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Tab Gilles : 3/15/2005 12:45:44 AM

Is the $VIX signaling a near term buy on the $SPX??? Link

Jeff Bailey : 3/14/2005 11:31:29 PM

Program Trading Levels for Tuesday ... HL Camp & Company has their computers set for program buying at $+5.85 and set for program selling at $+3.35.

OI Technical Staff : 3/14/2005 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The Market Monitor has been archived.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 : 3/14/2005 5:44:42 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 3/14/2005 5:29:46 PM

Closing Internals ... at this Link

Jeff Bailey : 3/14/2005 5:32:53 PM

You're welcome Mark: I needed to look at the QQQQ within a DAILY Pivot perspective to try and get a feel for what a trader/computer might have been doing during the day, then try and think what impact the DNA news might have had on things, to then try and figure out what the trader/computer might be looking to do tomorrow.

Mark Davis : 3/14/2005 5:08:39 PM

Thanks Jeff!

Jeff Bailey : 3/14/2005 5:10:05 PM

Mark : Yes... an order that was put together during the day, then billed to the client at $37.11. My view would be a trader wants to look long at DAILY S1, and more of a seller back toward DAILY R2. If we were to see some weakness tomorrow morning, let the QQQQ pull in, maybe TRIN will rise to its DAILY R2, then bulls can give'm he@@ from the bullish side at DAILY S1 in the QQQQ with a rather tight stop (look for TRIN to then reverse and confirm buying). The QQQQ was trading about $37.14 when DNA (not a component of the QQQQ, but biotech implications) rose to their close.

Jeff Bailey : 3/14/2005 5:02:38 PM

Hmmmm.... while there may have been more than the two big blocks I've noted in the QQQQ (today and several weeks ago at $37.57) I see both those levels in tomorrow's DAILY Pivot Matrix.

Mark Davis : 3/14/2005 4:58:50 PM

Jeff is that QQQQ block trade something a market maker worked on all day and just reported? QQQQ is trading 23 cents above 37.11. I'm not sure whether to interpret your post as bullish or bearish.

Jeff Bailey : 3/14/2005 4:58:11 PM

Big block alert ... 5.39 million shares billed out at $37.11 in the QQQQ (16:49:01)

Jeff Bailey : 3/14/2005 4:52:19 PM

Pivot Matrix for Tuesday at this Link

Jeff Bailey : 3/14/2005 4:30:33 PM

Current OPEN MM Profiles that I've made at this Link Today's Activity ... Day trade short shares of IBM (IBM) at $91.73, but was stopped out at $91.90. ($-0.17, or -0.19%).

Linda Piazza : 3/14/2005 3:58:31 PM

The OEX attempts to push above the 30-sma. Touch and go as to whether it will make it today--looks as if it might--but my brain wasn't working earlier. The 50% retracement of Friday's range is higher than that MA, up at 576.08, nearly a point above the 30-dma, and it seems less likely that the OEX will make it that high, so that it's likely to close in the bearish half of Friday's range.

Jeff Bailey : 3/14/2005 3:55:01 PM

Genentech (DNA) $54.73 +24.13% Link ... intra-day trade at $51.00 gets stock back on a PnF buy signal with initial bullish vertical count to $75. Sellers have been formidable below $56.00, but a trade there would trigger a spread triple top buy signal.

Linda Piazza : 3/14/2005 3:47:32 PM

Today the OEX has been challenging the 50% retracement of Friday's range, backed up by the daily 30-sma, with that average at 575.24. Bears want the OEX to end the day below that level, in the bearish half of Friday's range.

Jeff Bailey : 3/14/2005 3:46:41 PM

Genentech (DNA) $53.66 +21.61% ... released for trade.

Linda Piazza : 3/14/2005 3:45:45 PM

The BIX has inched back above the 200-sma, but it's having difficulty moving much above that important average.

Jeff Bailey : 3/14/2005 3:45:18 PM

Biotechnology Index (BTK.X) 507.52 +4.38% ... QQQQ $37.27 +0.24% ....

Jeff Bailey : 3/14/2005 3:44:36 PM

Dow Diamonds (DIA) $107.98 +0.11% .... IBM $91.87 +0.39% ... MMM $85.92 +0.33% ...

Jeff Bailey : 3/14/2005 3:42:56 PM

Genentech (DNA) $53.05 +20.34% ... I've still got the stock as halted for trade.

Linda Piazza : 3/14/2005 3:38:48 PM

The OEX pulls back for now from a test of the 50% retracement of Friday's range. The 15-minute formation (confirmation of a double-bottom formation) is not one that encourages new bearish entries, though. Sigh.

Linda Piazza : 3/14/2005 3:33:35 PM

I would like to look at the OEX's 60-minute nested Keltner channel, but QCharts doesn't want me to do that, so I'm studying the 15-minute chart instead. The Keltner line that has been turning the OEX back (on 15-minute closes) since about midday last Wednesday has now joined up with other Keltner resistance, at about 576.90. Bears would like to see that resistance hold. At just over 576, the OEX will be facing the 50% retracement of Friday's range, and bears would really like to see the OEX turned back from below that level.

Jeff Bailey : 3/14/2005 3:30:26 PM

Bearish day trade stop alert ... for IBM (IBM) $91.90

Linda Piazza : 3/14/2005 3:19:06 PM

When I was mentioning the important events taking place overnight in my 2:59 post, I kinda sorta forgot to mention that the Bank of Japan begins a two-day meeting tomorrow, with Monetary Policy Meeting Decisions expected on the 16th, with time as yet undecided, according to the Bank of Japan's website. Various officials have been speaking lately saying that Japan wasn't ready yet for a tightening of its extremely loose monetary policy, but I don't know whether Japanese officials are known for telegraphing their intentions, as ours are, and if they might reverse themselves. I think there's some concern about when a tightening might come, so the emphasis might not be on what the BoJ does this meeting, but rather on what it says about the future. Japan's revised GDP, issued this morning, showed an upside surprise, but that's "upside" from a worry about recession.

Jeff Bailey : 3/14/2005 3:26:21 PM

Genentech (DNA) $51.13 +15.99% ... on report that company's Avastin drug aids in lung cancer survival when used with traditional chemotherapy. The NCI, which sponsored the study said median overall survival increased to 12.5 months compared to patients treated with standard chemotherapy alone, who had a median survival of 10.2 months.

Jeff Bailey : 3/14/2005 3:13:05 PM

03:00 Internals at this Link

Linda Piazza : 3/14/2005 3:05:52 PM

The TRAN's rise is taking it toward the 3845-ish right shoulder level for the H&S possible on its 15-minute chart. This formation is setting up within a congestion zone, so I'm not sure how valid it is to watch.

Linda Piazza : 3/14/2005 2:59:27 PM

Tonight's economic reports in the overnight session include the important February machine tool orders for Japan and the much-watched March eurozone and Germany ZEW Economic Sentiment. Big night overnight.

Jeff Bailey : 3/14/2005 2:55:17 PM

Bearish day trade lower stop alert ... for IBM (IBM) $91.72 +0.22% .... to $91.90.

Linda Piazza : 3/14/2005 2:50:23 PM

The RLX today dropped back below the 30-sma after having lost the 50-sma last week. Today, the RLX also dropped back below huge gap from January, making both February's and March's swing highs look like gap tests only. The 200-ema and -wma lie just below January's post-gap drop, however, so it may be that the RLX is going to consolidate between those averages and the gap resistance. For now, for today, the RLX is weak and that's not going to help the OEX.

Linda Piazza : 3/14/2005 2:46:07 PM

The BIX has dropped back below its 200-sma and -ema. Not a great sign for bulls.

Jeff Bailey : 3/14/2005 2:44:26 PM

GeoResources (GEOI) $8.20 +28.32% ... jumps to the top of today's percentage gainer list. Has some volume from $7.10 last hour.

Linda Piazza : 3/14/2005 2:43:56 PM

On the OEX's three-minute nested Keltner chart, we had tentative Keltner-style bullish divergence on the OEX's test of Friday's low a few minutes ago, but the OEX hasn't been able to move high enough yet to turn its smallest Keltner channel up again, even on that three-minute chart. Instead, it's verging dangerously on forming a continuation-form H&S on that chart. A drop below Friday's low would confirm it and would set up a downside target about a point below that, near the 572.23 lowest downside support on the three-minute channels. Bulls need to pull it together here.

Jeff Bailey : 3/14/2005 2:42:26 PM

Not a lot of activity to start the week. Most actives ... QQQQ $37.11 -0.16% just over 44 million, MSFT $25.05 -0.15%, INTC $24.16 -0.16%, SUNW $4.42 -0.67%, SIRI $5.29 -1.30%, EBAY $36.10 -6.64%

Jonathan Levinson : 3/14/2005 2:35:10 PM

I need to leave for a dentist appointment- couldn't have chosen a better day for it.

Linda Piazza : 3/14/2005 2:29:33 PM

Next 15-minute nested Keltner support is 572.81 on a 15-minute closing basis, with a drop below that suggesting a next downside target of 571.63, getting ever closer to that 50-sma.

Linda Piazza : 3/14/2005 2:26:45 PM

The TRAN of course did violate that H&S neckline and fall below the five-minute 100/130-ema's. In fact, the TRAN has done a fair amount of moving around today, showing a day's range of about 35 points so far. Currently, it's bouncing from just above Friday's low, perhaps on its way toward forming a right-shoulder for a larger H&S, with this morning's H&S being the head of the bigger formation. It's been doing battle with the five-minute 21-ema at 3833.83, with the TRAN at 3832.17.

Jonathan Levinson : 3/14/2005 2:26:04 PM

Session high for ten year treasury bonds here, with TNX down 1.5 bps at 4.52%.

Jonathan Levinson : 3/14/2005 2:24:01 PM

QQQQ update at this Link with the short cycle channel rising within the downsloping 30 and 60 min channels. QQQQ failed at the 7200 tick SMA, never clearing 37.15- but volume has yet to even make it to half of the average, and 37.00 support hasn't been tested. This is as close to trendless as it gets.

Linda Piazza : 3/14/2005 2:18:44 PM

Here's how I would describe today's OEX action: the OEX rose off Friday's low, continuing that rise briefly today before breaking down ahead of a 38.2% retracement of Friday's range. It didn't drop far, however, questioning whether the OEX might be trying to form a higher or equal low. It's uncertain whether it will be able to do so, but with potential support at the 571 level, new bearish entries haven't been offered today. Bears needed a stronger bounce for a safer new entry. Since any bullish play would have been a countertrend one, that wouldn't have been one I would have recommended at all, and the early corrective look of the first rise didn't look promising for bulls, either. Just one of those days.

The lack of action surprised me, though. Currencies did a bit of zooming around this morning from about 6:00 EST until about an hour after the open, so I had thought that might translate into some equity movement, too. Didn't.

Linda Piazza : 3/14/2005 2:12:46 PM

On a three- or five-minute chart, the OEX's rise off the day's low looks corrective.

Jeff Bailey : 3/14/2005 2:12:25 PM

02:00 Internals at this Link

Jonathan Levinson : 3/14/2005 2:06:44 PM

QQQQ is challenging 720 tick SMA resistance here. A break above 37.15 would represent the first bullish development for the 30 min cycle since about 10AM today.

Linda Piazza : 3/14/2005 2:04:47 PM

Nice trap there on the OEX. The OEX did create a breakdown signal on the three-minute chart, but quickly bounced back, erasing that signal that would have set up a downside target near 572.32. Next resistance hasn't quite firmed up, but is near 573.80, with next resistance above that, also not quite firmed up, near 574.30-574.54.

Jeff Bailey : 3/14/2005 2:02:28 PM

02:00 Market Watch at this Link

Jonathan Levinson : 3/14/2005 1:57:10 PM

The Treasury auctioned another 20B of 3-month t-bills today, generating a bid-to-cover ratio of 1.97 at a rate of 2.735%. The 6-month t-bill auction generated a low bid-to-cover ratio of 1.8 at a rate of 3%. This was the lowest b-to-c ratio in a year and below the yearly averages for the past 5 years.

Ten year bonds have ticked up since the end of the auction, however, with TNX down .9 bps at 4.526%.

Jeff Bailey : 3/14/2005 1:55:54 PM

Bearish day trade short alert ... for IBM (IBM) $91.73 +0.24% here, stop $92.00, target $90.91.

Linda Piazza : 3/14/2005 1:52:52 PM

According to one forex news source, the Fed's San Francisco President Yellen's speaks concerning management issues, with her suggestion that banks' interest-rate management strategies with be challenged, hinting that rates may rise considerably. If bond traders are listening, they're not reacting, though, are they?

Jonathan Levinson : 3/14/2005 1:48:37 PM

Back. QQQQ tested lower channel support but didn't violate it. Despite the break to new lows, the 7200 tick SMA crept lower by another 3 cents to its current 37.15. The 60 min channel is also pointed south now, and so there's a negative bias on both the 30 and 60- but the volume remains low, and so the move is no more credible than the morning bounce. 37.00-37.35 remains the key range for the ambiguous daily cycle.

Linda Piazza : 3/14/2005 1:45:46 PM

VIX has been testing Friday's high, but is slightly below it now.

Linda Piazza : 3/14/2005 1:42:13 PM

You know, I just redrew that trendline for the OEX, using an intraday chart rather than a daily one, and it looks as if the OEX has broken below that trendline, but it's done it by trading sideways over the last few hours. Again, mixed evidence.

Linda Piazza : 3/14/2005 1:39:58 PM

Keene and I aren't the only ones noticing that the SPX and OEX (see Keene's 1:31 post and my first OEX-related post this morning) are testing ascending trendlines off long-term lows, off the September low for the OEX. Aggressive bulls might be willing to buy these tests of these trendlines. Bulls don't want to see breaks of these trendlines (confirmed by a move below the 50-sma for the OEX) while bears don't want to see a sideways trade out of the wedge shape partially defined by the rising trendline. That suggests that the OEX could try to rise along the underside of the wedge.

Linda Piazza : 3/14/2005 1:34:31 PM

The OEX appears to be breaking through the support on the three-minute nested Keltner charts, setting up a potential downside target of 572.46, according to that chart. This would be roughly in keeping with the downside target predicted by the break of the rectangular trading range that has held most of the day. Remember that the OEX's 50-dma is below at just above 571 and that might provide support.

The 60-minute chart shows potential support from 572.79 to the current level. If this is broken on a 60-minute closing basis, this chart suggests an ultimate downside target of 565.37, but I'm still worried about a bounce from just above 571 even if the new downside target is confirmed, which it has not yet been.

Jeff Bailey : 3/14/2005 1:32:04 PM

VIX.X 12.93 +1.01% ... highs of session with lows coming just above WEEKLY Pivot. Looking 13.19 here. DIA $107.69 -0.13% SPX 1200.39 +0.02%

Linda Piazza : 3/14/2005 1:24:17 PM

The OEX is bumping closer to the first (and perhaps only) downside target suggested by the three-minute nested Keltner charts, with that target currently at 573.45. (See my 1:04 post.) That's also likely support, but if that supporting line is violated on a three-minute closing basis, the three-minute chart suggests a test of 572.47.

Jonathan Levinson : 3/14/2005 1:21:20 PM

Stepping away for 5 minutes here.

Jeff Bailey : 3/14/2005 1:12:42 PM

01:00 Internals at this Link

Linda Piazza : 3/14/2005 1:10:41 PM

VIX is headed up, but it's been basically rangebound today, too.

Jonathan Levinson : 3/14/2005 1:07:38 PM

Ten year notes continue to hold south of unchanged, TNX +0.3 bps at 4.538%, June ZN -.5156 at 108 45/64. The ZN contract has been trading sideways at these levels since the early morning.

Jeff Bailey : 3/14/2005 1:04:56 PM

01:00 Market Watch at this Link

Linda Piazza : 3/14/2005 1:04:45 PM

Here's what the OEX's 15-minute nested Keltner channels show: Not much. Both support and resistance lines have separated so that it's difficult to give more weight to either support or resistance.

Dialing down to the three-minute nested Keltner chart, sometimes useful on the OEX, shows resistance to be stronger, with a possible downturn toward 573.61 and then potentially toward 572.57 if the 573.61 support does not hold. This is an "iffy" conclusion, though the OEX did start turning down a little as I typed.

Linda Piazza : 3/14/2005 1:02:00 PM

TRAN testing the five-minute 100/130-ema's.

Linda Piazza : 3/14/2005 12:56:57 PM

The TRAN did appear to drop below the neckline of its H&S on its five-minute chart, but as I mentioned earlier, I wouldn't consider that confirmed until the TRAN also dropped below the five/minute 100/130-ema's, which it has not yet done. It's attempting to bounce from them instead. Those averages are at 3840.58 and 3839.63, respectively.

Jonathan Levinson : 3/14/2005 12:55:42 PM

QQQQ's remained below 7200 tick SMA resistance since 11:15AM, despite several tests around noon. That SMA has declined to 37.19, a small move but nevertheless significant because it's occurring on the bulls' nickel. 30 min resistance is down to 37.29, support to 37.02.

Tab Gilles : 3/14/2005 12:50:32 PM

Strength in the dollar today and some profit taking. A look at the EUR/USD and GLD charts. Link Link Link

Linda Piazza : 3/14/2005 12:45:33 PM

Most of the day, the OEX has been building a rectangular trading range from about 573.70 to 575.00--too small to be a range you'd want to trade with OEX options. As we approach the typical stop-running time of day, beginning in about 45 minutes but sometimes early, remember that a break of that range that is quickly reversed may have been a stop run.

Jonathan Levinson : 3/14/2005 12:38:50 PM

QQQQ update at this Link

Jonathan Levinson : 3/14/2005 12:34:09 PM

QQQQ's just broken the 30M share mark for the day. Friday's volume was 102.9M, and the average is down to 94.1M.

Linda Piazza : 3/14/2005 12:31:19 PM

The OEX's five-minute 21-ema is at 574.41, with the OEX spending much of the day oscillating around that average. The five-minute 100/130-ema's are at 575.03 and 575.42, respectively, with the OEX having tested that 100-ema in the last five-minute period. The test may still be ongoing.

Jeff Bailey : 3/14/2005 12:27:00 PM

Current OPEN MM Profiles at this Link Very negative response to news that eBay's (EBAY) $36.80 -3.79% Meg Whitman had shown and interest, and interviewed, for top spot at Disney (DIS). S&P Equity Research doesn't believe Ms. Whitman is actively pursuing a departure from eBay, but Disney news does raise questions and uncertainty about her long-term future at the company. I would have to agree and this weekend's news does provide a negative cloud. Should eBay get a bounce back to $40, I will most likely sell the April $45 Calls (XBA-DI) into that strength.

Linda Piazza : 3/14/2005 12:22:16 PM

The OEX's 30-sma at 575.23 has been giving it some problems today, especially as that also is near a 38.2% retracement of Friday's range.

Jonathan Levinson : 3/14/2005 12:16:36 PM

So far, QQQQ is holding below the 7200 tick SMA at 37.22. Volume is very light at 29.1M shares, but so far this light volume is coinciding with this morning's 30 min cycle upphase.

Gold is holding just above the 441.10 low at 441.30 here, with euro and CAD futures also holding losses. TNX is up 1.1 bps at 4.546%.

Jeff Bailey : 3/14/2005 12:11:11 PM

12:00 Internals at this Link

Linda Piazza : 3/14/2005 12:09:26 PM

Here's the OEX wedge that I mentioned earlier today: Link

Linda Piazza : 3/14/2005 12:05:16 PM

That potential inverse H&S on the OEX's five-minute chart can now be officially tagged as having fizzled out. That doesn't mean that the OEX won't rise today, but it certainly means that the bulls weren't able to pull it all together earlier.

Jeff Bailey : 3/14/2005 12:02:51 PM

12:00 Market Watch at this Link

Linda Piazza : 3/14/2005 12:01:34 PM

The BIX is still slightly above its 200-sma, with that average at 361.76 and the BIX at 362.19. The BIX is off its HOD, but daily MACD remains uncommitted to either direction, with RSI squiggling around near the neutral 50-ish level.

Jeff Bailey : 3/14/2005 11:55:46 AM

Dow Diamonds (DIA) $108.02 +0.16% ... tight morning range (107.80-$108.08) with breadth holding positive at 20:10. Caterpillar (CAT) $96.92 -2.10% percentage loser after downgrade by Legg Mason, while American Intl. Group (AIG) $63.72 -1.52% lower on news that Maurice Greenberg plans to step down as company's CEO. Hewlett Packard (HPQ) $20.24 +1.91% and United Tech (UTX) $103.28 +1.89% are percentage gainers, while Disney (DIS) $27.98 +1.41% up after naming Bob Iger as replacement for Michael Eisner.

Linda Piazza : 3/14/2005 11:54:59 AM

So far, the TRAN resists confirming its H&S on its 5-minute chart. Bulls trying to hold on.

Linda Piazza : 3/14/2005 11:49:36 AM

By the way, although Jane's name was listed as the author of this weekend's Traders Corner article, I wrote it. I'm making the correction because the last two charts, for TOL, were mixed, and I mean really mixed. The arithmetic-based chart was posted where the semi-log one should have been, but the annotations on the two charts were also mixed. The effect of the charts should have been the same as those displayed on the arithmetic and semi-log charts for the DJUSHB: a rise that went parabolic far sooner on the arithmetic-based chart, but did so far later on the semi-log one.

Linda Piazza : 3/14/2005 11:46:18 AM

Jim said in this weekend's Wrap that unless you have a reason to be in the market, it might be a good idea to wait out the first few days to see what happens. This morning's confusing chart evidence supports his suggestion.

Jonathan Levinson : 3/14/2005 11:43:50 AM

The 30 min channel is losing its neutral stance here for QQQQ, rolling over to drop support down to 37.05, where it lines up with the 60 min channel bottom. A successful retest at or above 37.00 would fit with the bulls' plan for a 30/60 min cycle upphase today, but QQQQ needs to bounce and ultimately break 37.35 to rule out the so-far corrective feel to this morning's bounce.

Linda Piazza : 3/14/2005 11:41:52 AM

The TRAN verges on a confirmation of a regular H&S (not inverse) on its five-minute chart. The TRAN's 100/130-ema's are at 3839.26 and 3838.39, and, although the neckline area is slightly above those, I wouldn't consider the H&S confirmed until the TRAN drops below those averages.

Jonathan Levinson : 3/14/2005 11:35:08 AM

QQQQ's back to the session low at 37.15. Euros are also hitting a low at 1.3383, -.75%, ditto gold at 442.

Linda Piazza : 3/14/2005 11:32:35 AM

The advdec line made a lower five-minute high this morning, but the actions of the VIX and TRIN as they move around don't support any extreme bearishness. TRIN has been generally dropping after the early morning volatility subsided and the VIX has continued a pullback. Doesn't that pullback look like a bull flag, though?

Jonathan Levinson : 3/14/2005 11:24:29 AM

QQQQ put in another low at 37.15 and is bouncing again. The 30 min cycle oscillators continue to work their way higher in a so-far corrective upphase. The channels continue to drift sideways and volume remains very light- it feels like the op-ex tractor beam is already in effect.

Linda Piazza : 3/14/2005 11:22:53 AM

Kansas City Fed Index for February rose to 32 from January's 18. Shipments and new orders rose. Only orders backlog and delivery time fell.

Jeff Bailey : 3/14/2005 11:21:24 AM

Avocent Corp. (AVCT) $23.45 -31.57% ... percentage loser after the analog and digital switching systems maker cut its Q1 revenue outlook.

Linda Piazza : 3/14/2005 11:20:21 AM

I'm still not getting a clear picture from the OEX's Keltner charts. Here's what the 15-minute one shows now: It looks increasingly likely that the OEX will pull back, based on its reaction to resistance at 574.23, with the OEX unable to maintain 15-minute closes above that level. However, the support just above 573.25 may be firm enough now to support the OEX on that pullback.

Linda Piazza : 3/14/2005 11:17:09 AM

Mark's 11:14 post commented on a Bloomberg report that oil may not dip below $40.00 for many years, although Mark commented that he didn't catch the source. I haven't heard that particular quote, but forex market news is reporting that Kuwait says that we should expect $50-55 for the rest of this year, and Kuwait thinks that we've ignored the risk of oil going to $60.00. A Saudi statement reportedly suggested that production may be increased by 500,000 barrels, partially undoing the 1 million cut effective earlier this year.

Jonathan Levinson : 3/14/2005 11:14:35 AM

Ten year treasuries continue to hold just south of unchanged, with the yield up .5 bps at 4.54%. Despite the hesitation on this move, it represents yet another breake to new highs for the move. Island support is at 4.44%, with today so far the fourth consecutive session to make higher highs and higher lows: Link

Linda Piazza : 3/14/2005 11:12:08 AM

Watch the TRAN today and this week. Last week, the TRAN completed a doji on the weekly chart at the top of a climb. Today, the TRAN climbs from yesterday's close, so it won't be creating a classic evening star formation, but I'm still watching for a not-perfect evening star formation. The week is young, of course. Link

Jeff Bailey : 3/14/2005 11:09:51 AM

11:00 Internals at this Link

Linda Piazza : 3/14/2005 11:08:16 AM

If I were in a bullish OEX play, I would not like all those upper shadows on the 15-minute candles.

Linda Piazza : 3/14/2005 11:03:08 AM

The OEX's 15-minute nested Keltner charts served traders well last week, so let's look at what it says now that we have a number of 15-minute periods behind us. That chart shows a lot of doji forming during 15-minute periods, not exactly indicative of confidence by either the bears or the bulls. Support is trying to firm just above 573.26, but it may be somewhat tentative. Resistance is trying to firm near 575.36-575.75, near the 38.2% retracement of Friday's range but it may be even more tentative. The 50% retracement is at 576.13. Strongest resistance is near 578.

Jeff Bailey : 3/14/2005 11:01:37 AM

11:00 Market Watch at this Link

Linda Piazza : 3/14/2005 10:56:10 AM

Confusing action so far on the OEX, but countertrend moves sometimes are confusing. The OEX dropped back below the neckline, but that was just one neckline version for the inverse H&S. Another is a horizontal version, and the OEX has not yet breached that. The OEX dropped back only as far as the right shoulder, so I would consider the inverse H&S to still be a valid formation. That right-shoulder level is extending far in time, however, so bulls better muster some strength and get this thing confirmed if they're going to do so.

Jonathan Levinson : 3/14/2005 10:52:24 AM

QQQQ hit a high of 37.35 and pulled back to the 37.22 level. Volume is still very light. Despite the oscillator upphase, the 30 min keltner channel is sideways, support currently 37.10, resistance 37.40.

Linda Piazza : 3/14/2005 10:44:49 AM

Good point, Mark. See Mark's 10:39 post. Another reason for bears to believe that internals might not be supporting a new entry just yet, with this "internal" being the Fed's net add that Jonathan noted. When I look at the bounce off Friday's low, I still see a corrective-looking bounce, however, and the OEX dropped right back below the neckline of that inverse H&S. Confusing action.

Jeff Bailey : 3/14/2005 10:41:31 AM

Altair Nanotech (ALTI) $4.53 +8.63% ... higher after Regulation FD Disclosure on Friday had company disclosing it had terminated President Rudi E. Moerck, Ph.D. Alan Gotcher, the company's current CEO, will assume the position of President of the company.

Jonathan Levinson : 3/14/2005 10:41:01 AM

The Fed's open market desk activity impacts the accounts it holds with its 22 primary dealers, who are free to do with it as they wish. It can find its way into equities, treasuries, currencies, etc. Because of the huge amount of debt auctioned by the Treasury last week, my guess is that these amounts are being provided to insure sufficient liquidity as the bonds purchased come payable. In particular, because foreign central bank participation was lighter than usual, I suspect that the Fed is anxious to insure that the markets don't get disrupted by the large amounts being drawn into the newly auctioned t-bonds.

Mark Davis : 3/14/2005 10:40:26 AM

Dow is about 4 points below 10800... big test coming up here

Mark Davis : 3/14/2005 10:39:49 AM

Linda Jonathan's post roughly coincided with the sudden reversal in all the equity indices. I'd say it's going into stocks, at least for now.

Linda Piazza : 3/14/2005 10:37:42 AM

Wow, just read Jonathan's 10:27 post. If you missed it, go back and read it. Of course, we don't know where that money is going. Any ideas, Jonathan?

Linda Piazza : 3/14/2005 10:34:15 AM

The OEX is breaking above one version of the neckline for the inverse H&S, heading up toward the horizontal version at the 38.2% retracement of Friday's range, with that level at 575.26. No sign yet that bears should step in with new entries, of course, but remember that not all countertrend formations meet their targets. Hmm. The OEX just immediately fell back below that neckline as I typed.

Jonathan Levinson : 3/14/2005 10:31:15 AM

Session highs across the board here, QQQQ at 37.34.

Jeff Bailey : 3/14/2005 10:28:00 AM

Current OPEN MM Profiles at this Link

Jonathan Levinson : 3/14/2005 10:27:29 AM

The Fed's open market desk just did the unexpected, announcing a big 8B overnight repo to supplement the 5B 4-day repo announced earlier. That flips the 2B net drain to a 6B net add.

Linda Piazza : 3/14/2005 10:21:07 AM

Watch the BIX. It's risen now to challenge its 200-sma, just above that MA at 361.76, with the BIX at 362.16. If it can maintain levels above that average, that will help bulls, but it needs to do more to be all-out bullish for the markets. It's just hanging on right now.

Jonathan Levinson : 3/14/2005 10:20:24 AM

Session low for Nymex crude here at 53.725. Gold and silver have recovered slightly off their lows, ten year notes as well with TNX down to a .5 bp gain at 4.54%.

Jeff Bailey : 3/14/2005 10:17:11 AM

10:00 Internals at this Link Friday's Internals at this Link

Linda Piazza : 3/14/2005 10:15:31 AM

Remember that OEX 50-dma lurking below, just above 571, waiting to provide potential support. The 60-minute nested Keltner chart gives a potential downside target much lower if a new breakout signal is given, but that hasn't happened yet. It looks possible sometime today, but currently would require a 60-minute close beneath the Keltner line now at 573.31. I really, really wanted to see the OEX bounce a bit and build a well-formed flag that we could see break and say "ah, ha!" with internals confirming bearishness and . . . pipe dreams. One problem lately is that internals have often not led bearish breakdowns but have reacted to them. While I might feel comfortable risking a bearish play without the cooperation of internals for my personal portfolio, I do not feel comfortable doing that for readers, as it's just too risky and I don't know which of you will adhere to your stops. Whenever I enter any play, mine are hard stops, so I don't give myself a choice.

Jonathan Levinson : 3/14/2005 10:11:27 AM

QQQQ's going net nowhere here, both price and volume-wise. The TRINQ is neutral at .83, though the QQV is up 3.59% at 17.91. That indicates premium being bought. Looking at the March options, I see volume heaviest in the 37 and 36 puts- call volume is much lighter. So, as QQQQ holds still at 37.22, the largest buys generating a rise in premium are taking place in the ATM and slightly OTM QQQQ puts.

Linda Piazza : 3/14/2005 10:10:23 AM

The OEX may have managed a 15-minute close above first 15-minute Keltner resistance, but it hasn't been able to maintain values above that resistance, currently at 574.12. Still, support is trying to firm beneath the OEX, from 572.30-573.57 and may hold. Depends on what the bulls can muster. Still watching that potential inverse H&S, with the current pullback in keeping with the formation of a right shoulder for that formation. A drop much below 573.50 would make that inverse H&S look less likely to be valid.

Linda Piazza : 3/14/2005 10:06:39 AM

An alternative, descending neckline for that potential OEX inverse H&S is at about 574.80. Remember that until proven otherwise, I now consider an OEX bounce a countertrend one, a hard type of play to manage profitably with a directional OEX options play, but that doesn't mean that we don't watch for signs of how high a bounce might take the OEX or whether one can get underway at all. Watching how the bulls manage this inverse H&S (whether it's confirmed, whether the target is met, etc.) will tell us a lot about short-term bullish strength. A countertrend play can be profitable, sometimes wildly so if shorts get scared, but that doesn't mean that it's a high-odds type of purely directional, unhedged OEX options play.

Jeff Bailey : 3/14/2005 10:05:36 AM

VIX.X 12.89 +0.70% .... Daily Pivot Levels ... 11.77, 12.30, Piv= 12.64, 13.17, 13.51.

Jeff Bailey : 3/14/2005 10:03:20 AM

10:00 Market Watch at this Link

Linda Piazza : 3/14/2005 9:58:31 AM

So far, the OEX's climb off Friday's low looks corrective. A 38.2% retracement of Friday's range is at about 575.26 and a 50% retracement at about 576.13. Bears would like to see a breakdown before the OEX reaches much higher than 576.13.

Evidence that bulls are trying to marshal strength shows up in a potential inverse H&S on the five-minute chart, however. That corrective rise is a rise off the head level up toward the neckline, a neckline that may be at the 38.2% retracement level. We have competing evidence (corrective rise, but a potential inverse H&S) on the charts then.

Jeff Bailey : 3/14/2005 9:58:28 AM

Dow Diamonds (DIA) $108.00 +0.14% ... with updated WEEKLY/MONTHLY Pivot retracement at this Link "zone of support" from $107.81-$107.93 holding on positive breadth of 22:8.

Jonathan Levinson : 3/14/2005 9:56:12 AM

QQQQ made it back above 37.20, retesting it as I type. The action is sideways and weak so far, a bad sign for 30 min cycle bulls. However, to rule a bullish retest of 37.00 (as we often see when the 30 and 60 min cycles are trying to turn), bears will want to see 37.00 fail before counting out the 30 min cycle upphase.

Jeff Bailey : 3/14/2005 9:54:33 AM

Altria (MO) $65.56 +0.64% ... company's Philip Morris division agreed to acquire a 40% stake in Indonesia's third-largest cigarette producer for 48 trillion rupiah ($5.2 billion). The deal wil boost market share in Asia as revenue around the world shrinks on health concerns.

Jonathan Levinson : 3/14/2005 9:53:45 AM

The Fed has announced a 4-day 5B repo, for a net drain of 2B for the day. No overnight repo has been announced- while there's the possibility that one will be released within the next hour, such is rare. More likely, the Fed's draining today.

Linda Piazza : 3/14/2005 9:51:54 AM

The ECB's President Trichet has been testifying before the European Parliament this morning. He thinks signs in the fourth quarter looked hopeful, but qualified last year's economic development as only moderate. He doesn't see signs of strong inflationary pressures, but mentions oil prices as a risk and thinks that the risks of inflation are to the upside. He still wants the Stability Pact maintained, and warns of "unwelcome and undesirable" sharp movements in the forex market.

Jonathan Levinson : 3/14/2005 9:51:23 AM

Session lows for gold and silver here at 442.50 and 7.39 respective, HUI and XAU extending their losses. The Fed has a 7B weekend repo expiring today- awaiting the 10AM release to determine the Fed's bias for the day.

Jeff Bailey : 3/14/2005 9:50:30 AM

eBay (EBAY) $37.53 -1.84% ... lower on talk that company's CEO Meg Whitman was trying for Eisner's position at Disney and leads to speculation that Ms. Whitman not a believer in eBay's future.

Linda Piazza : 3/14/2005 9:47:23 AM

The OEX did close the first 15-minute period above that massed Keltner resistance, so that resistance can now be presumed to be support. We're watching for a potential countertrend bounce.

Jeff Bailey : 3/14/2005 9:46:22 AM

Payless Shoe (PSS) $15.00 +0.75% ... coverage initiated by JP Morgan at "neutral."

Linda Piazza : 3/14/2005 9:45:00 AM

The advdec line is at 859, down slightly from the day's high. TRIN is also down from the day's high, but climbed well off the day's low before starting that slight decline. At its current 0.91 level, I think Jane would term it neutral. I don't have a reading for the VIX just yet.

Linda Piazza : 3/14/2005 9:39:35 AM

The TRAN is higher this morning, but not yet above Friday's 3855.00 high. It's less than four points away, though.

Linda Piazza : 3/14/2005 9:38:23 AM

The BIX is near the flat-line level this morning, not moving much yet. Bulls need to see the BIX push back above its 200-ema and -sma today.

Jonathan Levinson : 3/14/2005 9:38:13 AM

April gold is flat at 443.40, while the miners have opened very weak with HUI -1.31% at 218.65 and XAU -1.27% at 100.6.

Jeff Bailey : 3/14/2005 9:37:57 AM

CMGI (CMGI) $2.09 +9.42% ... among this morning's most active after posting a profit for Q2 of $7.2 million, or 1 cent per share compared to a net loss of $5.5 million, or a loss of 1 cent a share in the same period last last year.

Linda Piazza : 3/14/2005 9:35:38 AM

The OEX has climbed above the Keltner resistance that looked massive on the 15-minute chart, but hasn't had a first 15-minute close above it, of course. Turning back to the 60-minute chart, that first resistance that I mentioned in my 8:42 post is now at 575.36.

Jeff Bailey : 3/14/2005 9:35:28 AM

Ascential Software (ASCL) $18.32 +16.68% ... higher after IBM (IBM) $91.90 +0.42% offers to buy company for $1.1 billion in cash, or $18.50 per share.

Jonathan Levinson : 3/14/2005 9:34:50 AM

Ten year bonds have drifted lower with TNX rising to a 3 bp gain here at 4.565%. Link

Linda Piazza : 3/14/2005 9:33:25 AM

Semi-related stocks were weak in Asia last night, some dropping at a magnitude of about 3.0%. The SOX closed near the 30-dma Friday, with that average currently at 428.42 and the SOX trying mightily to hold onto that support. SOX at 427.75 as I type, just below that average.

Linda Piazza : 3/14/2005 9:31:08 AM

Turning to the OEX's 15-minute Keltner chart, I see massive resistance just overhead near 574. The OEX is going to need a strong, strong push to sustain values over that this morning, but it's trying even as I type.

Jeff Bailey : 3/14/2005 9:18:30 AM

Program Trading Levels for Monday ... HL Camp & Company has their computers set for program buying at $5.68 and set for program selling at $3.21.

Jonathan Levinson : 3/14/2005 9:07:09 AM

QQQQ never broke 37.00, despite the daily cycle sell signals that printed off Friday's bearish engulfing candle. The 30 min cycle appeared to have bottomed just before the close, and the lack of selling this morning is enough to have it on a buy signal. This opposition should stem any losses this morning, and the key range is between 37.00 and 37.35. Above 37.35, the new daily cycle downphase should stall. If QQQQ breaks 37.00 and holds below 37.00 for 10 minutes or longer, the 30 min upphase will reverse.

The current orientation of these cycles suggests that we should have a corrective upphase for a few hours today, and it should top within Friday's range, followed by a lower low below 37. The daily cycle rolled over from its midpoint last week, however, and so the sell signal there is relatively weak. This is a good recipe for uncertainty, which fits well with op-ex week kicking off today.

Linda Piazza : 3/14/2005 8:42:08 AM

On the OEX's daily chart, the OEX looks vulnerable to the 50-sma, at 571.03, where bulls hope support will still hold. Actually, bulls hope Friday's close, at the ascending trendline from the October low, holds. The OEX broke below that trendline intraday on Friday but bounced to close right at the trendline at about 573.50. This is the bottom trendline of a rising wedge months in the making.

The OEX has not confirmed a downside break of that large wedge, but until proven otherwise, we should now assume that the OEX is in a sell-the-rallies mode. Because of the potential for a bounce from the 50-dma, new bears looking for an entry would probably like to see a bounce to produce a new entry rather than an immediate decline today. Futures near the flat-line level don't give strong clues as to which it might be.

Here's what the 60-minute Keltner chart shows: The OEX ended the day trying to steady on 60-minute support. That support turned lower, however, and it wasn't clear whether the OEX could steady on that slippery slope or just slide down toward the next 60-minute target, not confirmed as yet, at 565.23. If the OEX bounces, first 60-minute resistance is near 575.60, and next resistance is beginning to converge between 577.31-578.60. Barring a strong swoosh higher, that second level of resistance looks strong enough to hold if the OEX should get past 575.61.

Jonathan Levinson : 3/14/2005 8:39:39 AM

Ten year treasury futures have recovered slightly, though June ZN remains lower by .5312 at 108 11/16. TNX is up just .3 bps at 4.538%, however, and equities are picking up, QQQQ +.08 at 37.25 and ES +2.25 at 1207.75.

Jonathan Levinson : 3/14/2005 7:54:09 AM

Equities are flat, ES trading 1206, NQ 1518.5, YM 10818 and QQQQ unchanged at 37.17. Gold is down .30 to 443.10, silver -.03 to 7.498, ten year notes down .7188 to 108 1/2, and crude oil down .375 to 54.05.

There are no major economic reports scheduled for today.

Linda Piazza : 3/14/2005 7:08:55 AM

Good morning. Although Japan's Q4 GDP was an upside surprise and Lehman Brothers upgraded its weighting of the country, the Nikkei dove most of the day Monday, hit by tech weakness. Other Asian markets were mixed, but European markets decline. Our futures hold to modestly higher values, barely above the flat-line. As of 6:48 EST, gold was down $2.80, and crude, down $0.36. More detail about Asian and European markets follows in succeeding paragraphs.

Before the Nikkei opened Monday morning, the revised Q4 and annualized GDP were released. They showed better-than-expected 0.1% and 0.5% growth, respectively. Preliminary estimates had been for drops of 0.1% and 0.5%, respectively, and expectations were that this release would show a further drop from the preliminary numbers. The business spending component was revised down, however. A few minutes later, an economic release showed less cheering information, with January's current account surplus declining a worse than expected 28.2% year-over-year. The trade surplus declined 46.3% year-over year. Monday, Lehman Brothers upgraded its weighting for Japan.

The GDP revision and Lehman Brothers upgrade weren't strong enough to benefit the bourse. The Nikkei opened and made another failed dash for 12,000, reaching a high of 11,955.29 before beginning to drop. The drop steepened at the end of the day, and the Nikkei closed lower by 73.64 points or 0.62%, at 11,850.25. Chip-testing equipment maker warned Friday after the close, and chip-related stocks were lower. Advantest dropped 3.0, with some other chip-related stocks dropping by similar percentages.

Other Asian markets were mixed. The Taiwan Weighted dropped 0.79%, and South Korea's Kospi fell 0.30%, with techs weak in South Korea, too. Singapore's Straits Times was flat, down 0.02%, but Hong Kong's Hang Seng climbed 0.11%. China's Shanghai Composite climbed 0.28%.

Most European markets trade in the red, with bank and drug stocks responsible for the decline in the U.K., and automakers in Europe. Crude costs above $54.00 hit the automakers and some airlines, although Swiss International Air Lines surged after Lufthansa's confirmation Sunday that it is in talks about taking over the other airline. Also of interest on an M&A Monday is the speculation that Italian oil company Eni SpA may bid for the U.S.'s Unocal Corporation. Conflict continues to surround Euronext's interest in acquiring the London Stock Exchange, both from Euronext shareholders and Deutsche Boerse that had made an offer of its own, since withdrawn.

As of 6:52 EST, the FTSE 100 was down 16 points or 0.32%, at 4,966.00. The CAC 40 was down 6.51 points or 0.16%, at 4,042.67. The DAX was down 6.88 points or 0.16%, at 4,353.61.

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