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  Jeff Bailey   1/21/200,  5:48:47 PM
Closing internals at this Link

Closing U.S. Market Watch at this Link BLUE arrows mark gains greater than 1%, RED arrows mark losses greater than 5% for both 5-day and 20-day Net % change. The most "obvious theme" I would pick up on is energy prices a negative, with some defensive play in few equity sectors, and longer-dated maturities.

Pivot Matrix for next week at this Link

Quick note #1 : This week's high/low for the BIX.X came on Tuesday. Big ramp up, then distribution into Friday. On Tuesday, WFC reported "strong earnings" fell to $60.10 at open, ramped to $61.50, then distribution into Friday's close. Earnings, valuation, fundamentals all argued (bullish and bearish). Yield curve flattened again this week.

Quick note #2 : Bond market's reaction to "Fed talk" that higher rates may come if productivity slows found INVERSE reaction than one might have thought. Buyers stepped up in bonds, especially shorter-dated. Defensive? Caution into Sunday's (01/30/05) Iraq election? Response sure didn't seem to be "inflation."

Quick note #3 : Keep eye on banks (see 10:52:31)

 
 
  Jeff Bailey   1/21/200,  4:33:18 PM
Cancel the day trade setup long alert for the QQQQ at $37.27 from 02:35:03 as this was never traded.

 
 
  Jeff Bailey   1/21/200,  4:30:26 PM
Current OPEN MM Profiles I've made at this Link with notes as to today's expiration. I will reduce (haven't yet) the cost basis for the currently LONG PHM-DM by $0.90 per contract, as the previously SOLD PHM-AM expired worthless.

Today's Activity ....

Closed out the NAKED calls for the DIA and the DIA Feb. $104 calls (DIA-BZ) at the offer of $1.60. ($1.15, or +41.82%)

Day trade short shares of Southwest Air (LUV) at $13.98, covered at target of $13.80. ($0.18, or +1.30%)

This week's CLOSED out trade blotter at this Link (Includes SMH and HIG options, but NOT the PHM Jan. $65 calls (PHM-AM) short as I use these to reduce cost basis in the long PHM Apr. $65 calls (PHM-DM)).

 
 
  Jane Fox   1/21/200,  4:07:38 PM
Drumroll please - the DOW has closed lower than the lowest close in December. Now if you combine this with the First Five days in January lower also (which they were) the chance of having a bearish year is 92%. Sorry bulls.

 
 
  Jonathan Levinson   1/21/200,  4:01:28 PM
A 30 min cycle downphase is in progress, with price well ahead of the oscillators which have yet reach oversold territory. Bulls need to see 37.00 hold and 37.22 (current 30 min channel resistance) broken before guessing at a premature end to the 30 min downphase. 1st sign of trouble for QQQQ bears is a break above 37.12.

 
 
  Linda Piazza   1/21/200,  3:55:45 PM
Bears have a decision to make, as to whether to hold over or not, and bulls as to whether this could be a new entry. Here's a chart that shows potential for a bounce, but a bounce into a possible right shoulder for yet another H&S on the daily chart. I think I'd want to see how things set up Monday before considering a long. Link Bears should perhaps consider taking at least partial profit in case of a bounce from this level. There are a lot of unknowns here.

 
 
  Jeff Bailey   1/21/200,  3:48:53 PM
Semi HOLDRs (SMH) $30.26 -1.27% .... no hope for the long Jan. $32.50 calls and a $0.40 fill.

 
 
  Jeff Bailey   1/21/200,  3:47:53 PM
Pulte Home (PHM) $64.40 -0.27% ... looks to close below the Jan. $65 strike. Still 13-minutes until expiration.

 
 
  Jeff Bailey   1/21/200,  3:45:34 PM
LUV $13.79 bid x $13.80 offer with stock hitting the bid.

 
 
  Jeff Bailey   1/21/200,  3:44:47 PM
Bearish day trade close out target alert for Southwest Air (LUV) $13.80 .... sit the bid and look for a fill. Should have a little room to $13.77.

 
 
  Linda Piazza   1/21/200,  3:43:56 PM
The OEX gives up its test of the five-minute 21-ema.

 
 
  Jeff Bailey   1/21/200,  3:41:26 PM
Soutwest Air (LUV) $13.85 -1.49% .... ticks at RED #5. I'd have my left index finger on the left mouse button.

 
 
  Linda Piazza   1/21/200,  3:39:20 PM
The OEX was turned back at its first approach to its five-minute 21-ema at 559.20, and it pulls back, but perhaps only in preparation for another test.

 
 
  Jeff Bailey   1/21/200,  3:37:24 PM
Southwest Air (LUV) $13.87 -1.35% ... moves to session low and slips below DAILY S1.

 
 
  Jeff Bailey   1/21/200,  3:36:01 PM
March Crude Oil futures (cl05h) settled up $0.67, or 1.40% at $48.53.

 
 
  Jeff Bailey   1/21/200,  3:29:18 PM
Bearish day trade lower stop alert for Southwest Air (LUV) $13.90 -1.13% ... to $13.93.

 
 
  Linda Piazza   1/21/200,  3:29:08 PM
The OEX attempts a bounce from 557.70, a little ahead of the 557-557.30 level I had pinpointed. The five-minute 21-ema is just overhead at 559.28, lending its resistance to the historical S/R found from 559.25-559.50, so getting past that is the OEX's first task before climbing further.

 
 
  Jim Brown   1/21/200,  3:28:27 PM
There are no economic reports scheduled for Monday. Companies with morning earnings include:

ETN, KMB, LM, LXK, OXY, STN, TZOO, UNP, WRLD, AXP.

Earnings after the close include:

ALTR, ACF, AUDC, CAI, CLDN, CEGE, CNF, CGNX, CR, FILE, FBC, JDAS, KEM, LSS, MSPD, NFLX, SLAB, TNL, TTEK, TMWD, TUP, VRST

 
 
  Jeff Bailey   1/21/200,  3:26:46 PM
Soutwest Air (LUV) $13.89 -1.14% ... sitting on DAILY S1.

 
 
  Jonathan Levinson   1/21/200,  3:25:12 PM
QQQQ clears first resistance at 37.12, next resistance 37.20.

 
 
  Jeff Bailey   1/21/200,  3:23:56 PM
Buy Program Premium .... DIA $104.08, SPY $117.12, QQQQ $37.12.

 
 
  Jim Brown   1/21/200,  3:23:51 PM
TrimTabs just reported that funds have seen outflows so far this month of -$2.6 billion and they are projecting -$4.8B outflows for the month. This compares with inflows in Jan-2004 of +43.8 billion. There was no warning that fund flows were going to dry up and fund managers are in serious trouble trying to balance and trim positions while keeping up with the cash drain. Many count on the January inflows in their investing plan and to fund tax payment withdrawals. With no inflows they can't open new positions or satisify the normal withdrawals for tax payments without selling stock.

 
 
  Jeff Bailey   1/21/200,  3:21:52 PM
Exxon/Mobil (XOM) $50.61 -0.21% .... edges negative

3M (MMM) $81.21 -2.09% ... got whacked after session high of $83.12. Will make intra-day note that as DIA had tried to bounce back to $104.40, MMM looked "exactly the same" at $81.80.

 
 
  Linda Piazza   1/21/200,  3:20:22 PM
My advice in my 20:29 post last night was that bulls not buy breakouts above the five-minute 100/130-ema's--good advice, it turned out--and that aggressive bears could enter new positions on rollovers beneath those averages if internals cooperated and if they were prepared for the possibility of the usual pin-them-to-the-numbers opex activity. Turns out I should have left out those two conditions. At the time of the first two rollovers beneath those averages, internals weren't so bearish.

 
 
  Jeff Bailey   1/21/200,  3:17:45 PM
03:00 Internals at this Link

 
 
  Jonathan Levinson   1/21/200,  3:15:23 PM
30 min channel support being tested now.

 
 
  Linda Piazza   1/21/200,  3:14:43 PM
OEX approaching this potential support: Link

 
 
  Jeff Bailey   1/21/200,  3:13:27 PM
Sell Program Premium ... DIA $103.84, SPY $116.83, QQQQ $37.02

 
 
  Jeff Bailey   1/21/200,  3:09:36 PM
Hmmmm.... DIA $104.02 , SPY $116.99, QQQQ $37.08 .... $104, $117, $37

Wouldn't have guessed that this morning.

 
 
  Jonathan Levinson   1/21/200,  3:07:16 PM
There's a bullish divergence on the short cycle Macd for QQQQ, but it will take a move above 37.20 to kick off the short cycle upphase to confirm it. First sign of trouble for QQQQ bears will be a break above 37.12. The 30 and 60 minute cycle channels continue to point south, with upper resistance at 37.44 currently.

 
 
  Linda Piazza   1/21/200,  3:04:48 PM
The OEX's 38.2% retracement of the rally off the October low is in the 557-557.30 level, but the 38.2% of the rally off the August low is nearer 556.20. I've been using the former number because it has some correspondence with other levels of support established by other means, such as the 100-ema, Keltner support, etc. Perhaps we ought to keep that lower number in mind, too. The TRAN has breached the 38.2% retracement of its rally off the August low, but the TRAN never really pulled back in October, so it was always clear that the August low should be used in calculations for the TRAN.

 
 
  Jeff Bailey   1/21/200,  3:02:53 PM
03:00 Market Watch at this Link

30-year YIELD "flopped" at the close to 4.643 from 4.654% just five minutes prior. Expiration related?

 
 
  Jeff Bailey   1/21/200,  2:58:27 PM
Bearish day trade lower stop alert .... for Southwest Air (LUV) $13.92 -0.99% ... to break even.

 
 
  Jeff Bailey   1/21/200,  2:56:21 PM
QQQQ $37.06 -0.75% ... most active options ... Feb. $39 Call (60,897:94,463), Feb. $38 Call (32,348:60,688), Jan $37.63 Call (26,456:128,841)

 
 
  Linda Piazza   1/21/200,  2:56:10 PM
The TRAN continues lower.

 
 
  Jane Fox   1/21/200,  2:55:07 PM
Unless a miracle happens, I really think the DOW will close lower than its lowest December close today. We then have to resolve how this fits into year's ending with a "5" been so bullish.

 
 
  Linda Piazza   1/21/200,  2:53:49 PM
OEX 557-557.30, here it comes. Seriously, we saw a number of days when 558 was support, too, so it must be folded into that level, as Jane somtimes puts it.

 
 
  Jonathan Levinson   1/21/200,  2:50:49 PM
QQQQ never regained the 7200-tick SMA line at 37.32, and the 30 min channel downphase never stalled. Lower 30 min channel support is down to 37.01 here.

 
 
  Jeff Bailey   1/21/200,  2:50:08 PM
Sell Program Premium SPX 1,170.56, QQQQ $37.14, DIA $104.10

 
 
  Jeff Bailey   1/21/200,  2:49:31 PM
TRIN 1.30 ... high of session and DAILY Pivot.

 
 
  Linda Piazza   1/21/200,  2:46:13 PM
The OEX is trying to steady around that 559.25-559.50 level, and it certainly needs to do so to avoid a drop toward the 557-557.30 level.

 
 
  Jeff Bailey   1/21/200,  2:42:59 PM
BIX.X 366.21 -0.49% ... sitting right on its DAILY S2.

DIA $104.24, 20-cents above its DAILY S2.

QQQQ $37.20 ... 20-cents above its DAILY S2

SPY $117.18 ... 5-cents above DAILY S1.

 
 
  Jonathan Levinson   1/21/200,  2:40:30 PM
Crude oil finishes for the day +2.8% or 1.325 per barrel at 48.625.

 
 
  Jeff Bailey   1/21/200,  2:39:40 PM
LUV $13.97 -0.64% ... still won't budge.

 
 
  Linda Piazza   1/21/200,  2:39:19 PM
The TRAN hasn't bounced yet. It's slightly below the 38.2% retracement of the rally off the August low and firmly below the 100-ema. Needs to bounce. I thought it might after the Nymex close, but no dice.

 
 
  Jeff Bailey   1/21/200,  2:38:33 PM
30-year yield ($TYX.X) after testing yesterday's low yield of 4.644%, 30-year now unchanged at 4.655%. Might get some steepening back to the close. Could give stocks the lift in last hour.

 
 
  Jeff Bailey   1/21/200,  2:35:03 PM
Bullish day trade long setup alert ... for the QQQQ. Go long with a trade at $37.27, stop $37.15 to begin, target $37.55.

QQQQ $37.22

 
 
  Linda Piazza   1/21/200,  2:28:37 PM
I'm watching Stockcharts.com SharpCharts Voyeur and note on the YHOO chart that YHOO just saw a big surge in volume as it started higher a few minutes ago. I also note that a lot of people are watching YHOO, as its chart keeps coming up. This isn't a recommendation, just a matter of interest.

 
 
  Jonathan Levinson   1/21/200,  2:28:35 PM
A short cycle upphase is trying to get started, but it's just noise below that 37.32 line.

 
 
  Jonathan Levinson   1/21/200,  2:27:48 PM
Next resistance for QQQQ is the 7200-tick SMA at 37.32, above which the 30 min cycle downphase will stall, with next resistance at the 30 min channel top, 37.41 currently.

 
 
  Jane Fox   1/21/200,  2:26:53 PM
The DOW's low today of 10423.95 has breached its December low of 10425.76. SPX's December low was 1173.76 and yesterday the SPX hit a low of 1173.39 and today's low so far is 1171.25.

 
 
  Jeff Bailey   1/21/200,  2:25:13 PM
DIA $104.28 -0.46% .... block of 100 in the Feb. $104 calls at $1.60 (time 2:02:54 PM EST).

 
 
  Linda Piazza   1/21/200,  2:22:27 PM
I've been posting nested OEX Keltner charts so that readers can gain some familiarity with what I'm watching. Some of those conclusions from those Keltner charts look fairly bearish at the current time, so I wanted to elaborate. One reason that Keltners are so valuable to me is that they allow me to form if/then statements. So, although they're configured to show more potential downside right now over the coming days or weeks, I can pinpoint when that outlook might change. I've given you some of those if/then statements. For example, in my 14:15 post, I noted that if the OEX can show a weekly close above the Keltner line that's currently at 564.90 (it's dynamic, so it might be at a slightly different spot by next week's close), then it might turn the blue channel higher again and not be as vulnerable to a drop toward 550-551. So, my viewpoint can be dynamic, too, as conditions change. If the week is strong next week, and the OEX closes higher than the position of that line next week, then it might look possible for the OEX to achieve an upside target near 579.40-583.63, for example. The intraday charts give me a better view of what's happening hour by hour, but I would no longer trade without Keltner charts.

 
 
  Jeff Bailey   1/21/200,  2:21:07 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   1/21/200,  2:16:45 PM
Oil Index (OIX.X) 401.92 +0.92% ... fading from session high of 404.00.

 
 
  Linda Piazza   1/21/200,  2:15:28 PM
A weekly OEX nested Keltner channel chart: Link It may be difficult for the inexperienced (with nested Keltner channels) to pick out, but there's bearish divergence showing up on this chart, at least so far. Notice the January 2004 swing high and then this January's. Notice that the blue channel broke out of the black on in January 2004, but the blue channel turned lower on this swing high before it even touched that black channel. That's bearish divergence, Keltner style. The blue channel isn't fully committed to the downturn yet, and weekly closes above that Keltner line at 564.90 can turn the blue channel higher again and erase that bearish divergence. As with all instances of bearish divergences, we can see them persist for quite a while before a real downturn occurs or they can even be undone. They serve as a warning to pay attention only.

 
 
  Jeff Bailey   1/21/200,  2:15:11 PM
DIA $104.27 -0.46% ... little bounce from session low of $104.13 found sellers right at $104.40.

 
 
  Jeff Bailey   1/21/200,  2:05:56 PM
02:00 Market Watch at this Link

 
 
  Linda Piazza   1/21/200,  2:04:14 PM
A look at the OEX on the daily chart with nested Keltner channels: Link (Note: I do know how to spell "converging," but just was being a bit fumble-fingered as I prepared the chart annotations.) This chart shows some correlation of support levels with those found by more conventional methods, such as Fib retracements, commonly watched moving averages, etc.

 
 
  Jonathan Levinson   1/21/200,  2:00:11 PM
Here's the test of 37.20 QQQQ support-turned-resistance.

 
 
  Jeff Bailey   1/21/200,  1:59:48 PM
Swing Trade NAKED call option close out alert ... closing out the two (2) NAKED DIA Feb. $104 Calls (DIA-BZ) at the offer of $1.60.

DIA $104.33 here.

 
 
  Linda Piazza   1/21/200,  1:57:20 PM
Interesting to note that the advdec line confirmed a H&S just before or as markets started tumbling: Link I've mentioned before that these formations on the advdec line sometimes do appear to have resonance on the markets, at least for confirmation of a move. The evidence is anecdotal so far (I haven't conducted any kind of scientific study, etc.), but compelling enough that I try to watch. This time, I missed the formation.

 
 
  Jonathan Levinson   1/21/200,  1:54:35 PM
This is shaping up to be another downside trending move for QQQQ- bearish below 37.39, snarling bearish below 37.20, the current site of violated lower 60 min channel support. All things being equal, the bulls should be pushing back on the keltner violations, but so far they're not.

 
 
  Jeff Bailey   1/21/200,  1:53:08 PM
DIA $104.22 -0.51% ... Feb. $106 puts $2.15 (1,437:5,271), Jan $104 Puts $0.15 (942:9,597), Feb $104 puts $1.30 (866:4,593)

 
 
  Linda Piazza   1/21/200,  1:50:05 PM
The TRAN sits on its 38.2% retracement of the rally off the August low. This should be support. I've been saying for a week that the TRAN looked vulnerable to this level, but it needs to bounce now, or it's vulnerable to the 50% retracement.

 
 
  Jane Fox   1/21/200,  1:48:18 PM
We might get that close under 10,440 that you mentioned yesterday

Yes John and that would not be good for the bulls. A DOW close under 10440 is the close the December Low Indicator needs.

 
 
  Linda Piazza   1/21/200,  1:48:05 PM
If the OEX should drop past 559.50, here's the next level to watch for possible support. Bears need to have profit-protecting plans in mind for this 557-557.30 level: Link

 
 
  Jeff Bailey   1/21/200,  1:46:29 PM
VIX.X 13.85 +0.14% ... edges green

VXO.X 14.09 -1.74%

VXN.X 18.77 -3.74%

 
 
  Linda Piazza   1/21/200,  1:45:20 PM
In the past OEX 559.50 has been better support than 560 . . . dropping faster as I type. Remember 557-557.30's importance and have profit-protecting plans for bearish plays at that level, too.

 
 
  Jonathan Levinson   1/21/200,  1:43:13 PM
Gold has firmed, +4.9 at 427.40, with HUI up 2.24% here at 209.03, XAU +1.75% and silver +4.01%. Session high for ten year bonds, TNX -2.2 bps at 4.143%.

 
 
  Jonathan Levinson   1/21/200,  1:41:39 PM
The 30 min channel has now rolled over, support slipping to 37.22, while the broader 60 min channel holds at 37.25. QQQQ is bearish below 37.40.

 
 
  Jeff Bailey   1/21/200,  1:39:06 PM
DIA $104.40 -0.34% ... session low $104.36.

 
 
  Linda Piazza   1/21/200,  1:38:10 PM
Bulls want yesterday's OEX low to hold. Bears don't, but bears should have profit-protecting plans in place in case of a bounce from now down to the equal-low level. That first rollover beneath the five-minute 100/130-ema's was a good new bearish entry after all. I mentioned at the time that we'd seen a number of those when the internals didn't yet support a bearish play, but an opex Friday didn't appear to be the best time to risk an entry without internals supporting it. A good play passed up, but there will be others.

 
 
  Jonathan Levinson   1/21/200,  1:37:10 PM
The large net 6B repo drain from the Fed bodes ill for the QQQQ, breaking lower from its pennant and now testing lower 30/60 min channel support.

 
 
  Jeff Bailey   1/21/200,  1:36:58 PM
Sell Program Premium ... DIA $104.40, SPX.X 1,173.92, QQQQ $37.25

 
 
  Jeff Bailey   1/21/200,  1:36:01 PM
Airline Index (XAL.X) 46.30 -2.65% ... moves to session low.

 
 
  Jonathan Levinson   1/21/200,  1:35:28 PM
QQQQ has next channel support at 37.24, which coincides with both 30 and 60 min channel support. Bulls need to regain 37.42 to stop what is setting up to be a premature 30 min cycle downphase.

 
 
  Jeff Bailey   1/21/200,  1:35:27 PM
VIX.X 13.71 -1.01% ... gets a little pop higher here. DAILY Pivot just ahead at 13.74.

 
 
  Jeff Bailey   1/21/200,  1:33:00 PM
Airline Index (XAL.X) 46.34 -2.58% .... still hugging session low of 46.32.

LUV $13.98 -0.56% ... not seeing further intra-day "leading weakness" at this point.

 
 
  James Brown   1/21/200,  1:29:52 PM
Progressive Corp (PGR) is breaking down under support near $83.00 and hitting new four-month lows. This could be a new bearish entry point, especially with the MACD producing a new sell signal today.

 
 
  Jeff Bailey   1/21/200,  1:29:40 PM
DIA $104.51 -0.23% ... moves to session low.

That 01:27:04 option action might be influencial. Watch at $104.40 level closely.

 
 
  Jonathan Levinson   1/21/200,  1:28:05 PM
Session low for Dow futs here with ten year treasuries at a session high, TNX -1.5 bps at 4.15%.

 
 
  Linda Piazza   1/21/200,  1:27:56 PM
The OEX continues to find resistance at the five-minute 100/130-ema's, currently at 562.53 and 562.83. Don't get too excited if it gets over them if it then immediately turns around, however, as it's spent some days when it just twines around those averages, not getting too far over them. One problem for bulls is that the OEX is getting pressured toward bottom-falling-out levels.

 
 
  Jeff Bailey   1/21/200,  1:27:04 PM
Hold on alert .... DIA Feb $106 puts (DIA-NB) $2.15 get some notable action, move to the top of most active .... (797:5,271)

VIX.X 13.53 -2.16% ...

 
 
  Jeff Bailey   1/21/200,  1:25:16 PM
DIA and Jan most actives... ... not much going on. Jan. 105 call (457:6,246), Jan. $105 put (391:5,297), Feb. 104 put (318:4,593)

 
 
  Jane Fox   1/21/200,  1:24:08 PM
And another Powell bites the dust. What a shame. Dateline WSJ WASHINGTON -- Federal Communications Commission Chairman Michael Powell said Friday he plans to step down in March, ending what has often been a controversial tenure as he tried to push the telecom and media industries into an increasingly deregulated world that some lawmakers, companies and consumer groups didn't like.

 
 
  Jeff Bailey   1/21/200,  1:21:13 PM
Dow Diamonds (DIA) $104.61 -0.13% ... nearing morning low of $104.54.

VIX.X 13.51 -2.31% .... will check DIA most active options.

 
 
  Jeff Bailey   1/21/200,  1:20:16 PM
10-year yield ($TNX.X) 4.152% ... (WEEKLY S1) session low for yield here. Down 1.3 basis points.

Found sellers yesterday at this exact yield.

 
 
  Jeff Bailey   1/21/200,  1:16:35 PM
01:00 Internals at this Link

 
 
  Jeff Bailey   1/21/200,  1:12:00 PM
Good comments from CNBC's Rick Santelli regarding January expiration and bond yields. Last hour of trading could be volatile for equities.

 
 
  Jonathan Levinson   1/21/200,  1:09:15 PM
QQQQ is down to a 1 cent gain at 37.36, with the futures just starting to tick red.

 
 
  Jeff Bailey   1/21/200,  1:04:14 PM
01:00 Market Watch at this Link

 
 
  Linda Piazza   1/21/200,  1:02:40 PM
What's doing well today? Stockcharts' Sector Market Carpet shows energy about the only sector among those covered showing a predominance of green. That's not a surprise to see that sector mostly green. Some materials stocks are green, and Allegheny (ATI) is among the top five percentage gainers today according to this site. Other top percentage gainers are scattered among the technology (Symbol Tech, SBL), consumer discretionary (in which they include eBay, EBAY, and Fortune Brands, FO) and financials (Providian Financial, PVN). Top five percentage losers are Delta (DAL), Scientific Atlanta (SFA), Affiliated Computer (ACS), Power-One (PWER) and Jones Apparel (JNY), stocks the site puts in the industrial, consumer discretionary and technology sectors. Consumer discretionary and technology include both top percentage gainers and top percentage losers. The Market Carpet squares devoted to those sectors show a spotting of greenish and pinkish squares indicating gaining and losing stocks. Here's a look at the Market Carpet if you haven't seen it previously: Link

 
 
  Jeff Bailey   1/21/200,  12:59:44 PM
Beetle's Balanced since 12/30/04 rebalance and addition of IJH and IWM at this Link

$HUI.X erases about 1/2 of its losses today. Mid-cap and larger caps of INDU show some relative strength.

"Hunger for yield" may have "junk" and longer-dated TLT gaining first-quarter favor.

 
 
  Jonathan Levinson   1/21/200,  12:57:09 PM
So far, this chop continues to coincide with a 30 minute cycle upphase, "The" 30 minute cycle upphase from yesterday afternoon. Suffice it to say that it is entirely corrective so far, and despite the bottomy daily cycle, bodes very ill for the next 30 min downphase to follow.

 
 
  Jonathan Levinson   1/21/200,  12:52:55 PM
Session high for crude oil here at 48.90.

 
 
  Jonathan Levinson   1/21/200,  12:52:04 PM
Here comes a lower pennant support test with a small burst of volume for QQQQ. Bears will want to see 37.30 support broken to confirm that this activity is directional and not mere chop.

 
 
  James Brown   1/21/200,  12:50:33 PM
Fortune Brands (FO) is breaking out from its seven-week trading range on big volume after reporting earnings this morning and beating estimates by 8 cents and guiding higher.

 
 
  Linda Piazza   1/21/200,  12:49:07 PM
The three-minute OEX Keltner chart now gives less information than it did earlier. Lines are scattered everywhere, so that it's difficult to give more weight to either support or resistance.

 
 
  Linda Piazza   1/21/200,  12:48:03 PM
The SOX remains below 395 but above this week's and last week's lows. Barely.

 
 
  Jonathan Levinson   1/21/200,  12:47:24 PM
QQQQ continues to coil within the sideways pennant noted earlier, with the apex now narrowed to 37.39-37.51. Volume has trailed off sharply, and a break should be imminent. Bearing in mind that this is opex week, however, the unexpected could see the light volume drift continue. Look for a surge of volume on a break of either upper or lower pennant resistance/support.

 
 
  James Brown   1/21/200,  12:45:11 PM
Online jeweler Blue Nile (NILE) is not looking very hot. The consolidation suggests a breakdown under the $25 level soon.

 
 
  James Brown   1/21/200,  12:41:32 PM
Legg Mason (LM) has upgraded EBAY to a "buy" this morning and the stock is seeing a decent oversold bounce. Shares are up 4.75% to $87.30.

 
 
  Jeff Bailey   1/21/200,  12:40:00 PM
Southwest Air (LUV) $13.99 -0.49% .... day trader's chart of LUV on 5-minute intervals at this Link

DAILY S1 hard to read, but $13.88.

Airline Index (XAL.X) 46.46 -2.33% is just under its DAILY S2 of 46.48.

 
 
  Marc Eckelberry   1/21/200,  12:31:00 PM
Traders might want to start thinking ahead, especially next week, for what could be a substantial relief rally after the Iraqi elections, barring a major negative event.

 
 
  James Brown   1/21/200,  12:30:22 PM
Scientific Atlanta (SFA) is down 6.3% to $29.20 and breaking multiple levels of support as it crashes through the bottom of its three-month rising channel. The company reported earnings last night and beat estimates by a penny but came up short on revenues.

 
 
  James Brown   1/21/200,  12:27:50 PM
Harmonic Inc. (HLIT) is up 16.6% to $11.37 hitting new one-year highs after reporting earnings last night that beat estimates by 4 cents. The company also guided higher and at least one broker reiterated their buy rating this morning.

 
 
  Linda Piazza   1/21/200,  12:26:45 PM
The TRAN is below the 100-ema now, just above 3500 at 3505.00 as I type. Remember the 38.2% retracement of the rally off the August low at about 3492.37, as that might serve as support, too.

 
 
  Jeff Bailey   1/21/200,  12:26:02 PM
Day trade short alert .... for Southwest Air (LUV) $13.98 here, stop $14.05 to begin, target $13.80.

 
 
  Linda Piazza   1/21/200,  12:25:21 PM
The SOX still hovers near the this week's and last week's low.

 
 
  James Brown   1/21/200,  12:23:37 PM
Fannie Mae (FNM) is forecasting an 8% drop in new homes sales and a 7% drop in existing home sales for 2005. They also expect home values to rise 4%-5% in 2005.

 
 
  Jeff Bailey   1/21/200,  12:22:40 PM
12:00 Internals at this Link

Gold got a pop from 11:00 AM

 
 
  James Brown   1/21/200,  12:17:54 PM
Fedex (FDX) is cracking technical support at its 100-dma. Shares are down 0.88% to $90.76. The Transports are only down 0.16%.

 
 
  James Brown   1/21/200,  12:17:01 PM
OI put play ADBE is showing some weakness down 1.5% after failing at the $59 level yesterday.

 
 
  Tab Gilles   1/21/200,  12:16:39 PM
FYI ...This is the 1st time that the NASDAQ has closed down 3 weeks in the month of January...for the INDU not since 1971 and the SPX not since 1990.

 
 
  Jonathan Levinson   1/21/200,  12:15:40 PM
Stuck on a phone call here.

 
 
  James Brown   1/21/200,  12:14:43 PM
OI call play ARLP is bouncing (+2.6%) from rising support at the 50-dma. This looks like a new bullish entry point.

 
 
  Jeff Bailey   1/21/200,  12:12:17 PM
12:00 Market Watch at this Link

Oil Service and healthcare closest to 52-week highs, and most likely are among NYSE and NASDAQ NH/NL lists.

Made comment yesterday regarding bid in "Junk Bonds" regarding firming for small caps. Maybe see that in the 5-day RUT.X and IWO. I also looked at the Beetle's Benchmark last night and see a bit of it too.

 
 
  Linda Piazza   1/21/200,  12:12:09 PM
The OEX is meeting the downside objective predicted by the three-minute Keltner charts after all. See my 11:57 post. The three-minute chart now shows the OEX at potential support, with resistance firming overhead at 561.87, but stronger at 562.17-562.47.

 
 
  Linda Piazza   1/21/200,  11:57:44 AM
Not even Keltners are giving much information at this point. All this squiggling around has settled the channels into equilibrium positions on most time intervals. Currently, the three-minute chart does show resistance looking much stronger than support, accounting for the just-now-beginning downturn. From that chart, the OEX looks vulnerable to 561.43, but when in an equilibrium position, these signals can't always be trusted.

 
 
  Jonathan Levinson   1/21/200,  11:48:53 AM
Session high for gold and ten year treasuries here, gold at 426, ten year notes at 112 15/16, TNX -.8 bps at 4.157%.

 
 
  Jonathan Levinson   1/21/200,  11:47:00 AM
QQQQ is drifting sideways within what appears to be an intraday pennant between 37.37 and 37.52 currently. Flat 30 min channel resistnace is still at 37.62, support 37.29.

 
 
  Jeff Bailey   1/21/200,  11:45:20 AM
QQQQ ... I'm thinking $37.60 close. Just a hunch. Most active is the Jan. $37.63 put (16,543:182,141) and the Jan. $37.63 call (15,896:128,841)

Like the game show "Price is Right," if the options market maker can get it close without going over, he/she wins.

 
 
  Linda Piazza   1/21/200,  11:43:41 AM
The OEX's five-minute 100/130-ema's continue to pressure it lower.

 
 
  Linda Piazza   1/21/200,  11:41:46 AM
I've been running through P&F charts today for some frequently traded and much-watched stocks. Here are a few results: GE, bullish price objective of $50, but note the potential H&S on its daily chart; MER, a bullish price objective of $84, but a potential H&S-ish formation on its daily chart, too; PFE, with a $6.00 bearish price objective; CSCO, $24.00 upside objective, but it would have to get through a bearish resistance line on the P&F chart to get there, and it's awfully close to producing a new sell signal and breaking through a potential bear flag on the weekly candlestick chart; ORCL, a $4.00 bearish price objective; TASR just for kicks, with a $0.00 bearish price objective. Same mixture of signs seen here as on the indices.

 
 
  Jeff Bailey   1/21/200,  11:30:50 AM
Pfizer (PFE) $24.77 -0.84% .... announced it would buy Angiosyn, Inc. in a deal valued at up to $527 million. The deal is contingent upon Angiosyn bringing an eye treatment, novel angiostatic agent, to market.

 
 
  Marc Eckelberry   1/21/200,  11:27:32 AM
i was looking at open interest on jan qqqq's expiration, the max pain in 39.625 with open interest of approx 425,000 contract the next three levels are 36,625 & 37.625 & 38.625 with each about 325.000 contracts. the 38 puts has 104,000 down from yesterday 125,000 and the 38 calls at 35,000 up from 33,000. do you think they will park it between 37.625 & 38 for today or as close to it as possible.

That is a tough one. They are doing their best to do that, but QM is exerting an influence even OE players can't control. My gut feeling tells me they will close it right at 37.50.

 
 
  Linda Piazza   1/21/200,  11:26:20 AM
The OEX is still working on that potential inverse H&S. It has not invalidated it.

 
 
  Jeff Bailey   1/21/200,  11:23:00 AM
March Crude Oil futures (cl05h) $48.73 +1.78% (30-min. delayed) .... after trade at 50% conventional retracement yesterday, bounces back to trade 38.2% here.

Has not been able to hold a settlement above this level since late November.

Benchmark .... 30-minutes ago, the OIX.X was trading 402.38.

 
 
  Jeff Bailey   1/21/200,  11:21:06 AM
SPY $117.77 +0.22% ... just noticing today's high of $118.00. A little "max pain" inflicted on those $118 Jan. put holders.

Most active options at this point are Jan. $118 call (7,650:11,474), Jan. $118 put (6,878:45,625), Feb. $116 put (4,311:15,483) and Feb $117 put (2,849:6,755)

 
 
  Jonathan Levinson   1/21/200,  11:18:25 AM
Session highs for gold and silver here at 424.5 and 6.708 respectively, with HUI +1.46% at 207.43 and XAU +1.56% at 94.57. TNX is down .5 bps at 4.16%. QQQQ continues to hold above 37.40- first sign of trouble for short cycle bears will be a break above 37.45.

 
 
  Jeff Bailey   1/21/200,  11:17:04 AM
11:00 Internals at this Link

 
 
  Linda Piazza   1/21/200,  11:12:40 AM
Here's a TRAN chart I've posted several times over the last weeks, showing how important the current TRAN level is: Link

 
 
  Marc Eckelberry   1/21/200,  11:08:07 AM
If you are inclined to bottom fish with long option calls, I would recommend you do not us Feb strikes as they are inflated right now and will be through Tuesday. Use March or further out, especially since next week we have the Iraqi elections and multiple possibilities there including a big relief rally at some point, but still some volatility.

 
 
  Linda Piazza   1/21/200,  11:08:05 AM
Some chart developments and formations on the OEX's five-minute chart: Link

 
 
  Jeff Bailey   1/21/200,  11:04:23 AM
11:00 Market Watch at this Link

Oil Service (OSX.X) came within 0.02 of recent 52-week high (128.62)

 
 
  Jeff Bailey   1/21/200,  11:00:59 AM
Oil Index (OIX.X) 402.59 +1.09% .... updated bar chart shown in prior Index Wraps. Link

For my Murphy Oil (MUR) $83.00 +0.96% put, really wanted to see some follow through weakness toward 393 today. Need 405 to hold resistance to hold my convictions.

 
 
  Linda Piazza   1/21/200,  11:00:24 AM
Careful, bulls. The SOX is drifting oh-so-close to this week's and last week's low, at 394.14 and 393.17. The SOX is at 395.32 as I type, with a day's low at 394.76. Bulls do not want to see the SOX break through those lows as that presents the possibility that the consolidation through all of January has been the bulb portion of a "b" distribution pattern, traditioinally recognized as a bearish formation. Many of those have broken to the upside during the late-year rally, but if rallying behavior is over, these might return to their traditional bearish breakdowns. Tech bulls do not want to see that happen.

 
 
  Jonathan Levinson   1/21/200,  10:55:55 AM
QQQQ is pulling back and has just cracked former intraday resistance-turned-support at 37.45. Next support is 37.32-35.

 
 
  Linda Piazza   1/21/200,  10:54:35 AM
Five-minute 21-ema is at 562.49 for the OEX. Bulls want that to hold.

 
 
  Jeff Bailey   1/21/200,  10:52:31 AM
S&P Banks Index (BIX.X) 367.40 -0.17% ... not confirming anything in my opinion. Yield curve action today should be "bank friendly." Yield curve steepening with bulk of action found from buying in the shorter-dated 5-year.

 
 
  Linda Piazza   1/21/200,  10:48:32 AM
The OEX has now confirmed the inverse H&S and moved above the five-minute 100/130-ema's. Sort of. The OEX turned immediately back to retest those averages, breaking between them again as I type. Bulls want to see support hold . . . fast. An immediate reversal after a formation confirmation is not what they want.

 
 
  Marc Eckelberry   1/21/200,  10:48:32 AM
The INTC APR 22.50 calls are trading at 1.30. Very tempting if you want to be lazy and ride it out. Solid support at 22.50.

 
 
  Jonathan Levinson   1/21/200,  10:46:41 AM
Session high for 10-yr treasuries here, TNX -.2 bps at 4.163%. Yet another retest of the confluence/trendline support on the daily chart.

 
 
  Jonathan Levinson   1/21/200,  10:41:22 AM
Session high for Nymex crude here at 48.5, +2.54%. QQQQ holding at 37.52, not advancing but refusing to back down.

 
 
  Jeff Bailey   1/21/200,  10:37:58 AM
March Unleaded Gasoline (hu05h) $1.293 +0.78% (30-minute delayed) ... moves above its 50% retracement from 08/30/04 pullback low to all-time high of $1.4479 on 10/22/04.

Not what an "energy bear" wants to see.

With crude oil futures rolled to March, here's a chart I put together for March Unleaded Gas, where I do think energy traders will begin focusing on more as winter begins to pass and the summer driving season approaches. Link

 
 
  Jonathan Levinson   1/21/200,  10:37:45 AM
Headlines:

10:31am U.S. NATGAS STKS DOWN 110 BLN CUBIC FT: ENERGY DEPT

10:31am FEB NATGAS CLIMBS 8.2C TO $6.39/MLN BTUS

 
 
  Linda Piazza   1/21/200,  10:34:57 AM
The OEX is so far once again finding resistance at the five-minute 100/130-ema's, although it penetrated those averages this time instead turning down ahead of a touch as it's been doing. This kind of thing can be a sign of bullish divergence but that's a real stretch and a micromanaging comment on a day when there's little else to note. Dangerous conclusion . . . or maybe not. The OEX moves up as I type.

 
 
  Linda Piazza   1/21/200,  10:31:38 AM
Thanks, Jeff, for your 10:27 post and link to your article related to finding index components. Your article will be a lot more explanatory than my "expand this" and "expand that" explanation. It's got pictures!

 
 
  Jonathan Levinson   1/21/200,  10:29:24 AM
QQQQ is testing the upper short cycle channel resistance at 37.50. That channel is turning up as I type, with the oscillator upphase starting to pick up. 30 min resistance is next at 37.62.

 
 
  Linda Piazza   1/21/200,  10:28:43 AM
OEX back up at the five-minute 100/130-ema's as well as the neckline of the inverse H&S on the five-minute chart. Those averages extend up to 563.32.

 
 
  Jeff Bailey   1/21/200,  10:27:03 AM
Who's in the index? (per Linda's 10:12:35) as an additional resource... Link

 
 
  Jeff Bailey   1/21/200,  10:24:43 AM
Current OPEN MM Profiles that I've made at this Link

 
 
  Jonathan Levinson   1/21/200,  10:24:21 AM
The current sideways chop is taking place on the bulls' nickel, during the 30 minute cycle upphase. Channel support is at 37.20, resistance way up at 37.62. This sideways chop could be an accumulation phase and thus bullish, but if bulls don't start generating some upward traction, the so-far corrective upphase will most likely be followed by another strong downphase.

 
 
  Linda Piazza   1/21/200,  10:24:06 AM
The OEX still coils, now below the five-minute 21-ema but essentially just coiling around it. Interestingly enough--at least when you don't see a good play setup (I agree with Keene on the Futures side) and have nothing else to do but micro-manage--the right shoulder of the potential inverse H&S on the five-minute chart is forming its own miniature inverse H&S. Bulls are still trying. Bulls and bears have been so closely matched that neither can make much headway so far.

 
 
  Jeff Bailey   1/21/200,  10:12:49 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Linda Piazza   1/21/200,  10:12:35 AM
Reader Question: Where do you find a list of stocks that are in different indexes, OEX, MSH, etc.? PS. nice weather in Dallas today.

Response: Yes, wonderful weather today, and I hope you're enjoying it, too. However, my husband and I are mountain bikers and kayakers and like to get outside on weekends. He just sent me this information about weather patterns for the next few days: Weather forecast today high 78. Turning cooler tonight. Windy tomorrow 25-35. Low tomorrow night 21. Sunday windy and cool. Warming Monday.

Good question. One of the best sources for finding component stocks is Link. Just put in the index in which you're interested and on a sidebar, you'll notice "Components." Click there. For some reason, today that "Components" button is not working. I was going to link a components page to show you. Another source I use for some indices is the CBOE site (www.cboe.com). On the side, you'll find a button for "Index Sites," and you can go to sites for major indices. At the top of the page for each index, you"ll find a button labeled "Components." For indices listed on the American Stock Exchange, you can go to the AMEX site (www.amex.com) and go through a similar process. You'll find a sidebar with "Other Products." Expand that and you get an option for "Product Information." Expand that and you get one for "Indexes."

All this sounds convoluted, but it isn't. I just bookmark the sites and go right to them when I want to check. Other options include going straight to the Russell site or Standard & Poors site, etc. Perhaps other writers have other suggestions, perhaps more straightforward than these.

But I have to confess that I can't find the BIX components anywhere! Must be titled something different under these sites. Jeff, any ideas?

 
 
  Jonathan Levinson   1/21/200,  10:04:51 AM
Session high for Nymex crude at 47.95, +1.37%.

 
 
  Jonathan Levinson   1/21/200,  10:03:59 AM
The Fed's open market desk has just announced a weekend repo of 1.75B against expiries of 7.75B, for a large net drain of 6B.

 
 
  Jeff Bailey   1/21/200,  10:03:27 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   1/21/200,  10:02:46 AM
OEX steadying near the five-minute 21-ema. That potential inverse H&S on the five-minute chart has not been invalidated. As I said earlier, although the downturn occurred just where bears might have hoped to see it, internals did not support a bearish play and I'm not sure it would have been a good entry. Better to pass up iffy plays, usually, knowing that a good one is going to come along. Note that TRIN is rising, but so is the advdec line after the initial drop.

 
 
  Jeff Bailey   1/21/200,  10:00:58 AM
VIX.X 13.69 -1.01% .... DAILY Pivot Levels ... 12.95, 13.37, Piv = 13.74, 14.16, 14.53.

 
 
  Jonathan Levinson   1/21/200,  9:56:37 AM
Michigan sentiment 95.8 vs. 97.5 exp.

 
 
  Linda Piazza   1/21/200,  9:54:12 AM
The OEX is turning down right on schedule at its five-minute 100/130-ema's, so far also dropping below the 21-ema on that chart, so despite the lack of evidence from internals, it's turning down where bears would have hoped for a new entry. Still not sure that was a good bearish entry, though, as the OEX approaches a level that held as support twice yesterday. Bulls now want to see the OEX steady ahead of 561.

 
 
  Jeff Bailey   1/21/200,  9:52:56 AM
Sell Program Premium ... SPX 1,175.27, QQQQ $37.33

 
 
  Linda Piazza   1/21/200,  9:43:16 AM
OEX rising closer to the five-minute 100/130-ema's, at 563.08 and 563.48 currently. Internals don't currently support the idea that the OEX is going to roll over here. I've seen many times lately when that's exactly what it did, without internals signaling first that it would be rolling, but traders really want all possible evidence on their side. Doesn't look like a time for bears to assume a rollover, then.

 
 
  Jane Fox   1/21/200,  9:41:49 AM
Michigan Sentiment out at 9:45.

 
 
  Linda Piazza   1/21/200,  9:40:56 AM
The OEX keeps setting up these well-formed H&S, minimally confirming them, and then chopping around at the neckline levels. It's doing that now on the version I've been showing over the last few days. The formations show that underlying psychology has to be tipped to the bearish side (hence, the formation), but that bears don't have enough strength to push through to meet downside targets while bulls so far maintain enough strength to absorb the supply being through at them. They're willing buyers on dips. That balance is going to change in favor of one or the other at some time, but that time might not be an opex Friday.

 
 
  Jonathan Levinson   1/21/200,  9:37:15 AM
QQQQ has bounced back as quickly as it dropped, currently +.11 at 37.46.

 
 
  Linda Piazza   1/21/200,  9:35:13 AM
For those not watching the Futures side and so not seeing Jane's more-experienced posts relating to internals, the TRIN is below yesterday's levels and still dropping, but not past the early-morning volatility. This supports the belief held among many of us that we might see at least an attempt to bounce (various of us believe more or less strongly in the sustainability of any bounce) this morning.

 
 
  Jeff Bailey   1/21/200,  9:34:29 AM
Peregrine Pharma (PPHM) $1.20 +20% ... Company and the New Approaches to Brain Tumor Therapy Consortium announced today that they have received approval from the National Cancer Institute (NCI) for their clinical protocol to treat Glioblastoma Multiforme, a deadly form of brain cancer, using Peregrine's Cotara.

Detailed story at this Link

 
 
  Linda Piazza   1/21/200,  9:32:48 AM
The OEX tests the five-minute 21-ema as I type. I was just about to type that I expected it to head higher, to test the 100/130-ema's when it did head higher. Those averages are at 563.09 and 563.50, for those who didn't see my earlier post.

 
 
  Jonathan Levinson   1/21/200,  9:32:36 AM
QQQQ has just tumbled to negative territory at 37.34, new lows for QQQQ and NQ as I type.

 
 
  Jeff Bailey   1/21/200,  9:23:40 AM
Silicon Labs (SLAB) $28.58 Link ... Merrill Lynch making notes that SLAB is scheduled to report its Dec. quarterly results after the close on Monday. Expects the company to report an in-line quarter, but the firm sees risk to their 5% quarter-over-quarter sales growth estimates for March quarter given some of the recent soft comments from handset O.E.M.s and I.C. vendors.

 
 
  Jonathan Levinson   1/21/200,  9:18:27 AM
The downtick in the 30 minute cycle discussed in last night's Futures Wrap for NQ has reversed with this morning's strength, and should remain intact for QQQQ above 37.40.

 
 
  Linda Piazza   1/21/200,  9:17:15 AM
Richmond Fed President Lacker seems to be doing his best to worry equity traders today. Despite my comment about futures activity in my 9:06 post, I'm keeping this in mind. Lacker now impresses upon his audience that rates can't remain at their current accommodative rate and need to be moved higher toward a more neutral rate. Of course, this isn't new information, but I at least had heard some theorizing earlier that the Fed might be able to slow down for a while. Doesn't sound as if that's going to happen from the tenor of Lacker's statements and from other Fed speakers we've heard this week. Earlier, Lacker had also said that there might be a temporary slacking in business spending in the first quarter.

 
 
  Jeff Bailey   1/21/200,  9:16:06 AM
MAY Dept. Stores (MAY) $34.25 Link ... Goldman Sachs upgrading to "in-line" from "underperform." According to some press reports yesterday, MAY and Federated (FD) $55.31 Link have held preliminary merger discussions. Goldman's valuation work suggests a $38-$39 fair value takeout value.

Goldman downgrades Saks (SKS) $14.40 Link , on thought that takeover speculation, which has buoyed the stock, should now subside.

 
 
  Jeff Bailey   1/21/200,  9:09:55 AM
Intl. Game Tech (IGT) $30.50 Link .... cut to "neutral" from "buy" at Roth following flat Q1 earnings results and lowered guidance.

 
 
  Linda Piazza   1/21/200,  9:06:51 AM
Futures dropped to test yesterday's closing levels above 5:45 this morning, but other than that have been on a generally upward cast all night, continuing the small bounce that began in the last five minutes of trading yesterday. With global bourses not showing particular strength, the degree to which our futures held up signals bears to exercise some caution this morning. Futures are telling us that markets at least want to bounce, whether or not bulls will be able to produce follow-through on that attempt. On any bounce this morning, watch the OEX five-minute 21-ema at 561.89 and five-minute 100/130-ema's at 563.11 and 563.52 for first potential resistance levels. As I mentioned in last night's update, a move above the five-minute 100/130-ema's confirms an inverse H&S on the five-minute chart. Since such a confirmation only sends the OEX right up into the choppy right-shoulder level for a large H&S, now visible on its daily chart, a long position on an opex Friday might not be a good risk to take. That H&S might eventually be invalidated, and if so, traders will have lots of opportunities for long plays. If traders are interested in a long play today, be aware of the risks. If shorts get surprised or just want to take profits at the end of the week, prices could explode upward, with 567 the potential upside target for that inverse H&S, but they could just chop around inside that right shoulder as indices get pinned-to-the-numbers, too. Not the kind of options play (options are different critters than futures) I'd recommend for anyone except those who are experienced enough not to need my recommendations anyway. So, a bounce looks possible this morning.

 
 
  Jeff Bailey   1/21/200,  9:03:39 AM
Buy/Sell Program Levels .... HL Camp & Company has their computers set for program buying at $+2.05 and set for selling at $-0.05

 
 
  Linda Piazza   1/21/200,  8:54:12 AM
I'm reading a report that Richmond Fed President Lacker alludes to the possibility of a steeper rate path if productivity growth slackens. The article writer concluded that Lacker speculates that in that environment, wage cost pressure would increase, thereby increasing inflation pressures.

 
 
  Jonathan Levinson   1/21/200,  8:45:20 AM
Ten year treasury yields are bouncing above 4.14%-4.16% support again, currently +1 bp to 4.175%.

 
 
  Jonathan Levinson   1/21/200,  8:44:25 AM
SAN JOSE, Calif., January 20, 2005 -- North American-based manufacturers of semiconductor equipment posted $1.24 billion in orders in December 2004 (three-month average basis) and a book-to-bill ratio of 0.95 according to the December 2004 Book-to-Bill Report published today by SEMI. A book-to-bill of 0.95 means that $95 worth of orders were received for every $100 of product billed for the month.

Link

 
 
  Jonathan Levinson   1/21/200,  8:23:49 AM
Equities are higher, ES trading 1179, NQ 1528.5, YM 10493 and QQQQ +.19 to 37.54. Gold is up .70 to 423.2, silver +.057 to 6.618, ten year notes -.031 at 112 3/64, and crude oil +.35 to 47.65.

We await the 9:45 release of Michigan Sentiment, est. 97.5.

 
 
  Linda Piazza   1/21/200,  7:20:39 AM
Good morning. The Nikkei fell 0.41% Friday, with other Asian markets mixed. European markets ease. Despite the weakness in other bourses, our futures have edged slightly higher all night. As of 7:01 EST, gold was up $0.10, and crude, down $0.64. More detail about Asian and European markets follows in succeeding paragraphs.

In Japan, the much-watched tertiary index of all-industries activity showed a rise of 0.4% month-over-month in November, one source stated. Another, the Nikkei website, tagged that rise at 0.3%. Whatever number was correct, the Nikkei opened below water and labored into positive territory by midmorning. Yahoo Japan rose after raising sales forecasts for the current quarter, but Sony dropped after yesterday's warning. That drop was to weigh down the bourse. So did the Semi Book-to-Bill number, with some semi-related issues taking a hit in Asia afterwards. That midmorning level was to be the high of the day, with the Nikkei spending a volatile afternoon and closing down $46.40 points or 0.41%, at 11,238.37.

A planned big stock offering by Shinsei Bank might be factoring into market weakness, too. One article speculates that investors are selling other holdings in other issues in order to be ready to buy Shinsei stock. Shinsea and some other banks declined Friday despite information that the major banks' bad-loan ratio had declined to 4.7% by the end of the fiscal year's first half, in September. In other news, Mitsubishi Motors reportedly discusses a settlement with DaimlerChrysler AG over Mitsubishi's actions related to recalls at one of its plants, with Mitsubishi falling on the news.

Other Asian markets turned in mixed performances. The Taiwan Weighted dropped 0.67%, but South Korea's Kospi gained 1.13%. Singapore's Straits Times was closed for a holiday. Hong Kong's Hang Seng fell 0.46%, but China's Shanghai Composite soared 2.50%.

Many European markets drift lower this morning despite encouraging earnings reports and French economic data. December's French household consumption increased 0.2% over the previous month's when economists had expected a decline. INSEE stated that sales of durables and cars fell, but purchases of textiles and leather more than made up the difference. In the U.K., economic news wasn't as encouraging. December's retail sales fell 1%, with the National Statistics office pegging that as the biggest Christmas-season decline since 1981. The number surprised, with most economists expecting a small gain. Automakers were mixed.

Reporting companies included steelmaker ThyssenKrupp, gaining in early trading after an encouraging earnings outlook, and computer games maker Ubisoft, soaring in early trading after raising expectations for its fourth quarter and fiscal year. Ubisoft noted that it was a potential takeover target, too, and mentioned an acquisition the company might make. Roche Pharmaceuticals moved a step closer to being able to market its Hepatitis B treatment, Pegasys, in Europe by obtaining a positive option that the company will now bring to the European Commission for final approval. Other reporting companies included luxury goods makers Christian Dior and Richemont, with Dior easing and Richemont remaining near the flat-line after their reports.

Many stocks reacted to M&A speculation or planned share offerings. Those included the stock exchanges London Stock Exchange, Deutsche Boerse, and Euronext, with the last two to give preliminary reports on their bids for the LSE; Deutsche Bank, declining after a newspaper reported that it was no longer in the running for a stake in ING; and bank and insurer Fortis, rising after pricing a second public offering of Assurant stock.

As of 7:02 EST, the FTSE 100 was down 9.80 points or 0.20%, to 4,791.00. The CAC 40 was down 3.02 points or 0.08%, to 3,839.42. The DAX was down 11.55 points or 0.27%, to 4,208.88.

 
 
  Linda Piazza   1/20/200,  8:29:05 PM
The OEX ended Thursday slightly under the 561.23 level that is the 38.2% retracement of the bear-market decline and slightly under the neckline for the H&S now visible on the daily chart. The right shoulder looks stumped in comparison to the left, but if the neckline break continues tomorrow, bears will take what they're given. A continued move lower should see bears protecting profits next in the 557-557.30 level, though, with the 100-ema, the 38.2% retracement of the climb off the October low and historical S/R all coming together at that level.

Not all evidence suggests that the OEX will continue lower, however. As I type, NQ and ES futures are struggling to eke out after-hours gains as the Nikkei similarly struggles to stay positive. There's a potential inverse H&S on the five-minute chart, with a neckline at about 563.11, the current level of the five-minute 100-ema. The 130-ema is at 563.52. Watch that formation and those averages tomorrow, as a sustained breakout above them and that neckline sets up a potential upside target of 567--still within the potential right shoulder formation. Depending on how internals look tomorrow, some aggressive bulls might buy a breakout above those averages, but I wouldn't be one, not on an opex Friday with the formation within the right-shoulder level of a potential large H&S. If the OEX is going to invalidate that formation, there's going to be plenty of opportunities to participate in long plays. No need to get into iffy ones. If internals cooperate, aggressive bears might consider entering bearish positions on rollovers beneath those averages, but even bears need to be careful and prepared for a possible ratcheting down of prices by midmorning.

 
 
  Jim Brown   1/20/200,  8:20:54 PM
Earnings Friday Morning

AT. est +0.83 - ADP est +0.42 - PNC est +1.04
FO. est +1.21 - BGG est +0.49 - UTX est +1.27
GE. est +0.50 - CRS est +0.76 - WIT est +0.11
WY. est +1.15 - FPL est +0.97 - CCUR est -0.05
WL. est +0.50 - KEY est +0.62 - HBAN est +0.43
AOS est +0.08 - LAB est +0.06 - ICST est +0.20
AWA est -1.50 - NTY est +0.33

 
 
  OI Technical Staff   1/20/200,  6:54:01 PM
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