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Tab Gilles : 1/25/2005 1:36:55 AM

The Nasdaq100 $NDX looks likely to find nearterm support at it's 200-ma. Link The $NASI which is one of the indicators I use has been signaling sell since early December; I've been short the Nasdaq. Link

On Saturday I posted a weekly chart of the $SPX and the 1158 target I've been calling highlighted now for several weeks. Link However, this level may not hold and any drop below would cause a huge free fall. Markets do over react and it wouldn't surpise me to see 1,110 at all. Link

Oil $WTIC continues its rise over many worries, Iraq election, Iran, cold weather...etc...$50 nearterm target is close. Link Link

Murphy Oil (MUR) Continues to inch up to my nearterm P/O of $85. Link Link

$VIX Volatility still rising over 14.50. Link Link

Jeff Bailey : 1/24/2005 7:00:09 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 1/24/2005 6:49:07 PM

Pivot Matrix for Tuesday at this Link

Linda Piazza : 1/24/2005 6:35:18 PM

Last night and this morning, I suggested the possibility that the OEX could either bounce into a right shoulder for yet-another potential H&S or that bulls might be exhausted and the OEX might roll down through the potential support we had been watching for a week. Today, the OEX bounced up to test its five-minute 100/130-ema's and then rolled back down through them. At that point, I suggested that aggressive bears might consider new bearish positions, but they needed to have profit-protecting plans in place near 557. The OEX had violated that support by the close. Link (Note: the annotations on this chart mention "the next chart," but as this summary grew so long, I decided just to list the next support level rather than post another chart.) Depending on individual profit-protecting plans, some news bears might have closed out all or partial positions or might just have followed the OEX lower with their stops. Those plans need to be continued.

I had also suggested that we needed to watch another level of potential support, this taken from a Fib level snapped off the rise off the August low, and not just the October low. Today, the OEX ended the day cents above that 556.18 level that's the 38.2% retracement of the rally off the August low. Note: the TRAN has not found support at that analogous Fib level, now plunging toward the 3400 level and the 50% retracement of the rally off August lows.

A further plunge OEX through 556 suggests that the 550-552 downside target will be met, but the possibility exists that this will be the support that finally holds. I've had the 555.50-556.00 level marked on a chart for months. On a bounce tomorrow morning, watch the 557-557.30, 559, and then the 560.80-561.60 level for potential resistance.

A warning to bears: Daily 9-period RSI measures 32.80, approaching but not yet in the sub-30 level that often marks swing lows for this oscillator. A warning to bulls: the RSI sometimes hits its swing low and starts higher again ahead of the OEX hitting its swing low. It leads, offering a warning, perhaps only that a period of consolidation is about to ensue, perhaps to be followed by one more dip lower before the actual rise. So bears should always be protecting profits but that doesn't mean that bulls should be assured that there's not a lower low in the making.

So the plan for tomorrow is that current bears should continue to follow the OEX lower with their stops or enact other profit-protecting plans put in place as the position was entered. Plans should include the potential for a bounce from today's close and then from 554, 550-552 if the 556 level should be breached.

What happens if the OEX should plunge straight through 556? The TRAN's action shows that indices can just keep breaking to the downside when you think they can't any longer, but any new bearish positions should be entered cautiously with the possibility that an explosive upside rally could begin at any time.

What if there's a bounce? We'll look at how the bounce proceeds--strong V-shaped recovery or corrective, zig-zagging bounce--and how internals look, watching the potential resistance levels above. We'll be watching for a potential rollover. If that relief rally explodes, however, bears don't want to get in the way. If the OEX had dropped to 550-552, I might feel more comfortable about a possible nibble at a long position, depending on how internals looked, but I still don't quite feel comfortable with one just yet. The train might get away from the station without me, but that's okay. Others will come by.

Jeff Bailey : 1/24/2005 6:30:53 PM

Closing Internals at this Link

Jim Brown : 1/24/2005 4:44:11 PM

SLAB +5 points after earnings

Jim Brown : 1/24/2005 4:35:09 PM

FILE earnings = +0.42, est +0.19
Includes Tax Benefit

Jim Brown : 1/24/2005 4:32:31 PM

TNL earnings = +0.15, est +0.15

Jim Brown : 1/24/2005 4:31:45 PM

CEGE earnings = -0.59, est -0.59
Revenue light

Jim Brown : 1/24/2005 4:30:35 PM

KEM earnings = +0.21, est -0.16

Jeff Bailey : 1/24/2005 4:29:50 PM

Current OPEN MM Profiles .... MMM $81.62 +0.43%, SNDK $22.62 -2.33%, PFE $24.26 -0.89%, CD $22.40 +0.76%, ADBE $55.39 -2.94%, MUR $83.81 +0.84%, EXTR $6.19 -3.88%.

Today's Activity ....

Stopped out of the two (2) Pulte Home PHM April $65 Calls (PHM-DM) at the bid of $4.20 when PHM traded $63.90. ($+1.90, or +82.61%)

Day trade long shares of Ford Motor (F) at the offer of $13.19, but was stopped out at $13.10. ($-0.09, or -0.68%).

Jim Brown : 1/24/2005 4:20:09 PM

MSPD earnings = -0.12 , est -0.13

Jim Brown : 1/24/2005 4:16:04 PM

VRST earnings = +0.02, est +0.01

Jim Brown : 1/24/2005 4:15:25 PM

Alert - ALTR earnings = +0.15, est +0.13

Jeff Bailey : 1/24/2005 4:12:56 PM

Buy Program Premium ... DIA $103.69, SPY $116.50

Jim Brown : 1/24/2005 4:06:38 PM

ACF earning = +0.39, est +0.35

Jim Brown : 1/24/2005 4:06:19 PM

CAI. earning = +0.67, est +0.67
guiding higher

Jim Brown : 1/24/2005 4:05:50 PM

AUDC earning = +0.06, est +0.05

Jim Brown : 1/24/2005 4:05:37 PM

Alert - NFLX earning = +0.14, est +0.10

Jim Brown : 1/24/2005 4:05:25 PM

Alert - SLAB earning = +0.25, est +0.21

Jim Brown : 1/24/2005 4:01:21 PM

CGNX guiding higher

Jim Brown : 1/24/2005 4:01:02 PM

TMWD earning = +0.00, est -0.01

Jim Brown : 1/24/2005 4:00:52 PM

Alert - JDAS earning = +0.14, est +0.06

Jim Brown : 1/24/2005 4:00:27 PM

CGNX earning = +0.14, est +0.11

Jeff Bailey : 1/24/2005 3:56:24 PM

American Express (AXP) $52.71 +1.50% ... heavy volume of 7.2 million shares today after brief undercut of its starting to round out 200-day SMA ($51.86).

Linda Piazza : 1/24/2005 3:54:21 PM

The SOX continues dropping and is at 383.02 as I type.

Linda Piazza : 1/24/2005 3:48:37 PM

The OEX falls beneath 557. Remember that the 38.2% retracement of the rally off the August low, rather than the October low is near 556.

Jeff Bailey : 1/24/2005 3:43:00 PM

Sell Program Premium ... SPX.X 1,165.41, QQQQ $36.51

Jonathan Levinson : 1/24/2005 3:42:36 PM

New lows for QQQQ after a failure at 36.70-.72.

Linda Piazza : 1/24/2005 3:40:28 PM

The OEX did find resistance at the five-minute 21-ema, just as bears would have preferred.

Jonathan Levinson : 1/24/2005 3:36:59 PM

QQQQ continues to hold below 36.72, with 30 min channel resistance at 36.80 currently, support down to 36.50. The uptick in the oscillators has stalled, the first step toward a trending oversold move. A bounce is overdue, but QQQQ will have to get over 36.72 to stall the current downphase. Above that, 36.80, 37.00 and 37.10 are upside resistance.

Linda Piazza : 1/24/2005 3:30:40 PM

The OEX's five-minute 21-ema is at 558.75, and bears would like to see continued five-minute closes beneath it.

Jeff Bailey : 1/24/2005 3:26:45 PM

Current OPEN MM Profiles .... MMM $81.82 +0.67%, SNDK $22.65 -2.24%, PFE $24.42 -0.24%, CD $22.43 +0.89%, ADBE $55.62 -2.54%, MUR $83.87 +0.91%, EXTR $6.25 -2.95%

Linda Piazza : 1/24/2005 3:25:55 PM

The TRAN continues testing Friday's low. Market bears want to see it plunge beneath that low. Bulls want a bounce here.

Jim Brown : 1/24/2005 3:24:28 PM

Earnings Tonight

CR.. est +0.48 - CLDN est +0.26
ACF. est +0.35 - CEGE est -0.59
CAI. est +0.67 - CGNX est +0.11
CNF. est +0.74 - FILE est +0.19
FBC. est +0.47 - JDAS est +0.06
KEM. est -0.16 - MSPD est -0.13
LSS. est +0.94 - NFLX est +0.10
TNL. est +0.15 - SLAB est +0.21
TUP. est +0.58 - TTEK est +0.14
ALTR est +0.13 - TMWD est -0.01
AUDC est +0.05 - VRST est +0.01

Jeff Bailey : 1/24/2005 3:22:08 PM

March Crude Oil (cl05h) settled up 28 cents, or 0.58% at $48.81.

Linda Piazza : 1/24/2005 3:20:11 PM

For those who might have missed my earlier post, I'm unable to receive email today. I pride myself in replying quickly to emails from readers. If you haven't heard from me, it's because I haven't received your email.

James Brown : 1/24/2005 3:19:00 PM

Oppenheimer just upgraded a whole bunch of oil and energy-related stocks to a "buy". Here's the list: SUN, TSO, UCL, VLO, XTO, NBL, OXY, PXD, PCO, E, EOG, FTO, KMG, MUR, BR, BR, CRK, DVN, APA, ASH, AHC.

Linda Piazza : 1/24/2005 3:15:03 PM

It was shortly before this time Friday that the TRIN finally bounced from its five-minute 100/130-ema's and ran up into the close. It attempted to bounce from those averages about twenty minutes ago, but has come right back down to test them. Bears want to see a continued climb in TRIN.

Jeff Bailey : 1/24/2005 3:15:01 PM

Treasuries finished mixed with some selling in the shorter-dated 5-year note as its yield ($FVX.X) rose 0.8 basis points to 3.647%. Strong buying in the longest-dated 30-year yield ($TYX.X) with yield falling 3.7 basis points to 4.606%.

Yield curve got flattened further with 5 to 30-year spread -0.45.

Jeff Bailey : 1/24/2005 3:12:02 PM

Linda: I'd sure like to know how you were able to upload a chart to the market monitor (02:06:24) ... I've been getting error messages all day.

Linda Piazza : 1/24/2005 3:09:55 PM

The three-minute Keltner chart shows resistance trying to firm just above and just below 559.

James Brown : 1/24/2005 3:05:37 PM

EBAY is down another 4.7% and testing its lows from last week in spite of being upgraded to a "buy" this morning.

Jonathan Levinson : 1/24/2005 3:05:13 PM

Look for resistance at former double bottom support- 36.72 QQQQ.

Linda Piazza : 1/24/2005 3:04:58 PM

As I mentioned earlier, those who might have entered new bearish positions on the rollover beneath the five-minute 100/130-ema's now need to have profit-protecting plans in place for the 557-557.30 area. Consider the possibility the OEX will form a higher low, too, with the OEX just dipping to 557.60 before this last little bounce. The TRAN is trying to stabilize at an equal low. Right now, OEX bears do not want to see the OEX back above the five-minute 21-ema at 559.07 and especially not back above the 100/130-ema's. A plunge through 556-557 might set up a new leg down, but the bounce potential through here remains.

James Brown : 1/24/2005 3:03:57 PM

Ouch! I feel sorry for the bears on Mercury Interactive (MERQ). The stock was in steep down trend and hitting new relative lows after what looked like a bear-flag pattern last week. Today the stock is up 13% after the company issued upside guidance this morning. MERQ now sees its Q4 results in the 40-42 cent per share range compared to Wall Street's estimates near 34 cents.

James Brown : 1/24/2005 3:00:45 PM

Apple's iTunes is reporting that its online store has passed the 250 million songs [sold] mark. The iTunes store is selling about 1.25 million songs a day at 99-cents each.

Jonathan Levinson : 1/24/2005 2:59:58 PM

The 3 month t-bill auction fared worse, with 19B worth of 3 month bills fetching a bid-to-cover of just 1.7, the lowest reading since my data begins in 2000.

Linda Piazza : 1/24/2005 2:59:42 PM

Finding news now that Snow said that he didn't expect much change in the language coming out of the G7 meeting. That language has lamented the unwelcome speed of currency shifts, but that's about it.

Linda Piazza : 1/24/2005 2:58:10 PM

I don't know what U.S. Treasury Secretary John Snow had to say about the dollar, but he must have said something that further reinforced the feeling that the U.S. would not support the dollar. I had CNBC muted and turned in time to see the interview conclude a few minutes ago. The dollar dropped suddenly against some currencies.

James Brown : 1/24/2005 2:58:06 PM

Ouch! Travelzoo (TZOO) reported earnings this morning and missed estimates by 4 cents in addition to reporting revenues under expectations. To make matters even worse the company is facing an SEC inquiry into stock trades made by its insiders.

Shares are currently down about 24% to $55.78 breaking multiple levels of support (like the $70 level, $60 level, exponential 200-dma). TZOO is currently trading at its lows for the day. The next level of potential support looks like the $40.00 mark (where it bounced in October), which happens to be underpinned by its simple 200-dma.

Jeff Bailey : 1/24/2005 2:57:06 PM

Bullish day trade stop alert .... for Ford Motor (F) $13.10 -0.07%. ($-0.09, or -0.68%)

Jonathan Levinson : 1/24/2005 2:56:03 PM

QQQQ just broke the double bottom low and is selling vertically as I type. Current low of 36.61, below both the 30 and 60 min channel bottoms on a big burst of volume. If there's no news, then this is a big sell program hitting right at the low of the day.

Jonathan Levinson : 1/24/2005 2:53:13 PM

The 6-month t-bill auction generated a bid-to-cover ratio of 2.11 on 16B total. This is the lowest demand of the young year, but above the average ratios for Q3 and Q4 2004.

Linda Piazza : 1/24/2005 2:50:17 PM

The TRAN has curled its toes (sorry for the anthropomorphism) just ahead of Friday's low, resisting plunging below that level. So far.

James Brown : 1/24/2005 2:49:54 PM

Fedex (FDX) is bouncing from support at the $90.00 mark after being upgraded to a "buy" this morning. Normally I might be tempted to consider bullish plays given the 10% pull back from its recent highs and today's bounce from round-number support. Unfortunately with crude oil nearing $49 a barrel and the Dow Transports still stuck in a downtrend I'd be careful with FDX.

James Brown : 1/24/2005 2:47:15 PM

Autodesk (ADSK) was a high-flying winner in 2004. The stock was a big target for profit taking in 2005 and is down another 12.2% to $27.53 today after Bank of America downgraded the stock to a "sell" this morning. The breakdown under support at $30.00 and its 100-dma looks like bad news but traders are starting to buy the dip now that ADSK is very short-term oversold.

James Brown : 1/24/2005 2:44:24 PM

Defense contractor giant General Dynamics (GD) is testing major support at the bottom of its 18-month rising channel and its 200-dma's. I would watch for a drop under $98-97 as a potential bearish entry point or a rebound over $103 as a bullish entry.

Jonathan Levinson : 1/24/2005 2:40:58 PM

The 4.14% TNX support level has finally let go, with TNX now down 1.8 bps to 4.122%. Next strong support is in the 3.95%-4.0% zone.

James Brown : 1/24/2005 2:40:24 PM

Technical breakdown - Research In Motion (RIMM) is down 3.95% and breaking major support at the $70.00 level, its 200-dma's, and its rising trendline of support dating back to May 2004.

Jonathan Levinson : 1/24/2005 2:38:46 PM

Just back in time to see QQQQ retesting the previous low. A double bottom here would be the low point of the 60 min cycle, but if so, QQQQ needs to hold above 36.70. Anything below that will set the 30 min cycle into a bearish trending phase, and likely spell the next dose of pain for the bulls.

Jeff Bailey : 1/24/2005 2:38:46 PM

Biotechnology Index (BTK.X) 513.95 -1.44% ... session lows and just undercuts its WEEKLY S1 (514.2).

James Brown : 1/24/2005 2:38:13 PM

Bearish entry point alert! Semiconductor equipment maker Applied Materials (AMAT) is down 1.86% and breaking down under major support near $15.50 to hit new two-year lows. This looks like an entry point to short or buy puts on the stock. Earnings are not until mid-February.

Linda Piazza : 1/24/2005 2:38:03 PM

After breaking through the rising trendline off Friday's low, the TRAN continued dropping. It's at 3471.02 as I type, with Friday's low at3465.77. The Dow hasn't followed its sister-index's pattern yet, however, with the Dow so far holding above the rising trendline off Friday's low. It's testing that rising trendline as I type. Bears want to see the Dow confirm TRAN weakness.

James Brown : 1/24/2005 2:36:39 PM

KMRT is extending its losses now down 4.3%.

Linda Piazza : 1/24/2005 2:33:10 PM

The OEX has now broken below 559, the first confirmation of weakness that those entering bearish positions on the rollover beneath the five-minute 100/130-ema's wanted to see. The decline is about as tentative as the rise, however, and may likely remain so as the OEX consolidates recent losses today. The advdec line did drop out of its bearish right triangle, adding further confirmation, but bears want more.

Jeff Bailey : 1/24/2005 2:25:42 PM

The Spain Fund (NYSE:SNF) $13.07 -17.33% ... notably weak after Friday's monthly portfolio update (December 31, 2004) . Link

Linda Piazza : 1/24/2005 2:25:40 PM

No bounce for the TRAN. It just headed straight down after breaking through its rising trendline off Friday's low. That's good news for market bears, but they'd like confirmation by a new LOD for the advdec line, something that the advdec line has resisted doing. It's headed down again as I type. For that matter, a new low for the TRAN would be nice for market bears, too.

Jonathan Levinson : 1/24/2005 2:21:41 PM

QQQQ is hovering right on the 7200-tick SMA. The 30 min oscillators have turned up, in what is either a bullish divergence or a very, very weak corrective upphase. I need to step away for 10 minutes- perhaps that'll get it moving :)

Linda Piazza : 1/24/2005 2:17:02 PM

The TRAN looks weaker than the OEX, but even on the TRAN, I wouldn't be surprised to see a steadying near 3480 (at 3481.39 as I type) and a rise toward 3488, to retest those five-minute 100/130-ema's again. We'll soon see, as the TRAN dropped to 3480.28 as I typed.

Linda Piazza : 1/24/2005 2:08:49 PM

No break below 559 for the OEX. It heads up again to retest the five-minute 100/130-ema's. Bulls want to see it break above them, confirmed by a move to a new HOD. Bears want to see a rollover beneath them, and definitely don't want to see a new HOD.

Jonathan Levinson : 1/24/2005 2:08:16 PM

A bounce from a higher low at 36.80 QQQQ just now, back above the 7200-tick SMA. 30 min channel support for QQQQ is up to 36.76.

Linda Piazza : 1/24/2005 2:06:24 PM

A daily chart of the Nasdaq: Link This test looks important for us all to watch.

Jeff Bailey : 1/24/2005 2:02:31 PM

Bullish swing trade exit alert ... closing out the two (2) PHM April $65 Calls (PHM-DM) at the bid of $4.20. ($1.90, or +82.61%)

PHM $63.90 here (see 10:18:29)

Linda Piazza : 1/24/2005 2:02:10 PM

The TRAN has broken through the ascending trendline off Friday's low.

Linda Piazza : 1/24/2005 2:00:23 PM

Any OEX aggressive bears who have entered bearish positions on the rollover beneath the five-minute 100/130-ema's need to have plans to protect profits in the 557-557.30 area, of course. They need confirmation that their plays are working right first by a move below 559.00. If you start getting that uh-oh feeling, probably best to get out. I find that uh-oh feeling after entering to be more reliable than the got-to-get-in-now one before entering. The advdec line has not confirmed weakness yet by dropping below the LOD, although it's getting closer.

Jonathan Levinson : 1/24/2005 1:59:14 PM

QQQQ gapped lower on the 100 tick chart, bounced and then failed at the 36.88 7200-tick SMA resistance line. That stalled the 30 min cycle upphase that was kicking off, and 37.00 was never breached to the upside. Bears need to attack the session lows again, however, because a sideways move from here will benefit the bulls within this oversold, stalling 30 min cycle downphase from Friday.

James Brown : 1/24/2005 1:57:44 PM

Ring, Ring! According to several articles out this morning it looks like search-engine titan Google (GOOG) plans to get into the Internet phone business. The current scuttlebutt is that GOOG plans to launch a free VoIP service. How they plan to make money on the offering is unclear. GOOG is currently denying any such plans.

Jeff Bailey : 1/24/2005 1:56:24 PM

Sell Program Premium ... SPX.X 1,169.89, QQQQ $36.80

Jeff Bailey : 1/24/2005 1:55:49 PM

Pulte Home (PHM) 64.14 -0.40% .... approaching its 09/22/04 relative high of $64.07.

Linda Piazza : 1/24/2005 1:54:36 PM

That five-minute 21-ema is not looking as if it's holding as support for the advdec line. A fall beneath the -1099 LOD would look as if that bearish right triangle is seeing its bearish outcome.

As I mentioned earlier, that upside push coming during the lunchtime lull has been rather suspect, but that didn't mean that surprised shorts couldn't get squeezed if it carried too far. Like Jane on the Futures Monitor, I believe that although there have been some minor signs of recovery, it's looking weak and longs need a tight leash on their positions. This is why I haven't been gung-ho on long positions. I suspect any OEX rise of being a rise into a right-shoulder position, so not particularly good risk vs. reward for long positions.

In fact, those bears who are aggressive can even try bearish OEX positions on rollovers beneath the five-minute 100/130-ema's, such as the one perhaps occurring now (averages being retested from the bottom as I type), but they need a tight leash, too, as this could well remain a consolidation day that chops into some sort of right-shoulder formation before deciding on final direction. Watch for advdec line confirmation, perhaps, before entering a bearish position.

James Brown : 1/24/2005 1:53:28 PM

Entry Point Alert! Shares of Kmart Holdings (KMRT) have broken round-number, psychological support at the $90.00 mark. Our trigger to buy puts was at $89.90. The stock is now down 3.76% to $88.22. FYI: We can't see any specific news to account for today's weakness. As expected this looks like a continuation of the recent trend.

James Brown : 1/24/2005 1:51:04 PM

Apollo Group (APOL) has produced another failed rally as shares rebounded this morning but reversed after nearing round-number resistance at the $80.00 mark. The stock was stronger this morning after Lehman Brothers issued positive comments for the education sector for 2005 but it looks like traders are selling into strength. This could be another bearish entry point.

James Brown : 1/24/2005 1:48:12 PM

Potential Exit Alert! ADBE is down another 1.69% hitting new three-month lows and has finally hit its simple 100-dma near $56. We suggested on Sunday that short-term traders may want to exit if ADBE hits this potential technical support.

Linda Piazza : 1/24/2005 1:46:42 PM

The advdec line is back at the five-minute 21-ema. Will this morning's resistance now be support?

Jeff Bailey : 1/24/2005 1:45:52 PM

Sector Strength .... Utilities +1.32%, Oil Service +1.29%, Oil +1.26%, Brokers +0.87%, Money Center Banks +0.81%

Sector Weakness .... Airlines -2.9%, Internet -0.91%, Networkers -0.91%, Gold Bugs -0.62%

James Brown : 1/24/2005 1:43:25 PM

Pixar (PIXR) is showing a little bit of strength as it rebounds from the bottom of its short-term five-day trading range. Readers may want to consider bullish positions on a breakout above the $90.00 mark.

Jeff Bailey : 1/24/2005 1:41:52 PM

March Crude Oil (cl05h) $48.25 -0.57% ... mid-point of today's range and rather quiet.

WEEKLY Pivot levels ... $45.53, $47.06, Piv= $48.23, $49.76, $50.93.

Linda Piazza : 1/24/2005 1:41:26 PM

Careful, bulls, the OEX is dropping back into the five-minute 100/130-ema's and the five-minute 21-ema, with the lowest of those the 21-ema, currently at 559.74. You want to see it find support there.

Linda Piazza : 1/24/2005 1:39:52 PM

Unlike the OEX, finding support today on its 100-ema, the TRAN has already fallen below that average and any rise will be bringing it up to test that level. The 100-ema is at 3509.07 and the 38.2% retracement of the rally off the August low is 3492.37, with both of those now being possible resistance.

James Brown : 1/24/2005 1:37:32 PM

The consolidation in shares of copper-producer Phelps Dodge (PD) is turning lower. It looks like PD might retest the $94 level and/or the bottom of its rising channel. Readers can watch for this dip but I'd wait for signs of a rebound before considering new bullish positions. Don't forget that PD has earnings on January 27th so new positions might need to wait until after PD reports.

I suspect that PD could announce a stock split with its upcoming earnings report. The stock last split 2:1 back in 1992.

Jonathan Levinson : 1/24/2005 1:37:21 PM

QQQQ failed below 37.00, but is holding above 7200-tick SMA support, the longest stretch above the line since Friday. The 30 min cycle channel is beginning to tick up, and unless QQQQ gets back below 36.89 soon, a new 30 min cycle upphase should be kicking off here.

Linda Piazza : 1/24/2005 1:35:03 PM

As I mentioned last night and last week, it's possible that the OEX is now rising into a possible right-shoulder level for a possible right shoulder. Time to consider other Fib levels, now: those taken off the decline from the January high into Friday's and today's low. Here's the chart I've been showing for several days with the new Fib levels to watch on the right, and with Friday's annotations: Link

James Brown : 1/24/2005 1:32:11 PM

Coal producer ARLP continues to show strength with today's 1.3% gain as a follow through on Friday's bounce from rising technical support. Short-term oscillators are turning higher and its MACD is once again on the verge of a new buy signal. At this point readers may want to wait for a move over the $74.50-75.00 level before considering new positions.

James Brown : 1/24/2005 1:30:00 PM

It looks like traders are buying the dip (again) in shares of Aetna (AET). Readers can choose to go long here or wait for the breakout over resistance at $130.00.

Jonathan Levinson : 1/24/2005 1:27:11 PM

WASHINGTON (MarketWatch) -- Investment bank Keefe, Bruyette & Woods upgraded the stocks of both Fannie Mae (FNM: news, chart, profile) and Freddie Mac (FRE: news, chart, profile) Monday, with Fannie moving to "market perform" from "underperform" and Freddie moving to "outperform" from "market perform". Analysts were encouraged by Fannie's cutting of its dividend by 50 percent and believe that Freddie's shares are "compelling for new money."

If nothing else, Keefe Bruyette and Woods are demonstrating great courage upgrading FNM, which I believe is still trying to produce a few years' worth of missing financials.

Linda Piazza : 1/24/2005 1:24:05 PM

The OEX is now at the 50% retracement of the decline off Friday's high, with that number at about 560.45. Bulls don't want to see a quick reversal that leaves only a candle shadow punching above that level. So far, that thrusting candle that broke above the five-minute 100/130-ema's has seen follow-through, however.

Jonathan Levinson : 1/24/2005 1:23:39 PM

New high for Dow futures here, QQQQ testing 30 min channel resistance/confluence at 37.00.

Jonathan Levinson : 1/24/2005 1:21:41 PM

Zarqawwi must be losing his touch- despite his "war on the Iraq election," crude oil is down 15 cents at 48.375 here.

Linda Piazza : 1/24/2005 1:20:30 PM

The TRAN has not yet made it above its five-minute 100/130-ema's. It usually leads the way. Maybe some are bottom feeding on the large caps that make up the OEX? If so, though, the OEX needs the participation of other indices. I watch the TRAN because it usually leads the way, but today it's not.

Linda Piazza : 1/24/2005 1:16:35 PM

Here's an OEX five-minute candle that's thrusts above resistance and is larger in range that the previous ones. Bulls don't want to see a quick reversal lower, now that the OEX is above the five-minute 100/130-ema's, however, with the current five-minute candle turning back. If the OEX continues to climb, bulls need to protect profits near 562-562.25.

Jonathan Levinson : 1/24/2005 1:15:52 PM

For the third time today, we have a break above the descending 7200-tick SMA resistance line for QQQQ. What's unique about this one is that the 30 min cycle channel has flattened quickly from its downtrend. A break above 37.00 will be required to turn it up. Because the 30 min cycle is oversold, there's a good likelihood that such will occur, but bulls looking to catch the intraday swing will want to see 37.10 resistance broken for confirmation. So far, these bounces have been failing below it.

Linda Piazza : 1/24/2005 1:08:36 PM

During the last fifteen-minute period, the OEX finally managed a close above 559.04, a change in trend from earlier. The OEX has not yet violated the top trendline of the broadening formation that it began forming earlier, however, and the candle that closed above that 559.04 level wasn't any bigger than previous candles, so that it doesn't yet look like a thrust out of the consolidation pattern. Looks like the expected blip up to test that resistance. Stay tuned, though. The 130-ema is shortly to be tested.

Linda Piazza : 1/24/2005 1:04:59 PM

The OEX is currently, finally, testing its five-minute 100/130-ema's, at 559.74 and 560.17, respectively. The TRAN tests the same averages. The advdec hasn't risen that far, but is testing its five-minute 21-ema (see my last post). Important test perhaps, but a bit suspect that it comes during the lunchtime lull. Still, if any rise gets away from the shorts, there could be an explosive gain. As before, it will happen without me suggesting that readers tag along just yet.

Linda Piazza : 1/24/2005 12:59:43 PM

Since about 10:00, the advdec line has formed a series of lower highs and a flat supporting line just under -1000 issues. In an equity, this would be seen as a bearish right triangle. Interestingly enough--again, at least to me--each advance is being capped by the five-minute 21-ema. Link Not a sign of strength, so far.

Linda Piazza : 1/24/2005 12:56:03 PM

Interesting, to me at least, that the TRIN has also found resistance all day at its five-minute 100/130-ema's, currently at 1.078 and 1.097, respectively.

Linda Piazza : 1/24/2005 12:52:38 PM

The TRAN is also pushing up toward its five-minute 100/130-ema's, currently at 3491.89 and 3497.39, both now below the TRAN's 100-dma. The day's high so far has been 3493.49.

Linda Piazza : 1/24/2005 12:50:55 PM

The OEX did not continue to show three-minute closes below the Keltner line needed to preserve its downside target near the bottom of the congestion zone, and now climbs. The five-minute 100/130-ema's are now at 559.74 and 560.20. Fifteen-minute closes and/or opens continue to be below 559.04 with the OEX spiking up to test higher levels during the fifteen-minute period. Watching for a change in trend. It wants to push higher, but those candle shadows left above that 559.04 level bother me.

Linda Piazza : 1/24/2005 12:44:20 PM

Nothing has changed today with the OEX. It continues to oscillate around its five-minute 21-ema, currently at 558.84. For the last twenty minutes, it's been closing five-minute periods at or beneath that five-minute average, but it's attempting a close above it as I type, at 558.90.

Tab Gilles : 1/24/2005 12:41:14 PM

Watching $GOLD & $USD. Targeting $85 on the dollar. Link

Lets see if resistance on $GOLD @ 431 (April '04 high) holds. Link

Jonathan Levinson : 1/24/2005 12:36:09 PM

That sharp selloff broke the previous intraday low and rolled the short cycle oscillators back down. 30 min channel support slipped to 37.68.

Linda Piazza : 1/24/2005 12:32:30 PM

Based on the OEX's three-minute Keltner chart, the OEX looks vulnerable to the bottom of its intraday consolidation range again, at least as long as it closes three-minute periods below the line currently at 558.86.

Linda Piazza : 1/24/2005 12:30:18 PM

The OEX is still closing and/or opening fifteen-minute candles at or below 559.04.

Jonathan Levinson : 1/24/2005 12:24:26 PM

QQQQ is chopping its way sideways here, trading 36.93, but the important point is that it isn't going lower. There has been a pattern of higher lows printing since the 11AM low at 36.79, and with the 30 min and daily cycles as oversold as they are, the danger is to the bears. The caveat is that the price has to clear 37.10, confirmed with a break above 37.20, to kick off the first key upphase on the 30 min cycle. To the downside, 30 and 60 min channel support line up at 36.75.

Jeff Bailey : 1/24/2005 12:23:50 PM

NYSE 12:00 Internals .... nothing to write home about with the NYSE Comp. ($NYA.X) 7,017 +0.29% up 20 points, advancers outnumber decliners by 16 to 15, with 72 stocks having traded a new 52-week high versus 30 new lows.

5-day NH/NL ratio -2.6% from Friday at 79.0%, while 10-day NH/NL ratio -1.0% at 78.9%.

NASDAQ 12:00 Internals .... had the NASDAQ Comp. ($COMPX) 2,032 -0.12% down 2.5 points with decliners outnumbering advancers by a heftier 17 to 11. Just 36 new highs compared to 49 new lows.

5-day NH/NL ratio down 5.7% from Friday at 59.4%, while 10-day NH/NL ratio down 2.5% at 61.9%.

Tab Gilles : 1/24/2005 12:22:31 PM

Murphy Oil (MUR) Intraday high $84.51 thus far, nearing my nearterm target of $85. Link

PnF chart has a $101 P/O. Link

Jeff Bailey : 1/24/2005 12:18:14 PM

Current OPEN MM Profiles ... MMM $81.42 +0.18%, SNDK $23.00 -0.69%, PHM $64.51 +0.16%, PFE $24.50 +0.08%, CD $22.44 +0.94%, ADBE $56.40 -1.17%, MUR $83.82 +0.85%, EXTR $6.34 -1.55%, F $13.26 +1.14%.

Linda Piazza : 1/24/2005 12:09:44 PM

The OEX's 15-minute Keltner chart shows strongest nearby Keltner resistance near to that predicted by other means, at 560.36, with strongest nearby Keltner support at 557.23, also near support predicted by other means. No wonder we've had consolidation this morning. I don't see a clear weighting of one as being stronger than the other.

Tab Gilles : 1/24/2005 11:59:14 AM

$SOX AUG/SEPT had produced a bullish divergence and in NOV/DEC a bearish divergence. 61.8% retacement being tested, next are the 75% and 80.9% levels. Link

Linda Piazza : 1/24/2005 11:58:14 AM

Looking at a 15-minute OEX chart shows how well-defined that consolidation pattern is, at least to the upside. For the last thirteen 15-minute periods, not counting the current one, opens or closes have been at or below 559.04, with most nearer 559.01-559.03. Upper shadows have moved above that level and are punching higher and higher in a broadening formation, but the candles are so far closing at or below that level. Those higher and higher punches are difficult to interpret, but seem to me as if the bulls are trying more and more desperately and getting knocked back each time. Others might interpret that differently, saying that the bulls get a little higher each time before getting knocked back and continued efforts will eventually exhaust sellers. I don't trust any kind of broadening formation, however. How are you going to tell when there's an upside break, as I count at least four that were knocked back over the previous thirteen fifteen-minute periods?

The answer might lie in requiring a break above the five-minute 100/130-ema's at 559.90 and 560.39 as a first step in believing in any upside breakout. Just a first step.

Jonathan Levinson : 1/24/2005 11:49:04 AM

Stepping away for 15 minutes here.

Linda Piazza : 1/24/2005 11:46:04 AM

Back. The OEX has now tested the five-minute 100/130-ema's and immediately began dropping away from that. Bulls want it to steady now at the five-minute 21-ema, as it's trying to do, and rise up again for a test of the 100/130-ema's at 559.94 and 560.43.

Jonathan Levinson : 1/24/2005 11:40:40 AM

That bounce off the 36.81 QQQQ low was a doji hammer on the 30 min chart. If QQQQ breaks above 37.10 from here, that will likely see the kickoff of a new 30 min cycle upphase from oversold, and with a small bullish-d thrown in for good measure. I'd look for confirmation on a move above 37.20, beyond which the bears should scatter for a few hours. With the 30 min and daily cycles both in oversold territory, bears need to be nimble in the event of a strong upside move from these levels.

Jeff Bailey : 1/24/2005 11:38:09 AM

Sell Program Premium ... SPX.X 1,171.02 , QQQQ $36.95

Linda Piazza : 1/24/2005 11:30:42 AM

Stepping away for a few minutes.

Jeff Bailey : 1/24/2005 11:29:55 AM

Bullish day trade long alert for Ford Motor (F) $13.19 +0.61% here, stop $13.10, target $13.45.

Linda Piazza : 1/24/2005 11:27:40 AM

For reference, the OEX's five-minute 100/130-ema's are currently at 560.02 and 560.53, respectively. They're coming down toward the top of the OEX's consolidation zone from late Friday and through today. When they meet that zone, I wouldn't be surprised to see an attempt to push up through them. Not sure at this point what to expect from that attempt, however.

Linda Piazza : 1/24/2005 11:24:27 AM

After confirming a H&S on its chart--continuation-form rather than topping form--the advdec line failed to follow through, as I mentioned in an early post. That was a warning that it might try to rise again, leading to my warning that the OEX might not be through testing resistance. Now the OEX heads up to test the top of this morning's resistance zone again. . . at least I think so. That strange rogue chart pattern is back again, with the two versions of five-minute charts not showing the same figures.

Jonathan Levinson : 1/24/2005 11:23:46 AM

I'm watching a descending intraday channel for QQQQ here, with resistance just being tested now at 37.00. Once again, it's just noise below 37.10. If 37.10 breaks, look for the 30 min channel to turn up after 5-10 minutes, targeting 37.20 confluence next.

Jeff Bailey : 1/24/2005 11:19:52 AM

Airlines (XAL.X) 44.21 -3.6% ... remain weak.

March Crude Oil futures (cl05h) $48.65 +0.24% (30-min delayed) ... retreat from morning high of $49.24.

March Unleaded futures (hu05h) $1.3110 -0.31% are off $0.0041.

March Heating Oil (ho05h) $1.3740 +0.32% are up $0.0045

Linda Piazza : 1/24/2005 11:17:33 AM

As Jane has commented on the Futures side, the TRIN keeps climbing. Its absolute level is not so bearish, perhaps, but the trend is up. The advdec line did confirm that H&S, but it didn't dive as it did, as it had done Friday afternoon as the late-day sell-off began. It's so far hovering just below the confirmation level. All in all, these actions are more bearish than bullish, but the OEX still holds above its 100-ema, still consolidating just above it. I wouldn't rule out continued attempts to rise just yet. I just wouldn't be participating in them.

Jonathan Levinson : 1/24/2005 11:08:01 AM

QQQQ has broken the previous low, just printed 36.81 here, with 30 min channel support down to 36.75. Upper 30 min resistance is 36.15, but 36.94 and 37.10 are lowered support.

Linda Piazza : 1/24/2005 11:06:34 AM

H&S on the advdec line, neckline at -1000 issues.

Linda Piazza : 1/24/2005 11:06:07 AM

The OEX gaps lower on the five-minute chart, attempting a downside break now, perhaps, to see if that holds any better than the upside one.

Jane Fox : 1/24/2005 11:04:41 AM

AD line making new daily lows and TRIN making new daily highs.

Linda Piazza : 1/24/2005 11:03:33 AM

That OEX attempted breakout went nowhere, and the OEX still consolidates on either side of its five-minute 21-ema, currently at 558.68.

Jonathan Levinson : 1/24/2005 10:58:42 AM

QQQQ is testing the former low , just printing 36.86 here as new lows break out in the futures. 37.10 was never broken on the upside test, and 30 min channel support has declined to 36.84.

Jane Fox : 1/24/2005 10:56:39 AM

Internals have flatlined along with equity markets; the AD line within its previous day range, TRIN within its neutral band and VIX at the upper end of its previous day range. Keep your eye on the TICKS because there are approaching -1000 and that could bring in the buyers.

Jeff Bailey : 1/24/2005 10:55:57 AM

Sell Program Premium .... SPX.X 1,168.35 +0.04%, QQQQ $36.86 -0.50%

Jeff Bailey : 1/24/2005 10:53:35 AM

Current OPEN MM Profiles update ... MMM $81.01 -0.31%, SNDK $23.18 +0.17%, PHM $64.75 +0.54%, PFE $24.52 +0.16%, CD $22.37 +0.62%, ADBE $56.87 -0.35%, MUR $84.13 +1.22%, EXTR $6.33 -1.70%

Linda Piazza : 1/24/2005 10:49:05 AM

The TRAN tried to push above the right-shoulder level for the continuation-form H&S on its five-minute chart, but couldn't stay above that level. A break above the day's high invalidates the H&S, but then the TRAN slams right into significant resistance. A drop below 3470 should confirm the H&S. I'm watching TRAN strength or weakness to give me a heads-up on other indices, as the TRAN sometimes leads both the Dow and the two S&P's.

Jonathan Levinson : 1/24/2005 10:44:55 AM

Crude oil has given back its previous gains, currently -.10 at 48.425.

Linda Piazza : 1/24/2005 10:38:19 AM

The OEX breaks out of this morning's and late Friday's consolidation zone, looking as if it's attempting a move up toward the five-minute 100/130-ema's at 560.35 and 560.86. The "breakout" is tepid so far, however, with the breakout candle already developing a long upper shadow. Could be a long morning.

Jonathan Levinson : 1/24/2005 10:37:57 AM

QQQQ is holding a higher low so far above 36.97, which has caused a bullish divergence in the short cycle TRIX- 37.10 is the number for bulls to beat, which will target 37.20, confluence and upper 30 min channel resistance.

Linda Piazza : 1/24/2005 10:36:38 AM

The TRAN forms a potential continuation-form H&S at the bottom of its plunge. I don't like continuation-form H&S's, but they're sometimes valid on the TRAN. This one will certainly be useful to watch to identify an invalidation, too, if that should occur, with a move above the high of the day, confirmed by a move above the five-minute 100/130-ema's at 3498.08 and 3504.72. That's just below the 100-ema on the daily chart.

Linda Piazza : 1/24/2005 10:29:40 AM

Strange. I've never had that happen with QCharts before, but I just had a rogue chart. I kept trying to change servers to get my two five-minute charts to reconcile OEX levels, but the five-minute 100/130-ema just wouldn't give the right level while the five-minute Keltner one would. Finally eliminated the rogue chart altogether and created a new one and it's working fine.

It's showing that the OEX is consolidating along the five-minute 21-ema, currently turning down just below it, with that average at 558.56. As Jane mentioned earlier, the internals are looking more bearish than they did earlier, too, although more in their trend than in absolute numbers. Support at the 100-ema at 557.32 continues to hold, however.

Jonathan Levinson : 1/24/2005 10:28:31 AM

There goes 37.00 again. Next wavelet support is 36.93, follwed by a test of the session low.

Jonathan Levinson : 1/24/2005 10:23:29 AM

QQQQ broke 37.00 after setting a new session low at 36.87, but has just run into trouble at 37.10, currently backing down now. Bulls will be pressing for a bounce at 37.00 to establish a new short cycle uptrend.

Linda Piazza : 1/24/2005 10:22:42 AM

As I believe Marc mentioned late last week, the SOX has dropped below the 61.8% retracement of the September-December rally. Today it rose to challenge that 61.8% level, at about 390.57, but it's below it again at 387.11 as I type. The SOX is within a congestion zone for much of September and October, so I wouldn't be surprised to see its decline slow, but if it should close beneath that 61.8% retracement again today, Friday's close below it would look like more than an end-of-day run for the door.

Jeff Bailey : 1/24/2005 10:18:29 AM

Bullish swing trade place stop alert ... for Pulte Home (PHM) $64.67 +0.41% and the two (2) PHM Apr. $65 Calls (PHM-DM) .... Placing a stop to try and protect gains at $63.90.

Jonathan Levinson : 1/24/2005 10:13:52 AM

Reports that the New York Mercantile Exchange is developing an oil ETF has fueled investor interest, but experts say such an investment faces stiff regulatory hurdles and likely won't trade anytime soon.

The high cost of transporting and storing oil is among the biggest roadblocks. One possible solution -- an ETF where the underlying security is an oil futures contract -- could have difficulty obtaining U.S. Securities and Exchange Commission approval.


Jeff Bailey : 1/24/2005 10:08:44 AM

Sector strength ... Brokers +0.94%, Oil +1.23%, Oil Service +1.66%

Sector weakness ... Semiconductors -0.74%, Airlines -2.5%

I'm unable to upload images at this point.

Jonathan Levinson : 1/24/2005 10:08:32 AM

This bounce from the 36.92 QQQQ low is now testing former 37.00 support from below, and failing as I type. The short cycle is not yet oversold, and this looks like a corrective wavelet bounce. If the failure from 37 bottoms above 36.92, we should see some positive divergences forming, but the picture remains bearish below 37.10 and 37.00.

Jane Fox : 1/24/2005 10:05:03 AM

The AD line is making new daily lows and the TRIN is making new daily highs - this is NOT bullish. The odd man out is the VIX which is making new daily lows so a bear would really like to see this making new daily highs as well. But the AD line and TRIN bearish is enough for me.

Linda Piazza : 1/24/2005 10:05:02 AM

A TRAN chart showing how the TRAN behaved with respect to key resistance this morning: Link

Linda Piazza : 1/24/2005 10:00:24 AM

The plunge in the advdec line over the last twenty minutes is anything but encouraging for bulls.

I have a real problem this morning. My intraday charts on QCharts show two different values for the OEX for the same time period charts. The chart on which I keep my five-minute 100/130-ema's shows a value of 559.09 and the Keltner five-minute chart shows 557.68, which is the same value shown by the daily charts, and the one I assume to be right. Difficult to trust anything with that kind of discrepancy.

Jonathan Levinson : 1/24/2005 9:58:53 AM

Nymex crude settled at 49 for the morning session, +.82%.

Jonathan Levinson : 1/24/2005 9:58:04 AM

The Fed's open market desk has announced a 4B overnight repo against 1.75B expiring, for a net add of 2.25B for the day.

Jonathan Levinson : 1/24/2005 9:52:09 AM

The corrective short cycle upphase has just given it up on QQQQ, now testing support at 37 and cracking it as I type. 37.10 should now act as resistance for any bounce, followed by 37.20.

Jeff Bailey : 1/24/2005 9:50:50 AM

VIX.X 14.32 -0.27% .... DAILY Pivot Levels ... 13.11, 13.70, Piv=14.00, 14.59, 14.89.

Jeff Bailey : 1/24/2005 9:48:35 AM

Buy/Sell Program Execution Levels .... HL Camp & Company has their computers set for program buying at $+2.02 and set for program selling at $-0.12.

Linda Piazza : 1/24/2005 9:46:11 AM

For reference, the OEX five-minute 100/130-ema's are now at 560.84 and 561.33, corresponding roughly to a former rising trendline.

Linda Piazza : 1/24/2005 9:42:22 AM

Here's the OEX daily chart I've been posting regularly over the last couple of weeks, showing the OEX rising from the potential support outlined. (The annotations are Friday's.) Link Now watch the 560-562 level for potential resistance if the OEX is going to roll down from first resistance, but the 566-568 level is the right-shoulder level if the OEX is going to rise into a full right shoulder. Until we see whether this formation is going to be invalidated or confirmed, I have to consider bounces to be countertrend moves.

Jonathan Levinson : 1/24/2005 9:39:50 AM

QQQQ has been consistently failing below 37.20 this morning, with short cycle channel resistance currently at 37.22. The 37.30 line for the 30 minute channel at 37.30 looks far overhead currently. 1st sign of trouble for bears will be a break above 37.20.

Linda Piazza : 1/24/2005 9:38:06 AM

The TRAN is currently at 3492.95, with its 100-ema at 3509.09 and the 38.2% retracement of its August rally at 3492.37. Market bulls want to see the TRAN safely above all that potential resistance; bears want to see it roll down beneath it.

Jane Fox : 1/24/2005 9:38:04 AM

Both the VIX and the AD line are within their respective previous day ranges and the TRIN is within its neutral range 0.70 - 1.20. Internals are neutral. TICKS +1100.

Linda Piazza : 1/24/2005 9:33:06 AM

The OEX opens up at the 100-ema at 557.30 and attempts a climb right away, as most assumed it would do. It's testing the five-minute 21-ema.

Linda Piazza : 1/24/2005 9:25:55 AM

I am not receiving email this morning, so if you've written me and have not received an answer, I just haven't yet seen your email.

Jeff Bailey : 1/24/2005 9:21:57 AM

Pre-market most actives .... SIRI $6.09 +4.4% (alliance with Interscope Geffen A&M Records Chairman Jimmy Lovine to act as creative adviser), EELN $3.87 +29% (automobile deal with eBay), ASTM $3.68 -8%, COCO $19.80 +15.6% (SEC ceases informal inquiry)

Jonathan Levinson : 1/24/2005 9:21:14 AM

The 30 min cycle for the NQ futures (pre-market QQQQ proxy) is swtill in a downphase, but I expect that to change if the bulls can crack the 37.30-.35 level at the open. So far, this is just a corrective short cycle bounce below the 37.30 confluence.

Linda Piazza : 1/24/2005 9:08:13 AM

Our futures have held onto some gains this morning, but gains are so far being capped by 10-minute 100/130-ema's on the YM, ES, and NQ contracts, and by the five-minute versions on some. They're probably also being capped by weakness in Europe and higher crude prices, although crude has eased somewhat off its overnight highs. In that context and with opex post-settlement activity ahead of us this morning, initiation of new plays should be carefully considered. Many expect a bounce and the OEX at least gives some technical, chart-related indications of having hit possible short-term support, but in this climate, I'd view any bounce with some skepticism. See my post last night (archived) for a chart and more information. Anyone long this morning should first want to see the OEX above the five-minute 21-ema to vindicate that decision, with that average at 558.78, and should then be prepared to protect profits, if necessary, at the level of the five-minute 100/130-ema's, now at 560.92 and 561.41, respectively. If a bounce gets going too far, I can imagine surprised shorts being squeezed and seeing prices explode up, but I wouldn't be surprised if such an explosion also isn't stopped at an appropriate right-shoulder area and show some unhealthy chart characteristics.

On any bounce, bears can watch those same five-minute 100/130-ema's for a potential rollover, although if a bounce gets legs underneath it, it may carry on for a day or two and then consolidate another day or two to week or two in order to form another shoulder for a newer and bigger H&S before deciding whether to confirm that one or invalidate it. As I mentioned in last night's post and have pointed out in a chart I've posted several times, Friday's closing level in the 557-557.30 level down to 556 (38.2% retracement of the rally off the August low, rather than October one) are potential support, but a rollover beneath that suggests a fall down toward 550.50-552.00, the 50% retracement of the October rally and a Keltner target. Note that the TRAN and Dow have not been respecters of their 100-ema's or the 38.2% retracement of their August rallies, falling beneath both Friday. That sends a warning to want-to-be-bulls that the OEX could be next. For this morning, I would first expect a bounce attempt since futures have been valiantly trying to bounce all night despite weakness in other bourses, but I'm just not sure how far it will go.

Jonathan Levinson : 1/24/2005 8:15:28 AM

Equities are higher, ES trading 1170.25, NQ 1510, YM 10407, QQQQ +.05 to 37.10. Gold is up .60 to 427.5 and silver is +.013 to 6.83. Ten year bonds are up .078 to 112 3/8, crude oil +.425 to 48.95.

There are no major economic reports scheduled for release today.

Linda Piazza : 1/24/2005 7:02:27 AM

Good morning. Despite rising crude costs overnight, the Nikkei climbed, but other Asian markets were mixed and European markets turn lower this morning. European markets have also been affected by a lowered forecast by Infineon. Our futures have generally climbed slightly all night, although they might best be described as coiling in a tight pattern since the European open. As of 6:54 EST, gold was up $0.70 and crude was up $0.52 to $49.05. More detail about Asian and European markets follows in succeeding paragraphs.

Cold weather in the U.S. had sent crude higher and the Nikkei opened lower, just above 11,200. Exporters suffered from that higher crude as well as from last week's disappointing Preliminary Michigan Sentiment number. The Nikkei had climbed into positive territory by midmorning, however, with positive sentiment helped by a newspaper report that Resona Holdings planned to repay part of the public funds used to bail it out in 2003. The Nikkei ended higher by 51.12 points or 0.45%, at 11,289.49. Banks closed higher and techs tended to do so, too. Sony did not participate in tech gains, however, continuing its decline after warning last week. Sony reports this week along with many other large cap companies.

Other Asian markets turned in mixed performances. The Taiwan Weighted declined 1.32%, but South Korea's Kospi gained 0.38%. Singapore's Straits Times fell 0.53%, and Hong Kong's Hang Seng declined 0.70%. China's Shanghai Composite climbed 1.73%.

Most European markets turn lower this morning, impacted by higher crude prices and a dour outlook on semiconductor demand by European chipmaker Infineon. Also, another report notes the German central bank's statement this morning that Q4 growth probably won't be much above Q3's. Q3 had been weak, and many had hoped that weakness was temporary. In the U.K., gains in miners and oil majors reportedly help tame losses. A Bank of England member this morning reports a greater likelihood that housing prices will decline than gain, but doesn't believe that decline will be as damaging to consumption as it might have been in earlier periods.

Customers of and suppliers to Infineon tended to decline, with Siemens and Nokia being among those customers. Other chip makers tended to decline, too. Car manufacturers and airlines fell in early trading due to the higher crude prices. Another sector gaining attention was the telecom sector after France Telecom announced its intention to buy out the remaining shares it doesn't own in Equant, with France Telecom declining but other potential buyout targets rising. In stock-specific news, German bank HVB announced write downs last week and received a downgrade by Credit Suisse First Boston to a neutral rating, with the bank's stock declining. Deutsche Bank raised its previous sell rating to a hold rating, however. The London Stock Exchange has been the subject of bidding interest lately, and Deutsche Boerse reported that it might join the fray. It declined after the announcement.

As of 6:55 EST, the FTSE 100 had declined 17.10 points or 0.36%, to 4,786.20. The CAC 40 had fallen 20.13 points or 0.52%, to 3,834.06. The DAX had fallen 37.93 points or 0.90%, to 4,175.77.

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