Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Jim Brown   1/20/200,  6:26:36 PM
Alert - Semi Book-to-Bill falls to 0.95 for December on a -7.1% drop in orders.

 
 
  Jeff Bailey   1/20/200,  4:50:53 PM
Closing U.S. Market Watch at this Link

Closing Internals at this Link

Pivot Matrix for tomorrow at this Link

Be very, very open to a bounce back toward those DAILY R2 correlations. Most notable in my mind, based on past week's option coverage is the SPX MONTHLY S1.

Here's Thursday's action in the SPDRs (AMEX:SPY), where I sorted by the bulk of open interest. Link

 
 
  Jim Brown   1/20/200,  4:47:09 PM
HAFC 2:1 stock split

 
 
  Jim Brown   1/20/200,  4:45:32 PM
PVN earnings = +0.32, est +0.29 BEAT
Revenue -$50 million light

 
 
  Jim Brown   1/20/200,  4:20:27 PM
Alert - XLNX earnings = +0.18, est +0.18
Revenue slightly light, guiding slightly lower for the current quarter

 
 
  Jeff Bailey   1/20/200,  4:20:07 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Day trade long/bullish Rambus (RMBS) at the offer of $20.41, exited the trade at $21.01 (just shy of $21.10 target) as President Bush said "I do." ($0.61, or +2.99%)

Swing trade short/bearish Exxon/Mobil (XOM) at the bid of $50.64, but was stopped out at very tight stop of $50.84. ($-0.20, or -0.39%)

Day trade short/bearish Extreme Networks (EXTR) at $6.65, but closed the trade at $6.60 as time remaining in session was running out. ($0.05, or +0.76%)

Three option contract positions expire tomorrow. SMH-AZ (long call), HIG-MJ (long put) PHM-AM (covered call).

 
 
  Jim Brown   1/20/200,  4:16:46 PM
STEL earnings = +0.04, est +0.03

 
 
  Jim Brown   1/20/200,  4:15:39 PM
SYNA earnings = +0.33, est +0.30

 
 
  Jim Brown   1/20/200,  4:15:21 PM
Alert - KLAC earnings = +0.61, est +0.59

 
 
  Jim Brown   1/20/200,  4:13:22 PM
CYT earnings = +0.68, est +0.65

 
 
  Jim Brown   1/20/200,  4:10:43 PM
TRID earnings = +0.03, est +0.02

 
 
  Jim Brown   1/20/200,  4:08:21 PM
MRX earnings = +0.36, est +0.36

 
 
  Jim Brown   1/20/200,  4:07:55 PM
ACS earnings = +0.73, est +0.73

 
 
  Jim Brown   1/20/200,  4:07:25 PM
VIRL earnings = +0.07, est +0.08

 
 
  Jim Brown   1/20/200,  4:06:12 PM
ELY earnings = -0.37 , est -0.31

 
 
  Jim Brown   1/20/200,  4:06:01 PM
SFA earnings = +0.38 , est +0.37
revenue light

 
 
  Jim Brown   1/20/200,  4:04:35 PM
Alert - HTCH earnings = +0.47, est +0.45
Guiding MUCH higher

 
 
  Jim Brown   1/20/200,  4:03:27 PM
CKFR earnings = +0.36, est +0.31

 
 
  James Brown   1/20/200,  4:03:19 PM
OI put play Fedex Corp (FDX) has hit our target at the 100-dma in the last 30 minutes or so. I would suggest readers consider exiting for a profit here.

 
 
  Jim Brown   1/20/200,  4:02:07 PM
ELX earnings = +0.21, est +0.19

 
 
  Jim Brown   1/20/200,  4:02:02 PM
ACE earnings = +0.42, est +0.42

 
 
  Jim Brown   1/20/200,  4:01:52 PM
Alert - HLIT earnings = +0.17, est +0.13

 
 
  Linda Piazza   1/20/200,  3:59:10 PM
Just thinking about tomorrow's possible trading pattern and remembering that tomorrow is an opex Friday. That could mean some pin-them-to-the-numbers-by-mid-morning patterns. Make decisions with that in mind.

 
 
  James Brown   1/20/200,  3:57:49 PM
United Health Group (UNH) could be producing a bearish reversal here. The stock failed at $90.00 resistance this morning and now is producing a bearish engulfing candlestick. Readers can watch for a drop under $85 and/or its 50-dma.

 
 
  Jeff Bailey   1/20/200,  3:57:47 PM
Bearish day trade close out alert ... for Extreme Networks (EXTR) here at $6.60.

Each time it would tick $5.58, that would trigger buying. Lots of stocks "fading" to the close, but this one has been "extreme" today.

 
 
  Linda Piazza   1/20/200,  3:56:28 PM
Tonight in Japan, an important economic number, the Tertiary Industries Activity Index, will be released. The Nikkei has been weak leading into this number.

 
 
  Jim Brown   1/20/200,  3:55:31 PM
Alert - LRCX earnings = +0.59, est +0.53
Orders down -10% compared to prior period

 
 
  Linda Piazza   1/20/200,  3:55:05 PM
The OEX is dropping slightly below the level most comfortable for bulls who might have bought the low today. It's threatening to fall below the appropriate right-shoulder level for an inverse H&S, but it hasn't quite done it yet. I haven't been a big fan of long plays today, but wanted to comment from the bulls' perspective, too.

Bears with profits have a decision to make. Hold over or not? The OEX sits at important support and near the neckline for that H&S I've been showing lately. (See my 10:09 post for a chart.) It's within a potential support zone, but possibly poised to move lower. I'd give the same advice I gave yesterday. Consider choices such as taking partial profits and allowing the rest to ride (with a breakeven stop) if you want to participate in further declines, if offered, or maybe take all profits and see what happens tomorrow morning concerning that neckline. Tomorrow, perhaps we'll see what's what with the inauguration behind us.

 
 
  James Brown   1/20/200,  3:51:45 PM
Looking at Dow-component Procter and Gamble (PG) you might see an inverse or bullish head-and-shoulders pattern with the stock testing resistance at the neckline near $57.00. The pattern holds true then the upside target would be about $63.

 
 
  Jim Brown   1/20/200,  3:47:37 PM
Important Earnings after the close

ACE est +0.42
ACS est +0.73
ELY est -0.31
MRX est +0.36
PVN est +0.29
SFA est +0.37
CYT est +0.65
ELX est +0.19
CKFR est +0.31
HLIT est +0.13
HTCH est +0.45
KLAC est +0.59
LRCX est +0.53
STEL est +0.03
SYNA est +0.30
TRID est +0.02
VIRL est +0.08
XLNX est +0.18

 
 
  James Brown   1/20/200,  3:47:09 PM
The breakdown in Mercury Interactive (MERQ) is hitting new relative lows. This could be a bearish entry point for a drop toward the $35 level.

 
 
  Jeff Bailey   1/20/200,  3:42:02 PM
Bearish entry point alert ... for Extreme Networks (EXTR) $6.65, stop $6.72, target $6.45 into the close.

This trade will NOT be held overnight.

 
 
  Jonathan Levinson   1/20/200,  3:41:51 PM
Re your 15:36 Linda, here's a photo I came across recently and saved under the title "Trade Deficit": Link

 
 
  Linda Piazza   1/20/200,  3:39:58 PM
One of my news sources is noting that U.S. container traffic continues to show an increasing imbalance (more imports than exports) with Asia that doesn't bode well for narrowing the trade gap.

 
 
  Linda Piazza   1/20/200,  3:36:19 PM
The five-minute Keltner chart shows that the OEX better stop its descent here or the support weakens. Support is below at 560.70 and 560.06, according to that chart. These lines can be pushed around a bit as they're dynamic and will move with the OEX.

This action is why I haven't been in favor of a long play today, as per my Market Wrap last night and last night's and this morning's OEX update. The OEX may be forming an inverse H&S on that five-minute chart, but even a confirmation just sends the OEX back into that right-shoulder zone. Better to wait and see what develops at the close and tomorrow morning, I think, at least for options players. By not entering a play, you still risk something: you risk losing out on an opportunity for a long play if the OEX should gap above resistance tomorrow and never look back. Things just look too iffy, though, and it's possible the OEX could close the day having confirmed that H&S. It's better to risk missing that opportunity. Futures players take on more risk, but they don't deal with decay in their positions and they can sometimes take on those risks when we options players shouldn't, for that reason.

 
 
  James Brown   1/20/200,  3:35:39 PM
Sony Corp (SNE) is trading lower today down 4.5% to $37.00 and breaking its 50-dma. The company raised its profit forecast for the year but lowered its sales guidance.

 
 
  James Brown   1/20/200,  3:32:58 PM
Looking at PACCAR (PCAR)... the failed rally at the $75 level looks like bad news. Shares are testing technical support at the 100-dma right now. Traders may want to keep an eye on this one for a bearish play. The P&F chart shows a sell signal with a $62 target.

 
 
  Jeff Bailey   1/20/200,  3:31:24 PM
Day trade short setup alert ... for Extreme Networks (EXTR) $6.69 +13.77% .... go short on trade at $6.65, stop $6.72, target $6.45 by the close.

 
 
  Linda Piazza   1/20/200,  3:28:41 PM
The OEX may see that 561.50 level after all. (See my 14:59 post for this prediction.) Bears want to see the OEX below 561.30 and hopefully to a new LOD. Bulls want to see it hold above 561 and hopefully above 561.50.

 
 
  James Brown   1/20/200,  3:28:39 PM
If you're watching the parade in Washington... It's amazing how those motorcycle cops at the front of the presidential parade can keep that formation so tight and so slow...

 
 
  Linda Piazza   1/20/200,  3:26:04 PM
Jane has been letting us know what the almanac says about trading patterns in January. (See her 13:30 post on the Futures side.) I was just taking a look at longer term charts and thought this monthly OEX one worth a look: Link

 
 
  Jeff Bailey   1/20/200,  3:19:37 PM
Feb. Crude Oil futures (cl05g) NYMEX settlement looks to be $46.91 -1.35%.

Link to NYMEX Link

 
 
  Linda Piazza   1/20/200,  3:18:29 PM
Jeff mentioned the bond market close. Yesterday's close precipitated or was concurrent with the afternoon sell-off. Not seeing that yet.

The OEX still preserves the possibility of building an inverse H&S on the five-minute chart. Hasn't crossed the 563.65-ish neckline but also hasn't dropped below the 561.30-ish right-shoulder level. Bulls need to see this confirmed.

Looking out longer term than a five-minute chart, the daily chart shows the OEX springing up once again from its test of the rising neckline for the H&S forming since early November. Unless a rout happens into the close, it's likely to close above that neckline but still within the right-shoulder formation on that chart.

 
 
  Jonathan Levinson   1/20/200,  3:17:22 PM
QQQQ's net sideways action today has scrambled the short and 30 / 60 min cycles, with all intraday channels now drifting sideways. That's bad news given how oversold all of these cycles were as of last night. So far the bounce is the weakest of sideways upphases. If the bulls can't run it up, the next 30 min cycle downphase threatens to be ugly.

 
 
  Jeff Bailey   1/20/200,  3:14:09 PM
03:00 Internals at this Link

 
 
  Linda Piazza   1/20/200,  3:10:56 PM
The OEX was turned back into the 562.20 level (see my 14:59 post). If it begins showing five-minute closes below the five-minute 21-ema in the 562.27 zone, it becomes more vulnerable to that lower target from that post, too. Bulls want to see it steady before falling lower than 561.30, however.

 
 
  Jeff Bailey   1/20/200,  3:03:38 PM
03:00 Market Watch at this Link

 
 
  Jeff Bailey   1/20/200,  3:00:16 PM
S&P Banks Index (BIX.X) 369.09 +0.09% .... session best here, but not sure if this is a signal for further strength when bond market closes.

 
 
  Linda Piazza   1/20/200,  2:59:37 PM
I would not be surprised to see the OEX turned back from its five-minute 100/130-ema's and dropped back into the 562.20 or 561.50 zone.

 
 
  Linda Piazza   1/20/200,  2:58:20 PM
The OEX breaks out of the possible bull flag to the upside, now rising to test the five-minute 100/130-ema's at 563.45 and 563.86, respectively. Important test for the OEX. As I type, it's getting slapped back immediately, but hasn't yet fallen beneath the five-minute 21-ema at 562.25, so this could just be initial volatility as it approaches those averages.

 
 
  Linda Piazza   1/20/200,  2:56:20 PM
There's a potential inverse H&S on the advdec line, with a neckline at about -1875 issues. Sometimes these formations on the advdec line do have relevance. That line has been generally climbing since about 1:15, but climbing within the context of very negative numbers.

 
 
  Jeff Bailey   1/20/200,  2:55:15 PM
Bearish swing trade stop alert ... for Exxon/Mobil (XOM) $50.84 -0.40%.

 
 
  Jeff Bailey   1/20/200,  2:52:15 PM
Rambus (RMBS) $20.30 +13.72% .... probing morning pullback low.

 
 
  Jeff Bailey   1/20/200,  2:51:34 PM
SPX.X 1,178.55 -0.51% ... as of last night, January "Max Pain" theory was calculated at 1,195.

 
 
  Linda Piazza   1/20/200,  2:49:42 PM
The TRAN broke down out of the latest potential bear flag and is now finding resistance again at its five-minute 21-ema. So far, the OEX holds up better, still finding support at that average.

 
 
  Linda Piazza   1/20/200,  2:40:56 PM
It's possible the TRAN is settling into another flag-like formation now, its rise, the second of the day, looking as corrective as the first. The OEX is a little more difficult to qualify, as it's bunching up between the support of the five-minute 21-ema and the resistance of the five-minute 100/130-ema's. Since the formation looks a bit like a triangle after the rise off the day's low, an attempt might be made to at least break to the upside, but unless the TRAN keeps rising, too, and avoids breaking down out of the potential flag, the two S&P's and Dow might have difficulty maintaining upward momentum. . . Oops, the OEX broke to the downside as I typed. That's no triangle any longer. If the five-minute 21-ema holds up as support, it could still be a bull flag on that five-minute chart. Needs the cooperation of other indices.

 
 
  Jeff Bailey   1/20/200,  2:40:05 PM
HL Camp & Company never updated their buy/sell program premium levels today. Otherwise I will post in MM each morning.

 
 
  Jeff Bailey   1/20/200,  2:35:53 PM
March Crude Oil futures (cl05h) $47.05 -1.69% (30-minute delayed) ... last Wednesday's settlement was $46.56.

In my mind, on a week-to-week basis, oil bears would look for that level to be important into tomorrow's settlement as it relates to yesterday's EIA report.

 
 
  Jonathan Levinson   1/20/200,  2:32:37 PM
QQQQ did it price-wise, but couldn't hold above support timewise. The short cycle upphase has stalled and should fail below 37.53.

 
 
  Jeff Bailey   1/20/200,  2:28:38 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   1/20/200,  2:25:27 PM
Exxon/Mobil (XOM) $50.77 -0.56% ... usually a slow mover bounced to $50.83 from $50.40.

OIX.X 399.02 -0.9% ... bounced to round number 400.00.

 
 
  Linda Piazza   1/20/200,  2:24:59 PM
Despite the way today feels, the daily OEX chart so far shows a strong candle springing up from support. I don't know why the 563-ish has so much resonance for the OEX, serving as S/R, as I've been unable to identify a Fib level that might have prompted its importance, but it certainly does seem to have more importance than the 561.23 level that's a 38.2% retracement of the bear-market decline. The funny thing is that 561.23 is a calculated, exact number. Back when we hit the bear-market lows and I snapped a Fib bracket on the chart, I think I'm remembering that it was showing somewhere near 563 as the 38.2% retracement, just from the way the chart honed in on the beginning and ending levels of the decline. Maybe a lot of people are using the snapped bracket rather than the exact calculations? Anyway, bears would like to see the OEX close the day below that zone, without such a long lower shadow springing up from support.

 
 
  Jeff Bailey   1/20/200,  2:22:01 PM
SPX.X 1,179.60 -0.42% after session low of 1,173.39 and sliver of support zone from 1,173.12-1,175.

SPX Most active options are the Jan. 1,200 puts (24,509:44,632) $22.00, Jan. 1,200 calls (21,402:57,539) $0.10, Jan. 1,175 puts (20,382:34,284) $1.00.

 
 
  Jeff Bailey   1/20/200,  2:18:33 PM
VIX.X 13.61 +3.26% ... after brief reading above 14.00 just after 02:00. Put sellers might have shown up.

 
 
  Linda Piazza   1/20/200,  2:17:54 PM
The SOX is at 398.46 as I type, still below 400.

 
 
  Jonathan Levinson   1/20/200,  2:17:16 PM
A burst of volume has just cleared 37.57-.60 QQQQ resistance. The short cycle has turned up, and within 5 minutes at these levels, the 30 min cycle will follow suit. QQQQ will turn bullish above 37.60 at that time.

 
 
  Jeff Bailey   1/20/200,  2:17:14 PM
Big bid has come into market.

 
 
  Linda Piazza   1/20/200,  2:14:45 PM
A change in short-term trend: The OEX produced a five-minute close above the 21-ema. Next watch the five-minute 100/130-ema's at 563.59 and 564.03 for potential resistance.

 
 
  Jeff Bailey   1/20/200,  2:07:00 PM
02:00 Market Watch at this Link

 
 
  Jonathan Levinson   1/20/200,  2:05:41 PM
The Fed's net 2.5B repo add for the day is small in comparison to yesterday's drain and Tuesday's add, but it's still a net gain for today. On this basis alone (and the oversold 30 min cycle oscillators) we might expect today to finish differently from yesterday. Bulls need to see the 37.40 low hold, and any bullishness will need to first pass the test at 37.57-.60 QQQQ.

 
 
  Jim Brown   1/20/200,  2:04:35 PM
EBAY was trashed by traders today after saying they were going to invest more in building a bigger business. They also said they spent more on advertising. Neither are critical long term negatives and both will server to increase profits in the future. EBAY has fallen to Just under $85 and currently appears to have formed a bottom and is trying to rebound. I profiled a post earnings EBAY play yesterday and I am updating it now with lower strikes. I personally believe this is a great entry point. With EBAY currently at $85 I would look at the April $85 calls XBA-DQ currently $6.80 or the April $90 calls XBA-DR currently $4.60. I would also consider a longer term option including LEAPS if you are a long term trader. I believe LEAP traders will be richly rewarded.

Traders should decide if they want to see if there is another closing dip today from those who are waiting for a bounce to sell into or enter now and take their chances. If we do bounce over $85 we could attract more dip buyers. I would hate to see a sudden spike rob you of the entry but that is your decision. Note that EBAY stopped dropping right on its long term uptrend support. Link

 
 
  Linda Piazza   1/20/200,  2:04:36 PM
The OEX approaches that five-minute 21-ema more closely, with that average at 561.55 and the OEX at 561.28.

 
 
  Jeff Bailey   1/20/200,  2:02:44 PM
Dow Diamonds (DIA) $104.77 -0.45% ... session low has been $104.58, just at DAILY S2/WEKLY S1 correlations. Checking to see what selling a Jan. $104 put might bring.

 
 
  Jonathan Levinson   1/20/200,  1:55:19 PM
Another session high for ten year treasuries, TNX -3.3 bps at 4.154%. Gold is down .80 at 422.60, hovering at this 422 support line. QQQQ is coming in for a retest of the low. Next fib support is at 37.31 if it fails.

 
 
  Linda Piazza   1/20/200,  1:49:36 PM
The OEX rises toward another test of its five-minute 21-ema, with that average currently at 561.72 and the OEX currently at 561.10. So far, the climb looks corrective.

 
 
  Jeff Bailey   1/20/200,  1:43:03 PM
Current OPEN MM Profiles that I've profiled at this Link

I did round the XOM swing trade short position up to 200 shares, which takes me $128.00 over my stated $10,000.00 full position, but may use the 200 shares with 2 contract trade depending on how things play out tomorrow.

 
 
  Linda Piazza   1/20/200,  1:40:49 PM
Today, CSCO has been testing its 200-week sma at $17.96. CSCO is at $18.18 as I type. This should be significant support, as it coincides with a rising trendline off the August low and with historical S/R. That means that it will also be significant if it's broken on a weekly closing basis.

 
 
  Linda Piazza   1/20/200,  1:34:56 PM
The TRAN hit a low of 3520.67, bouncing from that level now. Remember that the TRAN's 100-ema is at 3509.34 and the 38.2% retracement of the rally off the August low is at 3492.37. The TRAN is moving down toward these potential support levels, but its formation on the daily chart looks bearish and this last move broke the TRAN below support and the 1/13 low.

 
 
  Jonathan Levinson   1/20/200,  1:31:48 PM
Stepping away for a few minutes here.

 
 
  Jane Fox   1/20/200,  1:30:11 PM
I would now like to remind everyone about the Stock Trader's Almanac December low indicator. It goes like this - if the DOW closes lower than its lowest December CLOSE in the first quarter of the New Year then you will have a bearish year. Of the 26 years (since 1952) when the DOW breached its December lows in the first quarter of the New Year, 13 times the DOW closed lower. Of those 13 years if you have a negative First Five Days in January also (which we did) 12 of those 13 years have closed lower. The DOW's lowest CLOSE in December was a close at 10440 so keep that number in mind and remember we are talking about a close lower.

 
 
  Linda Piazza   1/20/200,  1:26:57 PM
Back, and the OEX not only dropped through that neckline and today's low, but below the 1/13 low, too. OEX 560 provided an automatic bounce and we can perhaps expect at least a short period of consolidation or a small bounce. Bears want to see the five-minute 21-ema continue to provide resistance. That average is now at 561.96, but sloping down strongly to catch up with the OEX. Bears should have profit-protecting plans in place, with those perhaps being as simple as following the OEX lower with stops.

 
 
  Jonathan Levinson   1/20/200,  1:25:21 PM
Volume picked up sharply on the break and is declining on the bounce, confirming a downside bias below QQQQ 37.57. 30 min channel resistance is down to 37.62.

 
 
  James Brown   1/20/200,  1:21:18 PM
Kmart (KMRT) is also looking weak here. The bounce from the $92 level a week ago is failing. Watch for a drop under round-number, psychological support at the $90.00 mark as a potential entry point.

 
 
  Jeff Bailey   1/20/200,  1:20:22 PM
S&P Retail Index (RLX.X) 432.54 -3.51% ... extending losses and session low.

 
 
  Jeff Bailey   1/20/200,  1:19:34 PM
01:00 Internals at this Link

Note to self: earlier mention of strength in "junk bond" surprising considering the steepening of yield curve. That starts to unwind on the yield curve side of things.

 
 
  James Brown   1/20/200,  1:15:07 PM
ITW is offering traders a bearish entry point here. The stock is down 1.9% and breaking major support at the $90.00 mark, its simple and exponential 200-dma's and its long-term rising trendline of support dating back to March 2003.

 
 
  Jonathan Levinson   1/20/200,  1:13:25 PM
This is behaving like a downside 30 min trending move. If so, QQQQ should stay and is bearish below 37.57.

 
 
  Jonathan Levinson   1/20/200,  1:12:03 PM
New session lows across the board.

 
 
  Jonathan Levinson   1/20/200,  1:11:16 PM
QQQQ retesting the session lows here.

 
 
  Jonathan Levinson   1/20/200,  1:09:49 PM
New highs for bonds, TNX -2.6 bps at 4.161%, retesting key confluence support to 4.14%.

 
 
  Jeff Bailey   1/20/200,  1:05:58 PM
01:00 Market Watch at this Link

 
 
  James Brown   1/20/200,  1:04:59 PM
NCR continues to show strength following its recent bounce from the 50-dma. Bulls can watch for a breakout over the $70.00 level as a potential entry point. The bullish P&F chart points to an $83 target.

 
 
  Linda Piazza   1/20/200,  1:03:44 PM
The OEX continues to find resistance at its five-minute 21-ema, currently at 562.67. Watch for a change in that trend as the OEX creeps reluctantly toward the LOD. I'll be away for about ten minutes.

 
 
  Jeff Bailey   1/20/200,  1:03:04 PM
February Crude Oil futures (cl05g) 46.65 -1.89% (30-minute delayed) ... will note that current session low of $46.25 comes at near-term "zone of support" from $45.93-$46.29 and fitted/conventional retracement. Also very close to last Wednesday's settlement of $46.37.

I will check the March contract settlement from last Wednesday in a minute.

 
 
  James Brown   1/20/200,  1:02:25 PM
After several days of struggling with resistance at the $65 mark and its 50-dma shares of Polaris Industries (PII) is turning lower. This could be a bearish entry point for a quick, short-term play to capture a drop toward $60 and its 100-dma.

 
 
  Jeff Bailey   1/20/200,  12:53:49 PM
Swing trade short alert ... for Exxon/Mobil (XOM) at the bid of $50.61, stop $50.84, and look for a close below $50 by tomorrow at 04:00 PM EST.

WEEKLY S2 of $49.06 could be in play. This week's weekly pivot levels $49.06, $50.07, Piv = $50.64, $51.65, $52.22.

January "Max Pain" still $45.00 ($2.50 increments)

 
 
  Jonathan Levinson   1/20/200,  12:51:30 PM
We're seeing the weak short cycle upphase letting go on QQQQ, with a new downphase starting. Below 37.57, key support is at the session low of 37.53. This is the do or doo-doo zone for the bulls.

 
 
  Jonathan Levinson   1/20/200,  12:49:41 PM
Session high for ten year bonds here, TNX -1.6 bps at 4.171%.

 
 
  Linda Piazza   1/20/200,  12:48:29 PM
The OEX's five-minute 21-ema is again proving to be resistance. That average is now 562.86.

 
 
  James Brown   1/20/200,  12:46:51 PM
Rowan Cos Inc (RDC) is up 1.5% and breaking out over major resistance at the $27.50 level to hit new three-year highs. This could be a bullish entry point. The next level of resistance looks like the $34 level.

 
 
  Jonathan Levinson   1/20/200,  12:43:18 PM
The 30 and 60 min cycle channels are beginning to show a downtick after what has been a very weak, flaggy bounce.

 
 
  Linda Piazza   1/20/200,  12:31:51 PM
These FIB levels are looking important today, both as support (now) and resistance (on each attempt to rise). The five-minute 100(blue)/130(maroon) ema's are on this chart, as is the red 21-ema. Link

 
 
  Jeff Bailey   1/20/200,  12:28:53 PM
Forward Industries (FORD) $6.97 +58.40% ... surged from 11:25 AM EST on earnings. The maker of carrying cases and accessories for the handheld consumer electronics market said net sales increased by $4.4 million, or 98%, to $8.9 million. Earnings came in at $1.4 million, or 21 cents per share, up from $192,000, or 3 cents per share earned in the same period a year ago.

 
 
  Linda Piazza   1/20/200,  12:22:14 PM
The OEX isn't going much of anywhere after dropping below that rising trendline off the day's low. Sideways trading after breaking a supporting trendline is not what bears want to see, but I suspect that markets might be in a holding pattern until after the inauguration ceremonies are concluded.

 
 
  Jonathan Levinson   1/20/200,  12:19:28 PM
QQQQ sinks back below 37.70 here. 30 and 60 min channel support are overlapping at 37.57.

 
 
  Linda Piazza   1/20/200,  12:16:01 PM
What I'm reading about the Philly Fed survey is that the business conditions component caused the big drop, but prices rose sharply. Prices received dropped. Orders dropped sharply. Not exactly the way you want to see these line up.

 
 
  Jeff Bailey   1/20/200,  12:13:32 PM
12:00 Internals at this Link

 
 
  Tab Gilles   1/20/200,  12:12:17 PM
$TRAN/$INDU/$SPX Targeting 3,300 on $TRAN, $SPX 1158, $INDU 10,300. Link

 
 
  Linda Piazza   1/20/200,  12:08:51 PM
The Philly Fed number broke the OEX below the flag's support. Those who might have entered new bearish positions--with good chart-related reasons but risky because this was an immediate reaction to a specific number, perhaps not to see follow-through--need to see the OEX break below the day's low to feel comfortable in this position.

 
 
  Linda Piazza   1/20/200,  12:06:19 PM
The SOX is above 400, but not much above it. This morning's follow-through on yesterday's plunge nearly invalidated the potential inverse H&S seen on its 60-minute chart, but since there was a quick bounce (on a 60-minute basis, that is), only a candle shadow was left below the appropriate right-shoulder level, for now keeping alive the possibility of an inverse H&S forming there. The SOX would need to climb above 407 to confirm that H&S, but I'd want to see a move above the 1/19 high of 407.75 before I believed too strongly that the SOX had confirmed that H&S. Then it's going to slam into resistance from many forms near 412. This all says to me that SOX bulls are trying to muster strength here, but they've got a lot of hard work ahead of them to drive the SOX higher and it's uncertain whether they'll be successful. There was a time in trading history (at least so I've read) when H&S's and inverse H&S's were so reliable that you could buy them (inverse) or sell them (regular) as soon as the right shoulder began rounding up or down, as the case might be. No longer. These days, you're not even sure the target will be met if confirmed. They're still useful to watch, though, for the insight they give into market psychology.

 
 
  Jonathan Levinson   1/20/200,  12:04:24 PM
Headlines:

12:03pm U.S. JAN. PHILLY FED NEW ORDERS 9.8 VS. 20.9 IN DEC.

12:03pm U.S. JAN.. PHILLY FED EMPLOYMENT 17.0 VS. 14.0 IN DEC.

12:04pm U.S. JAN. PHILLY FED INDEX LOWEST IN 18 MONTHS

 
 
  Jeff Bailey   1/20/200,  12:03:10 PM
12:00 Market Watch at this Link

 
 
  Jonathan Levinson   1/20/200,  12:02:37 PM
QQQQ down to 37.68 here.

 
 
  Jonathan Levinson   1/20/200,  12:02:04 PM
Philly fed 13.2 vs. 25 exp., 25.4 prior.

 
 
  Jonathan Levinson   1/20/200,  12:01:13 PM
Session high for 10 year treasuries, TNX going negative at 4.186%, -.1 bp.

 
 
  Jeff Bailey   1/20/200,  11:58:02 AM
President Bush sworn in ... INDU 10,524, SPX.X 1,180.34, QQQQ $37.74.

President Bush will now give speech.... approximately 15 minutes.

 
 
  Jane Fox   1/20/200,  11:57:19 AM
Philadelphia Fed at 12:00. (Didn't Elton John sing a song about the Philadelphia Fed - oh that's right it was Freedom!)

 
 
  Jonathan Levinson   1/20/200,  11:57:17 AM
Philly Fed data due in 3 minutes.

 
 
  Jeff Bailey   1/20/200,  11:57:11 AM
Rambus (RMBS) $21.05 +17.88% ... close enough to DAILY R2 of $21.12

 
 
  Jeff Bailey   1/20/200,  11:55:41 AM
Bullish day trade exit alert ... for Rambus (RMBS) $21.02

 
 
  Jonathan Levinson   1/20/200,  11:55:01 AM
I'd love to hear the American Idol versions of this opening performance.

 
 
  Jeff Bailey   1/20/200,  11:49:39 AM
Bush Inauguration begins .... INDU 10,533, SPX 1,181.68, QQQQ $37.79

 
 
  Linda Piazza   1/20/200,  11:49:23 AM
For reference, the OEX's five-minute 100/130-ema's are currently at 564.98 and 565.26, respectively, cycling down toward the 50% retracement of the plunge off yesterday's last five-minute high, with that number at 564.41. Bears wanting a new entry would like to see the OEX zig-zag up toward that 50% retracement, but no higher, at least on a five-minute closing basis, and then drop below the rising trendline on a then-flag-like formation, with that support now at about 563.29. They'd need to see corroboration from internals, and they'd need to be prepared for another possible bounce from today's low, willing to take that risk. And it's a big risk. TRIN just has not been supporting the idea of anything other than chop so far, today. New bears would want to see something more.

 
 
  Jeff Bailey   1/20/200,  11:48:16 AM
Oil Service Index (OSX.X) 126.80 +0.21% ... bids back into green.

 
 
  Linda Piazza   1/20/200,  11:44:39 AM
The OEX still has not been able to make it above the 38.2% retracement of the plunge off yesterday's last five-minute high, at least on a five-minute closing basis. That's at about 563.67. Testing it now.

 
 
  Linda Piazza   1/20/200,  11:37:23 AM
The OEX is zig-zagging its way higher, the climb looking corrective now. It's formed a bigger triangle now, upside break at 553.56, downside break at 562.81, but I think an upside break, if it occurs, might resolve into a flag.

 
 
  Jonathan Levinson   1/20/200,  11:36:05 AM
Hi Jonathan, wondering when you would consider going long on a swing trade with the Q's....do you think we're at the bottom at 37.53 (not too far from the 38.2 fib retrace which I have at 37.49 from the low of 32.35 back in Aug) I'm a new student to Fib so I'm not sure I even got that right. Anyway, would love to hear your comments. Thanks Frank

Frank, I have fibonacci support at 37.60, followed by 37.31 based on the retracement off yesterday's 38.06 confluence. However, my principal tool is cycle setup based on multiple timeframes. On this basis, the 30 minute cycle downphase appears to be stalling within the bottomy daily cycle downphase. Entries at lower flattened 30 minute channel support with stops tight beneath the session low have the greatest chance of catching the bulk of a synchronous upphase- currently the channel support is at 37.59, just below that fib line. The trouble is that the short cycle oscillators are looking weak midway up a corrective upphase. Entries in this area will need tight active stops, in the event that the daily cycle downphase isn't yet done and causes the 30 min cycle to begin the dreaded bearish downside trending move discussed in last night's Futures Wrap.

 
 
  Jeff Bailey   1/20/200,  11:35:01 AM
Bullish day trade raise stop alert ... for Rambus (RMBS) $20.95 to $20.75

 
 
  Tab Gilles   1/20/200,  11:31:08 AM
Notice that the $USD strength continues as the markets ($SPX) weaken...this inverse correlation is still intact. Link

 
 
  Jeff Bailey   1/20/200,  11:27:18 AM
Bullish day trade raise stop alert ... for Rambus (RMBS) $20.92 +17.19% ... to $20.65.

 
 
  Jonathan Levinson   1/20/200,  11:27:02 AM
IB is back up for me on the east coast server.

 
 
  Jonathan Levinson   1/20/200,  11:22:52 AM
My Interactive Brokers connection is offline, as is being noted on the Futures side as well.

 
 
  Linda Piazza   1/20/200,  11:21:06 AM
A GSO chart, with the stocks in this sector important to tech performance in general: Link

 
 
  Jeff Bailey   1/20/200,  11:20:47 AM
Bullish day trade raise stop alert ... for Rambus (RMBS) $20.87 +16.91% to $20.60.

 
 
  Jeff Bailey   1/20/200,  11:17:30 AM
Bullish day trade raise stop alert ... for Rambus (RMBS) $20.74 +16.19% .... to break even.

 
 
  Jeff Bailey   1/20/200,  11:14:44 AM
11:00 Internals at this Link

 
 
  Linda Piazza   1/20/200,  11:08:24 AM
OEX dropping back below that five-minute 21-ema again after piercing it. Touch and go this five-minute period as to whether it will close above it or not. (It didn't, but this five-minute period probably will.) The ascending trendline off the low of the day, the bottom line of the symmetrical triangle the OEX appears to be forming is now at about 562.53. As I type, though, the OEX appears to be pushing through the top of that formation, perhaps on its way to forming a bigger flag-type formation. While current bears don't want to see the OEX retrace more than 50% of the plunge off yesterday's last five-minute low, want-to-be new bears might like to see it rise all the way to the five-minute 100/130-ema's and get rolled down from that level, with the internals corroborating a possible near bearish entry. Important to see that corroboration, by the way, as there are equal numbers of people who see today's low as a buying opportunity.

 
 
  Linda Piazza   1/20/200,  11:02:52 AM
So far, the five-minute 21-ema at 563.07 turns the OEX back, although it's challenging it again as I type. For reference, the five-minute 100/130-ema's are now at 565.31 and 565.54, respectively, nearing the 61.8% retracement of the plunge off yesterday's last five-minute high. Bears don't really want to see the OEX retrace more than 50% of that plunge, though, with that number at 564.41.

 
 
  Jeff Bailey   1/20/200,  11:02:34 AM
11:00 Market Watch at this Link

 
 
  Tab Gilles   1/20/200,  11:02:05 AM
As I highlighted last night on my 10:08PM post, that the $NASI was signaling continuing downside on the $COMPQ. Sure enough the selling is occuring. But where will it find nearterm support? To the charts... Link Link Link

The $VIX 60 minute chart I highlighted last Friday and yesterday is climbing as I expected. I've targeted 1158 on the $SPX as nearterm support. Link

 
 
  Linda Piazza   1/20/200,  10:58:39 AM
The OEX again faces the five-minute 21-ema. This average, just above the OEX's current 563.11 level, turned the OEX back on the earlier rise. The OEX pierced it but showed five-minute closes beneath it. Let's see what happens this time. I'd like to see the OEX set up a definitive formation that can be watched for a downside or upside break. It looks as if it might be trying to do so, perhaps into a triangle shape. The advdec line is showing the same attempt to climb as the OEX, so keep a watch.

 
 
  Jonathan Levinson   1/20/200,  10:55:42 AM
QQQQ is so far holding a higher low above 37.60, but volume and confidence are weak so far. The 30 and 60 min channels have yet to turn up, with resistance coinciding right at the high of the day, from 37.80-.82.

 
 
  Jeff Bailey   1/20/200,  10:55:18 AM
Bullish day trade long alert ... for Rambus (RMBS) $20.41 here, stop $20.25, target $21.10.

 
 
  Jeff Bailey   1/20/200,  10:52:47 AM
Biiiiig bid for junk this morning ... Pacholder High Yield (PHF) $10.02 +1.62% .... a bit surprised considering the steepening yield curve had longer-dated Treasury yields moving up.

Might begin looking for small caps to show some firming and strength.

 
 
  Jonathan Levinson   1/20/200,  10:51:14 AM
From the Nymex website:

Note: Because of the forthcoming Inauguration Day holiday, the Weekly Natural Gas Storage Report for the week ending January 14 will be released on Friday, January 21, between 10:30 a.m. and 10:40 a.m. (Eastern Time). The official release schedule is accessible by use of the link titled "Schedule" located on the menu bar at the top of this web page.

 
 
  Jeff Bailey   1/20/200,  10:51:00 AM
Taser Intl. (TASR) $18.00 +3.03% ... after gap open low of $15.90.

 
 
  Linda Piazza   1/20/200,  10:49:24 AM
The Fed's Poole is speaking today, saying that inflation seems to be in check, but that the Fed would take aggressive steps if needed to counter too steep a rise in prices.

 
 
  Linda Piazza   1/20/200,  10:45:25 AM
The advdec line is attempting to steady, but not really climbing yet. VIX remains near its high of the day, but TRIN certainly isn't especially encouraging to bears, is it?

Studying the OEX's five-minute chart, I see resistance attempting to firm near 562.56-563.28.

 
 
  Jeff Bailey   1/20/200,  10:43:23 AM
Pulte Home (PHM) $65.56 -1.44% .... related to the sold PHM Jan. $65 Calls (PHM-AM) which are still bid $0.95, that's $0.40 premium per contract at this point. With tomorrow's expiration, still would rather wait and do nothing at this point.

 
 
  Jonathan Levinson   1/20/200,  10:39:01 AM
Headlines while I was away:

10:00am U.S. DEC. LAGGING INDICATORS FLAT

10:00am U.S. DEC. COINCIDENT INDICATORS UP 0.3%

10:00am U.S. DEC. LEADING INDICATORS RISE 0.2% AS EXPECTED

 
 
  Jonathan Levinson   1/20/200,  10:36:07 AM
Back in time to see QQQQ aborting a short cycle upphase in the early going. However, bulls should be OK so long as the 37.53 low holds. In such case, this will be a stronger than usual pullback to test the short cycle bounce that started half an hour ago. 30 min channel support has crept up to 37.57.

 
 
  Jeff Bailey   1/20/200,  10:30:13 AM
Rambus (RMBS) $20.37 +14.11% ... backfilling morning gap higher to WEEKLY S1 here.

 
 
  Linda Piazza   1/20/200,  10:29:31 AM
The OEX found resistance at the 38.2% retracement of the plunge off the last five-minute high yesterday. It was also the five-minute 21-ema. Those who want to try a new bearish entry could use further rollovers beneath that 38.2% retracement, at 563.65 and the 50% one at 564.41. The danger, though, is that the OEX is zig-zagging into a bigger bear flag that retraces more than the last drop from yesterday's last five-minute plunge.

 
 
  Linda Piazza   1/20/200,  10:19:53 AM
The TRAN is bouncing from its 3524.36 low this morning. The TRAN's 100-ema is at 3509.53, with the 38.2% retracement of its rally off its August low at 3492.37. These are strong potential support levels for the TRAN, but its pattern looks more bearish than bullish.

 
 
  Linda Piazza   1/20/200,  10:14:23 AM
OEX bouncing from the neckline. So far, this bounce does not look corrective, but it's early going yet and difficult to tell. The OEX is on the verge of creating a morning-star pattern on the 15-minute chart, though. I think this is part of the chopping-around process, but the outcome for today and for the next week still is undetermined as long as the OEX is within the right shoulder zone.

 
 
  Jeff Bailey   1/20/200,  10:14:17 AM
Semiconductor Index (SOX.X) 401.25 +0.84% .... percentage gainer. XLNX +2.66%, ALTR +2.45%, BRCM +1.95%

 
 
  Jeff Bailey   1/20/200,  10:12:40 AM
VIX.X 13.39 +1.59% ... reversing like a rocket out of fuel.

SPX.X 1,180.73

 
 
  Jeff Bailey   1/20/200,  10:11:42 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Linda Piazza   1/20/200,  10:09:39 AM
Promised chart showing the OEX's H&S, the current potential support and support at the first downside target if the neckline is broken: Link See how long it took to form the left shoulder? If the formation is to be symmetrical, the OEX could still chop around above that neckline and below that right-shoulder level for another day or two before a final direction is decided, so be aware of that possibility when considering new or existing positions. Be prepared to be wrong and get out. Bears had ample time to decide on a strategy for handling this neckline test and should have employed it, whether it was ratcheting down the stops, taking partial profits, or even automatic total profits and waiting out the next move.

 
 
  Jeff Bailey   1/20/200,  10:05:07 AM
10:00 Market Watch at this Link

 
 
  Jonathan Levinson   1/20/200,  10:03:30 AM
Need to step away for half an hour here.

 
 
  Linda Piazza   1/20/200,  10:01:19 AM
OEX still trying to steady at the neckline, at the 38.2% retracement of the bear-market decline, at historical and Keltner support. Chart to follow.

 
 
  Jonathan Levinson   1/20/200,  10:01:01 AM
The Fed has added another 7.75B via overnight repo against 5.5B expiring for a net add of 2.25B for the day.

 
 
  Jane Fox   1/20/200,  9:59:50 AM
Leading Indicators at 10:00.

 
 
  Linda Piazza   1/20/200,  9:57:45 AM
Reader Question: I'd like to know if there's any relation between Deustche Bank's downgrade [of RAI] the day before options expiration and the fact that the OI on the Jan 75 and 80 calls is over 10k. Am I too big a cynic or does somebody at DB want to see RAI below 80, or even 75 tomorrow?

Response: Great question. I'm not accusing DB of anything, but I think it pays to be a cynic and be watchful. However, it's sometimes difficult to match up the open interest figures with the specific position that might have been entered. I note that OI on the JAN 70 puts is 14,749 alone this morning, according to QCharts, at least. Was some kind of hedged position entered? Is there a calendar spread, with near-term options calls in the strikes you mentioned having been sold against a held long-term call or long stock position? I didn't check leaps, if they're offered in RAI. Some writers may have better ideas and may be better able to decipher this information, and I hope they'll chime in, if so, but I've always been able to conceive of too many possibilities to decide on just one scenario, and so haven't found this study of OI as useful a tool (other than in deciding max pain, which is sometimes helpful) in deciding on positions likely held or entered.

 
 
  Linda Piazza   1/20/200,  9:55:39 AM
As expected, during the typical first retracement of the day, the OEX attempts a bounce from the neckline, the 38.2% retracement of the bear-market decline, historical support, and the 60-minute Keltner support that I mentioned earlier. Certainly is a tepid bounce so far. . . in fact, ended as I typed.

 
 
  Jeff Bailey   1/20/200,  9:51:08 AM
Extreme Networks (EXTR) $6.37 +8.33% ... launches after early morning congenstion at $6.00.

 
 
  Jeff Bailey   1/20/200,  9:49:54 AM
VIX.X 13.62 +3.18% ... DAILY Pivot Levels .... 12.19, 12.62, Piv = 12.85, 13.28, 13.51.

 
 
  Jonathan Levinson   1/20/200,  9:45:48 AM
QQQQ has just rolled back over, giving back its previous gains, down .47 at 37.61 here. Bulls will hope for a double bottom to hold here, to permit the short cycle oscillators to at least stabilize in oversold territory.

 
 
  Linda Piazza   1/20/200,  9:45:14 AM
The OEX is at or approaching the neckline for its latest H&S. Bears would like to see confirmation of a neckline break by a move below the 1/13 low of 560.47, and preferably below 560, helping them to breathe a bit easier. We're into the time when the first retracement of the day usually occurs. The three-minute Keltner chart shows resistance at 562.33, 562.92, and then stronger from 563.54-564.16. Bears would like to see continued three-minute closes beneath the line currently at 562.92.

So far, there's been no neckline break.

 
 
  Jeff Bailey   1/20/200,  9:41:39 AM
Alcoa (AA) $29.00 -0.60% Link ... trade at $29 generates a reversing lower point and figure sell signal. Testing bullish support trend here. Turns a bit defensive here with downside risk being assessed to currently under construction bearish vertical count of $23.

 
 
  Jeff Bailey   1/20/200,  9:38:55 AM
Current OPEN MM Profiles at this Link

 
 
  Jonathan Levinson   1/20/200,  9:38:25 AM
QQQQ has first resistance at 37.90, with the heavier confluence from 38.00-38.10. The short cycle oscillators are still buried in an oversold trending move, no sign of life there except for the already-topping wavelet oscillator.

 
 
  Linda Piazza   1/20/200,  9:38:10 AM
Although the 15-minute Keltner chart shows a lower potential target, the 60-minute chart reveals potential support at 561.40, just below the neckline of the latest H&S on the 60-minute chart. This is also near the 561.23 level that's the 38.2% retracement of the bear market decline. It's possible that the OEX could pierce that line during a 60-minute period and bounce back to close above it, so that it met the downside target on the 15-minute chart, but then found support on the 60-minute one, but that's kind of convoluted thinking. At any rate, current bears need to have their plans for handling the test of the neckline area and approaching Keltner and historical support. It's not guaranteed that support will hold, but have a plan in place.

If you plan to enter on a neckline break, have a plan for handling a potential bounce right back above it, too. We're approaching the time for the first reversal of the day. Bears want to see a measured corrective-type bounce, preferably a tepid one.

 
 
  Linda Piazza   1/20/200,  9:32:12 AM
As expected, the OEX opens and heads lower, quickly moving toward the neckline of the H&S on its 60-minute chart. Unless it bounces quickly above 564.16 on a 15-minute closing basis, it looks vulnerable down to 560.67 support on that chart. I think we've got some post-EBAY & QCOM volatility to settle out this morning, though, so be careful of reaching any conclusion too soon.

 
 
  Jeff Bailey   1/20/200,  9:24:16 AM
Rambus (RMBS) $21.30 ... higher after it announced it had received seven summary judgement rulings from the U.S. District Court of Northern California regarding patent infringement and validity issues in the Rambus patent case involving Hynix Semiconductor. The court found that Hynix infringed 29 claims from four Rambus patents. Rambus, which is seeking to collect billions of dollars in royalty payments from makers of dynamic random access memory (DRAM), said in a statement that Judge Ronald Whyte also granted one of the six summary judgment motions filed by Hynix.

Hynix filed suit against Rambus in August 2000 seeking to declare 11 Rambus patents invalid. The case has been divided into two parts, the first of which is set to be tried starting on March 21 in the U.S. District Court in San Jose, California.

The second phase of the case is scheduled to be tried in June and it will focus on various non-patent defenses and counterclaims asserted by Hynix, Rambus said.

 
 
  Jeff Bailey   1/20/200,  9:21:20 AM
HL Camp & Company has their computers set for program buying at $1.93 and set for selling at $-0.04. (Still Wednesday's, but might have to use)

 
 
  Linda Piazza   1/20/200,  9:20:24 AM
Future are lower this morning. If cash markets follow through with futures weakness, not always a given, the OEX may open near the neckline of its newest H&S, forming since November or might move down toward that 561.60-ish level rather soon in the trading day. Bears already in profitable positions need to decide ahead of the open how they'll handle that test. Taking automatic profits and waiting to see what happens next is one option. Taking partial profits and setting a breakeven stop for the rest of the position is another. Ratcheting down stops is another. Your pick.

What about entering new positions near the open? Risky. I would have rather had a new bounce-and-rollover entry as I'm fearful that there might still be a day or so of chopping around within the right-shoulder formation before a final direction is decided, and a bounce from the latest neckline area is one possible reaction. A neckline break suggests a move down toward next strong support near 557-557.30, as shown in a chart posted last night and over the last several days, although the actual downside target from a downside break is much lower. There's just the chance that the OEX will form yet another potential H&S, this one with a horizontal neckline at 557-557.30, with the current H&S forming the head of this next one. We've seen one potential H&S resolve into another bigger and more formidable formation after another, and there's nothing to stop it from happening again. In fact, there's lots of evidence to suggest it could and that bullish fervor is far from exhausted. Among our own writers, many consider this a buying rather than a selling opportunity. The P&F target is sky-high for the OEX. Many indices have confirmed big inverse H&S's on their monthly or weekly charts, and the current H&S's on their daily charts have to cross those necklines in order to fulfill their own downside targets. It's going to take a strong thrust down to produce those downside targets.

What about a long play on a bounce? I'm not going to be recommending that today. Could be wildly profitable if shorts get surprised, but that's not for me, because it would be flying in the face of negative chart formations.

 
 
  Jeff Bailey   1/20/200,  9:18:31 AM
Pre-market most actives .... EBAY $87.00 -15.5%, ASTM $4.07 +0.5%, RMBS $21.25 +19%, SIRI $5.56 -4.3%, AVII $3.39 -18%

 
 
  Jeff Bailey   1/20/200,  9:13:36 AM
March Crude Oil Futures (cl05h) $47.10 -1.58% .... little moved since just after last night's EIA data was released.

 
 
  Jonathan Levinson   1/20/200,  9:08:42 AM
The Fed has a 14-day 9B repo expiring today, and has just replaced it with another 9B for a net wash in that timeframe. There's only the 5.5B overnight repo left to deal with- that short term repo will be announced by the open market desk at 10AM.

 
 
  Jim Brown   1/20/200,  9:02:21 AM
PGR earnings = +2.01, est +1.67

 
 
  Jonathan Levinson   1/20/200,  8:55:44 AM
Session low for gold here, -2.8 at 420.60. Silver is down as well, -1.81% at 6.50, as are CAD futures. Looks like the USD Index is back on the move. So far, dollar strength has not been bullish for equities- the binary dollar trade working in reverse.

 
 
  Jim Brown   1/20/200,  8:49:02 AM
EBAY down to $87.50 and the cash market has not even awakened yet. We may get an $85 entry or maybe even $80 at this rate. If you are going to buy the dip make sure you wait until well after the open. You don't need to pick a bottom to be successful.

 
 
  Jonathan Levinson   1/20/200,  8:45:19 AM
The US Dollar Index hit its head on 84 resistance, currently trading 83.77, while TNX has bounced and is up 1.8 bps to 4.205%. TNX's gyrations are starting to look like noise to me below 4.26%. Any treasury bearishness will need to confirm with a move above 4.26% for the yield.

 
 
  Jim Brown   1/20/200,  8:44:28 AM
CREAF - Creative Technology, MP3 player maker, is anticipating a 50 percent year-on-year sales growth in the third quarter as well, with gross margins around 27 percent. Creative said it sold two million of its MP3 players iPod, in the quarter, a rival to Apple Computer's iPod.

 
 
  Jim Brown   1/20/200,  8:42:22 AM
EBAY - CIBC World Markets recommending a BUY on EBAY saying higher marketing costs and margin concerns are not a long term issue. They think revenue growth will accelerate in response to the EBAY move.

Piper Jaffray cut EBAY to a "market perform"

Deutsche Bank cut EBAY to a "hold"

 
 
  Jim Brown   1/20/200,  8:37:54 AM
GDW earnings = +1.09, est +1.07

 
 
  Jim Brown   1/20/200,  8:36:38 AM
Citigroup saying on the conference call that earnings will be closer to the bottom end of analyst expectation.

 
 
  Jonathan Levinson   1/20/200,  8:35:24 AM
QQQQ is finding support at the lower 30 min channel, but needs to bounce and hold above 38.05 to turn that channel up from its ongoing downphase. Lower channel support has fallen to 37.52 currently.

 
 
  Jim Brown   1/20/200,  8:26:51 AM
Jim, With Ebay getting hammered and their 2005 forcasts are you still recommending the April calls or should we go out further or forget about it.

I have no reluctance about going long EBAY at this level. I would only use a lower strike than the $105 I profiled yesterday. I would probably look at an April $95 strike today but I would like to see the volatility ease first. The opening print on all the options is going to be a huge spread. Once the stop losses and the expiring options for January get flushed I would not hesitate to jump in. EBAY said they were spending more money on China in anticipation of more volume than the U.S. That can't be bad. With the cash traders still an hour away from being able to dump their stock I would look to get a better entry than the current $89. $89 is weak support and $85 would really be nice.

It should be noted that EBAY's forecast for 2005 earnings remains $1.48-$1.52 and exactly the same as their prior guidance of $1.50. Analysts had hoped for $1.61. EBAY did not change for the year, only the over optimistic analyst community changed.

 
 
  Jim Brown   1/20/200,  8:20:37 AM
Every week I tell myself I am going long on TOL when it pulls back. I should have just bitten the bullet $20 ago.

 
 
  Jim Brown   1/20/200,  8:16:56 AM
Busy morning for earnings but no economic reports of importance.

 
 
  Jonathan Levinson   1/20/200,  8:15:34 AM
....whereupon Jim's keyboard burst into flames...

 
 
  Jim Brown   1/20/200,  8:15:25 AM
MRCY earnings = +0.29, est +0.27

 
 
  Jim Brown   1/20/200,  8:14:27 AM
RMBS up +$5 on the court news

 
 
  Jim Brown   1/20/200,  8:13:25 AM
VIGN earnings = +0.01, est -0.01

 
 
  Jim Brown   1/20/200,  8:12:54 AM
AVCT earnings = +0.40, est +0.40

 
 
  Jim Brown   1/20/200,  8:12:20 AM
UNH earnings = +1.09, est +1.08
Guiding higher

 
 
  Jim Brown   1/20/200,  8:11:44 AM
STI earnings = +1.31, est +1.27

 
 
  Jim Brown   1/20/200,  8:11:11 AM
REY earnings = +0.33, est +0.26

 
 
  Jim Brown   1/20/200,  8:10:16 AM
IGT earnings = +0.33, est +0.33

 
 
  Jim Brown   1/20/200,  8:09:35 AM
HDI earnings = +0.71, est +0.69

 
 
  Jim Brown   1/20/200,  8:08:53 AM
DHI earnings = +1.01, est +0.93

 
 
  Jim Brown   1/20/200,  8:08:24 AM
DPH earnings = -0.18, est -0.15

 
 
  Jim Brown   1/20/200,  8:07:46 AM
CAL earnings = -3.12, est -3.32

 
 
  Jim Brown   1/20/200,  8:07:15 AM
CMA earnings = +1.21, est +1.11

 
 
  Jim Brown   1/20/200,  8:06:22 AM
DAL earnings = -5.88, est -5.47

 
 
  Jim Brown   1/20/200,  8:04:12 AM
More Earnings Scheduled This Morning

CMA est +1.11
CAL est -3.32
DPH est -0.15
DAL est -5.47
DHI est +0.93
GDW est +1.07
HDI est +0.69
IGT est +0.33
PPG est +1.02
PGR est +1.67
REY est +0.26
STI est +1.27
AVCT est +0.40
UNH est +1.08
VIGN est -0.01

 
 
  Jim Brown   1/20/200,  8:02:24 AM
SUN earnings +2.62, est +1.80

 
 
  Jonathan Levinson   1/20/200,  8:01:54 AM
There was an early morning repair attempt in the futures, but they've sunk back lower, ES trading 1179.5, NQ 1530.5, YM 10503, QQQQ -.48 at 37.60. Gold is down 1.7 to 421.7, silver -.076 to 6.549, ten year notes -3/64 to 111 55/64, and crude oil trading 47.60.

We await the 10AM release of Leading Economic Indicators, est. +.2%, and at noon, the Philly Fed, est. 25.

 
 
  Jim Brown   1/20/200,  8:01:52 AM
RMBS saying they received seven summary judgments in one of their patent cases.

 
 
  Jim Brown   1/20/200,  7:58:57 AM
NITE earnings +0.20, est +0.14

 
 
  Jim Brown   1/20/200,  7:58:32 AM
HDWR earnings = +0.34, est +0.30

 
 
  Jim Brown   1/20/200,  7:57:53 AM
F - Ford earnings +0.28, est +0.27

 
 
  Jim Brown   1/20/200,  7:56:54 AM
C earnings +1.02, est +1.01

 
 
  Jim Brown   1/20/200,  7:56:16 AM
BEBE earnings = +0.39, est +0.40

 
 
  Jim Brown   1/20/200,  7:55:45 AM
KRB earnings = +0.59, est +0.58

 
 
  Jim Brown   1/20/200,  7:55:09 AM
T earnings = +0.78, est +0.58 BEAT
Guiding slightly lower

 
 
  Linda Piazza   1/20/200,  6:52:32 AM
Good morning. Despite a drop in crude prices overnight after the late-day release of crude inventories, the Nikkei and other Asian markets followed U.S. markets lower. Techs led the declines, and they're at least partly responsible for this morning's declines in European markets, too. Our futures have spent the night trying to recover from the after-the-close drop after several reporting companies disappointed. Neither the ES nor the NQ had closed that gap as of 6:41 EST. As of that same time, gold was down $1.40, and crude, down $0.79. More detail about Asian and European markets follows in succeeding paragraphs.

Many had predicted that tech weakness in the U.S. markets would lead to weakness in the Nikkei, and that happened. By mid-morning, the Nikkei had dropped into levels not seen since late December, hitting its low of the day. It was to close lower by 120.57 points or 1.06%, at 11,284.77. Techs dropped, as anticipated. Companies in the same food chain as QCOM dropped, with those companies including Kyocera and LG Electronics. A Lehman Brothers analyst also lowered estimations for LG Electronics' report, due next week. This morning, after the Nikkei's close, Sony has trimmed its forecast for sales through March, citing lower demand for some products. The company raised its net profit forecast.

Most other Asian markets declined, too. The Taiwan Weighted dropped only 0.12%, but South Korea's Kospi declined 0.75%. Singapore's Straits Times fell 0.57%, and Hong Kong's Hang Seng declined a heftier 0.99%. China's Shanghai Composite fell 1.13%, with this bourse bumping along at many-year lows.

Most European markets also turn lower, with technology stocks leading indices lower as they did in Asia. Nokia, Ericsson, and Royal Philips Electronics numbered among the techs sliding lower. Techs were joined by drug maker Novartis and luxury goods maker LVMH Moet Hennessy Louis Vuitton SA, both declining after their earnings reports. Deutsche Bank received a rating cut by Goldman, Sachs to an underperform rating, and declined. Holcim Ltd., the world's second-largest cement company, bucked the weakness and gained after confirming its intention to buy Aggregate Industries. Although the FTSE 100 contains only one tech stock, declines in oil majors and insurer Legal & General helped weigh it down.

As of 6:37 EST, the FTSE 100 had declined 21.90 points or 0.45%, to 4,796.40. The CAC 40 had fallen 21.86 points or 0.57%, to 3,847.15. The DAX had fallen 36.98 points or 0.87%, to 4,208.57.

 
 
  OI Technical Staff   1/19/200,  10:25:48 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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

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

 
 

Market Monitor Archives