Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
OI Technical Staff : 4/8/2005 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jim Brown : 4/8/2005 4:23:37 PM

Ford warning in after hours that earnings will be less than expected for the full year but slightly better than their previous warning for the current quarter. Ford had previously said full year earnings would be in the $1.75-1.95 range and they are now saying $1.25 to $1.50.

"Historically high prices for steel and crude oil, escalating health care expenses and a weak U.S. dollar presented formidable challenges as we entered 2005," said Don Leclair, executive vice president and chief financial officer. "Throughout the first quarter we saw those and other business factors worsening, and as a result in mid-March we announced that we expected our full-year performance to be at the lower end of the guidance we provided in January 2005. The Company's analysis of recent market trends, which include the prospect of higher and sustained gasoline prices and continued aggressive pricing actions by competitors, have led us to conclude that further challenges lie ahead. Accordingly, we have revised our earnings outlook for the full year."

Jane Fox : 4/8/2005 4:06:42 PM

Jim was it the Pope's Funeral :)

Jim Brown : 4/8/2005 4:04:42 PM

Jeff was out today attending a funeral.

Linda Piazza : 4/8/2005 4:00:15 PM

Jonathan, great reminder in your 3:56 post.

Jonathan Levinson : 4/8/2005 3:56:28 PM

Don't forget, op-ex week kicks off "early" this month, starting Monday. Link

Linda Piazza : 4/8/2005 3:51:15 PM

According to the OEX's 15-minute Keltner chart, the OEX may see a little bounce into the close, perhaps up toward 563.41 or even 564.25, although that last looks less likely as charts are arranged now.

Linda Piazza : 4/8/2005 3:42:02 PM

Should you hold over the weekend if you're in a bearish position? Depending on what happens into the close, it looks as if the OEX might produce a bearish engulfing candle or a tweezer-top reversal signal, even if the candle doesn't entirely engulf yesterday's. However, it may also end the day near or above the 562-562.50-ish potential support. The daily Keltner channel chart is difficult to interpret, because the OEX has spent the day traveling from next Keltner resistance all the way back to next Keltner support on that chart.

While I definitely wouldn't want to be buying the dips here, I can't guarantee that others wouldn't want to do so or that we couldn't see a day or two of consolidation at the daily 100/130-ema's, at 564.73 and 562.61. If you look back at the 2/25 and 2/28 candles, you'll see another instance of a tweezer-top reversal signal after a climb, being produced at resistance. What happened next? The OEX climbed into the March high, that's what!

Jonathan Levinson : 4/8/2005 3:41:13 PM

The daily QQQQ is nowhere near as bearish as that of the SPX futures, which broke yesterday's low in a bearish engulfing candle. QQQQ needs another 20 cents of downside to get to an equivalent print. However, for both QQQQ and ES, the daily cycle upphase has yet to even pause.

Linda Piazza : 4/8/2005 3:33:45 PM

If short-term (daytrading, etc.) OEX bears haven't taken partial profits yet and moved up their stops on the rest of the position to breakeven or better, they might want to do it now. The risk to taking that step is that the OEX will plunge deeply into the close, but the risk of remaining in is that some will decide to buy the dips after some indices approach 4/06 lows.

Jonathan Levinson : 4/8/2005 3:31:43 PM

7200 tick SMA resistance is down to 36.72 QQQQ, and the 30 and 60 min channels continue their steady march lower. The 30 min cycle oscillator is approaching oversold territory, while the 60 min is barely half way there.

Linda Piazza : 4/8/2005 3:30:10 PM

The OEX did dip further, as the Keltner charts had suggested that it would at the time of my 3:17 post, and it did find support on the Keltner line currently at 562.34. Support just overhead is firming up enough that it's going to take a strong thrust to break through it. As that Keltner chart is configured now, it looks as if the OEX could drop further, but perhaps not until a test of overhead resistance. One trouble with this theory is that I've found that get-me-out-now thinking that sometimes prevails at the end of the day sometimes has more to say about end-of-day behavior than the charts reveal. Keep those profit-protecting plans in mind.

Jonathan Levinson : 4/8/2005 3:24:02 PM

QQQQ 100 tick chart update at this Link . Despite those program trades just now, volume is still 11M shares short of yesterday's weak volume of 88.7M.

Linda Piazza : 4/8/2005 3:17:26 PM

The OEX threatens to drop again, but remember the potential 562-562.40-ish support.

Jonathan Levinson : 4/8/2005 3:17:07 PM

ES has broken yesterday's low, while NQ and QQQQ remain confortably above theirs despite the latest rash of lows. The daily cycle upphase for QQQQ and NQ remains unchallenged so far- which fits with the interpretation of today's 30 min and 60 min cycle downphases as corrective.

Linda Piazza : 4/8/2005 3:15:22 PM

Scanning charts, I found another reason for the OEX finding support where it now rests: Link Note that these averages have prompted other bounces. So far, the OEX hasn't shown the same strong bounce after approaching these averages as it did on 4/05 and 4/06, however. If the OEX should keel over below the 130-ema on this chart as it's threatening to do as I type (after the chart was already uploaded), that looks bad. Note the 4/06 low near 562, however, so that's another place to look for potential support should the OEX continue lower.

Linda Piazza : 4/8/2005 3:09:46 PM

The OEX's three-minute chart was showing the possibility of a bounce and now shows the possibility of resistance from 564-564.19, a level we already knew was resistance. It's not giving a strong sense of whether that resistance will be stronger that nearby support.

Jonathan Levinson : 4/8/2005 3:09:27 PM

QQQQ 100 tick chart update at this Link

Linda Piazza : 4/8/2005 3:03:22 PM

Important test going on for the OEX right now. There's Keltner support at 563.31 and 60-minute 21-ema's possible resistance at 563.98.

Linda Piazza : 4/8/2005 2:57:14 PM

This last "bounce" from Keltner support isn't turning into much of a bounce. Keltner resistance is from 564.26-564.67 and again at 565.20, but so far, the OEX can't even bounce up into that resistance, but rather appears to be waiting for it to drop down to the OEX's position. The smallest Keltner channel points lower, still, now toward 562.48.

Another bad sign (for bulls) is that the OEX fell back below the 60-minute 21-ema for the first time since Monday and now has risen to retest it, with that average now appearing to serve as resistance. The OEX is challenging the 100-ema on that chart. A rollover here looks to retest 562-562.48, but I would again expect a bounce attempt from that level, so bears should be prepared for an attempted bounce if the OEX should touch that level.

Jonathan Levinson : 4/8/2005 2:56:45 PM

Volume is lame for QQQQ as well for the day, but it's grown notably heavier during the past hour.

Jonathan Levinson : 4/8/2005 2:54:44 PM

Volume has picked up for QQQQ, but price remains stalled above 36.65 support: Link

Linda Piazza : 4/8/2005 2:42:58 PM

Next resistance on the OEX's 15-minute chart is from 564.38-564.71. Bears want to see this resistance hold and the OEX roll down to the Keltner line now at 562.48. The OEX hasn't touched that channel line since Monday, though, so it's unclear whether it will dip that low or not. Until and unless the OEX drops below 562, bounce potential remains.

Jonathan Levinson : 4/8/2005 2:40:51 PM

Crude oil closed lower by .80 at 53.30 on the Nymex, -1.48% for the day, off a low of 52.725. Ten year treasuries are lower again, TNX up 1.7 bps at 4.489%. The broken daily trendline was retested by the "return to the scene of the crime" dip, but it held, the first sign of trouble for yield bears/bond bulls: Link

Linda Piazza : 4/8/2005 2:34:41 PM

If the OEX should end the day near its current level, it will have produced a tweezer-top reversal signal from within a broadening formation, at/just below the 38.2% retracement of the decline off the March high. That won't look good, corroborating my warnings that we have to consider any bounce a possible countertrend one while the OEX is below the 38.2% and 50% retracements of the decline. We still don't know all the answers, particularly with 90 minutes left in the trading day, but these are great signs just yet, certainly.

Linda Piazza : 4/8/2005 2:30:28 PM

The OEX has now dipped into the mid-channel potential support area, also the zone which includes some of those important MA's we've been watching. A drop below 562 will look dire indeed, but remember that this zone is also one of potential support. I'd be scared to start buying right here, but maybe someone else feels differently. Bears who might have entered automatically on the touch of the 38.2% retracement level today need to have those profit-protecting plans in place now, whatever those plans might have been.

Jonathan Levinson : 4/8/2005 2:30:22 PM

I've highlighted intraday support in play here for QQQQ. If this is a complex top or h&s, then a support break here could target a low below yesterday's low (implied h&s target roughly 40 cents below 36.66), which would be the first daily cycle victory for bears in nearly two weeks. The last hour is shaping up to be important- we might even see some volume. Link

Jonathan Levinson : 4/8/2005 2:18:38 PM

QQQQ's back to 37.72 low, breaking it as I type- new lows across the board.

Linda Piazza : 4/8/2005 2:17:42 PM

No, the three-minute support did hold on the OEX's three-minute Keltner chart. I'm micromanaging now because of the OEX moving into the possible support zone, so here's a look at resistance. Next resistance on this chart is at 564.40 and then at 564.75. Bears would prefer no three-minute closes above the nearest resistance, but the OEX often rises all the way through its smallest Keltner channel on the three-minute chart, and that's up near 564.74. Watching to see.

Jonathan Levinson : 4/8/2005 2:16:46 PM

2-day 30 tick chart of Nymex crude oil at this Link

Linda Piazza : 4/8/2005 2:15:32 PM

Mark, I saw you warning about potential bounces, too! Smile. (See Mark's 2:12 post.)

Mark Davis : 4/8/2005 2:12:44 PM

Stop that Linda! (grin)

Linda Piazza : 4/8/2005 2:12:43 PM

That OEX bounce up to 564.17 occurred as I was typing that last post and failed right away. There's now a chance that that "bounce" could be it, and the OEX could fall toward 563. Still watching.

Linda Piazza : 4/8/2005 2:11:41 PM

The three-minute OEX chart suggests a bounce might be coming, perhaps up to 564.54, but perhaps stopped somewhat sooner, near 564.17.

Linda Piazza : 4/8/2005 2:10:32 PM

Remember, OEX bears who might have entered bearish plays on a touch of the 38.2% retracement of the decline off the March high, have profit-protecting plans in place as this 562.60-564 level is tested. If a strong sell program should drive the OEX below this zone, support is near 558, but it seems likely that it will require such a program to get through this level, with so much support gathered there.

Jonathan Levinson : 4/8/2005 2:10:14 PM

100 tick QQQQ chart update at this Link . Neither the 60 min channel, nor even the 30 min channel twitched, maintaining a downward bias. Bears need to see QQQQ break the 36.72 low to reverse the upturn in the short cycle oscillators.

Linda Piazza : 4/8/2005 2:08:29 PM

Turning back to the OEX's 15-minute Keltner chart, I still see a likelihood that the OEX will decline toward the midchannel level, currently from 562.59-563.48 . . . well, that's a big surprise now, isn't it? The OEX began dropping as I began typing.

Linda Piazza : 4/8/2005 2:04:50 PM

Three-minute OEX Keltner resistance held again. Three-minute support is currently at 564.14.

Jonathan Levinson : 4/8/2005 2:00:27 PM

QQQQ popped above and then plopped back to the declining 7200 tick SMA, where it currently sits. Aside from that buy program, volume remains dismal. Link

Linda Piazza : 4/8/2005 1:51:56 PM

The OEX turns down from the three-minute Keltner resistance, but nearby support looks almost equally weighted on the three-minute chart, so the outcome is uncertain as yet.

Jonathan Levinson : 4/8/2005 1:49:58 PM

Ten year bonds are sliding sideways just south of unchanged, with ZN down .0312 at 109 7/16, TNX still up .8 bps at 4.48%. Crude oil is currently -1.05 at 53.05.

Jonathan Levinson : 4/8/2005 1:44:56 PM

QQQQ is now above 7200 tick SMA resistance, but declining 30 min channel resistance is just overhead at 36.93.

Linda Piazza : 4/8/2005 1:43:58 PM

The OEX is attempting to push above the 15-minute Keltner resistance just under 565, having done so at least temporarily. However, it's run right up into three-minute resistance that's been stopping it all day.

Be careful. Remember that this is prime stop-running time of day.

Linda Piazza : 4/8/2005 1:35:16 PM

So far, first OEX Keltner resistance, now near 564.88, is holding, but its hold looks more tentative than it did and support from 563.44-563.98 is trying to strengthen.

Jonathan Levinson : 4/8/2005 1:31:02 PM

Currently, Nymex crude is down 1.1 at 53 and TNX is down to a .8 bp gain at 4.48%. Lower and lower yields should be a step in the right direction for equity bulls.

Jonathan Levinson : 4/8/2005 1:29:37 PM

QQQQ has just broken the previous resistance and has raced up to a test of 7200 tick SMA resistance, in play now. A break above it will kick off a new short cycle upphase and stall the 30 min down. The move that started it was a buy program a minute ago, roughly 1.2M QQQQ shares within 100 ticks. Link

Linda Piazza : 4/8/2005 1:21:10 PM

Fifteen-minute Keltner resistance still holds, so far, at least.

Jonathan Levinson : 4/8/2005 1:21:04 PM

QQQQ failed at 37.80 resistance on the last attempt, similar to the prior failure at 37.85. The 30 and 60 min cycles continue to work their way lower, with the short cycle now trending in oversold territory. QQQQ remains bearish below the 7200 tick SMA (36.83) on an intraday cycle basis. Link

Linda Piazza : 4/8/2005 1:14:39 PM

Here's a chart I've been watching, showing historical horizontal resistance coinciding with the 38.2% retracement of the decline off the March high, the point from which the OEX turned lower today. Link It also shows the 60-minute 21/100/130-ema's. Notice the bounces from the red 21-ema? The OEX is currently bouncing again from that MA, testing Keltner resistance (not shown).

Jonathan Levinson : 4/8/2005 1:12:38 PM

Session low for Nymex crude at 52.80 just now, TNX down to a .8 bp gain at 4.48%.

Linda Piazza : 4/8/2005 1:10:47 PM

So far, Keltner resistance just under 565 is holding. Smallest channel still pointed lower.

Jonathan Levinson : 4/8/2005 1:04:06 PM

QQQQ update at this Link with 30 min channel support edging lower to 36.67. Bonds continue to firm, TNX now up 1.1 bps at 4.483%.

Linda Piazza : 4/8/2005 1:03:54 PM

Fifteen-minute Keltner resitance firming up near 565. Smallest channel still pointed down toward 562.65-563.39. Bears want to see continued 15-minute closes beneath the line currently just beneath 565 level, but need those profit-protecting plans in hand for any test of the 562.60-564 level.

Linda Piazza : 4/8/2005 1:00:56 PM

I wanted to remind any in bearish plays on the downturn from the OEX's test of the 38.2% retracement this morning to keep those profit-protecting plans in place now as the OEX has a new test of the 60-minute 21 and 100-ema's. Again, this could be a bounce zone. It could also be the confirmation zone for a H&S on that 15-minute chart. I wouldn't be surprised to see some chopping around before a final direction is chosen.

Tab Gilles : 4/8/2005 12:59:15 PM

$SOX Testing 100-ma and 420 resistance level Link

Jonathan Levinson : 4/8/2005 12:58:24 PM

Session low for QQQQ at 36.75, 30 min channel support down to 36.70.

Linda Piazza : 4/8/2005 12:57:57 PM

Potential H&S on the OEX's 15-minute chart, shown here on a line drawing to make it clearer: Link Remember that H&S's can and are rejected at the neckline. Since the right shoulder here appears stunted in relationship to the left, I'm wondering if it still doesn't need a right shoulder anyway. Something to watch.

Tab Gilles : 4/8/2005 12:57:46 PM

$FVX up/ EVV Down Link Link

Tab Gilles : 4/8/2005 12:55:16 PM

Nasdaq Summation Index ($NASI) & NYSE ($NYSI) Summation Index These two indicators have turned positive, NYSI on Wednesday and NASI on Thursday. Granted they are not a stand alone market timiing indicator, however they've been fairly reliable in the past. I pointed out the other day that the Nasdaq had given a bullish divergence buy signal and the NASI now has added confirmation. Link Link

Linda Piazza : 4/8/2005 12:55:14 PM

Turning back to the more reliable 15-minute chart for the OEX, I see that the smallest Keltner channel still points down toward 562.65-563.38. Bulls want to see 15-minute closes above a Keltner line currently at 565.11 to stabilize the smallest Keltner channel, while bears want continued 15-minute closes below that.

Linda Piazza : 4/8/2005 12:53:27 PM

The OEX has hit three-minute Keltner support now, after pulling back. Bears want three-minute closes below a Keltner line currently at 564.90.

Linda Piazza : 4/8/2005 12:51:52 PM

Don't forget the 60-minute 21-ema at 564.10 for the OEX. It's been powerful support for a week and may continue to be. Other important MA's--including the 60-minute 100-ema at 563.74--are just below, too. I mentioned earlier today that bears should have profit-protecting plans in place for a test of the 562.60-564 zone, if hit.

Linda Piazza : 4/8/2005 12:49:23 PM

The OEX is pulling back after moving back up to 565.23. Doncha just love those Keltner charts?

Linda Piazza : 4/8/2005 12:47:43 PM

The OEX tests the 565.25 level. We're about to see whether the "pullback more likely than a move much over 565.25" supposition holds.

Jonathan Levinson : 4/8/2005 12:46:36 PM

Volume remains very light, and QQQQ has slowed to a crawl. Bonds are advancing again, however, with TNX down to a 1.9 bp gain at 4.491%, and crude oil has weakened as well, -.90 at 53.20. This combination should favor equities, but so far there's little movement in either direction.

Linda Piazza : 4/8/2005 12:40:25 PM

Turning to the OEX's three-minute Keltner channel, I see that resistance near 565.25 looks fairly firm--firmer than the nearby support. However, this is a three-minute chart, and while it sometimes gives good insight, a three-minute chart isn't as trustworthy as others. Still, I would say that a pullback is more likely than a climb much above 565.25. Famous last words? We'll see.

Linda Piazza : 4/8/2005 12:36:53 PM

So far, the OEX's first Keltner resistance is holding, but that hold is tentative so far. Both bulls and bears have risk here. The advdec line has been trying to rise again, but that rise looks as tentative as it did earlier.

Jonathan Levinson : 4/8/2005 12:36:18 PM

So far a failure for QQQQ at the 7200 tick SMA line: Link . The picture is currently bearish on an intraday cycle basis, but still easily bullish for the longer daily cycle. Daily cycle bears need a break of yesterday's low to even challenge the current upphase in that timeframe. So far, the 30 and 60 min cycle downphases are sideways and corrective within it.

Jonathan Levinson : 4/8/2005 12:30:01 PM

There goes 37.85 QQQQ, with the 7200 tick SMA resistance line being tested now. The 30 min cycle downphase has yet to stall, but will on a break above 36.90.

Linda Piazza : 4/8/2005 12:29:26 PM

I mentioned earlier that the Dow had already touched the mid-channel level on its 15-minute chart and that it looked as if it might be time for a bounce. The Dow is bouncing, rising to test next Keltner resistance, now from 10,513.57-10,516.30. Bears want to see continued 15-minute closes beneath that resistance, and bulls want to see 15-minute closes above it.

Linda Piazza : 4/8/2005 12:26:20 PM

So far, first resistance on the OEX's 15-minute chart is holding. This is a really iffy point, though, with the support of the 60-minute 21-ema also just below, at 564.00. The 60-minute 21-ema has been prompting bounces since 4/04. There are also the 60-minute 100/130-ema's, at 563.72 and 564.68, respectively. The daily 21/100/130-ema's are nearby, too, at 564.76, 564.77 and 562.64. Bulls, of course, would not like to see the OEX round down below those 100/130-ema's after having pushed through them.

Jonathan Levinson : 4/8/2005 12:26:05 PM

QQQQ testing 36.85 resistance. Link

Jonathan Levinson : 4/8/2005 12:19:46 PM

Bond yields edging back up, TNX currently +2.7 bps at 4.499%.

Linda Piazza : 4/8/2005 12:15:51 PM

I've mentioned the 60-minute 21-ema a couple of times today. It's currently at 564.01, and the OEX is indeed bouncing from that average again. Keltner evidence and MA evidence are somewhat at odds here. The OEX needs to produce 15-minute closes above the resistance line now at 565.22 before it stops its smallest Keltner channel from tilting down toward 562.67-563.32.

Jonathan Levinson : 4/8/2005 12:14:48 PM

QQQQ is back to a test of 36.85 here, with 7200 tick SMA resistance down to 36.90. A break above 36.90 would stall the 30 min cycle downphase early.

Linda Piazza : 4/8/2005 12:07:21 PM

A few minutes ago, the advdec line dipped to a new low.

Jonathan Levinson : 4/8/2005 12:04:46 PM

Session high for May gold here at 429.30, with HUI +.47% at 201.04 and XAU +.45% at 93.65. Euros are in the green, CAD futures up to a .07% loss. USD Index chart at this Link

Linda Piazza : 4/8/2005 12:05:20 PM

OEX resistance is forming from 564.82-565.17. It's looking more and more as if it's going to dip toward but perhaps not to 562.62-563.29. It's difficult to tell whether the previous Keltner-style bullish divergence will continue with this test, so that the OEX pulls up just ahead of the test of this support.

Linda Piazza : 4/8/2005 11:58:47 AM

The DOW is already hitting the mid-channel level on its 15-minute Keltner chart, and so might be ready for a bounce. It looks as if it might find resistance at the 10,517.30-ish level, if so. Unles it can produce 15-minute closes above that level, its smallest Keltner channel will continue pointing down toward 10,473.33, but this mid-channel level can be powerful support, too. Might get choppy for a while.

Jonathan Levinson : 4/8/2005 11:57:03 AM

100 tick QQQQ chart at this Link

Jonathan Levinson : 4/8/2005 11:55:57 AM

Gold, silver, XAU and HUI have gone green, with HUI +.34% here at 200.78, XAU +.41% at 93.6.

Linda Piazza : 4/8/2005 11:54:12 AM

The SPX's 15-minute Keltner chart suggests that it could test 1183.11-1184.18, perhaps rather soon or perhaps after a bounce up to test 1187.61-1188.08 resistance first.

Jonathan Levinson : 4/8/2005 11:51:46 AM

The break through 36.85 QQQQ support sets up that level as resistance below the declining 7200 tick SMA (now at 36.92). The short cycle oscillators are now in oversold territory, but with the 60 min cycle just starting its downphase, the short cycle might well begin trending in oversold, as it did in overbought for much of yesterday's session.

Linda Piazza : 4/8/2005 11:51:58 AM

The first Keltner resistance encountered did stop the OEX, and it rolls down into next potential support, looking a bit as if it could break through that support after all. I speculated earlier this morning that the OEX could be making its way toward the midline level, then rising and still rising, and currently at 562.62-563.27. It's still possible that the OEX is making its way toward that support. One note: on each of the last few tests of that midline level, the OEX has pierced that support to a lesser degree, if that explanation makes sense. If that's going to continue, then it's possible that the OEX might not actually touch that support, but might be bought just ahead of it. That means that any who are in bearish plays, perhaps on the touch of the 38.2% retracement of the decline off the March high, need to have profit-protecting plans in place for a test of that support and maybe just ahead of that support.

Jonathan Levinson : 4/8/2005 11:48:30 AM

QQQQ 100-tick update at this Link

Linda Piazza : 4/8/2005 11:39:41 AM

At its LOD, the TRAN had an almost 90-point drop today.

Jonathan Levinson : 4/8/2005 11:39:14 AM

Crude oil continues to edge higher, currently up to a .575 loss at 53.525, as ten year notes rise as well, TNX pulling back to a 2.5 bp gain at 4.497%.

Linda Piazza : 4/8/2005 11:34:15 AM

The nearest Keltner resistance on the OEX's 15-minute chart continues to hold. Support is rising beneath the OEX, however, and beginning to firm, near 564.74, so it's possible that this support will hold if the OEX does roll down, or will even keep it from doing so. It's not good news for bulls that this first resistance is holding, however.

Jonathan Levinson : 4/8/2005 11:32:25 AM

Session low for QQQQ here, testing 35.85 support as the 30 min channel support drops to 36.77. The 60 min channel is finally ticking lower, support still holding at 36.80. QQQQ remains bearish on an intraday basis below 36.95, the current site of the 7200 tick SMA.

Linda Piazza : 4/8/2005 11:29:38 AM

The advdec line has been climbing since about 10:50, with the climb looking tentative as yet. Keep a watch on this for either a stronger climb or a rollover.

Linda Piazza : 4/8/2005 11:22:05 AM

First resistance is tentatively holding on the OEX's 15-minute Keltner chart. During the last 15-minute period, the OEX inched just over that resistance and is at it now, so the "holding" is tentative as yet.

Jonathan Levinson : 4/8/2005 11:18:29 AM

QQQQ 100 tick chart at this Link with volume growing thinner.

Jonathan Levinson : 4/8/2005 11:14:09 AM

Session high for silver here, +.9% at 7.142 and gold -.30 at 428.10. The XAU is trying to go positive, HUI still down .52 at 199.57. Refreshable chart of the USD Index at this Link

Jonathan Levinson : 4/8/2005 11:12:51 AM

Daily TNX chart update at this Link . Currently, TNX is up 3.5 bps at 4.507%. Crude oil is up to an 80 cent loss at 53.30.

Linda Piazza : 4/8/2005 11:12:37 AM

The OEX now pushes above first resistance on the 15-minute Keltner chart, and bulls will want to see the OEX hold onto this level into the close of the current 15-minute period, with that resistance currently at 565.68. Otherwise, we have to consider the resistance as having held.

Linda Piazza : 4/8/2005 11:06:23 AM

So first, first 15-minute Keltner resistance at 565.62 is holding on 15-minute closes.

Jonathan Levinson : 4/8/2005 11:05:10 AM

QQQQ 100-tick chart update at this Link with 30 and 60 min channel support lined up at 36.80, resostamce at the 7200 tick SMA at 36.96, followed by 37.05 and 37.15. The short cycle oscillators have yet to suggest an upphase forming- we'll have to see at the channel bottom if it gets hit.

Linda Piazza : 4/8/2005 11:00:58 AM

Closest 15-minute Keltner-channel resistance is now at 565.65. Bulls want to see 15-minute closes above that resistance, while bears want it to hold on 15-minute closes.

Linda Piazza : 4/8/2005 10:58:40 AM

The RLX once again heads down toward a test of its 200-ema and -sma's, at 423.89 and 422.27, respectively.

Linda Piazza : 4/8/2005 10:57:13 AM

Although the BIX has been trying to pierce its 38.2% retracement of the decline off the March high, it's been falling back below or to that level by the close. It's currently below it now, after having tried again this morning to pierce it. It did not top yesterday's high in that effort.

Jonathan Levinson : 4/8/2005 10:55:20 AM

Session high for euros here at unchanged, 1.2873. Gold and silver are edging up as well, as the TNX ticks lower to a 3.9 bp gain at 4.511%.

Jonathan Levinson : 4/8/2005 10:47:29 AM

QQQQ's 30 min channel is declining, though with little vigor as the 60 min cycle upphase continues. The range remains narrow, however, and the daily cycle upphase has its higher high for the day, and a 40+ cent cushion between current levels and yesterday's low. Until the 60 min channel rolls over, we can expect more of this choppy decline- though the intraday cycles continue to favor the downside.

Linda Piazza : 4/8/2005 10:45:36 AM

As suggested in my 10:14 post, the OEX did not maintain support near 566, but instead dipped down to the next Keltner support on the 15-minute channel, with that support now at 564.62-564.74. Currently, this support and the resistance up near 567 look about equally weighted, so it's difficult to tell which will hold. If there's a bounce now, perhaps beginning as I type, the test of first resistance at 565.80 might tell us much about whether to expect a further decline, perhaps toward the 562.54-563.13 zone.

Jonathan Levinson : 4/8/2005 10:45:06 AM

Daily chart of ten year treasury yields (TNX) at this Link

Linda Piazza : 4/8/2005 10:46:26 AM

VIX certainly isn't looking too bearish yet today, is it, unless you consider the drop excessive and thereby bearish from a contrarian viewpoint?

Linda Piazza : 4/8/2005 10:39:03 AM

That host of converging MA's on the SPX's chart, with the 30-, 50- and 100-sma's all converging at the SPX's close yesterday, are at least temporarily turning the SPX lower, too.

Jonathan Levinson : 4/8/2005 10:38:35 AM

QQQQ 100-tick chart update at this Link

Jonathan Levinson : 4/8/2005 10:36:41 AM

Crude oil is bouncing off a low of 52.925 and is currently up to a .825 loss at 53.275. Ten year treasuries remain quite weak, with TNX up 4.5 bps at 4.517%. So far, it's an upside breakaway gap on the daily chart, but the day is young.

Linda Piazza : 4/8/2005 10:36:17 AM

I mentioned yesterday that a good buy-the-dip test for the OEX might come at a test of the 60-minute 21-ema, which had been providing bounces most of the week. However, I also warned that internals and other conditions should support a buy-the-dip play, and that plunging advdec line is anything but supportive of a new bullish play. Reversals can and do happen as the low of the day is hit, both in price and the advdec line, but I wouldn't want to be buying after the 38.2% retracement had been hit, with the advdec line dropping sharply. However, new bears, perhaps those who might have entered a bearish play on a test of that 38.2% retracement, should certainly be aware of the approaching support. That 60-minute 21-ema is now at 563.91. The 60-minute 100/130-ema's are at 563.69 and 564.68, respectively. Daily 21/100/130-ema's are at 564.81, 564.78 and 562.65, so there's lots of potential support nearby, too. If I were in a bearish play, I'd certainly have profit-protecting plans for the 562.60-564 zone.

Jonathan Levinson : 4/8/2005 10:26:58 AM

Session low for 10 year bonds here at 109 13/64, TNX up to a 4.4 bp gain at 4.516%.

Jonathan Levinson : 4/8/2005 10:25:12 AM

QQQQ 100 tick chart update at this Link . The 7200 tick SMA held as resistance.

Jonathan Levinson : 4/8/2005 10:21:50 AM

Session low for Nymex crude here at 52.975.

Linda Piazza : 4/8/2005 10:26:34 AM

Notice the TRAN today? It's diving. There's some bad reaction to YELL's intended acquisition of USF Corporation (USFC), but nevertheless, we have to ask why the reactions are so extreme. This movement has broken the TRAN below the 50% retracement of the rally off the January low, questioning whether that declining regression channel was just a bull flag. As you know, I've been warning that the TRAN was overbought on both a weekly and monthly basis, based on historical action around an envelope surrounding weekly and monthly 200-ema's.

Jonathan Levinson : 4/8/2005 10:19:42 AM

QQQQ is retesting the broken 7200 tick SMA from below with a short cycle downphase underway. However, the range this morning is so narrow that bears will want to see a break of 36.85 before trusting any weakness- the cycles can give false signals in a narrow/consolidation range.

Linda Piazza : 4/8/2005 10:15:20 AM

Advdec line still dropping.

Linda Piazza : 4/8/2005 10:14:48 AM

The OEX tests first Keltner support on the 15-minute Keltner chart. Bulls would most like to maintain 15-minute closes aboe this Keltner line currently at 566.11, but some Keltner-style bearish divergences building for a while might be suggesting a drop to stronger support near 564.69-564.95. Hasn't happened yet.

Jonathan Levinson : 4/8/2005 10:14:15 AM

Session lows across the board, QQQQ breaking the SMA line now.

Jonathan Levinson : 4/8/2005 10:10:57 AM

7200 tick SMA support for QQQQ is at 36.97- still not touched. Despite that the 30 min cycle upphase stalling, and the short cycle is ticking lower from overbought territory.

Jonathan Levinson : 4/8/2005 10:07:04 AM

Nymex crude has reopened and is currently -.65 at 53.45 on the May contract, current low still 53.25.

Jonathan Levinson : 4/8/2005 10:06:13 AM

No reprieve for bonds, with ZN down .1719 at 109 19/64, TNX up 3.1 bps at 4.503%.

Jonathan Levinson : 4/8/2005 10:04:52 AM

QQQQ 100 tick chart update at this Link , edging higher. 30 and 60 min channel resistance are converging at the 37.10-.14 range.

Linda Piazza : 4/8/2005 10:01:28 AM

The OEX still presses against 15-minute Keltner resistance, but nudging that resistance higher along with it. Top resistance is at 568.72, so the OEX may just be pointing that channel up toward that resistance. The advdec line is trying to recover, but still negative. The way I see it is that current bulls can just follow the OEX higher with their stops or take partial or full profit at the levels they identified to do so when they entered the play, but that I wouldn't advise this as a place for a new bullish entry. Despite rather weak internals, the chart signs aren't yet giving me significant signs that this would be a good entry place for a bearish play, either. I am seeing some bearish divergences begin to set up, but that's just not quite enough evidence for me to suggest a bearish entry just yet. This certainly does look like a precarious place for the OEX, though, doesn't it? Link If you're the kind of trader who likes to identify a particular place at which to sample a play, based on Fib levels or perceived S/R, as Leigh Stevens suggested in a recent article, this might be one place for try, but some traders like more corroboration. That usually includes me when I'm making suggestions to readers, which means I occasionally miss a great play.

Jonathan Levinson : 4/8/2005 10:00:25 AM

The Fed has announced a 4.25B weekend repo to replace the 7.75B expiring today, for a net drain of 3.5B.

Jonathan Levinson : 4/8/2005 9:56:05 AM

QQQQ is net unchanged from its early morning levels- so far just sideways chop. Provided that the highs don't get violated by much or for long, a range at these levels will suggest topping action in the 30 and 60 min cycles.

Jonathan Levinson : 4/8/2005 9:49:03 AM

QQQQ 100 tick chart at this Link

Linda Piazza : 4/8/2005 9:48:35 AM

I don't think I'd take a bet on a new bullish position with the advdec line diving right now. Doesn't mean that current bulls should automatically bail out of their positions, but they should have those profit-protecting plans. Keltner charts don't give me a strong view as to the relative strength of resistance or support just yet.

Jonathan Levinson : 4/8/2005 9:47:27 AM

Gold, silver and the miners are all lightly negative, with XAU -.11% at 93.11 and HUI -.11% at 199.87. Euros and CAD futures are also red, -.21% at 1.2846 and -.57% at .8136 respectively. Higher treasury yields are benefiting the USD.

Linda Piazza : 4/8/2005 9:44:51 AM

Advdec line still headed lower. I continue to advise bulls to have their profit-protecting plans made. The OEX could continue to climb higher into this 566-568 resistance zone and even break out of that to head toward 570, but the OEX currently deals with the 38.2% retracement of the drop off the March high at about 567.30, and there's no assurance that the OEX can break above or stay above that retracement level.

Jonathan Levinson : 4/8/2005 9:43:41 AM

Session low for ten year note futures just now at 109 13/64, with TNX +3.7 bps at 4.509%.

Linda Piazza : 4/8/2005 9:42:29 AM

The OEX again approaches 15-minute Keltner resistance. It's been pulling back from that resistance each time it touches it, but only slightly. First support is currently at 565.85 on a 15-minute closing basis, stronger support below that at 565.51-564.75. Sooner or later, it's going to be time for a pullback to the midline level, currently at 562.25-562.90, but climbing. By the time the OEX retreats all the way to that midline level, it may have risen further.

Jonathan Levinson : 4/8/2005 9:40:10 AM

QQQQ continues to hold yesterday's high at 37.00, as the 30 and 60 min channel resistance lines continue higher to 37.17 and 37.09 respectively. The short cycle upphase is overbought, however, and a break below the 7200 tick SMA at 36.93 should be enough to kick off the next downphase.

Linda Piazza : 4/8/2005 9:39:35 AM

Advdec line negative right now.

Linda Piazza : 4/8/2005 9:37:47 AM

An overview of the OEX on a daily chart: Link

Jonathan Levinson : 4/8/2005 9:12:41 AM

The 60 min cycle for QQQQ continues to point north while the 30 min cycle is buried in overbought and late for a downturn. Without an immediate continuation of yesterday's closing blast, that cycle should flip to a sell signal. My guess is that we will see rangebound chop as the 60 and 30 min cycles try to get back in sync- the "weightless" rangebound drift we often see as these cycles top out. However, with the daily cycle strengthening despite the low volume, intraday bears need to be close on their stops in the event of a rare but possible upside trending move. It's the exception, but it's also more likely to occur under conditions like this, in the context of a daily cycle upphase. Current 30 min channel resistance is at 37.12. Link

Linda Piazza : 4/8/2005 9:05:30 AM

Thursday, the OEX finally did it. It finally closed above the daily 21/100/130-ema's. It's still within the broadening formation, so that we still have to be aware of the long-term resistance offered at the top of that broadening formation. The OEX has not broken out of that formation yet, so we can't have complete confidence in the sustainability of the upside breakout. This is especially true since some indices remain in consolidation patterns. The RLX does. The TRAN remains within a descending regression channel off the March high, although attempting a breakout. The BIX attempted an upside breakout, but dropped back within its flag and at the 38.2% retracement of the drop off its March high. The SPX ended the day at the resistance assumed at its converging 30-, 50- and 100-sma's. The OEX ended the day just below those analogous averages.

Earlier in the week, I mentioned that logic suggested that the OEX should at least attempt a right-shoulder formation, and that symmetry would suggest a move up toward 575-578 before the OEX flattened at the right-shoulder level and perhaps consolidated again, but logic doesn't always play a part in market behavior. At that time, no signs yet pointed to the possibility that the OEX could rise, but the close above the daily 21/100/130-ema's is one the signs awaited. However, before we get too gung-ho about the possibility of a climb, it should be remembered that the OEX has not retraced even 38.2% of the dip off the March high, much less moved above a 50% retracement. That means that we still have to consider any climb to be potentially countertrend. Remember that while the OEX has moved out through its broadening formation, we've seen strongly bullish days followed by strongly bearish ones as trading became more volatile. That's what sometimes happens in a broadening formation, although the impetus lately has been a steady move up toward the top boundary.

Current bulls should have profit-protecting plans in place for the current 566-568 zone being tested as this could be strong resistance, one reason I've been warning that a breakout above the daily 21/100/130-ema's would soon slam into next resistance. The top of the broadening formation, from 568.25-570, depending on how many candle shadows are included, also presents potential resistance. It has since March 22.

With that potential resistance just overhead, new want-to-be bulls should consider buying dips, perhaps to the 60-minute 21-ema, as that average was prompting bounces all this week. Be sure that internals and the shape of the decline (corrective, not impulsive) support the idea that there will be a bounce. I'll also be watching out for signs that it's time to watch for a rollover bearish play, but Thursday wasn't the right day for that. Will today be? I'll be watchful, since our futures did not participate in overnight gains by other bourses, but that's not much of a sign upon which to hang a bearish play just yet. It is a possible sign to be watched.

Jonathan Levinson : 4/8/2005 8:23:49 AM

Ten year bonds are sliding lower as well, with TNX up 3.1 bps to 4.503% at the cash open and gapping above the descending resistance line that has held for the duration of the daily cycle downphase. A pullback to retest that line would not be uncommon, but this violation should end the daily cycle downphase, setting up yesterday's key reversal as a daily cycle bottom. Link

Jonathan Levinson : 4/8/2005 8:16:13 AM

Crude oil is edging lower, now down 40 cents at 53.70. The overnight low was 53.25.

Session low for gold as well at 427. Daily chart of June gold showing the current 425-432 range at this Link

Jonathan Levinson : 4/8/2005 7:34:11 AM

Equities are mixed, ES trading 1194.75, NQ 1510.5, YM 10572 and QQQQ +.10 at 37.04. Gold is down 1 at 427.4, silver -.018 at 7.06, ten year notes -.0938 at 109 3/8 and crude oil is down .325 at 53.775.

There are no major economic reports scheduled for today. Alan Greenspan will be speaking at the Fed's Community Affairs Research Conference today at 12:30PM.

Linda Piazza : 4/8/2005 7:27:00 AM

Good morning. The Nikkei and most other Asian markets gained as crude prices dropped. Most European markets gain, too. The OECD's Leading Indicator for February fell to 98.7 from 99.4 in Japan, 100.3 from 100.4 in the U.K., 105.7 from 105.8 for the eurozone and 103.1 from the previous 103.2 in the U.S. Among eurozone countries, the indicator fell among all major countries, with France's falling less than some others. One article concludes that the indicators give the impression that the recovery is somewhat shaky. Our futures mostly flat-lined overnight. As of 7:00 EST, gold was down 0.80, and crude, down $0.36 to $53.75. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei gapped higher Friday morning, benefiting from a drop in crude prices. It came down to test the gap in the early afternoon, and then climbed, accelerating that climb after the government released February's core machinery orders. Those orders rose far more than the predicted 3.1%, to 4.9% over January's level. A sell-off just before the close erased 40 points of the gain, but the Nikkei still closed higher by 63.76 points or 0.54%, at 11,874.75. Gains in exporters had been partly responsible for that gap higher at the open, with airline stocks being among the issues climbing.

Other Asian markets gained, too. The Taiwan Weighted gained 0.88%, and South Korea's Kospi climbed 0.33%. Despite some worries about the effect that currency issues and falling LCD panel prices might have on LG Electronics' profit and the expectation that the company will show an operating loss, its shares jumped 3.1% ahead of Monday's earnings results. Perhaps it was shortcovering ahead of the report. Singapore's Straits Times rose 0.26%, and Hong Kong's Hang Seng climbed 0.47%. China's Shanghai Composite gained 1.88%.

Most European markets gain, too, with lower crude prices also a factor in the gains occurring in that region. In addition, some credit M&A activity for bolstering enthusiasm, with a joint bid for U.K. beverage company Allied Domecq by Pernod Ricard and U.S. company Fortune Brands being one deal being discussed. However, the Office of Fair Trading believes that either of the bids to take over the London Stock Exchange will result in less competition, if accomplished, and so LSE customers are unlikely to benefit from either. Better-than-expected earnings from cosmetics maker Clarins also helped sentiment. In Germany, the February Trade Balance was released, showing that surplus slightly higher than the 12.6 billion euros expected, at a seasonally adjusted 13.1 billion euros. Both exports and imports fell month over month, but rose over the year-ago comparisons. The unadjusted current account surplus rose to 8.4 billion euros from January's revised 6.8 billion.

In stock-specific news, speculation arose that strategy disagreements between Alcatel's chief executive and COO will lead to the resignation of the COO. DaimlerChrysler benefited when a U.S. district court judge stopped Kirk Kerkorian's suit against the company, with that suit relating to the company's 1998 restructuring. Chemicals and perfumes maker Givaudan reported disappointing Q1 sales, saying sales in China and South Asia climbed, but those in the U.S. and Western Europe dropped.

As of 7:10 EST, the FTSE 100 had climbed 10.60 points or 0.21%, at 4,987.60. The CAC 40 had gained 13.44 points or 0.33%, to 4,137.81. The DAX had gained 15.57 points or 0.35%, to 4,405.09.

Market Monitor Archives