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Jeff Bailey : 2/9/2005 12:08:28 AM

March Crude Oil (cl05h) $45.11 -0.37%, or $-0.17. S&P futures (sp05h) 1,202.20 (unch) NASDAQ futures (nd05h) 1,531.00 +0.09%, or +1.50

Jeff Bailey : 2/9/2005 12:00:51 AM

Program Trading Levels for Wednesday ... HL Camp & Company has their computers set for program buying at $1.50 and set for program selling at $-0.30.

OI Technical Staff : 2/8/2005 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 2/8/2005 6:47:30 PM

March Crude Oil (cl05h) $45.40 (unch) ... settled up $0.12, or 0.27% today at $45.40. Weekly inventory data due out tomorrow. Updated daily interval chart with conventional (BLUE) and bearishly fitted 38.2% (PINK) at this Link

Jeff Bailey : 2/8/2005 6:36:42 PM

Silicon Valley Bancshares (SIVB) $44.96 -0.72% Link a name familiar to some and a past Ask the Analyst column. Mercantile Bankshares (MRBK) $51.09 -0.23% Link Sovereign Bancorp (SOV) $23.29 -0.04% Link Three commercial lenders (business lenders) that CNBC guest analysts said could benefit from Fed tightening. Reason given (fundamental) is that loan generation is made at a higher rate of interest to customer from monies already on deposit.

Jeff Bailey : 2/8/2005 5:41:09 PM

This I've got to hear ... tonight's Bullseye topic/discussion on CNBC will be "Why you should buy bank stocks despite flattening yield curve." As I update the Pivot Matrix, I note the BIX.X closed right at its WEEKLY Pivot. The only reason I can think of to buy banks is the loan stimulation from lower consumer borrowing rates. Yesterday I suggested home owners be dialing up their mortgage lenders.

Jim Brown : 2/8/2005 5:25:05 PM

Alert - CSCO guiding revenue flat to +2% over Q4 Not a good sign. Inventories also rose +$45 million instead of an expected drop of -$150 million. Margins were weaker as well.

Jeff Bailey : 2/8/2005 6:24:23 PM

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

Jeff Bailey : 2/8/2005 5:51:07 PM

Current OPEN MM Profiles that I've made at this Link Today's Activity ... Closed out the bullish day trade c/o in Nortel Networks (NT) at $3.16. ($+0.06, or 1.94%) Day trade short Lucent Tech (LU) at $3.35, got that one shoved back down my throat and stopped at $3.39. ($-0.04, or -1.19%) Day trade long Alcoa (AA) at $29.50, exited at target of $29.75. ($+0.25, or 0.85%). Fascinating intra-day events for AA wasn't it? (see 2:29:59, then 02:52:51, then 02:55:29)

Jeff Bailey : 2/8/2005 4:19:47 PM

QQQQ $37.74 +0.17% ... DAILY Pivot levels for tomorrow are $37.40, $37.57, Piv= $37.79, $37.96, $38.18. Trades $37.62 on CSCO headline. After-hours low has been $37.56.

Jeff Bailey : 2/8/2005 4:11:23 PM

DIA $107.19 ... SPY $120.20

Jeff Bailey : 2/8/2005 4:06:43 PM

Sell Program Premium ... DIA $107.18, SPY $120.15

Jim Brown : 2/8/2005 4:05:18 PM

Alert - CSCO earnings = +0.22, est +0.22, whisper +0.24

Jeff Bailey : 2/8/2005 4:05:22 PM

TRIN 1.12 -9.01% ... rose toward the close. Briefly traded above its DAILY Pivot at this morning's open.

Jeff Bailey : 2/8/2005 4:01:24 PM

Cisco Systems (CSCO) ... goes out at $18.24 +0.44%.

Jonathan Levinson : 2/8/2005 3:55:05 PM

QQQQ chart update at this Link

Linda Piazza : 2/8/2005 3:54:13 PM

Continuing my 3:49 post, the OEX has zoomed right up underneath key S/R (on a monthly basis, perhaps enduring for years) as we prepare for CSCO earnings tonight. It's also near a potential breakout zone, of course. Make careful, account-appropriate decisions as you think about whether to hold overnight or not. I'm still thinking that CSCO had better deliver. The company could. I have no way of knowing, but . . . well, you know the rest.

Jonathan Levinson : 2/8/2005 3:52:59 PM

QQQQ's back below 7200 tick SMA support and the 30 min channel is rolling over after a less than impressive sideways upphase. Channel support is 36.60 (60 min basis) to 37.62 (30 min basis).

Keene Little : 2/8/2005 3:51:29 PM

James, you're right about the home builders. In fact the DJUSHB index is making all time highs still. This index, on a weekly chart, is developing that parabolic spike and these never end well.

Jeff Bailey : 2/8/2005 3:52:08 PM

Alcoa (AA) $29.92 +1.01% ... session high and DAILY R2. Didn't think it would get here by the close. "It is better to have left some on the table than to never have sat down to eat". February "Max Pain" theory is $30.00 ($2.50 increments)

Linda Piazza : 2/8/2005 3:51:45 PM

I have had a horizontal 578.30-579.60-ish resistance line drawn across my OEX chart for years. In December, the OEX was coming right up to that S/R level and even pierced it slightly, but it didn't close above that resistance zone, so I'm thinking it's a valid zone to watch. I believe that when I first drew it, it was as a sort of eyeballing where a number of monthly opens, closes, highs, and lows tended to hit on the monthly chart back in 2001-2002, but that's just my best recollection of why I put it there. I don't see a Fib level that would account for it, for example.

So, the OEX approaches a S/R zone that may have been important on a monthly closing basis and may still be. We've got a bit to go in February, unfortunately, and much can happen. The monthly chart looks a little as if the OEX broke above a bull flag and now monthly candles bunch below this S/R zone. On a monthly basis, at least, there's not much between that zone and 584 and then 590, but we can presume that it's also strong resistance.

Jonathan Levinson : 2/8/2005 3:47:17 PM

QQQQ has now broken the apex of the pennant and continues to drift net sideways. Look for a break above 37.81 or below 37.68, with confirmation of direction above 37.85 or below 37.60-.62.

James Brown : 2/8/2005 3:47:02 PM

Keene, you may be right but the homebuilders certainly aren't showing it. I do see that mortgage lender Countrywide (CFC) is in a P&F sell signal.

Keene Little : 2/8/2005 3:45:28 PM

James, your reminder about the difficulty FNM is having (3:23) is probably one of the best indicators we have that the mortgage market (and therefore the housing market) is in trouble. No surprise here.

Marc Eckelberry : 2/8/2005 3:42:31 PM

CSCO optimism just keeps growing. 20 feb strike has a .18 pc ratio, short interest is light and even the 17.5 strike is positive on calls. It will not get a short covering boost, that's for sure. It will need new buyers, thus stellar earnings. I will stay away from that one.

Linda Piazza : 2/8/2005 3:33:09 PM

A 60-minute chart of the TRAN: Link

Jeff Bailey : 2/8/2005 3:31:05 PM

Dow Components sorted by PRICE with 5, 10 and 52-week percentage gain/loss at this Link Remember that the Dow Industrials is a PRICE weighted index.

Jeff Bailey : 2/8/2005 3:25:00 PM

3M (MMM)

James Brown : 2/8/2005 3:23:26 PM

Fannie Mae (FNM) is really starting to breakdown here. Shares are down 3.3% on rising volume as it surpasses the September low to hit new one-year lows.

Jeff Bailey : 2/8/2005 3:25:47 PM

Alcoa (AA) $29.80 +0.60% .... is 24th-most heavily weighted Dow component. DIA 107.32 +0.28% ... isn't budging. Most recent "Max Pain" theory level still $107 ($1 increments)

Linda Piazza : 2/8/2005 3:19:52 PM

It was on Friday that the OEX first set up a breakout signal from one channel line to another on the 60-minute chart. At that time, the upside resistance was at 577, but it's been climbing since then, and the OEX just can't seem to catch up to it. That resistance is now at 578.75.

Linda Piazza : 2/8/2005 3:17:14 PM

The upper envelope resistance on the TRAN weekly chart linked to my 1:37 post is at 3639.07. Remember that this is on a weekly closing basis. That resistance also turns sharply higher and might rise further, but weekly MACD has turned lower, perhaps signaling a waning in strength. See that post for an explanation.

Linda Piazza : 2/8/2005 3:12:45 PM

At about 3605.90, the TRAN will hit the descending trendline off yesterday's high. The TRAN is at 3605.73 as I type.

Jeff Bailey : 2/8/2005 3:09:14 PM

Nortel (NT) $3.19 ... session high

Jeff Bailey : 2/8/2005 3:08:22 PM

Bullish day trade exit/target alert for Alcoa (AA) $29.76 +0.45%

Jane Fox : 2/8/2005 3:06:40 PM

Jonathan do you have a pic of someone pulling their hair out? That would be me.

Linda Piazza : 2/8/2005 3:06:00 PM

Remember CSCO earnings tonight as you make your end-of-day decisions. CSCO sometimes has the same market-moving capacity as does an important economic release. Not always, but enough times that we all remember when we were either on the right side or wrong side of a post-CSCO earnings market reaction. If you're not the kind of trader who typically holds over an important announcement, you might not want to hold this time, either.

Jeff Bailey : 2/8/2005 3:04:03 PM

DIA $107.33 +0.29% ...

Jeff Bailey : 2/8/2005 3:03:43 PM

Alcoa (AA) $29.66 +0.13% ... bids green and session high. DAILY R1 just ahead at $29.77

Linda Piazza : 2/8/2005 3:03:02 PM

The SOX has moved back toward the 426.77 level that's the 61.8% retracement of the decline off the December high. Bulls do want to see a close as near the high of the day as possible, but I still feel that gains above this level and especially above the current HOD might be slow. Perhaps famous last words, but the SOX moves into a congestion zone from late November through December after that, and also faces a small gap from early December.

Jeff Bailey : 2/8/2005 3:17:31 PM

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

Jeff Bailey : 2/8/2005 3:00:38 PM

VIX.X 11.50 -1.96% ... ticks to afternoon low. Session low has been 11.45.

Linda Piazza : 2/8/2005 3:00:28 PM

The TRAN bounced today just ahead of a confirmation of a double-top formation on its 60-mintue chart. A move above much above 3618.32 before 3568.48 is touched invalidates the formation, but that hasn't happened yet.

Jeff Bailey : 2/8/2005 2:58:54 PM

Nortel (NT) $3.17 +1.27% .... comes back to test session high of $3.18.

Linda Piazza : 2/8/2005 2:57:15 PM

There's a sort of stretched out, shallow H&S formation on the OEX's 15-minute chart, neckline currently at about 576 but rising. There was bearish price/MACD divergence as the head was formed. A move above the HOD invalidates the formation.

Jim Brown : 2/8/2005 2:54:54 PM

GOOG has fallen -$20 off last weeks earnings high and is now trading just over $195. Google has a massive 187 million share lockup expiring on the 16th and it will more than double the current float. It will be interesting to see how it acts after the release. Some analysts think many funds have been holding off on buying it until after this event. Based on its current market cap it is a "need to own" for the majority of generic funds. I am sure they are all hoping for a substantial drop and a buying opportunity.

Jeff Bailey : 2/8/2005 2:55:29 PM

Alcoa (AA) $29.57 -0.16% ... Hmmm... VXO.X now lower. See that 1,010 volume (OI 11,461) in the AA Apr. $35 Calls (AA-DG)? 1,000 of it came at 02:37:50 at $0.10. When was that volume spike?

Linda Piazza : 2/8/2005 2:54:20 PM

The TRAN tests 3600 again, at 3600.30 as I type.

Jeff Bailey : 2/8/2005 2:52:51 PM

TRIN 0.96 VIX.X 11.55 -1.53% VXO.X 11.21 (unchanged) ... VXO.X was up earlier this morning. Session lows now.

Jeff Bailey : 2/8/2005 2:48:36 PM

Lucent (LU) $3.39 ... did see a session high of $3.41 within past 30-minutes.

Jeff Bailey : 2/8/2005 2:47:27 PM

We're going nowhere fast. Might get some end of session action after bond market closes in 13 minutes.

Jonathan Levinson : 2/8/2005 2:45:36 PM

The 30 min channel should remain bullish above 37.72, which is the current now-rising 7200-tick SMA. However, eyeballing the chart, I see that the bounce off the 12:30 low has been a lot more gradual than the decline that preceded it. A nice surge above that 37.81 level on volume would change the picture, but until that happens, this bounce has a corrective feel to it. Link

Jeff Bailey : 2/8/2005 2:51:03 PM

Cisco (CSCO) $18.31 +0.82% ... intra-day chart on 5-minute intervals looks exactly like the Qs. Saw quite a bit of Feb. $17.50 call actio in CSCO yesterday for $0.90, but CSCO yet to break the $18.50 barrier.

Jonathan Levinson : 2/8/2005 2:41:35 PM

It would fit with the rising 30 min channel and the double intraday bottom above 37.62.

Jeff Bailey : 2/8/2005 2:40:23 PM

QQQQ $37.80 +0.30% ... look set to erupt. Jonathan?

Jonathan Levinson : 2/8/2005 2:38:51 PM

QQQQ double-topped at the 37.81 level, but a pattern of higher intraday lows has emerged: Link If this is a bullish rising triangle, then look for a surge of confirming volume on a break above 37.81. The short cycle upphase continues and has yet to become overbought.

Linda Piazza : 2/8/2005 2:35:36 PM

Stepping away for a few minutes.

Jeff Bailey : 2/8/2005 2:35:05 PM

Alcoa (AA) $29.56 -0.20% ... turned 482,000 shares prior 5 minutes. 211,700 this five.

Jeff Bailey : 2/8/2005 2:32:43 PM

DIA $107.28 +0.25% ... buyers look hesitant... seller seem nervous.

Linda Piazza : 2/8/2005 2:32:27 PM

The OEX is falling away from that 15-minute Keltner resistance, but not too far yet. There's nearby support now, too, because it crept between some lines when it climbed.

Linda Piazza : 2/8/2005 2:29:12 PM

The OEX's three-minute Keltner resistance is now 577.42.

Jeff Bailey : 2/8/2005 2:29:59 PM

Good Gravy! ... Alco (AA) $29.52 ... volume spike of 309,000 suddenly. That can't be MM volume. MACD moving positive (above zero) on 5-minute chart first time today. If it's true that volume proceeds price action... then hold onto your hat!

Jeff Bailey : 2/8/2005 2:24:44 PM

DIA $107.36

Jeff Bailey : 2/8/2005 2:23:42 PM

Bullish day trade long alert ... for Alcoa (AA) at the offer of $29.50, stop $29.45, target $29.75.

Jonathan Levinson : 2/8/2005 2:22:56 PM

QQQQ is retesting 37.81 resistance here.

Jeff Bailey : 2/8/2005 2:21:05 PM

3M (MMM) $84.59 +0.84% ... new session highs.

Jeff Bailey : 2/8/2005 2:15:32 PM

Dow Diamonds (DIA) $107.35 +0.31% ... back for yet another test of DAILY R2 after support found at DAILY Pivot. Bracing for a buy program above $107.45.

Linda Piazza : 2/8/2005 2:13:39 PM

Big push on the OEX. Three-minute Keltner chart suggests a potential to climb to 577.37, but it needs 15-minute closes above the Keltner line currently at 577.02 before it's truly broken out.

Jonathan Levinson : 2/8/2005 2:10:42 PM

Updated QQQQ chart at this Link

Jonathan Levinson : 2/8/2005 2:06:20 PM

Nymex crude is flat at 45.275, a quiet session for a change, with ten year treasuries also flat, TNX unchanged at 4.052%. QQQQ is holding at descending 7200-tick SMA resistance, with the 30 min cycle channel flat and showing an uptick. Look for a break above 37.80 or below 37.65 to target key intraday resistance at 37.85, support at 37.62.

Jeff Bailey : 2/8/2005 2:11:01 PM

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

Jane Fox : 2/8/2005 2:03:25 PM

The internals are giving NO clues as to direction. Both the VIX and AD line are right in the middle of their previous day ranges and moving sideways and the TRIN is smack dab in the middle of its neutral band. "Stuck in the middle with you."

Linda Piazza : 2/8/2005 1:55:00 PM

The TRAN is dropping, too, after bouncing up in a strong V-shaped recovery to test 3595 again. It might be difficult for the OEX to push above that gathering 15-minute resistance unless some of these other indices cooperate.

Linda Piazza : 2/8/2005 1:52:50 PM

Another lower high for the SOX? That would need to be confirmed by a drop below the trough between the two peaks, with that trough at 422.76. The 200-ema is just about a point and a half below that, though, so it might be difficult for the SOX to drop much below the confirmation level. While I thought that SOX gains might be limited past the 426.75 level, I would expect the 200-sma and -ema to be staunchly defended now. At least this afternoon.

Linda Piazza : 2/8/2005 1:48:38 PM

Vulnerable to a downturn or not, the OEX never fell but instead climbed steadily up into the 15-minute Keltner resistance. It's beginning to make inroads on that resistance, so that the resistance doesn't look as firm as it did earlier. It's still there, however, from the OEX's current position, up to 576.84 on a 15-minute closing basis.

Jeff Bailey : 2/8/2005 1:43:10 PM

Deltathree (DDDC) $6.25 +20% Link ... voice over Internet player showing some "Delta Force." PnF chart shows bullish vertical count to $8.75.

Linda Piazza : 2/8/2005 1:40:56 PM

Thanks, Keene. Unlike some, I actually like a slow market day now and then. When else are we going to have time to experiment with charts?

Linda Piazza : 2/8/2005 1:37:29 PM

A view of the TRAN's weekly chart using envelopes surrounding the 200-week ema: Link

Jonathan Levinson : 2/8/2005 1:36:47 PM

QQQQ is backing down from the 7200 tick resistance line, but the 30 min cycle downphase remains stalled. A move below 37.65 would restore it.

Keene Little : 2/8/2005 1:34:41 PM

And by the way, that 5th wave would also complete a larger 5-wave move from October 2002. And that would mark THE top to this rally.

Keene Little : 2/8/2005 1:33:08 PM

That's a great chart Linda (1:28). Looking at that chart one can count a 4-wave move so far from the August low and it looks like we might be starting wave-5 up. By rallying to a new high to finish the 5th wave it would also likely retest the upper envelope.

Jeff Bailey : 2/8/2005 1:29:11 PM

Current OPEN MM Profiles that I've made at this Link

Linda Piazza : 2/8/2005 1:31:00 PM

Look what I noticed when tinkering around with the Russell 2000's weekly chart: Link In the annotation, I mention "that's at 665.68 currently," referring to the upper 30% envelope, not the 200-week ema. Is the Russell 2000 going to hit that upper envelope again or is that bearish divergence on the weekly chart showing us that the late December touch may be the highest the Russell will see and that it's had its touch?

Jonathan Levinson : 2/8/2005 1:21:25 PM

QQQQ has just gapped up to the 7200 tick SMA resistance line at 37.76, with the 30 min channel downphase still in progress but on the verge of stalling. Above this level comes resistance at 37.81, followed by 37.85.

James Brown : 2/8/2005 1:20:02 PM

Drug giant Pfizer (PFE) is up 3.13% to $25.70 after reporting positive news for one of its developing cancer drugs. Yet shares are just now testing technical resistance near the 50-dma and the top of its descending channel.

James Brown : 2/8/2005 1:17:10 PM

Liberty Corp (LC) is up 3.9% to $41.35 after announcing a special $4.00 dividend this morning.

Jonathan Levinson : 2/8/2005 1:16:22 PM

QQQQ 100 tick chart updated at this Link

Linda Piazza : 2/8/2005 1:06:30 PM

So far, the OEX's 15-minute Keltner resistance is holding, so the OEX may be vulnerable at least to 574.95-575.36 on a 15-minute closing basis. If that support doesn't hold, it begins to thin and space out below that. Bulls would prefer that the OEX hold above 575 and then bounce strongly through that resistance.

Jeff Bailey : 2/8/2005 1:14:15 PM

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

James Brown : 2/8/2005 1:04:51 PM

Nike Inc (NKE) is down 3% to $83.61 and breaking down under round-number support at $85.00 and technical support at the 100-dma following a downgrade from Merrill. The firm cut NKE from a "buy" to a "neutral".

Our TRIGGER to buy puts was at $84.65 so this morning's opening price at $84.55 opened the play. NKE Is currently beginning to fade from this morning's oversold bounce off the lows.

James Brown : 2/8/2005 1:01:20 PM

OI call play Invitrogen (IVGN) is up 5.05% to $73.22 after raising its earnings outlook following the acquisition of private firm Dynal Biotech.

Our target was $75.00 and shares hit $74.83 this morning. Readers may want to consider taking some profits here above $73 given the spike in option values.

James Brown : 2/8/2005 12:58:00 PM

OI call play Goldman Sachs (GS) is breaking out over its December highs to hit new three-year highs at $111.68.

Jeff Bailey : 2/8/2005 12:58:20 PM

Bearish day trade stop alert for Lucent (LU) $3.39. Could probably sit a bit at $3.38 (just 32,000 shares) vs. offer 334,000 shares, but closing out here.

Linda Piazza : 2/8/2005 12:55:32 PM

The OEX's five-minute 21-ema is just ahead now, at 576.16, but the OEX's climb looks a little flaggy.

Jonathan Levinson : 2/8/2005 12:55:01 PM

The bounce in QQQQ has a weak, flaggy feel, and until first resistance at 37.75 breaks, this corrective bounce will continue to suggest more pain ahead. A break below 37.65 should cancel this volume short cycle uptick and see a resumption of the decline.

Jeff Bailey : 2/8/2005 12:50:20 PM

Lucent (LU) 641,000 at the bid of $3.37, looks like 256,400 billed out at the offer of $3.38. Offer builds to 115,600 here.

Linda Piazza : 2/8/2005 12:47:02 PM

The TRAN's 15-minute Keltner chart shows that the TRAN might be vulnerable to a drop toward 3556.28, although there's known support in the 3570 region. The TRAN is at 3579.79 as I type. Perhaps the TRAN will bounce up from 3570-ish support to test the resistance gathering overhead, trying to converge somewhere near 3590 and then either roll down or else rip through the resistance and head higher again. On a fall through 3568.49, however, it will have confirmed a double-top formation on the 60-minute chart, so market bulls definitely want that surge up through resistance and they want it relatively soon.

Tab Gilles : 2/8/2005 12:46:04 PM

MURPHY OIL (MUR) Raising stop to 10-ema from previous $87 level Reasons... with $WTIC weak, plus MUR RSI/MACD in overbought levels. Link

Jeff Bailey : 2/8/2005 12:45:49 PM

Lucent (LU) $3.37 bid .... I need a long liquidator NOW!

Linda Piazza : 2/8/2005 12:41:29 PM

The OEX's 15-minute Keltner chart is showing some gathering of resistance overhead, in the 576.23-577.06 region, suggesting that the OEX is going to have to punch through with some vigor to get to that 578.52 upside target suggested by the 60-minute chart. It can be done, but support is beginning to thin out beneath the OEX on that chart, too, so that unless it does punch through with some vigor, it's beginning to look vulnerable to a stronger pullback, perhaps only to 574.87 but perhaps to 573.19 or even 571.82. These numbers will change, of course, as the OEX moves, but give general guidelines.

Tab Gilles : 2/8/2005 12:37:25 PM

Gold and the US Dollar. This inverse relationship is testing resistance levels and is likely to make a decisive move in the coming days. Link Link Link Other related dollar news on Sect. Snow/China Link

Gold stories.. Link Link

Linda Piazza : 2/8/2005 12:36:11 PM

OEX attempting to bounce from the five-minute 100/130-ema's at 575.42 and 475.94, respectively. Bulls want to see it safely above the turning-lower 21-ema at 576.30.

Jeff Bailey : 2/8/2005 12:34:44 PM

Bearish day trade stop adjustment alert .... for Lucent (LU) $3.37 ... raise the stop a penny to $3.39.

Jeff Bailey : 2/8/2005 12:31:46 PM

Dow Diamonds (DIA) $107.04 +0.02% ... slips back under its DAILY Pivot. Most active options now have Mar. $108 C $0.90 (842:9,905), Feb. $107 C $0.90 (824:10,853) evenly matched. Feb. $105 P $0.15 (165:8,569) VIX.X 11.58 -1.27% VXO.X 11.40 +1.69%

Jonathan Levinson : 2/8/2005 12:25:05 PM

30 min channel support slides to 37.63 QQQQ here.

Linda Piazza : 2/8/2005 12:21:21 PM

The TRAN's failure to follow through on gains in other indices was a first clue this morning that all was not right with the short-term bullish view. The TRAN broke below a bearish right triangle after failing to find support at the five-minute 100/130-ema's. Now the OEX tests those averages, currently at 575.41 and 574.91. So far, their support holds, but the bulls don't want to see the 21-ema currently at 576.53 now prove to be resistance.

Jeff Bailey : 2/8/2005 12:20:04 PM

Nortel (NT) bidding $3.14.

Jonathan Levinson : 2/8/2005 12:19:52 PM

QQQQ's short cycle oscillators are approaching oversold territory, with the short cycle TRIX currently buried. A move above 37.75 would be the first sign of trouble for short cycle bears, but the 30 min channel will remain in a downphase so long as QQQQ holds below 37.86. Link

Jeff Bailey : 2/8/2005 12:18:39 PM

Bearish day trade short alert ... sell Lucent (LU) here at $3.35 bid, stop $3.38, target $3.27.

Linda Piazza : 2/8/2005 12:17:37 PM

I thought SOX gains might be limited. The SOX isn't holding up as well as might be expected, diving back below the five-minute 21-ema. That average had gotten quite extended, however, away from the 100/130-ema's, now at 421.05 and 419.63, so it's possible that the SOX is headed back for a test of its 200-wma and 200-ema, both in that same area. Bulls DO want those to hold as support and for the SOX to bounce from them, if not bounce sooner. Otherwise, the SOX will have left a long, long upper shadow above them and the 50% retracement of the decline off the December high.

Jonathan Levinson : 2/8/2005 12:14:42 PM

QQQQ is plunging through 30 and 60 min support. Next confluence support is 37.60-.62.

Jeff Bailey : 2/8/2005 12:24:03 PM

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

Jonathan Levinson : 2/8/2005 12:10:05 PM

QQQQ is testing first support at the lower 30 min channel here, with still rising 60 min support 3 cents lower. If price holds below 37.81 resistance for another 10 mins or so, then that channel should join in to the downside. Link

Tab Gilles : 2/8/2005 12:08:29 PM

$SOX Link

Jane Fox : 2/8/2005 11:55:13 AM

The TRIN has spent the entire day within its neutral band but is climbing a tad now but nothing the bulls should worry about. However, I do see the VIX has made a double bottom and is also climbing and the AD line is falling. I'm really grabbing at straws here because the internals' patterns are not too clear.

Jonathan Levinson : 2/8/2005 11:54:17 AM

QQQQ chart update at this Link

Jeff Bailey : 2/8/2005 11:51:00 AM

TRIN 0.85 -22.13% ... edging up a bit after session low reading of 0.81. VIX.X 11.57 -1.36% ...

Jeff Bailey : 2/8/2005 11:48:39 AM

Bullish day trade exit alert for Nortel Networks (NT) at the BID of $3.16.

Jonathan Levinson : 2/8/2005 11:47:02 AM

QQQQ has just broken the 7200 tick SMA support at 37.90, the first such break of the day. The 30 min channel is rolling over, with support currently at 37.75.

Jeff Bailey : 2/8/2005 11:47:34 AM

Dow Diamonds (DIA) $107.39 +0.35% ... set to re-test morning high and DAILY R2. That's all that stands between current price and MONTHLY R1. But so far... it has been enough. SOX.X 427.18 +2.11% leads in the WEEKLY with a trade at WEEKLY R1.

Jonathan Levinson : 2/8/2005 11:34:16 AM

Ten year treasuries, CAD and euro futures are at session highs here. Silver is joining in as I type.

Linda Piazza : 2/8/2005 11:34:06 AM

I'll be away for about twenty minutes.

Linda Piazza : 2/8/2005 11:33:56 AM

The SOX is in danger of creating a lower five-minute high, to be confirmed by a fall beneath the five-minute 21-ema at 425.85 and the trough between the two peaks at 425.30.

Jonathan Levinson : 2/8/2005 11:31:47 AM

Nymex crude oil is down .025 at 45.25 here, with ten year treasuries extending their gains, TNX down 1.9 bps at 4.033%. Gold has recovered off the 412 low to its currently 414.8, with HUI and XAU going positive.

Linda Piazza : 2/8/2005 11:29:41 AM

The OEX's 60-minute upside Keltner target is now at 578.32, with the OEX now at 577.36. The OEX can create an upside breakout on this chart as well as on the shorter-term ones, of course, but this should serve as at least temporary resistance on a 60-minute closing basis.

Linda Piazza : 2/8/2005 11:25:35 AM

The SOX now breaks back above the 61.8% retracement of the decline off the early December high, but I still think this is likely a tough area for the SOX and gains might be limited from here.

Jeff Bailey : 2/8/2005 11:22:42 AM

Bullish day trade raise stop alert for Nortel Networks (NT) $3.18 +1.60% to $3.14.

Linda Piazza : 2/8/2005 11:14:20 AM

So far, this looks like a potential bull flag pullback on the OEX's five-minute chart, with the five-minute 21-ema rising up to meet the OEX. That average is now at 576.56. Bulls would like to see it continue to hold as support, although sooner or later, it's going to be time for the OEX to pull back all the way to the 100/130-ema's, currently at 547.99 and 574.48 and retest those averages.

Jonathan Levinson : 2/8/2005 11:12:11 AM

QQQQ challenges 7200 tick SMA support as the 30 min cycle upphase stalls: Link

Linda Piazza : 2/8/2005 11:16:41 AM

The TRAN is threatening to drop below the bottom support of a likely bearish right triangle, although it looks to me as if it might be due at least one more lower high before dropping below 3595. It's testing that 3595 level after pulling back from the neckline of a potential continuation-form inverse H&S on its 60-minute chart, so there's the possibility that this is just part of a right-shoulder building exercise for this index. However, I haven't been pleased that the TRAN has not been participating in the market euphoria, as it's often a leading index. If the SOX keep leading higher and the TRAN keeps leading lower, we may have that old bifurcated market again, a guarantee for choppy market behavior in the S&P's.

Jeff Bailey : 2/8/2005 11:12:15 AM

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

Linda Piazza : 2/8/2005 11:02:30 AM

The OEX's five-minute 21-ema, a supporting average on five-minute closes since about 2:30 yesterday afternoon, has now climbed to 576.45. Bulls want to see it continue to provide support.

Linda Piazza : 2/8/2005 11:01:13 AM

One danger sign for bulls today is the continued lack of participation by the oil- and economy-sensitive TRAN. It's at 3598.12, not able to stay above 3600 or its 30-dma at 3618.52.

Jeff Bailey : 2/8/2005 10:57:17 AM

Gold Bugs ($HUI.X) 192.17 -0.19% ... battle back after brief piercing of long-term upward trend from November 2001 low to March 2003 pullback low.

Jonathan Levinson : 2/8/2005 10:51:24 AM

7200 tick SMA has risen to 37.84 QQQQ. The 30 min channel remains bullish above that level.

Linda Piazza : 2/8/2005 10:48:53 AM

As most of you know, CSCO reports this afternoon, and I believe that those currently in plays should be factoring this report into their hold-over-or-not strategies, already making some decisions. We've seen both CSCO rallies and CSCO routs, but with markets having zoomed up so strongly, I believe that bulls absorb some risk in holding overnight, so spend some time thinking about how you might like to protect profits if you do plan to hold overnight. As discussed in my Traders Corner article this weekend, the CBOE offers an easy link to important Earnings Conference Calls. Here's the page: Link

Jonathan Levinson : 2/8/2005 10:46:10 AM

Session high for ten year notes here at 112 3/4, with TNX going negative, down .1 bps at 4.049%.

Linda Piazza : 2/8/2005 10:42:48 AM

The 60-minute upside Keltner target is now at 578.31, with the OEX high of the day at 577.51.

CSCO better deliver when it reports. CSCO is of course an OEX component.

Jeff Bailey : 2/8/2005 10:44:40 AM

Dow Diamonds (DIA) $107.35 +0.31% ... updated daily interval bar chart with WEEKLY/MONTHLY pivot retracement at this Link Not a lot of option action early, but see some call buying and put selling. VIX.X 11.52 -1.79%

Linda Piazza : 2/8/2005 10:39:12 AM

On CNBC Europe, wee-hours-of-the-morning discussions centered on the RLX and on the retailers that will begin reporting over the next couple of weeks. They particularly noted WMT's release February 17, but thought we might begin to see some trend as Abercrombie and others reported first. The gist was that there's still some uncertainty and potential weakness in the sector. So, perhaps we should pay attention, too.

Jonathan Levinson : 2/8/2005 10:37:11 AM

QQQQ just failed at the 127.2% line off yesterday's high. Link

Jeff Bailey : 2/8/2005 10:32:43 AM

QQQQ $38.00 +0.86% .. fills its "eBay gap"

Jonathan Levinson : 2/8/2005 10:31:31 AM

QQQQ chart update at this Link. New highs printing as I type, with QQQQ reaching for 38.00 confluence resistance.

Jane Fox : 2/8/2005 10:29:16 AM

This is looking rather bullish to me and the internals are sort of agreeing. The VIX and the TRIN are falling and AD line is climbing.

Linda Piazza : 2/8/2005 10:29:33 AM

SOX 426.77 is the 61.8% retracement of the decline off the early December high. Today, the SOX has spanned the distance from the 50% retracement to the 61.8% retracement. That's another reason for a possible slowing of gains now on the SOX. If it can hold its gains today, though, it's soundly done away with the potential for an evening-star reversal signal on the daily chart. The need to wait for reversal signals to confirm has been readily apparent lately.

Linda Piazza : 2/8/2005 10:25:11 AM

The SOX isn't slowing, so far, but is approaching a small gap from early December on the daily chart. I've found that even small gaps can sometimes impact later trading. I'm not sure that this one would, except that the SOX is also entering a congestion zone from late November and early December and it's zoomed so high already.

Jonathan Levinson : 2/8/2005 10:24:35 AM

The 78.2% fib retracement off yesterday's low is at 37.82 QQQQ, which provided some support on the initial pause off the highs at 10AM. That will be first support on the current pullback. 30 min channel support is down at 37.72 but rising steeply, with the 7200 tick SMA up to 37.74.

Jeff Bailey : 2/8/2005 10:18:44 AM

Current OPEN MM Profiles I've made at this Link

Jeff Bailey : 2/8/2005 10:29:45 AM

Bidder up for Nortel (NT) $3.17 +1.27% ... Note upper 5-MRT BLUE #5 $3.205 with correlative DAILY R1 $3.20. DAILY Pivot $3.15. Link

Jeff Bailey : 2/8/2005 10:12:37 AM

TRIN 0.93 -23.77% ... slips below DAILY S1. Looking S2.

Linda Piazza : 2/8/2005 10:09:41 AM

The OEX's five-minute 21-ema is at 575.42. The OEX has been finding support at that average on five-minute closes since about 2:30 yesterday afternoon.

Jonathan Levinson : 2/8/2005 10:06:08 AM

Look for confluence and 7200 tick SMA support at 37.69 for any pullback. Here's where the bears should be pushing back on the upper keltner violation. So far, it's looking quite shallow.

Linda Piazza : 2/8/2005 10:05:42 AM

Bulls, it goes without saying, I hope, that plans to protect profits should be made as the OEX approaches the December highs.

Linda Piazza : 2/8/2005 10:04:39 AM

SOX continues to gain.

Jonathan Levinson : 2/8/2005 10:03:10 AM

The Fed has done a 2.25B overnight repo to replace the 5B expiring from yesterday, for a net drain of 2.75B.

Jeff Bailey : 2/8/2005 10:03:01 AM

VIX.X 11.56 -1.44% ... Daily Pivot Levels ... 11.19, 11.42, Piv = 11.58, 11.81, 11.97.

Jonathan Levinson : 2/8/2005 10:02:13 AM

QQQQ is exceeding the rapidly rising upper 30 min channel here, a rare move that usually indicates trending. The bears' fumble from yesterday's weak 30 min downphase is now being exploited by the bulls. A break above key 38 resistance, just 15 cents away, will confirm it and add the next leg to the ongoing daily cycle upphase.

Jeff Bailey : 2/8/2005 10:10:29 AM

10:00 Market Watch at this Link 10:00 Internals at this Link Yesterday's Internals at this Link

Linda Piazza : 2/8/2005 10:01:32 AM

The upside target predicted by the OEX's 60-minute chart is now 578.16.

Jeff Bailey : 2/8/2005 9:57:57 AM

QQQQ $37.79 +0.31% ... strong move above DAILY Pivot.

Jeff Bailey : 2/8/2005 9:56:52 AM

Invitrogen (IVGN) $74.00 +6.16% Link ... gapping higher on strong earnings/guidance. Also announced acquisition of Dynal Biotech.

Jonathan Levinson : 2/8/2005 9:55:29 AM

Bonds are pulling back slightly, TNX currently up 1.2 bps at 4.066%. Gold remains weak, down 2.6 at 412.80, with HUI -.82% at 190.8 and XAU -.98% at 87.72.

Jonathan Levinson : 2/8/2005 9:54:30 AM

QQQQ has just exceeded upper 60 min resistance and is now challenging upper now-rising 30 min channel resistance. If the bears don't push back strongly within the next 10 minutes, we'll probably be looking at the start of that impulsive 30 min cycle upphase I've been discussing.

Jeff Bailey : 2/8/2005 9:53:45 AM

Sina Corp. (SINA) $22.00 -19.59% Link ... gapping lower after missing by a penny and guiding below consensus for Q1. Piper Jaffray downgrade to "market perform" and cutting target to $22.

Jonathan Levinson : 2/8/2005 9:51:53 AM

QQQQ chart update at this Link

Linda Piazza : 2/8/2005 9:51:12 AM

The SOX tests its 200-sma and -ema, performing strongly so far this morning. It approaches the 422.10 high from yesterday . . . above it as I type. Bulls want to see the SOX hold above that level now.

Jeff Bailey : 2/8/2005 9:51:34 AM

Business Objects (BOBJ) $26.50 +12.61% Link ... gapping higher on strong earnings (beat by $0.04 per share) and guidance as well as Wachovia upgrade.

Linda Piazza : 2/8/2005 9:48:43 AM

The Vix has not broken out of yesterday's range, with yesterday being an inside-day for the VIX. There's some debate over whether it's valid to apply technical analysis tools to indicators such as the VIX, but I do sometimes find it helpful.

Jeff Bailey : 2/8/2005 9:47:35 AM

Networking Index (NWX.X) 222.75 +1.07% ... only equity sector I've got up more than 1%. Internet (INX.X) 190.14 -0.66% is weakest sector in early going.

Linda Piazza : 2/8/2005 9:47:27 AM

The OEX's three-minute Keltner chart shows potential support at 574.40-574.78.

Linda Piazza : 2/8/2005 9:43:48 AM

The OEX balances on its five-minute 100-ema, testing it.

Jeff Bailey : 2/8/2005 9:48:12 AM

eBay (EBAY) $75.90 +0.41% Link ... in an updated 8-k filing the company now saying it has amended the terms of its previously announced acquisition of Rent.com, and will now buy the Internet housing rental listing service entirely with cash for $415 million.

Jeff Bailey : 2/8/2005 9:39:48 AM

Nortel (NT) $3.14 +0.31% ... Lucent (LU) $3.35 +1.82% ... still looks "expensive" vs. NT. Cisco (CSCO) $18.20 +0.22% ...

Jonathan Levinson : 2/8/2005 9:35:29 AM

QQQQ is chopping its way sideways after peakingat 37.71 in the premarket. The 30 min cycle channel is sliding sideways with yesterday's pathetic 30 min cycle downphase beginning to tick up above oversold territory. Unless the bears can get the price below yesterday's 37.51 low in short order, we can expect a new and most likely impulsive upphase to kick off on a break above 37.75-.80.

Linda Piazza : 2/8/2005 9:34:42 AM

SPX tests 1200, at 1200.49 as I type. The TRAN turns lower, too. The SOX is higher, but off its HOD already and moving down to test its five-minute 21-ema at 418.10. This average supported the SOX late yesterday afternoon.

Linda Piazza : 2/8/2005 9:32:43 AM

The OEX is maintaining the five-minute 21-ema on the open after a quick break below it, but the support looks iffy. That average is at 575.08. If the OEX slips below it and it becomes resistance, then a test of the 100/130-ema's at 574.20 and 573.73, respectively, might be in the works.

Jeff Bailey : 2/8/2005 9:32:12 AM

Arch Coal (ACI) $37.51 Link ... lower at $35.52 after guiding 2005 EPS to $1.50-$2.00. Consensus is $2.23. Look for possible weakness in ARLP, BTU, CNX, FCL, FDG, HDWR, MEE, NRP, WLB, YZC

Jeff Bailey : 2/8/2005 9:28:04 AM

Chesapeake Energy (CSK) $23.14 Link ... downgraded to "sell" from "hold" at Smith Barney. Target lowered to $21 from $26.

Jeff Bailey : 2/8/2005 9:27:08 AM

Taser Intl. (TASR) $17.15 Link .... top of this morning's most active list and lower at $14.20 after reporting quarterly earings of $5.0 million, or $0.08 per share. Consensus was $0.11 per share. Revenues were up 79% versus same quarter last year to $19.2 million, but was also shy of the $20.4 million consensus estimate.

Linda Piazza : 2/8/2005 8:54:09 AM

Futures are off their overnight highs, off their overnight lows. Not much sense of direction there, as futures appeared to generally sway one way with the Nikkei and another with the European markets.

Market bulls need to see the SOX break out above its converging 200-sma and -ema, at 420.48 and 421.37, respectively, or at least continue to consolidate just underneath them. They need to see the SPX reach back above and maintain levels above Monday's 1204.15 high. That's the location of a former ascending trendline off the September and October highs, with that rather steep trendline then supporting the SPX through November and December. Bulls need to see the TRAN above its 30-sma at 3623.76, perhaps thereby confirming an inverse H&S on its daily chart. They need to see the Nasdaq above its 30-dma and then 50-dma at 2108.06.

The SPX and OEX joined several other indices in printing doji at the tops of climbs, so bulls just want to see something more convincing than today's outcome. For the OEX, the first order of the day is a move above the neckline of a potential continuation-form inverse H&S on the five-minute chart, with that neckline at about 575.50. That's possible. Although the OEX could not muster much strength into the close, it did manage to hold above the five-minute 21-ema all through the last 90 minutes of trading. Bulls want to see that trend continue or at least want to see the OEX hold above its five-minute 100/130-ema's at 574.19 and 573.71. If the OEX can bounce from any test of those averages, the 60-minute Keltner chart suggests that it also keeps alive the potential for a move up to 577-578.02.

Keep an eye on the TRAN, but especially on the SOX and SPX. Rollovers beneath the 200-ema and 200-sma for the SOX and the 1200-1204 level for the SPX might present the possibility of the evening-star patterns on their charts being confirmed. Bulls don't want to see an OEX close today below the midpoint of Friday's tall white candle, with that midpoint at 571.68. I would assume that there would be a big push to stop that from happening, so if a rollover begins, be prepared for a possible strong buy-the-dip response, particularly in the 570-572 region, if those should be tested. Don't be too hasty to buy the top, either. The VIX produced an inside-day candle Monday, and bulls don't want to see it break to the upside and then maintain higher percentage values today.

Jane Fox : 2/8/2005 8:45:59 AM

Dateline CNN - Palestinian Authority President Mahmoud Abbas and Israeli Prime Minister Ariel Sharon announce they have agreed to cease-fire.

Jonathan Levinson : 2/8/2005 8:24:48 AM

TASR is currently down over 18% to the low 14's after reporting Q4 earnings of 8 cents or 5M on revenue of 19.25M, a 79% rise from Q4 2003's 10.78M. Estimates were for 10 cents on 20.3M revenue, however, and the stock is getting slammed this AM.

Jonathan Levinson : 2/8/2005 7:53:22 AM

Equities are higher, ES trading 1202, NQ 1533, YM 10709 and QQQQ +.03 at 37.71. Gold is down 2.30 to 413.10, silver -.058 to 6.496, ten year notes -.0781 to 112 11/16, and crude oil -.40 to 44.875.

There are no major economic reports scheduled for today.

Linda Piazza : 2/8/2005 6:28:49 AM

Good morning. The Nikkei saw a modest decline in afternoon profit-taking. Several Asian markets were closed for the Chinese Lunar Year holiday, but most others gained. With lower crude, cheering economic numbers from Germany, and positive earnings from selected companies, European bourses see gains, although they're modest in some cases as bourses approach important resistance levels. Our futures are modestly higher. As of 5:52 EST, gold had dropped $2.40. As of 5:34 EST, crude had just dipped below $45.00, down $0.31 to $44.97. More details about Asian and European markets follows in succeeding paragraphs.

The Nikkei oscillated around 11,500 Tuesday, but again could not close above 11,500. It closed down by 9.43 points or 0.08%, at 11,490.43 With crude having moved lower and the dollar having firmed, exporters gained in early trading, but some techs saw profit-taking as the session progressed. Some investors were cheered by the lack of sell-offs recently during such profit-taking sessions, however. Most automakers still closed higher.

Other Asian bourses mostly traded higher, although some remained closed for the Chinese Lunar Year holiday. The Taiwan Weighted remained closed today, as did South Korea's Kospi. Singapore's Straits Times gained 0.56%, and Hong Kong Kong's Hang Seng climbed 0.22%. China's Shanghai Composite was closed again today.

Most European markets also climb, although only modestly and on thin volume during a carnival period in some countries. On CNBC Europe this morning, commentators noted ongoing talks in both France and Germany to reform work-week rules. In France, in particular, those rules had been instituted to combat unemployment, but the unintended result has been steady unemployment and slowing productivity. The French National Assembly votes on allowing a longer work week, and Germany considers revising the seniority rules upon which civil service salaries were based, among other issues. Other important news has been the dip in crude, Germany's December Goods Output, up 2.4% month over month, and Industrial Production, up 1.2%, cheering news that nevertheless did not appear to move the markets.

The decrease in crude has helped European airliners. Earnings continue to pour in, in Europe as well as in the U.S., and BP's earnings results have been greeted with enthusiasm this morning. Renault reported this morning, the CEO giving a cautious outlook for demand in Europe, mentioning in particular the need for a rebound in consumer confidence. Renault dropped, with other carmakers showing mixed trading behavior. UBS reported and was gaining in European trading, despite the company's mention of unpredictable financial markets.

As of 5:41 EST, the FTSE 100 had gained 5.70 points or 0.11%, to trade at 4,985.50. The CAC 40 had gained 0.98 points or 0.02%, to trade at 3982.83. The DAX had gained 8.56 points or 0.20%, to trade at 4,374.91.

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