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Jeff Bailey : 3/1/2005 11:53:20 PM

Program Trading Levels for Wednesday ... HL Camp & Company has their computers set for program buying at $+1.54 and set for program selling at $-0.70.

OI Technical Staff : 3/1/2005 9:59:59 PM

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Jeff Bailey : 3/1/2005 6:44:08 PM

Closing Internals at this Link

Jeff Bailey : 3/1/2005 6:35:31 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 3/1/2005 6:31:55 PM

Pivot Matrix for tomorrow at this Link

Jeff Bailey : 3/1/2005 6:05:51 PM

Payless Shoe (PSS) $14.68 +25.25% ... here's the conclusion to my day trader's chart at this Link Things were looking "sure thing" for my bearish target of $13.15. Trouble comes once PSS found a close above $13.75 (two levels above $13.33). Day traders should burn this chart into their minds and can be helpful for knowing what to look for in other charts you may look at.

Jeff Bailey : 3/1/2005 4:27:13 PM

Current OPEN MM Profiles that I've made at this Link Today's Activity .... Stopped out of the two (2) Newmont Mining NEM June $45 Calls (NEM-FI) at the bid of $2.00. ($+0.40, or +25%) Day trade shorted 1/2 bearish position in the underlying shares of Payless Shoe (PSS) at $13.63, but was stopped out at $13.65. ($-0.02, or -0.15%. Day trade shorted additional 1/2 bearish position in the underlying shares of Payless Shoe (PSS) at $13.50, and also stopped out at $13.65. ($-0.15, or -1.11%)

Jeff Bailey : 3/1/2005 4:16:00 PM

Bullish swing trade call option cancel alert .... I tried to buy some PSS April $15 Calls (PSS-DC) after my trade profile (03:58:37) but order didn't execute. Will monitor for an entry tomorrow. When I profiled today's day trade short I thought we'd get more of a pullback, and while we came close to target, sudden burst of buying combined with sudden lack of selling took hold. Feb. 15 short interest was/is 6.379 million shares, and while today's volume was well above average daily volume of 389,433, there may be a bigger short squeeze still to come with days to cover at 16.38.

Jeff Bailey : 3/1/2005 3:58:37 PM

Swing trade bullish call option alert ... taking five (5) of the Payless Shoe PSS April $15 Calls (PSS-DC) at the offer of $0.75. PSS $14.56 here.

Linda Piazza : 3/1/2005 4:01:46 PM

As far as categorizing the OEX's pattern today, I can't say anything other than that, at least for today, this resistance held: Link A breakout above it should be bullish; a downturn below it should be bearish, although declines could be limited. In either case, traders should be willing to jump out if proven wrong by a move an account-appropriate distance back across that resistance zone.

Linda Piazza : 3/1/2005 3:45:05 PM

At least for the moment, both the OEX and Dow turned down from the Keltner resistance levels just pointed out. It's not a big downturn yet, of course. I don't really expect it to be. I'm kind of thinking the OEX, in particular, may just consolidate sideways in a several-point range while the mid-channel S/R levels rises up to meet it, perhaps sometimes tomorrow. It may be then before we'll know if that support holds or not.

Jeff Bailey : 3/1/2005 3:42:12 PM

Elan Corp. (ELN) $8.03 +0.37% ... up just 2 cents on a whopping 81.01 million shares. Most active today.

Linda Piazza : 3/1/2005 3:38:40 PM

The OEX faces that same combination of Keltner resistance lines as those displayed on the Dow's chart in my 3:35 post. That combination also held for the OEX this morning. The OEX would need a 15-minute close above the Keltner line currently at 578.88 to set a new upside target of 580.73, but the resistance may hold again, as it did this morning.

Linda Piazza : 3/1/2005 3:36:44 PM

The Dow adheres fairly well to its 15-minute nested Keltner chart's resistance and support levels. Here's a Keltner chart showing the resistance the Dow faces: Link Note: The upside target at the purple line changed slightly from the time I typed the annotations until I snapped the chart.

Jeff Bailey : 3/1/2005 3:34:29 PM

Payless Shoe (PSS) $14.06 +19.96% ... approaching morning highs.

Jeff Bailey : 3/1/2005 3:33:43 PM

TRIN 0.74 ... approaches morning lows!

Linda Piazza : 3/1/2005 3:31:34 PM

The TRAN needs a 15-minute close considerably above the Keltner line currently at 3764.38 to break the pattern of Keltner-style bearish divergence on the 15-minute chart. The TRAN is currently at 3763.31, facing that next Keltner resistance.

Jeff Bailey : 3/1/2005 3:29:13 PM

TRIN 0.80 VIX.X 11.97

Linda Piazza : 3/1/2005 3:26:36 PM

The internals certainly haven't made this a day when it appeared a good idea to short the markets, but there hasn't been anything to trade to the upside (OEX wise) since shortly after the open, either. The OEX topped yesterday's high by one cent earlier today, but this current push hasn't even touched that level, and the OEX hasn't come close to a breakout above the February high.

Linda Piazza : 3/1/2005 3:23:22 PM

As I suggested in my 3:11 post, that brief downside violation of the TRAN's neutral triangle and the quick reversal back inside the triangle presaged a move up to test the top of the triangle. That top was a little higher than the cursor told me it was, but the TRAN did hit it, and now pulls back a little. It has not of yet broken through the top.

Linda Piazza : 3/1/2005 3:17:46 PM

INTC, TXN, FCS, CY and NSM, all companies upgraded by JP Morgan, are all seeing stock prices higher today, but not all those climbs look healthy. FCS produces a red doji above the $17.00 breakout level. TXN climbed, but so far hasn't been able to break above yesterday's high, having been quickly sold yesterday when it reached beyond $27.00.

Jim Brown : 3/1/2005 3:17:06 PM

The current bounce was brought to you by Philly Fed President, Santomero, saying the Fed sees no bubble in the housing market and economy gaining strength.

Jeff Bailey : 3/1/2005 3:15:54 PM

Buy Program Premium ... SPX 1,211.77, DIA $108.38

Jonathan Levinson : 3/1/2005 3:15:25 PM

QQQQ is reaching for the upper channel resistance lines between 37.62 and 37.66 despite the still-light volume. An upside break from here will constitute an early abort for these intraday downphases and hold the QQQQ's daily cycle downphase stalled.

I need to step away here and battle the snowstorm that arrived in Montreal this morning.

Jeff Bailey : 3/1/2005 3:14:21 PM

03:00 Internals at this Link

Linda Piazza : 3/1/2005 3:13:50 PM

GE still isn't moving. I understand that GE is no longer the be-all-and-end-all of bellwether stocks, but how far are these markets going to get without GE going along, too? I see PG and G producing inside-day candles today.

Linda Piazza : 3/1/2005 3:11:57 PM

The TRAN broke minimally below a neutral triangle that had been building today, reversed immediately and broke back inside the triangle again. That likely means that bulls are going to try running up past the upper boundary of that triangle, currently at about 3762.30. The TRAN is at 3758.95 as I type.

Linda Piazza : 3/1/2005 3:08:03 PM

According to forex markets news sources, the IMF believes that global growth may slow to 4.3% this year, down from 2004's 5%, and that higher crude costs will be to blame. U.S. specific numbers were for 3.7% growth this year and next, down from last year's 4.4%. The IMF believes that the U.S. could see inflation this year.

Jeff Bailey : 3/1/2005 3:09:24 PM

Bearish day trade stop alert for Payless Shoe (PSS) $13.65. Day trade shorts could give some room to $13.75, but now look to close out back below $13.50.

Linda Piazza : 3/1/2005 3:04:14 PM

No sooner did I upload that last post than bulls mounted an assault. The two-minute chart shows the OEX gapping higher above the previous two-minute high, climbing out of that likely bull flag. Bulls need the breakout to hold.

The 15-minute Keltner chart suggests that the OEX will face next resistance on a 15-minute closing basis just above the current level, up to 578.75.

Linda Piazza : 3/1/2005 3:02:11 PM

The OEX's 15-minute chart shows the strangest-looking pattern--15-minute candles that look like insubstantial bubbles drifting slightly higher, mostly sideways. Bulls need to produce something more substantial.

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

03:00 Market Watch at this Link

Linda Piazza : 3/1/2005 2:52:11 PM

GE at 35.19. LOD was 35.15. Remember that I'm watching GE as a bellwether stock. A neckline break of the H&S (34.95) might not meet its full downside target because the 200-sma and -ema are at 34.03 and 34.30, and might support GE even if it should confirm that H&S.

Jeff Bailey : 3/1/2005 2:51:51 PM

Payless Shoe (PSS) $13.31 ... udpated day trader's chart at this Link

Jeff Bailey : 3/1/2005 2:46:10 PM

TRIN 0.90 VIX.X 12.00

Jeff Bailey : 3/1/2005 2:45:26 PM

Bearish day trade lower stop alert ... for Payless Shoe (PSS) $13.33 +13.73% (BLUE #7) ... to $13.65.

Linda Piazza : 3/1/2005 2:41:09 PM

I'm reading that Philly Fed President Santomero is speaking on the economy and that while basically reiterating known Fed-speak about the economy, he also reiterates the thought that unit labor costs may rise, putting pressure on prices.

Jonathan Levinson : 3/1/2005 2:39:00 PM

QQQQ volume is running light at 61.2M shares so far today compared with yesterday's 96M shares and the average of 101.3M. Today's range is no wider than 30 cents, and the 2-day chart looks alternately bullish and bearish depending on the minute- very little direction apparent here: Link . The 30 min cycle downphase has gone net nowhere so far, with the 60 min stalled in mid-rollover. If the bears can't run it down with these synchronized downphases, the next upphase, marked by a high volume break of the session high, could be a doozy.

Jeff Bailey : 3/1/2005 2:38:15 PM

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

Linda Piazza : 3/1/2005 2:31:00 PM

So far, the OEX has not been able to maintain its breakout above the potential bull flag. It's falling back inside that flag and also back below the neckline of its supposed inverse H&S. Not what bulls want to see.

Jeff Bailey : 3/1/2005 2:30:22 PM

Forest Labs (FRX) $43.57 +2.03% ... having a good day today. No news that I have been able to uncover. FDA did give tentative approval to Ranbaxy Laboratories' generic Alzheimer's drug called Aricept. The approval was for 5 mg and 10 mg strength donepezil hydrochloride tablets. This drug competes with FRX's Namenda.

Linda Piazza : 3/1/2005 2:27:05 PM

GE is not able to build on any supposed rejection of the neckline of its H&S on its daily chart, which questions whether all this consolidation on top of that formation really is a rejection or just consolidation before another drop.

Linda Piazza : 3/1/2005 2:25:32 PM

In the last four minutes, the OEX has attempted a breakout above the descending regression channel on its five-minute chart, with the breakout level at about 577.50, but it's not holding the breakout level particularly well just yet. It's at 577.63 as I type.

Jeff Bailey : 3/1/2005 2:23:04 PM

Bearish day trade lower stop alert .... for Payless Shoe (PSS) $13.51 ... to $13.80

Jeff Bailey : 3/1/2005 2:21:30 PM

Bearish day trade round to full alert ... selling another 1/2 position in shares of Payless Shoe (PSS) $13.50 offer.

Jonathan Levinson : 3/1/2005 2:18:11 PM

While crude oil has recovered off its lows and is holding just below unchanged, gold remains just off the midpoint of today's decline, currently -3.80 at 433.90, with HUI and XAU still weak. Ten year treasuries are holding 1 bp below unchanged at 4.369%, while QQQQ is trading both sides of 37.55, net unchanged from this morning's cash open.

Jeff Bailey : 3/1/2005 2:17:15 PM

02:00 Internals at this Link

Linda Piazza : 3/1/2005 2:16:40 PM

Watching the Russell 2000, too. The 2/16 high was 640.59, with the RUT at 637.63 as I type. The RUT's pattern through February looks a lot like its pattern through January. In January, it then broke above the 38.2% retracement of the decline off the December high and moved up toward that 2/16 high. However, as the RUT moved up to the breakout level late last week, the pattern differed from January's. As soon as the RUT moved back up to that level in January, it broke through the next day and climbed. This time, it has consolidated a couple of days. Don't know if that's significant or just a slightly different pattern, but it became noticeable because the January and February's patterns look so similar otherwise.

Jeff Bailey : 3/1/2005 2:14:00 PM

TRIN 0.88 VIX.X 11.98

Jeff Bailey : 3/1/2005 2:13:40 PM

Payless Shoe (PSS) $13.48 +15.01% ... "softening up" a bit under $13.50.

Linda Piazza : 3/1/2005 2:10:35 PM

On the TRAN, bears keep trying to set up H&S formations on the five-minute chart and bulls keep rejecting them. For all that, the TRAN has been coiling since about 10:05, with all bulls' efforts not leading to a new HOD after that time.

Jeff Bailey : 3/1/2005 2:08:17 PM

02:00 Market Watch at this Link

Linda Piazza : 3/1/2005 2:08:08 PM

Those who might be contemplating bullish OEX plays on an upside breakout through the bull flag, if such a breakout should occur (in question as the OEX hovers near that level) should remember that the upside target isn't big--perhaps up to 579 or so--and that shortly after that, the OEX would be facing that recent 580.08 intraday high. A breakout here might be the first movement of a larger breakout, but that's still to be decided and that other resistance may be too strong for the OEX. It has been for years.

Linda Piazza : 3/1/2005 2:04:49 PM

The OEX moved above the neckline of this inverse H&S. Bulls do not want to see a quick reversal now, or as the top of the descending regression channel (bull flag?) is tested. Link The definitely do not want to see a fall back below those 2-minute 21/100/130-ema's.

Linda Piazza : 3/1/2005 1:58:45 PM

Here's what the OEX's 7-minute chart shows currently: The test of 576.89 support looks important. There's stronger support below, at about 576.40, but a drop down to that level to test that stronger support would keep the OEX's smallest Keltner channel turned lower. A 7-minute close above the Keltner line currently at 577.51 would turn that channel higher again, at least temporarily, and would move the OEX into a zone where resistance lines separate somewhat. Right now, 578.30 still looks like relatively strong resistance, though. As always a strong buy or sell program could change the whole picture, but that's what's showing up now.

Jeff Bailey : 3/1/2005 1:55:54 PM

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

Jonathan Levinson : 3/1/2005 1:50:06 PM

QQQQ springs above 7200 tick SMA resistance at 37.47, stalling the 30 min cycle downphase. An upside break from here would be very bullish, suggesting that all of today's downside has been corrective and possibly a flag. Look for resistance at 37.55, followed by 37.64, being the 30 and 60 min channel tops. Above 37.60, the intraday will shift to the upside.

Linda Piazza : 3/1/2005 1:48:55 PM

The TRAN moves higher again. To continue that Keltner-style bearish divergence, the TRAN would likely not see five-minute closes much above the Keltner line currently at 3762.26 and would perhaps not do more than briefly touch or approach 3766.29.

Jim Brown : 3/1/2005 1:47:31 PM

GM saying sales fell -12% in February. They are also cutting production -45,000 vehicles for the current quarter.

Jeff Bailey : 3/1/2005 1:44:40 PM

Payless Shoe (PSS) $13.60 +16.05 .... TRIN and VIX tie at $13.50? A PSS short would probably want to see still trending up TRIN and VIX with PSS slipping below that recent intra-day low of $13.50.

Jeff Bailey : 3/1/2005 1:42:42 PM

VIX.X 12.07 -0.08% ... has edged back above WEEKLY Pivot as session progresses, but not its DAILY Pivot (12.12).

Jeff Bailey : 3/1/2005 1:41:22 PM

TRIN 0.88 -39.31% .... session high has been 1.0 (trader's checklist)

Linda Piazza : 3/1/2005 1:39:59 PM

Here's why the OEX bounced (bottom of a descending regression channel), but now bulls want to see it above the midline of that channel, with two-minute 100 (blue) and 130-ema's located there. Link Bears want the OEX to find resistance at that midline and turn down again.

Jeff Bailey : 3/1/2005 1:36:15 PM

Payless Shoe (PSS) $13.58 +15.87% .... updated day trader's chart at this Link and decision to just short 1/2 position (explained). Level II traders may have seen that 10,000 share bid at $13.60 just as we shorted? I think that was the specialist buying back some short to a long liquidator. Now specialist will hopefully short stock down to $13.33, turn buyer for a bit, as he/she buys back current short.... stops, lets further pullback take place to $13.08. That's when we show back up hopefully!

Linda Piazza : 3/1/2005 1:28:21 PM

The BIX remains near the day's high.

Linda Piazza : 3/1/2005 1:27:56 PM

The SOX comes down for a test of its 200-week sma.

Jeff Bailey : 3/1/2005 1:27:11 PM

Payless Shoe (PSS) $13.63 +16.29% ... filled short 1/2 position at $13.63 alert. Stop goes $13.95 to begin, target to $13.15.

Jonathan Levinson : 3/1/2005 1:26:23 PM

The pattern of lower highs confirms the 30 and 60 min downphases, and it's looking like a bearish descending triangle above the 37.35 zone. If so, we can expect a surge of volume when that level breaks. Next support will be at the 37.20 level, below which yesterday's 37.14 and 37.04 lines come into view. With the daily cycle downphase still intact, yesterday's low should break, failing which that downphase will be in jeopardy.

Linda Piazza : 3/1/2005 1:25:07 PM

A GE drop below the 1/24 low of 34.95 would confirm the H&S on its daily chart, but I don't know that I'd expect to see the full downside target reached, even if the formation were confirmed. The 200-sma and -ema are at 34.03 and 34.30, respectively, so I'd certainly have profit-protecting plans in place for a test of those averages. Don't know that playing GE with puts on a H&S breakdown would be such a great idea, then, since downside might be so limited, but watching this bellwether stock still remains important for us to help measure market strength or weakness. GE is at $35.20 as I type.

Jeff Bailey : 3/1/2005 1:21:29 PM

Payless Shoe (PSS) $11.61 +16.12% ... day trade short 1/2 position here. (Disclosure... I'll be shorting this one in my own account also)

Linda Piazza : 3/1/2005 1:20:55 PM

So far, the TRAN's Keltner-style bearish divergence pattern is holding. The TRAN has not shown five-minute closes above the top Keltner resistance. Bears want this bearish divergence to continue, but would like to see it backed up by a real decline in prices.

Linda Piazza : 3/1/2005 1:21:14 PM

The SOX resisted confirming a H&S on its five-minute chart: bears don't have control just yet. However, neither did it rise up quickly in a rejection of the formation: bulls don't have complete control over the very short term, either. It's also forming a kind of neutral triangle, but one that has already narrowed to its apex, so that it might not have much relevance any longer.

Jeff Bailey : 3/1/2005 1:18:13 PM

01:00 Internals at this Link

Linda Piazza : 3/1/2005 1:16:55 PM

GE down from the open, about to be negative on the day again if it continues much lower.

Linda Piazza : 3/1/2005 1:16:10 PM

The BIX is showing a flattish neutral triangle at the top of its climb off yesterday's low. Continuation or reversal pattern? That's yet to be seen.

Linda Piazza : 3/1/2005 1:14:03 PM

The TRAN offered a warning to bears when it traded sideways instead of continuing its decline off the day's high. Now it rises to test that day's high again. However, the TRAN has been showing bearish divergence with each approach to/breach of five-minute upper Keltner resistance. If it's to continue that bearish divergence, it won't show five-minute closes too much above the Keltner line currently at 3764.87.

Jeff Bailey : 3/1/2005 1:06:56 PM

01:00 Market Watch at this Link

Jonathan Levinson : 3/1/2005 1:05:07 PM

Crude oil has recovered near 1 dollar off its lows to trade 51.60 here, -.15 for the day. On the daily chart of April crude posted with last night's Market Wrap, the 78.6% fib retracement line is at 50.30.

Jeff Bailey : 3/1/2005 1:04:08 PM

Payless Shoe (PSS) $13.58 +15.87% ... day trader's chart with upper 5-MRT (BLUE) and stacked 5-MRT (PINK) at this Link

Linda Piazza : 3/1/2005 12:54:34 PM

Here's what the OEX's 7-minute Keltner chart suggests: The OEX clings to last 7-minute Keltner support before 575.55-576.06. The OEX could try to bounce ahead of those numbers, but it looks as if resistance from 577-577.70 would likely firm up enough to hold it back unless the OEX bounces hard and does it quickly. Maybe be giving it a try as I type.

Jeff Bailey : 3/1/2005 12:56:17 PM

Day trade short setup alert .... Let's look day trade short shares of Payless Shoes (PSS) $13.55 +15.61%, on a bounce back near $13.75, stop $13.95, then target $13.15 toward today's close. Watch you VIX.X as it looks like we might soften up a bit toward the close. I will give an al_rt for this trade when I think we should go short. I don't want us getting caught up in some type of further euphoric move higher.

Linda Piazza : 3/1/2005 12:46:17 PM

Do you ever change around the way you look at charts to see if something different jumps out at you? I sometimes like to look at line charts because formations sometimes show up easier. Here's a weekly line chart of the BIX, giving a slightly weaker view than that seen by its bounce back above the daily 200-ema and -sma: Link

Jonathan Levinson : 3/1/2005 12:42:59 PM

Back to find QQQQ below 37.45 support and on its way to the 37.35 support level that stopped 4 downside spike/bad ticks this morning. A move below that level will bring the 60 min channel fully into sync with the 30 min downphase.

Ten year notes have weakened further, with TNX now up 2.2 bps at 4.381%.

Jeff Bailey : 3/1/2005 12:39:08 PM

XMSR/SIRI montage with WEEKLY Pivot levels on 5-minute day trader's chart. Link

Linda Piazza : 3/1/2005 12:33:57 PM

It's going to be one of those kinds of days, isn't it, where formations peter out and nothing changes from the early morning level? (I'm hoping that by saying this, markets will move immediately to shame me, thus getting something going.)

Seriously, however, I've been thinking about the psychology. Clearly, markets were positioned for a breakout this morning at the release of the 10:00 numbers. Didn't happen. I think it needs to happen or else bears will attempt to push prices lower again.

Jeff Bailey : 3/1/2005 12:29:25 PM

Sirius Satellite Radio (SIRI) $5.97 +7.18% ... WEEKLY R2 is $6.04. XM Satellite Radio (XMSR) $34.13 +3.51% ... WEEKLY R2 right now. I shorted some XMSR earlier this morning at $34.49, but covered here. Thought it might be a little overdone on the upside and get squared up with SIRI in the WEEKLY Pivot.

Jeff Bailey : 3/1/2005 12:24:35 PM

U.S. Dollar Index (dx00y) 82.78 +0.32% ... has been pressed at its WEEKLY Pivot (82.74) all morning after yesterday's support test of WEEKLY S1. Gold miners were/are weaker than I would have thought. I day traded some Bema Gold (BGO) from the long side yesterday, lost 3-cents per share, and stock was heavy all day. Dollar feels/looks WEEKLY R2/MONTHLY Pivot.

Linda Piazza : 3/1/2005 12:20:44 PM

The TRAN has been displaying Keltner-style bearish divergence on the five- and seven-minute charts. If that's to continue, the TRAN won't show a seven-minute close too much above the Keltner line currently at 3760.68.

Jeff Bailey : 3/1/2005 12:19:39 PM

McDonalds (MCD) $33.24 +0.48% ... see that volume spike on the last 5-minutes bar? Looks like the Golden Arches are on the "buy list" today. MCD has been bumping up against $33.32 since early morning, but hasn't been able to make a move above that level. Buy program included. DAILY R1 of $33.28 just like that of the INDU/DIA.

Jeff Bailey : 3/1/2005 12:16:23 PM

Buy Program Premium .... SPX.X 1,209.70, DIA $108.22

Jeff Bailey : 3/1/2005 12:14:15 PM

12:00 Internals at this Link

Jonathan Levinson : 3/1/2005 12:13:29 PM

Stepping away for 20 minutes here.

Linda Piazza : 3/1/2005 12:07:12 PM

OEX traders will likely have noticed that the OEX also sports a continuation-form inverse H&S at the top of its climb. If you've read my posts for long, you know that I don't trust continuation-form inverse or regular H&S's, but that doesn't mean that I don't watch them. This one has a neckline at about 578.76, depending on how the neckline is drawn. This is also near Keltner resistance on the 15-minute chart. I'm worried that confirmation might come with a quick spike and then a quick reversal might follow. I'd wait until a push above the 580.08 February high before I considered a breakout underway anyway. This is just a formation that allows us to measure bullish or bearish strength. Bears don't want to see it confirmed, of course.

Jeff Bailey : 3/1/2005 12:05:35 PM

XM Satellite Radio (XMSR) $34.12 +3.54% ... "softening up" a bit back at its WEEKLY R2 ($34.12).

Jeff Bailey : 3/1/2005 12:02:57 PM

12:00 Market Watch at this Link

Linda Piazza : 3/1/2005 12:03:05 PM

The TRAN now may be trying to complete a cup-and-handle formation on its 15-minute chart. Since such formations frequently are continuation patterns, the push above yesterday's 3767.49 high would be considered a confirmation of this formation. An envelope surrounding the monthly 200-ema suggests that the TRAN already is overbought at this level up to late December's level, so there's mixed evidence. The confirmation of the continuation formation would suggest another leg higher for the TRAN off the 2/22 low, but the monthly chart suggests that it would be fighting against overbought pressures the entire time it climbed.

Jonathan Levinson : 3/1/2005 11:56:12 AM

A surge has QQQQ flipping back above the 7200 tick SMA, stalling the 30 min downphase. Volume is light, however, and this looks like more sideways gyration within the topping 60 min cycle. A break above the session high would invalidate that interpretation.

Jeff Bailey : 3/1/2005 11:55:07 AM

Buy Program Premium ... SPX 1,210.99, DIA $108.29

Linda Piazza : 3/1/2005 11:53:53 AM

There's a roughly shaped continuation-form potential inverse H&S on the SOX's chart. Because it's roughly shaped, it's somewhat difficult to determine the neckline area, but yesterday's high and the 454.20-454.42 levels are probably more important to watch anyway than that neckline would be.

Jonathan Levinson : 3/1/2005 11:48:37 AM

QQQQ is edging lower after a spike/bad tick to 37.35. The 30 min channel is in a dowphase, with support currently at 37.35, while the 60 min channel has finally stopped rising and is only now beginning to roll over. As the 2 channels pull into sync, the downside traction should increase. On a 60 min cycle basis, the fireworks should start on a break of the 37.30-.35 confluence. In the meantime, QQQQ remains bearish below 37.55.

Linda Piazza : 3/1/2005 11:32:58 AM

One of the first to begin rolling down, the TRAN now trades sideways instead of following through on losses. Five-minute Keltner support can be found just above 3744.30 and five-minute resistance can be found just above the current 3749 position and then at 3755.44-3760.67.

Jeff Bailey : 3/1/2005 11:31:58 AM

Bullish call option stop alert ... for the two (2) Newmont Mining $43.97 -2.02% NEM June $45 Calls (NEM-FI) at $2.00 bid.

Jeff Bailey : 3/1/2005 11:30:48 AM

Biotechnology Index (BTK.X) ... 497.44 -0.11% ... slips red.

Jonathan Levinson : 3/1/2005 11:24:09 AM

Bonds have steadied in negative territory, TNX up 1.2 bps at 4.371%. Gold remains weak, bouncing from an intraday low of 431.70 to its current 433.30, down 4.40, with HUI -2.35% and XAU -2.07%. Crude oil is down .75 at 51, off an intraday low of 50.675. Euros and CAD futures remain weak.

Linda Piazza : 3/1/2005 11:21:27 AM

The SOX drops off its high of the day, but remains so far above its 200-week sma

Linda Piazza : 3/1/2005 11:20:05 AM

The TRAN falls toward next Keltner support on the five-minute chart, swith that support near 3744. Below that is perhaps stronger support near 3731.

Jeff Bailey : 3/1/2005 11:19:13 AM

Russell 2000 Index ($RUT.X) 634.01 (unch) ... slips back to unchanged.

Linda Piazza : 3/1/2005 11:18:38 AM

Advdec line H&S now confirmed.

Jeff Bailey : 3/1/2005 11:17:48 AM

11:00 Internals at this Link Yesterday's Internals at this Link

Jonathan Levinson : 3/1/2005 11:16:32 AM

Here's the break, with volume light but picking up.

Jonathan Levinson : 3/1/2005 11:12:59 AM

The 30 min cycle upphase for QQQQ has stalled, with price now hugging the flattened 7200 tick SMA and the channel starting to show a downtick. The longer 60 min channel is still rising, however, and this opposition is yielding the sideways chop we're seeing. The pattern is either a small head and shoulders top above 37.52, or its a consolidation/flag at the highs. A high-volume break above 37.65 will set up the latter, below 37.52 the former.

Linda Piazza : 3/1/2005 11:09:10 AM

No confirmation of that H&S on the advdec line. If the advdec line hovers near the neckline too much longer, that potential H&S will begin to look more like a bullish falling wedge, with an entirely different connotation, of course.

Jeff Bailey : 3/1/2005 11:05:54 AM

11:00 Market Watch at this Link

Linda Piazza : 3/1/2005 11:05:48 AM

The OEX is slipping through first Keltner support on the 7-minute chart. Keltner lines separate below the current level, so that it's difficult to tell which might support the OEX, but the assumption would be that it would likely find at least temporary support from 575.85-575.64, from lines in that region, if not earlier.

Tab Gilles : 3/1/2005 10:59:32 AM

Newmont Mining (NEM) Link

Linda Piazza : 3/1/2005 11:06:08 AM

Careful, bulls. The advdec line verges on confirmation of a H&S on its intraday chart, an event that sometimes precedes or accompanies weakness in the equities: Link Of course, a H&S can be rejected on the advdec line as easily as it can on an equity price chart. Watch this, though. This is a three-minute chart, so any implied weakness might also be short-lived.

Linda Piazza : 3/1/2005 10:54:59 AM

Still watching the BIX, SOX and TRAN, among other indices. The TRAN looks vulnerable to a pullback to 3743 and maybe to 3730. Bulls don't want to see it drop below the 3714.73 mid-afternoon low from yesterday, as that would confirm a double-top formation on the intraday charts.

Jonathan Levinson : 3/1/2005 10:51:47 AM

QQQQ broke the prior high by a penny and has backed down again, now coming in for a test of flattening 7200 tick SMA support at 37.55. A break through this level will test confluence at 37.52, and if that fails to hold, the 30 min cycle should roll over 5-10 minutes after that or on a break of 37.45, whichever comes first. Bulls need to defend this level.

Linda Piazza : 3/1/2005 10:51:24 AM

GE still isn't moving much.

Tab Gilles : 3/1/2005 10:52:22 AM

Ohhh...ohh....! Is MUR and oil putting in a nearterm top here? Link Link

Tab Gilles : 3/1/2005 10:47:33 AM

SMH Yesterday I posted this chart of the SMH where 35 presented resistance. Link Can we breakout? Link

Linda Piazza : 3/1/2005 10:46:44 AM

The OEX's five- and seven-minute charts show the OEX producing spiky candles, a sign that it might need to retreat to nearest support. Nearest support is quite close on the seven-minute chart, at 577.73 and then again at 577. The trouble is that below 577.73, support does space out a bit in about $0.70-0.75 increments. It doesn't look as firm.

Jeff Bailey : 3/1/2005 10:48:43 AM

Payless Shoe (PSS) ... $13.88 +18.68% Link has been steadily building gains since flat open and launches above its 200-day SMA. At the open, company reported Q4 loss of $26.5 million, or $0.39 per share, compared with a loss of $17.2 million, or $0.25 a share in same period a year ago. Sales fell 1.7% to $607.2 million. Sales at stores open at least a year (same store sales) fell 2.3%. However, same store sales for February rose 13.5%.

Jeff Bailey : 3/1/2005 10:34:55 AM

Continental Airlines (CAL) $11.41 +6.53% ... higher after company announced late yesterday that it has reached tentative agreements on new contracts with company's pilots, flight attendants, mechanics and dispatchers following negotiations with unions. CAL expects to achieve approximately $500 million in annual cost savings on a run-rate basis when agreements with the various work groups are fully implemented. The $500 million excludes approximately 10 million stock options that the company expects to issue to its employees in connection with pay and benefit reductions.

Linda Piazza : 3/1/2005 10:34:11 AM

Just as it became dangerous for bears yesterday when indices held just above next support, as that would encourage bulls to buy the dip, it will become dangerous for bulls for the indices to hold just below important resistance too long, with no follow through, as memories of yesterday's drops from those resistance levels will reassert themselves and encourage bears to sell.

Jonathan Levinson : 3/1/2005 10:33:05 AM

QQQQ is declining slowly off the high, which has a bull-flag feel to it, but the rising 7200-tick SMA is now approaching at 37.50. A move below this SMA would stall the 30 min cycle upphase and suggest a retest of 37.45 and then the key 37.30-.35 confluence. A bounce that breaks 37.62 should break the session high, which would confirm a resumption of the intraday uptrend.

Linda Piazza : 3/1/2005 10:26:34 AM

The TRAN has pulled back from its test of yesterday's high. Not too far yet, however. The advdec level remains strong, although I'm watching for a potential H&S formation on that line. These sometimes do corroborate or precede price movements in the equities.

Linda Piazza : 3/1/2005 10:24:37 AM

If the SOX should continue climbing, watch it near 450 and again at the 200-week ema at 454.41, just above the 12/03 high.

Jonathan Levinson : 3/1/2005 10:22:26 AM

Bonds are firming back up, with TNX down to a .4 bp gain at 4.363%. Upper daily bollinger resistance at 4.385% was tested this morning, and the 10 day stochastic continues to press higher into overbought territory. First support is at 4.32%.

Jeff Bailey : 3/1/2005 10:22:01 AM

Current OPEN MM Profiles at this Link

Linda Piazza : 3/1/2005 10:19:38 AM

BIX posting strong gains, but headed up toward the next resistance zone near 367.40.

Linda Piazza : 3/1/2005 10:19:06 AM

GE still not moving much.

Linda Piazza : 3/1/2005 10:17:46 AM

Here's how I feel about the OEX this morning. It's at this important resistance zone I carried forward from a monthly chart: Link That zone has proven itself to be important. A breakout above it should be important. A roll down below it should be important, although it could be just part of a consolidation zone ahead of another approach to it. If the OEX breaks out and you're so inclined, a trial bullish play should be to your liking, but you better be ready to jump out again if the OEX quickly reverses. If the OEX rolls down and you're so inclined, that's the time to test a bearish play, but again, be ready to jump out. The line has been drawn, and it's there for all to see. I'd sure be quick to take profits either direction, however, with profit-protecting plans at 584-585 for the upside and at 572-574 for the downside, in case that's all that's seen.

Jeff Bailey : 3/1/2005 10:17:26 AM

Bullish swing trade call place stop alert ... Placing a stop on the two (2) Newmont Mining NEM June $45 Calls (NEM-FI) at $2.00.

Jeff Bailey : 3/1/2005 10:13:59 AM

10:00 Internals at this Link

Linda Piazza : 3/1/2005 10:12:10 AM

The TRAN is approaching yesterday's high, just a couple of points away now. There is tentative 15-minute bearish price/MACD divergence, but that can be erased. Bulls want to see the TRAN push above yesterday's high and maintain that value to avoid the potential for a double-top formation at the top of a climb. The TRAN's 60-minute candles have expanded in length, making its trading pattern look more volatile, not particularly what bulls want to see at the top of a climb . . but it's still climbing.

Jonathan Levinson : 3/1/2005 10:10:44 AM

The CRB continues to march higher, up .89 to 305.89 led by cotton, sugar, coffee and lean hog futures.

Linda Piazza : 3/1/2005 10:09:40 AM

Advdec line still climbing.

Linda Piazza : 3/1/2005 10:09:15 AM

The OEX tests 15-minute Keltner resistance. Bulls want to see a 15-minute close above the Keltner line currently at 578.18 to set an upside target that will challenge the February high. Bears want to see a 15-minute close below that line.

Tab Gilles : 3/1/2005 10:08:56 AM

With the gold basically trading off of dollar weakness and inflationary prospects, a potential short term bottom has put gold in a minor correction, with $430 as nearterm support. Link Link Link

Jeff Bailey : 3/1/2005 10:06:52 AM

VIX.X 11.71 -3.06% ... DAILY Pivot Levels ... 11.35, 11.74, Piv= 12.12, 12.51, 12.89

Jonathan Levinson : 3/1/2005 10:06:02 AM

Session highs, QQQQ cracking 37.60 resistance. If it holds, next resistance is 37.82.

Jeff Bailey : 3/1/2005 10:04:39 AM

10:00 Market Watch at this Link

Jeff Bailey : 3/1/2005 10:04:03 AM

Buy Program Premium ... SPX 1,210.00, DIA $108.17

Jonathan Levinson : 3/1/2005 10:02:42 AM

January construction spending +.7% vs. +.4% exp., prior revised up from 1.1% to 1.2%.

Feb. ISM Index, 55.3 vs. 57 exp., prior 56.4.

Linda Piazza : 3/1/2005 10:01:02 AM

The OEX has not yet broken out on a 15-minute Keltner chart basis, not yet setting an upside target in the 580.10 range. It's facing immediate resistance near 578 on a 15-minute closing basis, with support trying to firm near 575.50 and again near 574.60. A strong reaction could break it out to the upside, of course.

Jeff Bailey : 3/1/2005 10:00:41 AM

Johnson & Johnson (JNJ) $66.67 +1.63% ... upgraded to "buy" at Merrill Lynch with target of $75. Firm says their price target assumes mutliple expansion and accompanies upward revisions to consensus sales and EPS estimates coupled with increased conviction in earnings accretion related to Guidant (GDT) $73.72 +0.39% acquisition.

Linda Piazza : 3/1/2005 9:58:43 AM

A couple of weeks ago, I mentioned DD's breakout above a years-long consolidation band, breaking above $50.00, and setting a new $66.00 P&F upside target. I'm still watching for a pullback so I can point it out to readers, but so far, there hasn't been one, and there may be another breakout in the making. I still don't believe I'd chase it. It's too far above important MA's on the daily chart. I heard a discussion this morning on CNBC Europe about how chemical companies might perform in the later half of 2005, and the consensus was that demand from the U.S. and China would probably lessen and costs would probably rise. Anyone considering buying DD stock/options for a long entry on a pullback, if one should ever occur, should be aware of that information.

Jonathan Levinson : 3/1/2005 9:57:50 AM

The Fed had 9B in overnight and 4 day repos expiring today, and has taken no action. Unless that changes in the next couple of minutes, that will result in a large 9B net drain.

Jeff Bailey : 3/1/2005 9:57:46 AM

XTO Energy (XTO) $44.58 -2.06% ... downgraded to "neutral" from "overweight" at JP Morgan based on valuation.

Jeff Bailey : 3/1/2005 9:56:09 AM

Evergreen Solar (ESLR) $6.56 +10.81% ... multi-year highs.

Jeff Bailey : 3/1/2005 9:53:08 AM

Intel (INTC) $24.57 +2.41% ... upgraded to "net positive" at Sesquehanna. Firm believes that the company's trough gross margins is nearing an inflection point and that INTC is well positioned to capitalize on the upcoming 64-bit Windows release from MSFT and could raise its Q1 forecast during its mid-quarter update.

Linda Piazza : 3/1/2005 9:53:04 AM

GE still can't make any headway. Link

Jonathan Levinson : 3/1/2005 9:50:41 AM

Gold remains weak, down 2.90 at 434.80, with HUI -1.17% at 212.8 and XAU down 1.19% at 97.79. Euros and CAD futures are negative as well, and the US Dollar Index is holding yesterday's gains Link with 10 minutes to go to the 10AM economic reports.

Jeff Bailey : 3/1/2005 9:49:27 AM

Elan Corp. (ELN) $8.09 +0.87% ... Piper Jaffray saying yesterday's bombshell regarding Tysabri makes doubtful drug ever returns to market. Piper believes ELN's "sum-of-the-parts" is worth $10.00 per share.

Linda Piazza : 3/1/2005 9:51:15 AM

The RLX moved just over yesterday's high but is now back below that high, falling back toward support. The formation is a little like a cup-and-handle formation, but those are often continuation formations and this one is forming inside a congestion band. Not sure how much to trust it, especially as the RLX completed a similar formation earlier in February, broke briefly above it on 2/15, and then promptly fell to its 2/24 low. I do know this: OEX traders would like to see the RLX headed the same direction as the OEX, with the stocks that are components of both contributing to the OEX's movements.

Jeff Bailey : 3/1/2005 9:47:35 AM

XM Satellite Radio (XMSR) $35.22 +6.82% ... upgraded at FBR and RBC

Linda Piazza : 3/1/2005 9:46:29 AM

This strong rise in the OEX this morning has skewed the 3-, 5-, and 7-minute Keltner charts. it will be a while before I can get reliable information from them. The 60-minute chart still shows the OEX between likely strong support and likely strong resistance, with the strong support at the 574.30-ish zone and again near 572.60-573.13, and with resistance from 578.70-579.51. From 576-578 is a congestion band on the OEX, however, so that resistance might be found anywhere near here. This all feels like positioning ahead of the 10:00 numbers, though, and so dependent on further follow through on what happens with those numbers.

Jeff Bailey : 3/1/2005 9:45:00 AM

Homebuilders .. Banc of America affirms positive stance on homebuilders, raises targets on DHI to $53 from $45, HOV to $64 from $52, CTX to $70 from $63, KBH to $127 from $90, LEN to $64 from $55, RYL to $70 from $59, SPF to $81 from $69 and TOL to $101 from $88. Lowers target on PHM to $70 from $75.

Linda Piazza : 3/1/2005 9:42:23 AM

GE is higher this morning, but I wouldn't call its movements particularly bullish. It's barely higher as yet, still below the daily 100-ema at $35.38.

Jonathan Levinson : 3/1/2005 9:40:56 AM

Don't forget the construction spending and ISM data due in 20 minutes.

Jonathan Levinson : 3/1/2005 9:45:10 AM

QQQQ update at this Link

Linda Piazza : 3/1/2005 9:39:50 AM

The markets I watch appear to be firing on all cylinders, with the TRAN moving higher, too, but also not yet above Monday's high. The bulls are pushing, but it's yet unclear how successful they'll be, but markets are being positioned under next resistance ahead of the 10:00 numbers.

Linda Piazza : 3/1/2005 9:37:58 AM

The J.P. Morgan upgrades have perhaps helped the SOX in first trading this morning, with the SOX again moving above the 200-week sma. Yesterday it pushed above this average, too, but couldn't sustain higher values, so this needs to be watched, especially as the SOX is already off its high of the day.

Jonathan Levinson : 3/1/2005 9:37:04 AM

QQQQ is reaching for yesterday's high in the 37.57-.60 confluence to complete the doji hammer that was interrupted by the closing bell yesterday. QQQQ is bullish above 37.30-.35 within the ongoing 30 min cycle upphase.

Linda Piazza : 3/1/2005 9:36:41 AM

The BIX gains this morning, still balanced above the 200-sma and -ema, but not agove Friday's high.

Jeff Bailey : 3/1/2005 9:36:38 AM

Tobacco stocks .... Morgan Stanley views tobacco industry "attractive" after Dept. of Justice tobacco trial Judge Gladys Kessler indicated that "it is not an overstatement to say that the 2-1 Opinion of the Court of Appeals, written by Judge Sentelle, has struck a body blow to the Government's case."

Jeff Bailey : 3/1/2005 9:45:53 AM

Federated Dept. Stores (FD) $56.94 +0.86% ... upgraded to "buy" at Deutsche Bank with target raised to $68 following company's acquisition of May Dept. Stores. Bear Stearns also coming with an upgrade to "outperform" from "peer perform"

Linda Piazza : 3/1/2005 9:32:33 AM

OEX 575-575.50 resistance didn't hold, but of course we have not yet had even a single five-minute close.

Jeff Bailey : 3/1/2005 9:31:03 AM

Overstock.com (OSTK) $53.41 -0.54% ... Piper Jaffray commenting that OSTK's $1 promotion to ship all orders placed during March, instead of its normal $2.95 per order rate could hurt margins.

Jeff Bailey : 3/1/2005 9:28:24 AM

Blue Martinini Software (BLUE) $3.88 +58% ... being acquired by Golden Gate Capital for $4.00 per share in cash.

Jeff Bailey : 3/1/2005 9:37:13 AM

Pre-market most actives ... SIRI $5.92 +6.2% (Volvo now offering SIRI radios), BIIB $39.20 +1.42%, ELN $8.37 +3.8%, ORCL $12.98 +0.23%, TLAB $7.09 -0.14%

Jonathan Levinson : 3/1/2005 9:03:46 AM

QQQQ is holding up at its upper 30 min channel top at 37.38, with the 30 min cycle oscillators in an upphase from yesterday's afternoon bounce. The 7200 tick SMA is currently at 37.23, with 37.30-.35 acting as confluence support. The bulls need to hold QQQQ above the SMA line to maintain the 30 min cycle upphase. While this could be set up for a gap n crap open, the 30 min cycle maintains an upside bias and suggests that a dip to support should bounce.

Linda Piazza : 3/1/2005 8:43:38 AM

Once again, the OEX turned down from long-term resistance that has been carried forward from the monthly chart: Link The SOX turned down below its 200-week sma again, and the TRAN produced a doji at the top of its climb. The BIX headed down into a test of its 200-sma and -ema's, but the BIX bounced from those averages back above the neckline of a confirmed H&S. It may be that BIX behavior that proves most worrisome to bears expecting more downside. The BIX's behavior as well as the SOX's should be watched today, with bears hoping for a BIX drop back below those 200-sma and -ema's. A J.P. Morgan upgrade of INTC, TXN, FCS, CY, and NSM will likely send the SOX higher in early trading, and we'll have to see if the higher values hold.

At the end of the day, five- and seven-minute Keltner charts showed the OEX vulnerable to the 573.50-574 level and perhaps to the 572-572.70 level as long as it continues producing five- and seven-minute closes beneath 575.50 or so. If futures hold their gains and cash markets open in accordance with futures activity, the OEX may move up to retest that 575-575.50-ish resistance first thing in the morning, and bears would want to see that resistance hold. As I suggested yesterday, bears should know ahead of time how they'll handle tests of those named support levels in case there should be strong bounces from those levels. Indices are starting to show some possible cracks in their bullish facades, but no real damage has been done yet, and J.P. Morgan is doing its best to help at least one sector lead indices higher again.

Once again, bulls and bears should watch the 580 level if the OEX should bounce that high. A 60-minute close above the Keltner line currently at 579.19 sets an upside target of 584.26. A move above the 2/15 high of 580.08 might prompt buying interest, but those entering bullish plays on a breakout should be willing to be wrong and jump right back out again if the OEX should get slapped back the way some indices were getting slapped back yesterday. A 60-minute close below the Keltner line currently at 569.27 sets a downside target of 561.89, but it seems more likely that the OEX will produce 60-minute closes within that channel from 569.27-579.19 than that it will break out.

Jonathan Levinson : 3/1/2005 8:36:48 AM

Headlines:

8:30am FED'S MOSKOW: U.S. WAGE PRESSURES AS EXPECTED, SO FAR

8:30am FED'S MOSKOW: U.S. LABOR MARKET HAS IMPROVED

8:33am MOSKOW: DISPLACEMENT TOPS ERAS OF HIGHER JOBLESS RATE

Bonds are lower following his comments, with TNX up 1.6 bps at 4.375%.

Jonathan Levinson : 3/1/2005 7:35:47 AM

Equities are higher, ES trading 1206.25, NQ 1517.5, YM 10787 and QQQQ +.11 at 37.33. Gold is down 1.70 to 436, silver -.021 at 7.334, ten year notes -.0938 at 110 25/32 and crude oil -.15 at 51.60.

We await the 10AM releases of Construction spending, est. .4%, and the ISM Index, est. 57.

Linda Piazza : 3/1/2005 6:52:28 AM

Good morning. After a brief dip into negative territory at the close of the morning session, the Nikkei climbed the rest of the day and bested Monday's closing levels. Other Asian markets turned in mixed performances. Most European markets currently gain but have not yet regained Monday's highs. Our futures are modestly higher, moving up after the European open. As of 6:24 EST, gold was down $1.40, and crude, down $0.06. More detail about Asian and European markets follows in succeeding paragraphs.

In January, Japanese household spending increased 8.2%, with that number used to compute the private consumption component of GDP. January's unemployment remained at the previous 4.5%. The Nikkei opened in positive territory, dipped into negative territory by the close of the morning session, but climbed throughout the afternoon session. It closed at its high of the day, up 39.93 points or 0.34%, at 11,780.53. The private consumption and unemployment numbers sent some retailers higher, particularly Aeon. NTT DoCoMo and Sumitomo Mitsui Financial Group saw the reactions from the separate news they'd divulged near or after the close Monday. NTT DoCoMo had trimmed its profit forecast for the fiscal year that will conclude at the end of this month, and lost 1.7% Tuesday. Investors sent Sumitomo Mitsui Financial Group lower in early trading after its late-Monday lowering of expectations due to costs incurred in disposing of bad loans, but the stock recouped its losses in the afternoon and closed flat.

Other Asian markets were mixed. The Taiwan Weighted gained 0.84%. South Korea's Kospi was closed for a holiday. Singapore's Straits Times gained 0.27%, but Hong Kong's Hang Seng fell 0.95%. Hong Kong's HSBC led that country's bourse lower. China's Shanghai Composite declined 0.20%.

Most European markets trade in the green this morning. February's Manufacturing PMI numbers are coming out across Europe, with Germany's falling to 52.2 from January's 52.4. This was an expected result. Although the number remained above the 50 benchmark, new exports orders decreased. The employment component was still below 50. Italy's PMI rose to 50.6 from the previous 50.1. France's rose, too, and the eurozone February number was steady at 51.9. New orders decreased here, too, but employment rose. The eurozone headline number was higher than expected. The eurozone February CPI rose to 2.0% year-over-year, with a monthly increase of 0.3%. Higher oil prices contributed to that rise, but overall, the number was reassuring in its outlook on inflation.

Bourses rose after these numbers were released, but an earnings disappointment by Dutch telecom KPN hit that company and may have impacted other telecom stocks. Some biotechs posted strong gains as Sanofi-Aventis released earnings and Deutsche Bank upgraded Serono and Schering to buy ratings. Those companies upgraded by Deutsche Bank will benefit from the suspension of sales in multiple sclerosis drug Tysabri, as both manufacture competing drugs. On CNBC Europe, much attention focused on French chemicals group Rhodia, falling after releasing earnings. Chemicals companies turn in mixed performances this morning, with Rhodia dropping. Merrill Lynch lowered its rating to a sell rating.

In the U.K., consumer credit rose in January, as did mortgage lending and credit card lending. Mortgage approvals steadied. Lender Nationwide reported that house prices increased 0.5% month over month in February, slowing to 10.2% annually, and commented that the housing market had bottomed out and might pick up as buyers returned. These results and earnings results liked by investors helped send the FTSE 100 higher. Not all companies' results were well-received, however. Boots Group blamed a slowdown in consumer spending in some areas for a lowered profit forecast, with the stock plummeting as a result.

As of 6:34 EST, the FTSE 100 had gained 16.30 points or 0.33%, to trade at 4,984.80, having lost 5,000 yesterday in a steep decline after U.S. markets showed weakness. The CAC 40 had gained 17.11 points or 0.42%, to trade at 4,044.27. The DAX had gained 15.01 points or 0.35%, to trade at 4,365.50. None of these three had yet regained Monday's highs.

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