Option Investor
Printer friendly version
  OI Technical Staff   1/13/200,  8:57:37 PM

Only 2 days left. Lock in your subscription rate NOW!: Link

  Jeff Bailey   1/13/200,  6:54:40 PM
Pivot Matrix for tomorrow at this Link

  Linda Piazza   1/13/200,  6:36:09 PM
Thursday, the OEX broke below the neckline of the H&S on the 60-minute chart, and this time, the break stuck: Link The OEX's 100-ema (daily chart) is at 556.65, not so far from the 557.50 Keltner support on the 60-minute chart and the 557.40 historical horizontal support. It's also near the 557.27 level that represents the 38.2% retracement of the rally off the October low: Link So, unless something changes overnight or early tomorrow morning, use bounces and rollover from 564 or perhaps as high as 566 to enter new bearish positions, but make plans to protect profits in the 556-558 zone, preparing for a possible bounce back up to 567-568.

I can't end this without warning of a danger, though: that danger is that the OEX is going to form a larger H&S with an ascending neckline. (On that second chart, imagine drawing a line from the November 8 swing low, through the early December one, etc., to find that neckline.) If so, the OEX ended the day at the neckline and might be ready to bounce toward 567-568 tomorrow, never first heading down toward 556-558. That's why we have to see what happens overnight.

  Jeff Bailey   1/13/200,  6:08:51 PM
Closing Internals at this Link

  Jeff Bailey   1/13/200,  5:09:50 PM
TASR slips to $20.63 as CEO explains gifting of options.

Analysis .... from beginning of interveiw to end, TASR slipped about 10-cents. Slight negative bias toward company's stock option practices.

  Jeff Bailey   1/13/200,  4:59:31 PM
Taser Intl. (TASR) $20.80 +22.8% ... CNBC special guest will be company's CEO (again).

Last tick at $20.91

  Jeff Bailey   1/13/200,  4:19:48 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Was stopped out of last night's extended session day trade long in the QQQQ at $38.48. ($-0.19, or -0.49%)

Sold two (2) covered PHM Jan. $65 Calls (PHM-AM) at the bid of $0.90

Sold three (3) covered PFE Feb. $25 Puts (PFE-NE) at the bid of $0.60

Bought two (2) TASR Feb. $20 Puts (QUR-ND) at the offer of $2.75

  Jim Brown   1/13/200,  4:16:37 PM
CBH earnings = +0.88, est +0.87

  Jim Brown   1/13/200,  4:06:04 PM
DGII earnings = +0.13, est +0.12,
revenue inline, guiding rev below est.

  Jim Brown   1/13/200,  4:05:20 PM
trading down -$4 on the news

  Jim Brown   1/13/200,  4:04:46 PM
Alert - CREE earnings = +0.32, est +0.32,
revenue light, guidance for Q1 also below estimates

  Jim Brown   1/13/200,  4:00:37 PM
Alert - SUNW earnings = +0.01, est +0.01 revenue light

  Linda Piazza   1/13/200,  4:00:19 PM
Bounce underway now for the OEX. Keltner resistance gathers at 561.86-562 and again at 562.82-562.94. Bears want to see one of those hold, but the test may be postponed until tomorrow morning.

  Jim Brown   1/13/200,  3:56:52 PM
Earnings after the close
CREE est +0.32
SUNW est +0.01
DGII est +0.12
CBH est +0.87

  Jonathan Levinson   1/13/200,  3:46:13 PM
Yesterday's QQQQ low and the low for this daily cycle downphase is now being tested. There's support to 37.90 beneath this move.

  Linda Piazza   1/13/200,  3:45:29 PM
The OEX is at 60-minute Keltner support and the 38.2% retracement of the bear-market decline, near 562-563 historical S/R and near yesterday's low. This is the appropriate place for a bounce attempt. If there is a bounce attempt, bears do not want to see a quick bounce that springs the OEX back above the neckline of that big H&S, with that neckline at about 563.60 or so. So far, I don't see a bounce attempt beginning, however, and that Keltner support weakens. If the OEX keeps diving, bears have to make a decision about whether to hold overnight or not, with important economic numbers expected tomorrow morning. There's now a downside Keltner target of 556.87, although the target for the H&S is nearer 552.50, but please keep in mind when making a decision that broadening formations, by definition, break out and reverse, break out the other direction and reverse. Since there's a reversal signal on the weekly chart and a formerly well-defined H&S on the 60-minute one, I give slightly more faith to downside breaks than to upside ones, but only slightly more.

  Linda Piazza   1/13/200,  3:39:12 PM
Jane had mentioned at 2:40 that the TRIN kept rising, making bulls nervous. They were right to be, as it turned out. The SOX's drop back into that symmetrical triangle on its five-minute chart and then below 400 were telling, too.

The OEX is attempting a bounce at the 561.23 level that's the 38.2% retracement of the bear-market decline. Guess someone else remembered that number other than me.

The TRAN has dropped all the way to 3539.03 as I type, not quite at 3492-3507 level I think it might approach. Looks as if Keene and I are thinking the same way. The 38.2% retracement of the TRAN's rally off the August low is at about 3492 and the 100-ema is at 3506.57.

  Linda Piazza   1/13/200,  3:32:44 PM
OEX 561.23 is the 38.2% retracement of the entire bear-market decline. Being approached as I type. We have now seen a 60-minute close below the neckline--any version of the neckline--of the OEX's big H&S on the 60-minute chart.

  Jonathan Levinson   1/13/200,  3:31:54 PM
30 and 60 min support are now being violated. If QQQQ doesn't at least pause for a sideways consolidation here, it will mean that we're looking at a downside trending move - less likely, more powerful.

  Linda Piazza   1/13/200,  3:31:14 PM
So far, the neckline break is holding on the OEX's 60-minute chart. Yesterday's low being tested as I type. Remember, this is a broadening formation, so don't get married to a breakout play if the index immediately bounces and bounces strongly.

  Jonathan Levinson   1/13/200,  3:30:25 PM
There goes 38.20 with nary a pause.

  Linda Piazza   1/13/200,  3:27:58 PM
The advdec line dove, of course. Now let's see if there's follow-through on the selling. The OEX's 60-minute Keltner chart shows potential support near 561.66, but support that's weakening. If that doesn't hold on a 60-minute closing basis, 557 looks like a next target.

  Linda Piazza   1/13/200,  3:21:42 PM
The OEX is back below the neckline for its big H&S on the 60-minute chart--we've seen this several times, but with the OEX bouncing back within the same 60-minute candle. I keep thinking one of these times, it's going to be real.

  Jeff Bailey   1/13/200,  3:21:03 PM
03:00 Internals at this Link

  Jonathan Levinson   1/13/200,  3:20:12 PM
Here's the retest of 38.30 QQQQ, current 30 and 60 min channel supports. Below this level, 38.20, followed by 38.08-.10 and 38.00 are the levels to watch.

  Linda Piazza   1/13/200,  3:19:55 PM
TRAN falling, now at 3551.01.

  Jeff Bailey   1/13/200,  3:16:57 PM
Pulte Home (PHM) $64.75 +3.26% ... eases from 03:00 bond market close.

  Linda Piazza   1/13/200,  3:12:56 PM
The TRAN still looks vulnerable to 3500 to me. So far, it's steadying near yesterday's low, however.

  Jonathan Levinson   1/13/200,  3:06:59 PM
Session low for YM futures here. QQQQ is testing the previous low- below 38.37, 38.40 should become resistance.

  Jeff Bailey   1/13/200,  3:06:56 PM
03:00 Market Watch at this Link

  Linda Piazza   1/13/200,  3:06:41 PM
The SOX is back inside that symmetrical triangle that it began building yesterday morning. The triangle may be losing its significance since it's nearing its apex. I've seen some research that suggests otherwise, but can't find it as I type this. However, what hasn't lost its significance is that the SOX and other indices can't follow through on either gains or losses. A mess. Bulls and bears are enticed into plays that turn around. They're stopped out of plays that turn around and head their way after all. A mess.

  Linda Piazza   1/13/200,  3:02:37 PM
SOX back at 400.

  Jeff Bailey   1/13/200,  3:00:38 PM
Swing trade buy put alert ... for Taser Intl. (TASR) $20.32 +19.4% ... and the TASR FEB $20 puts (QURND) ... taking two (2) at the offer of $2.75, target $18.00.

  Jonathan Levinson   1/13/200,  2:58:05 PM
At this point, a break below 38.40 could be a rising expanding wedge break, good for a quick run back to 38.30. A large sell program just hit QQQQ, testing 38.40 as I type.

  Linda Piazza   1/13/200,  2:57:30 PM
The word "perhaps" used in my 2:32 post was correct, as the OEX got only as high as 566.01, not 566.25-566.50, before turning around and retesting that support, slipping right through it. Until the OEX either breaks through the neckline of that big H&S again on the 60-minute chart, confirming that with a 60-minute close below 563.40, or finally climbs high enough to violate the right shoulder level, at least above 571 but maybe as high as 572-574, it's just in a broadening formation that's earning its reputation as being notoriously difficult to trade.

  Linda Piazza   1/13/200,  2:36:59 PM
Careful, bulls. SOX is dropping back toward the symmetrical triangle that it broke out of earlier today. This took a bit too long to be an immediate reversal after a stop-run, so maybe it's just a retest of the former resistance, to see if it holds as support. Maybe support will hold, but bulls don't want to see the SOX drop below 400 again, and particularly below 399.30, the bottom of that triangle.

  Linda Piazza   1/13/200,  2:32:02 PM
Right now, over the very short-term, OEX Keltner support looks stronger than Keltner resistance, perhaps allowing for a push up toward 566.25-566.50. Just "perhaps," though. I'm not trusting much of what I'm seeing.

  Jeff Bailey   1/13/200,  2:30:43 PM
All-time high alert ... Pulte Home (PHM) $65.09 +3.84% ...

  Jonathan Levinson   1/13/200,  2:28:13 PM
It's going to take more than this choppy drift to take out 38.60-.62 resistance. The 60 min channel remains flat, though the 30 min channel is trying to turn up.

  James Brown   1/13/200,  2:22:44 PM
Jeff mentioned the breakout in the DJUSHB earlier. We've had KB Home (KBH) on the OI watch list the last few days with instructions to watch for a move over $105 as a breakout from the bull flag pattern. That breakout is occurring today.

  Jonathan Levinson   1/13/200,  2:20:38 PM
The short cycle oscillators are still in their uncertain upphase, reaching the 75% level just ahead of overbought territory. The 30 and 60 min cycle channels have overlapping resistance at 38.60. Volume is very light, running well behind yesterday's flow with just 54M QQQQs so far today compared with yesterday's 127.9M for the day. The past 4 hours have felt more like 8.

  Linda Piazza   1/13/200,  2:19:52 PM
When I study the OEX's 60-minute chart, I see a pattern that over the last week has disintegrated into a mess. It's as if bears are trying to stomp down the candles into the ground and bulls are trying to prop them back up again, but they're all broken up and splintered.

  Linda Piazza   1/13/200,  2:12:26 PM
Speaking of five-minute 100/130-ema's, the OEX has returned to the scene of the crime, testing them once again. I just can't see this as anything other than a lot of chopping around.

  Linda Piazza   1/13/200,  2:11:17 PM
The TRAN has bounced back above yesterday's low and today's, but "bounce" may be too generous a word to apply to the so-far-tepid move off the day's low. The five-minute 100/130-ema's are at 3570.91 and 3576.88, and the TRAN's trading pattern has shown some relevance to these averages. Late yesterday and this morning, it consolidated right on the 100-ema before dropping again. That doesn't mean that the TRAN can't move above these averages, but only that they're likely to slow any advance and that a sustained move above them would mean something over the very short term.

  James Brown   1/13/200,  2:09:49 PM
OI call play Phelps Dodge (PD) is up 3.3% to $101.50 and nearing new highs with a new MACD buy signal.

  Jim Brown   1/13/200,  2:09:29 PM
Speech by Vice Chairman Ferguson
Recessions and Recoveries associated with asset-price movements Link

  James Brown   1/13/200,  2:08:40 PM
Strength in the oil markets is helping push our new call play FRO to a 4.4% gain today.

  James Brown   1/13/200,  2:07:40 PM
Today's 1.8% gain in Aetna (AET) is enough to breakout over resistance at $127.50 and we have been triggered in our long play.

  Linda Piazza   1/13/200,  2:05:36 PM
I show the SOX as having broken above the symmetrical triangle on its five-minute chart, right on target at the 1:45 stop-running time of day. Bulls don't want to see a quick reversal now back into that symmetrical formation, so below 400.45. The purpose of these stop-runs is to see if the break will be sustained. So far, it is, but the SOX has a whole lot of work ahead of it to make sustained gains.

  Jeff Bailey   1/13/200,  2:04:39 PM
02:00 Market Watch at this Link

  Jonathan Levinson   1/13/200,  2:01:26 PM
QQQQ needs to stay above 38.50 and break above 38.62 to resolve today's logjam to the upside.

  Jonathan Levinson   1/13/200,  1:54:35 PM
Here comes another test of 38.50. We've now spent 3 hours within a 20 cent range- most of which has been between 38.40-.50 QQQQ. Lettuce hope it breaks soo. The 60 min channel still points south, while the 30 is just sliding sideways on this light volume chop.

  Jeff Bailey   1/13/200,  1:49:58 PM
All-time high alert ... DJUSHB 811.41 +3.33%

  Linda Piazza   1/13/200,  1:49:39 PM
I'm cleaning up my workspace, deleting old charts that I no longer need. I came upon this one, prepared sometime in November, I think, when I was comparing the then-current OEX action with that seen in Dec 2003-Jan 2004. The OEX had consolidated at some of the same levels, zoomed up through some of the same levels without pause, consolidated again. After all that action, last January the OEX moved to a new high before declining into August's lows. I was asking on this chart whether the congruence in levels meant anything and whether there could be a repeat this year. Now, we've moved into new highs, exceeding last January's, but the bearish price/RSI divergence shows up. Will the pattern repeat? Current comments are in red, last November's are in blue: Link

  Jonathan Levinson   1/13/200,  1:27:49 PM
QQQQ is taking a sharp dip here on the failure at 38.50. Testing 38.40 as I type as the short cycle oscillators shows its first downticks in an hour and a half. A move below 38.40 should start the downphase after approx. 5 minutes.

  Linda Piazza   1/13/200,  1:22:59 PM
The NWX hasn't been able to make much upward progress with the 200-ema, -sma, and 200-week sma all grouped between 235.39-236.27. It hasn't fallen much more this week with 230-ish historical support and the 50% retracement of the rally off the September low just below it. One or the other is going to eventually win, but neither has yet.

  Linda Piazza   1/13/200,  1:16:54 PM
According to the QCharts-drawn version, the OEX has broken above the descending regression channel established off this morning's high. According to the 60-minute chart, it's still caught within the recent broadening formation, and furthermore within yesterday's congestion zone.

  Jeff Bailey   1/13/200,  1:14:20 PM
01:00 Internals at this Link

  Jonathan Levinson   1/13/200,  1:14:01 PM
Volume is picking up here as QQQQ tries to break out of its sideways drift above 38.40. The bounce off 38.30 launched a short cycle upphase that is still in progress but losing traction as the price edges sideways. A break above 38.50 or below 38.40 will get things moving, and if either move holds for 5 minutes or better, should cause the floundering short cycle oscillators to follow.

  Linda Piazza   1/13/200,  1:05:10 PM
The OEX tests its five-minute 100/130-ema's, inching above them as I type, but not yet showing a five-minute close above them. Lately, these have turned from being benchmarks for whether the OEX is bearish or bullish into a measure of where the OEX will likely trade. The OEX is just not traveling far from these averages, currently at 565.34 and 565.40, respectively. The OEX is at 565.46 as I type, seconds away from closing the current five-minute period.

  Jeff Bailey   1/13/200,  1:04:56 PM
01:00 Market Watch at this Link

  Linda Piazza   1/13/200,  1:03:08 PM
SOX testing 400 again.

  Linda Piazza   1/13/200,  1:00:57 PM
The OEX is pushing above that Keltner resistance on the three-minute chart. The SOX is doing likewise, although now struggling with 400. The SOX's pattern looks as if it attempted an upside breakout out of its bear flag, but it's right in the middle of that symmetrical triangle, so there's no real breakout either direction. Yet.

  Linda Piazza   1/13/200,  12:56:33 PM
The OEX's three-minute chart shows resistance trying to firm near 565.31.

  Jonathan Levinson   1/13/200,  12:54:26 PM
Stepping away for 20 minutes here.

  Jeff Bailey   1/13/200,  12:51:55 PM
SPX 1,184.68 -0.25% ... as I look at today's developing yield curve trade, which looks just the INVERSE of what we saw yesterday, and think about last night's Index Trader wrap, sure get the feel of expiration-related trade.

  Linda Piazza   1/13/200,  12:50:48 PM
The SOX remains within the symmetrical triangle that's been building since yesterday morning on its intraday charts. As I type, it needs 400.95 for an upside breakout and 398.55 for a downside one. The typical stop-running time of day approaches as the SOX's triangle narrows to an apex.

  Linda Piazza   1/13/200,  12:40:32 PM
The SOX's three-minute pattern looks to me like a bear flag rising into the 400-ish resistance. The three-minute Keltner channels suggest that the SOX might have difficulty making it above 399.60 on a three-minute closing basis.

  Jonathan Levinson   1/13/200,  12:37:48 PM
QQQQ broke back above 38.40, with next resistance at 38.50, just above which we have declining 30 min channel resistance at 38.52. The 60 min channel is pointed south, and should provide a bearish bias provided that 38.62 does not break. Current channel support is from 38.22-.28.

  Jeff Bailey   1/13/200,  12:36:23 PM
Jeff: What's your read on SIRI over the next few months?? Thanks.

Still think it trends in toward $5-$5.50, then begins a rally into Stern.

Upgrade today may get a 3-box reversal higher to $7.50, then back lower to give sell signal at $5.50 (this then allows for possible new buy signal at $8.00 (rally into Stern) and new bullish vertical count to assess some longer-term upside to).

Here's the Pnf chart at this Link

Here's the bar chart of SIRI with same fitted 38.2% (pink) and conventional (blue) retracement I have been using.

Jeff Bailey

  Linda Piazza   1/13/200,  12:35:24 PM
The VIX is moving off the day's low. The TRIN and advdec line look to me as if they've been trading sideways for a while now. The SOX still coils. The TRAN still hovers just above yesterday's and today's lows.

  Linda Piazza   1/13/200,  12:32:23 PM
The RLX declines today. Its pattern on the daily chart still looks like a bear flag rising into resistance, in my opinion.

  Jeff Bailey   1/13/200,  12:30:00 PM
Current OPEN MM Profiles at this Link

  Jonathan Levinson   1/13/200,  12:26:40 PM
Session high for ten year bond futures here, TNX -4.5 bps or 1.06% at 4.191%. Below 4.2%, there's light support at 4.18%, followed by stronger support in the 4.14%-4.16% confluence.

  Linda Piazza   1/13/200,  12:23:14 PM
The SOX is still within yesterday's range, but below 400. It's got a flattish-angled symmetrical triangle on its 5-minute chart, upside breakout at about 401.12 currently and downside at 398.40 currently. These breakouts would not constitute inside-day trades since those would be at different levels, but are only noting the parameters of the formation that's been setting up since yesterday morning. The direction of the break could be significant, but it may come during the stop-running time of day, so be careful of a trap, too.

  Jeff Bailey   1/13/200,  12:09:12 PM
Pacholder High Yield (PHF) $9.95 +1.63% ... 2,100 at the offer

  Linda Piazza   1/13/200,  12:08:35 PM
The OEX holds above the neckline of its H&S formation on the 60-minute chart. Bulls just do not want to see this confirmed. I don't know that I'd be buying just ahead of a confirmation of a H&S even if I believed it would eventually be rejected, but someone is propping this thing up.

  Tab Gilles   1/13/200,  12:08:21 PM
SPX/VIX hourly chart:

Target $SPX is 1158.


Crude Oil $47.90: testing 50% Fib Retrace as I noted last night. XLE & MUR - Murphy Oil up nicely today...using WHAAI LEAPS.


$SOX/SMH down again I'm calling for 390.50 on the $SOX.

$GHA up on Apple earnings news.

  Jeff Bailey   1/13/200,  12:03:16 PM
12:00 Market Watch at this Link

  Jeff Bailey   1/13/200,  11:56:15 AM
SanDisk (SNDK) $24.82 +1.34% ... stock may be finding bid today after M-Systems Flash Disk Pioneers (FLSH) $21.18 +5.11% warned to the upside.

  Jonathan Levinson   1/13/200,  11:52:29 AM
The 30 min cycle channel has rolled over into a new downphase from an overbought oscillator setup, and so I expect support to continue to decline on a break of 38.30 support. 38.40 should now act as resistance, former support. The short cycle downphase has yet to become oversold.

  Linda Piazza   1/13/200,  11:52:25 AM
The SOX is still entirely within yesterday's range, entirely within the day before's range.

  Jeff Bailey   1/13/200,  11:52:09 AM
Swing trade covered call alert ... Let's sell two (2) of the Pulte Home PHM Jan. $65 Calls (PHM-AM) at the bid of $0.90.

PHM $63.89 +1.89% here.

Selling against the currently long PHM Apr. $65 Calls

5.5 trading sessions until January expiration.

  Linda Piazza   1/13/200,  11:51:37 AM
The TRAN did violate yesterday's low, but now hovers just above that level.

  Linda Piazza   1/13/200,  11:47:28 AM
The OEX once again heads down toward the confirmation level for the big H&S visible on its 60-minute chart, with that confirmation level at about 563.45, according to one neckline version.

  Jonathan Levinson   1/13/200,  11:43:00 AM
QQQQ breaking to new lows here, next support 38.30.

  Linda Piazza   1/13/200,  11:39:50 AM
The TRAN shows a continuation-form H&S on its 15-minute chart. While I don't generally trust continuation-form H&S's, and they've earned my distrust, they sometimes do follow through on the TRAN, either with gains after a rejection or losses after a confirmation. For example, the TRAN confirmed a rough one this morning at the open and plunged straight down from there, exceeding the downside target. No surprise that the confirmation level would be a move below yesterday's 3557.90 low and that the formation would be rejected on a move above this morning's first 15-minute high.

  Linda Piazza   1/13/200,  11:32:57 AM
Notations on an OEX 15-minute Keltner chart: Link I promised that I'd start showing more of these and detailing what I was seeing. They're kind of difficult to decipher at first, but well worth the effort.

  Jonathan Levinson   1/13/200,  11:32:18 AM
Session high for Nymex crude just now at 47.85, + 3%.

  Linda Piazza   1/13/200,  11:24:07 AM
Jonathan, that's kind of how it looks to me, too, but the TRAN can certainly surprise at times. See Jonathan's illustrated chart, linked to his 11:19 post. I've got Fib levels snapped off the latest climb (off August lows), and see that the TRAN consolidated for a period at the 19.1% retracement and now falls away from that. There's congruence between the 38.2% rally retracement and the 100-ema, with those at 3492.37 and 3507.10, respectively. I gotta believe that the TRAN is headed down eventually toward a retest of that 3500 level.

  Jane Fox   1/13/200,  11:19:44 AM
Linda not much more insight other than the VIX and the AD line seem to be in agreement so they may be the ones to watch today.

  Jonathan Levinson   1/13/200,  11:19:31 AM
Linda, in honor of Marc's comments about the TRAN yesterday, I've pulled out this chart for your amusement: Link

  Linda Piazza   1/13/200,  11:19:26 AM
Looks as if Jane and I were both looking at the same things at the same time.

  Linda Piazza   1/13/200,  11:18:29 AM
TRIN heads sideways (if you can consider sideways movement heading anywhere), the VIX heads lower and the advdec line sort of heads sideways, too, after having climbed off the day's low. Not much clarity there, at least to me. Maybe Jane has more insight.

  Jonathan Levinson   1/13/200,  11:12:34 AM
The bounce from 38.40 will attract those double-bottom 'bots on a break above 38.62, also the session high. So far, we have a rectangle between 38.40-.62.

  Jeff Bailey   1/13/200,  11:12:24 AM
11:00 Internals at this Link

  Linda Piazza   1/13/200,  11:11:57 AM
No surprise, either, that the OEX confirmed the H&S formation on its three-minute chart, dropped a short distance, and immediately turned around and retests the neckline. This is the way both bullish and bearish formations have acted over the last few days--minimal confirmation, no follow-through.

  Linda Piazza   1/13/200,  11:08:41 AM
No surprise that the OEX didn't travel far from its five-minute 100/130-ema's. Scanning other indices, I see that the TRAN is still below yesterday's close, still above yesterday's low. I see that the SOX's range today is inside yesterday's range, which was inside the previous day's. Indices are narrowing down prior to a breakout, with oscillators giving the usual mixed up signals as they do.

  Jonathan Levinson   1/13/200,  11:07:08 AM
QQQQ bounced from 38.40 support, but any failure to make a new high above 38.62 should see .40 retested. 60 min channel support is still at 38.30, and that should prove to be the more significant level under this decline.

  Jeff Bailey   1/13/200,  11:04:26 AM
11:00 Market Watch at this Link

  Linda Piazza   1/13/200,  10:57:55 AM
The OEX is falling below its five-minute 100/130-ema's and is also breaking minimally below the ascending trendline off yesterday's low. Without a quick bounce, this looks short-term bearish. Perhaps very short-term, given this trading pattern lately! The 15-minute Keltner chart shows support thinning below the OEX's position, however.

  Jonathan Levinson   1/13/200,  10:54:22 AM
Nymex crude is up to a 2.26% gain at 47.45 here. Gold is currently down 2.1 at 424.5.

  Jonathan Levinson   1/13/200,  10:53:44 AM
Session low for Dow futures here at 10575, at key support from yesterday.

  Linda Piazza   1/13/200,  10:50:41 AM
The OEX has come right back to the five-minute 100/130-ema's. Bulls don't want to see it break back below those averages.

  Linda Piazza   1/13/200,  10:48:05 AM
The advdec line has been generally climbing since about 9:45, something that needs to be watched.

  Jonathan Levinson   1/13/200,  10:46:38 AM
Session high for 10 year bond futures here, TNX down 4.1 bps at 4.195%.

  Linda Piazza   1/13/200,  10:45:14 AM
The OEX did confirm the H&S on the three-minute chart, but it's bouncing right back up to the neckline again. Big surprise, huh?

  Jeff Bailey   1/13/200,  10:45:12 AM
Toll Brother (TOL) $71.60 +2.67% ... lurches to all-time high.

  Jonathan Levinson   1/13/200,  10:44:10 AM
QQQQ just lost it again at 38.62, now reaching for another test of that 38.40 support line below which the bulls will have fumbled this intraday attempt. 30 min channel resistance advanced to 38.82.

  Linda Piazza   1/13/200,  10:38:26 AM
The five-minute chart shows the OEX coiling in a symmetrical triangle.

  Jonathan Levinson   1/13/200,  10:36:42 AM
Here's another test of the high from a higher low. Looks like the bulls mean business.

  Linda Piazza   1/13/200,  10:35:00 AM
The OEX moves sideways. Keltner resistance and support is still scattered, neither looking stronger than the other.

  Jeff Bailey   1/13/200,  10:34:39 AM
Swing trade sell put alert .... let's sell three (3) of the Pfizer PFE Feb. $25 puts (PFE-NE) at the bid of $0.60.

Covered by the currently long March $25 puts.

  Jonathan Levinson   1/13/200,  10:30:33 AM
Another failure at 38.62, the 2nd of the day. Look for a move below 38.40 to possibly trigger the double-top/bottom 'bot attacks that we often see on similar setups. Above that level, there's a better chance of a retest and break. The short cycle upphase is still in progress and is not yet maxxed out.

  Linda Piazza   1/13/200,  10:28:02 AM
The BIX approaches yesterday's low and its 100-ema (daily chart) at 367.55. The BIX is at 368.12 as I type, with yesterday's low at 367.87. There's some historical support near 367, so today, it's conceivable that the BIX could range between that historical support and the historical S/R at 369.50-370. Bulls want one to break and bears the other.

  Jeff Bailey   1/13/200,  10:22:01 AM
Current OPEN MM Profiles at this Link

  Linda Piazza   1/13/200,  10:18:34 AM
The OEX's three-minute chart now shows a potential H&S with a neckline at 565.50. Just below that, however, is the ascending trendline off yesterday's low, so a confirmation of the three-minute formation would immediately hit potential support. We're seeing competing formations everywhere. A move much above the current 566.60 and certainly a move to an equal or higher high would invalidate this latest one.

  Jonathan Levinson   1/13/200,  10:17:36 AM
QQQQ's coming in for a retest of the highs, with 30 min channel resistance just above at 38.65. This is do or doo-doo time for bears, with the 30 min cycle oscillators just entering overbought territory.

  Jeff Bailey   1/13/200,  10:13:09 AM
10:00 Internals at this Link

  Linda Piazza   1/13/200,  10:08:29 AM
For reference, the OEX's five-minute 100/130-ema's are at 565.40 and 565.47, respectively. The OEX also bounced from these averages this morning. Bulls now want to see the bounce confirmed by a higher high. Just for clarification, while the OEX is within this potential right shoulder for the big H&S on the 60-minute chart and the weekly chart shows a confirmed evening-star formation, I'm not putting too much trust in the upside, considering upside moves countertrend until proven otherwise. I've heard lots of reasons to believe money is going to be put to work, and I'm on notice that bearish formations are resistant to confirmation, but the greatest accumulation is technical evidence makes me leery of bullish plays.

  Jonathan Levinson   1/13/200,  10:07:07 AM
Nymex crude has just broken 47 again, curretnly trading 47.025, +1.4%.

  Jonathan Levinson   1/13/200,  10:05:21 AM
The 30 min cycle oscillators still point north, but QQQQ's cycle channel has durned down. The 60 min channel is flattening now, which could account for the sideways-down corrective drift so far this morning. A break below 38.30 should bring both cycles into sync for a downside retest of 38.20 and 38.01 support from yesterday, but first 38.40 needs to break and 38.62 resistance needs to hold.

  Linda Piazza   1/13/200,  10:03:24 AM
The TRAN is lower this morning, but hasn't yet violated yesterday's low.

  Jeff Bailey   1/13/200,  10:02:39 AM
10:00 Market Watch at this Link

  Linda Piazza   1/13/200,  10:02:22 AM
The three-minute mid-channel Keltner support was enough to bounce the OEX, and now it faces that neckline off yesterday's confirm inverse H&S. Bulls need to see the OEX stay back above that neckline, currently at about 575.75. Moving out to a 15-minute Keltner chart for a look at how things are lining up, the outlook remains clouded. The OEX is below the mid-channel level--so bearish in that respect--but both support and resistance lines are somewhat scattered, making it almost impossible to assign greater weight to either support or resistance. Resistance is trying to firm up near 567 and just above it, while support is trying to firm up near 565.48. Neither is quite firmed yet.

  Jeff Bailey   1/13/200,  9:59:44 AM
Yield curve flat as a pancake

  Jeff Bailey   1/13/200,  9:57:59 AM
Homebuilders +1.27% and Oil Service +1.27% early sector winners

Gold bugs -1.41% and Semiconductors -1% sector losers.

  Jeff Bailey   1/13/200,  9:55:31 AM
VIX.X 12.64 +0.63% .... DAILY Pivot levels ... 12.06, 12.30, Piv = 12.78, 13.02, 13.50

  Jonathan Levinson   1/13/200,  9:53:31 AM
The Fed's open market desk has added a number of repos totally 10B for the day against 9.25B expiring, for a net add of 750M.

  Linda Piazza   1/13/200,  9:52:28 AM
The OEX tests three-minute mid-channel Keltner support as I type. At about 564.90, it faces the rising trendline off yesterday's low, another level of potential support. Still not looking strong, but one of these support levels may send it up to retest resistance. As I said earlier and over the last few days, as soon as the broadening formation became evidence, trading is risky and patterns are just plain goofy within a broadening formation. Don't trust anything. Protect profits.

  Linda Piazza   1/13/200,  9:49:40 AM
Time to look at Keltner evidence for the OEX and see if it can give us any guidance. Early in the morning, I like to look at three-minute charts. The three-minute chart shows that the OEX not only met the downside target for the double-top but actually exceeded it. It shows that the OEX not only tested the neckline for the inverse H&S but actually drops below it as I type. Over the very short-term, that's not good if you're bullish. The OEX is drifting down toward the mid-channel level, at 565.35, where it might find short-term support, but resistance is trying to firm overhead at 565.80 and then again at 567, with other, perhaps lighter resistance at 566.26. The OEX does not look strong over the short-term, of course.

Scanning out to a regular 60-minute chart, the OEX has retraced all of yesterday's last 60-minute gain and heads right back down toward the neckline of the big H&S on that chart, with the neckline now at about 563.45, depending on the neckline version you're using.

  Jonathan Levinson   1/13/200,  9:47:44 AM
Session lows for QQQQ and NQ here. The 30 min channel is ticking down for the first time since 1PM yesterday, with support now at 38.30.

  Jeff Bailey   1/13/200,  9:45:41 AM
Bullish day trade stop alert for the QQQQ at $38.48

  Linda Piazza   1/13/200,  9:40:45 AM
So far, the SOX has not broken above the high of yesterday's inside day nor below the low of yesterday's inside day.

  Linda Piazza   1/13/200,  9:40:00 AM
We see a mixture of indications from the breadth indicators. Volatility measures show the VIX declining this morning. Jane covers these indicators in more detail on the Futures side, but I'm mentioning them for the benefit of those who monitor only the Options side.

  Linda Piazza   1/13/200,  9:38:01 AM
The OEX has come down to retest the neckline of its inverse H&S, confirmed late yesterday, as I suggested it might do due to the observed overnight futures actions. Now we see. Was the upside break any more real than the downside one?

  Jeff Bailey   1/13/200,  9:37:42 AM
QQQQ $38.50 -0.18% .... chart with WEEKLY/MONTHLY Pivot retracement at this Link

  Jonathan Levinson   1/13/200,  9:34:54 AM
Equities have flipped to positive territory as bonds extend their gains, QQQQ pulling back to unchanged as I type at 38.58, TNX -2.8 bps at 4.208%. 30 min channel support is flat at 38.36, just below the 38.40 confluence.

  Linda Piazza   1/13/200,  9:33:39 AM
As futures suggested might happen, yesterday's late-day gains are not sustained. The OEX has just confirmed a double-top on the one-minute chart, suggesting that it might head down to retest the neckline of that inverse H&S it confirmed on the five-minute chart late yesterday. I chose the word "might" deliberately, however, as this action is goofy within the broadening formation.

  Linda Piazza   1/13/200,  9:27:31 AM
In ECB President Trichet's introductory comments to the press today, after the ECB decision to leave rate hikes steady, Trichet claims that short-term inflationary pressures have eased, although they still exist. He mentions the decline in oil prices as being partly responsible for that easing. He mentions the need for vigilance in guarding against the effects of inflationary pressures. The ECB sees moderate growth as ongoing. He reiterates the "unwelcome" nature of sharp moves in the currency markets. Here's a link to the comments: Link

  Linda Piazza   1/13/200,  9:04:43 AM
Futures are dropping off the post-Apple-report highs immediately after the close yesterday, with only NQ futures showing gains as I type. That action is a bit troubling for bulls, as it hints that gains might not be any more lasting than declines. The OEX is within that broadening formation, with such formations notoriously difficult to trade. For now, the OEX is also still within the right-shoulder formation of a large H&S on the 60-minute chart, also now visible on the daily chart. If this goes on too long without confirming the formation, it's validity might be questionable, however, no matter how well formed it appeared, but for now, the current trading pattern is within keeping with the formation. That, and the evening-star pattern on the weekly chart, should keep us skeptical about upside plays, ready to take profits quickly or close out positions if we get that "oh, no, this doesn't feel right" feeling about them.

In the last hour of trading yesterday, the OEX confirmed a small inverse H&S on its five-minute chart. The neckline is near 565.90-566, so early weakness in the markets could send the OEX back down to retest that neckline. A sustained move back below the neckline makes yesterday's late-day move look like short-covering ahead of AAPL's report. A basing near yesterday's close, with continued five-minute closes above a Keltner line currently at 566.96 might preserve the possibility of moving up toward 568.88 at least. Since I was traveling yesterday and didn't watch the flow of the markets and since there was first this late-day burst of buying--always a bit suspect in my mind--spring higher in the futures after AAPL's report, and then a constant drifting lower during the night, I think we have to be skeptical of yesterday's late-day move while still allowing for the possibility that it was real. Therefore, I hesitate to give more than the very short-term guidance given above.

  Jonathan Levinson   1/13/200,  8:44:45 AM
Export prices ex-ag +.1%, prior +.4%.

  Jonathan Levinson   1/13/200,  8:40:44 AM
Still waiting on the export price data.

  Jonathan Levinson   1/13/200,  8:38:08 AM
Dec. import prices -1.3%, import prices ex-oil +.5%.

  Jonathan Levinson   1/13/200,  8:32:14 AM
Equities have slipped negative, with gold down to 424.80 and bonds green following the data, TNX -1.4 bps at 4.222%.

  Jonathan Levinson   1/13/200,  8:31:20 AM



8:30am U.S. 2004 RETAIL SALES UP 8%, BEST SINCE 1999





8:30am U.S. WEEKLY JOBLESS CLAIMS UP 10,000 TO 367,000


  Linda Piazza   1/13/200,  8:31:10 AM
As expected, the ECB does not change rates, keeping them at 2%. The ECB's Trichet has a press conference this morning. As was also anticipated, the Bank of England left its rates unchanged at 4.75%.

  Jonathan Levinson   1/13/200,  7:53:58 AM
Equities are mixed, ES trading 1187.5, NQ 1572, YM 10605 and QQQQ +.03 at 38.61. Gold is down 1.40 at 425.20, silver flat at 6.732, crude oil up to a session high of 46.825.

We await the 8:30 releases of Export prices ex-ag. for Dec., prior +.4% and import prices ex-oil, prior +.7%, retail sales for Dec. est. +1.1% and retail sales ex-auto, est. +.4%, as well as initial claims, est. 340K.

  Linda Piazza   1/13/200,  7:16:43 AM
Good morning. The Nikkei fell 0.83%, with currency issues a major concern. Other Asian markets turned in mixed performances. Most European markets trade cautiously higher just ahead of rate decisions by central banks in Europe and England. Our futures zoomed up immediately after the close yesterday and remain higher now, but have been drifting off the immediate post-close high all night. As of 7:05 EST, gold was down $1.10, and crude, up $0.33. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei headed lower again in Thursday's trading, with dollar weakness against the yen still being the culprit. It trended lower all day, closing down 95.17 points or 0.83%, at 11,358.22. Exporters declined, with stocks of auto manufacturers mostly falling. Banking issues also tended to be weak. Some tech stocks were weak, with Sharp Corp. reportedly leading losing issues after it revealed plans to build a new plant dedicated to production of large-size LCD panels.

Other Asian markets turned in mixed performances, with Asian iPod suppliers such as Taiwan's Asustek Computer and Nidec benefiting from AAPL's after-the-bell report. The Taiwan Weighted still declined 0.43%, but South Korea's Kospi gained 0.65%. Singapore's Straits Times climbed 0.12%, and Hong Kong's Hang Seng gained 0.06%. China's Shanghai Composite fell 0.05%.

European markets are mixed this morning. Today the ECB and Bank of England make rate-hike decisions. Some speculation has surrounded the Bank of England's decision, with most expecting rates to be kept steady, but some suggesting that the Bank of England ought to drop rates a quarter point, having raised them one too many times. The central bank forecast that the U.K.'s growth may have slowed 2.5-3.1% in 2004. The ECB is expected to keep rates at the current level despite the European Commission raising its forecast for Q1's growth yesterday, with a Bloomberg article suggesting they'll do so to encourage more hiring. Germany's Federal Statistics Office said today that the country's economy grew 1.7% in 2004. Consumer spending dropped, but exports increased.

Headlines this morning include news that Baird downgraded Verizon due to higher pension costs and other concerns. EADS lifted of its 2004 earnings forecast. EADS was posting strong gains in early European trading. Merrill Lynch was not cheery about EADS' outlook, however, citing currency concerns and a lack of clarity about its outlook in China, among other concerns. Food retailers were in the news, with Goldman Sachs upgrading Carrefour and downgrading Casino Guichard, and with Royal Ahold moving higher after reporting earnings that included Q4 sales that declined from the year-ago level. Royal Ahold mentioned currency issues as one factor in the declining sales figures. Infineon was also in the news, rebounding after warning last night. The company had been driven to a big loss this week ahead of the warning. Cement makers and aggregate companies showed mixed trading throughout Europe as the impact of various deals and broker statements were absorbed.

As of 7:05 EST, the FTSE 100 had gained 7.80 points or 0.16%, to trade at 4,791.40. The CAC 40 had gained 10.47 points or 0.27%, to trade at 3,826.61. The DAX had gained 2.49 points or 0.06%, to trade at 4,211.31.

  Linda Piazza   1/12/200,  11:21:14 PM
I'm just back from my trip to Austin and back today and note that a broadening formation struck again. This morning, the OEX violated the neckline of its big H&S on the 60-minute chart and did so with some forcefulness. That was before crude inventories were released or the potential 562-563 support was hit. Although 561.23 is actually the 38.2% retracement of the bear-market decline, historically 562-563 has had more relevance with the OEX for some reason. The OEX bounced right back above the neckline once again, once again trapping bears who sold the appearing-to-be-forceful breakdown. After coiling for most of the rest of the day, the OEX had formed an inverse H&S on its five-minute chart. During the last hour of trading, the OEX confirmed that formation, setting up a potential 570.40 upside target. I don't see a lot of corroboration between that number and Keltner resistance levels, with some resistance currently converging in the 568.30-569.40 area, and some much higher, near 573, but only a single Keltner line on a single Keltner chart now near 570.40. From that, it appears that the OEX could either get stopped before that meeting that upside target or else could exceed that target. Keltner lines might realign themselves tomorrow, but that's what's showing up now. Another rollover under 571 keeps alive the possibility that the OEX is forming that right shoulder for the large H&S. A move much over 571 will break the OEX out of the broadening formation that's forming the right shoulder for the large H&S on the 60-minute chart, but it might take a move above 574 to actually negate the H&S formation. The SOX created an inside-day candle, so it might be watched for some guidance tomorrow, for a breakout either direction. I'm not particularly trustful of inside-day trades on indices, but this might be one guide to watch.

  Tab Gilles   1/12/200,  8:47:33 PM
The latest government report on oil inventories showed a welcome rise in distillate stocks, but inventories of crude dropped. Crude inventories fell by 3 million barrels last week, while distillates, which include home heating oil, rose by 1.9 million barrels.Analysts were looking for a smaller 1.7 million barrel drop in crude stocks. And the report powered that jump in light crude prices.EIA Weekly Report Link

$WTIC chart Link

Both Murphy Oil and XLE/WHAAI leaps were up today, both plays I'm tracking and that I highlighted today on MM.

The Pharma/Drug sector has been flat since the PFE news, I'm watching this sector and PFE for an entry point. Link

On the Nasdaq, I use the $NASI, which has been fairly reliable over the past year or so. It hasn't reversed trend yet and I'm still bias, being short the $COMPQ. Link

After today's bell, Apple (AAPL)-the computer maker said it earned 70 cents a share in the first quarter of its 2004-2005 fiscal year. That's more than triple the results of a year ago and nearly 49% better than analyst expectations. Revenue was 3.49 billion, up 74% from a year ago and 9.7% higher than expectations. Apple said it shipped more than 1 million Macintosh computers and 4.58 million iPods music players during the quarter, representing a 26% in computers and a 525% increase in iPods over the year-ago quarter. Thursday should see the $GHA react to the AAPL news, Apple being a stock in that index. $GHA chart Link

Last week I presented a weekly multi chart (VIX/NYSI/SPX/USD) from July '04 to present. Link

Here's an updated version one week later... Link

SPX chart... Link

SPX/VIX 30 minute... Link

  OI Technical Staff   1/12/200,  7:44:21 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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


Market Monitor Archives