account when "near" could mean four OEX points away, for example.

 
 
  Jonathan Levinson   1/4/2005,  2:56:08 PM
QQQQ is bouncing from its current low of 38.55, but it will take a move above 38.80 to even suggest a short cycle upphase. Volume remains heavy, with 103M QQQQ shares already traded with more than an hour left to go.

 
 
  Linda Piazza   1/4/2005,  2:55:38 PM
The SOX does attempt to slow its descent from within that 406-408 potential support zone. This attempt was a given, but the outcome isn't yet.

 
 
  Jane Fox   1/4/2005,  2:46:13 PM
When Jonathan mentioned that the QQQQ has broken December lows I decided to revisit this phenomena presented by the Stock Trader's Almanac. The theory goes like this. During the first quarter of the year if the DOW breaches is December's low of the prior year, stocks are likely to enter the doldrums of a trading range with a downward bias. Stock Trader's Almanac points out that in years the December low was traded below, on average, the market has gone down another 10.7% from the break of the lows. That’s a Dow drop of about 1,100 points! Since 1952, the break of the lows has taken place 26 times and only 12 times did prices end higher for the year. The DOW's December lows are 10400.

However, Larry Williams thinks you should use the November lows and your odds of a down year increase to 80%.

 
 
  Linda Piazza   1/4/2005,  2:44:28 PM
The dollar zooms again while equities are dropping.

 
 
  Jonathan Levinson   1/4/2005,  2:41:51 PM
New lows across the board, 39.55-.60 coming into view. Both the 30 min and 60 min cycle oscillators remain on their synchronous sell signals, in line with the bearish divergent daily cycle sell signals as well. The benefit of the doubt goes to bears below QQQQ 39.00, with first resistance 38.80.

 
 
  Linda Piazza   1/4/2005,  2:40:19 PM
Couldn't type or upload fast enough. The OEX dropped while I typed.

 
 
  Linda Piazza   1/4/2005,  2:39:55 PM
Like the SOX, the OEX enters a 567-568 zone that should present significant potential support, perhaps slowing the OEX's descent. The 60-minute Keltner chart argues against that theory, though, suggesting that the OEX could fall all the way to 562 and could perhaps do that in rather short order, too. Those in bearish positions should be following the OEX lower with their stops and should have a profit-protecting plan in place for that 562 level. Remember that 561.23 is the 38.2% retracement of the entire bear-market decline and the 561-563 level has served as S/R on the way up and down over several years.

 
 
  Linda Piazza   1/4/2005,  2:28:51 PM
Just doing some checking under the "tight range day often follows large range day" theory relating to the SOX's big drop today, to see if we could perhaps predict a consolidation day tomorrow for the SOX as it digested the declines over the last couple of days. A look back at late April's and early July's performances suggest that we can't necessarily count on that at all. Logic does suggest that the SOX should begin slowing its decline now that it's dropped back into the 406-408-ish support and as it approaches round-number support at 400, however, so I think I'd be more likely to expect a smaller decline or a long-legged, small-bodied candle for tomorrow than another tall red candle.

 
 
  Jonathan Levinson   1/4/2005,  2:28:15 PM
Today's drop has now broken the December lows and is trending in the intraday timeframes. 38.80 support broke for QQQQ, with next support at 38.55-.60. Link

 
 
  Linda Piazza   1/4/2005,  2:23:15 PM
Huge drop on the SOX today. ATR (Average True Range) for the SOX is 8.69 points and the SOX has dropped almost 15 points off yesterday's close, almost 17 off today's high.

 
 
  Linda Piazza   1/4/2005,  2:14:37 PM
I've been mentioning since yesterday a 568-570 downside target for the OEX, a target that's being met. The 60-minute chart suggests a lower possible target, to 562.24, depending on whether the OEX remains below that Keltner support.

 
 
  Linda Piazza   1/4/2005,  2:12:21 PM
The OEX broke below the 60-minute Keltner support. Bears want to see it stay there, not springing back up above the Keltner support at 570.34 by the close of the current 60-minute period.

 
 
  Jonathan Levinson   1/4/2005,  2:08:10 PM
The current drop below 30 min channel support is lasting too long, and the channel is heading lower now, currently down to 38.80. This is becoming a trending move, a 'crash' in the 30 min timeframe. The outlook is bearish below 39.00 QQQQ- above that, the 30 min channel should flatten back out from its downturn.

 
 
  Linda Piazza   1/4/2005,  2:01:39 PM
The OEX still can't quite break below the 60-minute Keltner support lines, but it's walking down those lines as they turn down. A reaction to the minutes could shake the OEX out of this consolidation period, one direction or another.

 
 
  Jim Brown   1/4/2005,  2:00:35 PM
FOMC Minutes - Interest rates still too low to keep inflation stable. Some Fed members say economy is close to its potential. Job outlook is improving. Economy likely to improve at a moderate rate.

 
 
  Jonathan Levinson   1/4/2005,  1:57:32 PM
The short cycle upphase won't survive more than 5 minutes below 38.95, and the 30 min cycle channel is alreading ticking lower, back to 38.90 after ticking up a few cents. If QQQQ is going to bounce, it will need to do so within the coming minutes from near current levels.

 
 
  Jeff Bailey   1/4/2005,  1:51:29 PM
Bullish swing trade setup cancel alert ... cancel the order to buy long the QQQQ $39.05 -1.11% at $38.91.

I have to leave for about an hour and run an errand.

Will reassess after release of FOMC minutes.

 
 
  Linda Piazza   1/4/2005,  1:44:21 PM
On the three-minute OEX chart, Keltner lines have scattered, with the OEX in the middle of the bottom half of the channels. Over the very short time, it's going to be difficult to assess likely direction, perhaps appropriate as we enter the stop-running time of day. On the 15-minute chart, we still have an alignment of support that now goes down to 570.45 on a 60-minute closing basis and of resistance that now goes up to 572.34 on a closing basis.

 
 
  Linda Piazza   1/4/2005,  1:37:37 PM
SOX H&S, as promised: Link

 
 
  Linda Piazza   1/4/2005,  1:35:08 PM
Remember that potential H&S we talked about on the SOX's daily chart, with a descending neckline? The SOX is either at or slightly below that neckline, having fallen through all other levels of support. It had gone on to form a second right shoulder. Chart to follow.

 
 
  Jonathan Levinson   1/4/2005,  1:11:19 PM
The short cycle upphase has started for QQQQ, with 7200-tick SMA resistance currently lined up at 39.12. 39.00 never broke, which was enough for a so-far weak short cycle upphase to initiate. If the price can't get above 39.12 very shortly, that upphase should abort in what would be a bear flag breakdown. 30 min channel support continues to hold at 38.90.

 
 
  Jeff Bailey   1/4/2005,  1:10:32 PM
01:00 Internals at this Link

 
 
  Linda Piazza   1/4/2005,  1:07:28 PM
The TRAN has now slipped below its 30-dma. Market bulls don't want to see it close beneath this average, something it hasn't done since August, as it began building this rising regression channel from which it scaled into the ether.

 
 
  Jeff Bailey   1/4/2005,  1:03:54 PM
01:00 Market Watch at this Link

 
 
  Jeff Bailey   1/4/2005,  12:59:15 PM
QQQQ $39.10 -1.01% .... 30-minute interval chart with WEEKLY/MONTHLY Pivot retracement at this Link

 
 
  Linda Piazza   1/4/2005,  12:49:11 PM
On the OEX, the last 60-minute candle closed at Keltner support rahter than below it. The OEX attempts a bounce from that same support, but will face Keltner resistance at 572.70 and slightly below. Above that, next Keltner resistance lies at 574.85. Currently, Keltner resistance looks stronger than support, but Keltner lines are dynamic and configurations can change with price changes.

 
 
  Marc Eckelberry   1/4/2005,  12:47:44 PM
Jeff, it actually got triggered Friday at $1.00. Thanks. I had it programmed with a trade of COMP above 2178.

 
 
  Jeff Bailey   1/4/2005,  12:45:11 PM
Marc ... I didn't see your put trade from earlier this morning! Nice trade. Got some premium/volatility spike too.

 
 
  Jonathan Levinson   1/4/2005,  12:44:41 PM
A break below the session lows for QQQQ will target 30 min channel support, currently down to 38.90 and coinciding with the entry level just noted by Jeff. 60 min channel support is higher, currently at the session low, and spike below it should find 30 min and short cycle support at the 38.90 level.

 
 
  Marc Eckelberry   1/4/2005,  12:42:16 PM
Qm is bidding and I might have exited the put too early. We'll see. My orginal target was NDX 1576 and it looks like I could have gotten an extra dime. Better safe than sorry, 50% return in two days is fine by me.

 
 
  Linda Piazza   1/4/2005,  12:40:29 PM
The RLX finally keeled over, dropping back below the descending trendline off the November high. This presents the possibility of recent highs being part of a double-top formation in the making. The RLX tests the 30-sma now, however, with that average being alternately support and resistance over recent months. Let's see if it holds up as support today.

Scanning several charts, I'm wondering if we're not in for a period when indices bump between nearest support and nearest resistance until they figure out where they're headed. Many look to me as if they'll eventually head a little lower at least, but they appear to have some consolidating to accomplish before doing so. The problem with this theory, though, is that we're entering a period of the day known for light volume and stop-running attempts. If a stop-run were to take indices below next support and that stop wasn't bought immediately, the bottom could give way and those slightly lower levels could be hit in short order.

 
 
  Jeff Bailey   1/4/2005,  12:37:41 PM
Swing trade bullish setup alert .... for the QQQQ $39.10 -1.01% .

Place and order to go long at $38.91 (MONTHLY 80.9% at $38.90), stop $38.70, target $39.80.

 
 
  Jonathan Levinson   1/4/2005,  12:37:25 PM
Quick little jump here for QQQQ. If it can clear 39.15, a move above 39.20 will confirm a new short cycle upphase to challenge the ongoing 30 and 60 min cycle downphases. Above 39.40, those cycles will turn up as well.

 
 
  Marc Eckelberry   1/4/2005,  12:32:37 PM
QQQQ Feb 40 put long at 1.00 EXIT now at 1.50, +50%.

 
 
  Linda Piazza   1/4/2005,  12:24:16 PM
The OEX is trying to break below the 60-minute Keltner support detailed in the chart linked to my 10:59 post, but those Keltner lines sank along with the OEX. We haven't yet seen a 60-minute close below them. I had noted in the 10:38 post that I was still looking at 568-570 as a downside target and the OEX is almost to the top of that zone now. We'll get a better idea when the OEX closes this 60-minute period in a few minutes, but for now it remains in potential bounce territory. I still think 568 (and maybe lower) is possible, but whether it's probable or not is still to be determined. Bears should be making plans in case of a bounce.

 
 
  Jonathan Levinson   1/4/2005,  12:20:24 PM
QQQQ is still close enough to qualify for a throwunder of the 39.10 level, but it has to hold the current lows. A break from here would put QQQQ into the airball zone, targeting initial support at 38.80 but bringing in daily cycle targets much lower than that.

 
 
  Jonathan Levinson   1/4/2005,  12:15:35 PM
Session high for Nymex crude, +2.08% at 43.02.

 
 
  Linda Piazza   1/4/2005,  12:15:19 PM
Reader Question: Just wondering if you have been following AAPL. If you have, what is your technical outlook?

Response: I haven't been following AAPL specifically. Any writers who might have been, feel free to chime in. Starting with AAPL's P&F chart, I see that it's got a bearish bias, with the downside price objective of $56.00. It's currently in an X column, showing short-term strength in a period of underlying weakness.

Next, I looked at long-term charts. It certainly looks extended on both the monthly and weekly charts. It's charged right back up to 1999 levels, hasn't it? The monthly chart shows not one red candle from April of last year until December. In addition, the daily chart shows three gaps as AAPL climbed, and it's time to start thinking in terms of exhaustion gaps when you see that many.

It was time for consolidation, and that's what it's been doing. The weekly chart shows it coiling. When dialing down to a daily chart, the coiling appears to be taking the form of a bearish right triangle with a horizontal bottom support at about $61.55 and with a descending top trendline. If that formation were confirmed by a fall through bottom support, the downside target would be about $53.55, a little lower than the $56.00 downside objective predicted by the P&F chart. That $56.00 level coincides with the bottom of the 11/22 gap and will likely coincide with the 100-ema, with that MA sometimes providing support for AAPL over the least year. That might be enough to prevent AAPL from meeting that $53.55 target, although it looks to me as if it needs to fall further than that or trace sideways until some important support can catch up. Link

So, I'd look for first support in the $56.00 area. If that's broken, the next support lies near $48-$51.75, and consists of trendline support, the 31.8% retracement of the rally and round-number $50.00 support.

The possibility exists, of course, that AAPL will break to the upside. If so, bullish profits should be protected near the November high.

 
 
  Jonathan Levinson   1/4/2005,  12:14:56 PM
QQQQ is now testing the key 39.10 level, violating lower channel support in a trending move.

 
 
  Jonathan Levinson   1/4/2005,  12:12:50 PM
Session lows across the board here, with QQQQ losing 39.20 as I type.

 
 
  Jonathan Levinson   1/4/2005,  12:06:53 PM
QQQQ is testing lower channel support now, current low at 39.20.

 
 
  Jeff Bailey   1/4/2005,  12:02:24 PM
12:00 Watch at this Link

 
 
  Jeff Bailey   1/4/2005,  11:58:18 AM
Current OPEN MM Profiles at this Link

 
 
  Jonathan Levinson   1/4/2005,  11:57:46 AM
QQQQ failed at 39.40 and is back to the high .20s currently. The rollover from a lower high was caused by the short cycle relieving oversold pressure within the downphasing 30 and 60 min cycles. Support on both these longer cycles is at 39.20 now. If it doesn't shift lower over the next 20-30 minutes, then there's a chance of a decent bounce from that level. This is where the bulls need to push back against the bears.

 
 
  Linda Piazza   1/4/2005,  11:38:53 AM
The TRAN is mounting the to-be-expected bounce attempt from its 30-sma, horizontal support, and the support of its rising regression channel. Any bounce now should be a suspected bounce into a right shoulder for a H&S on the daily chart, however. I'm not sure that the TRAN will even get that far--into a right-shoulder level near 3760. The TRAN has a kind of double-headed potential H&S formation and that's because the head itself could have been the beginnings of a H&S formation. Instead of rising from 3750 into a right shoulder, the TRAN just fell through the neckline area, down to a neckline for a larger potential formation.

 
 
  Linda Piazza   1/4/2005,  11:34:34 AM
The advdec line has been trying to steady and climb over the last 30 minutes.

 
 
  Jonathan Levinson   1/4/2005,  11:33:43 AM
QQQQ is banging its head against yesterday's lows, now resistance. A move above 39.40 will restore QQQQ to yesterday's range, while a failure should target the 39.10-.15 support zone.

 
 
  Jonathan Levinson   1/4/2005,  11:20:12 AM
The bounce from 39.25 QQQQ is just starting to pull up the short cycle oscillators, but it's occurring within a nested 30 and 60 min cycle downphase. Unless the bulls can clear 39.50 for ten minutes or better on this run, the bounce should prove corrective.

 
 
  Linda Piazza   1/4/2005,  11:19:12 AM
The TRAN sits now on its 30-sma, often important support/resistance for the TRAN. That average is at 3727.51 as I type, with the TRAN at 3730.56. The average's importance is perhaps enhance by its coincidence with on version of the TRAN's rising regression channel's support.

 
 
  Linda Piazza   1/4/2005,  11:09:59 AM
The OEX sinks down toward a retest of yesterday's 571.48 low, almost there as I type. This is prime bounce territory, so bearish traders should have profit-protecting plans in place, knowing ahead of time how much of a bounce they're willing to weather.

 
 
  Jeff Bailey   1/4/2005,  11:07:15 AM
11:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Linda Piazza   1/4/2005,  10:59:18 AM
I'm going to start showing more of the Keltner charts I use so often. The OEX is still snagged between Keltner support and Keltner resistance on the 60-minute chart. Here's a chart, showing the last three 60-minute candle bodies snagged in a web of Keltner lines, demonstrating what I mean: Link Since the chart was uploaded, the OEX turned lower, but not out of that web of lines. Note that on 60-minute closes below the black line, the OEX becomes vulnerable to 562.58.

 
 
  Jeff Bailey   1/4/2005,  10:58:22 AM
10:55 Market Watch at this Link

 
 
  Jonathan Levinson   1/4/2005,  10:52:29 AM
Bonds continue to weaken despite the Fed's general 10B injection of funds this morning, TNX up 2.7 bps at 4.246%. Next resistance is the 4.26% line, again.

 
 
  Jonathan Levinson   1/4/2005,  10:48:46 AM
There's light support at 39.33, but the stronger stuff is at 39.25, stronger still at 39.10. Yesterday's low is being broken as I type.

 
 
  Jeff Bailey   1/4/2005,  10:46:04 AM
Bullish swing trade stop alert ... .for SBC Communications (SBC) $25.52 -0.27% .... did trade profiled stop of $25.50.

 
 
  Jonathan Levinson   1/4/2005,  10:45:10 AM
A new session low just printed at 39.40 QQQQ.

 
 
  Tab Gilles   1/4/2005,  10:42:30 AM
XLE appeared to be putting in a H&S pattern, testing the neckline yesterday, but bouncing as I type. This a fairly good entry point here into a long position. On the WHAAI, I would say taking a partial position here would be profitable. Reason being the XLE has bounced off its 100-ema and in the past that has proven to be a profitable entry point. Using the conservative $35 Jan '06 leaps ask $3.20. Breakeven $38.20 (+9.15% stock); Double at $41.40 (+18.3%). Charts, uploaded as of yesterday's close: Link

 
 
  Jonathan Levinson   1/4/2005,  10:42:14 AM
39.50-.53 should act as resistance on the bounce. Given the abortive short cycle upphase and the rollover in the 30 min cycle, that level should prove to be a tough nut to crack. Above that, 39.60, the level at which that little bounce just doji-ed back down, is next resistance.

 
 
  Linda Piazza   1/4/2005,  10:38:57 AM
Still looking at 568-570 as a potential downside target for the OEX, but that requires a move below yesterday's low, of course. There's the possibility that the OEX is now attempting to reform into a wider bear flag or other type of distribution pattern and that it will still attempt a climb. On the 60-minute Keltner chart, it's trapped between nearby Keltner resistance at 572.42 (on a 60-minute closing basis) and nearby support, down to 571.26. Until it breaks out of one on the 60-minute closing basis, we won't really know for sure. So far, the advdec line at least supports an eventual bearish conclusion.

 
 
  Jonathan Levinson   1/4/2005,  10:35:42 AM
Volume is solid for QQQQ at 24.3M shares so far. The session low so far was 39.42, reached on the initial break of 39.50.

 
 
  Marc Eckelberry   1/4/2005,  10:34:47 AM
QQQQ Feb 40 put, long at 1.00, raise stop to 1.00, break-even. Now trading 1.25/1.30. Exit target is NDX 1569/1577 (50 DMA or 10 weekly ema). I use NDX as conditionals for programing QQQQ option exits.

 
 
  Linda Piazza   1/4/2005,  10:32:12 AM
The OEX recoiled from the five-minute 100/130-ema's as if it had been electrocuted. Currencies began a big move at the same time, with the dollar strengthening against other currencies.

 
 
  Jonathan Levinson   1/4/2005,  10:27:08 AM
39.52 support is cracking now, with a session low at 39.50. There's support to 39.40, below which 39.25 and 39.10-.15 come into view.

 
 
  Jonathan Levinson   1/4/2005,  10:24:12 AM
Gold, euro and CAD futures are getting creamed here, with CAD -1.13% and ER down 1.24% currently. The USD is on the move, and it's only now pulling equities lower, with the R2K leading the charge. QQQQ is up .11 at 39.61, still waiting for a break of 39.52-.53 support.

 
 
  Linda Piazza   1/4/2005,  10:20:18 AM
The OEX is zig-zagging its way up to the levels detailed in my 10:07 post.

 
 
  Jonathan Levinson   1/4/2005,  10:09:10 AM
QQQQ is breaking the prior high as bonds make new lows with TNX +1.5 bps at 4.234%.

 
 
  Jeff Bailey   1/4/2005,  10:07:49 AM
Buy Program Premium ... SPX 1,205.41 , QQQQ $39.70

 
 
  Linda Piazza   1/4/2005,  10:07:12 AM
On a Keltner basis, here's what I see for the very short-term. The OEX reached down and tested a Keltner line that's currently at 573.08, finding support there and bouncing. It's about to face Keltner resistance, up to 573.95. It looks likely that the OEX might be working its zig-zagging way up toward a Keltner line currently just below 575, with that line descending to meet the OEX. They may meet somewhere near the five-minute 100/130-ema's, so essentially, it looks likely that these will be tested. That's where bears should watch for a potential rollover, if internals support a potential bearish play as that test occurs.

 
 
  Jeff Bailey   1/4/2005,  10:05:37 AM
10:00 Market Watch at this Link

 
 
  Jonathan Levinson   1/4/2005,  10:05:08 AM
QQQQ is net unchanged from its 8AM levels, holding 39.63, perfectly centered between 39.72 resistance and 39.53 support.

 
 
  Linda Piazza   1/4/2005,  10:03:54 AM
RLX now turning down. This is a danger signal for the OEX, as many of its recent gains have been helped by the retailers shared between the OEX and RLX.

 
 
  Jonathan Levinson   1/4/2005,  10:01:32 AM
Headlines:

10:00am U.S. NOV. FACTORY ORDERS UP 1.2% VS FORECAST UP 1%

10:00am U.S. OCT. FACTORY ORDERS REVISED UP 0.9% VS 0.5% PRIOR

10:00am U.S. NOV. DURABLE GOODS REVISED UP 1.4% V PREVIOUS 1.6%

 
 
  Jonathan Levinson   1/4/2005,  9:58:53 AM
The Fed has replaced 4.75B in expiring overnight repos with a 10B 2-day repo for a large net add of 5.25B.

 
 
  Linda Piazza   1/4/2005,  9:54:56 AM
Here's where the OEX is with respect to the potential resistance levels I mentioned last night and earlier this morning, as seen on a 60-minute chart: Link Not pictured are the five-minute 100/130-ema's just overhead, too. The current morning-star-ish pattern on the 60-minute chart suggests to me that the OEX isn't yet through challenging that resistance, although the first hour's trading is far from over and the current 60-minute candle could look quite different 40 minutes from now. So, much may depend on those 10:00 numbers. The five-minute chart shows the OEX coiling beneath that resistance, awaiting that 10:00 report. I would guess that the OEX will likely eventually roll down from resistance, but whether that's at 574 or 576-577, I'm not yet certain.

 
 
  Jeff Bailey   1/4/2005,  9:54:51 AM
VIX.X 14.00 -0.56% .... QCharts' Daily Pivot levels ... 12.98, 13.58, Piv = 13.90, 14.51, 14.83

 
 
  Linda Piazza   1/4/2005,  9:48:38 AM
As Jonathan warned earlier, we're awaiting numbers for November's Factory Orders at 10:00. My handy-dandy Yahoo economic calendar source says that this is an old-news report that normally doesn't move the markets, but with the precariousness of trading here near multi-year highs, I wouldn't ignore the possibility that it could impact trading.

 
 
  Linda Piazza   1/4/2005,  9:45:19 AM
AMZN may have taken a hit today on the downgrade, but this retailer is not a component stock of the RLX or OEX, and they're not seeing an impact yet, unless the impact is in the capping of gains.

 
 
  Jeff Bailey   1/4/2005,  9:44:11 AM
SanDisk (SNDK) $23.80 -1.69% Link ... breaks back below its starting to round flat 200-day SMA. Earnings not until 01/27/05 (after January expiration) with consensus at $0.28 per share versus year-ago $0.47 and Q3 $0.29.

 
 
  Jonathan Levinson   1/4/2005,  9:42:49 AM
So far, the decline has not impacted the short cycle upphase, and the pattern has a bull-flag feel to it on the 100-tick intraday chartt. A move below 39.52-.53 QQQQ will change that, however.

 
 
  Linda Piazza   1/4/2005,  9:40:40 AM
Scanning charts, I see that the SOX continues lower this morning, now below the important 50-dma. The last-ditch nearby support for the SOX is the 100-ema at 420.09, near horizontal support, too.

 
 
  Linda Piazza   1/4/2005,  9:35:05 AM
The OEX easily passed up first Keltner resistance and now heads straight for converging midline of the rising regression channel and bottom of the former rectangular consolidation zone, possible resistance that it's hitting now. Above them are the five-minute 100/130-ema's at 574.46-574.80.

 
 
  Jonathan Levinson   1/4/2005,  9:33:12 AM
QQQQ has 30 and 60 min channel resistance lined up at 39.72, and ran into trouble 1 cent below it. If price holds at current levels for another 10 minutes or so, those channel bands will begin to drift higher. A short cycle upphase is in progress and suggests that will happen, so long as price holds above 39.53 support.

 
 
  Linda Piazza   1/4/2005,  9:29:26 AM
Futures are slightly higher this morning, indicating that the OEX and some other indices may open at or slightly above their closing levels yesterday. It's not always easy to correlate SPX futures action to OEX action, however, as early morning developments in big caps may affect the OEX more, proportionately, than the they do the SPX. If the OEX does continue the bounce begun yesterday afternoon, look for first resistance just overhead, near 572.40-573 and further resistance at levels outlined in last night's report.

 
 
  Jonathan Levinson   1/4/2005,  8:38:42 AM
Euro and CAD futures are recovering slightly, and gold is up to a 10 cent loss at 429.40 from its low of 426.80. Equities are holding steady however, as are bonds, both holding their gains.

 
 
  Jonathan Levinson   1/4/2005,  7:57:57 AM
Equities are higher, bonds are flat and commodities and currencies lower as the dollar bounces, with ES trading 1208, NQ 1616, YM 10767 and QQQQ +.13 to 39.63. Gold is down 2.60 to 426.90, silver -.128 to 6.386, ten year notes +.03 at 111.9062 and crude oil -.175 at 41.95.

Awaiting the 10AM release of Nov. factory orders 1%.

 
 
  Tab Gilles   1/4/2005,  7:55:51 AM
Monday's dollar strength caused a decline in the markets. Is this the start of something? Link

 
 
  Tab Gilles   1/4/2005,  7:23:43 AM
As I indicated yesterday at the 10:02 MM post and the 12/31 post, the SMH has tested the 200-ema/GAP area and pulled back to the lower end of the uptrend channel. (see attached charts). However, what's next...$32 support? I'm expecting, as is Jim, a correction here in January, but bullish longer term. Link

 
 
  Linda Piazza   1/4/2005,  7:07:58 AM
Good morning. The Nikkei climbed in its half-day session to its highest close since July 13, but many other Asian markets fell. European markets trade in the green today despite disappointing economic and earnings news. Lower crude and a firmer dollar help overcome the disappointing news. Our futures have drifted slightly higher throughout the night. As of 6:52 EST, gold was down $2.00, and crude, down $0.20. More detail about Asian and European markets follows in succeeding paragraphs.

In its first half-day open after a several-day holiday, the Nikkei turned lower early in the shortened session. Initially, it was sent lower by Monday's performance on U.S. markets and an ISM number that was deemed disappointing by some measures. Exporters declined in early trading, and investors also took profits in stocks showing big gains last year. After that initial bout of selling, the index turned higher. Weaker crude prices helped. Exporters and banking stocks erased early losses. The Nikkei closed up 28.99 points or 0.25%, at 11,517.75, its highest close since July 13 when the index closed at 11,608.62. In stock-specific news, NTT DoCoMo and 25 other mobile carriers and telecoms equipment makers have decided to create a standard that allows high-resolution video to be instantaneously transmitted. The stock was flat on the news.

Other Asian markets were mixed, but the ones typically followed in this report each morning were mostly lower. The Taiwan Weighted dropped 1.35%, and South Korea's Kospi fell 0.76%. Singapore's Straits Times declined only 0.08%, but Hong Kong's Hang Seng fell 1.35%. China's Shanghai Composite fell 1.87%, to 1,242.774, below September's multi-year closing low of 1,260.32.

Most European markets currently turn in positive performances, however, helped by a firming dollar. News has not been all good, however. In the U.K., some retailers dropped after Woolworths discussed its same-store sales figures. In France, INSEE revised the Q3 GDP estimate lower to an expectation for a flat number, citing decreasing household consumption as being responsible for the lowered expectation. In Germany, the rise in unemployment was bigger than expected. Throughout Europe, chemical companies reacted to assessments made by Citigroup Smith Barney, cutting ratings for some, including Bayer, and raising ratings on others. In stock-specific news, Lehman Brothers raised Vivendi Universal's rating to an overweight rating, sending that stock higher in early European trading. Fortis rose after the company's statement that it had filed initial paperwork for an IPO on its Assurant unit to be sold by Fortis Insurance.

As of 6:56 EST, the FTSE 100 had gained 28.10 points or 0.58%, to trade at 4,842.40. The CAC 40 had gained 9.56 points or 0.25%, to trade at 3,865.24. The DAX had gained 6.41 points or 0.15%, to trade at 4,297.94.

 
 
  OI Technical Staff   1/3/2005,  7:20:36 PM
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