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Linda Piazza : 4/21/2005 12:01:57 AM

I'll be gone Thursday at least until early afternoon and maybe all day. I'll be leaving too early to prepare the Asia/Europe update, but I took a look at the OEX's charts tonight. Wednesday, before the market opened, I noted that I'd be watching for a breakdown of the apparent bear flag. If the formation waddled like a bear, we had to assume it was just what it appeared to be. This was a classic case of a flag rising from the low in a tight pattern of higher highs and higher lows, not even retracing 38.2% of the drop that immediately preceded it when the OEX did indeed break out of that flag. For a while, it refused to trade to a new low, climbing the underside of that bear flag instead, but the ten-minute 100/130-ema's continued to provide resistance as they had all day Tuesday. The OEX finally fell away, dropping into that 543.50-545.75 zone that I'd mentioned as one possible downside target. As the OEX dipped into that zone, it was also testing Keltner support from the 15-minute all the way through the weekly chart. I suggested that bears have profit-protecting plans in case of a sharp bounce, but such a bounce never occurred. By the end of the day, the OEX had created a new breakdown signal on the daily chart, setting a new downside target just under 526. That corroborated with other potential downside targets, such as the target set by the H&S on its daily chart (with a blunted right shoulder). Also, if the month-long consolidation from the middle of March until the middle of April occurred midway through a big move, as sometimes happens, the downside target would perhaps be even a little lower.

I do not anticipate the OEX falling straight to 524-527, of course, and I'm not even certain that it will ever get that low. However, the vulnerability remains, and the sell-the-rallies mentality does, too. I don't like to play countertrend plays, and don't like to suggest them for readers, either, so if a rally begins, I would likely advise standing aside. If the OEX should climb, the volatility indices would likely drop and call prices would drop with them. That can and sometimes does result in the OEX moving higher while call prices don't really climb with them.

So, will a rally begin today? With the OEX ending the day perched on last Keltner support before a breakdown signal on the 15-, 30- and 60-minute charts, that's hard to say. Keltner charts were developed to pinpoint breakouts, so it can't be said that the OEX will always bounce from that final support. Once a breakdown signal is established, which hasn't been done yet except on the daily chart, I usually advise traders already in a play to follow the OEX lower with their stops. Sometimes a new breakdown signal is a good new entry, but without seeing what internals will look like today and sometimes they're quickly reversed, I have no way of making judgments today. If there's a bounce, the 15-minute chart shows first resistance at 545.02-545.23. Other charts show that 546.20-548.20 may also be strong resistance, a level to watch for a potential rollover.

Since markets are due for a relief rally any day, and since markets have been pressed down so hard, a relief rally may be hard, too, so before entering a bearish play on an apparent rollover, know first where your stops should be as appropriate to your entry and your account-management style, set those stops and be ready to jump out if the OEX suddenly heads the other direction.

Jeff Bailey : 4/20/2005 11:35:30 PM

Not surprised that TASR discovers error in financial statements (8-K filing) relating to a future tax benefit. This stock has been shocking bulls into submission for months.

Jeff Bailey : 4/20/2005 11:33:11 PM

Stocks that should be volatile Thursday morning (after-hours change): MOT +3.2%, FFIV -6.0%, QCOM -3.5% and PMCS -2.3%

Jeff Bailey : 4/20/2005 11:32:14 PM

Qualcomm (QCOM) Conference Call notes: increased sales of lower margin phones in less developed markets; higher royalties received from companies who use its patented technology and comfortable with guidance. Company did reduce 2005 sales and profit outlook due to slow mobile operators adaption of QCOM's latest technology (wcdma). Co. sees an accelerating transition to 3G products at a pace that varies by region. Co. continues to invest in R&D.

Jeff Bailey : 4/20/2005 11:27:36 PM

Program Trading Levels for Thursday...HL Camp & Company has their computers set for program buying at $+3.06 and set for program selling at $+.18.

OI Technical Staff : 4/20/2005 9:59:59 PM

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Tab Gilles : 4/20/2005 7:36:41 PM

Was out most of the day today, just getting an opportunity to post some charts and thoughts.

$NASI Still signaling more downside,,,no reversal signal as of yet for the $COMPQ. Link

On 4/18 9:28 AM post I presented a weekly COMPQ/$NAHL/$NASI weekly chart. I'm looking for the 10 week ema on the $NAHL to test the -100 level. That would put the $COMPQ more than likely below the nearterm support of 1900. More likely price target on the downside of 1750. Link Link

$SPX 1125 looks more likely as a downside target. Posted 4/15 12:02 PM... Link

current $SPX chart... Link

Jeff Bailey : 4/20/2005 4:59:57 PM

Notice how the BIX and 345 lines up with the Daily Pivot. The QQQQ's shouldn't get above Daily R1 and a breakdown in the SOX below it's Daily S1 could have us looking at Weekly S1 and 370. As long as the banking correlation continues, prepare for short positions like today. 10-year yields getting close to Weekly S1 again (already tested this week) and traders need to watch this 41.96 level as well.

Jeff Bailey : 4/20/2005 4:52:53 PM

Pivot Matrix for tomorrow at this Link

Jeff Bailey : 4/20/2005 4:31:20 PM

Current OPEN MM Profiles at this Link Today's Activity...Day trade 1/2 position short in QQQQ at 35.20 and covered 1/2 at 34.97 and the rest at 34.83.

Jeff Bailey : 4/20/2005 4:22:25 PM

Closing Internals found at this Link

Jeff Bailey : 4/20/2005 4:20:28 PM

Closing Market Watch found at this Link

Jonathan Levinson : 4/20/2005 4:18:35 PM

EBAY reports Q1 EPS of 19 cents vs. 15 cents on revenue of 1.03B vs. 756.2M y-o-y, a 36% increase. EBAY is currently up 5.4% at 33.95.

Linda Piazza : 4/20/2005 3:54:11 PM

I've been looking for a reason that the OEX's decline should stop here, other than Keltner support. I'm not finding it, but Keltner's have surprised me before, and then the OEX does verge on creating breakdown signals on some of those charts. If we assume that the big consolidation patterns such as the one that formed from the middle of March until the middle of April form about midway into the drop, as they often form midway in a big movement, then the OEX has a downside target near 524, near the 526-ish downside target that may be renewed with today's close on the daily Keltner chart. I wouldn't expect a drop to 524-526 to occur without a pause, however, and exiting at least partial positions might be a good idea for bears this afternoon. It remains a sell-the-rallies environment, however, until proven otherwise. Somewhere through here, expect a sharp relief rally.

Jonathan Levinson : 4/20/2005 3:52:53 PM

Sharp spike up in EBAY here. Might be a "pre-release" of the report, or someone thinks they know something: Link

Jeff Bailey : 4/20/2005 3:50:58 PM

SOX also coming into its 50% retracement from the lows from near October 2002 to Jan 2004....385.65...currently at 384

Jeff Bailey : 4/20/2005 3:42:48 PM

SOX nearing Daily S2 of 383.73....currently at 384.45.

Jeff Bailey : 4/20/2005 3:39:59 PM

It seems too late in the day to try to pick bottoms, but support in most major indices is just below. A lot of red today after a failed rally this a.m. With the VIX at 16.77 and well above Daily R2 we could see more bulls exit into the close. Monthly R2 is 16.47 and will see if that holds as support. Tomorrow's opening should be important for sentiment.

Linda Piazza : 4/20/2005 3:37:24 PM

I will not be in the MM tomorrow morning and perhaps for much of the day. I'm not certain yet whether I'll be able to post the early morning Asia/Europe report, but the futures writers sometimes note overnight developments, so check there, too, if I'm not on the Monitor at all.

Linda Piazza : 4/20/2005 3:34:38 PM

The OEX's four-minute 21-ema is now at 544.61, with that average having stopped the OEX most of the day. Bears, adhere to your profit-protecting plan and begin thinking about whether you intend to exit by the close.

Jonathan Levinson : 4/20/2005 3:34:47 PM

IB just printed a bad tick to 33.75 QQQQ. To clean up your intraday chart in Quotetracker, click on it and press ctrl-shift-L until it disappears.

Jonathan Levinson : 4/20/2005 3:32:13 PM

QQQQ's 30 and 60 min cycle downphases continue to point lower, neither yet oversold, with channel support currently down to 34.60. The 7200 tick SMA resistance is down to 34.81, and the 30 min cycle downphase will continue below it. So far, these downphases are getting good traction, confirming the daily cycle downphase still in effect. Intraday chart at this Link

Jeff Bailey : 4/20/2005 3:24:46 PM

Banking Index (BIX) continuing lower....343.11.....equities still under pressure. This doesn't mean a weak BIX tomorrow will mean lower equities, but it IS a correlation we will have to look out for early in the a.m. to judge sentiment.

Jonathan Levinson : 4/20/2005 3:24:20 PM

Nothing that I see yet, Marc.

Linda Piazza : 4/20/2005 3:23:11 PM

Here's where the OEX is with respect to lower Keltner channel support, on the 60-minute chart here: Link A breakdown is possible, offering a new breakdown signal, the reason for which Keltner channels were developed. The OEX could just slide down that lower line. Or it could bounce strongly, as it did the last time it tested this channel, after consolidating for a few hours. Be careful and follow the OEX lower with your stops if in bearish positions.

Jonathan Levinson : 4/20/2005 3:23:56 PM

June gold is up 2 at 436.60 despite the miners, XAU and HUI, both being down over 1%. Gold held a low of 433.10, well above the breakout zone of 432. 6 month daily chart at this Link

Jonathan Levinson : 4/20/2005 3:19:27 PM

QQQQ 100-tick chart update at this Link

Linda Piazza : 4/20/2005 3:19:03 PM

Now that the OEX is trending more strongly, you need to dial down to a shorter-interval chart to watch how it reacts in relationship to the 21/100/130-ema's and to detect a change in trend. Since late morning, it's been bouncing back off its 21-ema on the four- or five-minute chart, and there have been CCI zero line rejections to corroborate new entries on the OEX with each touch of the four-minute (it's far away from it now).

Keep following the OEX lower with your stops, bears, as it's approaching support on 15-minute through weekly charts. Be prepared for a bounce any time, although it's not proven one will occur. Honestly, if I'd been calling an official bearish play rather than suggesting that traders could consider such a play on a breakdown out of the bear flag, I would have closed it at just over 546, as the OEX was hesitating, forming an inverse H&S on the three-minute chart. I would have chickened out before this last drop.

Jonathan Levinson : 4/20/2005 3:12:55 PM

The cash bond market has closed, with TNX going out +0.8 bps at 4.211% after testing the 4.3% level at the session highs- an amazing recovery for the ten year note/dunk for the ten year yield. Nevertheness, despite the blowoff doji top, a higher high and higher low printed for the day, the first sign of trouble for the bottomy daily cycle downphase: Link

Jeff Bailey : 4/20/2005 3:09:01 PM

QQQQ's in-between Daily Pivot and Daily S1 as bonds close. Above 34.97 and then sentiment will go more neutral. Interesting how the recent bad tick was back into the 35.20 area. This level will most likely be Daily R1 tomorrow just a guess.

Linda Piazza : 4/20/2005 3:07:45 PM

Support is trying to form under the OEX's current position, with that support at 545.55-546.00 on the 15-minute chart, but resistance is ringing tighter around the OEX's current position, too. First resistance at 546.81 and then from 548.06-549.10. Next strong resistance is near 552. For now, the OEX has to begin producing 15-minute closes above the Keltner line currently at 546.81 before it can even begin turning its smallest Keltner channel higher again.

Jeff Bailey : 4/20/2005 3:03:38 PM

3:00 P.M. Internals at this Link

Jeff Bailey : 4/20/2005 3:02:59 PM

Market Watch at this Link

Linda Piazza : 4/20/2005 2:56:04 PM

Today, the RLX, one of the indicator indices I like to watch, has been testing the 400-401 level, psychological support but also the location of the 61.8% retracement of the rally off last summer's low. This is potential support, but not particularly bullish that the RLX has retraced this much of that rally. Below about 412-413, the RLX began moving into a year-long congestion zone from the summer of 2003 through to the summer of 2004, so logic suggests that even if the RLX is going to retrace all the rally, that declines would slow now or become choppier. Perhaps at least temporary support might be found at any time.

Jonathan Levinson : 4/20/2005 2:47:55 PM

Headline:

PRESIDENT BUSH SIGNS BANKRUPTCY BILL INTO LAW

Jonathan Levinson : 4/20/2005 2:46:28 PM

QQQQ shows a slight bullish divergence on the short cycle TRIX and Macd (bottom and third-to-bottom frames Link ), but needs to clear the 34.90 resistance level to kick off a new upphase, with confirmation on a move above 34.96. However, with the 30 and 60 min channels still pointing south, there's a better than usual chance that the short cycle upphase will be weak/corrective/sideways within it.

Linda Piazza : 4/20/2005 2:36:46 PM

The OEX's 15-minute downside Keltner target is 544.33 currently, but the 30- and 60-minute charts also have targets near this range, both of those slightly above this one. Keep those profit-protecting plans in place. This breakdown-out-of-the-flag play (not an official one, but one that some traders may have employed on their own) has worked well, but don't let it turn into a loss.

Jonathan Levinson : 4/20/2005 2:34:41 PM

Nymex June crude has closed +.425 at 54, off a session high of 54.575. Intraday 30 tick chart at this Link

Jeff Bailey : 4/20/2005 2:29:53 PM

It feels like bears holding positions will still lean on equities, while new bears may not be that aggressive. The key, as noted this morning, should still be in the BIX and closing under 345 will most likely have bulls nervous again. Seems like too much risk taking another short position at this level in the QQQQ's. Swing trade shorts in stocks, on the other hand, may still be a possibility.

Jonathan Levinson : 4/20/2005 2:28:41 PM

Session high for ZN bonds, filling the morning gap and back to yesterday's range, TNX now up 0.8 bps at 4.211%- an amazing recovery in bonds today.

Linda Piazza : 4/20/2005 2:30:11 PM

If you still have a bearish position on the OEX, follow the OEX lower with your stops now as it sets a breakout signal with a target of 544.26 and especially as it approaches that target, if it does. The OEX could create a new breakdown signal, just cratering, so decide if your stops will widen or tighten as that support is reached. Whatever you decide is dependent on your trading style and how much downside you still think is possible, but don't let a winning position become a losing one. I don't like countertrend plays and especially don't like trying to catch the bottom before there's some sign there's a bottom other than where I think it might be, so I wouldn't feel confident enough to try to pick such a bottom and suggest a long options play (different in nature than futures plays), but bears shouldn't feel uncomfortable about deciding to take whole profit at some point, either, if they don't think they'll be nimble enough to get out in case there is a bounce.

Jonathan Levinson : 4/20/2005 2:25:08 PM

QQQQ 100 tick chart update at this Link with 30 min cycle channel support down to 34.70.

Jonathan Levinson : 4/20/2005 2:22:48 PM

Volume breadth has deteriorated, but much moreso for the NYSE which has declining volume now outpacing advancing 3.6:1. On the Nasdaq, it's 1.4:1. The TRINQ is up to 1.03, showing neutral selling pressure, the TRIN up at 1.38.

Linda Piazza : 4/20/2005 2:18:53 PM

The OEX did create a breakdown signal on the close of the last 15-minute period, but only barely. It's moving down now, though, and without a quick bounce soon, we can begin to trust that breakdown signal a little better. Potential downside target of 544.29 now, but it's iffy.

Jonathan Levinson : 4/20/2005 2:18:15 PM

ZN bonds are recovering from their Beige Book dip, back to the pre-CPI highs with TNX up 2.8 bp here at 4.231%. Crude oil is down to 53.875 gain while the USD Index is bouncing from a higher low above 83.40: Link

Linda Piazza : 4/20/2005 2:12:53 PM

Remember that as the OEX drops lower, it drops deeper into potential daily and weekly Keltner support. There can be a breakout signal on one of those as well as on an intraday chart, so that doesn't make it impossible for the OEX to just keep dropping, but it makes further downside less predictable, and perhaps . . . just perhaps . . . begins to shift danger onto bears. Just protect your profits. If you didn't take partial profits earlier, that might be something you consider soon, moving stops on the rest to breakeven so that you have an opportunity to participate in further bearish gains if they're offered. If you have only one contract, you might consider whether you want to take profit or just set a stop at a breakeven level. Don't feel bad if you elect to take profit now and then the OEX craters. It's just an iffy time and you have to make your account-management decisions in such an iffy environment.

Jeff Bailey : 4/20/2005 2:12:35 PM

Day Trade Exit Now we get the volume at Daily S1 and therefore let's close our our QQQQ short from 35.20 at 34.83.

Linda Piazza : 4/20/2005 2:08:29 PM

Took a while, but the OEX is now breaking through the Keltner support that had been holding it up just above 546. If there's a 15-minute close below the channel line currently at 546.45, the new downside target is 544.33. Bears need to keep their profit-protecting plan in mind. This 15-minute period has not concluded and the target is not yet set.

Jeff Bailey : 4/20/2005 2:08:36 PM

Internals for 2:00 P.M. Link

Jonathan Levinson : 4/20/2005 2:07:53 PM

Session lows across the board, QQQQ retesting yesterday's low. 30 min channel support has declined to QQQQ 34.74.

Jonathan Levinson : 4/20/2005 2:05:04 PM

It helps to be able to identify which rocks are making waves when they occur. The Beige Book usually isn't much of a market mover, but it's helping the bond bears here.

Linda Piazza : 4/20/2005 2:02:36 PM

Thanks, Jonathan, for always getting the economic news out to us quickly.

Jonathan Levinson : 4/20/2005 2:02:23 PM

Ten year bonds have weakened again following the data, TNX back up to a 4.4 bp gain at 4.244%. QQQQ is resting on 34.90 here.

Linda Piazza : 4/20/2005 2:01:52 PM

The OEX begins a push from Keltner support, but the push certainly doesn't lok convincing just yet.

Jeff Bailey : 4/20/2005 2:01:44 PM

Market Watch 2:00 P.M. Link

Jonathan Levinson : 4/20/2005 2:01:21 PM

Headlines:

FED BEIGE BOOK: CHOPPY EXPANSION IN U.S. ECONOMY

BEIGE BOOK: SOME DISTRICTS REPORT UNEVEN GROWTH

BEIGE BOOK: UPWARD PRICE PRESSURES HAVE STRENGTHENED

BEIGE BOOK: ENERGY COSTS CAUSING PRICE PRESSURE

BEIGE BOOK: SOME DISTRICTS SEE POOR RETAIL SALES

BEIGE BOOK: FACTORY SECTOR CONTINUES SOLID GROWTH

BEIGE BOOK FINDS INCREASE PRICE POWER IN RETAIL SECTOR

Jonathan Levinson : 4/20/2005 2:00:44 PM

Fed Beige Book summary at this Link

Jonathan Levinson : 4/20/2005 1:59:31 PM

QQQQ 100 tick chart at this Link with Fed Beige Book due now.

Linda Piazza : 4/20/2005 1:57:41 PM

The Beige Book is going to matter more than Keltner lineups, at least over the very short term, but here's what the OEX's 15-minute Keltner chart shows: support gathering just under the OEX, down to 546.70 on 15-minute closes, resistance at 548.26 and then stronger at 549.60-549.85, and then again at 552.28-553.00. Next support below the current level is at 544.51.

Linda Piazza : 4/20/2005 1:52:24 PM

I've already cautioned that those in bearish OEX positions might consider taking partial profits. In fact, you might consider whether you want to hold over the release of the Beige Book at all. Decide soon. It could be market-moving, in either direction.

Jonathan Levinson : 4/20/2005 1:45:27 PM

Awaiting the Fed Beige Bok at 2PM. Bonds continue to firm, testing their pre-CPI release levels here with TNX down 2.8 bps at 4.231%. Gold and silver have pulled back slightly, still holding most of their gains, while HUI and XAU have edged negative here. QQQQ has bounced from a low of 34.80 to the prior support at 34.90. Link

Jeff Bailey : 4/20/2005 1:41:39 PM

Day Trade Short Move stop on our 35.20 short in the QQQQ's on remaining position down to 35.01.

Jeff Bailey : 4/20/2005 1:40:41 PM

Back to IBM: Weekly S1 is at 72.73 and Weekly S2 is 68.91. Until shares can close above its Daily Pivot, put buyers can continue to be active and monitor the close versus the daily pivot as far as position management is concerned.

Jeff Bailey : 4/20/2005 1:38:51 PM

Subscriber QuestionCould you tell me what the buy and sell program numbers are correlated to?

The following link should be helpful for answering this question Link

Jeff Bailey : 4/20/2005 1:35:33 PM

Subscriber Question My question is whether this is something worth playing via IBM puts or DJI puts? Despite, the significant drop in IBM the October 70 and 75 puts still look cheap.

Well, the implied volatility in IBM isn't that cheap (76.75 roughly) and at the 58%ile doesn't give the best opportunity; however, the Oct 75 Puts probably is the best of the two. IBM is certainly showing much more damage than the Dow and should continue to do so. Offer at 5.00 for the Oct 75.

Jonathan Levinson : 4/20/2005 1:31:54 PM

QQQQ is breaking the prior low at 34.90, testing short cycle channel support. A failure bounce back above 34.95 should see that level decline- currently, 30 min channel support is down to yesterday's spike low at 34.78: Link

Jonathan Levinson : 4/20/2005 1:30:42 PM

Ten year bonds have strengthened, TNX down to a 3.8 bp gain at 4.241% with the daily candle blowing off its gains in a steep doji: Link

Jeff Bailey : 4/20/2005 1:28:03 PM

SOX at Daily S1 and new shorts most likely going to wait until a new low as this is some support here. 388.31 also near Monthly S2 at 385.

Linda Piazza : 4/20/2005 1:29:26 PM

Those who might have entered a bearish play today or yesterday near the close when the OEX couldn't get above the ten-minute 100/130-ema's after repeated tries might consider whether they want to take partial profits soon, although those profits would likely be tepid. Should get into the stop-running time of day soon. Keltner resistance is just above the current Keltner level, next support down at 544.62, but the OEX will be testing the Monday low before that and is soon moving into daily/weekly potential Keltner support. Resistance next found at 548.84 and then a bit stronger just above 550 up to 550.30.

Jonathan Levinson : 4/20/2005 1:22:18 PM

Stepping away for 10 minutes.

Linda Piazza : 4/20/2005 1:16:20 PM

The resistance that was at the OEX's then-current 547.80-ish area held so far, but the test isn't over yet. Support just below, resistance just head, and the stop-running time of day just ahead, too. So far, the breakdown of the probable bear flag is working, but just barely.

Jeff Bailey : 4/20/2005 1:12:51 PM

Banking index at 345....QQQQ's at Daily Pivot....should be important area. Dow just above 10103 and under daily pivot.

Linda Piazza : 4/20/2005 1:10:10 PM

As expected, the OEX bounced from the Keltner line that was then at 547.18 (see my 12:52 post), bouncing from a few centas atove that line. Keltner resistance exists at the OEX's current 547.80-ish level and at 549.26, but is perhaps stronger from 550.23-550.74. Bears would like to see the 549.26 resistance hold on 15-minute closes. Bears may be working on borrowed time, so keep those profit-protecting plans in mind.

Jonathan Levinson : 4/20/2005 1:08:45 PM

QQQQ 100 tick chart update at this Link

Jonathan Levinson : 4/20/2005 1:08:09 PM

Volume breadth has shifted to negative on both exchanges for the first time today, 2.15 declining shares for each advancing on the NYSE, 1.1 on the Naz. The TRINQ is up to a neutral .83, TRIN .96.

Jeff Bailey : 4/20/2005 1:07:45 PM

Internals Link

Jeff Bailey : 4/20/2005 1:03:00 PM

Market Watch Link

Jeff Bailey : 4/20/2005 1:01:46 PM

Day Trade Short Move stop on QQQQ's now down from 35.15 to 35.07 from the 35.20 entry.

Jonathan Levinson : 4/20/2005 1:00:22 PM

QQQQ's breaking lower 30 and 60 min channel support now here, with the short cycles entering oversold territory. A failure to bounce back above the 7200 tick SMA resistance at 35.13 here will see those 30 and 60 min channel levels slide lower, however, as those downphases have plenty of room to run.

Linda Piazza : 4/20/2005 12:55:56 PM

The daily chart now shows the OEX perhaps bunching up into a dreaded "b" distribution form. They're dreaded because although they're deemed bearish, they don't always break to the downside as expected.

Jeff Bailey : 4/20/2005 12:53:23 PM

Day Trade Short Exit Covered 1/2 of our our 1/2 short QQQQ's position at 34.97 from 35.20 and now move stop down on remaining half to 35.15. We will let the other 1/2 ride.

Jonathan Levinson : 4/20/2005 12:52:56 PM

QQQQ testing the morning low here at 34.97. Link

Linda Piazza : 4/20/2005 12:52:23 PM

The OEX tests the previous LOD. The daily and weekly Keltner support is apparent in this reluctance to reach a new LOD, so bears now should be watchful for a quick reversal once again and should expect a potential bounce from 547.18, if it's reached. Next support below that is at 544.81 currently.

Jonathan Levinson : 4/20/2005 12:48:19 PM

Ten year bonds have firmed slightly, TNX back down to a 4.8 bp gain at 4.251%, a 1.14% gain for the day. June crude oil is up .175 at 53.75, while gold and silver are near the highs, +2.30 at 436.90 and +.092 at 7.34 respectively. USD Index chart at this Link

Jonathan Levinson : 4/20/2005 12:41:27 PM

QQQQ is taking a sharp break lower, heading for channel support in the 35 area. Session low for GE as I type. Link

Jeff Bailey : 4/20/2005 12:33:55 PM

With Pacholder (PHF) unchanged, treasury bond yields higher, S&P 500 lower and Dow higher, a good day for only 1/2 position size trading. Dollar also near Daily S2.

Linda Piazza : 4/20/2005 12:29:23 PM

Resistance still holds on the OEX, but bears still need to see that new LOD.

Jonathan Levinson : 4/20/2005 12:25:20 PM

Nymex June crude +.075 at 53.65 here. Breadth has weakened for both exchanges, NYSE declining volume back in the lead 1.4:1 over advancing volume, while on the Nasdaq, advancing volume is leading declining 1.9:1, off its earlier highs above 3:1. The TRINQ is up to .48, TRIN .89.

Jeff Bailey : 4/20/2005 12:12:32 PM

S&P 500 continues to underperform, with Dow also below Daily R1 and BIX just above 345. QQQQ's stubborn at our short entry of 35.20 but resistance did hold and we will keep being patient. S&P 500 under daily pivot now.

Jonathan Levinson : 4/20/2005 12:10:22 PM

QQQQ 100 tick chart, pulling back toward the rising trendline again: Link

Linda Piazza : 4/20/2005 12:09:31 PM

The advdec line is breaking out of what looked like a bear flag on that chart, too, as it rose off this morning's high, but the break is a sideways one, always suspect in my opinion.

Jeff Bailey : 4/20/2005 12:09:40 PM

Internals Link

Linda Piazza : 4/20/2005 12:07:51 PM

The TRAN's and Dow's 15-minute Keltner charts give little information, too, as does the OEX's. Both often adhere to 15-minute Keltner channel S/R levels. The Dow's does show a slight hint of stronger resistance than support, with that resistance from 10,179.38-10,200.41 on a 15-minute closing basis. Support is trying to firm from 10,118.37-10,134.35, but doesn't yet look as firm as that resistance.

Jeff Bailey : 4/20/2005 12:08:02 PM

Market Watch Link

Linda Piazza : 4/20/2005 12:00:52 PM

The OEX's weekly Keltner chart shows support from 543.63-544.85. Both daily and weekly Keltner charts shows the OEX not so far above potential support. Last week, the OEX produced a Keltner breakdown on a daily close but erased it in this week's climb. Until the OEX starts producing daily closes above a line currently at 554.66, however, that smaller channel still continues to roll down, suggesting that tests of support could be ongoing and the OEX might be vulnerable to a new breach of Keltner support. Basically, it tells us what we already knew, that the OEX was rising in a likely bear flag and that the 554-557 level (locations of the 200-sma and -ema) are likely to be firm resistance on the rise. Sometimes the Keltners give us new insight and sometimes they just confirm what we already knew.

The usually helpful 15-minute Keltner chart tells us even less just now. These channels are perhaps settling into an equilibrium position, each channel flattening and lining up inside the next wider. When that happens, the OEX tends to trade in an ever-narrowing formation until a breakout finally occurs.

Jonathan Levinson : 4/20/2005 12:00:19 PM

ZN bonds are rolling back over from a lower high, with TNX advancing again, now up 5.9 bps to 4.261%, a 1.38% gain for the day. Gold is up 2 at 436.60, silver +.082 at 7.33, with HUI +.93% at 195.57 and XAU +.25% at 91.04.

Jonathan Levinson : 4/20/2005 11:51:35 AM

IB reports a huge 2M+ QQQQ shares bought in the last 100 tick candle with QQQQ breaking back above 7200 tick SMA resistance.

Linda Piazza : 4/20/2005 11:45:29 AM

The OEX's 15-minute Keltner chart looks more muddled than it did earlier, but so far, the 10-minute 100/130-ema's continue to hold as resistance, the former bear flag's support continues to hold as resistance. The weakness is not confirmed, however, because the OEX has not actually fallen away from its former channel, but rather climbs it from the underside.

Jonathan Levinson : 4/20/2005 11:44:28 AM

Nymex crude +.25 at 53.825 here. The CRB is up another 1.40 to 305.43, led by copper, wheat and cocoa futures. USD Index intraday chart at this Link , with a failure from a lower high below 84.10, testing support at 83.40.

Jonathan Levinson : 4/20/2005 11:38:11 AM

QQQQ 100 tick chart update at this Link , stuck between the rising intraday trendline and the 7200 tick SMA. The short cycle oscillators have turned down and have room to run lower.

Linda Piazza : 4/20/2005 11:31:05 AM

The advdec line looks as if it, too, has been rising into a bear-flag rise off the low of the day, and I've been watching to see if it breaks support. Testing that support now.

Jonathan Levinson : 4/20/2005 11:26:41 AM

June crude edges back up, +.55 at 54.125 here.

Linda Piazza : 4/20/2005 11:26:08 AM

Tough to call here. The OEX's rising regression channel still holds now as resistance, but the OEX still hasn't fallen away from that channel.

Jeff Bailey : 4/20/2005 11:24:04 AM

For the Day Trade Short in the QQQQ's at 35.20, cover 1/2 position right above Daily Pivot at 24.97.

Jonathan Levinson : 4/20/2005 11:22:12 AM

QQQQ 100 tick chart at this Link . I've indicated what should be the support line that coincides with the short cycle upphase, an upphase I believe to be corrective. Note that the prior high was never touched within the toppy 30 and 60 min cycle upphases that rolled over earlier.

Jonathan Levinson : 4/20/2005 11:16:47 AM

Volume breadth is advancing on the NYSE, with advancing volume now matching declining volume, while it's pulled slightly higher on the Nasdaq but is well off its earlier highs, currently 2.1 advancing shares for each declininbg, with the TRINQ up to .45. The NYSE TRIN is pulling lower to .77 here.

Linda Piazza : 4/20/2005 11:13:55 AM

The OEX's ten-minute 130-ema held on the 10-minute close. Still seeing suspicious (to bears) action, though, as the OEX is climbing the underside of its forming rising regression channel rather than falling away from it. This is not what bears want to see, at least not so far. Yet, it's not exactly whatbulls want to see, either, is it, as resistance continues to hold as resistance.

Jeff Bailey : 4/20/2005 11:12:47 AM

Day Trade Setup....half position short in the QQQQ at 35.20. Stop at 35.42.

Jeff Bailey : 4/20/2005 11:11:00 AM

Internals found at this Link

Jonathan Levinson : 4/20/2005 11:09:01 AM

June crude down to 53.80, off its high of 54.575. Ten year bonds have weakened again, TNX up 6.8 bps to 4.271%- updated daily candle chart at this Link

Linda Piazza : 4/20/2005 11:06:42 AM

The OEX charges right up to the ten-minute 130-ema, the average that stopped it yesterday, with that average at 551.83. Time to review some of those Fib levels off the 4/12 high. The 38.2% retracement level is 554.17, near the 200-sma, and the 50% retracement is at 556.63, between the 200-sma and 200-ema.

Jeff Bailey : 4/20/2005 11:04:59 AM

11:00 Market Watch at this Link

Jonathan Levinson : 4/20/2005 11:02:00 AM

Both the 30 and 60 min cycle oscillators are showing bearish crosses from overbought teritory. A lower or equal high for QQQQ on this bounce below 35.35 would fit with the view that the current range represents the topping process in these longer intraday cycles. But, if that high is violated by more than a few pennies and for longer than 10 minutes or so, we'll be on the lookout for an upside trending move. That's the less likely scenario as these cycles don't tend to trend for long. Link

Linda Piazza : 4/20/2005 11:01:57 AM

The OEX still (?) again (?) retests the resistance at the bottom of the former rising regression channel, now also testing the ten-minute 100/130-ema's. Keltner resistance may be softening somewhat.

Jonathan Levinson : 4/20/2005 10:53:00 AM

Volume breadth has weakened for the Nasdaq, with 1.9 advancing shars for each declining and the TRINQ edging up to .42, still overweighted with buying pressure but out of the earlier extreme territory. On the NYSE, declining shares continue to outnumber advancing 1.5:1, with the TRIN a neutral .8.

Linda Piazza : 4/20/2005 10:51:35 AM

Just checked the daily Keltner chart again to see what's supporting the OEX. Daily Keltner support lies from 547.47-548.32, so the possibility remains that the OEX is just widening its bear flag and still might climb toward a 38.2% retracement of the entire climb off the 4/12 high. Bears really want to see a new LOD soon.

Jeff Bailey : 4/20/2005 10:47:37 AM

QQQQ's came under pressure, Banks near daily lows and Dow barely positive. AV also didn't come back. Looking at 1/2 short positive in QQQQ but thinking more near 35.16 currently.

Linda Piazza : 4/20/2005 10:44:46 AM

Here's a look at the OEX's probable bear flag, the resistance offered by the 100/130-ema's on this ten-minute chart, the 38.2% retracement level indicated by the green horizontal line at the top of the chart, and the just-completed retest of the flag's former support. So far, it's holding as resistance, but bears need to see confirmation by a new LOD: Link

Jonathan Levinson : 4/20/2005 10:44:39 AM

QQQQ 100-tick chart at this Link with price trading both sides of the 7200 tick SMA line. Given the toppiness in the 30 and 60 min cycles, a sideways range here would look like the usual "weightlessness" as the 60 min cycle makes its turn. A failure to break the 34.95 line or to hold below the morning 35.57 high would invalidate that picture and kick off an upside trending move in these cycles.

Jonathan Levinson : 4/20/2005 10:41:44 AM

June crude hit a high of 45.575 on the data, currently back to 54.40. Ten year notes are holding the bulk of their losses, TNX +4.5 bps at 4.248%, 1.07% gain today. Gold is up 2.70 to a session high of 437.30, HUI +1.46% at 196.59. Daily chart of the USD Index at this Link , intraday chart at this Link

Linda Piazza : 4/20/2005 10:37:29 AM

For a week, the ten-minute 21/100/130-ema's have been important in the OEX's behavior, with candles finding resistance yesterday first at the 100-ema and then the 130-ema's. The 100/130-ema's are currently at 551.17 and 551.89, respectively.

Linda Piazza : 4/20/2005 10:34:08 AM

The OEX turns down at Keltner and bear-flag resistance, but bears need to quickly see a new LOD to feel any comfort level at all.

Jonathan Levinson : 4/20/2005 10:33:32 AM

Crude inventories fell 1.8M barrels vs. an expected decline of 1.4M, gasoline fell 1.5M barrels vs. a 275K expected decline.

Jonathan Levinson : 4/20/2005 10:31:46 AM

Looks like oil inventories are down, June crude popping to 54.40, a session high.

Linda Piazza : 4/20/2005 10:28:09 AM

So far, Keltner resistance and the resistance at the bottom of the former bear flag still holds on the OEX, but only tentatively.

Jonathan Levinson : 4/20/2005 10:23:45 AM

Volume has been heavy this morning, 36M QQQQs traded within the first 45 minutes. Volume breadth is mixed, with declining volume leading advancing volume on the NYSE 1.4:1 but advancing volume in the lead on the Naz by a strong 3:1. The TRINQ is down to .33 here, showing extreme buying pressure, while the NYSE TRIN is a neutral .83.

Jeff Bailey : 4/20/2005 10:23:25 AM

Hard to take new bullish position with Banks under pressure. QQQQ's gettting back to resistance. S&P still weighted down by banks.

Linda Piazza : 4/20/2005 10:22:55 AM

The bottom of the OEX's rising regression channel is still being tested, as is 15-minute Keltner resistance, but resistance overhead now softens.

Linda Piazza : 4/20/2005 10:18:04 AM

The OEX tests 15-minute Keltner resistance.

Linda Piazza : 4/20/2005 10:16:39 AM

It looks as if the OEX is going to climb up to test the bottom of that rising regression channel and the 15-minute Keltner support just ahead of the release of the inventories number. The resistance may have softened a bit, but still looks relatively firm at the top of the rising regression channel, near the location of the 200-sma. It's concerning to bears, however,to see a quick move back inside the channel, if that happens.

Jonathan Levinson : 4/20/2005 10:15:37 AM

QQQQ 100-tick chart update at this Link , price peeking its head back above 7200 tick SMA resistance.

Jonathan Levinson : 4/20/2005 10:13:22 AM

Gold has flipped to a 50 cent gain at 435.10, with HUI now up .45% at 194.64 and XAU back to unchanged. June crude is flat 53.575, ff a high of 54.225, with just over 15 minutes to go until the inventory data's release.

Jeff Bailey : 4/20/2005 10:13:06 AM

10:00 Market Watch at this Link

Jeff Bailey : 4/20/2005 10:12:30 AM

10:00 Internals at this Link

Linda Piazza : 4/20/2005 10:07:01 AM

Next 15-minute Keltner resistance is from 550.27-550.58 on 15-minute closes. Bears want to see it hold. Bulls do not, of course.

Jonathan Levinson : 4/20/2005 10:05:10 AM

Ten year bonds have recovered part of their losses, TNX currently up .5 at 4.253%. Bond bulls/TNX bears need to see the opening low broken to abort what appears to be an imminent daily cycle upphase setting up. A break of 4.20% would re-confirm the downphase, but the oversold 10-day stochastic appears to be shaping up for a bullish turn: Link

Linda Piazza : 4/20/2005 10:02:47 AM

I would expect a bounce attempt as the OEX approaches 547.50, if not before.

Jeff Bailey : 4/20/2005 10:01:06 AM

Banks (BIX.X) down at 346 and Daily S2. Should keep equities under pressure as long as 348 holds as resistance.

Linda Piazza : 4/20/2005 9:59:14 AM

Advdec line still dropping, so far supporting the idea that this is a bear-flag breakdown. Do be watchful, however, for a bounce attempt from a higher low. Next 15-minute Keltner support at 547.49, with support beneath that at 545.43. Resistance may be firming now near 550.60.

Jeff Bailey : 4/20/2005 9:59:04 AM

QQQQ's 34.99 with Daily Pivot at 34.94. Daily R2 and Weekly Pivot held and will will most likely get a test of Daily Pivot.

Linda Piazza : 4/20/2005 9:57:49 AM

No move back into the rising regression channel as yet for the OEX.

Jonathan Levinson : 4/20/2005 9:57:32 AM

Session low for QQQQ, breaking prior support and now testing yesterday's confluence to 34.95. 30 min channel support is at 34.95, followed by the 60 min channel bottom at 34.90. Link

Jonathan Levinson : 4/20/2005 9:54:11 AM

The Fed's open market desk has just announced a 5.75B overnight repo to replace yesterday's expiring 4.25B, for a net add today of 1.5B, the first this week.

Jonathan Levinson : 4/20/2005 9:51:32 AM

QQQQ bounces from 35.05, now testing 7200 tick SMA resistance at 35.16. The 30 min cycle top has pulled back down to meet the 60 min top at 35.36, which will be the big test if the bulls can reignite the rocket from here.

Linda Piazza : 4/20/2005 9:50:54 AM

The OEX attempts a bounce back up to test broken bear-flag support. Bears obviously want the support to now serve as resistance. The 15-minute Keltner chart isn't clear yet as to whether the resistance is strong enough to hold the OEX back, but it is clear in showing support to be weak and a retest of the 547.50 level at least being possible. Bears should obviously have profit-protecting plans in place as Monday's low is approached, if it is, being aware that some will begin buying ahead of the test of that low.

Jeff Bailey : 4/20/2005 9:49:17 AM

VIX.X 15.08 +0.12...DAILY Pivot Levels...14.36, 14.66, Piv= 15.11, 15.41, 15.86

Linda Piazza : 4/20/2005 9:47:34 AM

Fifteen-minute Keltner support thins. Nearest support is at 547.58 and then at 545.51 below that, but the OEX sort of clings to support that's actually a little above its current level. A bounce during this 15-minute period could turn that Keltner line back into support.

Linda Piazza : 4/20/2005 9:45:50 AM

Advdec line diving, as Jane may have already noted on the Futures side.

Jonathan Levinson : 4/20/2005 9:44:22 AM

QQQQ 100 tick chart: Link

Linda Piazza : 4/20/2005 9:44:13 AM

he OEX is breaking below its rising regression channel. Those who might have entered a bearish play on this breakdown want to see it hold and do not want to see a quick reversal into the channel again.

Jonathan Levinson : 4/20/2005 9:42:33 AM

QQQQ is testing the 35.10-.13 confluence here, but the short cycle downphase has plenty of room to run- breaking 35.10 as I type with barely a pause.

Jeff Bailey : 4/20/2005 9:40:11 AM

AVAYA (AV) -21% after JPMorgan cuts rating to 'neutral'. Don't expect this stock to fill its gap. 8.51 bid.

Linda Piazza : 4/20/2005 9:38:19 AM

So far, the OEX still holds to the support of its rising regression channel and to nearest Keltner support on the fifteen-minute chart.

Jonathan Levinson : 4/20/2005 9:38:17 AM

The miners are giving back part of yesterday's gains, HUI -.42% at 192.96 and XAU -.73% at 90.15, with gold and silver still fractionally lower. June crude oil closed +.45 at 54.025, off an overnight high of 54.225.

Linda Piazza : 4/20/2005 9:35:46 AM

A reminder to those who might be in bullish OEX positions to have profit-protecting plans as/if the top of the channel and the 200-sma are tested. The OEX could break through, of course, but could also begin a prolonged consolidation or even pick that point from which to roll over and break through what may well be a bear flag formation. Know what you're going to do. Honestly, I'm not yet sure that the OEX will rise quite that high. The advdec line is dropping. . . . OEX drops as I type, too.

Linda Piazza : 4/20/2005 9:33:21 AM

The OEX opens within its rising regression channel. Fifteen-minute Keltner support (on 15-minute closes) near 550.19, and strongest nearby resistance from 553.30-553.68. These are roughly congruent to the rising channel's upside and downside trendlines.

Jonathan Levinson : 4/20/2005 9:29:04 AM

2-day 100 tick QQQQ chart at this Link showing the afterhours spike to 35.37. IB still reports 35.33 as the high, for what it's worth.

Jeff Bailey : 4/20/2005 9:27:44 AM

BIX closed at 348.66 but Weekly Pivot just above at 349.64. A move under 348 (Daily Pivot at 348.99) should put bulls on defensive in S&P

Jonathan Levinson : 4/20/2005 9:21:43 AM

Big upside move in the US Dollar Index following the CPI release Link but gold and silver have so far given back only a small portion of yesterday's big gains, June gold currently -.90 at 433.70, silver -0.04 at 7.208.

Jeff Bailey : 4/20/2005 9:07:59 AM

QQQQ's expected to open near Daily R2 (35.30) and there is also correlative resistance at Weekly Pivot of 35.40. Should be a good test early and most likely bears will win first test.

Jeff Bailey : 4/20/2005 8:57:31 AM

Program Trading Levels for Wednesday...HL Camp & Company has their computers set for program buying at $+3.28 and set for program selling at $+.84

Linda Piazza : 4/20/2005 8:46:46 AM

The OEX is still climbing in a rising regression channel toward the 200-sma and the 38.2% retracement of the decline off the 4/12 high, with the channel presumed to be a bear flag. That 200-sma and 38.2% retracement level are at 554.12 and about 554.17, respectively, with the 50% retracement higher, between the 200-sma and -ema. Since until proven otherwise, the move is a countertrend move, I'm watching for a breakdown out of the channel. Yesterday, the ten-minute 100/130-ema's proved to be important resistance, with the OEX unable to break above the 130-ema. Those averages are at 551.36 and 552.10, respectively. A push above them might suggest that the OEX is going to finally test the 200-sma and 38.2% retracement level. A fall out of the rising regression channel, with support currently at about 550.50, suggests a possible retest of Monday's low. This channel wafts like a bear flag, and so we have to presume that's what it is, but if you enter a new bearish play on a break below the channel, be prepared to jump right back out again if prices reverse.

Jonathan Levinson : 4/20/2005 8:44:02 AM

Bonds continue to crater, TNX now up 8.7 bps to 4.29%, a 2.07% move this morning. Daily chart at this Link

Jonathan Levinson : 4/20/2005 8:32:53 AM

Gold is up a buck to to 435.60, silver +.019 to 7.267. Euros and CAD are mixed, CAD up .1% at a session low of .806, Euros -.18% at 1.3032 off a low of 1.303.

Jonathan Levinson : 4/20/2005 8:31:39 AM

TNX is up 7.3 bps or 1.74% to 4.276% here, QQQQ is up from a spike to 35.11 to 35.19 currently.

Jonathan Levinson : 4/20/2005 8:31:00 AM

CPI +.6% vs. .5% est., core CPI +.4% vs. .2% est., bonds and equities dropping.

Jonathan Levinson : 4/20/2005 8:29:20 AM

Bonds are holding their losses approaching the CPI data, TNX currently +2.4 bps at 4.227%.

Jonathan Levinson : 4/20/2005 8:07:44 AM

Interactive Brokers currently reports the QQQQ high at 35.33, but its pre-market highs and lows are often wrong. In any case, QQQQ is currently trading 35.31 after last night's meltup, and the 30 min cycle, overbought at the cash close, has been driven higher in bullish trending territory. The 60 min cycle upphase was within a couple of hours of its own top, and this drive should similarly have maxxed it out. Currently, 30 min channel resistance is up at 35.40, and the 60 min channel top is at 35.33 to the penny. On an intraday basis, this should be the extent of the bounce/rally.

The daily cycle is the wildcard. Neither QQQQ nor the NQ's daily cycle oscillators have turned up, and continue to indicate this as a corrective bounce. if so, it should crap out this morning. If it runs higher from here, the downphase will be in trouble. Because it has run less than half of its range, an early abort would actually be a very bullish development in this longer timeframe, and the downphase would end with a steep bullish divergence. A close above 35.55-35.65 should be enough to stall the daily cycle downphase.

Jonathan Levinson : 4/20/2005 7:25:18 AM

Equities are up, ES trading 1159, NQ 1436.5, YM 10163 and QQQQ +.29 at 35.28. Gold is down a dime to 434.5, silver -.008 to 7.24, ten year notes -1/16 to 111 1/4 and May crude oil +1.85 to 52.225.

We await the 8:30 release of the CPI and Core CPI, est. .5% and .2% respectively, and at 2PM, the Fed's Beige Book.

Linda Piazza : 4/20/2005 6:12:36 AM

Good morning. The Nikkei gapped higher by more than 100 points, but barely managed a positive close. Other Asian bourses were mixed. A slew of economic data from China showed mixed effects from the government's efforts to cool the economy, with the GDP coming in higher than expected. European markets are mixed. Our futures are positive, but have generally trended down from overnight highs all night. As of 6:00 EST, gold was down $0.70, and crude, up $0.32 to $52.61. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei gapped higher by more than 100 points Wednesday morning, but trended down all day. Late in the afternoon, a bout of selling brought the index briefly into negative territory before a last-minute bounce avoided a negative close. The Nikkei closed higher by 22.72 points or 0.21%, at 11,088.58. Semi-related stocks led early gains after INTC beat estimates and raised its forecast for its profit margin when reporting Q1 earnings Tuesday. Tokyo Electron was helped to a gain by an upgrade to a buy rating by Nomura Securities. The firm felt that chip-makers were seeing orders increase.

Other Asian markets were mixed. The Taiwan Weighted dropped 0.96%, but South Korea's Kospi gained 0.53%. Singapore's Straits Times rose 0.36%, and Hong Kong's Hang Seng climbed 0.36%. China's Shanghai Composite dropped 1.31% amid economic releases showing mixed results and a report that the government will allow Shanghai Pudong Development Bank to issue 700 million additional shares. Against expectations that the Q1 GDP would show a cooling, the GDP instead rose 9.5% from the year-ago level. While some data, including data released Wednesday, shows that China's efforts to cool its economy are working, this number hinted that more efforts might be needed. Wednesday's data also showed Q1's fixed-asset investment growth climbing 22.8% on the year, down from the year-ago period's 43% growth. CPI rose 2.8% on the year, trending below 2004's 3.9% increase. Q1's industrial value-added output climbed 16.2% on year, down from 2004's 17.7%.

European markets are mixed. February's eurozone trade surplus rose an in-line-with-expectations 3.0 billion euros with February's trade data falling a revised 1.7 billion. Seasonally adjusted, the number was 5.1 billion, almost identical to that of the previous two months. Both exports and imports fell month over month, with currency issues and slowing demand hurting exports. In the U.K., mortgage lending fell in March when compared to February's number, but some felt that approvals and other signs suggest stabilization in the housing markets rather than a continued collapse. The Bank of England's April minutes were released, showing that the vote to raise rates was a 7-2 vote. Members appeared uncertain as to the effect that crude prices would have. Those who voted for the rate hike saw that possible same stabilization in housing prices and thought the hike needed to mitigate inflation pressures. In Italy, February's industrial orders climbed 0.7% over the previous month's and 3.2% year over year. Industrial sales fell 1.3% month over month and 0.2% year over year. Domestic orders fell, but foreign orders increased. Digging into the numbers convinced some economists that the industrial production might decline further.

In the U.K., miners climbed. Techs and industrial stocks climbed in Europe. Chip-makers ASML, STMicroelectronics and Infineon rose in early trading. J.P. Morgan and Deutsche Bank both upgraded U.K. semiconductor design group ARM Holdings, but the FTSE 100 didn't benefit because this isn't a FTSE 100 component unless recently added. Philips Electronics said it would sell asset management and pension activities to Merrill Lynch and Hewitt Associates, and climbed more than 1% in early European trading.

U.S. company Fortune Brands will reportedly join French company Pernod Ricard in bidding for the U.K.'s Allied-Domecq. The U.K. company's products include everything from spirits to donuts.

As of 6:04 EST, the FTSE 100 had declined 9.50 points or 0.20%, to 4,846.10. The CAC 40 rose 11.43 points or 0.29%, to 3,973.82. The DAX rose 6.39 points or 0.15%, to 4,211.00.

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