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Jeff Bailey : 2/3/2005 12:52:49 AM

The dollar has been on a tear since 03:00 PM EST. U.S. Dollar Index (dx00y) 83.69 nearing its DAILY R1.

Jeff Bailey : 2/3/2005 12:50:39 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $1.32 and set for program selling at $-0.70.

OI Technical Staff : 2/2/2005 10:00:00 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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

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

OI Technical Staff : 2/2/2005 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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

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

Jeff Bailey : 2/2/2005 7:44:07 PM

Great discussion regarding the U.S. Dollar on CNBC. Beetle's Balanced Benchmark at this Link The CNBC discussion was in regards to "why Buffett, Gates and Soros might be wrong" as it relates to dollar weakness. And I think you can see the point some economists make regarding weaker European and Japan economy compared to stronger U.S. economy with a deficit. I'm introducing a Crude Oil observation to the Beetle's Balanced (only to get a percentage gain/loss from 12/30/04 benchmark). Discussions I've had with a hedge fund buddy of mine is the driving force still behind oil, which seems to impact dollar and yield curve action. I (Jeff Bailey) think of the SHY (this is price) of the 5-year note, where its decline would have YIELD moving higher. This action makes sense as it relates to what the Fed is doing with interest rates. I think of the TLT as the 30-year where strong buying since 12/30/04 benchmarking, has its YIELD falling, thus flattening of the yield curve. This does NOT make sense as to what the Fed is doing with interest rates. This can be worrisome (flattening of the curve) as it can be construed as economic slowing. What can I do or learn from this? IF there is an OIL/DOLLAR/YIELD CURVE relationship (benchmark the dollar's % gain with TLT % gain), then should OIL prices FALL, we might think that beneficial to economic growth, if not "less taxing" as Mr. Greenspan and others have said. IF that is true, then we might expect the yield curve to steepen, with the TLT falling in price. Beat down anyone that might think Buffett, Bill Gates, or Soros might be wrong. If they were to be proven wrong, then a strengthening dollar, steepening yield curve, and higher stock prices (reflection of economy) would be found.

Jeff Bailey : 2/2/2005 8:18:23 PM

Big block alert ... 1,250,000 share block of QQQQ was billed out at net $37.57 in extended session. (5:54:44) Traders might want to investigate today's most active QQQQ options. Take their average h/l/c then add/subtract to that strike. See if you can figure out what is going on. Today's action had the NASDAQ-100 Volatility Index (VXN.X) 17.30 -2.59% falling.

Jeff Bailey : 2/2/2005 6:53:12 PM

Closing U.S. Market Watch at this Link Closing Internals at this Link Note: Recent action now has the NASDAQ 5-day NH/NL ratio giving a "buy signal" and follows that of the NYSE 5-day NH/NL ratio from Monday. Pivot Matrix for tomorrow at this Link NYSE NH/NL Chart at this Link NASDAQ NH/NL Chart at this Link

Jeff Bailey : 2/2/2005 4:42:00 PM

Current OPEN MM Profiles I've made at this Link Today's activity .... Day trade (overnight) stopped out on Microsoft (MSFT) at $26.30. ($-0.11, or -0.42%).

Jonathan Levinson : 2/2/2005 4:10:10 PM

QQQQ update at this Link , with QQQQ running back lower. I would be inclined to treat any weakness above the session low as noise only, because the daily cycle oscillators are turning bullish and the 30 min cycle has exhausted most of its downward pressure on today's overall corrective decline. A break below 37.20 would change that, but bears will have a lot of work to do tomorrow morning in order to achieve it.

Jeff Bailey : 2/2/2005 4:03:16 PM

Buy Program Premium ... SPY $119.41, DIA $105.93

Jeff Bailey : 2/2/2005 4:26:00 PM

QQQQ $37.59 +0.18% ... they're going to fill that gap aren't they? QQQQ with WEEKLY/MONTHLY Pivot retracement at this Link

Jeff Bailey : 2/2/2005 3:53:01 PM

VIX.X 11.61 -3.49% ...

Jeff Bailey : 2/2/2005 3:52:44 PM

IWO $65.12 +0.41% ...

Jeff Bailey : 2/2/2005 3:52:08 PM

S&P Banks (BIX.X) 372.23 -0.53% ... nice recovery here.

Linda Piazza : 2/2/2005 3:51:27 PM

Okay, so what are you going to do into the close? Are you going to carry options plays overnight? As of this typing, it's possible that the OEX might close the day with a gravestone doji, but also possible that it might close it at a closing high not seen since January 3. It's possible that the OEX will close below the converging 30- and 50-sma's, but it seems likely that will be defended into the close, even if the OEX should produce that gravestone doji. As I type, the OEX is making another push up toward the day's high, so perhaps bulls will have their hoped-for higher close instead of bears their hoped-for gravestone doji. It's apparent to me that there was some selling into the announcement. If I'd entered a new bearish play after the post-FOMC spike higher and it was on lottery money only as I advised, hey, it's just lottery money. (Note: I didn't advise new bearish entries, just said they should be on lottery money only if entered.) If I were sitting on big bullish gains . . . well, you've had lots of opportunities to devise and revise your profit-protecting plans as I've been advising for yea-so-many days. The VIX scares me, but it's not a sound market-timing tool and it could continue to drop while the OEX scoots right up to retest those late-December highs.

Jeff Bailey : 2/2/2005 3:46:08 PM

Microsoft (MSFT) $26.40 +0.03% ...

Jonathan Levinson : 2/2/2005 3:45:08 PM

QQQQ updated 100 tick chart at this Link . 37.55 is asserting 1st resistance over this bounce even as the 30 min channel downphase begins to stall.

Jeff Bailey : 2/2/2005 3:42:38 PM

QQQQ $37.51 -0.03% ... reclaims its DAILY Pivot again.

Linda Piazza : 2/2/2005 3:41:20 PM

The OEX remains above that 30-minute 21-ema as I type. It's rising again, its five-minute pattern defying qualification as one type of formation or another. I can probably find a potential H&S in there, as I mentioned earlier, with a rounding down below 570 or so looking like a possible right shoulder, but it certainly is a shaggy formation.

Jonathan Levinson : 2/2/2005 3:39:20 PM

QQQQ's testing 1st confluence resistance beneath this morning's 37.43-.45 low, bouncing from today's 37.31 low. That's not quite the extreme level of technical damage for which 30 min cycle bears were hoping, and as I type, QQQQ has run back to the 37.50 level. Another 5 minutes at these levels and the 30 min channel should flatten and begin to tick up.

Jeff Bailey : 2/2/2005 3:28:12 PM

March Crude Oil (cl05h) settled down $0.43, or 0.91% at $46.69. March Unleaded Gas (hu05h) settled down $0.021, or 1.60% at $1.2935. Both settlements were below last Wednesday's settlement prices of $48.78 and $1.3714 respectively.

Linda Piazza : 2/2/2005 3:27:14 PM

The TRAN is below 3600, at 3598.12 and rising to retest the bottom of the consolidation zone from the last couple of days. Note that the TRAN has a confirmed inverse H&S on that 60-minute chart, and any decline might find support at its neckline, if it gets that far. That neckline is now near 3550.

Linda Piazza : 2/2/2005 3:25:26 PM

Danger of a tweezer-top on the OEX's 60-minute chart. The OEX needs to bounce and bounce hard in the next five minutes or so to avoid that eventuality.

Jeff Bailey : 2/2/2005 3:24:11 PM

BIX.X 371.42 -0.74% .... bulls defend WEEKLY R2 for now. QQQQ while not a bank in the bunch, easy tie with its WEEKLY S1.

Linda Piazza : 2/2/2005 3:23:50 PM

The OEX just bounced from its 30-minute 21-ema, that average I mentioned earlier. The OEX has not closed a 30-minute period below this average all week, although it's been pierced a couple of times, as it was minimally a few minutes ago. It's currently at 568.48.

Jeff Bailey : 2/2/2005 3:21:27 PM

QQQQ $37.33 -0.47% ... just tested WEEKLY R1. After a trade at WEEKLY R2, computers should be a buyer. If not, then potential reversal of recent rebound needs to be assessed.

Jeff Bailey : 2/2/2005 3:19:23 PM

TRIN 0.90 -4.25% ... just challenged morning high reading of 0.99. VIX.X 11.73 -2.49%

Linda Piazza : 2/2/2005 3:18:29 PM

This sentence in my 3:16 post was supposed to read this way: The VIX is currently closer to the "fall to a new low" category than "swing high" for the VIX. rather than say The markets are . . . . Big difference since the VIX and markets are usually on opposing sides of the fence.

Jonathan Levinson : 2/2/2005 3:15:12 PM

Yesterday's low is now broken for QQQQ. 30 min channel support is down to 37.30 on a steep drop.

Linda Piazza : 2/2/2005 3:16:32 PM

Bulls do not want to see a gravestone doji at the top of the OEX's recent climb on the daily chart, particularly if the OEX closes beneath that 566-568 zone. The OEX has been known to consolidate another day after producing such a candle (see 12/03 and 12/06), but then it usually does succumb to the predicted weakness. Not always. See 11/01 and 11/02 for two reversal-type doji at the top of the climb and see what happened then.

There's a major difference in those two periods, however. In early November, the VIX was reaching a swing high of its own. In early December, it was consolidating prior to its fall to a new low. The VIX is currently closer to the "fall to a new low" category than "swing high" for the VIX.

Jeff Bailey : 2/2/2005 3:14:49 PM

S&P Banks Index (BIX.X) 370.96 -0.97% ... slip to session low, WEEKLY R2.

Jeff Bailey : 2/2/2005 3:14:10 PM

Bullish day trade stop alert ... for Microsoft (MSFT) $26.30

Linda Piazza : 2/2/2005 3:10:04 PM

On a five-minute chart, the current OEX formation is beginning to look like a "b" distribution pattern, with a break of the post-FOMC low likely to see a decline matching the one that has already occurred. There's just one problem with that. Multiple Keltner channels and moving averages and other potential support shows that the OEX might have difficulty plunging another +2 points. That's what the formation suggest will happen, though.

Jonathan Levinson : 2/2/2005 3:10:05 PM

The current session low has reached 37.38, the first (successful) test of that key support zone at yesterday's 37.36 low. Bears need to do some damage below this level in order to remove the corrective bias to this so-far weak 30 min cycle downphase in effect all day. Link

Jeff Bailey : 2/2/2005 3:05:54 PM

Sell Program Premium ... SPX 1,190.56, DIA $105.74

Jeff Bailey : 2/2/2005 3:10:55 PM

03:00 Market Watch at this Link 30-year bond traders don't believe the Fed with 30-year finishing down 1.1 bp at 4.581%. 03:00 Internals at this Link

Linda Piazza : 2/2/2005 3:02:35 PM

Another benchmark to watch. The OEX's 30-minute 21-ema is at 568.51. The OEX hasn't closed a 30-minute period below this average all this week.

Jeff Bailey : 2/2/2005 2:59:38 PM

Microsoft (MSFT) $26.36 ... just above DAILY Pivot ($26.34) QQQQ

Linda Piazza : 2/2/2005 2:56:22 PM

While the OEX was bouncing along its two-minute 100/130-ema's, the Nasdaq (not trending as strongly) was bouncing along its five-minute versions. It came down after the FOMC release to test those averages and now attempts a bounce from them, although it's not getting far yet. They're at 2069.77 and 2068.39, respectively.

Jeff Bailey : 2/2/2005 2:56:02 PM

VIX.X 11.64 , TRIN 0.80

Linda Piazza : 2/2/2005 2:51:05 PM

The OEX is now back above the two-minute 100/130-ema's and they will perhaps lose their benchmark status if the OEX starts consolidating either side of them.

Jonathan Levinson : 2/2/2005 2:49:19 PM

Note the downside doji spike to 37.40 for QQQQ. Link QQQQ has so far retested both the high and low without breaking either. The 30 min channel should remain bearish if QQQQ holds below 37.55- but ultimately, we need to see yesterday's 37.37 level broken to confirm any kind of 30 min cycle weakness beyond the weak corrective sideways move we've had so far.

Linda Piazza : 2/2/2005 2:50:18 PM

Has major damage been done? Not until the OEX is below its 30- and 50-sma's, I don't think. Until then, the pullback remains a question mark. Doesn't mean I consider it a sign of strength, either.

Linda Piazza : 2/2/2005 2:42:47 PM

The OEX's 15-minute Keltner chart suggests that next support is at 568.13-568.50, but the OEX is already trying to bounce ahead of that support. It's going to run into Keltner resistance just above the current 569.34 level, however.

Linda Piazza : 2/2/2005 2:39:30 PM

This is what bulls did not want to see, and what I suspected might happen after the FOMC meeting. (See my 1:43 post.) I wasn't alone, of course. Now the trick is in knowing whether or not this pullback will hold any more than the higher prices did. If it gets too much momentum behind it, it will. Although we all know not to trust those H&S formations to confirm, bulls have to be aware of them.

Linda Piazza : 2/2/2005 2:36:39 PM

Should be at least momentary support here or something's really wrong (if you're a bull, over the very short-term). Someone has been watching these two-minute 100/130-ema's today. . . OEX gaps below them as I type.

Jonathan Levinson : 2/2/2005 2:35:54 PM

QQQQ now breaks below the rising triangle support. Look for next support at teh sesion low, 37.40. Link

Linda Piazza : 2/2/2005 2:35:41 PM

Some OEX volatility now, at least if you're watching a two-minute chart. The OEX has been skipping off the two-minute 100/130-ema's today, touching them at shortly after 10:00, shortly after 12:30 and again after 13:45. It's dive-bombing to those averages as I type, with the averages currently at 569.50 and 569.35.

Jeff Bailey : 2/2/2005 2:34:22 PM

Sell Program Premium ... SPX.X 1,192.92, DIA $105.83

Jonathan Levinson : 2/2/2005 2:34:49 PM

QQQQ has just Steve McQueened back to the triangle range, dropping even more steeply than it rose. The session high was never broken for QQQQ on that runup. Link

Jeff Bailey : 2/2/2005 2:29:49 PM

IWO $65.23 +0.58% ...

Jane Fox : 2/2/2005 2:29:39 PM

Jonathan I love the way you spell neighbourhood.

Jonathan Levinson : 2/2/2005 2:28:02 PM

Note the VXO down to 11.25 here, in the neighbourhood of decade lows.

Jeff Bailey : 2/2/2005 2:26:52 PM

Buy Program Premium ... SPX.X 1,195.00, DIA $106.02

Jonathan Levinson : 2/2/2005 2:26:41 PM

QQQQ chart update at this Link

Jeff Bailey : 2/2/2005 2:26:24 PM

30-year Treasury yield (TYX.X) ... gets some action. Unchanged here after dipping fractions red.

Linda Piazza : 2/2/2005 2:25:46 PM

The OEX has broken back inside that "bearish" rising wedge. Expect a test of the upside resistance coming up, with that resistance at 571.37. Bulls want this breakout to be maintained.

Jonathan Levinson : 2/2/2005 2:25:30 PM

Here's the triangle break now, with QQQQ sailing above the 37.60 level to 37.69 on a surge in volume. Testing the session high now as I type.

Linda Piazza : 2/2/2005 2:24:21 PM

The OEX has now reached the upside target predicted by its inverse H&S confirmation (five-minute chart) earlier this morning. It took a while, but it really did make it. Zooming higher as I type.

Jeff Bailey : 2/2/2005 2:25:02 PM

Dow Industrials (INDU) 10,600 +0.46% ... session highs. VIX.X 11.62 -3.4% ... approaching session low. Could go DAILY S2. Could go to zero too.

Linda Piazza : 2/2/2005 2:23:15 PM

The OEX attempts to produce a Keltner channel breakout. Bulls want continued five-minute closes above the Keltner line currently at 569.97 or at least the one currently at 569.38.

Jeff Bailey : 2/2/2005 2:23:03 PM

June Fed Fund futures (ff05m) 97.015 (unch) ... predicting 100% chance of 3% fed funds at this point.

Jonathan Levinson : 2/2/2005 2:22:20 PM

Headline:

2:20pm $TNX 10-YEAR TREASURY PARES LOSS AS FED STATEMENT UNCHANGED

As I type, TNX is up 1.7 bps at 4.153%, unchanged from its pre-announcement level.

Linda Piazza : 2/2/2005 2:21:25 PM

The TRAN, economically sensitive, rises but it's rise is tentative.

Jonathan Levinson : 2/2/2005 2:21:18 PM

Nymex crude is down .375 at 46.75 here, -.8% with 10 minutes left in the session.

Jeff Bailey : 2/2/2005 2:21:13 PM

Microsoft (MSFT) $26.38 -0.03% ...

Jonathan Levinson : 2/2/2005 2:20:41 PM

Gold has ticked positive, up .30 at 423.20 with HUI now fractionally in the green at 202.97.

Jeff Bailey : 2/2/2005 2:20:13 PM

IWO $65.04 +0.29% DIA $105.77 +0.35% BIX.X 371.64 -0.68% VIX.X 11.65 -3.15%

Linda Piazza : 2/2/2005 2:19:45 PM

Bulls now do not want to see the OEX drop below 568.89, the trough between the last peak and the one perhaps in the process of forming.

Jonathan Levinson : 2/2/2005 2:19:27 PM

QQQQ zigged up 3 cents, then back down 3 cents, currently resting at 37.56 on only moderately higher volume so far.

Linda Piazza : 2/2/2005 2:18:19 PM

CNBC says the language was "virtually identical" to that seen in December.

Jonathan Levinson : 2/2/2005 2:18:18 PM

More headlines:

2:17pm FOMC SAYS ECONOMY GROWING AT MODERATE PACE

2:17pm FOMC SAYS INFLATION REMAINS 'WELL CONTAINED'

2:17pm FOMC SEES BALANCED RISK FROM GROWTH AND INFLATION

2:17pm FOMC RATES CAN STILL BE RAISED AT 'MEASURED' PACE

2:17pm FOMC SAYS RATES STILL ACCOMMODATIVE

2:17pm FOMC MAKES NO MAJOR CHANGES TO STATEMENT

2:17pm FOMC HIKES RATES BY QUARTER POINT TO 2.50%

Jeff Bailey : 2/2/2005 2:18:15 PM

CNBC ... bond traders looking at the TV. Seeing very little action. Open palms and back of hands give mixed picture.

Jonathan Levinson : 2/2/2005 2:17:30 PM

Headline:

02/02/2005 14:17 +DJ Fed Raises Rates 0.25-Pt To 2.50%; Sees Balanced Risks

Jonathan Levinson : 2/2/2005 2:16:00 PM

QQQQ is still holding within the rising triangle, apex range 37.51 to 37.58-.60.

Linda Piazza : 2/2/2005 2:15:24 PM

The OEX was getting a running start. Will it hold?

Linda Piazza : 2/2/2005 2:13:33 PM

SOX still lower, still not able to climb above its 30-sma. It's at 406.75 as I type.

Linda Piazza : 2/2/2005 2:10:32 PM

The OEX climbed the bottom of that rising wedge and now rises again. MACD (five-minute) can't pick itself up from the flat-line level, though, at least not yet. This is the very action I warned again early this morning--this sideways trade out of a rising wedge.

Jonathan Levinson : 2/2/2005 2:05:18 PM

Ten year treasuries have firmed slightly, with TNX now firmly in the middle of the 4.14%-4.16% confluence at 4.153% here, +1.7 bps.

Jeff Bailey : 2/2/2005 2:09:52 PM

02:00 Market Watch at this Link 02:00 Internals at this Link

Jonathan Levinson : 2/2/2005 1:58:54 PM

QQQQ chart update at this Link . Note the potential for a bullish rising triangle formed off the 10:20AM low- look for a break above 37.58-.60 on expanding volume to signal a break.

Linda Piazza : 2/2/2005 1:55:49 PM

The DJUSHB, the Dow Jones US Home Construction Index, turns lower today, although the MBA reported higher mortgage activity in all components. The DJUSH tried punching above yesterday's high, but hasn't been able to maintain that level. Monday's data on new home sales had disappointed.

Linda Piazza : 2/2/2005 1:49:20 PM

The OEX is definitely outside that wedge, below the lower support now, but it's still just trading sideways, still possibly just reforming into a rising regression channel. We saw this happen so many times on daily charts in early 2003, for example.

Linda Piazza : 2/2/2005 1:47:51 PM

Just heard someone say "And here it is," on CNBC and thought they were talking about the Fed announcement. (They weren't: they were discussing Symantec.) Wouldn't it be more fun if they would just mix up the announcement time a little? Some days at 11:15, perhaps, and some days at the usual time? Maybe we'd at least avoid this park-them reaction that messes up the oscillators so much.

Jeff Bailey : 2/2/2005 1:46:19 PM

Take some notes here .... I'm running an "advanced" WEEKLY Pivot matrix, where I've already placed this week's current high/low (update each day). If I plug in today's high and keep yesterday's close, that darned WEEKLY R2 would be $106.65. WEEKLY R1 would be $106.03. Analysis ... that Feb. $107 call was probably a directional bullish trade. Test will be above $106.03-$016.08.

Linda Piazza : 2/2/2005 1:43:14 PM

There's a debate going on, on the Futures side, as to whether indices are at good levels to short ahead of the FOMC decision. There's that same debate going on in my head, too, and probably in most of yours. Many indices are climbing. That's irrefutable. The OEX climbed a little farther ahead of the FOMC decision than I expected. Does that undo the possibility of a rounding over into a right shoulder for a H&S? No, it didn't rise that high. Does that rising wedge, traditionally a bearish formation, prove that it's a good idea to short this level? No.

The 60-minute Keltner chart suggests that if there's a true upside breakout, sustained, the OEX could reach 576.37 (maybe not today, though, of course). The OEX has been sitting right at the breakout level for that chart all day, showing some minimal closes above the breakout level (60-minute closes), but not really breaking free. It definitely hasn't broken free on the 15-minute chart, and support levels are starting to drift further apart on that chart, indicating that if the OEX slips, it would find it easier to decline now than earlier. I'd like to see the first reaction and the reaction to that reaction before I made up my mind. This is a good area to try a short if you're compelled to do so, but don't risk anything more than lottery money if you're so compelled, keeping that upside breakout possibility in mind. As Keene said, it's not a suggestion I would give (for options players other than those wanting to risk a little lottery money) with public money. I'm not even taking the risk with private money.

If I had to guess, I'd say that we will see higher values after the announcement, but that they'll be reversed and then we'll either see can't-make-up-mind consolidation or a pullback of some degree. That's nothing more than a guess. The OEX is just too near important resistance for there not to be some effort to sell into any post-Fed rally, whether that selling is sustained or not.

Jeff Bailey : 2/2/2005 1:39:42 PM

Now wait just a minute... (01:27:26) ... $106.65. Wasn't there some unusual option action that drove us to sell NAKED the Feb. $104 calls (DIA-BZ) back on 01/11, but then close them out for a nice profit on 1/21 as we neared the target of $104? It was centered around that $106.65 level as I remember.

Jonathan Levinson : 2/2/2005 1:30:02 PM

The 30 min cycle downphase has not reversed and continues to meander lower. This is bad news for the bears, as it suggests only corrective action from an otherwise overbought, bearish-divergent downphase that kicked off yesterday. The implication is that if they can't run QQQQ down, the next upphase should be impulsive/explosive. Bears to need break yesterday's 37.37 support to get things moving within this cycle, while bulls will want to see a break above 37.63, confirmed with a break of today's 37.73 high. Given that the daily cycle upphase continues to build, bears shouldn't be too tolerant of any higher high seen today.

Jeff Bailey : 2/2/2005 1:28:59 PM

52-week high alert ... Morg. Stanley Health Provider (RXH.X) 407.62 +0.45%

Jonathan Levinson : 2/2/2005 1:26:06 PM

I wonder if it's this slow inside the Marriner S. Eccles Building too. Are Bernanke and Greenspan struggling to stay awake?

Linda Piazza : 2/2/2005 1:26:40 PM

Here's that OEX rising wedge from earlier. Link This may look like a breakdown in progress, but it's sideways trading, and a sideways break out of these things is sometimes nothing more than an attempt to widen the wedge into a regular ascending regression channel.

Jeff Bailey : 2/2/2005 2:16:41 PM

Pretty good trade of 200 contracts in those DIA Feb. $107 calls took place at 01:19:41 at $0.35. $107 -/+ $0.35 gives us $106.65-$107.35. Do these levels make any sense in the pivot matrix?

Jonathan Levinson : 2/2/2005 1:16:11 PM

QQQQ 100-tick chart updated at this Link

Jonathan Levinson : 2/2/2005 1:08:03 PM

QQQQ is up .02 for the day at 37.54 here, with bonds, euros and CAD futures, gold and silver holding just above the lows. Too bad there's still just over an hour to go until the FOMC announcement.

Jeff Bailey : 2/2/2005 1:12:22 PM

01:00 Market Watch at this Link 01:00 Internals at this Link

Linda Piazza : 2/2/2005 12:56:32 PM

The OEX is attempting a bounce from the support of its rising wedge.

Jonathan Levinson : 2/2/2005 12:54:44 PM

Volume is picking up here on the bounce off the 37.47 fibonacci line, QQQQ currently back to challenging 7200 tick resistance at 37.52. The short cycle oscillators are choppy and sideways, as are the 30 and 60 min channels.

Linda Piazza : 2/2/2005 12:55:42 PM

Corrected the chart linked to my 12:50 post.

Tab, I'd love to take credit for that China link, but that was Jeff, I think.

Linda Piazza : 2/2/2005 12:54:45 PM

Here's that formation I was watching on the Russell 2000, Jeff, but, no, I don't usually follow the RUT on the MM. Link

Tab Gilles : 2/2/2005 12:49:47 PM

Linda, great link on China oil.

Take a look at the $MID index. Here's a chart of several indexes and their 20/50 ma's. Link

Jeff Bailey : 2/2/2005 12:49:02 PM

Dow Diamonds (DIA) $105.69 +0.27% ... most active options are the Feb. $106 calls $0.75 (640:8,375) and the Feb. $106 puts $1.05 (295:7,241). VIX.X 11.69 -2.82%

Linda Piazza : 2/2/2005 12:40:25 PM

The OEX is testing/challenging its rising wedge support. Sure would like to see an equal or lower high before I believed too strongly that support was getting broken.

Jeff Bailey : 2/2/2005 12:39:14 PM

Linda .... have you shown your h/s top on the RUT.X in prior commentary? I'm having a tough time seeing it on the daily interval bar chart.

Jonathan Levinson : 2/2/2005 12:36:33 PM

Crude oil's holding 47, currently down .075 at 47.05.

Jeff Bailey : 2/2/2005 12:42:42 PM

I can't remember the date, and with no archives, I can't find. But Tab's 12:29:36 most likely ties in with China's recent announcement to build a strategic oil reserve similar to that of the U.S. Here's a recent story/update on China's plans. Link

Jonathan Levinson : 2/2/2005 12:33:37 PM

Ten year treasuries have eased off the lows, with TNX up 2.3 bps to 4.159%, back below the 4.16% confluence top. Gold and silver remain at session lows, though contract volume in the e-mini futures is light. QQQQ is testing 7200-tick SMA support at 37.50 as I type.

Linda Piazza : 2/2/2005 12:29:48 PM

Here's the Nasdaq's five-minute chart with 100/130-ema's: Link Something else to watch today as a benchmark.

Jeff Bailey : 2/2/2005 12:29:39 PM

S&P Banks (BIX.X) 371.50 -0.72% ... coming back toward its WEEKLY R2 (371.00) today. Meanwhile, INDU/DIA pulled higher toward their WEEKLY R2s. Almost like computers are getting things balanced into FOMC.

Tab Gilles : 2/2/2005 12:34:06 PM

China's need for oil continues...

On Sunday I posted this on MM:

*** Venezuelan Energy Minister Rafael Ramirez is not attending a meeting of the Organisation of Petroleum Exporting Countries because of a visit in Caracas by Chinese Vice President Zeng Qinghong, an official statement released here said The minister "will not attend the OPEC meeting to be held on January 30 since he was committed to very important issues related to the visit of the vice president of China, who is now in Caracas to sign economic and energy cooperation agreements," the statement said Ramirez also heads the state oil company PDVSA. ****

News today...

China has made a loan to Russia for 6.0 billion dollars to pursue the financing of nationalizing the main production unit of Yukos. They've paid this money in advance for future shipments of oil. The deal will fall short of China's overall goal of gaining outright ownership stakes among the world's big oil reserves but it was easier to reach because Russia is nervous about selling its oil industry to other nations. Link

Jonathan Levinson : 2/2/2005 12:27:59 PM

QQQQ 2-day 100-tick chart updated at this Link

Linda Piazza : 2/2/2005 12:30:10 PM

Pull up a Nasdaq five-minute chart with the 100/130-ema's and you'll notice that the Nasdaq has been skipping along the 100-ema since Monday morning. Each skip off that average travels a small percentage away from that average, however. Those averages are at 2068.10 and 2066.41, respectively.

Linda Piazza : 2/2/2005 12:25:42 PM

Add to that the Russell 2000 H&S "top," Jeff. (See Jeff's 12:20 post.) The Russell came all the way down to its neckline before zooming up again and invalidating the formation. H&S's can be rejected at the neckline as well as at the shoulder levels, even though all looks in place. However they turn out, though, they provide benchmarks for us to watch and so are important. They also show some underlying bearishness, whether or not bulls eventually overcome that bearishness. By the way, the Russell 2000 pauses today beneath the 50-dma and the 19.1% retracement of its rally off the August low. Still a bit of work for bulls to do, too, before they're in the clear.

Jonathan Levinson : 2/2/2005 12:25:51 PM

QQQQ has been holding a range from 37.53-37.59 for the past hour and a half. Volume has fallen off to a trickle, and while the 30 and 60 min oscillators are still in their earlier downphase, the tick-based channels have stalled and are sliding sideways. A break below 37.50, the current 7200 tick SMA, would kickstart them again to the downside.

Linda Piazza : 2/2/2005 12:20:06 PM

The OEX is trading sideways into the lower support of its rising wedge, not really falling to test it. Sign of strength? Perhaps, but it traded sideways for a while on Monday, too, and then began a pullback.

Jeff Bailey : 2/2/2005 12:25:46 PM

Great observation Tab (12:02:47) ... after the OIX broke above that "right shoulder" of its potential head/shoulder top, the OIX.X hasn't looked back. This might also be very concerning to SPX/OEX bears that are playing the potential h/s tops. This chart of the Morg. Stanley Health Provider Index (RXH.X) 407.48 +0.39% Link would also show a breach of right shoulder yesterday (ascending neckline).

Linda Piazza : 2/2/2005 12:12:12 PM

The OEX is now in danger of slipping beneath that Keltner support on the three-minute chart. Just tangled in it for now, but there's still a danger. That support has been battling overhead resistance showing up on the 15-minute chart.

Jeff Bailey : 2/2/2005 12:15:28 PM

12:00 Market Watch at this Link 12:00 Internals at this Link

Linda Piazza : 2/2/2005 12:03:21 PM

The OEX did find support where the three-minute Keltner chart suggested it would. It now faces the day's high. That support, down to 569.63, still looks as if it will take a strong thrust to get through it, but a long lingering here would separate the lines, too, and reconfigure them.

Tab Gilles : 2/2/2005 12:02:47 PM

Oil stocks continue to perform. Link Link Link

Linda Piazza : 2/2/2005 12:01:46 PM

Q-Charts insists I look at charts I had no intention of viewing today. I keep finding rogue charts, such as one for IPXL (trending up nicely, by the way, but toward the mid-January resistance) that I didn't summon.

Jeff Bailey : 2/2/2005 12:00:50 PM

Current OPEN MM profiles I've made at this Link

CBOE option chain of Cendant (CD) at this Link

Jeff Bailey : 2/2/2005 11:53:18 AM

VIX.X 11.65 -3.15% .... hasn't gotten above 11.71 since falling below.

Linda Piazza : 2/2/2005 11:52:33 AM

Thanks for the 11:51 post and linked chart, Tab. I had typed something about crude coiling into my draft for tonight's Wrap, but forgot to mention it here. Nice chart.

Tab Gilles : 2/2/2005 11:51:08 AM

Light crude 15 minute. Link

Linda Piazza : 2/2/2005 11:50:50 AM

Dialing down to a three-minute Keltner chart, I see potential Keltner support at the OEX's current level, support that may require a strong thrust to break.

Jeff Bailey : 2/2/2005 11:51:21 AM

IWO $65.01 +0.24% ... session high still $65.13. Bull's don't appear to be "convinced" and perhaps bears a little complacent, or confident. 50-day SMA ($65.02) right in here too.

Jonathan Levinson : 2/2/2005 11:50:05 AM

QQQQ is stalled at the 37.55 level, with ten year notes at a session low, TNX now breaking above 4.16% resistance at 4.163% currently, +2.7 bps. Volume has stalled for QQQQ, and I suspect that we're falling into the pre-Fed holding pattern.

Linda Piazza : 2/2/2005 11:44:06 AM

Just turned to a TRIN chart. That's not at scary levels: not if you're a bull.

Linda Piazza : 2/2/2005 11:43:15 AM

The VIX is getting scarier and scarier, with Jeff noting its moves to/below pivot levels.

Tab Gilles : 2/2/2005 11:42:46 AM

SPX/VIX Link

Jeff Bailey : 2/2/2005 11:42:07 AM

Dow Diamonds (DIA) updated daily interval bar chart with review of naked puts and possible trade setup for selling of NAKED Feb. $107 calls at this Link

Tab Gilles : 2/2/2005 11:39:50 AM

$NDX Link Link

Linda Piazza : 2/2/2005 11:39:45 AM

A Keltner-chart look at the OEX: Link I'm watching that rising wedge (not shown on the Keltner chart) for guidance, too, with top resistance now at about 570.45 and bottom support now at about 568.65.

Jeff Bailey : 2/2/2005 11:39:21 AM

DIA $105.77 +0.35% ... benchmarking SPX.X 1,192.37 +0.24% ... benchmarking

Jeff Bailey : 2/2/2005 11:38:42 AM

VIX.X alert 11.66 -3.07% ... darts below 11.71. Now monitor.

Tab Gilles : 2/2/2005 11:33:00 AM

$SOX Finding resistance. Link

Linda Piazza : 2/2/2005 11:30:32 AM

The NDX pauses at its 100-ema, as Jonathan may have already alerted readers. He's much more experienced in watching the NDX and QQQQ's than I am, but I'm just running through charts, noticing discrepancies in behavior.

Linda Piazza : 2/2/2005 11:27:43 AM

The SOX turns down from its 30-sma, never hitting a higher-than-yesterday high as some indices have done. The SOX is at 406.94 as I type.

Linda Piazza : 2/2/2005 11:26:45 AM

The Nasdaq remains at the top of its gap down from the 1/19 close.

Linda Piazza : 2/2/2005 11:25:58 AM

If you didn't catch Jeff's VIX-related 10:50 post earlier, you might look back at it now.

Linda Piazza : 2/2/2005 11:24:44 AM

The OEX moves up toward the top of its rising wedge forming since Friday, and toward the upside target for the inverse H&S confirmed this morning. The top of that rising wedge has now risen to about 570.35, above the 570.20-ish upside target for the inverse H&S.

Jeff Bailey : 2/2/2005 11:24:46 AM

Dow Diamond Option Chain at this Link Currently looking to sell NAKED five (5) of the DIA Feb. $107 Calls (DIA-BC), but would like to get something near $0.60 should the DIA reach $106.

Need to understand NH/NL ratios ramping to bullish leadership past couple of sessions. However, today's notes regarding VIX.X, which I used to help time the selling NAKED the Feb. $103 puts last week may come into play.

Jonathan Levinson : 2/2/2005 11:21:40 AM

Session low for gold, ten year notes and euros, session high for ES futures here.

Tab Gilles : 2/2/2005 11:19:22 AM

Linda, I was just looking at that "bearish" rising wedge on the SPX 15 & 30 minute chart myself.

Linda Piazza : 2/2/2005 11:12:37 AM

The top of that rising wedge just displayed in the chart linked to my 11:07 post is near 570.20, near the projected upside target of the inverse H&S confirmed this morning (five-minute chart).

Jonathan Levinson : 2/2/2005 11:11:24 AM

QQQQ is trading both sides of the 37.55 level with the 30 and 60 min channel downphases now stalled. CAD and Euro futures are printing new lows, with ten year treasuries holding their losses, TNX currently up 1.2 bps at 4.148%. Volume has slowed considerably for QQQQ, currently 35M shares traded for the day. Link

Linda Piazza : 2/2/2005 11:09:07 AM

Bulls and bears alike want to watch this rising wedge on the OEX: Link We've seen a number of them break to the upside over the last couple of years, across all time frames, but they're named "bearish" rising wedges.

If that wedge should break to the downside, but then prices should trade sideways, that should probably give new bears an "uh-oh" moment. That's not what they'll want to see.

Jeff Bailey : 2/2/2005 11:12:32 AM

11:00 Market Watch at this Link 11:00 Internals at this Link

Jeff Bailey : 2/2/2005 11:01:24 AM

Microsoft (MSFT) $26.41 +0.07% ... little "spike" to its DAILY R1 of $26.47.

Linda Piazza : 2/2/2005 10:59:56 AM

OEX bulls want to see a 60-minute close above the Keltner line currently at 568.78. They don't want to see the OEX pull back inside that channel before the close of the current 60-minute period, because that would suggest that resistance was holding, even though the OEX might have pierced it during the 60-minute period.

Jeff Bailey : 2/2/2005 10:55:51 AM

Crack the whip alert ... IWO $65.13 ... session high.

Jeff Bailey : 2/2/2005 10:55:16 AM

30-year YIELD ($TYX.X) up 0.9 bp at 4.601% .... session high here. Curve still flat.

Linda Piazza : 2/2/2005 10:58:15 AM

The OEX's 15-minute Keltner chart proved right. (See my 10:46 post.) Still keeping that 570.20-ish upside target for the inverse H&S in mind. Bulls should still continue to adapt their profit-protecting plans.

Jonathan Levinson : 2/2/2005 10:53:27 AM

Session highs for R2K and Dow futures here, with QQQQ holding at 37.55. The 30 min cycle downphase is stalling now, with channel resistance just overhead at 37.60.

Jeff Bailey : 2/2/2005 10:51:52 AM

Dow Diamonds (DIA) $105.66 +0.25% ... session high and first trade for it at February's MONTHLY Pivot.

Jeff Bailey : 2/2/2005 10:50:30 AM

VIX.X 11.88 -1.33% ... just noticing now that the VIX's DAILY S1 is correlative with its WEEKLY S1. Be alert if trade as this may be a decision point for option market makers. As noted a several sessions ago, it appeared that options market makers turned to put selling and call buying. That can be reversed after nice rally.

Jonathan Levinson : 2/2/2005 10:46:46 AM

Unverified headline:

02/02/2005 10:43 DJ Iraq Insurgents Blow Up Domestic Oil Pipe To Pwr Stations

Currently, Nymex crude is back up to 47.05, bouncing from a low of 46.725.

Linda Piazza : 2/2/2005 10:46:40 AM

The OEX faces 60-minute Keltner resistance. Shorter-term Keltner charts suggest that the OEX can still climb higher, with the 15-minute chart suggesting that 569.64 might be possible.

Jonathan Levinson : 2/2/2005 10:44:41 AM

Session low for gold and euro futures here, gold -.20 at 422.70, euros 1.3039.

Jonathan Levinson : 2/2/2005 10:41:11 AM

QQQQ is coming in for a test of 37.50-.55 confluence. A break above 37.55 will stop the young 30 min channel downphase. Note the heavier volume so far at 29.7M QQQQ shares so far today. Link

Jeff Bailey : 2/2/2005 10:40:55 AM

IWO $65.00 +0.16% ... back to challenge morning high. Looking for any sign of "crack the whip" action.

Jeff Bailey : 2/2/2005 10:39:13 AM

VIX.X 11.90 -1.0% ... session low.

Jeff Bailey : 2/2/2005 10:38:40 AM

Dow Diamonds (DIA) $105.56 +0.15% ... make a session high here.

Linda Piazza : 2/2/2005 10:38:21 AM

The OEX hits yesterday's high.

Linda Piazza : 2/2/2005 10:37:18 AM

Thanks, Jonathan, for those numbers. This morning I read that there was an expectation for a rise in distillates by 2.4 million barrels, a climb in crude inventories by 1.3 million, and a slight easing in gasoline inventories.

Jonathan Levinson : 2/2/2005 10:34:24 AM

Nymex crude has dropped to a low of 46.80 here, -.69%.

Linda Piazza : 2/2/2005 10:34:19 AM

According to CNBC, at least, the distillates numbers disappointed. Jonathan will probably have the numbers posted before I find them, but I'm looking now.

Jonathan Levinson : 2/2/2005 10:33:32 AM

Headlines:

10:31am U.S. CRUDE STKS DOWN 300,000 BRLS LAST WK: ENERGY DEPT

10:31am U.S. DISTILLATE STKS DOWN 2.9 MLN BRLS: ENERGY DEPT

10:31am U.S. GASOLINE STKS UP 1.6 MLN BRL: ENERGY DEPT

10:32am MARCH CRUDE NEAR FLAT AT $47.10, DOWN 2C

Jonathan Levinson : 2/2/2005 10:33:03 AM

So far the bounce has a flaggy feel to it, and neither the 30 min nor the 60 min channels have deviated from their downward trajectory. 30 min channel support is down to 37.33, resistance down to 37.57.

Linda Piazza : 2/2/2005 10:31:53 AM

The OEX has now broken above the neckline for that inverse H&S and has shown two five-minute closes above it. The upside target, if met (I don't trust these), would be 570.21.

Jeff Bailey : 2/2/2005 10:30:56 AM

S&P 100 (OEX.X) 568.73 +0.09% ... session high. Will note that the IWO $64.93 +0.12% edged back from morning high of $65.06.

Mark Davis : 2/2/2005 10:28:06 AM

Thanks Linda!

Jeff Bailey : 2/2/2005 10:28:11 AM

TRIN 0.93 -1.06% ... right at its DAILY Pivot here. QQQQ $37.44 -0.20% ... just under its DAILY Piv of $37.51.

Jeff Bailey : 2/2/2005 10:25:03 AM

SOX.X 405.95 -0.61% ... tests DAILY S1 here. Got a bullish bounce from here yesterday morning.

Linda Piazza : 2/2/2005 10:22:46 AM

The OEX has a continuation-form inverse H&S on its five-minute chart, but it's so far resisted confirming it by a move over the trendline off yesterday's high. It's still trying. I don't trust continuation-form inverse H&S's too much under the best of circumstances, and in this case, there was no bullish divergence as the head was formed. Doesn't mean I won't watch it, however.

Jeff Bailey : 2/2/2005 10:21:08 AM

QQQQ $37.42 -0.26% ... bound between DAILY S1 and DAILY R2 early. EIA weekly inventory data due out at 10 minutes.

Jonathan Levinson : 2/2/2005 10:14:07 AM

The Fed's open market desk has announced an 8.25B overnight repo to replace the 9.25B expiring, for a net drain of 1B.

Jonathan Levinson : 2/2/2005 10:13:37 AM

QQQQ has stalled at the 37.43 line as the 30 min channel keels over. 37.50-.55 should now act as resistance. 30 min support has declined to 37.36, where it overlaps the current 60 min channel bottom.

Linda Piazza : 2/2/2005 10:12:52 AM

Prices just aren't dipping as charts suggest they should on the OEX. This is normal for pre-announcement trading.

Linda Piazza : 2/2/2005 10:05:14 AM

For reference, the OEX's 30-sma is at 567.41 and the 50-sma is at 566.72.

Don't forget the crude inventories numbers this morning.

Jonathan Levinson : 2/2/2005 10:03:43 AM

Here's the test of 37.43 support, the current low for QQQQ.

Jeff Bailey : 2/2/2005 10:13:19 AM

10:00 Market Watch at this Link 10:00 Internals at this Link NYSE new highs not as numerous as I would have thought, but NASDAQ a bit stronger than I had anticipated. Yesterday's Internals at this Link

Jonathan Levinson : 2/2/2005 10:00:58 AM

Headlines:

10:00am U.S. JAN. LAYOFFS LOWEST SINCE AUGUST

10:00am U.S. JAN. LAYOFFS DOWN 15% TO 92,351: CHALLENGER

Jonathan Levinson : 2/2/2005 9:59:20 AM

30 min channel support is currently at 37.43 QQQQ, 60 min support 4 cents below that. The intraday bias should be bearish below 37.53, but we'll want to see a break of the 37.43 line for confirmation. Link

Linda Piazza : 2/2/2005 9:57:53 AM

Here's what I think. All those spiky 60-minute OEX candles don't look healthy. I think the OEX needs a pullback at least to 566-566.50 and maybe deeper, to 564.25-565. Whether it will do that or not when trading is so artificial ahead of an important announcement, I don't know, but that's what I think.

Linda Piazza : 2/2/2005 9:55:41 AM

The TRAN isn't holding that breakout level. It's retesting it, though, so this pullback is as tentative as the breakout was.

Jeff Bailey : 2/2/2005 9:55:31 AM

Russell 2000 Growth iShares (IWO) $65.04 +0.29% ... threatening to move above $64.78-$65.00 "zone of resistance" after closing inside it yesterday. This would pressure bears to cover any short positions as the IWO has now moved up two (2) levels.

Jonathan Levinson : 2/2/2005 9:55:15 AM

QQQQ has now filled the gap, testing 37.55 confluence with a current low of 37.55. That low needs to break to stall the now-rising 30 min cycle channel.

Mark Davis : 2/2/2005 9:55:02 AM

This is a lot of yanking around for just one ES point. The drops and spikes are not large but they do happen rather quickly. Battle for the 50sma?

Linda Piazza : 2/2/2005 9:54:11 AM

VIX below 12, still back at the levels we were seeing in late December when the indices were hitting their highs. This is NOT a good market-timing tool, but it does suggest that bulls might be taking efforts to protect profits, as I suggested yesterday.

Jeff Bailey : 2/2/2005 9:53:37 AM

Sector action is largely positive, but not one sector up/down more than 1% at this point. S&P Banks (BIX.X) 371.20 -0.80%, which have rebounded strong the past two sessions gives 1/2 of yesterday's gains back. Treasuries are fractions lower, with yield curve flat as a pancake.

Linda Piazza : 2/2/2005 9:51:11 AM

The TRAN has broken to the upside out of yesterday's consolidation pattern, although there's been only one five-mintue close above yesterday's high. The breakout might be tentative as yet.

Jeff Bailey : 2/2/2005 9:50:59 AM

VIX.X 11.98 -0.41% ... Daily Pivot Levels ... 11.36, 11.71, Piv= 12.36, 12.71, 13.36

Jonathan Levinson : 2/2/2005 9:50:30 AM

The Fed has 9.25B in various repos expiring this AM. We await the 10AM announcement to determine whether the open market desk will be adding or draining reserves for the day.

Linda Piazza : 2/2/2005 9:47:03 AM

Crude is now down only $0.02.

Linda Piazza : 2/2/2005 9:44:55 AM

I'm pretty much limited to watching what was already on my Q-Chart workspace, in whatever time interval was there, because Q-Charts insists that no other indices or stocks exist. The OEX has risen again to challenge that three-minute Keltner resistance just overhead, with the sideways trade on the OEX beginning to flatten that overhead resistance and make it look a bit firmer. Support is trying to firm, too, though, at 567.81-567.99 and again at 567.25. Although the lower support zone looks relatively firm and should be even firmer by the time the OEX could approach it, right now that 567.81-567.99 zone doesn't yet look particularly firm. Bulls want the OEX to trade sideways long enough to firm that first support or even to climb and break through the resistance.

Linda Piazza : 2/2/2005 9:40:05 AM

For those not watching the Futures side as well as this side of the MM, Jane is noting a mixture in internals. Not a prescription for a strong bias just yet.

Linda Piazza : 2/2/2005 9:38:32 AM

Asian semi-related stocks performed well in the overnight session. I note that the SOX today still challenges that 30-sma on its daily chart, moving up toward yesterday's high as I type, but it hasn't reached it yet. It's got a 100-ema at 413.36 and the 38.2% retracement of the rally off the September low just above that, with the 50-sma lurking if that should all be surpassed, so semi-related investors had better be feeling confident to push the SOX past all that.

Linda Piazza : 2/2/2005 9:34:05 AM

Although I didn't suffer a gremlin attack on my Q-Charts as Jeff did, they are slow this morning.

Jonathan Levinson : 2/2/2005 9:33:05 AM

A steep drop has QQQQ back below the upper 30 min Keltner band, but there still another 10 cents to go for a full gap fill. A failure to get back below 37.55 minimum should confirm an upside whipsaw for the 30 min cycle- this is a repeat of yesterday's opening action as well- another potential early abort to an otherwise convincing 30 min downphase as of yesterday's cash close.

Linda Piazza : 2/2/2005 9:33:33 AM

The OEX's first push higher was turned back below three-minute Keltner resistance. That resistance still turns higher, so it's still possible for the OEX to climb its underside, but it's showing no inclination so far.

Jeff Bailey : 2/2/2005 9:24:01 AM

Gremlins got ahold of my QCharts last night. I'll be delayed a bit until I can get things fixed.

Linda Piazza : 2/2/2005 9:18:45 AM

I've been looking at charts for several indices this morning and notice some interesting differences. Although the OEX has already moved above an ascending trendline that had marked the neckline of a former H&S (not the one with the horizontal neckline perhaps forming now), the Dow has not. Neither has the Nasdaq moved above its neckline for its H&S version, marked by that gap. The Russell 2000 soundly rejected its H&S version forming during that same time, never confirming the neckline.

Jonathan Levinson : 2/2/2005 9:08:54 AM

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity increased 7.3 percent to 706.4 in the week ended Jan. 28, after decreasing 3.6 percent in the MBA's prior week survey. The MBA's seasonally adjusted index of refinancing applications surged 16.6 percent to 2,253.9, more than erasing the 5.7 percent drop the prior week. ... The MBA's purchase index, a gauge of loan requests for home purchases, edged up 0.3 percent to 440.3, marginally offsetting the 2.0 percent loss the previous week. Link

Linda Piazza : 2/2/2005 8:54:39 AM

We're closer than ever to finding out whether the OEX will break above the appropriate right shoulder area for a H&S on its daily chart or whether it will roll down and retest that neckline. I'm kind of expecting some spikes above that right-shoulder area, but also kind of expecting them to get knocked back, at least ahead of the announcement. We often see markets parked just under important resistance or just over important support before an important announcement. That may happen today, with all movement over rather soon into the session until after the announcement. Don't forget that we're on another kind of Fed watch, too, with this Fed being President Bush, scheduled to deliver his State of the Union Address tonight. I'm going to be in a watching mode leading up to the rate-hike announcement and suggest that conservative options traders out there consider the same unless internals and other factors set up an overwhelming case for a move one direction or the other.

Jonathan Levinson : 2/2/2005 8:50:34 AM

Session high for ten year notes here, with TNX flat at 4.136%, ZN futures +.0156 at 112 19/64.

Happy Groundhog Day, incidentally.

Jonathan Levinson : 2/2/2005 7:47:09 AM

Equities are higher across the board, ES trading 1192, NQ 1535, YM 10561 and QQQQ +.20 at 37.72. The gains aren't huge, but they represent breaks of key resistance and, in all cases save for YM, yesterday's highs. In the case of QQQQ, the current print is 13 cents higher than the 30 min cycle channel top, an admittedly rare occurrence. Gold and silver are up at 423.90 and 6.741 respectively, ten year notes down .0625 at 112 7/32, and crude oil is down .125 to 47.

The only major economic news scheduled for today will be the 2:15 rate announcement from the FOMC.

Linda Piazza : 2/2/2005 7:14:05 AM

Good morning. The Nikkei posted a gain last night, but closed off its high of the day in cautious trading ahead of today's U.S. rate-hike decision. Other Asian markets were mixed, but most European markets turn higher despite mixed economic news and cautiousness ahead of that U.S. decision. After their usual gyrations near the European open, our futures are now modestly higher. As of 6:55 EST, gold was up $1.00, and crude, down $0.18 to $46.94. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei gapped higher Wednesday morning and coiled, with Asian chip-related stocks benefiting from a CSFB upgrade on European chipmakers. Yahoo Japan Corp. also benefited from Google's earnings report. The Nikkei couldn't hold onto all its gains ahead of the U.S.'s FOMC meeting today, however, and closed nearer its low of the day than its high of the day. It closed up by 22.74 points or 0.20%, at 11,407.14. Although Sharp Corp reported a sharp rise in Q3 profit, it erased early gains to close lower, perhaps hurt by recent lowered forecasts of competitors Sony Corp. and Pioneer Corp. Some car manufacturers gained as they released news about new developments, including Toyota Motor and Nissan Motor.

Other Asian markets were mixed. As mentioned yesterday morning, Taiwan Semiconductor joined TXN as CSFB's most strongly recommended chipmakers and it posted a 1.9% gain, while some other Asian chip-related stocks gained even more, percentage wise. The Taiwan Weighted gained 0.65%, but South Korea's Kospi declined 0.24%. Singapore's Straits Times climbed 0.67%, but Hong Kong's Hang Seng fell 0.17%. China's Shanghai Composite climbed an amazing 5.35% after reaching many-year lows.

Most European markets are currently higher but show choppy trading patterns, with mixed economic data to be digested and ahead of the U.S.'s rate-hike decision. The eurozone's December's PPI surprised by falling 0.2% month-over-month, with the decline in crude prices during that period touted as a chief reason for the decline. Energy costs dropped 1.5% over November's but still jumped 6.7% over the year-before level. In Germany, January's jobless rate rose to 11.4% and 12.1% on an unadjusted rate, with the number of unemployed above 5 million, as had been feared. The number was in line with some expectations. Germany's December retail sales declined 0.3% from the previous month's and 2.7% from the year-ago level, disappointing. Reports from German retailers had suggested that the month's report would show better results. For the year, retail sales fell 1.7%. The fall in retail sales and the unemployment figures question a rebound in domestic demand, although some blamed the rise in unemployment on a new system of computing the numbers. In the U.K., the January construction PMI dropped with housing activity declining to 54.9 from the previous 56.7.

Car makers were moving after releasing news and U.S. sales figures. Stock-specific news included a Morgan Stanley upgrade of Uniliver to an overweight rating, with the stock gaining in early trading. Insurer Allianz also received an upgrade, this one from Merrill Lynch to a buy rating, and the company's stock was the biggest DAX gainer in early trading. Other stock-specific news included earnings reports from Roche, Vivendi and Swatch Group, with Roche falling but the other two gaining in early trading.

As of 6:50 EST, the FTSE 100 was up 9.80 points or 0.20%, to 4,916.00. The CAC 40 was up 8.61 points or 0.22%, to 3,947.79. The DAX was up 12.96 points or 0.30%, to 4,292.93.

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