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  Linda Piazza   1/18/200,  9:03:30 PM
Tuesday, the OEX looked weak in earliest trading, but not weak enough. I worried that it might be preparing for a climb into a right shoulder for this formation: Link I had been warning of that possibility since Thursday evening, and it came to pass Tuesday. About mid-morning, the OEX gapped above the five-minute 100/130-ema's. It crossed the 50-dma and headed up toward the 30-dma, where it was finally stopped, at least temporarily. Symmetry suggests that the OEX might now chop around for a day or two at the top of the shoulder before bulls or bears win supremacy and either invalidate the formation or confirm it.

The H&S formation that was confirmed last week has disintegrated a bit, or at least the neckline has, suggesting that bears haven't yet exhausted willing buyers. I began warning that this failure of bears to follow through was troublesome. Tuesday's move brought the OEX back into the broadening formation it's been forming throughout most of January, questioning whether the downside breakout was a trap: Link You know what trading it like inside a broadening formation. It's usually choppy and unpredictable. While the OEX's candles are inside that formation, the possibility still exists that the OEX forms a right shoulder for the bigger H&S that's been forming since early December. On a breakout above the top trendline of the broadening formation, we can consider that right-shoulder scenario undermined. I'm watching daily 9-period RSI for clues. Since the middle of November, while that larger H&S was perhaps forming, the RSI has begun forming a descending trendline off lower highs. If the RSI leads by punching up through that trendline or punches through it at the same time that the OEX punches through the upper boundary of the formation, the breakout appears more valid.

For now, I'm worried about the possibility of another day or two of choppy trading conditions before bulls and bears finally sort it all out. We'll look at what develops overnight.

 
 
  Jim Brown   1/18/200,  8:52:30 PM
Important Earnings Wednesday Morning

BK. est +0.48 - ETH est +0.67 - LUV. est +0.08
LU. est +0.04 - HIB est +0.50 - EXAR est +0.02
WB. est +0.98 - JPM est +0.68 - NTRS est +0.58
APH est +0.49 - MEL est +0.44 - PMTC est +0.05
AMR est -3.10 - PFE est +0.59 - SAFC est +1.30
CIT est +0.90 - RDC est +0.18 - SYMC est +0.22
CVG est +0.25 - SLM est +0.57

 
 
  Jim Brown   1/18/200,  8:14:15 PM
Speech by Governor Susan Schmidt Bies
The Economy and Challenges in Retirement Savings Link

 
 
  Jeff Bailey   1/18/200,  6:11:32 PM
S&P 500 Index (SPX.X) 1,195.98 +0.96% .... daily interval bar chart with updated WEEKLY/MONTHLY Pivot retracement at this Link

Nasty-looking POTENTIAL head/shoulder top, where bears could get their heads handed to them much above 1,201. Alert to squeeze just ahead at 1,197.

VIX.X 12.47 +0.32%, and while one can never be sure, most active SPX Sep. 700 puts (30,000:35,017) for $0.50 might have been a decoy to hide 1,200 call and 1,200 put buying. Two day's until expiration.

 
 
  Jeff Bailey   1/18/200,  5:55:06 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   1/18/200,  4:41:03 PM
Closing Internals at this Link

It would take an 82% reading for the NYSE 5-day NH/NL ratio to reverse up 3 boxes on its PnF chart. It would take a 68% reading for the NASDAQ 5-day NH/NL ratio to reverse up 3 boxes on is PnF chart.

 
 
  Jim Brown   1/18/200,  4:30:29 PM
Alert - YHOO earnings = +0.13, est +0.11 BEAT
Guiding just slightly higher on revenue. Not what traders are probably expecting.

 
 
  Jeff Bailey   1/18/200,  4:21:16 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Swing trade put two (2) Murphy Oil (MUR) with the MUR Feb. $80 puts (MRU-NP) at the offer of $1.90, with target of $76.

 
 
  Jim Brown   1/18/200,  4:16:04 PM
FSL earnings = +0.17, est -0.01 BIG BEAT

 
 
  Jim Brown   1/18/200,  4:15:47 PM
Alert - JNPR earnings = +0.15, est +0.14 BEAT

 
 
  Jim Brown   1/18/200,  4:15:27 PM
AMD earnings = -0.08, est +0.08 MISS
EX items now hearing +0.05 cents after -13 cent charge for debt retirement.

 
 
  Jeff Bailey   1/18/200,  4:11:55 PM
Sell Program Premium .... DIA $106.18 , SPY $119.57

 
 
  Jim Brown   1/18/200,  4:09:11 PM
RYL earnings = +2.17, est +2.08
Raised guidance for 2005

 
 
  Jim Brown   1/18/200,  4:07:43 PM
CHKP earnings = +0.30, est +0.29
Beat on EPS and REV

 
 
  Jim Brown   1/18/200,  4:06:26 PM
Alert - IBM earnings = +1.81, est +1.76

 
 
  Jim Brown   1/18/200,  4:05:47 PM
Alert - MOT earnings = +0.28, est +0.24 BEAT
Guiding inline

 
 
  Jim Brown   1/18/200,  4:05:23 PM
RMBS earnings = +0.06, est +0.08
Missed

 
 
  Jim Brown   1/18/200,  4:01:49 PM
STX earnings = +0.29, est +0.24
beat on EPS and REV, guided higher on EPS and REV for Q1

 
 
  Linda Piazza   1/18/200,  3:57:58 PM
The RLX and OEX both appear to be headed for a close near their 30-sma's. Also of interest to OEX traders is the BIX, producing a tall white candle today, but not yet testing its 30-sma, so trailing the other two indices on this basis. I'm still worried about the possibility that the OEX is going to chop around for at least a day or two before it decides whether to head higher and invalidate the potential H&S building now, a new and longer-in-the-making one, or roll down and confirm it. If so, that chop isn't going to do options positions any good.

 
 
  Jonathan Levinson   1/18/200,  3:57:29 PM
Remember the bearish divegence in the 30 min cycle? Well, the 300 min stochastic finally caught up to the price, and so the divergence is no longer. The stochastic is as overbought as it's been in a month, however, and so we can start looking for a rollover below 38.80. If 38.80 breaks, the bulls will have a trending upphase, which will should line up with a new upphase for the daily cycle. More likely, cycle-wise, would be a pullback to bounce from a higher low, preferably at or above 38.45- but then, tonight's earnings announcements could scramble the picture too.

 
 
  Linda Piazza   1/18/200,  3:54:39 PM
The OEX shows Keltner style bearish divergence on each new high today. Of course, you can see for yourselves how much good this did the bears.

 
 
  Linda Piazza   1/18/200,  3:51:09 PM
Chart check: Every once in a while, I like to review old charts to see if the chart evidence held to be true. On 1/10, I believe, a reader wrote asking if KMRT had received enough of a drubbing and might be ready for a bounce. Here's the chart I posted along with the original annotations from that day: Link

So far, the chart evidence holds true. KMRT did bounce where expected, but the bounce has so far been as tepid as expected, too. My source says that KMRT won't report again until the middle of March, but it could be impacted by earnings reports from other retailers as earnings season heats up. It's a possibility that KMRT could rise up to test the converging 30- and 50-sma's, but there's not strong evidence as to whether it will do so or be able to get through those averages if it does. Right now, it's not a great bet either direction, I don't think.

 
 
  Subscriptions   1/18/200,  3:49:51 PM
Jeff,

Would you say I am looking at the 3M numbers through my "conspiracy theory" glasses.

With a 6.3% weighting (the second heaviest on the DOW), it is down quite a bit after earnings that really showed little reason to drop the stock.

THE CONSPIRACY THEORY: DIA needs to finish "max pain" 106. It is already at 106... if 3M were in the green, the DJX/DIA would be up huge today... so to keep the DIA/DJX in check, let the other players run, but keep 3M down enough to keep the "max pain" 106 inline...

Going on this "theory", with the DJX/DIA already at 106+, I would assume that IBM would see little to no movement tomorrow, regardless of their earnings tonight, because if they do, the DJX/DIA move over 107 and well above the "max pain".

Going on these crazy "theories" perhaps I should short IBM at the close????

Same thoughts crossed my mind at 12:00 PM EST regarding MMM trade. Quick note on IBM is that as of Thursday evening, its January "Max Pain" theory in increments of $5.00 was $90.00. IBM $94.87 +0.81% (intra-day range has been $93.62-$95.21)

See related posts at 12:38:24 and 02:27:02

 
 
  Jeff Bailey   1/18/200,  3:46:36 PM
Disk Drives (DDX.X) 120.73 +2.29% ... take over today's "sector winner."

SanDisk (SNDK) $25.10 +0.72% ....

 
 
  Jonathan Levinson   1/18/200,  3:33:24 PM
A move either above 38.80 or below 38.60 should be directional. The middle of this range appears to be good for nothing other than generating gray hair.

 
 
  Linda Piazza   1/18/200,  3:30:43 PM
The TRAN hasn't yet confirmed the large inverse H&S on the 30-minute chart but still hasn't invalidated it, either. The five-minute chart shows that the right shoulder itself is forming an inverse H&S, but I wouldn't start feeling bullish on the confirmation of the right-shoulder version alone, as that wouldn't yet confirm the big one, with that one requiring a push above 3633.60.

 
 
  Linda Piazza   1/18/200,  3:28:03 PM
No new high as yet, but the OEX hasn't stopped trying yet, either. The five-minute 21-ema is at 568.33 and the 100/130-ema's are at 566.70 and 566.33, respectively.

 
 
  Jeff Bailey   1/18/200,  3:27:18 PM
February Crude Oil futures (cl05g) settled unchanged at $48.38. (Per NYMEX)

Feb. Heating Oil (ho05g) settled down $0.007, or -0.53% at $1.3438. (WEEKLY Pivot Levels $1.220, $1.287, Piv= $1.325, $1.392, $1.430.)

Feb. Unleaded Gas (hu05g) settled down $0.0142, or -1.11% at $1.2619.

Oil's settlement still above WEEKLY Pivot and conventional 50%, so holds a bullish bias in my opinion. (see 1:01:51 post)

 
 
  Linda Piazza   1/18/200,  3:17:42 PM
The OEX is crawling up along the five-minute 21-ema. At shortly after 1:00 this afternoon, the OEX bounced from this average, but the last downdraft took the OEX back down and it didn't rebound immediately. Bulls want to see it do so . . . beginning as I type, but needs to be confirmed by a higher high or there's the risk of another H&S formation.

 
 
  Jeff Bailey   1/18/200,  3:12:23 PM
03:00 Internals at this Link

 
 
  Linda Piazza   1/18/200,  3:11:03 PM
The OEX is moving up again toward that 568.80 Keltner resistance. It's not looking quite as firm as it did earlier.

 
 
  Jonathan Levinson   1/18/200,  3:10:55 PM
QQQQ just backed away from the ledge again. Until 38.60-.62 breaks, these pullbacks look more like a bear trap than a breakdown to me.

 
 
  Linda Piazza   1/18/200,  3:02:46 PM
The RLX broke above the top of its recent consolidation zone and charged up to its converging 30- and 50-sma's. Because of the retailers shared between the RLX and the OEX, OEX bulls want to see the RLX above those averages while OEX bears want to see it roll down beneath them.

 
 
  Jeff Bailey   1/18/200,  3:02:25 PM
03:00 Market Watch at this Link

 
 
  Linda Piazza   1/18/200,  2:56:23 PM
Anyone taken a look at the BIX today? Huge gains.

 
 
  Linda Piazza   1/18/200,  2:54:08 PM
For reference, the OEX's five-minute 100/130-ema's are at 566.44 and 566.09, respectively.

 
 
  Linda Piazza   1/18/200,  2:51:41 PM
The OEX did fall beneath the Keltner resistance on the three-minute chart, and below the confirmation level for the H&S's visible on that chart. Keltner support attempts to converge near 556.91-557.41. Keltner resistance is firming up from 568.26-568.76.

 
 
  Jonathan Levinson   1/18/200,  2:45:23 PM
Crude oil closed higher by .075 at 48.45 after hitting a high of 49.425.

 
 
  Jonathan Levinson   1/18/200,  2:43:39 PM
QQQQ's back below 38.70. Bears want to see a break of the previous low with a move below 38.62 here. Below 38.60, the 30 min cycle upphase should stall.

 
 
  Linda Piazza   1/18/200,  2:36:59 PM
The OEX keeps trying to form H&S's at the top of its climb on the three-minute charts. It hasn't confirmed them, but a decline beneath 568.20 confirms one or maybe even two, since the right shoulder of one looks like a H&S in its own right. These are small formations with small downside targets, perhaps down to 566.75 for the largest of the two. Keltner charts suggest that on a sustained fall beneath 568.20, the OEX is vulnerable to 567.40 or 566.73, so there's some congruence with downside targets. Remember that it's possible now that the OEX might chop around for several days at the current level, up to 571-572, forming a right shoulder for an even larger H&S, forming since early November, visible on the chart linked to my 19:16 post. The danger in investing too strongly in that scenario is not only the danger that the OEX will shoot higher. It's also the danger that this is it, the top of the right shoulder and that all who can see the light (or the shoulder) will decide to get out and the OEX will crater. Right now, I give a tentative nod to the chop-around-for-a-few-days scenario, though.

 
 
  Jeff Bailey   1/18/200,  2:36:43 PM
Oil Service Index (OSX.X) 125.52 -0.07% .... drips red. Option action matched at 5,000 contracts for the Feb. 125 puts and Feb. 120 puts.

I'm thinking a "hedgy" might be a near-term seller of the 125, but long the 120 puts, rake the premium, but set to do some shorting if need be on Wednesday.

Benchmark the Feb. 125 puts $3.60 with 5,001 traded, OI 4,186.

Feb. 120 puts $1.85 wih 5,000 traded, OI 10,342.

 
 
  Jeff Bailey   1/18/200,  2:31:05 PM
Buy Program Premium .... SPX 1,194.83 , QQQQ $38.78, DIA $106.17

 
 
  Jonathan Levinson   1/18/200,  2:30:16 PM
Session highs across the board here.

 
 
  Jeff Bailey   1/18/200,  2:27:02 PM
3M (MMM) $82.05 -2.28% .... notably weak after reporting quarterly earnings.

Only "negatives" I find from call is company saying it will begin expensing stock options beginning July 1, 2005, which was not included in the company's 2005 full-year forecast to earn between $4.15-$4.25 per share.

In October, MMM did repatriate about $800 million in overseas profits because of a favorable change in U.S. tax law. However, a financial decision to possibly repatriate an additional $800-$900 million in earnings has been put off because of an IRS ruling last week that left the tax benefit unclear.

 
 
  Jonathan Levinson   1/18/200,  2:27:02 PM
Crude oil is currently down .075 at 48.30, recovering part of its earlier losses to a low of 47.675.

 
 
  Linda Piazza   1/18/200,  2:21:34 PM
The TRAN hasn't yet completed and confirmed that inverse H&S at the bottom of its decline, visible on the 30-minute chart, but neither has it invalidated the formation. It's still in an appropriate right-shoulder level.

 
 
  Linda Piazza   1/18/200,  2:20:35 PM
It's going to be iffy as to whether the OEX closes the current 60-minute period above the 60-minute Keltner mid-line resistance currently at 568.22. The OEX is at 568.46 as I type.

 
 
  Jeff Bailey   1/18/200,  2:20:10 PM
Taser Intl. (TASR) $1959 -0.25% ... slips red and afternoon low.

 
 
  Jonathan Levinson   1/18/200,  2:15:44 PM
QQQQ poked higher to 38.77 and is back to 38.72. This upward creep has been progressing for hours, confirming that this is significant resistance being attacked. 38.82 continues to hold as the 30 and 60 min channel tops, but I see no way in which a close at or above current levels wouldn't constitute a victory for bulls on a daily cycle basis. The daily cycle isn't yet on buy signals, but the downphase is stalled in oversold territory.

 
 
  Jeff Bailey   1/18/200,  2:13:48 PM
02:00 Internals at this Link

 
 
  James Brown   1/18/200,  2:12:05 PM
Homebuilder Beazer Homes (BZH) continues to bounce and shares are nearing resistance at the $150 level. Its MACD just produced a new buy signal. Watch for earnings around Jan. 27th.

 
 
  Linda Piazza   1/18/200,  2:11:33 PM
One note: The SOX's 100-ema is at 406.57, with the SOX at 405.77. I haven't found a particular relevance to the SOX's trading pattern and this moving average over the long term, although there appears to be at certain points, such as during late October through mid-November.

 
 
  James Brown   1/18/200,  2:09:35 PM
Bob Pisani on CNBC is talking about brokerage stocks doing better. I notice that Goldman Sachs (GS) is bouncing and shares have traded back above the $105 level and its 50-dma. Watch for a breakout over resistance at $106.00 as a potential bullish entry point.

 
 
  Jeff Bailey   1/18/200,  2:02:20 PM
02:00 Market Watch at this Link

 
 
  Linda Piazza   1/18/200,  1:58:19 PM
Take a look at this OEX 120-minute chart? Link Remember the broadening formation I had been watching on the 60-minute chart? Here's another view.

 
 
  Jeff Bailey   1/18/200,  1:57:43 PM
Offshore Logistics (OLG) $31.03 -3.81% ... guides third quarter (December) lower saying it now sees EPS between $0.45-$0.51 versus consensus of $0.56. Blames reduction in flight activity and higher costs in the company's Gulf of Mexico operations as primary reasons for lower than expected results.

 
 
  Jane Fox   1/18/200,  1:57:00 PM
At 8:30EST tomorrow the Bureau of Labor Statistic's releases its Consumer Price Index, a market mover because of its inflation implications. Separately, but at the same time, the Commerce Department reports its December numbers on new home construction, possibly another market mover because it is perceived as the leading indicator of the housing market's health.

 
 
  Jim Brown   1/18/200,  1:51:36 PM
Important Earnings after the close

AMD est +0.08
FSL est -0.01
IBM est +1.76
MOT est +0.24
RYL est +2.08
STX est +0.24
TER est +0.02
CHKP est +0.29
JNPR est +0.14
LLTC est +0.32
RMBS est +0.08
YHOO est +0.11

 
 
  Jonathan Levinson   1/18/200,  1:50:35 PM
QQQQ is one cent below the session high. 30 and 60 min resistance line up at 38.82.

 
 
  Linda Piazza   1/18/200,  1:46:58 PM
The OEX continues to challenge the 60-minute Keltner resistance currently at 568.21. Bulls want to see a 60-minute candle close above this Keltner line. Next resistance on this chart is at 571.15.

 
 
  Linda Piazza   1/18/200,  1:42:49 PM
The TRAN challenged 3600 this morning, but didn't get all that close. Its high of the day has been 3593.99, and it's currently at 3579.89. The TRAN does have a rough sort of inverse H&S at the bottom of its descent, visible on the 30-minute chart. If that's a viable formation, it's in the process of forming the right shoulder now and the neckline would currently cross at about 3596.00. The TRAN 3600 level seems an important one for short-term guidance anyway for this index. Because the TRAN sometimes leads the Dow and two S&P's, watching to see whether this formation is confirmed or invalidated would be a useful tool. Invalidation would come on a fall much below 3550.

 
 
  Linda Piazza   1/18/200,  1:38:25 PM
The OEX did manage to claw its way on top of the gathering Keltner resistance on the three-minute chart rather than sinking below it: a sign of short-term strength at least. That foothold above those gathering Keltner lines looks somewhat tentative, however.

 
 
  Linda Piazza   1/18/200,  1:37:12 PM
Doing a quick check of other indices, I see that the SOX still moves higher on the daily chart in what might be a bear flag formation--it's a right series of higher highs and higher lows after a steep decline, so it fits the bill. So did this morning's five-minute climb on the OEX, though, and see what happened there? So, although we can recognize the shape of the SOX's climb as a likely bear flag climbing into resistance and be forewarned to watch for a potential rollover, we shouldn't act on that belief until we see evidence that it's being fulfilled. With a number of SOX components, including KLAC and XLNX, reporting later in the week, the SOX might be particularly volatile and its behavior hard to predict.

 
 
  Jonathan Levinson   1/18/200,  1:37:03 PM
The 30 min cycle upphase continues for QQQQ, with the oscillators still pointing north but holding at their lower high. Bulls need to break 38.75 to avoid the bearish divergent 30 min downphase that will otherwise follow. A short cycle downphase has kicked off, so far corrective, and the 30 min cycle channel has support now up to 38.53. Below 38.60, that upphase will stall.

 
 
  Jeff Bailey   1/18/200,  1:36:08 PM
01:00 Internals at this Link

 
 
  Linda Piazza   1/18/200,  1:18:48 PM
I'm back from my appointment. What's obvious is that the OEX did not roll over beneath the 564-566 level, and did break out of the descending regression channel to the upside. In fact, a study of the charts shows the OEX gapping above its five-minute 100/130-ema's, a running gap that was fortunately predicted by the always climbing advdec line. In my 10:22 post before leaving, I had warned that bears would not "necessarily want to bet on a rollover beneath the five-minute 100/130-ema's if the advdec line climbs all day."

This brings that possibility of a climb into a right shoulder for a new and even bigger H&S, with that right shoulder at 570-571 and maybe as high at 572 since the neckline slants, as discussed late last week, this weekend, and this morning, with the neckline an ascending one as depicted in the chart linked to my 19:16 post last night. If the OEX is going to form such a right shoulder, that means that we could be in for a tough week. Most gains toward the top of that shoulder have already been realized this morning. Symmetry suggests that the OEX might then linger for several days at the top of the shoulder, chopping around between support and resistance, before either rounding down into the right shoulder or else rising high enough to invalidate the formation.

As I type, the OEX is jammed against 60-minute Keltner resistance at 568.21, with this resistance on a 60-minute closing basis. It looks as if it might be time to pause or retreat, with support currently trying to firm between 565.50-566.00. On the three-minute chart, it looks as if that drop could come at any time unless the OEX can pull itself up quickly and get above the massing three-minute resistance.

It's always possible this was "it." The advdec line now flattens. However, I haven't been back and watching the ebb and flow long enough to tell, and symmetry would suggest otherwise.

 
 
  Jonathan Levinson   1/18/200,  1:09:13 PM
Stepping away for 10 minutes.

 
 
  Jeff Bailey   1/18/200,  1:06:43 PM
01:00 Market Watch at this Link

 
 
  Jeff Bailey   1/18/200,  1:01:51 PM
February Crude Oil (cl05g) $47.90 -0.99% (30-minute delayed) ... updated Daily Interval bar chart, with WEEKLY Pivot levels noted. Link

Oil BEARS would want to see a daily settlement below $47.37 in my opinion.

 
 
  Tab Gilles   1/18/200,  12:57:31 PM
Be out rest of the day...update tonight.

 
 
  Tab Gilles   1/18/200,  12:55:16 PM
MUR setting stop @ $81, upside p/t $85.

Link

 
 
  Jeff Bailey   1/18/200,  12:50:01 PM
Exxon Mobil (XOM) $51.08 +0.01% .... has been quiet most of session. High = $51.29 and Low = $50.90 at the opening ticks.

 
 
  Jonathan Levinson   1/18/200,  12:49:30 PM
Gold remains 70 cents off its intraday high at 423.60 currently, while the miners are strong today, HUI +1.33% at 204.89 and XAU +.94% at 94.12. Bonds have recovered some of their losses, TNX down to a 1.4 bp gain at 4.23% currently.

 
 
  Tab Gilles   1/18/200,  12:46:02 PM
$BIX; Bank Sector ...bouncing off of it's ascending channel. Any break below trend would be bearish.

Link

 
 
  Jeff Bailey   1/18/200,  12:44:29 PM
Bearish swing trade put alert .... for Murphy Oil (MUR) $81.96 -0.12%. Link

Taking two (2) of the MUR Feb $80 puts (MUR-NP) at the offer of $1.90. Target $76.

Testing top end of downward regression and bearish resistance trend, with Feb. Crude Futures (cl05g) $48.06 -0.66% (30-minute delayed) finding selling after morning bid into "zone of resistance" from $49.29-$50.27.

CBOE Oil Index (OIX.X) 403.11 +0.27%

 
 
  James Brown   1/18/200,  12:42:45 PM
Google (GOOG) is still rebounding and shares are testing resistance in the 202-205 range. The stock appears to have produced a small cup-and-handle formation. Technical traders may want to consider bullish positions on a move past today's high. Watch for earnings on Feb. 1st.

 
 
  James Brown   1/18/200,  12:40:52 PM
General Motors (GM) continues to sink one day before its earnings report. Shares are now hitting new one-year lows.

 
 
  Jonathan Levinson   1/18/200,  12:40:09 PM
QQQQ continues to hover just off the session highs, with a current high of 38.75. The 30 min cycle channel is up to 38.82, with support now 38.50. The short cycle oscillators are maxxed out in overbought territory, while the 30 min oscillators have turned up, but remain at a much lower high so far. If the bounce fails below 38.75, the lower 30 min cycle high would complete a steep bearish divergence, which could result in a drop as steep as this morning's rise was. First sign of trouble for bulls with me a move below 38.60, below which the 30 min cycle upphase will stall. Key confluence this morning was at 38.45.

 
 
  Jeff Bailey   1/18/200,  12:38:24 PM
Dow Diamonds (DIA) $105.97 +0.50% .... screen capture of DIA option chain just minutes ago at this Link . Has me thinking $105.50-$106.00 type of January "Max Pain"

Session low was exactly $105.00.

 
 
  Tab Gilles   1/18/200,  12:26:08 PM
Well... the cold weather is back! Did you realy beleive that 50 degrees would last? Oil has climbed to over $49.00 per barrel today, can $50 or higher be far off?. The Wall Street Journal reports crude has closed over $40.00 per barrel every day for the past 6 months. Despite oil being over $40.00 for the last 6 months, we've not seen demand deteriorate. Most analysts one year ago would have said that $40.00 would have stopped global economic growth, but that has not happened. And according to Bloomberg News, the world's largest producer Saudi Arabia has sold a record $106 billion of fuel and that's 54% higher than the last 5 years.

The IEA... International Energy Agency says they are worried about slower oil demand growth. Today's Financial Times reports the IEA expects oil demand growth to slow in 2005 after surging 3.3% in 2004 and that is the fastest rate of demand growth since 1976. And that is with oil prices being 30% higher than in 2003. They also report that growth of oil supply fell below expectations with crude produced outside of OPEC rising only 1.4 million barrels per day versus the forecast of 1.9 million barrels per day. Demand in 2004 outstripped the IEA forecast and supply fell short of their forecasts as well. They overestimated supply and underestimated demand and thus we had higher prices. Now if supply falls short again this year, oil prices could easily hitnew highs.

The International Energy Agency reported a huge increase in Chinese demand in November. After slowing a bit in previous months China demand soared to 6.72 million barrels of oil per day and that set a new record. For the year China demand was up 16%. And that demand for energy has China racing to secure supply. The Wall Street Journal reports that BP, Shell and a small Untied Kingdom consulting firm have been selected to conduct technical studies of Iraq's 2 largest oil fields. This will provide China with a toe hold in Iraq's oil industry. These contracts are the most significant so far of the handful of technical and service agreements awarded by the Iraqi Oil Ministry.

 
 
  James Brown   1/18/200,  12:21:04 PM
I would suggest caution with the ADBE put play. Shares broke support this morning and fell a couple of points very quickly but just as quickly the market is buying the dip.

 
 
  James Brown   1/18/200,  12:19:17 PM
Texas Industries (TXI), another OI call play, is adding more than one percent and nearing our short-term target in the $64.50-65.00 region. Short-term traders may want to consider taking profits now.

 
 
  James Brown   1/18/200,  12:17:48 PM
Dade Behring Holdings (DADE) is adding 2.5% to $58.15 and breaking out through the top of its 3 1/2 month trading range. RBC Capital Markets reiterated their "out perform" rating on DADE this morning. This could be a bullish entry point.

 
 
  James Brown   1/18/200,  12:15:48 PM
OI call play Reynolds American (RAI) is breaking out over resistance in the $80.00-80.50 region with a 1.2% gain today. The MACD just produced a new buy signal. Larger rival Altria Group (MO) is also hitting new highs.

 
 
  James Brown   1/18/200,  12:14:11 PM
OI call play PHM(+0.7%) is hitting a new all-time high over the $66 level.

 
 
  James Brown   1/18/200,  12:12:59 PM
OI call play Frontline Ltd (FRO) is up another 1.3% and breaking out over its 100-dma. Shares are nearing our suggested exit/profit range in the $50-52 region. Short-term traders may want to consider taking some money off the table now.

 
 
  Jonathan Levinson   1/18/200,  12:11:38 PM
QQQQ surged to 38.74 as I was typing, currently hovering 2 cents below that high of the day.

 
 
  James Brown   1/18/200,  12:11:35 PM
New OI call play Cummins Inc (CMI) is rebounding from an early morning dip toward support at the $75 level and its 100-dma. Shares are up 0.9% and pushing past its 10-dma.

 
 
  Jeff Bailey   1/18/200,  12:11:16 PM
12:00 Internals at this Link

 
 
  Jonathan Levinson   1/18/200,  12:10:50 PM
Crude oil is in negative territory, currently down 42.5 cents at 47.95.

 
 
  James Brown   1/18/200,  12:09:16 PM
OI call play ARLP continues to rally with another 1.2% gain. Shares are nearing potential resistance in the $74.50-75.00 level and short-term traders may want to consider taking some profits soon.

 
 
  James Brown   1/18/200,  12:07:14 PM
Corning Inc (GLW) is breaking out today with a 2.2% rally pushing shares through resistance at the $12.00 mark.

 
 
  James Brown   1/18/200,  12:05:51 PM
Bank of America reiterated their "buy" rating on Amgen (AMGN) this morning but the current OI call play is only up 0.47% to $64.11 and under performing the 1.4% rally in the BTK biotech index.

 
 
  Jeff Bailey   1/18/200,  12:02:04 PM
12:00 Market Watch at this Link

 
 
  Jonathan Levinson   1/18/200,  11:55:30 AM
QQQQ made a nominally higher high at 38.70, but is back to the 38.66 level now. 30 min channel resistance is holding at 38.75.

 
 
  Jeff Bailey   1/18/200,  11:54:27 AM
VIX.X 12.42 -0.08% ... session lows.

 
 
  Tab Gilles   1/18/200,  11:51:26 AM
On Thursday (1/13 1:46 AM)I posted several charts on MUR, XLE & WHAAI. Updating those charts. XLE is hitting the $36.85 level on the daily chart.

Link

The 30 minute chart has what appears to be a bearish divergence.

Link

On 1/4 10:42 AM post I recommended entering the Jan '06 $35 LEAP at $3.20, currently now at $4.10. Taking some money off the table here wouldn't be a bad idea, up +25%.

$WTIC after opening up today over $49, is currently at $38.60, or the 50% Fib level from Oct/Dec retracement.

Link

Murphy Oil (MUR) ...still continuing it's run, targeting $85.

Link

Bounce in the $TRAN today, $INDU up. But, there could be more downside ahead.

Link

 
 
  Jeff Bailey   1/18/200,  11:47:17 AM
Cendant (CD) $22.45 +1.99% Link ... session highs and set to test rising 50-day SMA ($22.58) and starting to curl lower 21-day SMA ($22.61).

MACD -0.032 just under zero. Bulls need strength above $23.50 to get the kick higher for test of $25.00 with momentum building to upside. $22.00 finds strong support.

 
 
  Jonathan Levinson   1/18/200,  11:43:29 AM
Current session high 38.69 QQQQ, with 30 min channel resistance moving higher to 38.75.

 
 
  Jeff Bailey   1/18/200,  11:40:46 AM
Green accross the U.S. Market Watch ... Brokers +1.62% now sector leader with Airline +1.56% close second.

 
 
  Jonathan Levinson   1/18/200,  11:38:14 AM
Rising 30 min channel support is currently at 38.40 QQQQ, resistance at 38.72. It's amazing how frequently that number comes up. QQQQ is hitting session highs as I type, currently 4 cents below the channel top. This will be a key test in all timeframes up to the daily cycle.

 
 
  Jeff Bailey   1/18/200,  11:38:04 AM
Buy Program Premium .... SPX 1,190.88 , QQQQ $38.67, DIA $106.09

 
 
  Jeff Bailey   1/18/200,  11:23:26 AM
U.S. Dollar Index (dx00y) 83.42 +0.43% ... (30-min delayed) ... broke above overlapping WEEKLY/MONTHLY Pivot retracement resistance of $83.19-$83.20.

Stocks begin to show some sign of move in unison.

 
 
  Jonathan Levinson   1/18/200,  11:22:11 AM
Headline:

10:57am WHITE HOUSE'S RICE: 'STRONG DOLLAR' STILL BUSH POLICY

 
 
  Jeff Bailey   1/18/200,  11:12:10 AM
11:00 Internals at this Link

NYSE 5-day NH/NL making a bullish effort to cross above its intermediate-term 10-day NH/NL ratio.

 
 
  Jeff Bailey   1/18/200,  11:02:14 AM
11:00 Market Watch at this Link

 
 
  Jonathan Levinson   1/18/200,  10:55:43 AM
The line in the sand should be at 38.70-.75 for the daily cycle which threatens here to turn up from oversold territory. QQQQ is currently drifting sideways below the session high of 38.64.

 
 
  Jeff Bailey   1/18/200,  10:55:13 AM
May Dept. Stores (MAY) $32.37 +16.27% ... soars after company's CEO resigns. Speculation that retailer may be in play as acquisition target.

Prudential raising price target to $40 from $30 saying they aren't ruling out possible buyer, where potential acquirer coul pay $40-$50 per share.

 
 
  Jeff Bailey   1/18/200,  10:52:23 AM
3 consecutive buy program premiums .... give lift to S&P 500 Index (SPX.X) from 1,182 to 1,190

 
 
  Jonathan Levinson   1/18/200,  10:49:59 AM
After a morning dip, crude oil is heading back higher, currently up 1.19% at 48.95.

 
 
  Jeff Bailey   1/18/200,  10:47:57 AM
Nortel (NT) $3.23 -2.71% ... says it plans to file unaudited first and second-quarter 2004 financials by end of January.

 
 
  Jeff Bailey   1/18/200,  10:45:55 AM
Sector Gainers .... Airline +1.90%, Brokers +1.40%, Oil Service +0.97% ... Sector Losers .... Networking -0.29%, Cyclicals -0.27%

 
 
  Jonathan Levinson   1/18/200,  10:42:54 AM
Trending move it is. QQQQ's 30 min channel has whipsawed to the upside, and 38.45 is now support, with a bullish outlook above that level. This should be the long-awaited daily cycle upturn, and so bears will want to see QQQQ back below 38.45 at a minimum before looking for a reliable downside move.

 
 
  Jonathan Levinson   1/18/200,  10:32:16 AM
A quick run has QQQQ making a high at 38.50, with a doji spike just now above the 38.46 channel resistance. It looks like the bulls mean business here, with a short cycle upphase challenging the young 30 min downphase. The upper band is being violated here- if that spike doesn't reverse almost immediately, it will signal a bullish upside trending move.

 
 
  Jonathan Levinson   1/18/200,  10:29:07 AM
Declining upper 30 min channel resistance is the next test at 38.46 QQQQ. That channel should turn up within 10 minutes above the current 38.38 high. The 30 min cycle downphase has barely begun, and an upturn from here would be a very bullish development.

 
 
  Jonathan Levinson   1/18/200,  10:25:37 AM
Session high for QQQQ here at 38.35, testing upper channel resistance now.

 
 
  Linda Piazza   1/18/200,  10:22:20 AM
On the OEX's five-minute chart, support attempts to firm up near 562.30 while resistance firms up from 563.45-563.92. The rise still looks corrective to me, but time will tell as that Keltner resistance, the five-minute 100/130-ema's and various resistance levels near 564-566 come together. I'm worried about the bears' inability to push the OEX much lower after it confirmed that H&S on the 60-minute chart. If there's a rise into that 564-566 level, watch internals as well as chart action. Don't necessarily want to bet on a rollover beneath the five-minute 100/130-ema's if the advdec line climbs all day, for example.

I'm leaving for my appointment, and will return as soon as possible.

 
 
  Jonathan Levinson   1/18/200,  10:18:26 AM
QQQQ has gone net nowhere in the past hour, and the Keltner channel has narrowed to 38.22-38.34, while a 30 min oscillator downphase has commenced.

 
 
  Jeff Bailey   1/18/200,  10:16:14 AM
VIX.X $12.93 +4.02% ... Daily Pivot levels ... 11.97, 12.18, Piv = 12.50, 12.70, 13.03.

 
 
  Jeff Bailey   1/18/200,  10:14:39 AM
10:00 Internals at this Link

Friday's Internals at this Link

 
 
  Linda Piazza   1/18/200,  10:12:26 AM
The OEX's climb this morning sure looks like a corrective move, doesn't it? On the five-minute chart, red candles and white ones alternate. That suggests a likelihood that the OEX will turn down from 564-566 if not before. Still not sure we'll get that test of 564-566. Still thinking this is acting like a bounce that wants to get underway, but not at all sure that it can.

 
 
  Linda Piazza   1/18/200,  10:09:02 AM
The OEX is bouncing from the 15-minute Keltner support near 561.75. Lots of thorny Keltner lines lie above it to trap it. Also keep a watch on the OEX's behavior at its five-minute 100/130-ema's at 563.87 and 564.01. I like to watch the TRAN for guidance, as it sometimes leads the way above or below these averages. Right now, the TRAN is challenging those averages, slightly above them but not yet truly pulling free. The TRAN is at 3567.02 and these five-minute 100/130-ema's are at 3563.91 and 5656.40, respectively. Oops. Dropped right back below them as I typed and then jumped right back above them. As I said, the TRAN still challenges those averages, not yet completely free of them, but keep a watch on this.

 
 
  Jeff Bailey   1/18/200,  10:04:17 AM
10:00 Market Watch at this Link

Dow Jones Home Construction (DJUSHB) 826.68 -0.27% ....

 
 
  Linda Piazza   1/18/200,  10:00:38 AM
Here's what I meant when I said that the neckline for the H&S confirmed last week had become rather ragged: Link This is a 120-minute chart, so doesn't clearly show that there have been many 60-minute closes beneath that neckline, but it does show the bears' inability to push the OEX much below that neckline. That's why I'm wondering if we won't get at least another test of 564-566 if not a rise into a right shoulder for the larger formation depicted in the chart linked to my 19:16 post.

 
 
  Jonathan Levinson   1/18/200,  9:56:14 AM
The Fed's open market desk has announced a 7B overnight repo with no expirations today, for a net add in that amount.

 
 
  Linda Piazza   1/18/200,  9:55:46 AM
This morning, the OEX approached the 561.50-ish level of the ascending red trendline shown in the chart linked to my 19:16 post. As I mentioned Thursday evening and Friday, this could constitute a rising neckline for an even-larger H&S, one forming since early November. If so, there might be a rise into a right shoulder, a shoulder that it could take the OEX a couple of weeks to form, rising into the 570-571-ish level to form that right shoulder. That's why I suggest caution for bears if the OEX breaks out of the descending regression channel that's been forming since 1/10, breaking out by climbing and sustaining levels above 566. Unless the OEX broke above recent highs, invalidating this new potential H&S, even this outcome would look bearish overall, but that wouldn't mean that bears would be comfortable holding on through a two-week test of the 570-571 level!

That trendline and whole scenario is the other reason that I'd like to see a bounce and rollover beneath 564-566 as new bearish entries. It would give a little cushion before that rising trendline was hit again, and it would also validate the smaller H&S that's already been confirmed, the one with a descending neckline that was confirmed last week. That neckline is looking awfully ragged now, though, and new bears need confirmation from internals. Watch Jane's entries while I'm gone this morning. I'll be leaving in about 20 minutes.

 
 
  Jonathan Levinson   1/18/200,  9:49:52 AM
Session low for ten year bonds just printed at 111 39/64, TNX +2.2 bps at 4.238% currently.

 
 
  Jonathan Levinson   1/18/200,  9:48:20 AM
QQQQ is holding steading within a narrow 16 cent channel between 38.20 and 38.27. With the 30 minute oscillators near the top of their range, the greater risk should be to the downside. The support levels from last week should be watched for signs of a breakdown, with 37.90-38.00 being the "make or break" confluence, while to the upside, a break above 38.37 will be the first sign of trouble for bears.

 
 
  Linda Piazza   1/18/200,  9:45:40 AM
Friday's last bounce and then today's move lower constitute a retest of the OEX's neckline for the big H&S that it formed on its 60- and 120-minute charts. However, it has not confirmed the rollover by dropping below Friday's low, so it remains possible that the OEX could still move up to retest the five-minute 100/130-ema's or perhaps the top of its descending regression channel and that neckline again. It's trying hard to form a morning-star pattern on its five-minute chart and has the first two candles, but is finding it difficult to rise into the needed tall white candle for the current five-minute period. So far.

If internals are bearish, a retest of and rollover from 564-566 might constitute a new bearish entry. If they're not bearish, be careful. If the OEX breaks above 566 and especially if the internals are bullish at the time, bears should exercise caution about assuming a rollover will occur. We may not even get the opportunity to worry about a rollover from 564-566, though. No morning-star pattern was completed.

 
 
  Jeff Bailey   1/18/200,  9:44:50 AM
Current OPEN MM Profiles at this Link

 
 
  Linda Piazza   1/18/200,  9:37:20 AM
Turning now to the OEX's 15-minute Keltner chart, I see that it's approaching Keltner support near 561.85. This is just above the 561.23 level that's the 38.2% retracement of the entire bear-market decline, so it could be powerful support, although it doesn't appear to be so on the 15-minute chart. There, it looks somewhat iffy. If it should hold up, however, the OEX would then be showing bullish divergence, Keltner-style, suggesting that it might see a bounce during the first retracement of the day, due to begin soon. Still iffy, though.

 
 
  Linda Piazza   1/18/200,  9:34:57 AM
The OEX is trying to pull itself up ahead of that first Keltner support I mentioned on the three-minute chart. That support has now descended, though, to 562.22. First Keltner resistance on the three-minute chart, which I like to use early in the morning, is near 563.20 with further resistance up near 563.76-564.00, so near the five-minute 100/130-ema's.

 
 
  Linda Piazza   1/18/200,  9:32:54 AM
The OEX also gapped below the five-minute 100/130-ema's this morning. Thosde are up just above 564.

 
 
  Linda Piazza   1/18/200,  9:32:18 AM
The advdec number is negative this morning, so far. Anxious to see how matters look as the early volatility subsides.

 
 
  Jeff Bailey   1/18/200,  9:30:51 AM
HL Camp & Company ... has their computers set for program buying at $2.15 and set for program selling at $0.30.

 
 
  Linda Piazza   1/18/200,  9:30:39 AM
The OEX's opens below nearest Keltner support on the three-minute chart, looking vulnerable now down to 562.34 on that chart.

 
 
  Jeff Bailey   1/18/200,  9:28:43 AM
Adobe Systems (ADBE) $58.23 .... edges lower pre-market at $58.00. Company announces the promotion of Shantanu Narayen to the newly created post of president and COO.

 
 
  Jeff Bailey   1/18/200,  9:26:18 AM
Wells Fargo (WFC) $60.69 ... looks flat after company reports quarterly EPS of $1.04, missing consensus estimates of $1.06. WFC saying revenues rose 9.7% year-over-year to $8.2 billion, which was well above the 7.51 billion consensus.

 
 
  Linda Piazza   1/18/200,  9:23:24 AM
If you're not looking at both sides of the Monitor, you might turn to Jane's 9:16 post regarding TRIN.

 
 
  Jeff Bailey   1/18/200,  9:22:23 AM
Yahoo! Inc. (YHOO) $36.70 ... higher at $37.35 with Verizon (VZ) teaming up with Yahoo to provide content later this summer. Terms of the deal, which was announced Monday, have not yet been disclosed.

CIBC says the deal was generally not expected, and should provide positive catalyst for Yahoo's shares as the match provides some needed visibility to Yahoo's organic growth outlook for next few years.

 
 
  Jeff Bailey   1/18/200,  9:14:55 AM
Krispy Kreme Doughnut (KKD) $8.72 ... jumps to $9.20 after company announces CEO departure, warns "significant" decline in Q4 sales may have company posting a loss.

 
 
  Linda Piazza   1/18/200,  9:09:58 AM
A Q-Charts-drawn OEX descending regression channel that began forming 1/10 on the 30- and 60-minute channels shows a top at just under 566. This is above the descending line off the 1/12 high, a descending trendline the OEX has already crossed to the upside. It has not yet moved out of that descending regression channel. If there's a bounce this morning, watch for a potential rollover beneath that 565.80-566.00 top line for the descending regression channel or for a potential rollover beneath it. As I mentioned this weekend, the Keltner channels give few clues as to direction first thing this morning.

I'll be gone for an appointment for a couple of hours this morning, but hope to stay long enough to see how internals set up and how a test of 566 might progress, if it occurs. Further observations, including a chart, can be found in my 19:16 post from last night.

 
 
  Jeff Bailey   1/18/200,  9:09:11 AM
3M (MMM) $83.97 .... reports fourth-quarter EPS of $0.91 which was inline with consensus estimates. Total Q4 sales rose 7.9% to $5.1 billion, with U.S. sales up 5.4% to $2 billion, while sales outside the U.S. rising 9.5% to $3.1 billion versus same period last year.

Looking forward, 3M forecasts Q1 2005 EPS of $1.00 to $1.02 and $4.15-$4.25 for 2005. 3M's earnings for 2004 totaled $3.75 per share.

Very light pre-market trade between $84.00-$84.20.

 
 
  Jonathan Levinson   1/18/200,  9:06:24 AM
Headline:

9:04am DOLLAR IMPROVES ON TREASURY FOREIGN INVESTMENT DATA

This is coinciding with a rash of new equity lows in the futures here, while gold is holding at 424, +1 for the day. Euros are down .32% at 1.3061. Session low for QQQQ here at 38.28.

 
 
  Jonathan Levinson   1/18/200,  9:04:56 AM
The Treasury Deptartment has reported that total net capital inflows to the US rose in November to 81B to a revised 8.3B in October, the highest level since June 2003.

 
 
  Jonathan Levinson   1/18/200,  8:31:57 AM
I believe that the "record high" headline refers not to the absolute 27.7 reading, but rather to that reading in the month of January. Neither equities, bonds nor gold have budged following the data.

 
 
  Jonathan Levinson   1/18/200,  8:30:50 AM
Headlines:

8:30am U.S. JAN. EMPIRE STATE PRICES RECEIVED RECORD HIGH 27.7

8:30am U.S. JAN. EMPIRE STATE EMPLOYMENT 12.7 VS.15.7 IN DEC

8:30am U.S. JAN. EMPIRE STATE INDEX BELOW CONSENSUS 25.3

8:30am U.S. JAN EMPIRE STATE INDEX 20.1 VS. REV 27.1 IN DEC.

 
 
  Jonathan Levinson   1/18/200,  8:30:13 AM
Session high for treasury notes and gold, TNX currently down .5 bps at 4.211% and gold up .3 at 423.3. QQQQ is down a dime at 38.33. Empire State Index due now.

 
 
  Jonathan Levinson   1/18/200,  8:28:56 AM
Headlines:

8:26am SANTOMERO SEES ROBUST CONSUMER, BUSINESS SPENDING

8:26am SANTOMERO SEES U.S. JOB GROWTH AT 150K-200K PER MONTH

8:26am SANTOMERO SEES 2005 U.S. GDP AT 3.5-4%

8:26am SANTOMERO SEES U.S. INFLATION 'WELL CONTAINED' IN 2005

8:26am FED'S SANTOMERO SEES MEASURED PACE OF FED RATE HIKES

 
 
  Jonathan Levinson   1/18/200,  7:44:45 AM
Equities are lower, Es trading 1182.5, NQ 1559, YM 10532, QQQQ -.14 at 38.29. Gold is trading 423, unchanged, while silver is up .012 at 6.61 and crude oil is up .85 to 49.225. Ten year notes are up .031 to 111 51/64.

We await the 8:30 release of the Empire State Index, exp. 26.5, prior 29.93.

 
 
  Linda Piazza   1/18/200,  6:32:16 AM
Good morning. The Nikkei had gained Monday, but more than erased Monday's gains in Tuesday's trading. Other Asian markets turned down, too, pressured by higher crude costs. European markets also trade lower. Our futures had climbed Monday, but rounded down off their Monday highs overnight. As of 5:59 EST, gold was down $0.60 and crude, up $0.90 to $49.28. More detail about Asian and European markets follows in succeeding paragraphs.

Monday, the Nikkei gained 48.71 points and most other Asian and European markets moved higher, too. China's Shanghai Composite was an exception, closing down almost 30 points at a more-than-five-year low. Trading was thin in some markets. Companies involved in the manufacturer of LCD displays gained after Samsung's optimistic view of the market, with those companies including LG Philips LCD in Asia and Philips Electronics and Merck in Europe. A Merck unit manufactures the liquid crystals for LCD's.

By mid-morning Tuesday morning, the Nikkei had erased much of Monday's gains, and it finished the job by the close, more than erasing Monday's gains. The Nikkei closed down 63.84 points or 0.56%, at 11,423.26. The dollar gained in early trading, but crude prices had risen, too. Some exporters were able to eke out gains. Fuji Television Network Inc. fell after making a bid for the shares of Nippon Broadcasting that it doesn't already own, with that bid at a 7% premium to Nippon's closing price as of Friday. Many telecommunications stocks were weak, although Nippon Broadcasting of course gained. Banking stocks were mixed. Other stocks appeared to be reacting to company-specific news. One was Mitsubishi Motor, surging during the day but closing up only 0.6% after an announcement that it would supply additional cars to Nissan Motor.

Most other Asian markets declined. The Taiwan Weighted lost 0.20%, and South Korea's Kospi declined 0.27%. Singapore's Straits Times fell 0.14%, and Hong Kong's Hang Seng declined 0.13%. China's Shanghai Composite gained 0.72%.

Most European markets decline, too, with rising crude costs pressuring markets. Other factors included a UBS decision to cut forecasts for Infineon, worry ahead of earnings reports by major U.S. tech companies today and a missing of Q4 profit forecasts by the Sony Ericsson joint venture. That earnings report revealed sales that beat expectations. Car manufacturers and airlines declined. Other declining companies included Maxim Pharmaceuticals, falling on news that the FDA requests an additional Phase 3 clinical trial for a leukemia drug, and Nestle, falling after announcing a new corporate executive lineup after its chairman reached mandatory retirement age. Companies posting gains included Novartis after a Merrill Lynch upgrade to a buy rating.

In the U.K., December's annualized inflation rate unexpectedly climbed to 1.6% from November's 1.5%, against an expectation of a drop to 1.4%. Many had thought that the Bank of England had raised rates one too many times and had hoped to see them lower rates, but this result squashes that hope. The cost of furniture and household goods drove the rate higher.

As of 5:59 EST, the FTSE 100 had dropped 31.60 points or 0.65%, to 4,815.10. The CAC 40 had fallen 22.62 points or 0.58%, to 3,858.82. The DAX had fallen 33.11 points or 0.78%, to 4,212.40.

 
 
  Linda Piazza   1/17/200,  7:16:15 PM
Friday, the OEX retraced slightly more than half of Thursday's range, closing above that midway point but below the 50-dma. Thursday, the OEX had confirmed a big H&S on the 60-minute chart, building since about December 13, but it also closed on an ascending trendline formed from the swing lows since November 10. Link It bounced from that trendline, historical support and Keltner support. The week ended below last week's close, showing some slight follow-through on last week's completed evening-star formation on the weekly chart, but the follow-through took the form of a doji at support. Bears have reason to be cautious about believing too heartily in further downside.

Keltner and Fib levels from the above graph suggest that the OEX remains vulnerable to the 555-557 zone, but perhaps not before it retests 566 or even the 568-570 zone. After the first zoom higher Friday, prices flattened, as did oscillators and Keltner channels, so that the day ended with little directional guidance apparent. It's possible to draw a descending regression channel that began forming January 10, with the top of that channel currently at just under 566, so that a break above 566 represents a change in trend while a rolling down before or at 566 suggests the OEX will roll down through the channel again, toward the bottom at about 560. That's about all that can be said until we get a look at how our futures react to overnight developments.

 
 
  OI Technical Staff   1/17/200,  5:40:59 PM
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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.

 
 

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