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  OI Technical Staff   1/8/2005,  6:59:23 PM

Lock in your subscription rate NOW!: Link

  Tab Gilles   1/7/2005,  7:52:14 PM
Thursday I made an observation on the SPX 15 minute chart that a pattern of rallying on the open and closing down for the day, was occuring. And if this pattern would continue? Link

Well, it didn't and perhaps it has only paused here with further declines to come? Link

Looking at a series of charts since July '04, I still believe that the SPX is heading lower. Link

On the $NASI it too is indicating a lower Nasdaq/NDX as I highlighted this past Wednesday. Plus on a chart from 12/22/04 MM post. Link Link

Oil rallied back this week and has broken out of the downtrend channel I indicated on Thursday. Testing the 38.2% Fib Retrace and 50-ma. Link

The semi's have found support on both the SMH and $SOX. But, could it be a pause or still trending with the descending channel in a chart from Wednesday? Link Link

Next week should be busy with AAPL, SUNW and INTC reporting. Five weeks ago, Intel, the world's largest maker of microchips, increased its quarterly revenue outlook, citing strong worldwide demand for its microprocessors and reduced levels of inventories. Intel's revenue in the quarter ending Dec. 25 is now expected to reach $9.3 billion to $9.5 billion -- up from an earlier target of $8.6 billion to $9.2 billion. At those levels, Intel will set a new all-time high, breaking a record of $8.74 billion reached in last year's fourth quarter. Enjoy the weekend everyone!

  Jonathan Levinson   1/7/2005,  4:47:25 PM
Sorry, Linda- just saw your 16:29 now. Quotetracker is still free and uses IB's realtime feed for its intraday charts. Configuring Quotetracker isn't for the faint of heart, though the "Help" and "Help for Interactive Brokers Users" screens will get you through it.

  Jeff Bailey   1/7/2005,  4:34:33 PM
Bond action, comment regarding homebuilders +2% gain ... at 09:26:00 AM, I made comment that I thought the homebuilders should trade up 2% today if economy was as strong as I think it is.

While the DJUSHB -0.17% finished fractionally lower, I do believe that at the time of those comments, we may have seen an inverse reaction low trade in Treasury yields (which I made comments on homebuilders). There are reports that a major newswire accidently reported that December's nonfarm payroll data was 312,000, which brought selling into Treasuries. The 312,000 figure was a revision to October's data. The correction was made, and then reportedly had treasuries whipping back around with yield jerked lower (probably as I made my homebuilder comment).

  Linda Piazza   1/7/2005,  4:29:55 PM
Reader Question: I've made a switch from Expresstrade to Interactive Brokers. I like IB transactions and commissions much better. BUT there is terrible charting on IB. Do you have any futures charting websites you can suggest, preferrably at no charge.

Response: I believe Jonathan uses QuoteTracker, and I believe it's free, with feed through IB if you're an IB user. Jonathan, is all that still true?

  Jeff Bailey   1/7/2005,  4:09:01 PM
Sell Program Premium ... DIA $105.95 , SPY 118.47

  Jeff Bailey   1/7/2005,  4:08:19 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Thursday evening's after-hours bullish day trade in Accenture (ACN) from $26.00 was sold at $26.70 ($0.70, or 2.69%)

Swing trade stopped on 1/2 bullish position in (Peregrine Pharma (PPHM) at the bid of $1.10. ($-0.06, or -5.17%)

Initiated a swing trade put Adobe Systems and two (2) of the ADBE April $55 puts (AEQ-PK) at the offer of $1.85. (see bottom of MM at 01/26/05 01:25:20 AM)

This week's trade blotter at this Link

  Linda Piazza   1/7/2005,  3:59:12 PM
The advdec line confirmed a H&S of its own at 2:35.

  Linda Piazza   1/7/2005,  3:50:43 PM
I expected choppy today, and we got that. I also expected a choppy rise into the right shoulder of a potential H&S on the OEX's 60-minute chart, with that formation forming since the early/middle of December. We didn't get that. The OEX's consolidation formation is roughly rectangular, roughly four points in width, so an upside break through that formation would set an upside target within the 572-574 area that's likely the appropriate level for the top of a right shoulder. It's possible, though, that the formation itself is serving as a right shoulder and that the break will be to the downside. The weekly candle completes an evening-star formation, a reversal formation. We've seen weekly reversal formations with the only reversal the candle needed to complete the formation. For example, in early November, we saw a nicely formed tweezer-top reversal signal on the weekly chart before the OEX began climbing toward this week's high. It's always possible that there could be no follow-through again this time, you still don't want to count on a reversal being reversed! This is bearish action on a weekly basis.

  Linda Piazza   1/7/2005,  3:40:18 PM
Thanks, Jonathan, for the link to the satellite photos. The first novel I ever had published was based partially on events surrounding the hurricane that hit Galveston early in this century, killing thousands. That's why I thought the numbers so inflated at first, because the devastation in Galveston had been so complete that I couldn't imagine a tsunami killing more than double the numbers killed in Galveston.

  Jonathan Levinson   1/7/2005,  3:38:37 PM
QQQQ is currently testing declining resistance connecting the tops since 12:30PM. A break above 38.70 should target 38.78 in short order. If on expanding volume, bulls may have a shot at the session highs, with 30 and 60 min channel resistance lined up just above at 38.90.

  Jonathan Levinson   1/7/2005,  3:30:57 PM
Linda, here is a series of incredible before and after satellite photos depicting some of the devastation. Link

  Linda Piazza   1/7/2005,  3:28:25 PM
I remember writing that first early morning report the morning after the tsunami hit, with estimates of casualties rising from 14,000 to 20,000 as I was preparing the report that morning. The 20,000 figure just seemed too inflated, and so I put the 14,000-20,000 range instead. Now, the latest estimate has been 147,000, with 7,000 more bodies discovered today in Meulaboh, which rescue workers had not been able to reach previously.

  Linda Piazza   1/7/2005,  3:20:25 PM
I was just looking at the OEX's weekly chart. If the OEX were to end the week anywhere near the current 567.36 level, it will have created a nice-looking evening-star formation at the top of the climb off October's low.

  Jeff Bailey   1/7/2005,  3:17:51 PM
03:00 Internals at this Link

  Jeff Bailey   1/7/2005,  3:08:29 PM
SanDisk (SNDK) $24.03 +2.6% ... spike to high of session amid volume.

  Linda Piazza   1/7/2005,  3:08:08 PM
The SOX minimally confirmed a H&S at the top of today's climb, seen on the five-minute chart, but then immediately bounced right back above the neckline. It was a nicely formed H&S, complete with bearish divergence as the head was formed. Had a lot going for it, and now the SOX is undoing the confirmation. That's the kind of day it is.

  Jonathan Levinson   1/7/2005,  3:08:03 PM
The sideways action here has QQQQ drifting below 7200-tick support at 38.70, but with very weak downside action from the 30 min and short cycled downphases. A break above 38.78, the previous high, would set these downphases up as mere corrections, while a break of 38.59 should get things moving to the downside.

  OI Technical Staff   1/7/2005,  3:08:02 PM
We continue to have a network outage on 1/3 of our network. The ISP is working to correct the problem. While the Monitor is not directly affected by the outage it has been experiencing momentary outages as they run diagnostics on our main Internet connection. If you experience a monitor outage it should only be temporary 2-3 min and should restart by itself. We apologize for the problem and hope to have it corrected soon.

  Jeff Bailey   1/7/2005,  3:04:18 PM
03:00 Market Watch at this Link

  Linda Piazza   1/7/2005,  3:02:36 PM
The TRAN reached a minimal new LOD, but tries to bounce.

  Linda Piazza   1/7/2005,  2:27:44 PM
The OEX is turning down through the consolidation pattern again. While support and resistance look evenly weighted on the 60-minute chart, they're beginning to look unbalanced on the 15-minute one, with the OEX threatening to keel over beneath resistance, with not much support beneath it. On a 15-minute close beneath the Keltner lines currently at 567.90, next Keltner support is at 567.02, then 565.13 and 563.03.

  Jeff Bailey   1/7/2005,  2:23:17 PM
02:00 Internals at this Link

  Jonathan Levinson   1/7/2005,  2:19:07 PM
This is looking like a lower intraday high just printed below 38.80 QQQQ.

  Jonathan Levinson   1/7/2005,  2:14:03 PM
It feels like molasses today, Linda. But volume is heavy, with 100.8M QQQQ's already traded. If it closes near the highs, it will be a high volume doji hammer - bullish. This is reaching do or doo-doo time for the bears.

  Linda Piazza   1/7/2005,  2:13:21 PM
The OEX still maintains 60-minute closes above the Keltner line necessary to keep alive the possibility of a test of the Keltner resistance now from 570.40-570.95, but there are upper shadows on a number of the 60-minute candles. I still think it's a possibility that the OEX will just consolidate sideways while those resistance lines cycle down toward it. As they cycle down, it's possible that they may separate, too, so that the resistance is not as firm. We'll just have to see.

Does this day seem interminable to anyone else but me?

  Jonathan Levinson   1/7/2005,  2:05:14 PM
QQQQ has now risen back above the confluence zone within the stalled 30 minute cycle channel. If QQQQ can break the previous 38.85 high, then the upphase will resume. If it fails, that should be the failed bounce to confirm a new downphase, and we'll look for a retest of the 38.65 support zone from there.

  Linda Piazza   1/7/2005,  1:56:15 PM
The OEX's 60-minute Keltner charts give zero clues as to whether 570.40-570.90 resistance or 565.40 support is more likely to be tested.

  Linda Piazza   1/7/2005,  1:51:39 PM
The OEX has hugged its five-minute 100/130-ema's for an inordinate amount of time. It's storing up energy for a move, but what direction?

  Jonathan Levinson   1/7/2005,  1:43:56 PM
QQQQ's now trapped within the 38.65-.73 confluence, resting on rising 7200-tick SMA support. Volume is rising slightly and the lack of an immediate bounce back above .73 suggests that 30 minute cycle upphase could be in trouble. A sustained move below even 38.65 should be enough to get it moving, but QQQQ remains above that 7200-tick SMA line, as it has for the past 2 hours.

  Linda Piazza   1/7/2005,  1:37:50 PM
The OEX 570.50-571 Keltner resistance still looks fairly solid on the 60-minute chart, and has actually slipped a little closer to the current OEX position, down to 570.40-570.95.

  Linda Piazza   1/7/2005,  1:29:37 PM
What's happening with the RLX? Yesterday, the RLX continued its steep declines, but today it's printing a doji at the bottom of that steep decline, at least so far. The OEX probably needs strength in the retailers it shares with the RLX if the OEX is going to maintain strength of its own.

  Jonathan Levinson   1/7/2005,  1:27:33 PM
QQQQ is breaking 38.63 now as the short cycle oscillators roll over. 30 min channel support is at 38.55, and if QQQQ can hold below 38.65 for another 10-15 minutes, that cycle will roll over as well.

  Linda Piazza   1/7/2005,  1:26:36 PM
The TRAN isn't a foolproof indicator, but it certainly does sometimes act as a leading indicator for the Dow and S&P's, and it's headed lower again, although not yet at the day's low. Keltner support looks pretty good just above the day's low, so it might be headed into an equal or slightly higher low. At any rate, it isn't headed higher.

  Jeff Bailey   1/7/2005,  1:25:29 PM
Standard Pacific (SPF) $60.84 -1.67% Link ... weak despite its announcing that preliminary new home orders of 2,486 for the 3-months ended December 31, versus 2,163 in the same period last year.

  Linda Piazza   1/7/2005,  1:22:10 PM
The TRAN shows no strength, looking as if it's headed down for a retest of the 3650 zone and maybe even the day's low.

  Jonathan Levinson   1/7/2005,  1:15:17 PM
QQQQ's confluence support extends to 38.65. The short cycles are just starting a downphase here, but it will take a break of that level to confirm it.

  Linda Piazza   1/7/2005,  1:13:29 PM
As long as the OEX continues 60-minute closes above the Keltner line currently at 567.87, it continues the possibility that it might reach up toward 570.50-571 Keltner resistance. The OEX's hold above that support level looks tenuous, however, and as the charts are configured now, that resistance looks massive.

  Jeff Bailey   1/7/2005,  1:13:10 PM
01:00 Internals at this Link

  Jeff Bailey   1/7/2005,  1:03:41 PM
01:00 Market Watch at this Link

  Linda Piazza   1/7/2005,  12:58:38 PM
The OEX's 30-sma appears to be playing a part in providing resistance over the last couple of days. That average is at 569.07, less than $0.20 under the day's high.

  Jeff Bailey   1/7/2005,  12:55:08 PM
3M (MMM) $82.62 +1.42% ... back to test its fitted 38.2% at $82.69 again.

Challenges INTC $22.81 +1.6% and AA $30.83 +1.48% for percentage gainer in the Dow

  Jeff Bailey   1/7/2005,  12:51:33 PM
Swing trade bearish position alert ... taking/buying two (2) of the Adobe Systems (ADBE Apr. $55 puts (AEQ-PK) at the offer of $1.80.

ADBE $59.46 +1.22% here.

  Jonathan Levinson   1/7/2005,  12:48:13 PM
The 30 minute cycle oscillators have finally, after 3 days of bumping and grinding higher, made it to the top of their range. The 60 min oscillators are still climbing. 38.65-.73 QQQQ should now act as support, but if QQQQ can't run past 39.00, there's a good chance that the break we've just seen will get reversed. The daily cycle downphase is still in progress, and bulls need that upward break of 39.00 to challenge it.

  Linda Piazza   1/7/2005,  12:43:51 PM
The TRAN is so far printing a doji at the 50-dma today: indecision visualized.

  Linda Piazza   1/7/2005,  12:38:35 PM
This morning, I noted that I wouldn't be surprised to see the SOX challenge the 412-414 level, and it's at 411.74 as I type. I also noted that I wasn't sure how much further the SOX could get, and I'm still not. It's challenging the 200-ema and one version of a neckline for an already confirmed H&S.

  Jeff Bailey   1/7/2005,  12:38:36 PM
5-year yield ($FVX.X) back to challenge morning high yield of 3.727%. Up 2.0 bp here.

30-year yield comes to unchanged at 4.854%.

Homebuilders losing earlier traction with DJUSHB 757.79 -0.75%

  Jonathan Levinson   1/7/2005,  12:35:28 PM
The break above 38.73 came on higher volume, and the 38.65-.73 QQQQ zone should now act as support for any pullback. Price is currently above the 60 min channel resistance band still at 38.73, while the 30 min channel has risen to 38.83 currently.

  Jeff Bailey   1/7/2005,  12:34:59 PM
I've got 6 sell and 5 buy program premiums having been generated so far today. Last was a buy at 11:20-25 AM EST

  Linda Piazza   1/7/2005,  12:29:38 PM
I'm back. In my 10:32 post, I noted that the confirming of the continuation-form H&S set up a downside target of 564.60, but that was complicated by a potential inverse H&S. The 564.60 downside target was hit, with an extra penny's decline, and now the OEX has headed up through the broadening pattern it's now forming. There's a new potential inverse H&S, but since the broadening formation has a flat top at about 569.50-570 (depending on whether all candle shadows are counted), a move through or rollover below that level is what should probably be watched. The advdec line has been on an upward trend since about midmorning, but so has TRIN, so there's some confusion among the indicators. Maybe we should count on more chop until indicators sort out the confusion. Keltners suggest a possibility of a climb toward 570.50-571, but also a possibility of another decline toward 564.70.

  Jeff Bailey   1/7/2005,  12:29:02 PM
Feb. Crude Oil (cl05g) 45.85 +0.63% ... (30-min delayed) ... moves above trend and into my "zone of resistance" from $45.93-$46.29.

  Jeff Bailey   1/7/2005,  12:26:21 PM
SOX.X 410.02 +1.95% ... BRCM +5.10%, MRVL +4.98%, TER +3.16%, KLAC +2.12% .... TSM $7.85 (unch), FSL.B -0.23%

  OI Technical Staff   1/7/2005,  12:20:39 PM
We have a network outage on 1/3 of our network. The ISP is working to correct the problem. While the Monitor is not directly affected by the outage it has been experiencing momentary outages as they run diagnostics on our main Internet connection. If you experience a monitor outage it should only be temporary 2-3 min and should restart by itself. We apologize for the problem and hope to have it corrected soon.

  Jonathan Levinson   1/7/2005,  12:18:10 PM
The 30 and 60 minute cycles continue to point north for QQQQ and volume has fallen off since the 11:30 attempt on 38.65. I'm thinking that this flat, low volume range would be accumulation in light of the uptilt in the 30 and 60 min cycles, but we won't know for certain until a decisive break above 38.73 (or below 38.40 to invalidate it).

  Jeff Bailey   1/7/2005,  12:17:11 PM
12:00 Internals at this Link

Yesterday's internals at this Link

  Jeff Bailey   1/7/2005,  12:04:45 PM
12:00 Market Watch at this Link

  Jonathan Levinson   1/7/2005,  11:57:59 AM
A big spike in the dollar following the 8:30AM data: Link

  Jeff Bailey   1/7/2005,  11:46:06 AM
QCharts needs to feed those hamsters, I've got nothing now. Link and I'm "seeing red."

  Jonathan Levinson   1/7/2005,  11:41:47 AM
Rising 30 minute cycle resistance and flat 60 min cycle resistance now line up at 38.70-.72, within the key confluence area for QQQQ. Volume is heavy so far at 63.8M shares just over 2 hours into the cash session. The 30 and 60 min cycle oscillators are still pointing uncertainly upward, but below 38.73 it's just noise.

  Jeff Bailey   1/7/2005,  11:38:37 AM
TRIN 0.91 ...

SPX.X 1,189.37 +0.12% ... QQQQ $38.55

Volatility measures all down 1.97% or better.

Trying to find a "bottom" but not a lot of conviction.

  Jonathan Levinson   1/7/2005,  11:25:40 AM
A quick bounce off 38.40 has QQQQ now above 38.48 resistance and challenging current 30 min channel resistance at 38.60. Recall that key confluence is from 38.65-.73. Above that level, the bulls will assume control on an intraday/30 min cycle basis.

  Jonathan Levinson   1/7/2005,  11:21:17 AM
QQQQ cleared 38.40, failed below 38.48 and is now testing 38.40 from above. 38.46 is current 7200-tick SMA resistance, and prints above that level will stall the 30 minute cycle downphase.

  Jane Fox   1/7/2005,  11:17:46 AM
Dateline CBS MarketWAtch - The launch of options on a popular S&P 500 exchange-traded fund expected by traders this week has been put on hold, at least for the moment.

A U.S. District Court in New York granted McGraw Hill Companies a temporary restraining order late Thursday preventing the International Securities Exchange and the Options Clearing Corporation from trading and clearing options on Standard & Poor's Depository Receipts or "Spiders."

"We are pleased by this initial development in the case, and continue to hope that ISE will be willing to enter into a license agreement with us to list and trade SPDR options," said Kathleen Corbet, head of Standard & Poor's, in a statement.

  Jeff Bailey   1/7/2005,  11:12:59 AM
11:00 Internals at this Link

  Jeff Bailey   1/7/2005,  11:05:59 AM
11:00 Market Watch at this Link

  Jeff Bailey   1/7/2005,  11:01:16 AM
Semi HOLDRs (SMH) $31.33 +0.43% ...

  Jonathan Levinson   1/7/2005,  10:59:40 AM
Gold is testing 418 support at a session low here. HUI and XAU have yet to enter negative territory.

  Jeff Bailey   1/7/2005,  10:59:19 AM
Cendant (CD) $22.66 -0.61% ...

  Jeff Bailey   1/7/2005,  10:58:58 AM
Pfizer (PFE) $26.34 +0.19% ...

  Jeff Bailey   1/7/2005,  10:58:33 AM
Pulte Home (PHM) $61.89 +0.16% ..

  Jeff Bailey   1/7/2005,  10:58:05 AM
SanDisk (SNDK) $23.58 +0.68% ....

  Jonathan Levinson   1/7/2005,  10:57:36 AM
QQQQ's bounce off the lows has the short cycle channel turning up for another run at 38.40 resistance.

  Jonathan Levinson   1/7/2005,  10:50:49 AM
30 min channel support is down to 38.18 here, short cycle resistance 38.32.

  Jeff Bailey   1/7/2005,  10:50:32 AM
3M (MMM) $81.92 +0.55% ... one of 8 Dow gainers. AA $30.63 +0.82% is percentage winner.

UTX -1.26%, HD -1.08%, GM -1.06%

  Jeff Bailey   1/7/2005,  10:47:34 AM
Accenture (ACN) $26.68 +4.95% ... did trade as high as $26.98.

  Jeff Bailey   1/7/2005,  10:46:57 AM
TRIN 1.31 +55.95% ... selling into opening strength

  Jeff Bailey   1/7/2005,  10:45:54 AM
Can't get option chains on QCharts right now, would take 1/2 bearish in ADBE with $55 strikes for March/April expire.

  Jonathan Levinson   1/7/2005,  10:42:19 AM
From Marketwatch:

WASHINGTON (CBS.MW) -- Treasury Secretary John Snow said the Bush administration continues to support the so-called "strong dollar" policy. "A strong dollar is in our national interest," Snow said in a television interview with CNBC. "We are focused here on the fundamentals. What really counts is the fundamentals," Snow said. The Treasury chief said fundamentals include strong job growth and "dealing with defict."

I've generated a quick chart from Economagic to depict the deficit to which he refers at this Link . Based on that data, he might appear to be announcing a change in policy.

  Jonathan Levinson   1/7/2005,  10:36:57 AM
38.40 melted immediately as support but is holding as resistance.

  Linda Piazza   1/7/2005,  10:32:07 AM
The OEX has now confirmed the continuation-form H&S on its five-minute chart, dipping down already to next support. This sets up a possible 564.60 downside target, with the 60-minute chart showing potentially strong Keltner support in that area, too, or actually slightly above it. This is all complicated by a potential inverse H&S with a head at yesterday's low and a right-shoulder level near 566. When you see competing formations like this, you know you're likely to be in for some stop-runninng choppy trading conditions.

I'm signing off for a couple of hours and will be back as soon as possible.

  Jonathan Levinson   1/7/2005,  10:28:43 AM
38.40 cracked with barely a pause, heading now for declining 30 min channel support currently at 38.27. The outlook is bearish below 38.48, with unbroken resistance at 38.65-.73 QQQQ.

  Jim Brown   1/7/2005,  10:28:09 AM
Speech by Governor Ben S. Bernanke
The Transition from Academic to Policymaker Link

  Jeff Bailey   1/7/2005,  10:27:59 AM
Bullish swing trade stop alert .... for Peregrine Pharma (PPHM) $1.10 -2.65% ...

  Jonathan Levinson   1/7/2005,  10:25:06 AM
Gold is getting clobbered as the R2K futures make new lows, with Feb. gold down to 420.80. QQQQ is down to 38.46 here, next support 38.40.

  Linda Piazza   1/7/2005,  10:24:00 AM
VIX starting to climb again.

  Jeff Bailey   1/7/2005,  10:21:14 AM
Can't say I'm seeing anything in the indices that spell euphoric bullishness.

BIX.X 372.76 -0.07% ...

  Linda Piazza   1/7/2005,  10:16:35 AM
The confirmation level for the continuation-form H&S on the OEX's five-minute chart is at about 567.05. If confirmed, the downside target would be about 564.60, near the potential downside target for the five-minute Keltner channels if 566.29 Keltner support is violated. The OEX coils, TRIN coils, the VIX drops, but so does the advdec line. Not a clear picture, but we shouldn't expect one until bulls and bears sort things out among themselves. I'm still not completely ruling out that choppy rise into a potential right-shoulder formation.

A family illness is going to necessitate my absence for a couple of hours. I'll be leaving a little later and returning as soon as possible.

  Jonathan Levinson   1/7/2005,  10:11:09 AM
QQQQ just suffered another clothesline drop off the touch of 38.65, again falling short of the 38.72-.73 confluence. Below 39.49, the 39.40 level should come quickly into view, below which 30 min channel support is at 38.34, an important support level earlier this week.

  Jeff Bailey   1/7/2005,  10:10:19 AM
Sell Program Premium .... SPX 1,189.40 , QQQQ $38.51

  Jeff Bailey   1/7/2005,  10:09:50 AM
10:00 Internals at this Link

If session ended now for the NH/NL ratios, the NASDAQ's 10-day NH/NL ratio would show a 3-box reversal lower at 86.0. Bulls "feel the need" today.

  Linda Piazza   1/7/2005,  10:02:58 AM
No confirmation of the continuation-form H&S on the OEX.

  Jeff Bailey   1/7/2005,  10:02:49 AM
10:00 Market Watch at this Link

  Jeff Bailey   1/7/2005,  10:01:53 AM
Buy program premium ... SPX 1,190.05 , QQQQ $38.59

  Jonathan Levinson   1/7/2005,  10:01:13 AM
The Fed has announced a 5B weekend repo to replace the expiring 5B from yesterday, resulting in no net change for the day.

  Linda Piazza   1/7/2005,  9:57:43 AM
The OEX tests Keltner support on three-to-five-minute charts. Confirmation of the continuation-form H&S still remains a possibility, as the 15-minute chart shows that if nearby support doesn't hold, support thins out beneath the OEX. Generally, Keltners give a picture of an index trying to achieve equilibrium, and if it does, that's going to make boring and choppy trading behavior today.

  Linda Piazza   1/7/2005,  9:52:59 AM
The OEX's 15-minute candles are again showing long upper shadows, not a sign of strength.

  Jonathan Levinson   1/7/2005,  9:49:39 AM
Gold has given back part of its gains, with the YGG5 contract up 2 at 423.60 on light volume of 372 contracts. The miners are relatively stronger, as they were yesterday, HUI currently +2% at 205.43 and XAU +1.97% at 94.84.

  Jeff Bailey   1/7/2005,  9:49:28 AM
VIX.X 13.18 -2.94% .... DAILY Pivot Levels .... 13.16, 13.35, Piv = 13.52, 13.70, 13.87

  Linda Piazza   1/7/2005,  9:48:20 AM
The OEX skims along the top of its five-minute 100/130-ema's, with those averages at 567.88 and 568.05, respectively. It's so far staying above them, perhaps basing and finding strength, but it's not mustering much of a bounce, either.

  Linda Piazza   1/7/2005,  9:42:22 AM
The OEX rose above 569.25, but barely, and quickly falls again, so perhaps hasn't completely negated the continuation-form H&S. If that's viewed on a 10-minute chart, only a candle shadow was left above the appropriate right-shoulder level.

  Jonathan Levinson   1/7/2005,  9:40:05 AM
QQQQ made a high of 38.65, stretching the upper descending 30 min resistance line but falling short of the key 38.72-.73 confluence line. QQQQ is falling back into the chop zone, currently 38.52. There's no major economic data scheduled until 3PM, when consumer credit gets released.

  Linda Piazza   1/7/2005,  9:38:20 AM
The SOX is climbing into the 406-408 S/R zone, with the 200-ema above that at 412.43, in another S/R zone. I wouldn't be surprised to see the SOX rise into the 412-414 zone, but am not sure about further gains.

  Jeff Bailey   1/7/2005,  9:34:38 AM
Bullish day trade target alert .... for Accenture (ACN) $26.70 +5.03% .... exit here!

  Linda Piazza   1/7/2005,  9:33:16 AM
As expected, the OEX opens and heads toward next Keltner resistance. Bulls want to see the OEX above 569.25 to negate the potential continuation-form H&S on the five-minute chart.

  Jeff Bailey   1/7/2005,  9:32:33 AM
Day trade raise bull stop alert ... for Accenture (ACN) $26.50 +4.09% ... to $26.25

  Jeff Bailey   1/7/2005,  9:29:03 AM
5-year ($FVX.X) all over the map. Now up 0.9 bp at 3.702%. I do think there was a "bad tick" to a low of 35.59, or 3.559% earlier this morning, but not sure as the the bond trade can be volatile on nonfarm reaction.

  Jeff Bailey   1/7/2005,  9:26:00 AM
5-year yield ($FVX.X) has reversed course from the 09:00 update Link to now trade down 1.4 basis points. 10-year down 3.3 bp, while 30-year off 4.9 bp at 4.805.

I'll say this now. If economy as strong as I think, then homebuilders should trade strong today, with DJUSHB +2% by the close.

I say it now, test it later.

  Jonathan Levinson   1/7/2005,  9:18:53 AM
At 38.60, QQQQ is testing but not breaking the descending flag pattern that continues to hold on the 30 minute chart. The 30 minute cycle oscillators continue to grind higher in the corrective pattern I discussed in last night's Futures Wrap. A move above 38.73 QQQQ on strong volume should be enough to constitute a flag breakout. Despite the bullishness at current levels, the uncertain corrective chop of the past 2 sessions has yet to be resolved.

  Jane Fox   1/7/2005,  9:16:33 AM
Just got a notice from IB "Due to a court injuction the SPY Options will not be available to be traded on any options exchange today Jan 7th."

  Linda Piazza   1/7/2005,  9:05:40 AM
Futures remain slightly higher after the jobs number. If the OEX sees follow-through at the open of the cash markets this morning, we can expect an opening near the close or perhaps near the gathering 568.50-ish resistance. Along with all the other myriad potential H&S's, there's one on the five-minute chart, with a neckline at about 566.95, so those hoping for a bounce this morning don't want to see the OEX fall below that level in early trading. After the jobs number this morning, seeing a quick reaction in the currency market, I'm not so confident that the choppy attempt to rise into a right shoulder for the large H&S on the 60-minute chart will be successful, but futures action suggests that a rise will in fact happen. That right-shoulder area would be at about 572-574, and for now I consider the rise to be a possible countertrend move and therefore risky to trade. My original thought is that the right-shoulder building exercise might take a day or two before we know whether the OEX is going to round over into a right shoulder or negate the formation, so it would be early next week before we'd truly know the outcome. This goes against Jim's impressions, and I feel that one of Jim's strengths is to have a good grip on what the markets ought to do, especially when fundamentals are working against what charts suggest, so temper this advice with his.

  Jonathan Levinson   1/7/2005,  8:44:33 AM
More details on the unemployment rate from the bls.gov website available at this Link.

  Jonathan Levinson   1/7/2005,  8:42:33 AM
Bonds, equities and foreign currencies are all rising together as the binary dollar trade retraces part of this week's progress. Euros and CAD are up .46% and .8% respectively, gold +.85% and QQQQ +.69% here.

  Jonathan Levinson   1/7/2005,  8:33:00 AM
Equities are up, QQQQ +.25 to 38.60 and climbing. ES is 1193.25, NQ 1573. Gold is up to 425 here, off a high of 426.40. TNX has pulled back in a downward spike, now up just 1.6 bps at 4.256%. Wild swings happening as I type.

  Jonathan Levinson   1/7/2005,  8:31:32 AM
Big spike in bonds on news of the 157K nonfarm payroll number. Headlines printing now:


8:30am U.S. 2004 AVERAGE HOURLY WAGES UP 2.7%



8:30am U.S. DEC. RETAIL JOBS DOWN 20,000





  Jonathan Levinson   1/7/2005,  8:01:52 AM
Equities are higher, ES trading 1189.5, NQ 1566, YM 10633 and QQQQ up .07 to 38.42. Gold is up 1.40 to 423, silver .024 to 6.487, ten year notes +.109 to 111.59 and crude oil is down .075 to 45.475.

We await the 8:30 release of December nonfarm payrolls, est. 175K, unemployment rate est. 5.4%, hourly earnings est. .2%, and average workweek, est. 33.8.

  Linda Piazza   1/7/2005,  5:36:30 AM
Good morning. The Nikkei traded during the flat-line level during the morning session but dropped during the afternoon session as the dollar dropped against the yen. Other Asian markets turned in mixed performances, and European markets show a cautious trading pattern in early trading. As of 5:20 EST EST gold was up $2.30, and crude, down $0.22. Our futures showed modest gains at that same time. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei spent much of the morning session oscillating around the flat-line level but tumbled lower during the afternoon session as the dollar weakened against the yen. It closed down 59.02 points or 0.51%, at 11,433.34. With the dollar firming in the morning session, exporters had tended to trade higher, including autos, but some techs had lost ground by late in the day. Sony was an exception, closing higher after Bill Gates enthused about incentives for his company and Sony to collaborate. Autos did close higher, but banking stocks turned lower. Yesterday, NTT traded lower on news that the government would be selling a hefty portion of its shares, and it was Central Japan Railway’s turn to suffer the same fate Friday. The Nikkei will be closed Monday for a holiday.

Other Asian markets turned in mixed performances. The Taiwan Weighted closed lower by 0.77%. South Korea’s Samsung rose on news that the company had developed a mobile phone that could translate spoken words into text. The Kospi dropped 0.05%. Singapore’s Straits Times dropped 0.20%, and Hong Kong’s Hang Seng fell 1.00%. China’s oil and gas producer CNOOC reportedly considers a bid for competitor Unocal. The Shanghai Composite bounced 0.43% after recent losses.

European markets also reveal mixed performances as the dollar weakens ahead of the U.S. jobs number, with some showing cautious trading patterns. The FTSE 100 was one bourse trading in the green, although several U.K. retailers’ holiday season sales figures disappointed. In continental Europe, Schering investors were disappointed today when the company received an approvable letter requesting more information from the U.S. FDA for its breast cancer drug. Investors had expected outright approval. Other stock-specific news that impacted sentiment was a Standard & Poors credit downgrade of Cap Gemini. Siemens received a better reception today after Goldman Sachs upgraded the stock to an outperform rating. In other developments, Deutsche Bank upgraded two European chemicals companies to buy ratings and perhaps changed ratings of others.

As of 5:27 EST, the FTSE 100 had gained 22.20 points or 0.46%, to trade at 4,846.50. The CAC 40 had gained 0.45 points or 0.01%, to trade at 3,856.93. The DAX had fallen 2.46 points or 0.06%, to trade at 4,298.48.

  Jeff Bailey   1/6/2005,  1:36:46 AM
Going to bed... ... February Crude (cl05g) $45.31 -0.54% is off 25 cents.

  Jeff Bailey   1/6/2005,  1:33:07 AM
Hey! the QQQQ came darned close to $38.31 today, but the much broader NASDAQ Comp. not that close to 2,076.85. Still some broader bullishness holding in?

At 10:00 AM on Thursday, the NASDAQ NH/NL count was 15:4, so I'll try and have the 10:00 internals up as close to 10:00 AM EST as I can.

  Jeff Bailey   1/6/2005,  1:25:20 AM
Adobe Systems (ADBE) $58.74 -1.65% ... with a BULLISH fitted 38.2% (blue), then a conventional (red), and now a BEARISH 38.2% (pink) retracement at this Link

Note the 100% result of the BLUE fitted 38.2%. Kind of like the chart second chart of the NASDAQ Composite from Wednesday evening's wrap, when I showed a different 38.2% bullish fitted retracement, where result was 2,196. Link

Stock generated a triple-bottom sell signal today (bear trap possible in bull phase market/sector), but if market reaction looks "too cold" may need this one for a bearish MM Profile.

Here's ADBE's PnF chart, and would only be playing as an "over extended" candidate. Link

Thinking ... If I were long, I'd be protecting profits.

  Jeff Bailey   1/6/2005,  12:18:35 AM
10-year YIELD ($TNX.X) with MONTHLY/WEEKLY Pivot retracement at this Link

Fed fund activity, month-by-month at the top.

Keep in mind the RATE OF CHANGE. Gradual, or volatile? The stock market, as well as an economy hates rate volatility. A measured approach is much prefered.

  Jeff Bailey   1/6/2005,  11:04:31 PM
Maxim Integrated (MXIM) $38.81 -1.44% Pnf Chart Link and bar chart Link

A chip stock I was bullish on in early November, as it was one of the FIRST chips to generate a buy signal at $45.00 in October. It then gives a double-bottom sell signal at $41.00, and now trades a new 52-week low.

This now becomes a "leading weakness" stock on my list for the SOX.X/SMH.

Time running out on my SMH calls, and they will most likely be sold into a bounce.

  Jeff Bailey   1/6/2005,  10:50:37 PM
NH/NL data table at this Link

Notes I make .....

1) 12/09/04 was an inflection PRICE low for both the NYSE Comp. and NASDAQ Comp.

2) Last two sessions, the NASDAQ Comp. (COMPX) 2,090.00 has just violated its 12/09/04 PRICE low of 2,097.86. The NYSE Comp. (NYA.X) has not.

3) I was a bit "concerned" of the lack of New Highs for both the NYSE and NASDAQ the last week of December, but was hesitant to make too much of it during the light holiday volumes. Still, I will note some of its meaning now, and know what has to happen going forward if bullish leadership is to be renewed.

4) Since the NASDAQ Comp. did violate its 12/09/04 relative low, I go further back to the 11/22/04 relative PRICE low of the COMPX. Note how CLOSE the number of new lows are today, as that found back then. Good benchmark for next few session. Think of the new lows as the tail-end of the inchworm.

5) Now.... think of JDSU and PPHM, which I did think would see a bounce in early January, which has NOT taken place at this point.

6) In row 501, I just plugged in some NH/NL numbers. Column S and T are numbers for the NYSE, which a combination of this NH/NL would give a daily ratio (column AD) sufficient enough to have the 5-day NH/NL ratio (column AE) staying just above 82.0 (see chart in Index Trader Wrap). I do the same for the NASDAQ. I should note, that even if we do get a bounce response from the equity markets tomorrow, I do not think the NYSE could possibly record 290 new highs. If it does, you wouldn't want to be short.

7) For the NASDAQ NH/NL ratios, I BLUE BOLD the 11/22/04, 12/09/04 and today's 01/06/04 readings. These are WEAK, or show LACK OF BULLISH LEADERSHIP. What am I likely to do?

For my NASDAQ-type stocks, I'm looking to sell strength on 1/2 of the positions if I have FULL positions. Otherwise, honor stops. All of my MM Profiles are 1/2 positions at this point, with the exception of PHM.

While PHM is a NYSE-listed stock, I'm watching it closely, as well as the longer-dated maturities (10-year and 30-year)

It has been my observation from the past year, that it has been the NYSE to pull the NASDAQ higher, and it has been the NASDAQ to pull the NYSE lower. (see note #2)

Do you see any sign of strength from the NH/NL indications? Look closely. Keep and open mind, as it is the open mind that allows for an unbiased test.

Don't just focus on the "head of the inchworm" and the new highs. What about the "tail of the inchworm?" The number of new lows? A BEAR would want to see those build, while a BULL wants them to remain shallow.

  Jeff Bailey   1/6/2005,  10:28:54 PM
REIDMCL did you send me something? I won't open as I'm afraid it might be a virus.

  OI Technical Staff   1/6/2005,  8:41:04 PM
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