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Jeff Bailey : 3/1/2005 1:02:01 AM

Program Trading Levels for Tuesday ... HL Camp & Company has their computers set for program buying at $+1.48 and set for program selling at $-0.98.

OI Technical Staff : 2/28/2005 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The Market Monitor has been archived.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 : 2/28/2005 6:51:49 PM

MONTHLY Pivot Matrix for last three months at this Link

Jeff Bailey : 2/28/2005 6:29:56 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 2/28/2005 6:07:56 PM

Closing Internals at this Link For the month of February, NYSE volume averaged 1.54 billion shares per day, which was down 2% from January's 1.57 billion. NASDAQ volume averaged 1.94 billion shares per day, which was down 10% from January's 2.17 billion.

Jeff Bailey : 2/28/2005 6:23:59 PM

Dow Diamonds (DIA) $107.70 -0.60% ... updated daily interval bar chart with new MONTHLY Pivot retracement at this Link Dow Industrials Bullish % ($BPINDU) Link .. on Friday, this very narrow bullish percent rose 3.33% with a net gain of 1 stock (CAT Link ) to a reversing higher point and figure buy signal. Still "bull confirmed" at 73.33%.

Jeff Bailey : 2/28/2005 5:39:02 PM

Pivot Matrix with updated MONTHLY Pivot Levels at this Link

Jeff Bailey : 2/28/2005 4:37:28 PM

Monthly Trade Blotter of Market Monitor trades I profiled in February that have been closed out between 02/01/05 and 02/28/05 at this Link For February, the S&P Depository Receipts (AMEX:SPY) rose $2.47 per share, or 2.09%. A 1,000 share long investment would have gained $2,470.00. A $10,000 long investment would have gained $209.00.

Jeff Bailey : 2/28/2005 4:23:29 PM

Current OPEN MM Profiles that I've made at this Link Today's Activity ..... Stopped out of the remaining 1/2 bearish position in XM Satellite Radio (XMSR) at $29.40. ($+0.85, or +2.81%)

Jeff Bailey : 2/28/2005 4:14:54 PM

U.S. Dollar Index (dx00y) 82.52 -0.16% ... using today's 03:00 PM EST as a monthly close, here's the daily interval bar with updated MONTHLY Pivot retracement at this Link As it relates to my current bullish call profile in Newmont Mining (NEM), those calls were profiled two days before the break below the new MARCH MONTHLY Pivot

Jeff Bailey : 2/28/2005 4:00:37 PM

Sell Program Premium ... SPY $120.55 , DIA $107.61

Linda Piazza : 2/28/2005 3:57:20 PM

There's mixed evidence on the OEX's daily chart, too. Daily MACD flattens. The OEX turns back from the resistance band noted on the chart linked to my 12:16 post, but it also sprang up from its test of support. It's ending the day so close to the midpoint of the day's range that it's going to be down to the wire as to whether it closes above or below that level. If other indices acted in unison, either mostly all bearish or mostly all bullish, then we'd be able to say, yes, the OEX turned down from resistance and looks bearish or yes, the OEX sprang up from historical S/R and the downturn was only an expected pullback, but we can't say that yet. The TRAN sprang higher today, although you know my thoughts on its overbought status on the weekly and monthly charts, and it did drop well off its high of the day. The Dow is going to leave it until the last few minutes as to whether it closes above or below 10,800. The Nasdaq broke below that neutral triangle on its daily chart, but doesn't go much of anywhere since doing so. Lots of mixed information, but internals looked more bearish than bullish and the afternoon bounces came when we were hearing about traders trying to get out of the office ahead of a big storm, so I'd tend to classify the action as more bearish than bullish, too.

Jonathan Levinson : 2/28/2005 3:52:37 PM

QQQQ is printing what appears to be a rising expanding wedge below the 37.35 level, a generally unhealthy pattern that suggests corrective strenth off the low. A break above 37.35. A break back below 37.14 or above 37.35 should yield a directional move, as the toppy short cycle will either reverse back lower or begin trending in overbought. The daily cycle oscillators are currently right on the line, and will follow the break in either direction.

Linda Piazza : 2/28/2005 3:47:13 PM

It looks as if the BIX may close the day above its converging 200-sma and -ema. It looks as if the SOX will likely close below its 200-sma. Mixed evidence from these two key indices.

Linda Piazza : 2/28/2005 3:43:47 PM

The TRAN's last two 15-minute periods are producing upper shadows, not what bulls want to see.

Linda Piazza : 2/28/2005 3:41:45 PM

Some observations on the SOX's daily chart: Link

Jonathan Levinson : 2/28/2005 3:37:48 PM

Session low for April gold on the Ecbot, +.5 at 436.60 as HUI ticks red. XAU is still up .18 at 99.06.

Linda Piazza : 2/28/2005 3:36:25 PM

The SOX tests the neckline of its inverse H&S.

Jeff Bailey : 2/28/2005 3:33:02 PM

Buy Program Premium ... SPX 1,207.17, DIA $107.96

Linda Piazza : 2/28/2005 3:31:22 PM

The SOX remains well below its 200-week sma, but it may be forming an inverse H&S at the bottom of the day's decline, with neckline just below 440. Bulls want to see a move across the neckline while bears want to see a new LOD. A move above the 200-week sma at 440.47 is more important than that inverse H&S seen on a five-minute chart, of course.

Linda Piazza : 2/28/2005 3:26:07 PM

We should be keeping a watch on the BIX, because a BIX bounce from its 200-sma and -ema appeared to lead the indices higher a few minutes ago. Right now, it's declining again, but hasn't even retraced 38.2% of the rally off the afternoon low.

Linda Piazza : 2/28/2005 3:23:51 PM

OEX 576.57 resistance is so far holding, but bears sure would have preferred to see lower resistance hold. Now, the 7-minute chart shows potential support gathering just above 575. Similar configurations of lines near this mid-channel level made little difference on the way up a little while ago. Let's see if it does on the way down.

Jonathan Levinson : 2/28/2005 3:21:33 PM

QQQQ approaches its reverse h&s implied target in the 37.30-.35 area as the short cycle oscillators begin to top out. The 30 min cycle channel has turned up however, and the 60 min downphase has stalled- this is a good recipe for chop, unless the 37.35 level can be broken for 5 minutes or better, at which point we should have a bullish short cycle trending move within the 30/60 min upphases.

Jeff Bailey : 2/28/2005 3:21:08 PM

Dow Diamonds (DIA) $107.95 -0.40% ... come back to challenge DAILY Pivot. Breadth improves but still negative at 20:10. AA +1.54%, XOM $1.21% ... GM -4.03%, PG -1.91%, AIG -1.75%, PFE -1.74%, DD -1.11%

Linda Piazza : 2/28/2005 3:14:16 PM

The SOX remains below its 200-week sma.

Jeff Bailey : 2/28/2005 3:13:22 PM

03:00 Internals at this Link

Linda Piazza : 2/28/2005 3:11:46 PM

Advdec line is still moving higher, but remains bearish at -1917 issues. If rumors are right and traders are leaving early due to the impending storm in the Northeast, markets could get pushed around a lot on light volume.

Linda Piazza : 2/28/2005 3:10:23 PM

Figures. The TRAN is usually fairly trustworthy, Keltner-wise, but we're about to see if it is today. It's trying to break out again, pushing up through the nearest layer of Keltner resistance, up to test the 3694.41 (15-minute close) resistance.

Jonathan Levinson : 2/28/2005 3:07:45 PM

Stepping away for 15 minutes here.

Jeff Bailey : 2/28/2005 3:04:23 PM

03:00 Market Watch at this Link

Linda Piazza : 2/28/2005 3:04:15 PM

The OEX pauses at mid-channel resistance on the 7-minute Keltner chart. No pullback yet.

Linda Piazza : 2/28/2005 2:55:21 PM

The TRAN is now undoing its breakout status on its 15-minute Keltner chart. Resistance is massing above it, from 3727-3737. Support at 3716 and then again at 3694. The Keltner line currently at 3715.71 (15-minute close) is the one that has been supporting the TRAN since Wednesday morning.

Jeff Bailey : 2/28/2005 2:51:32 PM

Buy Program Premium ... came about 12 minutes ago. SPX was trading 1,201, DIA $107.53.

Linda Piazza : 2/28/2005 2:51:23 PM

A bounce in the BIX may be either helping the OEX bounce or else corroborating the OEX's bounce. The OEX now tests the 10-minute 21/100/130-ema's. If that inverse H&S scenario is going to come to pass, the OEX needs another right shoulder. If the OEX does fall back from this resistance, watch for either a refutation of the inverse H&S or a confirmation.

Jonathan Levinson : 2/28/2005 2:50:34 PM

Here's the break above 37.14 QQQQ on strong volume. The 37.14 neckline should hold as support if retested.

Jonathan Levinson : 2/28/2005 2:43:17 PM

QQQQ's chopping along within a 10 cent range. Provided that the 37.03 level holds on the dips, a possible reverse head and shoulders can be seen below 37.14. However, given the ongoing 60 min cycle weakness, QQQQ bulls will want to see the 37.14 neckline broken on expanding volume for confirmation: Link

Linda Piazza : 2/28/2005 2:44:18 PM

I had suggested earlier that bearish OEX traders know how they would handle a test of 573.20-573.60, and the OEX actually dipped a little lower than that. Now, the OEX's prices may be shaping up into a potential inverse H&S at the bottom of its decline today. If so, the OEX may find resistance at the 10-minute 21/100/130-ema's, all grouped between the OEX's current 574.31 level and 574.79, and then drop back toward 573.60-574 before either creating a new LOD and invalidating the potential formation or climbing above those averages and confirming it. A confirmation would not result in a big upside, even if the upside target is met, and the 7-minute chart shows Keltner resistance near 575.13. Bears don't want to see the OEX above that or certainly above 576.39 again.

If bulls are going to stampede the indices higher, now is the time to get ready to do that.

Linda Piazza : 2/28/2005 2:32:52 PM

There's a small uptick in the advdec line, but not much of one as yet.

Linda Piazza : 2/28/2005 2:29:38 PM

That is not a pretty candle showing on the SOX's daily chart. The SOX has reversed back below the neckline of an inverse H&S (continuation-form) on the daily chart as well as below the 200-week sma. Bulls do not want to see the SOX end the day here. I mentioned last week that Pring had said that a penetration of an important S/R level needed to be decisive, followed by several days' corroboration or by a percentage (say, 5%) move above/below that level, before it was considered valid.

Linda Piazza : 2/28/2005 2:23:02 PM

The OEX is bouncing as the 7-minute Keltner charts had suggested it might do (see my 2:13 post). In fact, the OEX is rising a bit higher than the Keltner chart had suggested it might do. Next resistance is from 574.58-575.27.

Jeff Bailey : 2/28/2005 2:19:48 PM

April Unleaded (hu05j) $1.40 -1.40% ... WEEKLY Pivot Levels ... $1.36, $1.39, Piv= $1.42, $1.44, $1.47.

Jeff Bailey : 2/28/2005 2:18:22 PM

April Crude Oil (cl05j) $51.60 +0.21% ... has been quiet, though higher today. Session low has been $51.10. WEEKLY Pivot Levels $48.81, $50.18, Piv= $51.11, $52.48, $53.41. Most likely takes a trade back under $49.38 to get much of a broader market reaction this week.

Jonathan Levinson : 2/28/2005 2:16:38 PM

The 300 minute stochastic is only beginning to approach oversold territory for QQQQ, while the short cycle oscillators are again ticking up with a slight bullish divergence on the Macd. 7200 tick SMA resistance is down to 37.05, being tested now, and a print above it would be the first break above it since the 11AM drop. A break north of 37.05 needs to clear 37.14, above which a 30 min cycle upphase should commence. While the upphase would be corrective, the intraday bias will nevertheless shift to the upside.

Jeff Bailey : 2/28/2005 2:14:36 PM

02:00 Internals at this Link

Linda Piazza : 2/28/2005 2:13:26 PM

The OEX's 7-minute chart currently shows vulnerability down to 571.91, although it looks as if the OEX might first bounce up toward resistance from 573.76-574.40, to test that.

Jeff Bailey : 2/28/2005 2:14:54 PM

02:00 Market Watch at this Link

Jonathan Levinson : 2/28/2005 2:05:22 PM

QQQQ chart updated at this Link

Linda Piazza : 2/28/2005 2:00:04 PM

The BIX holds at its 200-sma and -ema. The danger for bulls is that the longer it stays there, the more danger is that bulls will decide to try sending it higher.

Linda Piazza : 2/28/2005 1:55:49 PM

GE moves closer to $35.00.

Jonathan Levinson : 2/28/2005 1:54:20 PM

Session low for ten year notes here at 110 23/32, with TNX up 10.3 bps or 2.41% today at 4.375%.

Jeff Bailey : 2/28/2005 1:53:33 PM

Intuit (INTU) $42.64 +1.98% ... stock strong again today. H&R Block (HRB) $53.23 +3.35% ... also adding to Friday's gains.

Jeff Bailey : 2/28/2005 1:50:29 PM

PacificNet (PACT) $9.16 +39.42% ... stock jumped near the top of today's percentage gainer list at approximately 11:00 after boosting Q4 and full year guidance. The Hong Kong-based provider of IT services said it now expects to report revenue of $10-$11 million, which is above prior guidance of $8-$10 million and 30% above Q3 results of $8.1 million. Net income is expected to be more than double Q3's profit of $136,000, or $0.02 per share.

Linda Piazza : 2/28/2005 1:38:18 PM

The OEX is breaking down below the support of its latest bear flag, but needs confirmation by a new LOD, which it may supply any moment. Remember, however, that there's potential support from 573.20-573.60 from various sources. The 7-minute Keltner chart shows a continued vulnerability to 572.11.

Jeff Bailey : 2/28/2005 1:28:19 PM

01:00 Internals at this Link

Jonathan Levinson : 2/28/2005 1:27:44 PM

The short cycle oscillators were buried in oversold and have been ticking up, not yet in an upphase. This coincides with the sideways drift above the session lows, and looks like corrective bear flag action. A break above 37.15 will be the first sign of trouble for bears, and both the short and 30 min cycles should begin upphases above 37.20. A break below 37.03 on expanding volume should see a resumption of the drop.

Jeff Bailey : 2/28/2005 1:27:23 PM

Buy/Sell Program Premiums ... other than at the opening cash market tick, no buy, or sell program premiums have been generated today.

Linda Piazza : 2/28/2005 1:19:54 PM

According to the OEX's 7-minute Keltner chart, it's still vulnerable to lower prices, now down to about 572.14. The daily Keltner charts shows possible support just above 574, however.

Linda Piazza : 2/28/2005 1:09:24 PM

The advdec line still continues lower. That's good news for bears.

Linda Piazza : 2/28/2005 1:09:06 PM

GE still holds above the confirmation level of its H&S. The BIX attempts a bounce from its 200-ema, with the -sma just below. The TRAN steadies near 3735. The SOX attempts a so-far-small bounce from its LOD. The OEX steadied just above 373.60. This is a dangerous point for bears. It's natural to see a bear flag bounce or two on a day of declines, but if the bounces get away from the bears here, the bulls could be emboldened.

Jonathan Levinson : 2/28/2005 1:07:54 PM

The bid-to-cover ratio on the 21B 13 week treasury bill auction was 2.06, of which indirect bidders (ie foreign central banks) took 4.9B. For the 18B 26 week bill auction the bid-to-cover ratio was 1.94, with indirect bidders taking 3.5B of the total.

Jeff Bailey : 2/28/2005 1:29:34 PM

01:00 Market Watch at this Link 01:00 Internals at this Link Friday's Internals at this Link

Jonathan Levinson : 2/28/2005 1:02:00 PM

QQQQ 100-tick chart update: Link

Jeff Bailey : 2/28/2005 12:57:46 PM

Current OPEN MM Profiles at this Link

Linda Piazza : 2/28/2005 12:55:21 PM

For the last 45 minutes, the TRAN has been steadying near 3735. If it's successful in holding at this level, it will have maintained its breakout status on the 15-minute chart, but the five-minute chart is starting to show resistance converging overhead again. The TRAN needs to bounce and bounce hard or it's vulnerable to 3715.40 at least, if not to 3690.20.

Jeff Bailey : 2/28/2005 12:53:17 PM

Dow Diamonds (DIA) $107.50 -0.79% ... have slipped below WEEKLY Pivot. Breadth negative at 26 to 4, but earlier strength names now finds just WMT $51.97 +0.97% holding tough. AA $31.77 +0.44%. Percentage losers remain GM $35.28 -4.36%, AIG $66.71 -2.39%, PG $53.28 -1.67%, UTX $99.70 -1.3% and PFE $26.53 -1.19%

Linda Piazza : 2/28/2005 12:42:35 PM

This morning, the RLX rose up to test, once again, the broken trendline of its bear flag that began forming in mid-January. Since breaking through that bear flag, the RLX steadied ahead of a new low and rose along the underside of that former support. Currently, it sinks lower after that test of the former trendline, but is not yet below 434-ish potential support.

Linda Piazza : 2/28/2005 12:40:39 PM

At 361.38, the BIX edges ever close to its 200-sma and -ema, as well as the 360 S/R level.

Jonathan Levinson : 2/28/2005 12:40:14 PM

Ten year treasury yields have daily bollinger resistance at 4.349%, with the daily cycle oscillators now in overbought territory. Bond bears will want to see TNX hold above 4.3%- but the daily cycle is at levels from which a downside reversal is becoming more likely.

Tab Gilles : 2/28/2005 12:38:28 PM

Looking at the EUR/USD hourly chart over the past week or so. Testing the 1.3270 level. I'd mentioned on Friday that the 1.3265 level was an upside target. Further analysis appears to set up an inverse H&S pattern if the EUR/USD pulls back over the next day. Maybe to early to call...but keeping an eye on it though.

Linda Piazza : 2/28/2005 12:33:15 PM

The OEX's 50% retracement of the rally off Tuesday's low lies at about 573.20, and I'd certainly know ahead of time how I was going to handle a test of 573.20-573.60 despite that 572-ish downside target set by 7-minute Keltner charts.

Linda Piazza : 2/28/2005 12:32:45 PM

According to the OEX's 7-minute chart, the OEX continues to be vulnerable to 572.11. Resistance converges near 575.40.

Jeff Bailey : 2/28/2005 12:30:02 PM

U.S. Dollar Index (dx00y) 92.39 -0.31% (30-min delayed) ... updated WEEKLY Pivot retracement at this Link

Linda Piazza : 2/28/2005 12:28:16 PM

Careful, bulls and bears both. The BIX drops toward a retest of the 200-sma and -ema on its daily chart. A sustained drop below those averages and through 360 would negate Friday's negation of the H&S. (In this case, two negatives make a negative, in a deliberate play on words.) There's danger for bears, too, though, in that this could just constitute a natural retest. The shape of the decline, not looking corrective at all, argues that this is not just a simple retest, however, and something perhaps more dangerous to bulls. Have to see what happens next, though.

Jonathan Levinson : 2/28/2005 12:26:54 PM

There's confluence support on the 30 min chart at 37.05, followed by 36.95. The 30 min cycle downphase is roughly halfway done according to the oscillators, with price drilling the channel bands lower. The 7200 tick SMA is down to 37.30, and QQQQ remains bearish below 37.20. TNX continues to rise as QQQQ falls, up 7.9 bps at 4.351% now. The 3 and 6 month treasury auction results are due in a little over half an hour.

Linda Piazza : 2/28/2005 12:25:33 PM

GE drops back toward the LOD, not quite there yet.

Linda Piazza : 2/28/2005 12:16:58 PM

Here's an OEX daily chart that I posted Friday, with Friday's original annotations: Link The OEX is approaching support beginning about 573.60, so the damage isn't great as yet, but the shape of the decline is disturbing to bulls, at least.

Jonathan Levinson : 2/28/2005 12:16:02 PM

Big move higher in ten year treasury yields, TNX +6.5 bps at 4.337%, a 1.52% jump for the day. QQQQ is cracking 37.20 now, with 30 min channel support down to 37.14.

Linda Piazza : 2/28/2005 12:13:04 PM

The OEX has now approached its 10-minute 100/130-ema's at 475.03 and 574.61. This could be at least temporary support for the OEX, perhaps sending it up to retest the neckline of the H&S broken through a few minutes ago or the 21-ema, broken through earlier this morning. The 7-minute Keltner chart suggests that unless the OEX bounces strongly now, however, it's vulnerable to 572.22.

Linda Piazza : 2/28/2005 12:10:59 PM

Earlier today, the BIX broke above the supposedly bearish "b" distribution pattern, but now it turns lower again dropping toward the 10-minute 100/130-ema's. The more-important daily 200-sma and -ema's are at 360.46 and 360.72, with the BIX currently at 362.08.

Linda Piazza : 2/28/2005 12:09:07 PM

The SOX is just above the 200-week sma.

Linda Piazza : 2/28/2005 12:08:27 PM

The TRAN drops heavily toward a 50% retracement of the day's range, with that level at 3728.78 and the TRAN now at 3738.62.

Jeff Bailey : 2/28/2005 12:11:14 PM

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

Jonathan Levinson : 2/28/2005 12:01:24 PM

QQQQ has now broken Friday's low. 30 min channel support descends to 37.20 here, but that level will drop so long as QQQQ holds below 37.33.

Jeff Bailey : 2/28/2005 12:00:30 PM

Sirius Sattelite (SIRI) $5.51 +6.99% ... #3 on the most active list.

Tab Gilles : 2/28/2005 12:00:08 PM

SMH Semi Holders daily chart. Resistance at 35. Link

Jeff Bailey : 2/28/2005 11:59:41 AM

XM Satellite Radio (XMSR) $31.28 +8.87% ... company said today that it is raising its monthly service charge to $12.95 per month from $9.99 as of April 2. Subscribers could lock in their current rate or better by prepaying for periods ranging from one to five years.

Linda Piazza : 2/28/2005 11:58:58 AM

GE still just a few cents away from where it was the last time I mentioned it. No great confirmation of weakness yet.

Linda Piazza : 2/28/2005 11:58:17 AM

The OEX is tentatively confirming a H&S on intraday charts. Bears don't want to see a quick bounce now. There's potential Keltner and 100/130-ema support just below.

Jonathan Levinson : 2/28/2005 11:57:33 AM

Session low for ten year treasuries here at 111 7/32, with TNX +3.2 bps at 4.304%, despite a second repo from the Fed's open market desk, this one a 3-day 3B repo. That brings the day's net add to a whopping 9B, and yet the treasury and equity markets are both red.

Tab Gilles : 2/28/2005 11:51:14 AM

$SOX.X Pullback in semi's? 60 minute chart. Link

Jonathan Levinson : 2/28/2005 11:46:00 AM

QQQQ is bouncing from an intraday double bottom at 37.33, currently challenging 7200 tick SMA resistance again at 37.45. The intraday action is degenerating into sideways chop, with light volume, but with a downward drift under the influence of the 60 min cycle downphase. QQQQ remains bearish below the SMA line and merely choppy below 37.57. It will take a strong break above 37.60 to overcome the 60 min downphase, and with volume set up to be light for the day, the bulls will be light on fuel with which to do it.

Linda Piazza : 2/28/2005 11:45:16 AM

The SOX rose again. It's been forming a series of lower five-minute highs today. Bulls want to see a five-minute high above the last one, as a start, and bears want to see the pattern of lower highs continued. The last five-minute high was 445.59, with the SOX at 443.89 as I type and perhaps beginning to turn lower again.

Linda Piazza : 2/28/2005 11:36:38 AM

The OEX's 7-minute Keltner chart again shows it vulnerable to a downturn toward 575.34-575.82.

The potential for a H&S still exists, too. The OEX approaches the 576.28 confirmation level, with the OEX at 576.89 as I type. Time for either a rejection of the formation (and a presumed zoom higher) or a confirmation of it.

Linda Piazza : 2/28/2005 11:34:59 AM

GE still just about where it's been most of the day--between the gap resistance above and the neckline of a H&S below.

Jeff Bailey : 2/28/2005 11:34:48 AM

U.S. Dollar Index (dx00y) 82.35 -0.37% (30-min delayed) ... has been holding WEEKLY S1 early. Gold bugs need further weakness to spark an intra-day rally. $HUI.X 215.94 +0.26% ... WEEKLY Pivot Levels ... 207.04, 211.35, Piv = 214.58, 218.89, 222.12 Newmont Mining (NEM) $45.10 +0.62% ... WEEKLY Pivot Levels ... $42.51, $43.67, Piv= 44.45, $45.61, $46.39.

Linda Piazza : 2/28/2005 11:27:06 AM

I still see mixed messages wherever I look. The SOX is testing its 200-week sma after moving above it last week and after getting slapped back after a test of 450 today. The TRAN charged higher this morning. It has pulled back off its HOD, but not far back yet. Its action hasn't mimicked the SOX's just yet. The BIX can't build on last week's gains, but it hasn't fallen back below the 200-ema and 200-sma, or the neckline of its H&S, either. Some of these bellwether indices are going to have to pull together before indices can make much progress either direction.

Linda Piazza : 2/28/2005 11:20:08 AM

Still watching the SOX and its action does not look great for the bulls. It's currently above the 200-week sma, however, but only about a point above that average, with the average at 440.48. Bulls do not want to see the SOX drop below that averages.

It's possible that this action is just a retest of the 200-week sma, but the way the SOX was slapped back from 450 doesn't look great.

Jonathan Levinson : 2/28/2005 11:18:49 AM

Session low for ten year treasuries, with TNX +1.8 bps at 4.29%.

Linda Piazza : 2/28/2005 11:12:22 AM

Potential remains for the OEX to form a H&S on the top of the Tuesday-Friday rally, but we've seen a number of these invalidated over the previous weeks, too. Bears would like to see the OEX roll over from below about 578.40 and roll down below 576.29, the approximate neckline area. Bulls want to see the OEX climb above Friday's and then the 2/15 high.

Jonathan Levinson : 2/28/2005 11:12:09 AM

Headline:

11:11am YELL , USFC YELLOW ROADWAY, USF CANCEL NY ANALYST MEETING FOR SNOW

Jonathan Levinson : 2/28/2005 11:10:00 AM

QQQQ failed at 37.57 and has just broken back below the 7200 tick SMA, restoring the 30 min channel downphase. A break below the 37.33 level will confirm the intraday bearish bias, while a bounce from above that would set the stage for more net chop as the 30 min cycle would begin to oppose the ongoing 60 min cycle downphase.

Jeff Bailey : 2/28/2005 11:13:10 AM

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

Linda Piazza : 2/28/2005 11:02:22 AM

The advdec line is all the way up to 24, according to QCharts. Of course, it is climbing. So is the VIX, giving mixed messages.

Linda Piazza : 2/28/2005 10:54:22 AM

The OEX did produce a seven-minute close above the needed resistance level to undo the vulnerability to lower values--at least for the time being. Watch for a potential flattening near 578 and then another roll lower again. Bulls don't want to see a push below 576.29, confirming a neckline for a H&S, but this may be one of those days when even confirmed bearish formations see little follow through. For example, the seven-minute Keltner chart shows potential Keltner support from 575.16-575.74.

Jonathan Levinson : 2/28/2005 10:49:19 AM

The CRB is up to new highs, +2.45 at 302.68 led by cocoa, soybean and coffee futures.

Linda Piazza : 2/28/2005 10:44:23 AM

GE stable near its 100-ema at $35.38 for the time being.

Jeff Bailey : 2/28/2005 10:43:57 AM

eBay (EBAY) $42.95 +1.68% ... highs of session. Files Form 10-K with SEC today. Form at this Link

Jonathan Levinson : 2/28/2005 10:40:44 AM

QQQQ breaks above the 7200 tick SMA at clears the previous high of 37.50 as crude oil dips negative at 51.475, a session low. The 30 min channel downphase is stalling but resistance is just overhead at 37.57. Bullish traders will want to see QQQQ break and hold 37.60 to rule out this move's being a flash in the pan- so far only the short cycle oscillators are showing any kind of uptick.

Jeff Bailey : 2/28/2005 10:39:54 AM

Mylan Labs (MYL $17.34 +2.36% ... called off merger with King Pharmaceuticals (KG) $9.57 -6.63% after failing to reach a revised agreement.

Linda Piazza : 2/28/2005 10:36:43 AM

The TRAN continues higher.

Jeff Bailey : 2/28/2005 10:35:43 AM

General Motors (GM) $35.75 -3.09% and Ford Motor (F) $12.57 -3.3% both weighed lower after Banc of America Securities downgrades to "sell" from "neutral" saying both U.S. automakers would likely continue to lose market share to their European and Japanese rivals.

Jonathan Levinson : 2/28/2005 10:34:04 AM

I'm hearing from a trader in New York that a large storm is expected to hit the northeast this afternoon, and that many traders are expected to light out early, possibly reducing volume and liquidity.

Jeff Bailey : 2/28/2005 10:32:19 AM

Protein Design Labs (PDLI) $15.01 -13.38% ... lower after company announced its earnings would be delayed from today to March 14. Earnings release was rescheduled to allow for completion of audited financial results after the company's January 25 announcement of PDLI's proposed acquisition of ESP Pharma.

Linda Piazza : 2/28/2005 10:30:30 AM

Here's what the OEX's 7-minute Keltner chart currently shows: The OEX is currently challenging nearest Keltner resistance at 577.23, but not able to produce 7-minute closes above that Keltner line. Until and unless it does, the OEX looks vulnerable down to 575.04-575.68.

Jeff Bailey : 2/28/2005 10:25:46 AM

USF Corp. (USFC) $48.55 +25.09% .... higher after Yellow Roadway (YELL) $59.80 -2.46% offers to buy trucker for $1.47 billion.

Linda Piazza : 2/28/2005 10:21:31 AM

The BIX's 10-minute chart shows the BIX consolidating now in a pattern that's reminiscent of a "b" distribution pattern. As with all supposedly bearish patterns, these sometimes break unexpectly to the upside, but traditionally, they're "supposed" to break to the downside. I wouldn't be surprised to see some volatility with the BIX today, with bulls encouraged by the break back above the 200-sma and -ema's and neckline for a H&S but confused by the failure to follow through, and with bears encouraged by the failure to follow through but confused by the break back above those levels. That could result in either an absolute stalemate or a lot of zigging and zagging until either bulls or bears win out. Here's where the BIX is with respect to those levels: Link The possible "b" distribution pattern is seen on a 10-minute and not a daily chart.

Jonathan Levinson : 2/28/2005 10:20:43 AM

Session low for QQQQ at 37.35, now 7 cents from a test of Friday's low. 30 min channel support is down to 37.28, with plenty of room to run in the 30 and 60 min cycle downphases. The 7200 tick SMA is down to 37.50, and QQQQ remains bearish below it.

Jeff Bailey : 2/28/2005 10:16:34 AM

G. Willi-Food Intl. (WILCF) $7.25 +32.78% ... Israeli food import/marketer

Linda Piazza : 2/28/2005 10:14:55 AM

The OEX is obviously now below the 10-minute 21-ema, currently at 577.41, so looks vulnerable down to the 100/130-ema's on that chart, now at 574.60 and 574.19, but still rising. I wouldn't be surprised to see at least temporary support in the historical S/R level of 576 and then an attempted rise from there, and it may be the quality of that rise that tells us about next direction.

Linda Piazza : 2/28/2005 10:13:01 AM

TRIN is above the range Jane noted in her 9:06 post.

Linda Piazza : 2/28/2005 10:11:13 AM

Thanks, Jonathan, for the information in your 10:07 post.

Linda Piazza : 2/28/2005 10:09:52 AM

Here's how the TRAN looks with respect to a 32.8% envelope surrounding its 200-month ema: Link While the pattern of the pullback looks correctively, like a possible bull flag, the TRAN approaches an envelope that marks major turning points for the TRAN, reversals from both the upside the downside, as evidenced by the chart. Perhaps particularly important chart today, with today marking the end of the month.

Mark Davis : 2/28/2005 10:07:23 AM

I was just noticing that too Linda. There are only 4 little specks of green on my screen today... $TRAN, $VIX, QM and (you guessed it) GOOG

Jonathan Levinson : 2/28/2005 10:07:18 AM

The Fed's 6B net add is one of the larger ones we've seen since the last FOMC announcement, but with heavy treasury auction activity this week, there are greater liquidity pressures that the Fed may be trying to address.

Linda Piazza : 2/28/2005 10:06:59 AM

Advdec line slips lower. Either this line or the TRAN is lying about the outlook.

Linda Piazza : 2/28/2005 10:05:50 AM

Wow. TRAN at the HOD.

Linda Piazza : 2/28/2005 10:04:47 AM

Jonathan, is that net add unusually high for recent patterns? (See Jonathan's 9:57 post.) I've lost track, but I know you've been commenting on less accommodative patterns lately.

Jeff Bailey : 2/28/2005 10:03:56 AM

VIX.X 11.78 +2.52% ... DAILY Pivot Levels ... 10.52, 10.99, Piv = 11.38, 11.85, 12.24

Jonathan Levinson : 2/28/2005 10:02:48 AM

Session low for April gold at 437, +.90 on volume of 421 contracts. Ten year notes remain soft, with TNX +1.6 bps at 4.288%.

Linda Piazza : 2/28/2005 10:02:54 AM

Lots of market day left ahead, but the SOX was immediately slapped back from its test of 450, with a HOD of 449.13.

Jeff Bailey : 2/28/2005 10:12:04 AM

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

Jonathan Levinson : 2/28/2005 10:00:39 AM

Headlines:

9:59am U.S. JAN. NEW HOME INVENTORY RECORD 438,000

9:59am U.S. DEC. NEW HOME SALES REVISED TO 1.218M VS. 1.098M

9:59am U.S. JAN. NEW HOME SALES FALL 9.2% TO 1.106M ANNUAL RAT

9:59am U.S. JAN. NEW HOME MEDIAN SALES PRICE DOWN 4.8% Y-O-Y

Jonathan Levinson : 2/28/2005 9:59:54 AM

Chicago PMI 62.7 vs. 60.5 exp., prior 62.4.

Jonathan Levinson : 2/28/2005 9:57:13 AM

The Fed's open market desk has announced a 6B overnight repo with no expiries, for a net add in that amount for the day.

Linda Piazza : 2/28/2005 9:55:25 AM

On the OEX's seven-minute Keltner chart, the OEX balances on first support, but resistance beginning at 577.83-578.52 looks relatively firm. If there's a bounce, that resistance is likely to turn the OEX lower again.

Jeff Bailey : 2/28/2005 9:54:09 AM

Dow Diamonds (DIA) $108.04 -0.29% ... early strength has AA $32.01 +1.2%, INTC $24.41 +1.29% and WMT $52.28 +1.53% ... weakness finds AIG $67.50 -1.24%, GM $35.71 -3.22%, MRK $31.55 -1%

Jeff Bailey : 2/28/2005 9:50:31 AM

Program Trading Levels for Monday ... HL Camp & Company has their computers set for program buying at $+1.50 and set for selling at $-0.75.

Jonathan Levinson : 2/28/2005 9:48:00 AM

QQQQ fails at the descending 7200-tick SMA at 37.58, holding the 30 min cycle bearish. A break above that level will stall the downphase, but so long as QQQQ holds below it, the outlook remains bearish- confirmed on a breal below the 37.42 premarket low.

Linda Piazza : 2/28/2005 9:47:11 AM

GE gapped down this morning--not good news for bulls--and heads lower, back toward the $35.00-ish neckline for a H&S on its daily chart. It had bounced from that neckline last week, but as I pointed out Friday, it couldn't get above a zone that includes a lot of gaps. Gap resistance held it. Right now, it's between that gappy zone and the neckline. Link GE might not be the be-all-and-end-all of bellwether stocks that it once was, but it still ranks among the bellwether stocks. Watch how it performs with respect to the H&S neckline and that gappy zone.

Jeff Bailey : 2/28/2005 9:42:33 AM

Current OPEN MM Profiles at this Link Note: Portfolio screen capture taken just prior to the XM Satellite Radio (XMSR) swing trade short being stopped out.

Jeff Bailey : 2/28/2005 9:40:26 AM

Swing trade bearish stop alert for XM Satellite Radio (XMSR) $29.40

Linda Piazza : 2/28/2005 9:42:41 AM

Here's what the OEX's 60-minute Keltner chart shows: Unless the OEX can produce 60-minute closes above a Keltner line currently at 578.57, it looks vulnerable to a downturn to 576.48, first support, and potentially to the 574.50 zone and maybe even as low as 572.87. Fib levels snapped off the last 60-minute rally coincide roughly with some of those levels, with the 38.2% retracement at 574.56 and the 50% at 573.19.

Until a decline takes on an impulsive shape, bears can't assume that the decline is anything other than the typical retracement of a rally. Many traders look to the low VIX levels and other measures and are concerned that markets are topping out on an intermediate level, at least, but price action certainly hasn't confirmed that, and you don't want to be short while the markets rally for days or weeks. You want to see some proof. Watch the low advdec line and some of the other indices I've pointed out.

Jeff Bailey : 2/28/2005 9:37:11 AM

Biotechnology Index (BTK.X) 501.77 -4.76% ... sector loser with BIIB $38.12 -43% providing bulk of the drag.

Linda Piazza : 2/28/2005 9:35:05 AM

The SOX isn't having any of this turning-lower business this morning. It's pushed above the 2/15 high, but remains between the 200-week sma and 200-week -ema.

Remember that we have Chicago PMI and new home sales at 10:00.

Linda Piazza : 2/28/2005 9:33:19 AM

The TRAN turns lower, too.

Linda Piazza : 2/28/2005 9:32:39 AM

The BIX heads slightly lower this morning, but market bulls don't want to see it drop below (and especially close below) the 200-sma and -ema's at 360.47 and 367.45.

Linda Piazza : 2/28/2005 9:30:54 AM

For reference, the OEX's 10-minute 21-ema is at 577.59, and the OEX ha snot had a ten-minute close below it since mid-afternoon Thursday.

Jonathan Levinson : 2/28/2005 9:30:45 AM

Trucker YELL announced that it will buy USFC for $1.47B comprised of $639M in cash, $731M in YELL stock and the assumption of $99M worth of USFC's debt.

Jeff Bailey : 2/28/2005 9:28:19 AM

Teva Pharmaceuticals (TEVA) $30.63 .... its Copaxone drug is main competitor for Biogen's Tysabri.

Jonathan Levinson : 2/28/2005 9:27:14 AM

FD has announced its agreement to buy MAY in a 17B deal that will create the largest department store chain in the US.

Jeff Bailey : 2/28/2005 9:26:46 AM

MedImmune (MEDI) $24.49 ... expands ex-US distribution agreement with Abbott (ABT) for monoclonal antibodies.

Jeff Bailey : 2/28/2005 9:30:31 AM

Biogen Idec (BIIB) and Elan (ELN) both lower after companies suspended sales of their new multiple sclerosis drug Tysabri after one patient died after being treated with Tysabri in combination with Biogen Idec's multeple sclerosis drug Avonex.

Jeff Bailey : 2/28/2005 9:15:40 AM

Pre-market most actives .... BIIB $39.81 -27%, ELN $9.45 -64%, TEVA $30.5 +10.45%, MCEL $2.51 +43%

Jonathan Levinson : 2/28/2005 9:11:22 AM

The 30 min cycle had begun to roll over at Friday's QQQQ close, and the morning drop has drilled QQQQ to the lower 30 min channel support. Friday's low at 37.28 is key support below which a new 30 min cycle downphase will be in play. With the daily cycle downphase stalled on Friday's strength, this is a key battle between longer term bulls and bears, as an early abort to the daily cycle downphase would indicate weekly cycle strength. QQQQ will remain bearish below 37.60, and bears need to see that level hold as resistance past the 9:30 open.

Linda Piazza : 2/28/2005 9:04:24 AM

The OEX nears a breakout or failure point. Currently, futures are lower due to the 8:30 economic numbers, but so far, the OEX follows the 10-minute 21-ema higher, with that average at 577.57. Those currently in bullish positions should continue to follow the OEX higher as long as it's bouncing from that average. Traders with a strong belief in a rollover might already be nibbling at bearish positions, but those hoping for a rollover should perhaps follow Keene's advice from last week and wait for an impulsive move down and then a retest, with signs of bearish divergence or other such signs at the retest.

A move above the OEX's 580.08 February high should produce some buying interest, but those going long should be willing to jump back out again if such a move is met with selling.

Some indices show strength while others only approach next resistance. Some, like the TRAN, show strength, helping lead indices Friday, but look overbought on longer-term charts. The TRAN looks overbought by some measures on both a weekly and a monthly basis. On a Keltner basis, it's looking that way on a 60-minute chart, too. Crude prices near $52.00 don't help equities, and especially those in the transportation sector. For market guidance, also keep a watch on the big continuation-formation inverse H&S on the SOX's chart, neckline at about 446.90 by one version and already surpassed by another. Watch the late-November high, just under the 200-week ema at 454.41. I think the SOX has to get above both of those before market bulls are out of danger. Also watch the BIX, bouncing back above the neckline of a large and already confirmed H&S and the converging 200 -sma and -ema's Friday. Bulls don't want to see a downturn this morning below those levels again.

Jonathan Levinson : 2/28/2005 8:35:08 AM

Session lows for April gold at 437, QQQQ at 37.58, ten year notes with TNX +1.2 bps at 4.285%.

Jonathan Levinson : 2/28/2005 8:31:54 AM

Equities have flipped to negative, with QQQQ dwn to unchaged at 37.62, a session low, ten year notes down to a session low of 111 5/16 as well, TNX +.08 at 4.28%.

Jonathan Levinson : 2/28/2005 8:30:58 AM

Headlines:

8:30am U.S. JAN. CORE INFLATION HIGHEST SINCE OCT. 2001

8:30am DROP IN U.S. INCOMES REFLECTS MICROSOFT PAYMENTS

8:30am U.S. JAN. SAVINGS RATE 1% VS. 3.6% IN DEC.

8:30am U.S. JAN. CORE PCE PRICE INDEX UP 0.3%, 1.6% Y-O-Y

8:30am U.S. JAN. INCOMES FALL 2.3% VS. 2.6% DECLINE EXPECTED

8:30am U.S. JAN. CONSUMER SPENDING FLAT VS. 0.1% EXPECTED

Jonathan Levinson : 2/28/2005 7:53:21 AM

Equities are higher, with ES trading 1212, NQ 1533, YM 10842 and QQQQ +.11 at 37.73. Gold is up 1.8 at 437.90, silver +.079 at 7.38, ten year treasuries +.0625 at 111 15/32 and crude oil +.35 at 51.85.

We await the 8:30 release of Personal Income for January, est. -2.6%, personal spending, est. +.1%, and at 10AM, the Chicago PMI, est. 60 and New Home Sales, est. 1.125M.

Linda Piazza : 2/28/2005 7:01:43 AM

Good morning. The Nikkei climbed Monday, buoyed by positive economic data, although other Asian markets were mixed. European markets opened positive, too, but are currently dropping off their early highs. Our futures are near the flat-line, all dropping off the highs hit near the European open. As of 6:47 EST, gold was up $1.70, and crude, up $0.51 to $52.00. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei gapped higher Monday morning, propelled by much-better-than-expected January industrial production and January retail sales figures. Industrial production rose 2.1% against an expectation of a 1.6% rise, and retail sales climbed 2.2% against an expectation of a 0.3% increase. The Nikkei rose and then flat-lined near the high the rest of the day, closing higher by 82.35 points or 0.71%, at 11,740.60. Near or after the close, however, two companies reported disappointing news. NTT DoCoMo trimmed its net profit forecast for the fiscal year that ends in March. Since that trimming of the forecast was related to a special charge, it's not certain how the stock will be affected. Sumitomo Mitsui Financial Group said that the costs of bad loan disposals would result in a net loss for the fiscal year that ends in March, rather than the 180 billion yen net income it had proposed to produce.

Other Asian markets were mixed. The Taiwan Weighted was closed for a holiday. South Korea's January industrial output climbed 3.1% against a decline of 0.8% in the previous month, with positive sentiment engendered by that number helping to send that country's steel manufacturer Posco's stock higher by 2.1%. The Kospi gained 1.45%. Singapore's Straits Times fell 0.73%, but Hong Kong's Hang Seng gained 0.27%. China's Shanghai Composite fell 0.49%.

Most European markets started out positive, but many drop off their highs of the day. In the U.K., GFK consumer confidence declined from January's +1 to February's 0. Zero is the long-term average for this number, so it was considered a healthy number. The FTSE 100 has, however, just turned negative as this article is completed. In the U.K. and throughout continental Europe, earnings reports or updates hit some companies. In the U.K., two decliners, bank HSBC and publisher Pearson, were cited by some as capping gains. In Europe, France Telecom declined, but Telefonica traded a little higher. Air Liquide declined. J.P. Morgan raised its rating of Germany drug manufacturer Bayer to an overweight rating, however, sending that stock higher.

As of 6:51 EST, the FTSE 100 had declined 1.30 points or 0.03%, to 5,005.50. The CAC 40 was higher by 5.43 points or 0.13%, at 4,040.00. The DAX was higher by 12.01 points or 0.28%, at 4,360.65.

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