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  Jeff Bailey   1/14/200,  7:15:00 PM
Pivot Matrix for next week at this Link

  Jeff Bailey   1/14/200,  6:29:57 PM
Closing Internals at this Link

  Jeff Bailey   1/14/200,  5:58:45 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Sold one (1) covered call by selling the SNDK Feb. $27.50 call (SWQ-BY) for $1.50 at the bid.

  Jim Brown   1/14/200,  4:02:36 PM
Earnings at the open on Tuesday

C est +1.02
PH est +1.02
RF est +0.59
ASO est +0.49
BAC est +0.94
ABT est +0.67
ACO est +0.18
FRX est +0.68
FCX est +0.69
JCI est +0.80
NCC est +0.65
STT est +0.58
USB est +0.57
WFC est +1.06
FLWS est +0.13
MMMM est +0.91
AMTD est +0.19
CRAI est +0.41
FITB est +0.29

  Linda Piazza   1/14/200,  4:01:40 PM
If you've hung around all day today, you've worked hard trying to discern something from the charts or make the decision that there was nothing to discern--which was the decision I made rather early on. I hope we helped. You deserve this long weekend.

Remember the daily Keltner chart I posted earlier? The OEX does appear to be closing the day beneath the Keltner lines currently at 564.70 and 565.52, so preserving the possibility of that channel continuing to tilt the OEX toward 555. The weekly candle turned out to be doji, so that also continues the impression of there being some indecision about sending the OEX lower, meaning bears need to exercise some caution.

  Jonathan Levinson   1/14/200,  4:00:57 PM
38.50-.52 held all day- but so did 38.33-.35. There are bullish divergences in the 30 minute oscillators, but the daily cycle downphase has yet to falter. Read all about it in the Futures Wrap this weekend.

  Linda Piazza   1/14/200,  3:54:04 PM
The OEX hasn't really made any more upward progress since confirming that inverse H&S than it did downward progress after confirming various regular H&S's. It just got run up a little past the top of the rectangular zone in which it traded most of the day, but it's back inside it now.

  Linda Piazza   1/14/200,  3:52:48 PM
SOX is dropping.

  Linda Piazza   1/14/200,  3:48:35 PM
The NWX is still having difficulty moving above the phalanx of moving averages grouping between 235-236, with those including the weekly 200-sma as well as the daily 200-sma and -ema. It's being supported at the 50% retracement of the rally off the September low, at just above 230. As I've said for several days, one or the other will eventually break. The formation so far looks like a "b" distribution pattern, usually bearish but certainly not always so. It's a nice chart to study because the levels are so clear-cut: Link If I had to pick component stocks that have charts that look most similar to the NWX's, it would probably be ADCT's and LU's, with ADCT balancing at the 50% retracement of the September rally, below a phalanx of moving averages, in a possible "b" distribution pattern and with LU doing the same. Unfortunately, both are low-priced stocks that I hesitate to recommend one way or another as I consider such low-priced stocks high risk to trade. FDRY's shares some characteristics, too, except that FDRY is already below the 50% retracement, and balancing on the 61.8% retracement. Here's a list of component stocks, if you want to check the charts for yourself: Link Note: I haven't checked reporting dates for any of these.

  Jane Fox   1/14/200,  3:37:06 PM
As you can see from the link on my 15:33 chart the Dow is real close to that December low.

  Jane Fox   1/14/200,  3:33:46 PM
In the January 5th Market Wrap I talked about the Stock Traders' Almanac's December Low Barometer, which is if the DOW closes below its previous year's December closing low in the first quarter of the new year it is an warning sign. Since 1952 the DOW has breached its December low 20 times and of those 20 years 14 were followed by a bearish year. But then add the January barometer (how January goes so goes the year) and things start to look a little different. If you have a bearish reading in January and then the Dow breaches its December low there is 86% chance of a bearish year. Link

  Jonathan Levinson   1/14/200,  3:31:59 PM
QQQQ has traded 83.4M shares so far and looks to fall short of yesterday's 93M shares, itself well below the 102.1M average daily volume.

  Linda Piazza   1/14/200,  3:26:16 PM
The TRAN is now back below its five-minute 100/130-ema's. The formation on its five-minute chart looks like a bearish right triangle now, with a flat support line just under 3560 and a series of lower highs marking the upper trendline. These are typically bearish but can and do break to the upside.

  Linda Piazza   1/14/200,  3:17:20 PM
The OEX's three-minute Keltner channels tell us what we already know. For most of the day after the initial climb, the OEX has been oscillating in a rectangular range from about 563.10 to about 564.60. The Keltner channels have stretched out sideways, and it's bumping from one side to the other of a Keltner channel now spanning from 563.33 to 564.56. A few candle shadows have pierced that channel, but most candles have closed inside it. Those channel lines will move as the OEX bumps against it, of course. We can watch the 563-564.60 levels for a breakout either direction if already in plays, but remember the unsuccessful record of breakout plays these days before considering any kind of entry on a breakout.

  Jonathan Levinson   1/14/200,  3:14:28 PM
Another failure just below QQQQ 38.52. If not for that crazy Ivan down to 38.15 back at 2PM, this rectangle has held within a 15 cent range since 10:30AM.

  Linda Piazza   1/14/200,  3:09:58 PM
Here's another OEX Keltner chart, this one a 60-minute one, with little directional guidance available from this chart: Link

  Jim Brown   1/14/200,  3:05:20 PM
Another 25 million shares of GOOG will be released for trading on Tuesday but the big drop will be the 187 million which will be released on Feb-15th. That will more than double the current float.

  Jeff Bailey   1/14/200,  3:05:11 PM
03:00 Market Watch at this Link

  Jonathan Levinson   1/14/200,  2:59:45 PM
A break above 39.52 could get interesting. The short cycles are in an upphase that is overbought but not maxxed out, while both the 30 and 60 min channels are caught in sideways drifts. Next resistance is at 38.62, but the key level is 38.70-.75 above.

  Jeff Bailey   1/14/200,  2:59:32 PM
Google (GOOG) $199.45 +2.08% ... high of the day after low of $194.13

Jan. "Max Pain" of $190 ($5 increments)

  Linda Piazza   1/14/200,  2:53:54 PM
The OEX confirmed yesterday's big H&S on the 60-minute chart, and now trades near the confirmation level. Earlier today, it confirmed a small H&S with an ascending neckline, visible on the five-minute chart, but hasn't drifted far from that neckline. Now it's testing the neckline for the large inverse H&S, one I mentioned earlier. The OEX may even have moved across the neckline, moving up to those same five-minute 100/130-ema's. Let's see if this one gets any further than those others.

  Linda Piazza   1/14/200,  2:43:41 PM
I mentioned earlier this week that I was going to begin showing more Keltner charts. I know they're confusing at first, but just be patient and you'll eventually be able to glean helpful information. Here's what I see on the daily one, showing that the OEX has been challenging important levels today: Link

  Jonathan Levinson   1/14/200,  2:35:46 PM
Other than the action at 2PM Link , this is one very quiet afternoon. With bonds and most futures closed for the weekend, there's an uneasy peace that's emerged. The 2 day pattern on this chart still has a bullish reverse h&s feel to it, but below 38.52, it's just speculation.

  Jeff Bailey   1/14/200,  2:27:35 PM
Netflix (NFLX) $11.18 +2.85% ... bids back to best levels of session after Fleck discloses his short position in the stock.

  Jeff Bailey   1/14/200,  2:25:29 PM
Sorry Fleck... if an investment house wanta to call in stock that they have lent short, its their, or their clients stock, and they can call it in if they want to. That's one of the inherent risks of short selling.

  Jim Brown   1/14/200,  2:23:54 PM
Fox news claiming that the FBI has noticed several suspicious events around the inaguration site. Claims security is being increased well in advance.

  Linda Piazza   1/14/200,  2:21:20 PM
I was just taking a look at the weekly Keltner chart. First, I use candles on that chart, too. Barring a strong rally into the close, the OEX is going to end this week negative after last week completing a bearish reversal signal known as an evening-star pattern. However, even a modest rally into the close might produce a doji for this week, with doji being indicative of indecision. In this case, that would be indecision about sending the OEX lower after the previous week's strong decline. That doji could just be forming while losses are absorbed, but it's occurring at potential historical support. On balance, the news is bearish because there was some follow-through, however minimal, to the weekly evening-star pattern, but there's some reason for bears to be cautious about assuming further losses.

Keltner charts give more evidence. The weekly chart suggests that as long as the OEX closes this week below a Keltner line currently at 565.29, the action keeps open the possibility (from a Keltner viewpoint) of a decline toward 550.77. A weekly close above that level presents the possibility of another climb toward 579.87. Neither of those would necessarily be accomplished in a week's time.

  Jeff Bailey   1/14/200,  2:17:22 PM
Pfizer (PFE) $25.24 -0.3% ... slips to session low

  Linda Piazza   1/14/200,  2:06:09 PM
Three-minute Keltner resistance pressures the OEX lower. That resistance looks stronger than nearby Keltner support, but the Keltner channels have settled into an equilibrium position, all the channels arrayed equally around a central average, and when that happens, the OEX sometimes bounces within a channel, moving easily across central support and resistance levels. They just don't matter until a breakout occurs . . . and here's an example. The OEX bounces, up into that resistance.

  Jonathan Levinson   1/14/200,  2:00:12 PM
QQQQ just printed a bad tick to 38.15, currently trading back at 38.36.

  Jonathan Levinson   1/14/200,  1:52:46 PM
Crude oil has taken its early close higher by .62% at 48.35, gold lower by .56% at 423 with HUI and XAU both down over 1% currently. The US Dollar Index is holding its overnight gains, while bonds remain soft with TNX closed at 4.126%, up 2.9 bps for the day.

  Linda Piazza   1/14/200,  1:50:01 PM
I'm watching the TRAN and SOX, both sometimes fast movers that lead other indices, but the TRAN just hugs its five-minute 100/130-ema's without moving much.

  Linda Piazza   1/14/200,  1:48:12 PM
The SOX drifts down, but remains above 400.

  Jonathan Levinson   1/14/200,  1:43:21 PM
The 30 and 60 min channels are flat and only starting to show downticks here. Support remains at 38.30. I'd think that yet another failure from a lower intraday high, continuing yesterday's pattern, should result in another selloff, but volume and selling pressure are both light, TRINQ .75 and volume 56.7M for the day so far. That might change if 38.20 breaks, but the action remains very slow currently.

  Linda Piazza   1/14/200,  1:39:12 PM
According to the neckline I drew, the OEX has now pushed below the neckline of the H&S on the five-minute chart. It has a steeply ascending neckline. The problem is that the OEX didn't go much of anywhere after moving down through that neckline. That's troublesome behavior when you see it and are expecting bearish outcomes. It's beginning to turn down as I type, but bears want to see a move below 562.99.

  Jonathan Levinson   1/14/200,  1:34:16 PM
QQQQ is bouncing from 38.35, but taking its time doing so, adding all of 3 cents in the past 10 minutes. Very little motion in my tick driven indicators.

  Linda Piazza   1/14/200,  1:34:09 PM
The OEX did not confirm the double-top formation, pulling up ahead of the confirmation level. It's pulling up into a retest of the five-minute 100/130-ema's again. I guess it's back into that mode when it doesn't move far away from those averages.

  Jeff Bailey   1/14/200,  1:33:44 PM
Amerco (UHAL) $46.81 +2.80% ... no options here, and looks to challenge all-time high found on Monday.

  Linda Piazza   1/14/200,  1:28:44 PM
Reader Question: Was just wondering everyone's thoughts on the homebuilders.....a couple of your writers have mentioned some of the individual builders but what about the sector itself? They sure seem overbought to me......with rates destined to go up........thoughts?

Response: It certainly feels as if the DJUSHB should turn lower. Eventually it will, as KKD and TASR finally did. However, some chart evidence suggests danger to bears who try to jump in. As a disclaimer, I'm looking at chart evidence only, and not what should happen because of possible rate hikes.

As usual, I took a look first at the P&F chart. According to that chart, the DJUSHB still have much more upside to go. The double-top-breakout that occurred January 13 so far has a 945 bullish price objective. Here's a chart: Link If any of the other writers has an idea, chime in.

  Jeff Bailey   1/14/200,  1:28:22 PM
MMM $83.58 -0.25% ....

  Jeff Bailey   1/14/200,  1:22:27 PM
DIA $105.35 +0.38% ... back to test daily pivot again ...

Most active ... Jan. $103 puts 979:2,761

Jan $101 puts 922:5,135

Jan $107 calls 588:12,554

If selling all three, might suggest $104-$105.

VIX.X 12.51 -2.57%

VXO.X 12.95 -0.91%

  Jonathan Levinson   1/14/200,  1:20:28 PM
Below 38.35, the rising triangle scenario is off the table. 30 and 60 min channel support line up currently at 38.30 confluence.

  Linda Piazza   1/14/200,  1:19:41 PM
The OEX rolls down toward a test of the confirmation level for the double-top formation, with that level at 562.99.

  Jeff Bailey   1/14/200,  1:18:18 PM
01:00 Internals at this Link

  Jonathan Levinson   1/14/200,  1:14:00 PM
Ten year treasuries remain soft, but have recouped part of their intraday losses, with TNX now up 2.9 bps at 4.216%.

  Jeff Bailey   1/14/200,  1:07:42 PM
01:00 Market Watch at this Link

  Linda Piazza   1/14/200,  1:04:26 PM
The TRAN heads down to test its five-minute 100/130-ema's again, at them now. The SOX turns down, but holds above the 403 level.

  Jonathan Levinson   1/14/200,  1:02:06 PM
QQQQ ticking below 38.40 here, but still in range for a higher triangle low above 38.35.

  Linda Piazza   1/14/200,  1:01:03 PM
The VIX is rising again.

  Jeff Bailey   1/14/200,  12:55:02 PM
Gold and Junk Bonds only thing I see red.

  Linda Piazza   1/14/200,  12:55:01 PM
We should consider whether there's a double-top formation on the OEX's intraday chart today. The two-minute chart shows bearish price/MACD divergence as that second equal high was hit and now a tentative bearish cross of the MACD lines from above signal. Scant evidence upon which to base a bearish scenario, isn't it? It would certainly need confirmation by a drop below the 562.99 low that marked the trough between the two highs.

  Jeff Bailey   1/14/200,  12:53:03 PM
Pulte Home (PHM) $65.81 +2.74% .... going to be very, very , very close on those Jan. $65 covered calls. If PHM takes out much above $66, next strike higher is $70.

Bulk of OI is at the Jan. $65 calls though.

Most active is the Feb. $65 calls 435:2,242 at this point.

  Linda Piazza   1/14/200,  12:49:25 PM
The OEX now sports a sloppy inverse H&S on its 15-minute chart. Difficult to tell even whether it's already formed a small right shoulder and is now retesting the neckline, formation nearly complete, or whether it still needs to form a right shoulder. As the OEX has been descending through this month, it's formed a number of these that sometimes confirm, move up a bit and then fail to see follow-through.

  Jeff Bailey   1/14/200,  12:48:35 PM
12:00 Internals at this Link

Tied up with last minute administrative brush fires.

  Linda Piazza   1/14/200,  12:43:43 PM
And the OEX rolls down a bit at the appropriate right-shoulder level. All day, the OEX has acted pretty much as one would expect if gains were going to be limited, but internals sure haven't supported the idea that this was providing a bounce-and-rollover entry. Price action is the arbiter, but the internals sure should give bears pause. Feels like a trick, doesn't it, but who is being tricked, the bears or the bulls?

  Jonathan Levinson   1/14/200,  12:41:45 PM
Stepping away for 10 minutes here.

  Linda Piazza   1/14/200,  12:37:44 PM
The OEX pauses at the appropriate right-shoulder level for the H&S on its five-minute chart, but it hasn't rolled down. The action of the TRIN still supports a bullish rather than a bearish interpretation, but we need to see what price gives us.

  Jonathan Levinson   1/14/200,  12:37:26 PM
Here's a double top below 38.52 QQQQ. A higher low above 38.35 could set up a rising triangle below that line. A break below 38.33 will invalidate that setup and set up a retest of 38.30, followed by 38.20. Volume is still light, with just 5M QQQQ shares traded in the past half hour.

  Linda Piazza   1/14/200,  12:33:21 PM
The OEX breaks back above its five-minute 100/130-ema's. Because the neckline for the small H&S slants steeply upward, it probably hasn't yet negated the formation, but it will unless the OEX drops quickly and soon. Internals support the bullish rather than the bearish case.

  Linda Piazza   1/14/200,  12:27:55 PM
Careful, bears. VIX has been diving.

  Jonathan Levinson   1/14/200,  12:23:56 PM
QQQQ is testing rising 7200-tick SMA resistance from below at 38.44, breaking the corrective pattern of lower lows and lower highs since the 10:45 high. This is the first step toward a retest of the 38.52 session high, which may or may not be reverse h&s/bullish c&h/bull flag resistance. A high volume break of that resistance would need to retest the 38.73 resistance level, above which the daily cycle should start generating buy signals.

  Linda Piazza   1/14/200,  12:23:32 PM
As I suggested might happen in my 12:09 post, the OEX has come back up to retest its five-minute 100/130-ema's.

  James Brown   1/14/200,  12:11:12 PM
Illinois Tool Works (ITW) is producing a bounce from the $90 level and its rising long-term supporting trendline. See chart: Link

  Tab Gilles   1/14/200,  12:10:42 PM
Murphy Oil (MUR) ....continues its climb higher. Link

XLE ...following too. Link

Gotta go, out for the rest of the day. Enjoy your weekend everyone!

  Linda Piazza   1/14/200,  12:09:55 PM
The TRAN still hugs its five-minute 100/130-ema's. The SOX hovers just underneath next resistance, above 400 S/R. Lots of indecision. The OEX found support at its neckline for the big H&S it confirmed yesterday, but so far finds resistance below its five-minute 100/130-ema's, at the 21-ema on that chart instead. There's a potential H&S formation on the OEX's three-minute chart, head at today's high, neckline at about 563.20, but even if it's valid and going to ultimately be confirmed, I'm not sure it's yet formed enough of a right shoulder. Might need another test of the five-minute 100/130-ema's first before we know whether it will be confirmed or rejected.

  James Brown   1/14/200,  12:05:35 PM
Ryland Homes (RYL) is also at a new all-time high over resistance at the $58 level. The P&F chart shows a fresh triple-top breakout buy signal with a $70 target.

  James Brown   1/14/200,  12:04:31 PM
Pulte Homes (PHM) once again trading at an all-time high over resistance at $65.00. The MACD is nearing a new buy signal. The P&F chart points to $86.

  Jonathan Levinson   1/14/200,  12:04:06 PM
Despite the sharp drop through 38.40 support, there's been little followthrough and the QQQQ decline here continues to feel corrective. Volume is light at 46M shares so far, and I expect it to stay that way ahead of the long weekend. Until QQQQ breaks back below 38.20, the bullish bias to today's action will persist.

  Tab Gilles   1/14/200,  11:57:00 AM
Linda, on your 11:30:23 AM post, you stated that you see an upside target for the $SOX in the 410 area and then a decline perhaps. I agree, here's a chart showing that...


And you also mentioned that your watching the VIX. Here's a 60 minute chart- MACD crossover signaling for upside for the VIX and perhaps more downside for the SPX, that I've been calling for also.


  Linda Piazza   1/14/200,  11:52:19 AM
Guess where the OEX stopped its decline just then? At the neckline for that H&S on the 60-minute chart.

  Linda Piazza   1/14/200,  11:47:10 AM
The OEX drops below the five-minute 100/130-ema's and confirms by dropping below the 21-ema on that same chart. Those who might have entered a bearish play on a rollover beneath the 60-minute neckline of the H&S, with a stop set an account-appropriate distance above the five-minute 100/130-ema's have not been stopped. What next? Are you safe? Not quite. Internals still aren't giving bears a warm feeling. The SOX remains above 400. The TRAN is back below the five-minute 100/130-ema's, but not far below. It's still in testing mode.

  Jonathan Levinson   1/14/200,  11:46:56 AM
QQQQ is breaking 38.40 now, targeting 30 min channel support at 38.30. The channel has stalled in its rise, resistance pulling back to 38.52.

  Linda Piazza   1/14/200,  11:44:48 AM
Maybe some of the rest of you are asleep at the wheel (or your computer monitors) as I must be, because I'd forgotten that markets are closed Monday in celebration of Martin Luther King, Jr. Day. It wasn't until Keene mentioned the shortened week for the second time that I jolted awake.

  Linda Piazza   1/14/200,  11:39:51 AM
The OEX remains below its five-minute 100/130-ema's, but hasn't yet confirmed a downturn by a five-minute close beneath its five-minute 21-ema, with that average showing some relevance this morning. That average is at 563.67.

  Jonathan Levinson   1/14/200,  11:36:11 AM
Trapped on a call, watching the low-volume drift above QQQQ 38.40. This could be a reverse head and shoulders or even a rough cup and handle over the past 2 days. In either case, look for a high volume surge above 38.50-.55 to signal a bullish breakout. Link

  Linda Piazza   1/14/200,  11:30:23 AM
If markets are going to sustain gains, I wouldn't be surprised to see the SOX work its way toward 410-412, but perhaps pull back from there. A former descending supporting trendline crosses there, it's historical S/R, and it would make an appropriate site for an inverse H&S neckline. The SOX currently deals with resistance in the 403-405 region, however, and must be through that before it can progress toward that neckline. The jury may still be out as to whether there will be further gains. I'm watching the VIX, coiling at the top of its range. An upside break wouldn't be good for equities, I wouldn't think, while a downside one might.

  Jeff Bailey   1/14/200,  11:20:08 AM
11:00 Internals at this Link

  Linda Piazza   1/14/200,  11:18:45 AM
The OEX is attempting to find its footing on the five-minute 21-ema and rise toward the 100/130-ema's again. So far, it's not looking too strong as it does so, but I'm keeping the current 0.81 level of the TRIN in mind.

Today some actions support a bearish scenario--the continued resistance offered by the five-minute 100/130-ema's, for example--and some support a bullish one--the TRIN level, the way the OEX shot past Keltner resistance levels this morning. Still, after that initial shot higher, the OEX perhaps now settles into a triangle at the top of its climb, and perhaps a breakout there will tell us direction.

  Linda Piazza   1/14/200,  11:12:59 AM
As Jane just mentioned on the Futures side, TRIN is not supporting bearish plays.

  Jonathan Levinson   1/14/200,  11:12:09 AM
Session low for 10 year note futures, TNX +3.7 bps at 4.224%.

  Jeff Bailey   1/14/200,  11:08:16 AM
11:00 Market Watch at this Link

  Jonathan Levinson   1/14/200,  11:08:03 AM
38.40 QQQQ support is being tested now on a pullback off the 38.52 high. The short cycles are overbought and showing a slight downtick- a move below 38.40 should kick off a new short cycle downphase.

  Tab Gilles   1/14/200,  11:06:45 AM
$TRAN/$INDU ... Markets getting a bounce here today, however I still beleive that there is further to go on this correction. As I mentioned in my last post, oil appears to have further upside gains in the coming weeks. That should put pressure on the markets, the transports have had quite a run and a correction there should bring it down within it's channel (3,300). That in my estimation places the $INDU at the 10,213 level. Link

  Jeff Bailey   1/14/200,  11:01:42 AM
Taser Intl (TASR) $19.46 -6.29% ... 5-MRT traders will also note Red #3 at $19.59 (tie daily S1) and Red #5 $18.28 (tie daily S2).

  James Brown   1/14/200,  11:01:37 AM
BAC has started coverage of drug giant Schering Plough (SGP) with a "sell" this morning. The stock is down 2% to $20.21.

  Linda Piazza   1/14/200,  11:00:05 AM
Today is kind of an I-believe trading day. If you believe that the OEX is going to bounce from above 560, then you're bullish as long as the OEX is above that level and are holding on through the whipsaws. If you believe that it's significant that the OEX confirmed that H&S on the 60-minute chart, building for a month, then you're bearish as long as the OEX is below the five-minute 100/130-ema's and perhaps, if you've got deep pockets and a lot of nerve, below the 50-sma on the daily chart. If you're conservative and don't believe in I-believe trading, you're not trading at all.

The OEX now tests its five-minute 21-ema, the average that provided some resistance for about 20 or 30 minutes this morning.

  James Brown   1/14/200,  10:59:31 AM
UBS is starting coverage of a few semiconductor stocks with a "buy" this morning.... (KLAC, VSEA, LRCX, and AMAT)

  James Brown   1/14/200,  10:56:57 AM
Prudential has also started coverage on several airlines with an "over weight" rating this morning (JBLU, LUV, AMR, CAL, and AAI).

  James Brown   1/14/200,  10:53:56 AM
OI call play RAI is trending higher today after being upgraded by Prudential this morning but shares are still under $80 resistance.

  Linda Piazza   1/14/200,  10:53:37 AM
The OEX turns down from its test of its five-minute 100/130-ema's, but hasn't yet confirmed by moving below its five-minute 21-ema at 563.42, an average at which it lingered for twenty or thirty minutes this morning. The TRAN turns down to retest its five-minute 100/130-ema's, but hasn't yet fallen below them.

  Jeff Bailey   1/14/200,  10:51:33 AM
Taser Intl. (TASR) $19.28 -7.2% ... quick little dip lower in last 10 minutes.

Did anyone catch "Dr. J's" comments last night from the CBOE?

TASR Daily Pivot levels ... $18.24, $19.51, Piv = $20.72, $21.98, $23.20.

  James Brown   1/14/200,  10:51:12 AM
Ask Jeeves (ASKJ) is up 9% to $29.46 and breaking out from its six-week trading range after being upgraded to "out perform" this morning.

  Jeff Bailey   1/14/200,  10:50:15 AM
VIX.X 12.71 -1.01% ....

  James Brown   1/14/200,  10:50:00 AM
Sun Microsystems (SUNW) is down 8% to $4.22 and breaking its 200-dma after its earnings report.

  Jeff Bailey   1/14/200,  10:49:54 AM
DIA most actives now .... Jan $104 puts (174:8,502), Jan $105 calls (135:7,659), Feb $105 puts (100:2,416)

  Linda Piazza   1/14/200,  10:47:12 AM
OEX still engaged in testing its five-minute 100/130-ema's, at 564.34 and 564.55. It's showing five-minute candle shadows spiking up to the 130-ema, but candle bodies so far forming below the 100-ema.

  Jonathan Levinson   1/14/200,  10:46:52 AM
There's confluence resistance at 38.55, followed by 38.62, then 38.65-.73. There are all levels that capped yesterday's bounce attempts, and a move above 38.73 should be enough to begin causing trouble for the daily cycle downphase.

  James Brown   1/14/200,  10:46:43 AM
Marsch & Mclennan (MMC) is up 4.8% as it bounces from the $30.00 level. The move appears to be fueled by news that MMC is trying to settle its bid-rigging allegations for $600 million. Investors seem hopeful with today's rally but Spitzer wants MMC to pay $750 million.

  Jeff Bailey   1/14/200,  10:44:35 AM
Current OPEN MM Profiles at this Link

DIA Comments ... note $90.00 premium erosion on just two contract, now think like option market maker for January expiration. What should market maker be doing with $104 and $105 strikes? Probably selling the living heck out of Jan. $104 is my thought.

  James Brown   1/14/200,  10:42:47 AM
Traders may want to keep an eye on Gannett (GCI). Shares are consolidating under resistance and this 4 1/2 month trendline. here's a chart: Link

  Linda Piazza   1/14/200,  10:42:20 AM
The TRAN is over its five-minute 100/130-ema's. It hasn't spent more than 15 minutes above those averages since Monday, and it's now been above them about that long, so perhaps there's a very short term change in trend by this measure for the TRAN.

  James Brown   1/14/200,  10:36:36 AM
Moody's just raised their debt rating on Corning Inc (GLW) to "positive". Stock traders may want to watch GLW for a breakout over four-week old resistance at the $12.00.

  Linda Piazza   1/14/200,  10:36:32 AM
The OEX is breaking through one level of Keltner resistance after another. At just over 564.50, it will have met its upside target for its inverse H&S and will also be testing its five-minute 100/130-ema's. The 50-sma is at 566.22. At this point, with the previous action, it's difficult to say if that resistance will hold, either. Those who might have entered bearish plays earlier need to adhere to stops set an account appropriate distance above those five-minute 100/130-ema's in case the OEX just blasts through all day, on its way up to 567-568. Internals keep changing direction today, and provide no guidance at all. Or rather, they provide guidance that never really supports one side or another, but hints that they might before changing sides.

  Jonathan Levinson   1/14/200,  10:36:10 AM
Support advances from 38.30-.33 QQQQ to 38.40. We now have synchronous upturns in the short, 30 and 60 min cycles.

  James Brown   1/14/200,  10:34:48 AM
Yet another analyst downgrades General Motors (GM). This time Calyon Securities cuts GM to a "sell". GM is down 9 cents to $37.23.

  James Brown   1/14/200,  10:32:45 AM
Angelica Corp (AGL) is up 3.8% to $27.21 after being upgraded to a "buy" this morning. Technicals are positive and its MACD is nearing a new buy signal.

  James Brown   1/14/200,  10:31:28 AM
Hmm... that's the first time I've seen that. The NASD is fining an analyst $75K for spreading a rumor about RF Micro Devices (RFMD).

  Jeff Bailey   1/14/200,  10:30:29 AM
Swing trade sell covered call alert while I only show one (1) SanDisk (SNDK) call in the MM Profiles, trader that may have more I'd be looking to sell covered calls on 1/2 of your holdings.

Selling one (1) of the SNDK Feb. $27.50 calls (SWQ-BY) at the bid of $1.15.

SNDK $25.02 +1.70%

ONCE COVERED CALL IS FILLED ... then cancel prior stop order on the SNDK Apr $22.50 call (SWQ-DK)

  Linda Piazza   1/14/200,  10:29:58 AM
The OEX does convincingly confirm its inverse H&S and head straight up to test its five-minute 100/130-ema's, with those extending up to 564.57.

  Jonathan Levinson   1/14/200,  10:28:45 AM
Here's the rectangle break now. 38.30-.33 should act as support from here if bulls can clear 38.40 just ahead.

  Linda Piazza   1/14/200,  10:27:56 AM
The TRAN is at its five-minute 100/130-ema's. These do have some significance for the TRAN. It was turned smartly away from the 100-ema after testing it late Wednesday and early yesterday, for example. These averages are at 3562.34 and 3567.37, respectively, with the TRAN at 3566.26 as I type.

  Jonathan Levinson   1/14/200,  10:26:39 AM
QQQQ is going net nowhere in a rectangle between 38.18-38.33. The short cycle oscillators are still rising, and the 30 and 60 min channel resistance lines now overlap at 38.40.

  Jeff Bailey   1/14/200,  10:24:53 AM
10:00 Internals at this Link

Yesterday's internals at this Link

  Linda Piazza   1/14/200,  10:24:21 AM
The OEX does not yet convincingly confirm its potential inverse H&S on its three-minute chart, although it's attempting the confirmation again as I type. Doing so would require it to push above the neckline for the larger, already confirmed H&S on the 60-minute chart. With internals doing some squiggling around of their own and not yet fully supporting a bearish play, at least, I wouldn't be surprised to see the OEX push higher, but would then hope it would be rebuffed at its five-minute 100/130-ema's, and that 60-minute candles would continue to close beneath that neckline. Well, actually I don't hope for a bearish outcome for our markets, but you know what I mean.

  Linda Piazza   1/14/200,  10:19:58 AM
The SOX invalidates its potential inverse H&S.

  Linda Piazza   1/14/200,  10:17:22 AM
Potential inverse H&S (continuation form) on the OEX's three-minute chart, looking as if it's about to test the neckline, either confirming the formation or rejecting it, as I type. Neckline at about 563.25, and the OEX attempts a push above it as I type. May be headed up to test the five-minute 100/130-ema's after all, depending on whether there's a quick reversal here or not.

  Linda Piazza   1/14/200,  10:15:15 AM
Potential H&S on the SOX's three-minute chart. Head at today's high. Shoulder level at about 400.40-400.60, neckline at about 399.30. The SOX is headed up to test the right-shoulder level as I type. A move above the day's high will invalidate the formation, of course, and look more bullish for equities in general. A confirmation looks the opposite.

  Linda Piazza   1/14/200,  10:13:12 AM
The dollar isn't looking so hot here, diving over the last forty minutes.

  Jeff Bailey   1/14/200,  10:12:32 AM
DIA 105.12 +0.16% .... most active options are Jan. $104 puts (DIAMZ) 164:8,502

Feb. $105 put (DIA-NA) 100:2,416

Jun 112 call (DIA-FH) 52:960

  Jonathan Levinson   1/14/200,  10:11:22 AM
Session high for Nymex crude here, going positive at 48.175 currently.

  Linda Piazza   1/14/200,  10:10:52 AM
Those who want a just-for-the-heck-of-it, these-numbers-might-work play can continue to use pushes up toward and rollovers from the OEX's confirmed H&S neckline, at 563.30, to enter bearish plays. TRIN continues to climb. The five-minute 100/130-ema's could be used as benchmarks--remain bearish beneath and exit bearish plays at an account-appropriate stop above them. They're at 564.44 and 564.65, respectively. I don't see a tremendous amount of evidence supporting such a play, however, although TRIN moves up and advdec is off its high and SOX is below the 400 level again. These are just places where the OEX should turn around, if it's going to turn around, without overwhelming evidence yet that it will be turning around.

  Jeff Bailey   1/14/200,  10:10:29 AM
VIX.X 12.76 -0.62% .... jumping higher from 12.45 ... Daily Pivot levels ... 12.22, 12.48, Piv = 12.62 12.88, 13.02.

  Jeff Bailey   1/14/200,  10:07:41 AM
10:00 Market Watch at this Link

  Linda Piazza   1/14/200,  10:05:34 AM
No particular form to the OEX's three-minute climb, just yet. When looking at the OEX's five-minute chart, I see that it's being stopped by the five-minute 21-ema, with that average currently at 562.93. Candles are forming at or along that MA.

  Jeff Bailey   1/14/200,  10:04:08 AM
Cree, Inc. (CREE) $27.00 -23% ... quick chart at this Link for 09:35:42 post

  Jonathan Levinson   1/14/200,  10:03:25 AM
The 30 minute channel resistance has only managed to creep up to 38.40, also confluence resistance, while the 60 min channel remains flat at 38.35 QQQQ. But unless QQQQ drops back below 38.20, that 60 min channel should continue what looks like a slow-motion reversal of its earlier decline. This flat range could be the chop within a bottoming 30 min/60 min channel setup, and so bears won't want to see the price chop sideways or higher within the next hour.

  Linda Piazza   1/14/200,  10:00:35 AM
Hmm. The BIX is below yesterday's low, and is also below a descending trendline off the lows from the last couple of months. It looks as if the BIX needs a bounce up into a right shoulder, because it's already got a left shoulder and head formation, but without a quick bounce back above that trendline just above 565, the BIX looks ready to drop instead.

  Linda Piazza   1/14/200,  9:57:44 AM
OEX rising again. Just didn't think it was over yet.

  Jonathan Levinson   1/14/200,  9:55:58 AM
The Fed's open market desk has announced a 5 day repo in the amount of 8B against 2B expiring, for a net add of 6B for the day.

  Linda Piazza   1/14/200,  9:55:34 AM
Here's one of my charts from last night, showing why I'm so hesitant to believe that the OEX is yet ready to give up. This has the original annotations and lines, but this time, I've added in the possible ascending neckline for a potential new H&S. See where the OEX is balanced right now, right on that rising neckline? Link I'd like to see a push a little higher or a little longer, with internals fully supporting a bearish play, and then a rollover, to give some cushioning ahead of a test of that rising trendline. I think the move down toward 556-558 makes sense, but this points out the possibility that the OEX could rise immediately into a right shoulder, over the course of several days or even a couple of weeks before rounding down again. I want to see supporting evidence for a rollover . . . unless, of course, the OEX rolls down below that ascending neckline. Even then, I'd keep a close watch on my stops since the OEX pierced that line yesterday and closed back above it.

  Linda Piazza   1/14/200,  9:49:22 AM
The OEX turned over right at that neckline of that big H&S, just as bears wanting a new entry might have hoped. Somehow I just can't bring myself to believe that was the only test that will occur, however, or that this few-minute bounce is all that will occur. I might be sorry for saying that later, but that's my impression now.

  Linda Piazza   1/14/200,  9:47:19 AM
Advdec line diving. SOX back below 400.

  Linda Piazza   1/14/200,  9:46:30 AM
And the OEX is getting turned back right at the neckline of the big H&S it confirmed yesterday. All that Keltner resistance that had looked so strong on the three-minute chart is now just below the OEX, however, perhaps ready to provide better support than it did resistance. That support is being tested now, however, and is from 561.54-562.00.

  Jonathan Levinson   1/14/200,  9:44:40 AM
The weakness in gold is again being confirmed in the miners, with HUI down 1.36% to 201.48, XAU -1.07% to 93.11. Silver futures are down 1.41% at 6.652.

  Linda Piazza   1/14/200,  9:42:45 AM
The TRAN bounces, too, but hesitates in yesterday's congestion zone from 3555 to 3565. The TRAN is at 3557.06 as I type.

  Linda Piazza   1/14/200,  9:36:53 AM
As expected by pre-market action in the futures after economic releases, the OEX bounces. It pushed right past three-minute Keltner resistance that looked strong. The OEX pauses now at the neckline for the big H&S that it confirmed late yesterday, but so far, the advdec line looks too strong and the TRIN too weak to suggest an immediate rollover at that neckline. Does that statement guarantee an immediate turnaround? Perhaps, but the evidence isn't there yet.

  Jeff Bailey   1/14/200,  9:35:52 AM
Cree, Inc. (CREE) $26.70 -23% ... investor sent me an e-mail that he owns 200 long at $36.83. What to do as it relates to a hedge for longer-term holding.

I would look to protect further possible decline to $22.50 at this point. Note that stock opens at 61.8% ($27.26) of a conventional retracement from July low to December high.

Could hedge with a $25 put, see if things don't calm down/stabilize.

Expect formidable resistance at $30 for next three months.

  Jonathan Levinson   1/14/200,  9:33:15 AM
30 and 60 min channel resistance lines up at 38.36 currently, with the 30 min channel rising toward the declining 60 min channel. A short cycle upphase is just getting started, however. Looks like the bulls are getting their wish as discussed in last night's Futures Wrap- an immediate upside reversal.

  Jonathan Levinson   1/14/200,  9:25:56 AM
Yields continue to rise, with TNX now back over 4.2% at 4.222%, +3.5 bps.

  Jonathan Levinson   1/14/200,  9:15:56 AM






  Linda Piazza   1/14/200,  9:10:14 AM
Finally, the OEX did move away from its five-minute 100/130-ema's. Those averages are now at 564.75 and 564.92, respectively, but still cycle down. Depending on the speed with which the OEX climbs, if it does climb, they could have cycled down toward 564 by the time the OEX climbs to that level.

  Jonathan Levinson   1/14/200,  9:07:55 AM
8 minutes until the industrial production/capacity utilization data.

  Jonathan Levinson   1/14/200,  9:01:42 AM
Bonds have reversed their earlier gains, TNX now up .6 bps at 4.197% after testing 4.18% support.

  Linda Piazza   1/14/200,  8:50:53 AM
After dipping slightly toward the flat-line level pre-PPI release, futures are higher again. If the cash markets follow through, that may mean an early bounce for the OEX. Let's look at how internals set up, but if they're bearish, bears might look for a bounce-and-rollover bearish entry below 564 or perhaps 566, depending on how internals look. A move higher than that suggests that the OEX could be beginning the bounce into a new right shoulder from an ascending neckline, with this one possible scenario detailed in my post last night. For those who didn't get an opportunity to read that post, I've included it below since it had a couple of charts you might want to see.

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.

  Jonathan Levinson   1/14/200,  8:40:27 AM
Bonds have strengthened following the 8:30 data, TNX -2.2 bps at 4.164%. Gold is up slightly, -3.1 to 422.30. QQQQ is up .10 at 38.17.

  Jonathan Levinson   1/14/200,  8:36:05 AM
December PPI -.7%, core PPI +.1%

Nov. Business Inventories +1%

  Jonathan Levinson   1/14/200,  8:02:06 AM
Equities are higher, ES trading 1180.25, NQ 1555, YM 10524 and QQQQ +.11 to 48.18. Gold is down 3.8 to 421.6, silver -.052 to 6.695, ten year notes up .078 to 112.078 and crude oil is down .05 to 48.

We await the 8:30 release of Nov. Business Inventories, est. .6%, the Dec. PPI and Core PPI, est. -.2% and .2%; at 9:15, we get industrial production and capacity utilization, est. .5% and 78.9% respectively.

  Linda Piazza   1/14/200,  7:27:31 AM
Good morning. Ahead of and after a better-than-expected machinery orders number, the Nikkei climbed, closing higher by 0.71%. Other Asian markets turned in mixed performances, with the Kospi and some others benefiting from not-as-bad-as-expected numbers from Samsung. Many European markets post gains, with the FTSE 100, CAC 40 and DAX all starting off negative and then gaining. Our futures have shown an upward trajectory all night, but that could either accelerate or reverse after the 8:30 economic releases. As of 7:06 EST, gold had fallen $3.40, and crude, $0.09. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei opened in the red, dipped to its low of the morning and then began climbing ahead of the afternoon release of Japanese machinery orders. That number serves as a leading indicator of capital spending among corporations. When released, that number showed a much-higher-than-expected increase of 19.9% from the previous month's number, pushing the Nikkei to its daily high just under 11,500. Repelled by that resistance, the Nikkei fell back off the high of the day, but still closed up by 80.17 points or 0.71%, at 11,438.39.

Other figures showed December's prices of corporate goods rising 1.9% over the year ago period due to higher raw materials. December's industrial outpost rose 1.7% month-over-month. With the dollar firming against the yen, automakers gained. Banks did, too, but techs were mixed. Steelmaker Nippon Steel Company declined after a newspaper report saying that miner Rio Tinto had upped prices for iron ore supplies, although some Asian steelmakers did post gains.

Other Asian markets turned in mixed performances. The Taiwan Weighted gained 0.61%. South Korea's Samsung reported that profit fell due to a drop in prices of mobile phones, flat-panel displays and chips. A drop had been expected, with Samsung's result actually better than the expected decline in profit. Samsung gained 6.2%, helping to propel the Kospi to a 2.21% gain. Singapore's Straits Times lost 0.30%, and Hong Kong's Hang Seng declined 0.58%. China's Shanghai Composite fell 0.85%.

Many European markets gain, but the FTSE 100, CAC 40 and DAX all started out in negative territory and climbed through the first hour of trading. Some attributed the negative beginnings to yesterday's rise in crude prices, but ECB member Weber had also said yesterday that rates might need to be increased if the eurozone economy grew more quickly than expected, perhaps sounding a slightly different note than ECB President Trichet had yesterday. In Germany, car registrations rose 6.5% in December, and many automakers posted gains by early in the trading sessions, and automakers helped bring the indices off their lows of the day.

CNBC and print commentators noted a warning by German electronic component manufacturer Epcos, with some believing this warning might weigh on the tech sector. Investors dumped the shares, but some tech-related stocks benefited from Samsung's better-than-expected results. Nokia was one. JP Morgan thought Samsung's results would be a positive for ASM International and ASML. Goldman Sachs also spoke in favor of ASML, and the stock gained in early trading. Morgan Stanley was active among European telecommunications companies, downgrading telecom Belgacom to an underweight rating and upgrading KPM to an overweight rating. In stock-specific news, Roche received approval for Avastin from the European Commission, with the stock benefiting in early trading. Perhaps of interest to some U.S. investors, Hard Rock Cafe owner Rank Group (RANKY) received a downgrade to an underweight rating from Morgan Stanley.

As of 7:25 EST, the FTSE 100 posted gains of 18.40 points or 0.38%, to trade at 4,818.70. The CAC 40 had gained 14.38 points or 0.38%, to trade at 3,848.49. The DAX had gained 12.10 points or 0.29%, to trade at 4,224.24.

  Tab Gilles   1/13/200,  1:46:16 AM
On Monday's 11:46AM post I eluded to crude oil price rising nearterm with the Iraqi election, sabotage and OPEC meeting this month. I also stated that a descending channel formation maybe forming on MUR ... Murphy Oil, with $85 at the upper end. Link

I also posted on 1/4/05 that the 150-ema on Murphy Oil had presented an opportune time to enter a position and a break over $80 to add to that position. Link

The $WTIC may have further upside still. Link

XLE ... has been perforing well,I had pointed out that it was ready to breakout and test recent December high. It may have further upside, but may see a pullback here. Link Link

The Jan '06 $35 Leap Call is up significantly since I presented this chart back on 1/4 10:42:30 AM post on MM. Link

Currently WHAAI


One further note $NASI continues decline thus I see further selling in the Nasdaq


  Jeff Bailey   1/13/200,  10:45:21 PM
Dow Diamonds (DIA) ... today's most active options at this Link

Observation: 107 and 105 were active strike. Split the two and I get $106.00

Observation: Only because I've profiled the selling of Feb. $104 naked call, if I take $105 - $0.97, I would come up with $104.03. Selling of Jan. $105 call? Can't be sure, but VIX.X 12.84 +2.22% was up today.

Now, let's sort by January open interest and see if we can't see where some "risk" of profit is at for the BUYERS of the various options, where the options market maker might be able to inflict some "Max Pain" by next Friday without harming his/her own book (assume market maker is short all of the options listed) .....

DIA January options sorted by Wednesday's open interest at this Link

Manipulation analysis : If the DIA were manipulated lower today, then bulk of risk right now would be for the OWNERS of the $107 and $106 puts. The OWNERS of the $105 calls may have felt some "Max Pain" today, unless they were determined buyers to begin with. The OWNERS of the $106 calls aren't happy and say "oh darned", but only 512 gave up hope. How can market maker influence them further to cash out and call it quits? Juke the DIA further lower toward $104?

Maybe, but remember what might happen to the option maker's book if he/she pushes the DIA toward $104. What happens to his/her book with the $107 and $106 puts, assuming the market maker is short (market particpants are LONG those options).

If YOU were the market maker of the DIA Options, would you want to push the DIA further lower to, or below $104? If you do that, what happens to YOUR book at the Jan. $104 puts? You're just pushing your book further into negative territory aren't you?

My thinking is, anything close to DIA $104 is going to get snapped up back toward $106. If I were an options market maker, I'd like to get a lower close near $104 tomorrow, let 3-day's of time premium erode (Monday is a holiday) then inflict some "Max Pain" on those $106 and $107 put holders next week.

MMM traded rather strong again today, up to $85.50, then the "bottom falls out" to close below Tuesday's low? MMM is the 4th-largest weighted stock in the INDU/DIA.

  OI Technical Staff   1/13/200,  9:02:47 PM
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