Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
OI Technical Staff : 2/3/2005 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The Market Monitor has been archived.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.

Jane Fox : 2/3/2005 9:08:09 PM

test

Jeff Bailey : 2/3/2005 6:21:00 PM

Swing trade long alert for 1/2 bullish position in the QQQQ here at $37.18, stop $36.85, target $37.90.

Jeff Bailey : 2/3/2005 6:13:13 PM

Closing U.S. Market Watch at this Link Closing Internals at this Link Pivot Matrix for tomorrow at this Link

Jeff Bailey : 2/3/2005 4:46:27 PM

Current OPEN MM Profiles that I've made at this Link Today's activity ... Day trade put the Dow Diamonds (DIA) with five (5) of the DIA Feb. $105 puts (DIA-NA) at $0.70. Was looking for the DIA to follow the QQQQ lower, get some premium pop for $0.95. Didn't happen but will hold overnight. Looking to sell these if DIA trades $105.25. Day trade short the underlying shares of Travelzoo (TZOO) at the bid of $58.38, closed out at $57.71 as time remaining to close was near. ($0.67, or 1.16%)

Jim Brown : 2/3/2005 4:36:13 PM

SNDA earnings = +0.38, est +0.28

Jim Brown : 2/3/2005 4:35:25 PM

ENZN earnings = +0.03, est +0.00

Jim Brown : 2/3/2005 4:34:58 PM

DNB earnings = +1.12, est +1.12

Jim Brown : 2/3/2005 4:31:49 PM

JCOM earnings = +0.37, est +0.34

Jim Brown : 2/3/2005 4:25:55 PM

CDN earnings = +0.26, est +0.25

Jim Brown : 2/3/2005 4:25:46 PM

RSYS earnings = +0.13, est +0.18

Jim Brown : 2/3/2005 4:24:21 PM

MCRL earnings = +0.06, est +0.05

Jeff Bailey : 2/3/2005 4:24:22 PM

Dow Diamonds (DIA) $105.90 +0.01% ... tomorrow's daily pivot levels are S2=$105.25, $105.58, PIV= $105.76, R1=$106.09, $106.27.

Jim Brown : 2/3/2005 4:23:19 PM

EPNY earnings = -0.03, est -0.05

Jim Brown : 2/3/2005 4:22:32 PM

CRAY earnings = -0.34, est -0.18

Jim Brown : 2/3/2005 4:21:18 PM

AVID earnings = +0.64, est +0.62

Jim Brown : 2/3/2005 4:19:55 PM

MXO earnings = -0.28, est -0.18 including charges

Jim Brown : 2/3/2005 4:17:45 PM

CELL earnings = +0.47, est +0.37 with items

Jim Brown : 2/3/2005 4:15:55 PM

RMD earnings = +0.22, est +0.48

Jeff Bailey : 2/3/2005 4:15:42 PM

Looks like a lot of option-related squaring into the DIA close. Note the most actives Feb. $105 puts (1,122:7,907), Mar. $106 puts (1,000:1,368), Mar. $105 puts (822:1,680) At points of today's session, we'd see a string of action in the Feb. $105 puts, and I got more of a sense of SELL induced trade than I did BUYing of these puts.

Jim Brown : 2/3/2005 4:11:17 PM

SHOP earnings loss of -0.09 cents, no estimate

Jim Brown : 2/3/2005 4:10:44 PM

TSCO earnings = +0.55, est +0.49
raising guidance

Jim Brown : 2/3/2005 4:08:43 PM

SAPE earnings = +0.06, est +0.07

Jim Brown : 2/3/2005 4:08:21 PM

DRTE earnings = +0.22, est +0.23

Jim Brown : 2/3/2005 4:07:21 PM

CERN earnings = +0.56, est +0.55

Jim Brown : 2/3/2005 4:05:44 PM

ASKJ earnings = +0.35 est +0.32

Jim Brown : 2/3/2005 4:05:32 PM

ICOS earnings = -0.53, est -0.50

Jeff Bailey : 2/3/2005 4:05:22 PM

VIX.X 11.73 +0.60% at the close!

Jim Brown : 2/3/2005 4:06:02 PM

HAIN earnings = +0.31, est +0.30
Raising guidance

Jim Brown : 2/3/2005 4:03:53 PM

SCUR affirming guidance

Jim Brown : 2/3/2005 4:01:40 PM

APCC earnings = +0.28, est +0.25

Jim Brown : 2/3/2005 4:00:43 PM

DCLK earnings = +0.08, est +0.06

Jim Brown : 2/3/2005 4:00:35 PM

CPKI earnings = +0.32, est +0.32

Linda Piazza : 2/3/2005 3:59:46 PM

The OEX struggles with the midpoint of the day's range. If you were to combine today's candle with yesterday's (a tool that Nison sometimes employs), you'd find a long-legged doji for the two days. Indecision, but indecision coming at the top of a rise. Today might not give a clean reversal signal in the form of a tweezer-top, but it may confirm indecision in this manner, with follow-through one direction or the other needed to either confirm a potential reversal or invalidate that possibility.

Jeff Bailey : 2/3/2005 3:58:04 PM

Dow Diamonds (DIA) 105.87 (unch)

Jeff Bailey : 2/3/2005 3:57:04 PM

March Crude (cl05h) $46.57 +0.25% ... opens up $0.12.

Jeff Bailey : 2/3/2005 3:54:17 PM

Bearish day trade short close out alert ... for Travelzoo (TZOO) here at $57.71

Linda Piazza : 2/3/2005 3:46:48 PM

The OEX moved above the neckline for the H&S on the five-minute chart and now comes back to test it. Bulls want it to hold; bears don't. Bulls want to see the OEX close above 568.29, the midpoint of the day's range while bears want to see the OEX close the day as close to the low as possible.

Jeff Bailey : 2/3/2005 3:39:55 PM

Day trade put update alert ... with DIA at $105.82 -0.05% ... will carry over (won't stop out at $105.90 if traded) today's put profile. If oil and unleaded gas had settled below important near-term support levels, I would have pulled the plug on this trade DIA Feb. $105 puts, but might get a bounce in oil/unld. gas based on today's settlement.

Linda Piazza : 2/3/2005 3:35:28 PM

New five-minute high. The OEX approaches the neckline for the inverse H&S on the five-minute chart, with that neckline near 568.31.

Linda Piazza : 2/3/2005 3:33:03 PM

Breakout above the OEX's descending regression channel, with the OEX now testing the five-minute 100/130-ema's. The OEX needs to hold above these averages and hit a new five-minute high to confirm this short-term strength, however.

Jeff Bailey : 2/3/2005 3:30:22 PM

Bearish day trade short alert ... for Travelzoo (TZOO) $58.38 +0.96% here, stop $58.80, target $57.05 toward the close.

Linda Piazza : 2/3/2005 3:24:02 PM

I said earlier this afternoon that I didn't think the OEX was through testing the top of its descending regression channel. It wasn't, but it hasn't been testing it the way I imagined. It's been creeping down along that channel's upper resistance, oscillating around the five-minute 21-ema. Here's the channel: Link

Jeff Bailey : 2/3/2005 3:22:39 PM

March Crude Oil (cl05h) settled down $0.24, or -0.51% at $46.45. Held above the $46.20 level.

Jim Brown : 2/3/2005 3:22:29 PM

A few companies reporting earnings tonight.

CDN. est +0.25 - DCLK est +0.06
DNB. est +1.12 - EPNY est -0.05
MXO. est -0.18 - ENZN est +0.00
RMD. est +0.48 - HAIN est +0.30
APCC est +0.25 - ICOS est -0.50
ASKJ est +0.32 - JCOM est +0.34
AVID est +0.62 - MCRL est +0.05
CELL est +0.37 - RSYS est +0.18
CPKI est +0.32 - SAPE est +0.07
CERN est +0.55 - SNDA est +0.28
CRAY est -0.18 - TSCO est +0.49
DRTE est +0.23 - WEBM est +0.01

Jeff Bailey : 2/3/2005 3:20:41 PM

March Unleaded Gas (hu05h) settled down $0.0250, or -1.94% at $1.2684. (see 02:44:39)

Jonathan Levinson : 2/3/2005 3:18:02 PM

I need to step away for the remainder of the day. Watch 37.00-37.20 QQQQ for a directional resolution to this 4+ hour range.

Linda Piazza : 2/3/2005 3:15:20 PM

Keltner support still shows up near 566 on both the 15- and 60-minute Keltner charts. It's perhaps a little softer looking than it was earlier, but still firm enough that it would take a strong thrust to get through it or else a prolonged consolidation while the Keltner lines separated.

Jonathan Levinson : 2/3/2005 3:12:51 PM

Volume has trailed off, with a bounce from 37.05 on the last dip. The 30 and 60 min cycle channels are now flat and sliding sideways, with the short cycle oscillators chopped up as well. While the 30 min cycle is due for an upphase, with the oscillators now pointing north, the bounce has been so far weak. Look for a break of 37.15 or 37.05 to hopefully resolve the deadlock. A move above 37.20 should confirm strength, while below 37 this afternoon's bounce will begin to look like a mere headfake.

Linda Piazza : 2/3/2005 3:07:27 PM

OEX bears want to see 567.25 hold as resistance.

Jeff Bailey : 2/3/2005 3:13:25 PM

03:00 Market Watch at this Link 03:00 Internals at this Link

Linda Piazza : 2/3/2005 3:03:20 PM

The OEX turns lower and may have actually confirmed the 2-minute H&S since it gapped at one version of the neckline.

Jeff Bailey : 2/3/2005 3:00:12 PM

DIA $105.71, SPX.X 1,188.20, QQQQ $37.12.

Jeff Bailey : 2/3/2005 2:59:45 PM

30-year yield ($TYX.X) alert session low at 4.580%.

Jonathan Levinson : 2/3/2005 2:57:01 PM

QQQQ failed from a lower high after bouncing from a higher low- this has the makings of a pennant. Look for a break of 37.05 or 37.15 to get things moving (hopefully).

Linda Piazza : 2/3/2005 2:55:57 PM

Bears want to see the OEX close near the low of the day to create a tweezer-top reversal signal. Bulls want to see the OEX close in the upper half of its day's range, to leave a long tail behind springing up from resistance.

Linda Piazza : 2/3/2005 2:54:14 PM

The OEX has been gyrating around the five-minute 21-ema. To further confuse matters (see my 2:44 post), there's a potential H&S on the OEX's two-minute chart, neckline at about 567 if all shadows are included, perhaps a little higher if not.

Jonathan Levinson : 2/3/2005 2:49:20 PM

Here's a bounce from a higher low, confirming the 30 min cycle upphase if the bulls can break and hold above 37.20 QQQQ.

Jonathan Levinson : 2/3/2005 2:45:33 PM

QQQQ is net unchanged for the past 4 hours.

Linda Piazza : 2/3/2005 2:44:42 PM

We've got battling regular H&S and inverse H&S's across several time frames today, making it difficult to predict what might happen next. Bulls and bears are both exerting pressure: Link

Jeff Bailey : 2/3/2005 2:44:39 PM

March Unleaded (hu05h) updated bar chart at this Link will be monitoring closely now as settlement below $1.25 could ignite further equity rally.

Linda Piazza : 2/3/2005 2:35:59 PM

Unlike the OEX, the SOX is holding up well so far at the right-shoulder level for its potential inverse H&S on its five-minute chart.

Jonathan Levinson : 2/3/2005 2:34:55 PM

QQQQ is testing rising 7200 tick SMA support now, with 30 min channel support at 37.05 and 60 min support at 36.99. A dip back to retest the previous low at 37 wouldn't invalidate the bullish 30 min cycle view, as there's often a successful retest of the prior low to mark a cycle bottom. But a break below would be very bearish, given the relatively short rise that failed at 37.20.

Linda Piazza : 2/3/2005 2:34:32 PM

Still no strength. The OEX is in danger of falling below the appropriate right-shoulder level for the inverse H&S visible on its five-minute chart. It's now dropping below its five-minute 21-ema, and if it closes this five-minute period below that average, at 567.45, it's much more likely to turn down through the channel again to the 565.31 current level for the channel's support.

Jeff Bailey : 2/3/2005 2:34:42 PM

March Unleaded (hu05h) $1.2540 -3.05% (30-minute delayed) .... testing overlap support of $1.2509 here. This would have come just as DIA tested DAILY Pivot again.

Jonathan Levinson : 2/3/2005 2:26:06 PM

Crude oil is heading into the close down 1.02% at 46.225. Link

Jeff Bailey : 2/3/2005 2:24:07 PM

S&P Banks (BIX.X) 370.39 -0.52% ... didn't quite make it back to 371.00 on the bounce from session low of 369.74. DIA $105.74

Linda Piazza : 2/3/2005 2:23:45 PM

After I noted the potential inverse H&S on the SOX's five-minute chart, I went looking on the OEX's, too, and it's there, the neckline at about 568.21.

Linda Piazza : 2/3/2005 2:22:15 PM

In addition to the big inverse H&S (daily chart) I mentioned on the SOX chart, there's also a potential one showing up on the five-minute chart, neckline currently at about 400.20, but rising steeply.

Linda Piazza : 2/3/2005 2:20:24 PM

The SOX pulled back slightly after hitting the 400.01 mark, and is now at 399.42.

Linda Piazza : 2/3/2005 2:18:59 PM

The OEX has turned down beneath the top of the regression channel displayed on the chart linked to my 1:57 post, and has turned down below the five-minute 100/130-ema's. It's testing the second gap higher, and has the 21-ema below at 567.41. All day, that average held the OEX back, so it might now serve as support. For now, however, the OEX turned back just where bears would have wished it to turn back. The bottom of the regression channel is at about 565.45, but I'm not entirely sure that the OEX is through testing the top of the channel yet.

Jeff Bailey : 2/3/2005 2:18:46 PM

DIA $105.71 -0.16% ... just off third test of DAILY Pivot. Not unlike the $HUI.X 198.31 -2.53%, which kept pounding against 200.00, should the level of support/resistance get broken, a move can really begin to take hold.

Jim Brown : 2/3/2005 2:17:59 PM

POT Potash is wedging up at $81.50 and appears to be about ready to breakout over this resistance. POT traded at a new high around $83 for the last two weeks of December and was knocked back to $73 on profit taking the first week of 2005. That weakness appears to be over and a break over $81.50 and eventually $83 appears to be in the works. The June $85 calls, POT-FQ are currently $4.80. Expensive but I believe last years chart will be repeated this year fueled by continued growth in China.

Jonathan Levinson : 2/3/2005 2:17:43 PM

QQQQ failed on a tick to 37.21 and is currently back to 37.15. 30 min channel support has risen to 37.05, 7200 tick SMA support to 37.11. The 30 min cycle will remain bullish so long as price holds above the SMA.

Linda Piazza : 2/3/2005 2:14:07 PM

The OEX's 15-minute Keltner chart shows that the OEX currently faces Keltner resistance, but it's got firm support below in that 566-567 zone, too, with some difficulty in evaluating which is stronger. Be aware that the 15-minute chart shows a potential H&S with the head at yesterday's high and with the current rise in keeping with a potential right shoulder. That chart shows a danger, however, because resistance lines thin above the nearby resistance. If the OEX can convincingly push past that nearby resistance (roughly congruent to the descending regression channel resistance) it has smooth sailing until 569.83 according to that chart, and a possibility for an approach to yesterday's high. So, a lot depends on the current level being tested.

Jim Brown : 2/3/2005 2:12:31 PM

XLE - Energy SPDR, has broken out to a new high at $38.87 despite the drop in oil prices back to $46. The XLE is a current play in the LEAP section and is performing very well considering the weakness in oil. I expect oil to continue lower as we ease into spring but the XLE is a broad mix of S&P energy stocks. Over the next year I expect the XLE to top $50 from its current $38 level. I continue to suggest buying the XLE on dips.

Linda Piazza : 2/3/2005 2:08:44 PM

The OEX is past the five-minute 100/130-ema's, now testing the top of the descending regression channel it established off the post-FOMC high.

Jonathan Levinson : 2/3/2005 2:08:25 PM

QQQQ 100 tick chart updated at this Link . QQQQ's testing 37.20 resistance now.

Jim Brown : 2/3/2005 2:06:05 PM

Thank you Linda. However, I also recommeded EBAY on the same day after the massive drop to $85. It has since fallen to $78. I am still very positive on EBAY but that recommendation did not work out. I would still be a buyer here but not until we see some buyers begin to return.

James Brown : 2/3/2005 2:05:37 PM

Check out a weekly chart of Choicepoint Inc (CPS) and you'll see a big cup-and-handle formation. Bulls can use a move over $48.00-48.50 as an entry point. Currently CPS has a bullish P&F chart with a triple-top breakout buy signal pointing to a $62 target.

I would not use a short-term option as CPS doesn't tend to move that quickly. The July calls might work well.

Linda Piazza : 2/3/2005 2:05:12 PM

The OEX gapped again on that five-minute chart, this time up to the five-minute 100/130-ema's, and is testing them now. The top of the descending regression channel shown on the chart linked to my 1:57 post is now at about 568.20. These gaps suggest someone has decided to buy as at least one has been a breakaway gap out of a formation. Not sure it will hold, but bears should be forewarned that something is going on here.

Jim Brown : 2/3/2005 2:04:12 PM

ADSK - Autodesk was decimated with the January profit taking and fell from $39 to a post earnings low of $26.20 on Jan-24th. After two weeks of post earnings depression the stock is beginning to show life again. Resistance is $32 and a breakout there should confirm the profit taking is over. The July $32.50 calls ADQ-GG is currently trading at $2.85 and would be my choice for a long position.

Jeff Bailey : 2/3/2005 2:14:12 PM

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

Linda Piazza : 2/3/2005 2:02:12 PM

Congratulations on the ADBE play, Jim.

Jeff Bailey : 2/3/2005 2:00:51 PM

Buy Program Premium ... SPX 1,188.99, QQQQ $37.18, DIA $105.76

James Brown : 2/3/2005 1:58:53 PM

I would not chase it but Carlisle Cos (CSL) is up 4.6% after reporting Q4 earnings this morning.

I only point it out because shares are breaking out over the neckline of an inverse or bullish head-and-shoulders pattern. The P&F chart is bullish with a $78 target.

Linda Piazza : 2/3/2005 1:57:03 PM

The OEX's five-minute 100/130-ema's coincide fairly well with the top of this descending regression channel. Link A test of one will be a test of the other. On an upside breakout, the OEX could attempt a retest of 569.80 to yesterday's high. A rollover may send it back down through the channel again.

James Brown : 2/3/2005 1:55:22 PM

AutoZone (AZO) is showing some relative strength today with a 1.39% rally to breakout over resistance and trade to new one-year highs. The MACD has produced a new buy signal and its P&F chart is bullish with a long-term $120 target.

I would watch for a little more confirmation. A move over $93.00 could be used as an entry point with a $98-100 target.

James Brown : 2/3/2005 1:53:15 PM

Bulls and bears can keep an eye on Phelps Dodge (PD). Shares are testing the bottom of its rising channel and technical support at the 100-dma. A breakdown under $90-91 could be used as a bearish entry point. A bounce back over $96-97 could be used as a new bullish entry.

Jonathan Levinson : 2/3/2005 1:52:26 PM

QQQQ's hanging below 37.20 but above the 7200 tick SMA at 37.09 currently. The 30 min cycle channel is turning up- a move above 37.20 should be enough to get the ball rolling.

Jim Brown : 2/3/2005 1:49:35 PM

ADBE - Follow up on the Adobe call play I recommended two weeks ago. ADBE was $58.75 and the recommended April $60 call AEQ-DL was $2.75. I suggested the 100 day average at $55 would hold and we saw a low of $54.80 before the rebound began. The call is trading today at an even $5.00. Congratulations to anyone who took that recommendation.

Jim Brown : 2/3/2005 1:45:42 PM

VMC On Jan-19th I suggested a call play in the monitor on VMC. It was testing upside resistance at $55 and I suggested a breakout over $55 could trigger some additional buying. The May $55 call, VMC-EK, was trading at $2.45. VMC broke out to a new high today at $56.62 and does not appear to be slowing. The drop on earnings on Feb-1st removed some premium expectation out of the option price and I believe it still represents a decent play.

Linda Piazza : 2/3/2005 1:44:43 PM

The SOX approaches 400, perhaps an important level to watch. It's at 399.30 as I type.

Linda Piazza : 2/3/2005 1:42:45 PM

While the converging 30- and 50-sma's are below the OEX, providing support, they're above the Dow's level. Yesterday, the Dow pierced the 30-sma by a few points and then fell back to close just above the 50, so those averages may be important resistance to watch. They're also at historical resistance levels. Currently, they're at 10,606.56 and 10,571.16, respectively. Watch to see if that resistance holds.

Jonathan Levinson : 2/3/2005 1:39:53 PM

A short cycle upphase is now underway for QQQQ. Note that 10 year treasuries are higher as well, with TNX down to a 2.3 bp gain at 4.163%.

Jim Brown : 2/3/2005 1:38:08 PM

ADBE - Leap play Adobe Systems has recovered almost completely from the January profit taking that pushed it down to below $55 on Jan-28th. It has bounced to $63.24 today and is only about $1 away from a new all time high.

Jeff Bailey : 2/3/2005 1:37:35 PM

VIX.X

Jeff Bailey : 2/3/2005 1:36:23 PM

QQQQ $37.12 -1.22% ... trying to reclaim DAILY S2 here. Was resistance when broken to downside earlier this morning. DIA $105.63

Jonathan Levinson : 2/3/2005 1:34:43 PM

The 30 min channel downphase has stalled, with 30 min resistance ticking up. It now lines up with 60 min resistance at 37.20.

Linda Piazza : 2/3/2005 1:32:16 PM

And there's the OEX bounce as soon as I uploaded that last entry. That bounce gapped the OEX above its five-minute 21-ema--that's one way to finally get above it. If this can hold, a test of the 100/130-ema's on this chart should be next, with those averages at just below 568.

James Brown : 2/3/2005 1:30:49 PM

Most of you probably already know that Starbucks (SBUX) is down more than 7% today on disappointing same-store sales numbers. The stock gapped lower and is trading near the $50.00 level and just above the exponential and simple 200-dma's.

You might find it interesting to note that this is very close to a 38.2% Fibonacci retracement of its eighteen-month rally that began back in June-July 2003.

Jonathan Levinson : 2/3/2005 1:29:24 PM

QQQQ chart update at this Link shows QQQQ beginning to test upper 7200 tick SMA resistance. The 30 min cycle is still down, but even a drift above the SMA will see it stall. , while a move above 37.15-.20 for 5 minutes or better will generate the first long-awaited upticks. Given the Fed's repo drain today, however, I'm skeptical of bounces below those levels.

Linda Piazza : 2/3/2005 1:28:33 PM

On a 15-minute bar chart, the OEX's pattern is looking a little like a "b" distribution pattern, with the bulb of the "b" forming along the 15-minute 100-ema. The OEX needs to get a bounce underway. Lots of charts show that it should bounce, too, but so far, it's not doing a convincing job.

Jeff Bailey : 2/3/2005 1:27:50 PM

Current OPEN MM Profiles at this Link DIA session low has been $105.44 and DAILY S1.

Linda Piazza : 2/3/2005 1:22:01 PM

The OEX is rising toward the five-minute 21-ema, the average that has been stopping its advances all day, but this rise sure looks bear-flag-like. Not sure the OEX is going to get past it on this go around. That average is at 567.05.

James Brown : 2/3/2005 1:16:31 PM

The RLX retail index is one of the few sectors in the green right now. Helping lead the way is a 3.4% rally in Claires Stores (CLE). The stock is breaking out over resistance at $21.50 and its exponential 200-dma near $22.00 after reporting same-store sales up +7.0%, which is way above expectations.

James Brown : 2/3/2005 1:12:38 PM

Construction-related Fluor Corp (FLR) beat earnings last night and now shares are breaking out over resistance and the top of its trading range at $55.00. These are new three-year highs.

Linda Piazza : 2/3/2005 1:10:33 PM

For reference, the OEX's five-minute 100/130-ema's are converging just above 568. The five-minute 21-ema has been pressuring the OEX lower all day, however, and that's now at 567.17. The OEX has to get above that before it could even retest those other averages. On the five-minute chart, some tentative bullish price/MACD divergence is showing up, hinting that bulls are trying to send this higher, but it's tentative as yet.

James Brown : 2/3/2005 1:09:31 PM

EBAY continues to meander lower after failing to bounce back over the $80.00 level today and yesterday. The next level of support looks like $72.50 - the July and August lows.

Jeff Bailey : 2/3/2005 1:12:05 PM

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

James Brown : 2/3/2005 1:03:13 PM

OI call play KBH dipped this morning to $109.20 but traders immediately bought the dip and now shares are up 1.2% hitting new all-time highs over resistance at the $112.00 level.

James Brown : 2/3/2005 1:01:55 PM

I see that OI call play AHC is cracking round-number resistance at the $90.00 mark.

Jeff Bailey : 2/3/2005 12:58:55 PM

3M (MMM) $83.20 -0.16% ...

Jonathan Levinson : 2/3/2005 12:56:56 PM

Recall that the Fed's drained 5.5B from the market today via the open market desk. So far, the bounces in equities have been little more than pauses.

Linda Piazza : 2/3/2005 12:54:52 PM

The TRAN's 60-minute Keltner chart suggests that this index has vulnerability down to 3535.65, with resistance firming up now near 3588-3603.

Linda Piazza : 2/3/2005 12:52:23 PM

The OEX is sinking further toward the downside targets predicted by the 15- and 60-minute Keltner channels, which means that it's also sinking closer to next support. Bears should have profit-protecting plans in place in this 566-568 zone. The 60-minute Keltner suggests support sinks a little lower, perhaps to 565.20 on a 60-minute closing basis. Depending on how internals and other factors look as the OEX bounces, if it does, bears can look for signs of a rollover in progress for new entries, but be sure you've got some corroboration. Right now, this downturn consists of nothing more than a retest of the 50-sma.

Jeff Bailey : 2/3/2005 12:51:38 PM

S&P Banks (BIX.X) 70.12 -0.60% ... make session low here. DIA $105.49 session low VIX.X 11.95

Jonathan Levinson : 2/3/2005 12:50:21 PM

QQQQ is testing 37 support at new lows for the day now. 30 min channel support remains at 36.95 for the time being, with 7200 tick SMA resistance down to 37.10. The outlook remains bearish for the 30 min and short cycle below that level.

Jeff Bailey : 2/3/2005 12:40:46 PM

March Crude Oil (cl05h) $46.10 -1.26% ... threatens to settle below the $46.20 level, which could have bias shifting back negative. Intra-day chart would show floor trade low of $45.70. $0.25 box of $WTIC at this Link , which is conventional box size has bearish vertical count pointing back lower to $42.75. $0.50 box , which removes some noise, sits on its bullish support trend. Link

Linda Piazza : 2/3/2005 12:38:29 PM

The 15-minute and 60-minute OEX Keltner charts still suggest a possible decline down toward 565-566, although the OEX is trying to steady ahead of that. Both of them show that if the OEX can steady at or above that level and climb, it has the possibility of resetting some upside targets from 568.40-570 to near yesterday's high. The OEX is still in the upper half of the widest Keltner channel on both charts, and will remain so until it breaks below that Keltner support. It's all just speculation at this point because we're still not certain that support will hold, but unless it's going to be a plummet, it looks strong enough to hold and send the OEX back up into some sort of bounce. If internals stay as bearish as Jane has been noting them to be, a bounce and rollover entry might present itself.

Jonathan Levinson : 2/3/2005 12:37:50 PM

QQQQ has now drifted sideways through the upper descending resistance line on the intraday bull wedge: Link

Linda Piazza : 2/3/2005 12:25:14 PM

The OEX needs to climb above about 567.75 to get any upside going, but then it's going to hit Keltner resistance (three-minute chart) again fairly soon at 568.30-568.40.

Jeff Bailey : 2/3/2005 12:25:08 PM

Juniper Networks (JNPR) $23.24 -5.02% Link ... sharp break of its 200-day SMA today. Alcatel (ALA) $12.45 -12.63% Link ... same technicals here after the network-equipment maker said it won't pay a dividend in 2005 after posting subpar Q4 results. C'mon Extreme (EXTR) $6.14 -3.45% Link

Jonathan Levinson : 2/3/2005 12:13:45 PM

QQQQ's sideways drift has a flaggy feel here, and 30 min channel support is stabilizing at 36.95. However, the short cycle oscillators are showing slight bullish divergences in the wavelet and TRIX- if price can get above 37.12, that should kick off a strong upphase. If it cannot, however, then it will have been a weak corrective upphase, opening the door to stronger downside action to follow.

Jane Fox : 2/3/2005 12:11:19 PM

TRIN at 1.38 is bearish. The AD line is making lower lows and highs so it is bearish as well.

Marc Eckelberry : 2/3/2005 12:09:10 PM

Triple bottom INTC.

Linda Piazza : 2/3/2005 12:07:25 PM

Looking at Keltner charts across several time frames, I see that the OEX is squarely in the middle of nearest support and nearest resistance on some. On the three-minute, however, it's nearer potential support, at about 567.16. It's trying to pull up into a higher three-minute low, although it's not yet clear whether that will be accomplished. The chart for today has a bit of a bullish falling wedge look to it, but it looks to me that, if that's what it is, the OEX has already broken sideways out of the wedge and traded sideways since. Perhaps we shouldn't trust that kind of sideways trading out of a bullish falling wedge any more than we should out of bearish rising one, as evidenced yesterday, but it does show some first, tiny steps bulls are taking. Let's see if they last long enough to bounce the OEX. Bears should have profit-protecting plans in place for this 566-568 zone, however, as I've been warning all day. I think the OEX should bounce into a lower high, but big fund managers have not yet consulted me this morning, so I can't tell if they'll sell into any bounce or not.

Jeff Bailey : 2/3/2005 12:12:43 PM

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

Linda Piazza : 2/3/2005 11:54:19 AM

If you look closely at the SOX's daily chart, you can see a potential inverse H&S setting up. I didn't see bullish price/MACD divergence as the head was formed (except in the MACD histogram), so I'm not certain how valid it is. I am sure that I'm not the only person seeing that potential formation, though, and there might be some willing to step in buy semi-related stocks as the SOX approaches the 396-ish right shoulder level. Whether this will eventually confirm or eventually be invalidated, I don't know, but it now gives us some benchmarks to watch.

Jonathan Levinson : 2/3/2005 11:53:38 AM

QQQQ 100-tick chart updated at this Link

Jeff Bailey : 2/3/2005 11:53:27 AM

S&P Banks (BIX.X) 371.26 -0.29% ...

Jeff Bailey : 2/3/2005 11:45:48 AM

Hewlett Packard (HPQ) $20.02 +2.29% ... Dow standout after company announced it will launch its smartphone later this year. The phone wil be an extension of the existing line of iPaq PDAs and will compete with Research in Motion's (RIMM) $74.70 -1.99% BlackBerry and PalmOne's (PLMO) $25.89 +2.53% Treo.

Marc Eckelberry : 2/3/2005 11:44:37 AM

INTC did a little bounce off of 50% 22.31, with a double bottom.

Jonathan Levinson : 2/3/2005 11:39:38 AM

Descending trendline resistance lines up with short cycle channel resistanceat 37.11. 7200 tick SMA resistance is down to 37.16. There's a slight uptick in the short cycle oscillators, but it will take a sustained (5 mins or better) move above the 7200 tick SMA to stall the broader 30 min cycle downphase.

Linda Piazza : 2/3/2005 11:38:08 AM

The Nasdaq approaches the bottom of the ascending regression channel (bear flag?) it formed as it rose off the 1/24 and 1/25 lows. A break below that channel (bottom support near 2043-2050 depending on whether you use a Q-charts drawn version or just hand-draw a rising trendline) would constitute a break out of that bear flag. For now, though, perhaps we should expect an attempt to rise.

Jeff Bailey : 2/3/2005 12:53:15 PM

Bearish day trade exit setup alert with QQQQ now below its DAILY S2, I want to place an order to sell the five (5) DIA Feb. $105 puts (DIA-NA) at $0.95. Look for a VIX.X pop to DAILY R2-WEEKLY S1 when/if the DIA slips near WEEKLY R1.

Jonathan Levinson : 2/3/2005 11:33:31 AM

The U.S. senate is considering increased tariffs on Chinese exports if Beijing does not raise the value of its currency and ease pressure on the dollar.

A proposal, expected to be introduced later Thursday would give China six months to re-value the yuan or face a possible 27.5 percent duty on exports to the United States.

Link

Linda Piazza : 2/3/2005 11:29:15 AM

If the OEX should steady and rise from somewhere between 566-567, as it is trying to do now, but then watch the 568-569 level for a possible rollover. Those watching for such a rollover would like to see the climb form some sort of bearish distribution pattern, such as a bear-flag. Don't want to see a strong V-shaped recovery.

Jonathan Levinson : 2/3/2005 11:22:53 AM

QQQQ has next support at 36.95, followed by 36.88. The 7200-tick SMA is down to 37.20 now, and QQQQ maintains its bearish bias below that level. Channel support is down to 37.00.

Linda Piazza : 2/3/2005 11:18:38 AM

The TRAN's 15-minute chart shows a big rounding-top. It's approaching potential support in the 3570 zone.

Jonathan Levinson : 2/3/2005 11:06:30 AM

QQQQ has just poked below the intraday bull wedge support line pictured in my 11:01 chart, but price is back above it on the bounce off the 37.04 low.

Linda Piazza : 2/3/2005 11:03:20 AM

OEX 60-minute Keltner support arrays from 565.14-566.38. I would expect a bounce from somewhere in that range, hopefully into a lower high that would offer want-to-be-bears a new entry. Current bears need to have profit-protecting plans in place if this level is approached.

Jeff Bailey : 2/3/2005 11:22:58 AM

11:00 Market Watch at this Link 11:00 Internals at this Link will note that NYSE 10-day NH/NL ratio threatening to turn higher.

Jonathan Levinson : 2/3/2005 11:01:06 AM

QQQQ 100-tick chart update at this Link

Linda Piazza : 2/3/2005 10:58:34 AM

Here's how the OEX is trading in relationship to its five-minute 100/130-ema's this morning. Link

Jeff Bailey : 2/3/2005 10:58:05 AM

S&P Banks (BIX.X) 370.51 -0.49% ... falter after coming back up to WEEKLY R2.

Jeff Bailey : 2/3/2005 10:57:17 AM

30-year yield ($TYX.X) now up just 1.1 bp at 4.592%. Curve really flat with spread -0.34

Jonathan Levinson : 2/3/2005 10:57:19 AM

QQQQ has just retested the previous low without breaking it. 1st sign of trouble for bears will be break above the previous high at 37.25. QQQQ is bearish below 37.20, now breaking the previous low as I type.

Jeff Bailey : 2/3/2005 10:51:54 AM

Should be filled $0.65 or $0.70 (session high) on those DIA Feb. $105 puts (DIA-NA)

Linda Piazza : 2/3/2005 10:51:19 AM

The 60-minute Keltner chart suggests that if the OEX can't produce 60-minute closes above the Keltner line currently at 568.77, it's vulnerable to 566.57 or perhaps to 565.14.

Jeff Bailey : 2/3/2005 10:48:11 AM

Homebuilders (DJUSHB) 855.05 +1.04% ... whip back higher.

Jeff Bailey : 2/3/2005 10:47:11 AM

Bearish day trade cancel trade alert ... for Newmont Mining (NEM) $41.03 -1.27% ....

Jonathan Levinson : 2/3/2005 10:46:00 AM

QQQQ has bounced off the 37.14 low and is back to challenging 37.23, which was the previous 60 min channel bottom. There was a surge of volume on the drop, and bears can't rule out the possibility that this was a terminal push in the 30 min downphase, a mere throwunder below 37.20. A break back above 37.30 will stall the 30 min downphase, and a break above 37.37 for 5 minutes or longer will kick off a new upphase.

Jeff Bailey : 2/3/2005 10:45:13 AM

TRIN 1.06 +24.7% ... nearing DAILY R1 and 1.0. Session low here DIA $105.81 -0.07% ... nearing session high of $105.82. VIX.X 11.85

Linda Piazza : 2/3/2005 10:41:00 AM

Stepping away for a few minutes.

Linda Piazza : 2/3/2005 10:39:15 AM

The OEX bounced from just above the 30- and 50-sma's, but also from the supporting trendline shown on the chart linked to my 9:44 post.

Linda Piazza : 2/3/2005 10:31:43 AM

For reference, the OEX's 30-sma and 50-sma are at 567.31 and 566.89, respectively. The day's low has been 567.69, so just above that 30-sma. The 19.1% retracement of the rally off the August low is also right in that 566-568 S/R zone. If the OEX is going to bounce, this would be the level from which it should do it. Those in bearish positions from the post-FOMC level yesterday should know how you'll handle this test.

Jonathan Levinson : 2/3/2005 10:31:45 AM

37.20 QQQQ cracking here, with 30 min channel support down to 37.15.

Jeff Bailey : 2/3/2005 10:38:18 AM

Bearish day trade put option alert ... taking five (five) of the DIA Feb. $105 puts (DIA-NA) at the offer of $0.75. Target $105.01-$105.26. Dow Diamonds (DIA) $105.62 -0.24%. Would place stop just above DAILY Pivot at $105.90.

Linda Piazza : 2/3/2005 10:23:44 AM

The RLX consolidates today at its 100-ema. The OEX and RLX share a number of component stocks: hence my reason for watching the RLX, too.

Linda Piazza : 2/3/2005 10:21:38 AM

Above the 568.24 Keltner resistance on the three-minute chart is stronger resistance from 568.63-568.98.

Jeff Bailey : 2/3/2005 10:19:40 AM

Current OPEN MM Profiles at this Link

Linda Piazza : 2/3/2005 10:18:57 AM

The VIX is climbing gain and the advdec line is dropping again, but TRIN has been, too. Jane has taught us that lately, we should be watching the action of VIX and the advdec line in relationship to each other, so that's what I'm paying most attention to so far. The OEX is perhaps headed toward that 566.97 downside target predicted by the three-minute Keltner chart, but first it's trying to steady on last Keltner support before that level. Bears want to see the OEX fail to produce three-minute closes above 568.28.

Jonathan Levinson : 2/3/2005 10:16:27 AM

Session low for QQQQ here, driving the 30 min channel bottom to 37.20.

Linda Piazza : 2/3/2005 10:13:54 AM

The OEX broke minimally below the bear flag it had been forming and to a new low, tried to bounce, but is perhaps stalling. The three-minute Keltner chart now shows resistance at 568.40 (on closes) and 568.81-569.03.

Jonathan Levinson : 2/3/2005 10:12:15 AM

The 30 min cycle downphase continues to meander its way lower, always counter to the daily cycle upphase for QQQQ. This is the same setup that held all through yesterday. The strange thing is how long that downphase is lasting relative to how little price traction it's been able to generate. QQQQ has yet to even tickle the 37.20 support level, and so this decline continues to look corrective to me despite its persistence.

Linda Piazza : 2/3/2005 10:04:59 AM

Turning to the OEX's 15-minute Keltner chart, I see that unless the OEX can maintain 15-minute closes above 569, it's vulnerable to 566.25.

Jonathan Levinson : 2/3/2005 10:03:50 AM

Bonds have recovered somewhat but remain weak, with TNX up 3.3 bps at 4.173% currently and ZN treasury futures -.25 at 112.00.

Jeff Bailey : 2/3/2005 10:11:56 AM

10:00 Market Watch at this Link 10:00 Internals at this Link

Jonathan Levinson : 2/3/2005 10:02:14 AM

Dec. factory orders +.3% vs. .6% exp., 1.2% prior.

Jonathan Levinson : 2/3/2005 10:01:36 AM

ISM services 59.2 vs. 61.0 exp. and 63.9 prior.

Linda Piazza : 2/3/2005 9:59:11 AM

As we head into the 10:00 numbers, TRIN and VIX drop and ADVDEC tries to climb. Careful.

Jeff Bailey : 2/3/2005 9:58:16 AM

Day trade short setup alert ... for Newmont Mining (NEM) $41.05 -1.25% ... look to short on any further bounce to $41.35, stop $41.75, target $39.75

Jonathan Levinson : 2/3/2005 9:56:13 AM

The Fed has announced a 7.75B overnight repo against 8.25B expiring, for a net drain of 500M. That gives us a net 5.5B drain for the day factoring in the 14-day repo action discussed earlier.

Linda Piazza : 2/3/2005 9:55:49 AM

The current pattern showing up on the OEX's three-minute chart looks like a possible bear-flag rise into resistance. The three-minute chart suggests that resistance is at 568.67 and then again just above 569.00. This chart suggests vulnerability down to 567.12 unless the OEX can break above that resistance just above 569.

Jonathan Levinson : 2/3/2005 9:55:20 AM

6 minutes to ISM services and Factory Orders.

Jonathan Levinson : 2/3/2005 9:53:02 AM

The 30 min channel continues lower to 37.23 QQQQ here, with QQQQ failing on its first wavelet push up to 37.41 just now. The 7200 tick SMA line is at 37.43 currently, and the 30 min cycle will remain bearish so long as QQQQ stays below that SMA.

Linda Piazza : 2/3/2005 9:51:04 AM

Jane has noted bearish internals. Don't know if that will hold true as the day proceeds.

Depending on what happens as early-morning volatility settles down, it's possible that want-to-be bears could start looking for bounce-and-rollover entries. The trouble is that we're not seeing much of a bounce yet. Another potential troublesome aspect is that after so many days of strong gains, it's possible (not sure whether it's probable) that markets will consolidate or chop around a bit at the top of the rise. This is particularly true because of tomorrow's important economic numbers.

Jeff Bailey : 2/3/2005 9:49:31 AM

VIX.X 11.90 +2.05% ... Daily Pivot Levels 11.24, 11.45 Piv= 11.72, 11.93, 12.20.

Jeff Bailey : 2/3/2005 9:45:26 AM

Buy Program Premium ... SPX.X 1,189.35, QQQQ $37.36, DIA $105.76

Linda Piazza : 2/3/2005 9:44:40 AM

Remember this OEX chart? Link The OEX approaches that potential support.

Jonathan Levinson : 2/3/2005 9:43:50 AM

30 and 60 min channel support for QQQQ line up currently at 37.28, with a short cycle downphase in progress.

Linda Piazza : 2/3/2005 9:42:47 AM

The SOX turns lower, but is now testing the 50% retracement of the rally off the September low. I've got that snapped retracement level at 402.82. This is a potential bounce zone, then.

The TRAN, the other indicator index I like to watch, is now at 3596.74, turning lower today but not yet below yesterday's low. There's some support in the 3591-ish zone.

Jane Fox : 2/3/2005 9:41:41 AM

TRIN moving up and AD line moving down.

Jonathan Levinson : 2/3/2005 9:41:10 AM

Gold is holding below the previous daily low, sitting at 417.30 here. HUI is down 2.04% at 199.3, XAU -1.99% at 90.5. Silver is down 1.88% at 6.627.

Jeff Bailey : 2/3/2005 9:40:52 AM

Sector weakness across the board with Gold Bugs ($HUI.X) 199.15 -2.13%, Networking (NWX.X) 219.56 -1.65%, Internet (INX.X) 193.68 -1.54% pacing declines. Airlines (XAL.X) 49.59 +0.58% and N. American Telecom (XTC.X) 699.96 +0.05% post fractional gains.

Linda Piazza : 2/3/2005 9:38:45 AM

Those who might have entered bearish OEX plays using lottery money yesterday and held overnight are feeling pretty good right now. The OEX approaches those linked 30- and 50-sma's, though, and those might provide strong support. The SPX is already there, at those same averages. Watch for a potential bounce. Those wanting new bearish entries will hope for a lower high and some signs encouraging new entries and bulls will of course hope for higher highs.

Jonathan Levinson : 2/3/2005 9:36:12 AM

The Fed has so far drained 5B against the expiring 9B 14-day repo, with a 4B 14-day repo to replace it. There's another 8.25B in overnight repos expiring today, and we await the 10AM announcement to see how the Fed will deal with that. So far, 5B has been drained net, with another 8.25B coming up shortly.

Linda Piazza : 2/3/2005 9:34:18 AM

Sorry for the previous 9:31 post. My Q-charts had frozen and I didn't realize that the OEX was dropping. It's dropping below the five-minute 100/130-ema's. Bears want to see it hold beneath these averages; bulls, to see it bounce from them. No sign of a bounce yet.

Linda Piazza : 2/3/2005 9:31:48 AM

If the OEX heads up to yesterday's post-FOMC high, watch for signs of bearish divergence.

Jonathan Levinson : 2/3/2005 9:30:01 AM

Session low for Nymex crude at 46.325 here, -.8%. Gold is 1.3 off the low of 426.20, currently trading 417.5. QQQQ is down at 37.34, so far not breaking yesterday's low.

Jeff Bailey : 2/3/2005 9:25:58 AM

MCI, Inc. (MCIP) $19.68 Link ... higher at $20.22 and atop this morning most actively traded stock in pre-market on reports that Qwest Communications (Q) $4.05 Link has offered to buy the long-distance telephone and data services company for $6 billion.

Jonathan Levinson : 2/3/2005 9:11:50 AM

Session for Nymex crude here at 46.35, down .35.

Jonathan Levinson : 2/3/2005 9:06:52 AM

Session lows for QQQQ, NQ and Dow futures here. QQQQ has 30 min channel support in play right here at 37.37, 60 min channel support at 37.31.

Jonathan Levinson : 2/3/2005 9:00:56 AM

Euro futures have broken 1.3, currently trading 1.295.

Jonathan Levinson : 2/3/2005 8:58:00 AM

Headline:

8:57am TREASURY'S SNOW HAS COLD, WON'T ATTEND LONDON G7 MEET

Linda Piazza : 2/3/2005 8:56:10 AM

ECB President Trichet carries on his post-ECB meeting press conference. In a theme that's familiar to us after last night's State of the Union address, he notes that the eurozone countries have not sufficiently prepared for an aging population. He urges that the Stability Pact be upheld, and says that they're not seeing second-round inflation pressures yet.

Jonathan Levinson : 2/3/2005 8:48:52 AM

Gold is breaking the previous low here, printing 416.90. 412-415 is next, and arguably key, confluence, below which 408, 405 and 398-402 come into view.

Linda Piazza : 2/3/2005 8:40:54 AM

As expected, the ECB left rates unchanged.

Jonathan Levinson : 2/3/2005 8:32:46 AM

Bonds are falling on the bullish productivity number, TNX currently up 3.5 bps at 4.175%, ten year treasury futures down .2656 to 111 63/64. Gold is down 4.1 at 418.80, coming in for a test of the previous low above 417. QQQQ is down .13 at 37.45.

Jonathan Levinson : 2/3/2005 8:31:13 AM

Headlines:

8:30am U.S. Q4 REAL HOURLY COMPENSATION DOWN 0.3%

8:30am U.S. Q4 MANUFACTURING PRODUCTIVITY UP 5.6%

8:30am U.S. 2004 UNIT LABOR COSTS UP 0.1%

8:30am U.S. 2004 PRODUCTIVITY UP 4.1%

8:30am U.S. JOBLESS CLAIMS NEAR CYCLICAL LOWS

8:30am U.S. 4-WEEK INITIAL CLAIMS FALLS TO 331,500

8:30am U.S. INSURED UNEMPLOYMENT RATE FALLS TO 2.1%

8:30am U.S. CONTINUING JOBLESS CLAIMS FALL TO 2.70 MLN

8:30am U.S. WEEKLY INITIAL JOBLESS CLAIMS OFF 9,000 TO 316,000

Jonathan Levinson : 2/3/2005 8:00:26 AM

Equities are lower, ES trading 1192.5, NQ 1524.5, YM 10583 and QQQQ -.11 at 37.47. Gold is down 3.60 to 419.30, silver -.074 to 6.68, ten year bonds -.1562 to 112 3/32 and crude oil -.25 to 46.45.

We await the 8:30 releases of initial claims, est. 330K, and Preliminary Q4 Productivity, est. 1.8%. At 10AM, we get ISM services, est. 61 and Factory orders, est. .6%.

Linda Piazza : 2/3/2005 7:55:41 AM

All this week, the OEX has been skipping along on top of its five-minute 100/130-ema's. Link Until that changes, at the least, bulls are in good shape. The 60-minute Keltner chart shows a potential for a climb toward 576.84, but the OEX has not yet managed the breakout on that chart that would set up that potential.

What if the OEX should decline below those five-minute 100/130-ema's? The converging daily 30- and 50-sma's wait below at 567.49 and 566.94, too, and they might halt any decline on the first test, although the OEX paid little attention to them on the way up.

Marc on the Futures side has pointed out the dangerously (dangerous for bulls) low pc ratio. Several of us have noted that the VIX is approaching levels last seen in late December. Neither is a good market-timing tool, as it's possible for new highs to be hit all the while these two signal a warning, but that's what they may be doing.

The SOX and TRAN, each sometimes serving as leading indices, also sounded their own versions of warnings, with the SOX declining and the TRAN printing a doji. Watch these two today.

All the way up from 557, I've been warning bulls to guard profits, and that's still what I'm doing. What about new bearish positions? Let's look at how things set up this morning first.

Linda Piazza : 2/3/2005 7:28:17 AM

The ECB meets today, but is likely to keep rates steady.

Linda Piazza : 2/3/2005 7:29:19 AM

Good morning. With the banking sector weak, the Nikkei closed down. Other Asian markets were mixed, as are European markets this morning ahead of an ECB rate-hike decision, but the three European markets commonly followed in this report all trade lower. As this report was prepared, NQ futures had held up overnight, but ES and YM had drifted modestly lower. As of 6:46 EST, gold was down $1.50, and crude, down $0.22. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei opened in positive territory, but then began dropping toward the day's low, reached early in the afternoon session. The Nikkei closed off that low, but still down 17.79 points or 0.16%, at 11,389.35. Asian steelmakers had performed well in early trading. Recently, the steel companies have passed along price increases to customers, and investors hope this will result in strong earnings. Nippon Steel was among the companies gaining in early trading. The banking sector was weak. All day Wednesday, there had been rumors in the currency markets that a Japanese bank might cut its forecast as it took further steps to cover bad loans. A newspaper speculated that the bank might be Sumitomo Mitsui Financial Group, with that stock leading banking sector decliners. Some also speculate that investors are selling banking issues to have money on hand for the Shinsei Bank offering next week.

Other Asian markets were mixed. The Taiwan Weighted gained 0.26%, and South Korea's Kospi climbed 0.80%, with that country's Posco being one of the steelmakers benefiting from raising prices. Singapore's Straits Times was down 0.03%, and Hong Kong's Hang Seng fell 0.30%. China's Shanghai Composite fell 0.81%.

European markets are mixed, too, but the ones commonly watched in this report all trade lower. The eurozone's service sector PMI rose to a higher-than-expected 53.4, with new business and business expectations indices responsible for much of the better-than-expected number. Employment expanded only slightly. Some components showed a need for further corporate belt tightening as input prices rose, but prices charged did rise, too. Germany and France contributed to the gain, both seeing rises in their services PMI's, but Italy's fell. In the U.K., January's services PMI rose to a much-higher-than-expected 55.9. One worrisome component was employment, falling in this report. The ECB meets today, but most believe rates will be held steady.

In stock-related news, Deutsche Bank climbs after announcing job cuts and producing earnings that investors applauded. Tech stocks tend to trade lower, with electronic components maker Epcos reporting a loss due to a steep decline in sales and also giving a dour outlook for demand in the near future. Alcatel led European decliners, however, plummeting after announcing that it would not pay a dividend in 2004, with that announcement made in conjunction with its earnings report. The U.K. bourses have been pressured by Royal Dutch/Shell's perhaps final cut to proven reserves estimates when it made its earnings report.

As of 6:46 EST, the FTSE 100 was down 7.40 points or 0.15%, to 4,908.80. The CAC 40 was down 9.80 points or 0.25%, to 3,941.92. The DAX had fallen 5.91 points or 0.14%, to 4,290.40.

Market Monitor Archives