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OI Technical Staff : 4/22/2005 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 4/22/2005 5:07:13 PM

Weekly Pivots last 3 weeks at Link

Jeff Bailey : 4/22/2005 4:58:35 PM

Pivot Matrix for next week at Link

Jeff Bailey : 4/22/2005 4:30:26 PM

OPEN MM Profiles at this Link

Jeff Bailey : 4/22/2005 4:19:28 PM

Today's Activity...SOLD short Veritas (VRTS) 1/2 position at 21.00 and covered at 20.85. SOLD short Costco (COST) full position at 40.76 and covered at 40.60.

Jeff Bailey : 4/22/2005 4:11:44 PM

Closing Internals at Link

Jeff Bailey : 4/22/2005 4:06:52 PM

Closing Market Watch at this Link

Linda Piazza : 4/22/2005 3:56:22 PM

What are you doing to do if you're holding a bearish position in the OEX? As you're making that decision, remember that the OEX is right in the middle of its broadening formation. They're already notoriously difficult to trade, and the middle of one is not a high-odds place to be when you're hoping for a move either direction.

The weekly chart gives a small glimmer of hope for bulls, in that a doji is being produced at weekly Keltner support after a steep decline on the weekly chart, but I'm not sure I'd hang a bullish over-the-weekend new play on such slim evidence. We could see an up week next week after such a signal--we did after a similar signal three weeks ago, but that isn't strong evidence that this is a good entry. I'm personally still looking at long plays as countertrend plays, and the 15-minute chart shows the OEX headed right into Keltner resistance (and the 38.2% retracement of the decline) into the close. I think this is just the automatic push to close the OEX this week above its 200-sma or as close to it as possible, so I'll be waiting until Monday to see whether I trust this bounce or not. (Hint: probably not.)

Jeff Bailey : 4/22/2005 3:52:27 PM

After finding a bid yesterday, Airlines Index (XAL) lower by almost 6% and could trade down towards 45 from current 46.13 level.

Linda Piazza : 4/22/2005 3:50:10 PM

Chartwise, the TRAN's breakdown through its H&S neckline either accompanied or shortly preceded the breakdown in some indices.

Linda Piazza : 4/22/2005 3:41:08 PM

Both the Dow and the OEX test the channel lines that signaled a new breakdown on their 15-minute charts. It's my opinion that charts matter less during the last few minutes of trading than they do earlier in the day, however. Bears, guard your profits.

Jeff Bailey : 4/22/2005 3:40:21 PM

Good thing we were already in a short position, but it is interesting that the VIX rose above the Daily Pivot as the QQQQs made new lows and really seemed to start this last move down. VIX now coming off Daily R2 and will confirm a flat position this last hour...COST at 40.30...

Linda Piazza : 4/22/2005 3:38:50 PM

This morning's first OEX chart questioned whether we could trust yesterday's rise any more than we could Monday's, or Wednesday's drop, for that matter: Link In that first OEX-related post, I concluded that we couldn't trust that rise any more than the others and we were just seeing a typical trading pattern as a broadening formation was formed. I finally concluded the following: That could lead to some choppy trading behavior today. I can see a possibility for that choppy trading behavior or even an immediate downturn from the 200-sma. The possibility of an upside breakout exists, too, but it's my gut feeling that the OEX would need to chop around a bit more before it sustained an upside move above the 200-ema (note: ema, not sma). It spent too long trying to establish that level as support to be able to sustain a move above that average. We got the chop and now the downturn, without ever seeing the test of the 200-ema. I point this out just to help fix in your mind that when there's a broadening formation setting up, we can't trust a strong rally any more than we can trust the slide. They're just part of it, until there's a final breakout.

Jeff Bailey : 4/22/2005 3:34:52 PM

Traders will certainly be watching Dow 10k and Nasdaq 1900 on Monday....will be looking for some early tests of Weekly S1. If the SOX and BIX and cracks, then we should get another solid wave down.

Linda Piazza : 4/22/2005 3:33:19 PM

Advdec line still diving, but again reaching extreme levels.

Linda Piazza : 4/22/2005 3:32:30 PM

New downside target of 10,009 set on the Dow. New downside target of 543.80 set on the OEX, but be careful as we enter the last thirty minutes of trading. Bears, have your profit-protecting plans in mind.

Jeff Bailey : 4/22/2005 3:29:25 PM

XLNX should crack some more....27.10 now as SOX could be in trouble heading into Monday.

Jeff Bailey : 4/22/2005 3:26:36 PM

There are most likely some short possibilities in the last 30-minutes, but these are aggressive trades and don't want to give up any profits from last 4 winning trades....COST at 40.28....tsk, tsk.

Linda Piazza : 4/22/2005 3:24:26 PM

The Dow hits the first Keltner target, but hasn't yet tried to bounce. If it does, first resistance is currently at 10,124.16 and then near 10,160, just above and just below that. Without a bounce, there's danger of a new downside target being set . . . perhaps the bounce gets started as I complete this post.

Linda Piazza : 4/22/2005 3:22:38 PM

The OEX hit that Keltner support and now tries to bounce. Resistance at 550.01 and then much more strongly near 551.60-552.00.

Jeff Bailey : 4/22/2005 3:20:01 PM

SOX coming into Daily S1 of 387.93...currently at 388.67

Jeff Bailey : 4/22/2005 3:17:32 PM

VRTS still near Daily S1 and COST 10 cents from its recent lows as QQQQs print lines of red...

Linda Piazza : 4/22/2005 3:16:10 PM

Los of Fib levels to keep in mind today, but the 50% retracement of the OEX climb off the 4/20 low is at 548.66, with midpoint support often being found. Bears should have profit-protecting plans in place now, and that goes for Dow bears, too, as the Dow approaches the first downside target, now at just above 10,100.

Jeff Bailey : 4/22/2005 3:13:47 PM

QQQQs at 35.01 and not much pivot support below....Dow down almost triple-digits.

Linda Piazza : 4/22/2005 3:14:03 PM

Downside Keltner target at 10,105.95 on the Dow's 15-minute chart.

Linda Piazza : 4/22/2005 3:13:05 PM

Downside OEX target dropping as the OEX does, but should probably expect at least a steadying if not a bounce at that 548.90-549.00-ish zone.

Linda Piazza : 4/22/2005 3:10:37 PM

The OEX has not erased its Keltner downside target, now at a Keltner line just above 549.03. Those who might be in bearish trades should know how they'll handle a test of 549, if it should occur.

Jeff Bailey : 4/22/2005 3:06:56 PM

Internals found at this Link

Linda Piazza : 4/22/2005 3:05:57 PM

The Dow usually adheres fairly well to the 15-minute Keltner channels. Here's what they show now: The Dow has set a new downside target at a Keltner line currently at 10,108.64. Resistance gathers at 10,142.89 on 15-minute closes, but is stronger from 10,168.28-10,171.21. Without a 15-minute close above that resistance, the smallest channel remains pointing down toward 10,108.49. On a day like today, however, be careful of action into the last twenty minutes.

Linda Piazza : 4/22/2005 3:02:28 PM

Former support on the OEX's 15-minute chart should now be resistance, with that resistance clustered near 552.00, just above and below. If someone wants the 200-sma to be surmounted by the close, it won't hold, but that's how Keltners look as I type. Downside target just above 549.00.

Jeff Bailey : 4/22/2005 3:02:27 PM

3:00 P.M. Market Watch at this Link

Jeff Bailey : 4/22/2005 3:01:14 PM

Day Trade Short Exit Stopped out at our COST short from 40.76 at 40.60 after missing an exit by 2 cents at 40.33. It felt like a trap when we entered, so overall not disappointed with trade at all. Was a little tricky.....40.60 currently.

Linda Piazza : 4/22/2005 2:58:24 PM

The OEX currently has a downside target of 549.07, according to the 15-minute Keltner chart. It's rising to test that support that it just broke through earlier, to see if it holds as resistance now.

The TRAN has confirmed its H&S on its 15-minute chart. Market bears don't want to see a break above that neckline again, currently at about 3449.

Jeff Bailey : 4/22/2005 2:57:16 PM

QQQQs near lows but COST bouncing...close to taking profits...few cents away.

Linda Piazza : 4/22/2005 2:47:20 PM

Support fails and the OEX sets a downside target just above 549, according to the 15-minute Keltner charts.

Jeff Bailey : 4/22/2005 2:45:14 PM

Well...COST found some support at 40.33 and missed our 40.31 level....let's lock in profits on this day trade...Move stop down to 40.60 from our 40.76 short and keep the 40.31 bid in for 1/2 position.

Linda Piazza : 4/22/2005 2:41:30 PM

The OEX tests Keltner support again, dipping a little below the 38.2% retracement of the decline off the 4/12 high. Without a quick bounce, bears may soon begin to gain confidence and attempt to push the OEX lower. I think there should be a psychological impetus to closing the OEX this week above its 200-sma, but . . .

Support broke. Bulls need to see a quick bounce or a downside target of 549.17 is set.

Jeff Bailey : 4/22/2005 2:39:21 PM

Day Trade Short Exit Take 1/2 profits from our 40.76 short entry at 40.31....then move stop down on remaining 1/2 to 40.60 if we get filled.

Jeff Bailey : 4/22/2005 2:36:53 PM

COST....40.51....-7.88%

Linda Piazza : 4/22/2005 2:33:37 PM

The OEX is coming down again to test support, but the 15-minute Keltner support from 551.83-552.28 still looks relatively strong. That's near the 38.2% retracement level, too. A strong sell program could punch through that support, but for now, it looks firm enough to hold up.

Jonathan Levinson : 4/22/2005 2:33:31 PM

I need to leave in a few minutes to head to the bank, and will not be back before the close.

QQQQ is fading from below 35.40 but unless it breaks the lows by more than 20 or 30 cents, the 30 min cycle should begin to form a bottom. The 60 min cycle downphase has more gas left in the tank, but so far the decline has been weaker than the rise that preceded it yesterday. An upphase from or above yesterday's low should be enough to end the daily cycle downphase, setting up the QQQQ for a retest of 35.40, followed by 35.65-.70 and 36.00 resistance.

100 tick 3-day QQQQ update at this Link

Jeff Bailey : 4/22/2005 2:31:32 PM

Day Trade Short Update Our COST short at 40.76..move stop down to breakeven. 40.54 is 50% of the day's range and this might act as support. Just being careful with 1.5 hours left.

Linda Piazza : 4/22/2005 2:30:11 PM

The TRAN tested the neckline of its H&S, but didn't stay below it, at least not yet. The OEX dipped tothe bottom of the rectangular consolidation pattern it's been forming today, but bounced from bottom support.

Jeff Bailey : 4/22/2005 2:29:03 PM

COST now at 40.59 and might give us a cushion on this day trade short..no real pivots to use or Fibs; however, momentum is clearly with bears. get ready to move stop to breakeven.

Jane Fox : 4/22/2005 2:26:51 PM

Dateline WSJ The Nasdaq Stock Market agreed to buy Instinet Group for $1.88 billion, in a bid to build market share and compete against the New York Stock Exchange, which this week announced it is acquiring Archipelago Holdings Inc.

The deal values Instinet, an electronic trading and brokerage company, at $5.44 per share. Under the terms of the deal, Instinet's electronic-trading business, INET ECN, will combine with Nasdaq, which will then sell Instinet's other major business, an institutional broker, to Silver Lake Partners, a private-equity firm. The announcement marks the end of a months-long negotiation process.

Instinet has also entered into a definitive agreement to sell its Lynch, Jones & Ryan subsidiary to Bank of New York prior to the completion of the Nasdaq transaction.

Linda Piazza : 4/22/2005 2:14:21 PM

The OEX's 30-minute candles are now spanning the distance between the 100-ema and 130-ema almost exactly, with those two averages currently at 553.21 and 554.25. A breakout from those averages faces the 38.2 and 50% retracements of the decline off the 4/12 high, at about 552.08 and 554.94, respectively.

Jeff Bailey : 4/22/2005 2:06:10 PM

Day Trade Short Move stop on COST short from 40.76 to 41.03 to protect risk a little more...feels like a small trap and want to do some capital preservation....40.85 currently.

Jeff Bailey : 4/22/2005 2:03:50 PM

Internals at this Link

Linda Piazza : 4/22/2005 2:03:16 PM

The Keltner lineup remains the same for the OEX. I'm watching to see if the TRAN eventually confirms its H&S at the top of the climb that began yesterday, with the confirmation level currently at about 3449.40 but descending. The TRAN is now at 3462.92.

Jeff Bailey : 4/22/2005 2:01:55 PM

2:00 P.M. Market Watch at this Link

Jonathan Levinson : 4/22/2005 1:58:27 PM

QQQQ is now above the 7200 tick SMA resistance and the 30 min channel is turning up for the first time today. Resistance lines up for the 30 and 60 min cycles at 35.40, but if price holds north of the SMA, those levels will begin to climb.

Jeff Bailey : 4/22/2005 1:51:31 PM

Day Trade Short Entry Short COST at 40.76 with stop at 41.12.

Jonathan Levinson : 4/22/2005 1:42:04 PM

QQQQ tests 7200 tick SMA resistance here at 35.28 after bouncing from a higher low at 35.20, with the 30 min cycle channel showing a slight uptick. Link

Linda Piazza : 4/22/2005 1:41:02 PM

No change in Keltner lineup on the OEX. The TRAN is coiling beneath the 30-minute 21/100/130-ema's, with a vague H&S form on that 30-minute chart. The right shoulder is more of a sideways trading pattern than a rise and rounding over, though. Earlier, I had thought the RLX's intraday chart looked as if there was a bear flag rising into resistance, and that flag did break to the downside. The RLX is testing the day's low. There's a vague inverse H&S shape to the RLX's 30-minute chart, and bulls hoping for a climb in the RLX and other indices want to see the RLX steady now and not breach Wednesday's low, invalidating that formation.

Jeff Bailey : 4/22/2005 1:37:25 PM

Day Trade Setup...COST..41.04. A move under 40.76 may be a shorting opportunity. Seems like recent move higher was simply short covering but there was some volume back above 41 (more than i would like)...will set alert.

Jonathan Levinson : 4/22/2005 1:33:24 PM

Session high for June crude just now at 55.875. Link

Jeff Bailey : 4/22/2005 1:32:34 PM

VRTS....20.82....did bounce at Daily S1.

Jeff Bailey : 4/22/2005 1:30:06 PM

QQQQs bounced exactly at Daily S1 today (35.17) but hasn't rebounded much off the lows. Daily pivot above Weekly pivot of 35.40 and bears may be waiting for new lows before getting involved...Dow between Daily R1 and Daily Pivot and neutral to slightly bearish as well.

Linda Piazza : 4/22/2005 1:29:45 PM

This is an update of the 30-minute OEX chart I posted early this morning, although the annotations are the original, grammatical mistakes and all: Link The role of the 200-sma as resistance is apparent as is the role of the 38.2% retracement as support. Something has to change, but note that gains could easily be capped near the 50% retracement or again at the 200-ema (top short blue line).

Linda Piazza : 4/22/2005 1:21:28 PM

Nothing has changed yet on the OEX's Keltner lineup. I was hoping that by the time the stop-running time of day got here, it would have done so, but it hasn't. So far, more consolidation seems the likeliest outcome nearterm, although a strong sell or buy program could change that.

Jonathan Levinson : 4/22/2005 1:13:49 PM

The short cycle oscillators are in sideways/corrective upphase that is getting no price traction on the QQQQ. The 30 min and 60 min oscillators point south, neither yet oversold, and so the jury is still out as to the fate of the daily cycle downphase that likely ended with yesterday's ramp. A lower low against yesterday's 34.97 is the goal for dialy cycle bears. Updated 3-day 100 tick chart at this Link

Jeff Bailey : 4/22/2005 1:03:39 PM

Internals at this Link

Jeff Bailey : 4/22/2005 1:03:22 PM

1:00 P.M. Market Watch at Link

Jonathan Levinson : 4/22/2005 1:02:11 PM

Nymex crude is up 1.275 at 55.475 here, off a high of 55.775. Ten year notes are edging lower, barely moving, with TNX up to a 1.7 bp loss at 4.283%. Kohn's comments reported earlier had little discernable effect.

Linda Piazza : 4/22/2005 1:00:18 PM

OEX resistance holds again. Support near 551.60-552.30 continues to look relatively firm. This needs either a strong buy or sell program to break either the resistance or support, or just some continued chop that will eventually separate Keltner lines.

Jonathan Levinson : 4/22/2005 12:48:23 PM

Headlines:

KOHN: FED NOT FINISHED TASK OF REMOVING ACCOMODATION

KOHN: MEASURED RATE PACE LIKELY COURSE OF ACTION

KOHN: NO HESITATION TO HIKE RATES TO CURB INFLATION

KOHN: ODDS FAVOR SMOOTH TRANSITION OF GLOBAL IMBALANCES

KOHN: LEGITIMATE QUESTION IF THERE IS HOUSING BUBBLE

KOHN: INVESTORS SHOULD BE AWARE OF HOUSING MARKET RISKS

KOHN: CORE INFLATION SHOULD MODERATE LATER THIS YEAR

Jeff Bailey : 4/22/2005 12:49:12 PM

Short Trade Exit, VRTS Exit short from 21.00 at 20.85....not getting expected price action. There was a MACD bullish divergence on one minute chart and volume was harder to read and Daily S1 is close enough and seemed to hold..as well as overall markets not conclusively falling.

Linda Piazza : 4/22/2005 12:44:34 PM

Here's the OEX bounce prompted by the test of the 38.2% retracement level as well as the Keltner support. Resistance is near the 200-sma, the 50% retracement, and Keltner resistance, all between the current level and 554.94. Support still looks relatively firm, too. While I wouldn't be surprised to see a pop above the resistance, I would be more surprised to see values above the 200-ema sustained. Could still be more chopping around, as both resistance and support look relatively firm. About to see.

Jeff Bailey : 4/22/2005 12:35:31 PM

VRTS new lows....20.82... Daily S1 at 20.79.

Jonathan Levinson : 4/22/2005 12:32:00 PM

QQQQ 100 tick 3-day chart at this Link with price hanging on low volume below prior 35.25 support. The 7200 tick SMA resistance is down to 35.30, and the channels barely budging, support down to 35.12. Until yesterday's low has broken, there will be the chance that this 30 and 60 min channel decline is merely corrective within a newly bullish/turning daily cycle.

Tab Gilles : 4/22/2005 12:24:13 PM

Jeff....what's with EVV today? Link

Linda Piazza : 4/22/2005 12:17:35 PM

Finally. The OEX tested the Keltner support, from 551.51-552.08. Now the way it reacts from here might tell much about next direction. The OEX also tested the 38.2% retracement of the decline off the 4/12 high. Support still looks strong enough to promote a bounce attempt. Resistance attempts to firm. Final direction still not entirely clear. The OEX might still need to chop around a bit, but we may be getting closer to stronger evidence as to next direction.

Jeff Bailey : 4/22/2005 12:16:34 PM

We all know trading is dynamic...and expectations change after a trade is put on and price action takes place...VRTS example...short at 21.00 with 'thought' of 20.28 but knew how to protect risk..more important...now at Daily S1 and might be reason to book profits as stock finding some support...not the plan going in but have to listen to market...essence of day trading.

Tab Gilles : 4/22/2005 12:08:54 PM

Here's an interesting chart. I ran a 1 year daily $SPX up against a 1 year daily EUR/USD with MACD. This chart is indicating a bottom in the SPX and a weakening dollar/rally in SPX. Link

Jeff Bailey : 4/22/2005 12:08:09 PM

Internals found at this Link

Jonathan Levinson : 4/22/2005 12:07:09 PM

QQQQ 100 tick chart updated at this Link with the corrective short cycle bounce giving up the ghost. 30 and 60 min channel support are down to 35.15.

Jeff Bailey : 4/22/2005 12:05:59 PM

Short Play Update Our VRTS short at 21.00....currently at 20.83....move stop down to breakeven.

Jeff Bailey : 4/22/2005 12:01:04 PM

12:00 P.M. Market Watch found at this Link

Linda Piazza : 4/22/2005 11:56:48 AM

Boorrring. Better to be bored than lamenting a loss of trading account funds, though. Identifying days or hours when trading is likely to be range-bound or choppy is a necessary tool for traders. I'm still watching for a breakdown below the 38.2% retracement of the decline off the 4/12 high or a move above the 50% retracement, with those levels at about 552.08 and 554.94, respectively, but the OEX might just need to chop around in that zone for a while. Or mostly within it. I think a downturn through the 38.2% retracement might need to be confirmed by a fall below the 30-minute 21-ema at 551.68, since the OEX is adhering so strongly today to the 100/130-ema's on that chart. I think an upside breakout is likely to find strong resistance near the 200-ema, so might be capped rather soon.

Linda Piazza : 4/22/2005 11:46:38 AM

Now that Keltner support has risen toward the day's low, the OEX does dip toward that Keltner support, now from 551.44-552.40. It's not exactly plummeting toward that support, however. Resistance is trying to firm, too, so there could still be some chopping around that needs to be done before either support or resistance breaks.

Jonathan Levinson : 4/22/2005 11:43:48 AM

The Fed's coupon pass was 1.2B, leaving today's net drain at a mere 300M, but more importantly adding longer term reserves to the Fed's dealers. I believe that this was the first coupon pass of the year.

Jonathan Levinson : 4/22/2005 11:40:28 AM

Session high for June crude oil at 55.55 here, ten year notes weakening with TNX up to a 3.1 bp loss at 4.269%.

Jeff Bailey : 4/22/2005 11:40:07 AM

VRTS held daily pivot as resistance of 21.04 and good size going off at 21.00..QQQQs getting close to session lows

Linda Piazza : 4/22/2005 11:39:05 AM

The OEX keeps looking as if it's going to break down and test support and it keeps not doing it.

Jonathan Levinson : 4/22/2005 11:37:06 AM

3-day 100-tick QQQQ chart at this Link , with price resting atop former confluence resitsance turned support at 35.20-.25. The TRINQ shows neutral selling pressure at 1.2, but more significantly, this sideways range and TRINQ above 1.0 are occurring during a short cycle upphase. If the short cycle bounce fails after a sideways bounce, the following downphase should be impulsive- as the 30 and 60 min cycles suggest it should.

Linda Piazza : 4/22/2005 11:32:03 AM

Lots of OEX small-bodied 15-minute candles with upper shadows. This suggests a downturn to come, but this is that micro-analyzing that I'm trying not to do. Support near 551.38-552.52 currently.

Jeff Bailey : 4/22/2005 11:28:19 AM

Dow, QQQQs and SOX neutral while COMPX nicely below Daily Pivot. Internals are slightly bearish, while VIX still below Pivot..slightly bullish.

Linda Piazza : 4/22/2005 11:25:30 AM

Another test of resistance underway on the OEX's 15-minute Keltner chart, although this resistance extends beyond Keltner resistance, to the 200-sma, the 50% retracement of the decline off the 4/12 high and the 30-minute 130-ema. A break over the 50% retracement level at 554.94, confirmed by a 15-minute close above the Keltner line currently at 554.41 might suggest a test of the daily 200-ema, but there's just no guarantee that the OEX will push above this resistance. The Keltner resistance looks about as strong as the support below the OEX's position. No way to give one preferred weight over the other.

Jonathan Levinson : 4/22/2005 11:20:06 AM

Against today's net 1.5B drain, the Fed has announced a coupon pass, which is a permanent open market operation and adds liquidity to the system. No amount has been announced yet.

Jeff Bailey : 4/22/2005 11:17:46 AM

Side news: The US population is aging so fast that by 2030 the number of Americans over 65 will outnumber youths under 18 in several states, the US Census Bureau said.

Jonathan Levinson : 4/22/2005 11:12:28 AM

3-day 30-tick Nymex crude chart with fib retracement based on yesterday's range, with June crude currently trading 54.925 off a session high of 55.175: Link

Jeff Bailey : 4/22/2005 11:11:56 AM

Internals at this Link

Linda Piazza : 4/22/2005 11:10:21 AM

The OEX is still trading between the 30-minute 100 and 130-ema's, between the 38.2% and 50% retracements of the decline off the 4/12 high, between the resistance of the 200-sma and -ema's and the support of the 550-552 zone. I don't want to microanalyze each move too much, corroborating some bias of readers, encouraging them into plays when so far, all we're getting is the expected chop. If I had to pick a direction today, I'd say that gains would probably be limited to a test of the 200-ema, if there are even any further gains, and that a decline is possible, but not until the OEX chopped around long enough or saw a sell program strong enough to break up that Keltner support just underneath the current position.

Jeff Bailey : 4/22/2005 11:07:08 AM

11:00 Market Watch at this Link

Jeff Bailey : 4/22/2005 11:06:07 AM

FISV now back to where we were watching it at 41.80...moved above 42.50 but now this is a different trade and much riskier long than before. Daily R2 at 41.43

Jonathan Levinson : 4/22/2005 11:05:22 AM

Session high for the Dow futures here but QQQQ is only retesting the 7200 tick SMA resistance after finding short cycle support at a higher low. A break above 35.40-.42 will set up a retest of the declining 30 and 60 min channel tops, lined up immediately above at 35.49. Until those longer cycles turn, the QQQQ strength should remain corrective.

Jonathan Levinson : 4/22/2005 11:01:22 AM

Ten year bonds are going net nowhere, holding their gains with TNX down 3.5 bps at 4.267%. The lack of movement would fit better with the lead-up to a Treasury auction, but none are scheduled for today. NYmex crude is back to the highs, +.70 at 54.90 here.

Linda Piazza : 4/22/2005 10:56:48 AM

The TRAN continues to look weak today. The RLX dropped this morning, too, but is now attempting a bounce. There's a hint of an inverse H&S attempting to form on the RLX's 60-minute chart, but on the 15-minute chart, the current rise just looks like a bear flag climb to retrace part of this morning's steep decline. Hard for bulls to feel too confident today with both the TRAN and the RLX showing such weakness, but the BIX is holding up much better.

Jeff Bailey : 4/22/2005 10:53:51 AM

Sector Movers Airline -2.4%, Retail -1.3%, Steel -1%, Healthcare -0.9% Networking -0.7%, Health Provider -0.7%.

Jeff Bailey : 4/22/2005 10:52:36 AM

Dow above daily pivot while VIX still below Daily Pivot...QQQQs near Weekly Pivot...reason for 1/2 position. S&P 500 1156 with 1158 Weekly Pivot.

Jeff Bailey : 4/22/2005 10:48:45 AM

Day Trade Short Entry (VRTS) Short 1/2 position at 21.00 and would like to see QQQQ's stay below 35.40. Will tighten stop near Daily S1 of 20.79.

Linda Piazza : 4/22/2005 10:48:38 AM

The OEX hasn't tested that Keltner support yet, but continues to look as if it will do so. It did all day yesterday, too, though. That support has now risen to 551.02-552.12.

Jonathan Levinson : 4/22/2005 10:47:36 AM

QQQQ 100 tick chart at this Link , edging back lower after anothre test of the 35.40 resistance. Channel support looks firm at 35.20, but bulls will want to see a higher low on this pullback above 35.25. There are bullish divergences in the short cycle Macd and TRIX, and a new upphase should launch on a break of 35.40-.42.

Linda Piazza : 4/22/2005 10:42:19 AM

The OEX remains caught in a web of Keltner lines, between a 38.2% and 50% retracement of the drop from the 4/12 high, near the top of a broadening formation. Difficult to predict next direction, but I wouldn't bet big on a move much above the 200-ema at least.

Jonathan Levinson : 4/22/2005 10:31:14 AM

Crude oil is backing off a high of 55, down to 54.70 +.50 here, while ten year bonds are weakening slightly, TNX up to a 3.7 bp loss at 4.263%. Gold and silver are holding their gains.

Jeff Bailey : 4/22/2005 10:28:14 AM

Short Entry Signal...Short 1/2 position size of VRTS at 21.00 sell stop with a stop at 21.30.

Linda Piazza : 4/22/2005 10:27:18 AM

Advdec line still declining.

Jonathan Levinson : 4/22/2005 10:25:29 AM

QQQQ 100 tick chart at this Link breaking to a new low after failing beneath descending 7200 tick SMA resistance. 30 min channel support looks firmer at 35.20, but a failure to clear 35.40 would see it continue to decline.

Jeff Bailey : 4/22/2005 10:23:53 AM

Shares of CBST making new lows at 9.05 and should have some more downside....hard to pick an entry, though

Linda Piazza : 4/22/2005 10:23:08 AM

Resistance holds, presenting the possibility of a double-top on the OEX's intraday charts. Difficult to trust anything while the OEX is within that broadening formation, within such a close distance of the 200-sma, which bulls must want to see hold on a daily close today, but so far, the resistance holds. Support near 550.80-551.93 still looks relatively firm, so the OEX might not yet be through with the choppy behavior.

Jeff Bailey : 4/22/2005 10:16:09 AM

Overall markets appear to be relatively neutral and staying near Weekly Pivots and showing some relative strength...but shares of COST will prob. not recover at all today...

Linda Piazza : 4/22/2005 10:14:31 AM

The OEX rises to test Keltner resistance from 553.89-554.53. Support is perhaps firming again from 550.65-551.72.

Linda Piazza : 4/22/2005 10:12:03 AM

The TRAN has been dropping all morning, not a good sign for general market health. It probably needs to bounce soon up to retest resistance, but isn't showing signs of a bounce just yet.

Jonathan Levinson : 4/22/2005 10:09:18 AM

June gold is up 2.20 at 436.70, off a lower low of 433.60. The key 432 support has yet to be tested. SIlver is up .072 at 7.292, with HUI up 1.2% at 192.51 and XAU +.91% at 89.81. June crude oil has repoened, up .45 at 54.65 here and a nickel below the session high.

Jeff Bailey : 4/22/2005 10:07:19 AM

Shares of FISV moved quickly above 42 and didn't quite pullback to Daily R2 before the run higher. Watching to see if 41.84 comes back into play.

Linda Piazza : 4/22/2005 10:07:17 AM

Here's an OEX chart I'm watching this morning: Link It shows the OEX trading between the 38.2% and 50% retracements of the drop from the 4/12 high, bouncing between the 30-minute 100/130-ema's. A drop below the 38.2% retracement level might be confirmed by a drop below the (red) 21-3ma on this chart. A break above the 50% retracement, if sustained, might see the OEX head up to test its 200-ema, near the 61.2% retracement level. So far, the choppy trading that I and some other writers had thought might happen is happening, so trade with care if you feel compelled to trade today.

Jeff Bailey : 4/22/2005 10:05:37 AM

Internals at this Link

Jeff Bailey : 4/22/2005 10:02:53 AM

10:00 A.M. Market Watch at this Link

Jonathan Levinson : 4/22/2005 10:02:51 AM

QQQQ 100 tick update at this Link , the short cycle oscillators ticking up from oversold with price so far taking a sideways bounce. 7200 tick SMA resistance is down to 35.49, and the longer cycles remain bearish below that line.

Linda Piazza : 4/22/2005 10:00:47 AM

OEX 15-minute Keltner resistance at 553.06-554.56, support at 550.66-551.83.

Jonathan Levinson : 4/22/2005 9:54:54 AM

The Fed has announced an 11 day repo of 5.75B to replace 7.25B for a net drain today of 1.5B. I've never seen an 11 day repo, and am wondering what motivated the selection of that odd timeframe. In any event, the small net drain is offset by the time-value associated with the longer-dated maturity on today's repo- today's activity looks neutral to me.

Jeff Bailey : 4/22/2005 9:53:38 AM

Still watching VRTS as a possible short and FISV as a long....waiting for overall markets to give some direction.

Linda Piazza : 4/22/2005 9:53:31 AM

An OEX drop to 550.51-551.62 looks possible still, with a bounce attempt perhaps likely from that level.

Jonathan Levinson : 4/22/2005 9:48:15 AM

QQQQ 100 tick chart at this Link with price walking lower along the declining channel bands. The short cycle downphase is just entering oversold territory. The longer intraday cycles remain bearish beneath 35.53, with 30 min channel support down to 35.28 currently.

Jeff Bailey : 4/22/2005 9:47:41 AM

VIX 14.65....Daily R2 at 16.35, 15.39 Daily Pivot14.91, S1 at 13.94 and S2 at 13.46. Day 2 opening below Daily Pivot...might temper some bearishness

Linda Piazza : 4/22/2005 9:46:54 AM

As I suspected might happen, the OEX's breakout signal has been erased on the 15-minute Keltner channel. The OEX is still caught inside a web of Keltner lines, both above and below, with a test of deeper support looking possible as I type. That support ranges from 550.50-551.67.

Linda Piazza : 4/22/2005 9:41:39 AM

The OEX's 50% retracement of the drop off the 4/12 high crosses at about 554.90, the level from which the OEX turned down this morning, and the 38.2% retracement is near 552.04, a level from which a bounce might be expected, if not before. We're entering a period in which the first retracement of the day usually begins, so a bounce might begin at any time. OEX bulls want to see a 15-minute close above the Keltner line currently at 553.70, but if not there, at least above the one currently at 553.10. It's looking a bit iffy as to whether that can be accomplished, so that a deeper test of 550.41-551.50-ish support might be tested instead.

Jeff Bailey : 4/22/2005 9:40:49 AM

On the short side, VRTS is near Weekly Pivot and had trouble with Daily R1...daily chart bearish.

Linda Piazza : 4/22/2005 9:37:26 AM

The Nasdaq drops down to test 1950 support and the top of the gap at 1946.58, with the Nasdaq at 1950.36 as I type.

Jonathan Levinson : 4/22/2005 9:37:12 AM

QQQQ is resting on lower 30 and 60 min channel support. Both channels are turning lower on the lack of a bounce from the opening bell. This downward 30 and 60 min cycle bias will remain so long as price holds below the opening gap at 35.54. Link

Jeff Bailey : 4/22/2005 9:36:24 AM

Fiserv (FISV) making a nice move early...aboe Weekly and Daily R2 and into Weekly R2. May look to take long position on pullback in FISV. Breakout on daily.

Linda Piazza : 4/22/2005 9:33:02 AM

The OEX turns down from its 200-sma and the top of its broadening formation. This first 15-minute period is far from over, but we're watching to see if the upside breakout signal is erased.

Jeff Bailey : 4/22/2005 9:30:43 AM

QQQQs at 35.44...Weekly Pivot and Support just below at 35.40.

Jonathan Levinson : 4/22/2005 9:28:13 AM

Ten year notes are holding their gains, TNX down 4.1 bps at 4.259% here. On the daily chart, today's young candle is is the middle of yesterday's tall engulfing. While there are many hours left to go, the daily cycle is oversold and looking for an upturn. Barring a strong yield decline today, that signal should continue toward a buy signal. Daily chart at this Link

Jonathan Levinson : 4/22/2005 9:17:10 AM

With no major economic news today and a lone speech to be given by Fed governor Kohn at noon, the markets are on their own. The Fed's open market desk has 7.25B in overnight repos expiring, the outcome of which will be announced at 10AM.

Jeff Bailey : 4/22/2005 9:14:31 AM

Looking at TASR, there has been a few times in last few months when strong volume came in and shares rallied...but it was a false bottom.....9.52...will monitor but still way off highs above 30.

Jeff Bailey : 4/22/2005 9:09:36 AM

Also interesting how 10-year yields (TNX) has a high of its daily pivot and traded almost Daily S1...this might be slightly bearish for stocks if daily pivot stays above.

Jeff Bailey : 4/22/2005 9:06:27 AM

With QQQQs slightly lower, will be watching 35.40 as support and Dow at 10149 (Daily Pivot). There is still a good possibility that we put in the week's high today, but that doesn't mean we stay at those levels.

Linda Piazza : 4/22/2005 8:59:34 AM

Look out. Another broadening formation on the OEX: Link Has your opinion of the market's next direction switched sides each day over the last few days? That's because the markets, or the OEX, at least, has switched direction with increasingly volatile moves as it hammers out the parameters of its broadening formations. We just can't trust what happens inside a broadening formation. The OEX has proven particularly prone to developing these formations over the last six months ago.

In my opinion, we can't trust yesterday's strong move higher, as it was just a move that zoomed from one side to another of the broadening formation, as prices are wont to do as a broadening formation first begins broadening. The OEX could break to the upside, but it just hasn't yet.

Yesterday's climb was a move to retest the broken support that held up the OEX during the recent month-long consolidation formation. We don't know whether that support, roughly near the 200-ema, now at 557.26, is going to hold as resistance. Without a break back above that former supporting zone, this is just an expected retest to see if former support will hold as resistance, presumably before another downturn.

Bulls are going to be emboldened by yesterday's gains. Bears are going to be sure that shorting at the 200-sma is a good tactic to employ. That could lead to some choppy trading behavior today. I can see a possibility for that choppy trading behavior or even an immediate downturn from the 200-sma. The possibility of an upside breakout exists, too, but it's my gut feeling that the OEX would need to chop around a bit more before it sustained an upside move above the 200-ema (note: ema, not sma). It spent too long trying to establish that level as support to be able to sustain a move above that average on the first retest, I would think.

But the 15-minute Keltner chart disagrees with me. It says that the OEX has established a new upside breakout signal with an upside target just above 559. That upside signal would be erased with a 15-minute close below the Keltner line currently at 553.45 and particularly on a 15-minute close beneath a Keltner line currently at 553.02, so it's possible that a negative opening this morning could erase that upside breakout signal. If it is erased, support that was relatively firm yesterday may be softening somewhat, but still exists down to 550.28. Below that, support thins, but without a strong sell program that drives the OEX below that support, the OEX may spend some time chopping around between that support and the 200-sma and -ema's. So if that breakout signal is erased relatively early, chop may also ensue relatively early. If the cash markets open flat instead of down, the possibility of a move up to the 200-sma and -ema's remain, but then I'd expect some chop or else a downturn. I think the job investors want accomplished today is just to hold the indices above their 200-sma's into the weekend, so I'm not currently feeling good about opportunities for new entries. We'll see if that changes after the markets open.

Jonathan Levinson : 4/22/2005 8:32:01 AM

Bonds have opened strong, retracing part of yesterday's losses. The ten year yield is currently down 3.1 bps at 4.269%.

Jonathan Levinson : 4/22/2005 7:54:49 AM

QQQQ is trading below the 7200 tick SMA support at 35.60, with the 30 min channel bottom ticking lower to 35.44, just above the 60 min bottom at 35.60. Both longer intraday cycles have stalled in their upphases, and should be getting ready for the next downphase. I'm guessing that this downphase will be corrective, and that the daily cycle oscillators are merely lagging an upturn, but today should tell the tale: if the longer intraday cycle downphases reverse above yesterday's low would confirm a new daily cycle upphase, while a lower low will re-confirm the ongoing downphase.

Jonathan Levinson : 4/22/2005 7:08:16 AM

Equities are lower, ES down 2.5 to 1159, NQ -4 to 1445, YM -25 to 10201 and QQQQ -.12 to 35.50. Gold is up .40 to 434.90, silver +.049 to 7.269, ten year bonds +5/32 to 110 15/16 and crude oil +.45 to 54.65.

There are no major economic reports scheduled for today.

Linda Piazza : 4/22/2005 6:51:13 AM

Good morning. With an easing of tensions between China and Europe, the Nikkei gained in overnight trading. Other Asian bourses were mixed, but many gained. European markets currently gain. Despite overnight gains in many bourses, our futures have drifted off their closing highs all night. As of 5:39 EST, gold was up $0.70, and crude, up $0.40 to $54.60. More detail about Asian and European markets follows in succeeding paragraphs.

Friday morning, Japan's Tertiary Industries Index was characterized as being both above expectations and inline with expectations. The tertiary industries index fell 1.0% month over month, and the all-industries index fell 1.1% month over month, with a 2.3% decline in industrial production impacting the all-industries number. Following strong gains in the U.S. and the Chinese ministry's call to citizens to end anti-Japanese demonstrations and online protests, the Nikkei gapped higher by more than 130 points. The Nikkei couldn't hold onto all its gains, dropping near the close, but still closed higher by 61.56 points or 0.56%, to 11,045.95. Many exporters gained. Nokia's earnings sent mobile phone-related companies higher.

Other Asian markets were mixed. The Taiwan Weighted gained 0.44%, and South Korea's Kospi gained 0.18%. Singapore's Straits Times dropped 0.04%, but Hong Kong's Hang Seng gained 0.71%. China's Shanghai Composite dropped 0.29%.

Most European markets gain, with earnings results from Ericsson buoying that company and investor sentiment throughout the continent. The company beat expectations, saying that the company still expected slight growth for the global mobile systems market for 2005 as compared to 2004. Various economic releases included Italy's February retail sales at an increase of 0.1% month over month. The U.K.'s GDP met forecasts, increasing 0.6% quarter over quarter. One German state, Bradenburg, released April's CPI, with that release showing prices unchanged, a softer number than expected. One newspaper reported that the German government will trim its GDP forecast for 2005 from its former 1.6% to 1-1.2%, but the DAX still climbed. Perhaps this is because the government's forecast has been out of line with that of many think tanks and the government has been rumored several times to be contemplating a trimming of its estimates. The government's annual forecast is scheduled for April 29.

News out of German companies may have helped the DAX, too. Broker Comdirect reported a rise in securities orders, although it also saw a decline in Q1 pretax profit. Merrill Lynch upgraded Siemans to a buy rating, also helping. In other European company-specific news, J.P. Morgan trimmed its rating of French cosmetics group L'Oreal to an underweight rating after the company reported earnings that were impacted by currency changes. The company's stock dropped heavily in early European trading. Shares of Swiss biotech company Serono also dropped heavily after reporting earnings that suffered from provisions in a settlement of an U.S. investigation into setting of average wholesale prices and commercial practices. Shire Pharmaceuticals collected a CSFB downgrade to a neutral rating after it revealed that it was buying Transkaryotic Therapies. Lehman spoke out for the firm, but that didn't help, as this company's stock dropped heavily, too.

As of 6:48 EST, the FTSE 100 had gained 20.20 points or 0.42%, to trade at 4,839.80. The CAC 40 had gained 21.39 points or 0.54%, to trade at 3,972.41. The DAX had gained 26.63 points of 0.63%, to trade at 4,220.33.

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