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OI Technical Staff : 3/2/2005 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The Market Monitor has been archived.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 : 3/2/2005 9:06:11 PM

Dow Diamonds (DIA) ... today's most active options. Link

Jeff Bailey : 3/2/2005 8:43:39 PM

Market Volatility Index (VIX.X) on 30-minute intervals and QCharts' WEEKLY Pivot levels at this Link As you can see, the "direction of VIX.X" isn't always indicative of PRICE direction (forgive me if I keep repeating myself). Keep this observation in mind when looking at the DIA components and their "Max Pain" levels. We may also use this in coming sessions if we see suspicious PUT SELLING combined with a LOWER VIX! Market makers will SELL options when premiums are HIGHER and buy them when premiums are LOWER. Computers set up on PIVOT LEVELS will do the same.

Jeff Bailey : 3/2/2005 7:49:39 PM

Tab ... (07:35:11) ... I guess I would tend to agree. More bullish than bearish. Buy those QQQQ's on pullbacks, but quick to sell at correlative pivot matrix levels of resistance.

Jeff Bailey : 3/2/2005 7:47:20 PM

Dow Diamonds (DIA) components with some "Max Pain" theory levels and increments at this Link

Tab Gilles : 3/2/2005 7:35:11 PM

Jeff... The $NAHL as I stated is best for BUY signals and used in conjuction with other indicators. I've found the $NASI Summation Index works on intermediate term trend reversals.

The $NASI is a longer-term version of the McClellan Oscillator and is more suited to major trend reversals. A rising Summation Index indicates the overall breadth trend is bullish, which should correspond with generally rising prices, while a falling Summation Index indicates negative breadth trend and generally coincides with a steadily falling market. Link

Currently, I'm getting a mixed signal there. But I would have to favor to the bullish side.

Jeff Bailey : 3/2/2005 7:30:17 PM

Closing Market Watch at this Link Current "Max Pain" theory levels for March DIA = $107 ($1.00 increments) SPX = 1,200 (5-point increments) SPY = $120 ($1 increments) OEX = 570 (5-point increments) NDX = 1,525 (25-point increments) QQQQ = $38.00 ($1 increments) SOX = 430 (5-point increments) SMH = $32.50 ($2.50 increments) $TNX.X = 42.50, or 4.25% (2.50 increments)

Jeff Bailey : 3/2/2005 7:07:00 PM

Pivot Matrix for tomorrow at this Link NDX/QQQQ and Dollar Indx (dx00y) see trade at WEEKLY R1s today.

Jeff Bailey : 3/2/2005 6:49:00 PM

What's it telling you Tab? Buy/sell, or hold? I've never been able to figure out the $NAHL until weeks after it all becomes clear.

Tab Gilles : 3/2/2005 6:29:09 PM

Jeff...I track the weekly $NAHL. Works best on buy signals. Link

Jeff Bailey : 3/2/2005 6:18:02 PM

Tab ... you might be on to something with CSCO (03:57:40). NASDAQ NH/NL action largely due to fewer number of new lows. Perhaps shorts covering on weakness.

Jeff Bailey : 3/2/2005 6:19:36 PM

NASDAQ NH/NL ratio chart at this Link Bullish confirmation at the two recent price inflection lows for the COMPX.

Jeff Bailey : 3/2/2005 6:04:26 PM

Closing Internals at this Link . Recent NH/NL action among NASDAQ stocks has the 5-day NH/NL ratio reversing up 3 boxes to 68%.

Jeff Bailey : 3/2/2005 4:47:02 PM

Current OPEN MM Profiles that I've made at this Link Today's activity .... Stopped out of 200 shares in Altair Nanotechnologies (ALTI) at $3.85. ($+1.13, or +41.54%) Swing trade call option in Payless Shoe and three (3) of the PSS April $15 Calls (PSS-DC) at the offer of $0.55. No stop on these, and looking for some potential short squeeze action to $17.50.

Tab Gilles : 3/2/2005 4:33:12 PM

Jeff, ...AA weekly chart looks somewhat bullish. If this economy is as Fed Chairman Greenspan stated... fairly strong, then basic material stocks should continue to do okay. Link

Jeff Bailey : 3/2/2005 4:01:45 PM

Bullish swing trade setup cancel order alert ... cancelling the order to go long a full position of Alcoa (AA) at $31.55. (from 01:46:18)

Tab Gilles : 3/2/2005 3:57:40 PM

Weekly CSCO chart...bullish divergence? Link

Linda Piazza : 3/2/2005 3:56:04 PM

Bulls and bears both have a tough decision tonight, as it appears that the OEX will end the day within that red resistance zone that represents long-term resistance. Make a decision that's right for you based on your trading style, your account balance, and other factors. For example, did you just enter a new bullish position today on the supposed breakout, intending it to be a daytrade only? If so, your answer is clear. It was intended as a daytrade and should be closed, especially as you have no cushion and probably have a small loss. If you're in a bullish trade, perhaps from 567, maybe you'll decide to go ahead and take partial profits at least, due to that long-legged doji being produced today. If you are thinking about holding overnight, do you have clearance to trade futures and could you hedge your position tonight if it looked as if markets were going to weaken? Or are you considering buying a OTM put as a hedge for a profitable position, locking in partial profit at least? Or, if you're bearish these markets, are you thinking about holding onto puts tonight since the OEX did not fully break out, and are you making some of these same decisions about whether to hedge, sell partial positions, or take other actions? There's no one right or wrong answer. I wish I could tell you definitively which way markets are going to go, but I can't. I've been worried about the TRAN's overbought status on long-term charts for a long time and what that might signal for the markets, but a breakout would be a breakout . . . if only it would stick. I don't like breakout plays on the OEX, but I do sometimes play them on other markets, and I can testify that overbought markets can get much, much more overbought while bullish positions profit. So, it's decision time. Make the decision that's right for you.

Jeff Bailey : 3/2/2005 3:54:11 PM

Dow Diamonds (DIA) with 30 components sorted by price at this Link

Jonathan Levinson : 3/2/2005 3:43:56 PM

QQQQ is trading both sides of unchanged within what appears on the 30 and 60 min charts as a slowly rolling top on both cycles. If that's the case, then today's almost-daily gravestone doji is bearish, despite the stall in the daily cycle downphase. The 30 min cycle band currently stretches from 37.55-37.80, but if the 30 and 60 min cycle rollovers are valid, then the next bounce should fail below the previous 37.75 high. The bias remains bearish here, but to reignite the daily cycle downphase, that 37.35 low will have to get broken tomorrow at the latest.

Jeff Bailey : 3/2/2005 3:48:18 PM

Microsoft (MSFT) $25.30 +0.07% ... a federal appeals court overturned a $521 million patent infringement ruling against the company. Reuters story at this Link Microsoft (MSFT) is the 27th-most heavily weighted stock in the price weighted Dow Industrials.

Linda Piazza : 3/2/2005 3:38:07 PM

It's going to be a down-to-the-wire race, isn't it? The OEX's 15-minute Keltner chart shows the OEX teetering just above tentative Keltner support near 578. If it can maintain that level on 15-minute closes, Keltner lines thin out above the current position. Next Keltner resistance is at 579.31 and then at 580.46. A breakout above that sends the OEX toward 582.34 next resistance on that 15-minute chart.

Linda Piazza : 3/2/2005 3:33:49 PM

GE is still between the confirmation level of its H&S and the resistance zone that's filled with gaps over the last several months. It's spanned the distance between the two today, but hasn't broken out in either direction.

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

The bullish divergence holds on the OEX's 15-minute Keltner chart. The OEX moves up through the resistance zone I've marked on my daily chart, carried forward from the monthly one, but it hasn't yet broken back above that zone. Bulls want to see the OEX close above 580.

Jeff Bailey : 3/2/2005 3:24:25 PM

TRIN ... 0.85 right back at DAILY Pivot. DIA $108.03 -0.18% ... just shy and under $108.16.

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

Bullish or bearish, it's possible to read something to your liking in this chart: Link If you're a bull, you see that the OEX is holding near the top of that resistance zone marked in red and that MACD may be attempting to turn higher again. If you're a bear, all you're focusing on is the long shadow left behind as the OEX attempted to punch out of that resistance zone. The truth is, the OEX is squarely inside that red zone right now and much may depend on what happens into the close. A new move above the HOD might scare shorts enough to cover, for example, ending the day with a strong candle that sprang up from support. I'm a little on the pessimistic side and think the OEX may end somewhere in that red zone, leaving both bulls and bears questioning what's next. Remember that this zone isn't a new one, drawn today just to conform to what's happening. It's been there a while.

Linda Piazza : 3/2/2005 3:13:33 PM

The BIX still hasn't made it above the 30-sma or yesterday's high, and it's negative for the day, but it also has not even touched the 200-sma and -ema, much less breached them. As I worried might happen, the BIX has bounced between support and resistance, not breaking out of either.

Linda Piazza : 3/2/2005 3:11:22 PM

Keltner-style bullish divergence was preserved on the OEX's 15-minute Keltner chart, but only tentatively. The OEX needs to make it above the current 578-ish Keltner resistance on 15-minute closes.

Jeff Bailey : 3/2/2005 3:10:28 PM

03:00 Internals at this Link

Jonathan Levinson : 3/2/2005 3:08:55 PM

Ten year treasuries closed near unchanged, with TNX +.7 bps at 4.379%, down from a high just shy of 4.4% this morning. Currently, ZN futures are down .015 at 110 49/64.

Linda Piazza : 3/2/2005 3:07:50 PM

I mentioned this morning in my 11:40 post how worried the TRAN's overbought status on the weekly and monthly charts made me about bullish plays, suggesting that players guard bullish plays. Someone buying the breakout this morning never had an opportunity to profit, at least with an OEX options play. The TRAN dropped steeply off the day's high, beginning during that stop-running time of day, when it confirmed a H&S on the five-minute chart. It's far exceeded the downside target of that formation, and the five-minute chart shows it vulnerable to 3730.48. The TRAN is at 3746.16 as I type, and it needs a five-minute close above this level to erase that downside target.

Jeff Bailey : 3/2/2005 3:03:31 PM

03:00 Market Watch at this Link

Linda Piazza : 3/2/2005 2:54:53 PM

The OEX still attempts to steady at the mid-channel level on the 15-minute Keltner chart. If it does and then bounces higher, it will have followed through with Keltner-style bullish divergence on that chart, but only barely.

Jonathan Levinson : 3/2/2005 2:50:22 PM

Former strong resistance at 37.57-.60 has just held as QQQQ support. 37.67-.70 is upside intraday confluence and should act as strong resistance on a bounce in light of the synchronized 30/60 min cycle downphases.

Linda Piazza : 3/2/2005 2:43:32 PM

The potential for Keltner-style bullish divergence remains on the 15-minute chart, although it has been erased on the five- and seven-minute charts. The OEX needs to turn around soon, though, if it's going to be erased.

Jonathan Levinson : 3/2/2005 2:41:15 PM

QQQQ in negative territory here converts the daily candle print to a gravestone doji if it were to close here. The 30 and 60 min cycles are at last in sync to the downside, with support down to 37.55- but these downphases have room to run, and should remain bearish so long as price holds south of the falling 7200 tick SMA, now at 37.78.

Linda Piazza : 3/2/2005 2:41:08 PM

Watching this trendline off the 2/22 low to see if the OEX bounces from it again: Link

Linda Piazza : 3/2/2005 2:42:17 PM

No Keltner-style bullish divergence on the five-and seven-minute charts. That was erased, too.

Jeff Bailey : 3/2/2005 2:35:53 PM

Sell Program Premium ... SPX 1,208.95, DIA $107.92

Linda Piazza : 3/2/2005 2:35:50 PM

Keltner-wise, the OEX has today erased some of the bearish divergences seen on the 5- and 7-minute charts. Currently, depending on whether the OEX can balance here near 577.50, the OEX could be showing Keltner-style bullish divergence on the five- and seven-minute charts. That's tentative, however, and what really matters is what price does, anyway. Is the OEX going to break below that resistance zone again and by how much and for how long? We may be about to get our answer soon.

Jonathan Levinson : 3/2/2005 2:35:38 PM

QQQQ breaks back below yesterday's high here.

Jeff Bailey : 3/2/2005 2:27:38 PM

April Unleaded (hu05j) $1.47 +5.00% ... WEEKLY R2 here.

Jonathan Levinson : 3/2/2005 2:26:02 PM

No sign of weakness in the CRB as the US Dollar Index pulls back off its highs- the CRB is now up .92 at 306.18, led by FCOJ, soybean, heating and crude oil futures. While gold continues to trade both sides of unchanged, May silver is up 1.13% at 7.348 here, with HUI and XAU up 1.07% and .94% respectively.

Linda Piazza : 3/2/2005 2:25:09 PM

If that had been a bull flag in which the OEX was pulling back from the high of the day--and that is what it had appeared to be--the OEX broke through it to the downside right in the typical stop-running time of day. Although I deem that a stop-running time of day, that doesn't mean prices will always reverse after those stops are run. That depends entirely on what happens when stops are hit. Are there buyers or sellers immediately stepping in? Do prices languish? Do prices continue to move in the direction of the stop-run? Right now, the OEX sits in the middle of that resistance band that I've carried forward from my monthly chart. It hasn't broken below it, but it's certainly not encouraging bulls right now, either. As I mentioned this morning, most breakout plays are not successful, and those going long on a breakout this morning may find that their plays aren't, either, but this zone does allow for a tight stop an account-appropriate distance either side of the zone.

Jonathan Levinson : 3/2/2005 2:15:20 PM

If it closes at or below current levels, QQQQ will leave a tall upside doji spike to the 38.02 high. A negative close would result in a gravestone doji, confirmed by volume that has already exceeded yesterday's 79.3M shares and is on track to reach or exceed the average of 101.3M. This would be a bearish print for the day- but for that occur, bears need to at least defend the 37.82 level, and preferably close below 37.63.

Jeff Bailey : 3/2/2005 2:13:42 PM

Swing trade bullish stop alert on 200 shares of Altair Nanotechnologies (ALTI) $3.85 -7%

Jeff Bailey : 3/2/2005 2:12:54 PM

02:00 Internals at this Link

Jeff Bailey : 3/2/2005 2:08:16 PM

TRIN 0.85 -2.29% ... rises back to its DAILY Pivot ... DIA $108.18 -0.04% ...

Jeff Bailey : 3/2/2005 2:03:21 PM

02:00 Market Watch at this Link

Jeff Bailey : 3/2/2005 2:01:18 PM

Chiron (CHIR) $38.61 +9.00% Link ... couldn't quite get through its bearish resistance trend.

Linda Piazza : 3/2/2005 2:01:08 PM

The OEX attempts to bounce from 15-minute Keltner support just above 578. This drop brought the OEX back inside that resistance zone I've had on my daily chart, but hasn't yet broken through that zone to the bottom.

Jeff Bailey : 3/2/2005 1:56:20 PM

QQQQ $37.70 +0.23% ... fades after testing correlative WEEKLY R1/DAILY R2.

Jeff Bailey : 3/2/2005 1:54:52 PM

Dow Diamonds (DIA) $108.12 -0.10% ... slips back into the red.

Linda Piazza : 3/2/2005 1:53:02 PM

The OEX now tests the top of the bullish right triangle that it broke through this morning. It's inching just a little below the top support as I type.

Jonathan Levinson : 3/2/2005 1:52:55 PM

QQQQ is testing 37.80 again after failing at a lower high- breaking south as I type. 30 and 60 min channel support is at 37.74, but the intraday bias is bearish below 37.82.

Linda Piazza : 3/2/2005 1:51:43 PM

As I'd mentioned earlier, Keltner support thins out once the OEX starts tumbling. Right now, the 15-minute Keltner chart shows next strong support at 577.97-578.68.

Jeff Bailey : 3/2/2005 1:46:18 PM

Bullish swing trade long setup alert ... for Alcoa (AA) $31.47 -0.56% ... let's go long a full position on a trade at $31.55, stop $31.30, minimum target $32.00.

Linda Piazza : 3/2/2005 1:44:06 PM

We're entering a prime stop-running time of day, so both bulls and bears need to be careful.

Linda Piazza : 3/2/2005 1:42:21 PM

So much for what the OEX's 7-minute Keltner chart "suggested."

Linda Piazza : 3/2/2005 1:39:13 PM

The OEX's 7-minute Keltner chart is suggesting the possibility that the OEX could make at least a minimal new high, up to 580.90 or so, if not higher.

Jonathan Levinson : 3/2/2005 1:37:21 PM

QQQQ has crossed back above the 7200 tick SMA, stalling the 30 min channel and both it and the 60 min channel are now drifting sideways. Bears can tolerate a retest of the session high to cap off the 60 min cycle upphase, but past 38.10 a trending move will be in place. The bears fumbled the daily cycle at 37.82, and the last ditch is for the topping 60 min cycle to hold. Anything beyond that would complete the daily cycle reversal to the upside.

Linda Piazza : 3/2/2005 1:36:18 PM

The OEX is trying to push above that 15-minute Keltner resistance, but it's not above it yet. That resistance could be strong enough to hold it back but I do notice an uptick in the advdec line over the last 40 minutes or so.

Jeff Bailey : 3/2/2005 1:30:49 PM

Broker/Dealer (XBD.X) 151.32 +1.35% ... percentage gainer among the sectors. Online traders set the theme... AMTD +4.13%, SCH +2.99%, ET +2.21%

Linda Piazza : 3/2/2005 1:29:38 PM

So far, the OEX holds where bulls would like it to hold, although the first preference might have been for a hold above 580.00. Next 15-minute Keltner resistance is just overhead as the OEX attempts a move higher, with that resistance at 580.35. Earlier, there was a 15-minute close above this same configuration of resistance, but the OEX could not maintain the breakout level despite that close. Bulls want to see it try again. The danger, of course, is that the longer the indices hang near their breakout levels without making any forward progress, the more likely it will be that intrepid bears will try their luck at sending them down again. If you're agonizing over whether the OEX will or won't continue the breakout, just set your benchmark for measuring that, and wait it out. That resistance zone that I carried forward from a monthly chart is just as good a benchmark as any: Link Set your stops an account-appropriate distance below that zone (if in a bullish play) or above that zone (if in a bearish one on a downturn through it again) and don't agonize.

Jeff Bailey : 3/2/2005 1:28:27 PM

Service Corp. Intl. (SCI) $7.78 +0.90% Link ... world's largest provider of deathcare facilities continues to impress. Changed stock symbol from SRV to SCI back in August. A trade at $8.00 would be spread triple top buy signal. Still some room to its bullish vertical count of $17.25.

Jonathan Levinson : 3/2/2005 1:23:18 PM

Crude oil is holding a 1.26% gain at 52.325 with gold and silver back to green, April gold ticking down to -.20 at 433.70 as I type with HUI and XAU up .98% and .78% respectively. Ten year treasuries are lightly negative, TNX +.7 bps at 43.78.

Jeff Bailey : 3/2/2005 1:12:40 PM

01:00 Internals at this Link Yesterday's Internals at this Link

Linda Piazza : 3/2/2005 1:08:15 PM

The OEX approaches the breakout level from the bullish right triangle this morning. Bulls want the OEX to hold above that breakout level at 578.91. On a 30-minute chart, the pullback looks like a standard bull flag pullback, but it has to be making bulls nervous anyway.

Jeff Bailey : 3/2/2005 1:01:44 PM

01:00 Market Watch at this Link

Jonathan Levinson : 3/2/2005 1:00:49 PM

QQQQ has broken below the 7200 tick SMA but bounced from 37.80. The 30 min cycle channel is taking a slow motion roll as the 60 min channel upphase begins to stall. If price holds below 37.90, then this is most likely the sideways chop as the intraday cycles top out. However, if the bears can't break 37.80 soon, an upside trending move will become more likely. Look for a directional break either above 38 or below 37.80.

Linda Piazza : 3/2/2005 12:47:53 PM

GE has climbed today, posting strong gains, but it's moved back up to challenge that gappy zone that stopped its advances earlier in the week.

Linda Piazza : 3/2/2005 12:43:00 PM

Bulls do not want to see the OEX close the current just-begun 60-minute period below the mid point of the second hour's range. That would complete the evening-star pattern on the 60-minute chart. That midpoint lies at 578.33.

Linda Piazza : 3/2/2005 12:40:56 PM

The OEX holds above 579 so far, but it fell below first Keltner support on the 7-minute chart. The trouble for bulls is that Keltner support thins now below this level, with only single lines. One of those might catch the OEX, but there is no convergence of lines that looks strong.

Jeff Bailey : 3/2/2005 12:40:16 PM

Russell 2000 Index (RUT.X) 640.56 +0.31% Link ... challenging February resistance intra-day.

Jonathan Levinson : 3/2/2005 12:38:52 PM

QQQQ is now resting on flattening 7200 ticks SMA support. Volume remains light and the price pattern remains flaggy- 37.80-.82 is still looking like the key level between bull and bear territory.

Jeff Bailey : 3/2/2005 12:35:59 PM

Autozone (AZO) $98.33 +1.02% ... stock has been all over the map this morning after falling as low as $95.72 then ramping to as high as $99.90. Earnings conference call company said revenue growth has been keeping pace with market and doesn't believe it is losing market share. Gross margin improvement has been coming from cost cutting and not the raising of prices.

Jeff Bailey : 3/2/2005 12:32:39 PM

McData (MCDT) $3.78 +4.70% ... higher after filing showed Director Alex Mendez purchased 100,000 Class A shares.

Linda Piazza : 3/2/2005 12:32:25 PM

The OEX's 7-minute chart shows next Keltner support just below 579.75 (closing basis). Bulls would like to see that support hold and the OEX break out above the day's 580.50 high.

Linda Piazza : 3/2/2005 12:18:12 PM

So far, the OEX hangs in there, but there's danger of a doji being completed on this 60-minutes' candle. That would be concerning after the previous tall white candle, especially with the concern that the OEX might be forming a rising regression channel. That's a concern I mentioned earlier today when talking about the bullish right triangle, and their tendencies sometimes to reform in this manner. Bulls don't want to see the OEX roll down through that channel now, even if it is a rising channel. Remember, though, that an evening-star reversal signal requires confirmation.

Jonathan Levinson : 3/2/2005 12:15:13 PM

The short cycle downphase is so far generating zero traction for QQQQ, and the move off the session high is flat/sideways, taking the form of a bull flag below 37.95. The 30 min channel is rounding out and trying to roll over, but it's all noise above 37.82- above that level, the benefit of the doubt goes to the bulls, while below it, the bull flag will fail.

Jeff Bailey : 3/2/2005 12:14:29 PM

XM Satellite Radio (XMSR) $33.95 +2.04% ... either side of its WEEKLY R1 ($34.13) today.

Jeff Bailey : 3/2/2005 12:13:31 PM

Sirius Satellite Radio (SIRI) $6.00 +1.86% ... edges above yesterday's high.

Jeff Bailey : 3/2/2005 12:11:12 PM

12:00 Internals at this Link Both NYSE and NASDAQ 5-day NH/NL ratios crossing above their 10-day NH/NL ratios.

Linda Piazza : 3/2/2005 12:06:58 PM

The TRAN erased the Keltner-style bearish divergence that was showing up on its five-minute chart yesterday, but perhaps not yet that on the 15-minute chart.

Linda Piazza : 3/2/2005 12:05:04 PM

First 15-minute Keltner support for the OEX is at 578.84 (on a 15-minute closing basis), near the breakout level. Bulls would most like this to hold. Next support is at 577.30-577.60. Bulls really need that to hold or the smallest Keltner channel is turned lower again.

Jeff Bailey : 3/2/2005 12:03:12 PM

12:00 Market Watch at this Link

Linda Piazza : 3/2/2005 11:55:57 AM

The BIX still hasn't topped yesterday's high. The SOX still hasn't topped last week's.

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

The OEX is holding above the breakout level, but it's producing spiky 15-minute candles, too, not particularly encouraging for bulls. It may need to pull back to next support, and bulls want to see that support above 579, if they have their druthers.

Jonathan Levinson : 3/2/2005 11:52:04 AM

QQQQ volume has reached 55M shares today, compared with yesterday's 79.3M total. This upside spike took place on high volume. The bearish view has to focus on the degree to which the price got ahead of the 30 and 60 min cycle oscillators, which, if price reverses from here, will leave a steep bearish divergence. For that to occur, price needs to break back below the 37.82 level from here.

Linda Piazza : 3/2/2005 11:40:06 AM

The TRAN's overbought status on the weekly and monthly chart worries, worries me, so I'd keep a close watch on bullish plays, going with the flow but remaining watchful.

Linda Piazza : 3/2/2005 11:38:47 AM

The OEX drops below 580 again, but so far remains above this morning's 578.91 breakout level. Bulls want it to stay above that level.

Jeff Bailey : 3/2/2005 11:35:19 AM

NASDAQ-100 Heatmap at this Link

Linda Piazza : 3/2/2005 11:36:47 AM

This morning's OEX break above the bullish right triangle and February's high was also a break above one neckline version for an inverse H&S on the 30-minute chart: Link You know how I feel about the trustworthiness of continuation-form inverse H&S's, but that doesn't mean that I don't watch them or would trade opposite them after a confirmation. Just don't necessarily count on the OEX hitting the 590-591 upside target! (The P&F chart does have a 680 upside target, though, so that puts 590-591 in perspective, doesn't it?) Also be aware that there can be inverse H&S failures as well as regular H&S failures. So far, so good, but just be willing to jump back out again if the OEX moves back across (by an account-appropriate amount) that resistance zone I've been pointing out, carried forward from the monthly chart. Some might consider the following tactic: setting a first profit target near 584-586 for those with multiple call contracts, moving up stops and then following the OEX higher with the remaining positions.

Jonathan Levinson : 3/2/2005 11:34:40 AM

Not much downside considering the sharp upper bollinger violation at the highs. The longer the price stays up here, the more likely it is that we're seeing the start of an upside trending move for QQQQ's 30 min cycle.

Linda Piazza : 3/2/2005 11:29:08 AM

Similarly, the SOX needs to push above 450, but remember the 454-454 resistance level, too, formed from the December high and the 200-week ema.

Linda Piazza : 3/2/2005 11:27:53 AM

The BIX sprang up strongly and now hovers just below yesterday's resistance level at the 30-sma. Bulls need to see it push through or else this looks like more bouncing between support and resistance.

Jeff Bailey : 3/2/2005 11:28:16 AM

QQQQ $37.91 +0.74% ... I'm selling a day trade long from my own account here. In at DAILY S1, out in this DAILY R2. Thinking was that bullish Chiron (CHIR) news would give QQQQ lift, just as the negative news had created weakness.

Linda Piazza : 3/2/2005 11:22:51 AM

The OEX is jammed against 60-minute Keltner resistance, above 15-minute Keltner resistance. The 15-minute breakout sets a new upside target of 581.60. A 60-minute close above the Keltner line currently at 580.89 will be needed to set a new 60-minute target of approximately 585.60. If in a bullish position, I'd know ahead of time how I was going to treat a test of 584-586, if the OEX should reach that high.

Jeff Bailey : 3/2/2005 11:22:28 AM

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

Jonathan Levinson : 3/2/2005 11:18:33 AM

Headline:

11:13am GREENSPAN: FISCAL IMPASSE COULD LEAD TO STAGNATION

QQQQ has broken above 37.82 on a surge in volume. Bulls need to hold above 37.82 to maintain what should prove to be an upside reversal in the daily cycle downphase after several days of sideways stall. Price is exceeding 30 and 60 min cycle channel resistance, and so this is where bears should push back. If they can't get price below 37.82 at minimum, then they will have fumbled the daily cycle downphase.

Linda Piazza : 3/2/2005 11:17:53 AM

The OEX breaks above the February high. Bulls do not want to see a quick reversal now as that would smack of a stop-run. So far, no signs of that, however.

Linda Piazza : 3/2/2005 11:15:02 AM

The OEX has broken above the presumed top of its bullish right triangle, but not above its February high. One caution is that this type of formation can sometimes reform itself into a rising regression channel, so that the breakout is soon followed by a retreat through the channel. Be careful if you see an immediate reversal, but as I mentioned earlier, I'd wait for a breakout above the February high before I considered a breakout to be real.

Linda Piazza : 3/2/2005 11:12:32 AM

The TRAN also has a potential bullish right triangle at the top of its 15-minute chart, and it's about to be testing the breakout level: Link

Jeff Bailey : 3/2/2005 11:10:35 AM

11:00 Internals at this Link

Jonathan Levinson : 3/2/2005 11:04:33 AM

QQQQ above yesterday's high on relatively heavier volume is bullish. Confirmation comes on a break above 37.82.

Linda Piazza : 3/2/2005 11:03:59 AM

Keene mentioned the bullish right triangle on the ES contract earlier, and there's a similar one on the OEX, upper horizontal trendline at 578.91, lower rising trendline at about 575.55. Remember the previous January high of 580.08, with possible resistance at that level as you're making decisions about whether you want to enter on a triangle breakout to the upside, should one occur.

Jeff Bailey : 3/2/2005 11:03:53 AM

11:00 Market Watch at this Link

Linda Piazza : 3/2/2005 11:01:36 AM

The OEX moves back into a gap test.

Jeff Bailey : 3/2/2005 11:01:25 AM

Chiron (CHIR) $40.00 +12.93% ... released for trade.

Jeff Bailey : 3/2/2005 11:00:57 AM

QQQQ .... GILD +3.5%, KMRT +2.37%, EXPD +2.26%, XMSR +2.10% ... SANM -4.2%, NVLS -4.01%, COST -3.98%, LRCX -2.73%

Jeff Bailey : 3/2/2005 10:58:53 AM

Chiron (CHIR) ... still halted at this point.

Jeff Bailey : 3/2/2005 10:58:19 AM

bulls look to rumble in the Qs

Jonathan Levinson : 3/2/2005 10:56:26 AM

Session high for QQQQ here at 37.65, reversing the 30 min cycle oscillators back up and testing yesterday's highs.

Jonathan Levinson : 3/2/2005 10:55:58 AM

Bond yields have flipped back to positive territory now, up 1.3 bps at 4.383%. With the daily cycle oscillators so toppy, the onus will be on yield bulls below 4.4% resistance- it will take a great deal of commitment to get the TNX above that level without a correction or consolidation first.

Jeff Bailey : 3/2/2005 10:51:01 AM

Swing trade bullish call alert ... taking three (3) of the Payless Shoe PSS April $15 Calls (PSS-DC) at the offer of $0.55. Payless Shoe (PSS) $13.88 -5.44% here.

Linda Piazza : 3/2/2005 10:48:54 AM

The OEX still turns down from its gap test, but it's also still above the LOD. Seemingly strong support converges near 575.57 and there's other support at 574.32, but now the support near 576.71 has perhaps been turned into resistance on a 15-minute closing basis. I think bulls and bears have some sorting out to do with respect to the SOX and BIX and other indices parked between likely support and likely resistance.

Jeff Bailey : 3/2/2005 10:43:43 AM

Chiron (CHIR) ... still halted after British authorities lifted flu vaccine production halt at company's U.K. facility.

Jeff Bailey : 3/2/2005 10:41:17 AM

Current OPEN MM Profiles at this Link

Jonathan Levinson : 3/2/2005 10:38:20 AM

Session high for Nymex crude at 52.15, +.92%.

Linda Piazza : 3/2/2005 10:35:26 AM

Gap resistance holding on the OEX? Perhaps.

Linda Piazza : 3/2/2005 10:34:32 AM

The OEX is coming up to test this morning's gap, with the bottom of that gap at 577.28, and the OEX currently at 577.15. Next 15-minute Keltner resistance is currently at 578.10 with next resistance above that at 579.11.

Jonathan Levinson : 3/2/2005 10:32:43 AM

Headlines:

10:30am DOE: CRUDE SUPPLIES UP 2.4 MLN BARRELS

10:31am DOE: DISTILLATE SUPPLIES DOWN 1.8 MLN BARRELS

10:31am DOE: GASOLINE SUPPLIES UP 1 MLN BARRELS

Jeff Bailey : 3/2/2005 10:31:37 AM

Buy Program Premium ... SPX 1,208.28 , DIA $108.08

Linda Piazza : 3/2/2005 10:34:48 AM

The advdec line still climbs. GE still hovers near the confirmation level of its H&S formation on the daily chart. The SOX hovers near the 200-week sma, slightly above it as I type. The BIX remains above its 200-sma and -ema. The OEX remains below the resistance zone carried forward from the monthly chart, although it's bouncing off its LOD. Kind of in limbo here.

Jonathan Levinson : 3/2/2005 10:22:18 AM

Session high for Nymex crude just now at 51.875m with 10 minutes to go until the weekly inventory supply data. QQQQ is back to 37.50 with the 30 min cycle downphase now stalled.

Jeff Bailey : 3/2/2005 10:19:55 AM

10:00 Internals at this Link

Linda Piazza : 3/2/2005 10:17:24 AM

The OEX needs a 15-minute close above 576.80 to break above that potential "b" distribution pattern's rectangular consolidation.

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

Bearish "b" distribution pattern on the OEX's 15-minute chart or consolidation before another rise? We'll have to watch to see. The OEX needs a 15-minute close beneath the Keltner line currently at 575.48 to confirm a downside break of that "b" distribution pattern, but then there's potential support again at 574.30.

Jonathan Levinson : 3/2/2005 10:09:19 AM

Session high for ten year treasuries at 4.365%, -.7 bps.

Linda Piazza : 3/2/2005 10:07:46 AM

The advdec line is trying to climb but still bearish, I think Jane would say. Still, watch its trend. We've been in the typical first-retracement-of-the-day period, so it wasn't too surprising to see the advdec line bounce a bit, too, but bears want all that bouncing stuff to be over soon.

Greenspan and a former Fed policy maker are both speaking, with currency markets listening closely to see how the dollar might be impacted. Although there's sometimes the inverse relationship that Jonathan often mentions between the dollar's behavior and U.S. equities, that's not always a guaranteed reaction, but a lot of movement in the currency markets might translate into some in the equities, too, one direction or the other. To top that off, we have crude inventories due at 10:30.

Jeff Bailey : 3/2/2005 10:07:03 AM

10:00 Market Watch at this Link

Linda Piazza : 3/2/2005 10:03:23 AM

Good points, Keene, in your 10:01 post. It was Jeff who first taught me to watch the BIX as corroboration or a leading indicator of what might happen with the OEX, too.

Jonathan Levinson : 3/2/2005 10:02:59 AM

Treasury yields are lower, with TNX now up 1.1 bps at 4.383%. April gold is holding at 433.60, while QQQQ is up to 37.50, key confluence and 7200 tick SMA resistance. A move above that level will stall the young 30 min cycle downphase.

Jonathan Levinson : 3/2/2005 10:01:51 AM

Headlines:

9:59am GREENSPAN REPEATS SUPPORT FOR PRIVATE SAVINGS ACCOUNTS

9:59am GREENSPAN: SOCIAL SECURITY CHANGES SHOULD COME SOON

9:59am GREENSPAN CALLS FOR 'MAJOR' DEFICIT-REDUCING ACTIONS

9:59am GREENSPAN SAYS ECONOMY GROWING AT REASONABLY GOOD PACE

10:00am M A RESPONSIBLE FOR 43% OF FEB. LAYOFFS: CHALLENGER

10:00am U.S. FEB. LAYOFFS UP 17% TO 108,387: CHALLENGER

Keene Little : 3/2/2005 10:01:09 AM

Linda, your observations of the BIX (9:45) reminded me to show this daily chart which shows how price has been bouncing around its uptrend lines. After breaking its steeper uptrend from Oct 25th, price found support at its uptrend from May 2004. It then bounced back up and found resistance at the previously broken uptrend line and now finds itself between the two uptrend lines. It's also the location of both 200-dma's. It's too early to predict an ultimate outcome here but obviously a break below the lower uptrend line, which will be another break below the 200-dma's, would be quite bearish. And as the banks go so goes the market, making this index (and the Trannies) an important one to keep an eye on. Link

Linda Piazza : 3/2/2005 9:57:38 AM

The BIX still remains above those converging 200-sma and -ema's. OEX bears would certainly like to see them below those averages.

Jonathan Levinson : 3/2/2005 9:57:28 AM

The Fed's open market desk has announced a 6.25B overnight repo to replace 6.75B expiring, for a smallnet drain of 500M for the day.

Linda Piazza : 3/2/2005 9:56:35 AM

As Marc has just noted on the Futures side, the SOX is now below its 200-week sma.

Jeff Bailey : 3/2/2005 9:56:07 AM

VIX.X 12.80 +6.31% ... Daily Pivot Levels ... 11.48, 11.92, Piv= 11.92, 12.18, 12.36.

Jeff Bailey : 3/2/2005 10:21:28 AM

Chiron Corp. (CHIR) $35.42 ... stock has been halted this morning. British authorities lifting their ban on flu-shot production at the company's U.K. plant.

Linda Piazza : 3/2/2005 9:48:00 AM

The OEX tries to steady at the 15-minute Keltner support named earlier, but it's not entirely clear whether it has steadied just yet. A 15-minute close below the Keltner line currently at 574.41 would be needed to set a new downside target according to the 15-minute chart, but it seems more likely that the OEX will at least attempt a bounce from somewhere near the current level down to that level. Not sure how successful it would be unless the advdec line picks itself up off the floor.

Linda Piazza : 3/2/2005 9:45:30 AM

The BIX continues lower, but remains above the 200-sma and -ema on the daily chart, with those averages near 360.75 and the BIX currently at 363.35.

Jeff Bailey : 3/2/2005 9:45:32 AM

eLong (LONG) $11.32 -20.22 ... online travel service provider breaks to new lows.

Linda Piazza : 3/2/2005 9:40:55 AM

GE hovers at the confirmation level for its H&S on its daily chart. One best-fit version of the neckline was violated on GE's small gap down this morning, but conservative traders wouldn't want to consider that formation confirmed until GE drops below the 1/24 low of 34.95, with GE at 35.10 as I type. Remember that entering a bearish GE play with options might not be a great idea as GE has potential support at its 200-sma and ema's at 34.06 and 34.31, so that declines might be limited. Still, it's useful to watch this former bellwether stock's behavior.

Jeff Bailey : 3/2/2005 9:40:25 AM

Loudeye Corp. (LOUD) $1.93 +17.68% .... posted wider than expected loss, but guides higher for 2005.

Jonathan Levinson : 3/2/2005 9:40:26 AM

Gold has gained 3.5 off its earlier low and is now down .20 at 433.70, with HUI -.59% at 209.27 and XAU -.46% at 96.40. Crude oil closed the morning session -.05 at 51.625. We have the Challenger jobs report at 10AM.

Linda Piazza : 3/2/2005 9:37:50 AM

Those who might have entered bearish positions yesterday as the OEX appeared to move down from the 579 level now should have some gains. There's potential Keltner support near 574.37-575.46, so the OEX has moved into that next zone of support. A 15-minute close below the Keltner line currently at 574.37 would set a new downside target just below 570, but it seems likely that the OEX will attempt a bounce from somewhere within this zone during that first retracement of the day that typically begins in a few minutes. You're doing fine now, but you should have a plan in mind as to how you'll handle this level. I mentioned the need for profit-protecting plans yesterday and also the possibility that declines might not be deep. That remains to be seen. The advdec line's action certainly favors the bearish side, but some might have been bailing ahead of Greenspan.

Jeff Bailey : 3/2/2005 9:36:12 AM

Rambus (RMBS) $15.17 -11.53% ... lower after patent claims versus Infineon dismissed in Virginia case.

Linda Piazza : 3/2/2005 9:34:04 AM

The TRAN turns slightly lower this morning. The BIX does, too, although the BIX remains above its 200-sma and -ema's, both near 360.75.

Linda Piazza : 3/2/2005 9:32:55 AM

The SOX heads back once again to that important 200-week sma, with that average currently at 440.48 and the SOX at 440.81.

Linda Piazza : 3/2/2005 9:31:04 AM

The OEX continues the decline toward next Keltner support that it had begun late yesterday, but it has already dropped through several layers of that support, presumably now headed down toward 574.53-575.47 possible support.

Tab Gilles : 3/2/2005 9:24:32 AM

$GOLD Additional $GOLD chart to 8:57:44 AM post. Link

Jeff Bailey : 3/2/2005 9:26:43 AM

Pre-market most actives ... TIBX $7.34 -17% (earnings/revenue warning), SIRI $5.77 -2%, OPSW $4.76 -13% (weaker than expected earnings), NKTR $18.68 +5.5% (Pfizer and Sanofi-Aventis file new drug application for Exubera)

Jonathan Levinson : 3/2/2005 9:14:08 AM

Session low for QQQQ at 37.41, session high for April gold at 433.30. QQQQ's 30 min cycle was looking toppy as of yesterday's close, and if QQQQ bears can hold price below 37.50, conflirmed by a break below 37.30, we should see a 30 min cycle downphase sufficiently strong to pull the 60 back into sync to the downside as well. Yesterday's end-of-session bounce failed to make a new high, and did so on lower volume. Bulls will want to see a solid break above 37.70, confirmed by a move above 37.82- that would be sufficient to resolve the daily cycle stalemate to the upside. Anything less will continue to look like a pause in the downphase.

Tab Gilles : 3/2/2005 8:57:44 AM

Dollar strength has EUR/USD and gold pulling back last few days. Looks as if $428/$438 to be a trading range. Link

I took a look at a longterm chart of the $VIX, $USD and Gold last night...just to see how volatility (fear/complancency), the dollar and gold interacted over 12 years. Interesting chart. Link

Jonathan Levinson : 3/2/2005 8:56:29 AM

Mortgage applications fell for the third week in a row, with the Mortgage Index dropping 2.4% to 710.1. The Refi Index declined 9.9% to 2281.1, while the Purchase Index rose 5.3% to 440, engulfing the prior week's 1.3% decline.

Jonathan Levinson : 3/2/2005 8:47:13 AM

April gold is bouncing from a low of 430.20, now up to a loss of 1.40 at 432.50 with both CAD and Euro futures negative. Bonds are weak as well, with TNX up 1.0 bps to 4.391. Next resistance there is at 4.4% and 4.44%.

Linda Piazza : 3/2/2005 8:47:11 AM

Yesterday, this resistance held: Link A breakout above the previous February high of 580.08 should confirm a breakout above this resistance, a signal for a long breakout play for those interested in breakout plays. (Breakout plays historically have a pattern showing more unsuccessful than successful breakout plays, but with the big gains on some making up for the small losses a disciplined trader incurs.) A downturn from this resistance should signal a bearish play, with the understanding that the OEX then moves back into a congestion zone and declines might be limited. Potential support appears in about 2-point increments starting at 576, all the way down to the 50-dma just above 570.00. Either direction, bulls or bears should be willing to jump back out of a play if the OEX moves an account-appropriate amount back across that resistance zone.

As the day ended, the OEX was just pulling away from 15-minute Keltner resistance near 579. A 15-minute close above that resistance zone (dynamic, so possibly at a slightly different level this morning) will set up a potential upside test of 580.80. First slight support was at 577.74 (on a 15-minute closing basis) with next support just under 577. Strongest support appeared to be from 574.68-575.46. A 15-minute close below that would set up a downside target of 570.11, according to that 15-minute chart.

Linda Piazza : 3/2/2005 8:43:35 AM

Greenspan speaks today, at 10:00, I believe, on the economic outlook and current fiscal issues. Be watchful for strange market movements (or non-movements) produced by his appearance.

Tab Gilles : 3/2/2005 2:32:20 PM

Murphy Oil (MUR) Oil looks to be topping nearterm, looking to sell MUR if it goes below it's 10-ema stop today, even though it touched the moving average yesterday. Link Link

Those who didn't catch Jim's Market Wrap on XLE, I think would agree with his analysis. Oil is due for a pullback!

Jonathan Levinson : 3/2/2005 8:06:16 AM

Equities are lower, with ES trading 1207, NQ 1522, YM 10801 and QQQQ -.17 to 37.46. Gold is down 3.1 to 430.80, silver -.076 to 7.19, ten year treasuries down .062 to 110 23/32, and crude oil -.20 to 51.475.

There are no major economic reports scheduled for release today.

Linda Piazza : 3/2/2005 6:18:45 AM

Good morning. The Nikkei posted a gain, closing above 11,800, but other Asian markets were mixed, with more lower than higher. Many European markets turn lower, too. Our futures have edged sideways down all night. As of 5:48 EST, gold was down $3.30, and crude, down $0.13 to $51.55. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei bounced around a bit during early trading, having gapped slightly higher and then coming down to test the gap, but most of the day it balanced above 11,800. The Nikkei closed higher by 33.18 points or 0.28%, at 11,813.71, with exporters benefiting from a stronger dollar. February's Japanese monetary base increased 1.2%, at a much slower rate than January's. One source deemed it the smallest growth since April, 2001. The Bank of Japan's Governor Fukui attended the lower house budget committee meeting. Although he is relatively optimistic about Japan's economy, he asserted that he wanted to continue the easy monetary policy as long as deflationary situations might still arise.

Other Asian markets were mixed, although most covered in this report closed lower. The Taiwan Weighted lost 0.55%, and South Korea's Kospi declined 0.38%. Singapore's Straits Times climbed 0.91%, but Hong Kong's Hang Seng declined 1.50%. Chinese oil refiner Sinopec fell 3.6% in Hong Kong after Exxon Mobil said it will sell its position in the company. China's Shanghai Composite fell 1.22%. Of interest might be Australia's central bank's decision to raise interest rates by a quarter point, as expected, with inflation fears cited as a reason for the decision.

Interest-rate decisions were on the minds of investors in U.K. stocks, too, with worry about the impact of future hikes encouraging a take-the-profit attitude. Many European markets turn lower this morning, with the ECB trimming forecasts for 2005's growth to 1.6%, down from the formerly estimated 1.9%. It also lowered its estimates for inflation. January's German retail sales rose a higher-than-expected 2.1%. In the U.K., bank HBOS and insurer Prudential dropped after their earnings reports. In Germany, Bayer dropped after its earnings report, too, with concerns about margins and a lack of outlook cited as possible reasons for the negative reaction, and French conglomerate Bouygues SA declined after its release. Car manufacturers turned in mixed performances, reacting to February's U.S. sales figures. Telecom-related stocks Alcatel and Ericsson both gained in early trading, with Alcatel gaining after announcing an acquisition of Ethernet transport solutions group Native Networks and Ericsson gaining after announcing changes in the way it sets performance targets for senior managers.

As of 6:07 EST, the FTSE 100 had declined 28.70 points or 0.57%, to 4,971.80. The CAC 40 had fallen 9.28 points or 0.23%, to 4,045.70. The DAX had fallen 7.81 points or 0.18%, to 4,375.81.

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