Option Investor
Printer friendly version
Jeff Bailey : 5/4/2005 12:31:23 AM

Dow Industrials (INDU) PnF chart at this Link . Hey! Today's trade at 10,300 gets the INDU back on a buy signal and negates the bearish vertical count of 9,800. Hey... 9,800. That's 98.00 on the DIA. Remember that put option observation in the DIA's from several weeks ago? "sold to you at ...., but I'll buy all you got at $98.00?"

Jeff Bailey : 5/3/2005 11:39:51 PM

That's been a heck of a reversal hasn't it? Maybe the dollar weakness is going to Hong Kong meet some bearish margin calls in equities?

Jeff Bailey : 5/3/2005 11:37:42 PM

Hang Seng ($HSI) ... PnF chart at this Link

Jeff Bailey : 5/3/2005 11:35:07 PM

Various global markets at this Link

Jeff Bailey : 5/3/2005 11:23:11 PM

Time for dinner and then some sleep.

Jeff Bailey : 5/3/2005 11:21:32 PM

Dollar Index (dx00y) 15-minute interval chart with QCharts' WEEKLY Pivot levels at this Link

Jeff Bailey : 5/3/2005 11:15:27 PM

Yes to 11:09:42 ... some time stamps on news reports regarding Hong Kong's move would be right about the time the dollar started its decline 84.32. See that volume build to the downside?

Jeff Bailey : 5/3/2005 11:09:42 PM

OK ... this dollar move may make some sense now. We could be seeing some capital rotate back to Hong Kong overnight to try and capture any shorter-term bond rate moves in the region.

Jeff Bailey : 5/3/2005 11:08:29 PM

Hong Kong's central bank raises rates 1/4 point to 4.5% matching U.S. Federal Reserve. However, local banks, which chose their own lending rates, left their prime lending rate unchanged at 5.25%. Bigger banks reportedly raised their mortgage lending rates. Analysts in the region expect banks to hold off with hikes of their own because interbank rates in Hong Kong have fallen in recent weeks.

Jeff Bailey : 5/3/2005 11:01:35 PM

Nobody in the futures monitor ... us cash traders can't do much at this point.

Jeff Bailey : 5/3/2005 10:51:07 PM

Dollar Index (dx00y) 84.01 (22:19:45) ... has traded as low as 83.96.

Jeff Bailey : 5/3/2005 10:47:31 PM

June Crude Oil (cl05m) $49.40 ... down 10-cents (12:11:57), still on the line.

Jeff Bailey : 5/3/2005 10:42:04 PM

e-mini NASDAQ (nq05m) ... up 1.0 at 1,439.00. (22:21:27)

Jeff Bailey : 5/3/2005 10:41:08 PM

e-mini S&P ... up a bone (1.00) at 1,167. (22:29:14)

Jeff Bailey : 5/3/2005 10:32:41 PM

June Gold (gc05m) ... up $2.0 at $429.70 (22:01:20) which is 30-min delayed from this post.

Jeff Bailey : 5/3/2005 10:30:20 PM

Dollar action might be a "Fed is done?" We might be witnessing first reaction to "inflation contained"....

Jeff Bailey : 5/3/2005 10:27:27 PM

June Gold (gc05m) ... 429.50 (21:57:21)

Jeff Bailey : 5/3/2005 10:26:50 PM

Dollar Index (dx00y) ... 84.10 (21:56:28)

Jeff Bailey : 5/3/2005 10:22:53 PM

Dollar really getting whacked alert ... 84.08. WEEKLY Pivot violated.

Jeff Bailey : 5/3/2005 10:20:25 PM

Remember that "divergence" (04/29/05 MM at 06:04:03) between gold equities and the commodity itself. (see closing U.S. Market Watch) and perhaps the 20-day Net % change. Gold equities might get some near-term arbitrage play to the upside. The "reason" I thing arbitrage is that big block of 1.5 million shares ($43.28) in the GLD noted 04/20/05 at 01:18:59 AM. That block was marked to the market from the 04/19/05 close. Hey! Today's CLOSE for the GLD at $42.76, is darned close to the 04/19/05 low of $42.72.

Jeff Bailey : 5/3/2005 10:06:11 PM

U.S. Dollar Index (dx00y) Asia waking up. Dollar Index lower at 84.23.

OI Technical Staff : 5/3/2005 9:59:59 PM

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

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

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

Jeff Bailey : 5/3/2005 9:59:29 PM

MONTHLY Pivot Analysis for July-Sept 2004 when majors tested their MONTHLY S2s at this Link

Jeff Bailey : 5/3/2005 9:53:32 PM

MONTHLY Pivot Analysis in April, the major indices all traded their MONTHLY S2s. Last night and tonight I'm trying to see what the pattern of trade was as it relates to MONTHLY Pivots. I still don't see past archives at this point and am trying to bring in WEEKLY observations to figure out how institutional computers handled their buy/sell activity after a test of MONTHLY S2. Here's a March-April 2004 snapshot of MONTHLY Pivot levels at this Link

Jeff Bailey : 5/3/2005 7:25:48 PM

I know of at least one trader that was looking for stocks to rally early today, but then sell off sharply into the close. Did it happen? Did the trader short the high of the day? If so... where's his stop?

Jeff Bailey : 5/3/2005 7:20:39 PM

Regional Bank HOLDRs (RKH) 10-minute interval chart at this Link . Using the RKH for volume observation and 10-minute interval so we can see the bars. We can see their was great interest/disagreement for the banks at WEEKLY R1 AFTER the FOMC announcement. Make the TIE with the large block of 500,000 in the QQQQ as it kissed its MONTHLY Pivot. For the most part, the RKH and the BIX.X will track almost identical in the Pivot matrix. What's the next level ABOVE WEEKLY R1?

Jeff Bailey : 5/3/2005 7:00:24 PM

Regional Bank HOLDRs (AMEX:RKH) $133.90 -0.33% ... WEEKLY Pivot Levels ... $129.41, $131.30, Piv= $132.35, $134.24, $135.29. Today's h/l was $135.40/$133.57. Last tick in extended session was $134.25, so did get some upside on FOMC "correction" to statement, but I would have to think bulls wanted to see an intra-day trade at WEEKLY R2 hold above WEEKLY R1 at the close.

Jeff Bailey : 5/3/2005 6:52:47 PM

Pivot Matrix for tomorrow at this Link ... a "doji day" for the BIX.X and not the most bullish of close after a test of WEEKLY R2. You've come a long way baby, but can you keep it going? Raising a stop for the QQQQ.

Jeff Bailey : 5/3/2005 6:40:13 PM

Swing trade raise bullish stop alert for the QQQQ to $35.20.

Jeff Bailey : 5/3/2005 6:10:17 PM

June Crude Futures (cl05m) walking the tightrope at $49.42.

Jeff Bailey : 5/3/2005 6:08:39 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 5/3/2005 4:52:35 PM

Closing Internals at this Link

Jeff Bailey : 5/3/2005 4:25:57 PM

Current OPEN MM Profiles at this Link Today's Activity Swing traded long 1/2 bullish position in Stillwater Mining (SWC) at $6.96, but closed out at $7.20. ($+0.24, or 3.45%)

Tab Gilles : 5/3/2005 4:15:08 PM

Cigna (CI) Followup chart to the 2 post s made today 9:05 AM & 1:52 PM. Link

Tab Gilles : 5/3/2005 4:09:24 PM

dropped inadvertently.....yeah right!

Jeff Bailey : 5/3/2005 4:04:59 PM

What a line to leave out Tab!

Jeff Bailey : 5/3/2005 4:03:03 PM

Maybe watch for any further large blocks after the close. I just happend to see the 500,000 out of the corner of my eye earlier today.

Tab Gilles : 5/3/2005 4:02:30 PM

Fed accidentaly had ommitted this line... "Longer-term inflation expectations remain well contained." Link

Jeff Bailey : 5/3/2005 4:02:14 PM

QQQQ $35.30 mark to the close.

Jeff Bailey : 5/3/2005 4:01:44 PM

Buy Program Premium ... SPY $116.37, DIA $102.69

Jeff Bailey : 5/3/2005 4:00:38 PM

QQQQ ... nice little pop to the close. I think a bull really needed to see something back above DAILY R1 to "round to full" though though.

Linda Piazza : 5/3/2005 3:59:50 PM

Short covering into the close as the OEX bounces from above next Keltner resistance, but from near yesterday's low.

Jeff Bailey : 5/3/2005 3:59:12 PM

Stillwater Mining (SWC) $7.35 +9.05% ... its May "Max Pain" is $7.50. If DCX had continued to bid, then I would have been more tempted to have held onto SWC. No regrets, but with SWC having just traded 52-week low, today's move most likely short covering triggered on the DCX auto sales figures, which may not last all that long.

Jeff Bailey : 5/3/2005 3:56:48 PM

Daimler Chrysler (DCX) $39.21 -0.35% ...

Linda Piazza : 5/3/2005 3:56:32 PM

If that was a "b" distribution pattern on the OEX's 15-minute chart, then it's breaking out of it to the downside. Next Keltner support at 550.50-551.50.

Jeff Bailey : 5/3/2005 3:54:20 PM

VIX.X 15.12 (unch) ... has been bound between DAILY Pivot and DAILY S2. I'm looking for clues, but not finding many.

Linda Piazza : 5/3/2005 3:54:12 PM

So what are you gonna do if you're in an OEX play? Sure looks like May is starting another rounding over process, doesn't it, with the OEX rounding over at the top of the descending regression channel, the actual descending trendline off the March high, and the 200-sma and -ema's. So far, there's no breakout, in my opinion, but with the OEX moving back into a recent consolidation zone, the possibility that this is just a choppy trading zone and not predictive of much deeper drops, either. I personally don't think a lot about near-term direction was decided although the quick slap back from the 200-ema was more bearish than bullish.

Tab Gilles : 5/3/2005 3:52:56 PM

MURPHY OIL (MUR) Here's a chart I presented last week. I've used the 100 and 150-ema for entry points on MUR. However, looking at the price of $WTIC dropping below $50, seasonal factor and the Presidents push to get more supply increases going along with his speech. I had targeted $85 on Murphy using the uptrend line. We may see that price objective tested this week. Now that said could oil trend lower? Sure it can, markets always go beyond expectation both on the upside and downside. But if you're looking at the longterm I'd say that these levels are great entry points for oil stocks. Still bullish on them longterm. Link Link

Jonathan Levinson : 5/3/2005 3:48:58 PM

QQQQ's coiling beneath the selloff from the 35.30 level, failing below 35.20 as the 30 and 60 min channels begin to tick lower. 30 min channel support is down to 34.90, 60 min support at 34.99. These cycles are rolling over from near the tops of their ranges, and have more downside than upside from here. QQQQ bears want a break below 34.96 to confirm the impulsive nature of that 35.30 break.

Tab Gilles : 5/3/2005 3:44:27 PM

$GOX/$GOLD/$USD Link Link

Linda Piazza : 5/3/2005 3:43:52 PM

Nearby resistance still looks stronger than nearby support on the SOX, with the SOX currently laboriously rising toward that resistance, from 385.34-386.43, according to the 15-minute Keltner channel chart. A strong buy program could propel the SOX through all that resistance, but for now, it looks vulnerable to 382.33-383.06.

Jeff Bailey : 5/3/2005 3:39:18 PM

June Crude Oil (cl05m) settled down $1.42, or 2.79% at $49.50.

Jeff Bailey : 5/3/2005 3:36:37 PM

July Fed Fund futures (ff05n) 96.76 (10-min delayed) ... nothing here. Still about 95% chance of another 25-bp hike at June meeting. How do I get 95% chance? ... Take base of 100.00, which is equivalent to 0% Fed Funds. With Fed Funds now at 3.0%... 100 - 3.0 = 97.00, so "100% chance of Fed Funds at 3.0%," which is what the Fed did today. So... 100 - 3.25 = 96.75 if Fed were to tighten another 25. You can get your probability by simply taking a retracement bracket, place 0% at 97.00, then drag down 100% to reflect another 25 hike. I'll edit my retracement into increments of 10% retracement, set al_rts, then I'm set.

Linda Piazza : 5/3/2005 3:33:05 PM

The OEX's current 15-minute pattern looks a bit like a "b" distribution pattern.

I don't know about the rest of you, but I'm about ready to see a few "p" accumulation patterns.

Jeff Bailey : 5/3/2005 3:29:56 PM

Stillwater (SWC) $7.34 +8.90% ... makes a session high.

Jeff Bailey : 5/3/2005 3:27:25 PM

NYSE NH/NL steady at 47:38 NASDAQ NH/NL soft at the bottom 39:114 from 03:00 readings.

Linda Piazza : 5/3/2005 3:26:03 PM

Resistance holds: support holds. The OEX attempts to bounce again from Keltner and historical support near 551.80. Keltner resistance snakes just under the 200-sma, so we'll see if that holds again on this bounce attempt.

Jeff Bailey : 5/3/2005 3:24:37 PM

QQQQ $35.18 +0.17% ... not a bank in the bunch but holding WEEKLY Pivot. Computers in control here.

Linda Piazza : 5/3/2005 3:24:00 PM

If I disappear again, I still think this is one chart to watch: Link Note that the resistance marked on that chart held as the OEX plowed right up to the breakout level and dropped back.

Jeff Bailey : 5/3/2005 3:23:52 PM

S&P Banks (BIX.X) 357.17 -0.17% ... slip back below WEEKLY R1.

Jonathan Levinson : 5/3/2005 3:22:49 PM

TNX closed lower by .5 bps at 4.189%, leaving a doji star for the day, the epitome of indecision. Daily chart at this Link

Linda Piazza : 5/3/2005 3:20:40 PM

The TRAN has confirmed that rough H&S at the top of its climb. I think. The formation is so rough that what I took to be a head and right shoulder might in fact be part of a sort of split formation for the head and the TRAN might have another right shoulder to form. Or perhaps it's just still zig-zagging around in a rectangular consolidation pattern at the top of its climb, which is probably the easiest explanation.

Jonathan Levinson : 5/3/2005 3:17:22 PM

QQQQ 100 tick chart update at this Link . Price is holding on the lower channel supports, and a failure to get back above 35.22 will see those support levels begin their descent as the 30 and 60 min cycle downphases get moving.

Jeff Bailey : 5/3/2005 3:17:16 PM

QQQQ $35.10 -0.05% ... back at DAILY Pivot.

Jeff Bailey : 5/3/2005 3:16:46 PM

TRIN 1.35 +45.16 ... back at DAILY R2.

Linda Piazza : 5/3/2005 3:15:48 PM

Still having connectivity problems. As I mentioned in my last post, the OEX punched up to the 200-ema, an average that has been important in the OEX's trading behavior, but it couldn't maintain values above that. I've mentioned several times that I won't consider an upside breakout confirmed until the OEX can do so, and good thing, but the OEX dropped like a stone from that level. It's attempting another bounce from support, and it could bounce once again, but the current pattern is anything but bullish.

Jeff Bailey : 5/3/2005 3:10:36 PM

Stillwater Mining (SWC) $7.20 +6.82% .. should be filled. Need this gain for account management more than anything else at this point.

Jeff Bailey : 5/3/2005 3:08:36 PM

Bullish swing trade long exit alert ... for Stillwater Mining (SWC) $7.20 at the bid to $7.15.

Jeff Bailey : 5/3/2005 3:07:42 PM

Sell Program Premium ... SPX 1,159.23, DIA $102.35, QQQQ $35.16

Jonathan Levinson : 5/3/2005 3:07:21 PM

QQQQ just broke the 7200 tick SMA support line, testing lower 30 min channel support now: Link

Jonathan Levinson : 5/3/2005 3:04:26 PM

Gold hit a session low of 427.40, currently up to 428.90 but failed at an earlier high of 431.30, confirming 432 resistance. Despite that, HUI and XAU are in the green, +1.2% at 179.91 and +1.16% at 84.62, the first bullish divergence between the miners and the metal in many sessions.

Jeff Bailey : 5/3/2005 3:03:21 PM

03:00 Market Watch at this Link

Linda Piazza : 5/3/2005 2:59:54 PM

Back up on dial-up, not sure what's up with Comcast today. While I was trying various remedies, the OEX punched up to the 200-ema, but hasn't been able to maintain values above that level yet. Keltner lines are being scattered by the zooming around and aren't a lot more helpful than they were when the OEX had consolidated in a tight range and flattened them.

Jonathan Levinson : 5/3/2005 2:54:26 PM

The cycle picture is a mess here, with the 30 min cycle oscillators trending in overbought, the 60 min sliding sideways midway into its downphase, and the daily still pointing north. A move below 35.23, the upsloping 7200 tick SMA, should resolve this choppy mess in favor of the downside, while above 35.40, it will shift to the upside.

Jeff Bailey : 5/3/2005 2:52:14 PM

TRIN 1.00 ...

Jeff Bailey : 5/3/2005 2:51:43 PM

SanDisk (SNDK) $23.84 -1.07% ... not participating at this point.

Jeff Bailey : 5/3/2005 2:51:00 PM

NASDAQ-100 Index (NDX.X) 1,432.82 +0.63% ... QQQQ tends to "over do" things a bit (up and down) .... NDX not test of MONTHLY Piv.

Jonathan Levinson : 5/3/2005 2:45:59 PM

Ten year yields back below 4.2% at 4.19% currently, -.4 bps. QQQQ is retreating from the 35.41 high, but needs to break 7200 tick SMA support at 35.21.

Jeff Bailey : 5/3/2005 2:45:43 PM

QQQQ $35.33 +0.59% ... just noting that that 500,000 block at $35.40 may have been MONTHLY Pivot related. New bulls want to see clearance above that and DAILY R2.

Jeff Bailey : 5/3/2005 2:43:22 PM

TRIN 0.94 +1.07% ...

Jeff Bailey : 5/3/2005 2:42:58 PM

Airline Index (XAL.X) 45.97 +2.29% ... sector winner.

Jane Fox : 5/3/2005 2:40:22 PM

Linda is having difficulties with the site and will be back as soon as she has them cleared up.

Jeff Bailey : 5/3/2005 2:39:19 PM

QQQQ $35.40 +0.79% ... "bad tick" to $36.00. This one "doesn't make sense" as it relates to a keypunch error $35.40 trade.

Jeff Bailey : 5/3/2005 2:37:27 PM

500,000 Q's at $35.40 ... there were 500,000 at yesterday's close too.

Jeff Bailey : 5/3/2005 2:36:34 PM

Bad tick to QQQQ $35.60.

Jonathan Levinson : 5/3/2005 2:36:24 PM

QQQQ is testing upper 30 and 60 min channel resistance here: Link Barring the strongest of trending moves, bulls should start defending the keltner band here.

Jeff Bailey : 5/3/2005 2:35:30 PM

Buy Program Prem. ... SPX 1,164.17, DIA $102.92, QQQQ $35.35. Bulls look to be in control here.

Jeff Bailey : 5/3/2005 2:34:31 PM

Stillwater Mining (SWC) $7.14 +5.93% ... spiked to $7.29, then back down to $6.99. It's a bit thin.

Jonathan Levinson : 5/3/2005 2:34:00 PM

Breadth is still skewed in favor of the Naz, 1.97 advancing shares for each declining, while on the NYSE, declining shares outnumber advancers 1.12:1. TRIN 1.03, TRINQ .58.

Jeff Bailey : 5/3/2005 2:33:22 PM

QQQQ $35.24 +0.34% ...

Jeff Bailey : 5/3/2005 2:33:07 PM

SAP Akt. (SAP) $39.47 -0.05% ...

Jeff Bailey : 5/3/2005 2:32:45 PM

SanDisk (SNDK) $23.85 -1.03% ...

Tab Gilles : 5/3/2005 2:32:32 PM

In March the Fed stated as follows...

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Output evidently continues to grow at a solid pace despite the rise in energy prices, and labor market conditions continue to improve gradually. Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices.

Now here's what they said about energy in today's release...

Recent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices.

Jeff Bailey : 5/3/2005 2:32:30 PM

Semi HOLDRs (SMH) $31.08 +0.42% ...

Jeff Bailey : 5/3/2005 2:32:12 PM

Cendant (CD) $20.24 +0.64% ...

Jonathan Levinson : 5/3/2005 2:31:00 PM

Volume has picked up sharply as expected, but so far QQQQ has respected the day's existing range. 30 min channel support is down to 35, resistance up to 35.32: Link

Linda Piazza : 5/3/2005 2:30:46 PM

The TRAN now has a potential roughly formed H&S at the top of its climb. It's so roughly formed that I don't know if it's valid, but there was bearish divergence as the head was formed. Those hoping for more topside today want to see the TRAN break above this morning's high and not round over here.

Tab Gilles : 5/3/2005 2:30:05 PM

Here's the March release from the Fed. Link

Tab Gilles : 5/3/2005 2:29:55 PM

Here's the March release from the Fed. Link

Jeff Bailey : 5/3/2005 2:27:50 PM

Sell Program Premium ... SPX 1,160.49, DIA $102.47, QQQQ $35.16

Tab Gilles : 5/3/2005 2:26:32 PM

Fed Press Release Link

Linda Piazza : 5/3/2005 2:26:26 PM

Big bounce right to the top of the rectangular consolidation pattern the OEX has been building, but can the OEX break out to the upside or hold that break, if it does? So far, just a lot of zooming around with no final direction yet determined, in my opinion.

Jeff Bailey : 5/3/2005 2:25:43 PM

Buy Program Premium ... SPX 1,162.11, DIA $102.58, QQQQ $35.16

Jonathan Levinson : 5/3/2005 2:24:53 PM

TNX +1.2 bps at 4.206% here. Next resistance is at 4.22%.

Linda Piazza : 5/3/2005 2:24:42 PM

Here are those several types of nearby resistance I've been pinpointing on the OEX: Link

Jeff Bailey : 5/3/2005 2:23:21 PM

Buy Program Premium .. SPX 1,159.96, DIA $102.47, QQQQ $35.12.

Linda Piazza : 5/3/2005 2:23:13 PM

Strongest nearby Keltner support for the OEX appears to be from 551.20-552.29. If the OEX can steady there and bounce back above the day's high, no real damage has been done and it's just been building a rectangular consolidation pattern at the top of a climb. If it drops below 551.61 and doesn't bounce quickly, however, it's confirming a downside break out of the rectangular consolidation pattern.

Tab Gilles : 5/3/2005 2:22:57 PM

Well...as always the Fed in it's vague wording tries to cover all the bases leaving use confused. Not much movement on the Treasuries.

Jeff Bailey : 5/3/2005 2:22:51 PM

02:00 Internals at this Link

Jonathan Levinson : 5/3/2005 2:21:12 PM

Session low for ZN 10-yr bond futures just now, TNX up to a .3 bp loss at 4.191%, but it's all noise below 4.2%.

Linda Piazza : 5/3/2005 2:21:07 PM

At a move below 551.61, the OEX will have confirmed a triple top (from the last two days) on the intraday chart.

Jonathan Levinson : 5/3/2005 2:20:07 PM

QQQQ testing 30 and 60 min channel support at 35.10. Link

Linda Piazza : 5/3/2005 2:19:22 PM

The OEX again turns down from its test of the 200-sma, heading into 15-minute support that has thinned as the day progressed. That support extends down to 551.32, with it being difficult to tell where support might be found since lines don't really converge. Remember that the first reaction is not always the final one.

Jeff Bailey : 5/3/2005 2:18:21 PM

Sell Program Premium ... SPX 1,160.45, DIA $102.34, QQQQ $35.11

Jonathan Levinson : 5/3/2005 2:18:30 PM










Jim Brown : 5/3/2005 2:16:50 PM

Link to the full Fed statement: Link

Jonathan Levinson : 5/3/2005 2:16:18 PM

FOMC raises overnight rate 25 bps to 3%.

Jonathan Levinson : 5/3/2005 2:12:18 PM

Nymex June crude -1.325 or 2.6% at 49.60.

Tab Gilles : 5/3/2005 2:13:37 PM

Let's see what the Fed gives for the future moves. I'm on the side of a pause and "measured pace" being dropped. EVV/$FVX Link Link

Jeff Bailey : 5/3/2005 2:08:39 PM

July Fed Fund Futures (ff05n) 96.77 (unch) ... about 95% of another 25-bp rate hike in late June. Will monitor after today's statement. Reached a recent low of 96.61 on 03/23/05.

Jonathan Levinson : 5/3/2005 2:07:34 PM

Ten year treasuries are firm, with TNX holding at the bottom of yesterday's range, down 1.2 bps at 4.178%. Daily updated TNX chart at this Link

Linda Piazza : 5/3/2005 2:05:55 PM

The advdec line is picking up, but the OEX isn't picking up yet with it. I see the smallest pickup in the RLX and BIX and maybe in the TRAN, but not much else, and that's microanalyzing to see any pickup there, either.

Jeff Bailey : 5/3/2005 2:05:28 PM

02:00 Market Watch at this Link

Jonathan Levinson : 5/3/2005 1:53:46 PM

Session low for crude oil at 49.50 here.

Jonathan Levinson : 5/3/2005 1:53:29 PM

A sell spike took QQQQ back below 7200 tick SMA support a few minutes ago, but with no followthrough. The 30 min channel has narrowed to a 20 cent range between 35.10-.30, overlapping the 60 min channel whose resistance is just above at 35.33. Link So far, total QQQQ volume today is 39.5M shares.

Jane Fox : 5/3/2005 1:53:17 PM

DAteline WSJ More U.S. housing markets are booming than at any time in at least 30 years, according to a new government study. Although that may not mean a wave of bad-news "busts" is on the way, the risks could be high.

Of 362 U.S. metropolitan areas, about 15% are in the middle of a housing "boom," defined as a three-year, inflation-adjusted price gain of 30% or more, according to Federal Deposit Insurance Corp. analysis of government housing data. Among the 56 booming locales are several red-hot markets in California, Florida and New York, along with Las Vegas, Boston and Washington, D.C. The FDIC said the percentage of boom markets was the highest ever in the 30 years Uncle Sam has been keeping track.

Some economists worry that the U.S. housing market, which has demonstrated remarkable resilience in recent years, is looking awfully bubbly. As important as it is to the broader U.S. economy, a housing bust could be ugly, soaking homeowners and leading to a wave of credit defaults.

Tab Gilles : 5/3/2005 1:52:28 PM

Follow-p to my Cigna post from 9:05:55 AM. Nice pop up today, but on the 10 minute chart we may see a re-test of 92.85 resistance. Link Link

Linda Piazza : 5/3/2005 1:47:56 PM

There's really nothing to say about the OEX, as candles, oscillators and Keltner channels have all flattened, as we thought they would headed into the FOMC meeting. Watch those levels shown on the chart linked to my 12:40 post for either an upside breakout or a rollover. Wouldn't it be strange if the markets just continued to trade sideways? I've seen that ho-hum reaction before, but it's not the most common one.

Jeff Bailey : 5/3/2005 1:46:37 PM

Economic data table ... some various economic measures with end of month benchmarks (Gold....S&P 500) at this Link . The May-05 figures were yesterday's closes.

Jane Fox : 5/3/2005 1:41:33 PM

Linda if you are going to have problems with your broadband now is the time. You sure didn't miss much.

Jonathan Levinson : 5/3/2005 1:41:02 PM

Still little change breadth-wise, with the TRIN at 1.1 and the TRINQ at .66. Advancing volume leads declining volume on the Nasdaq 1.4:1, while declining leads advancing on the NYSE 1.06:1.

Linda Piazza : 5/3/2005 1:39:55 PM

I lost my broadband connection temporarily, but the OEX has only marched out sideways anyway. If I should lose my connection again and disappear from the Monitor, watch what the Futures writers are saying about the ES for the best guidance on the OEX, as the closest match. They're not analogous and don't always move in concert, of course, but their guidance should help.

Jonathan Levinson : 5/3/2005 1:29:57 PM

Predictably, the 30 min cycle upphase has been weak and has recently stalled, while the 60 min cycle downphase in progress at the open has also stalled. The only clear indicator is the daily cycle, still in an upphase and looking for another week to two weeks' worth of strength. A strong break of the 34.60-.80 range would stall it as well. Bulls want to see a break of the 35.30 level to set up a test of 34.45 resistance, above which the daily cycle uncertainty will again resolve to the upside.

Jeff Bailey : 5/3/2005 1:28:24 PM

Current OPEN MM Profiles at this Link

Jeff Bailey : 5/3/2005 1:21:41 PM

June Crude Oil (cl05m) $50.30 -1.21% (30-min. delayed) ... updated 30-minute interval chart with QCharts' WEEKLY Pivot levels and my bullishly fitted 38.2% we've been tracking at this Link . Some say it is OIL that has become the "hedge commodity" for inflation, not gold.

Jeff Bailey : 5/3/2005 1:11:39 PM

01:00 Internals at this Link

Jonathan Levinson : 5/3/2005 1:08:26 PM

Session low for June crude oil at 49.75 here, -2.26%.

Jeff Bailey : 5/3/2005 1:03:15 PM

01:00 Market Watch at this Link

Jonathan Levinson : 5/3/2005 1:03:35 PM

The auction results are coming in now, with foreign central banks taking 1.9B of the 8B total. The high rate was 2.605%, and the bid to cover a strong 3.69. Ten year notes are firming here slightly, TNX down .6 bps at 4.188%.

Jeff Bailey : 5/3/2005 1:01:24 PM

QQQQ $35.21 +0.25% ... as "expected," the QQQQ did find early resistance at DAILY R1. Updated 5-minute interval chart at this Link

Linda Piazza : 5/3/2005 1:00:41 PM

If I look at a daily chart, it looks as if nothing has moved for hours. Wait, it looks about the same way if I study a 15-minute chart.

Seriously, The TRAN is sort of slowly sinking toward support at 3460, with the TRAN now at 3470 and testing nearest Keltner resistance. The TRAN has fallen far enough that it's probably invalidated the potential inverse H&S, continuation form, that had been visible on its 15-minute chart.

Jonathan Levinson : 5/3/2005 12:58:35 PM

QQQQ 3-day 100 tick chart update with price glued to the 7200 tick SMA and the short cycles still pointed south in a corrective downphase: Link

Keene Little : 5/3/2005 12:55:12 PM

Linda, I'm glad you asked Jonathan that question about his vignettes. I was thinking of Jonathan's pictures when the freakish looking Greenspan popped into my head.

Jonathan Levinson : 5/3/2005 12:44:26 PM

Although right at this moment, my screen isn't moving much more than our old favorite: Link

Jonathan Levinson : 5/3/2005 12:42:39 PM

Linda, he's been so busy lately that my "remote viewing" techniques have been coming up dry: Link

Linda Piazza : 5/3/2005 12:40:49 PM

Here's an OEX chart with some important levels and formations to watch: Link

Linda Piazza : 5/3/2005 12:43:33 PM

Jonathan, where are your vignettes when Keene's 12:35 post (Futures side) cries out for a little scene with a freakish-looking Greenspan driving a bus? I bet some of you readers out there miss Jonathan's vignettes, too, that used to relieve the stress on days like today.

Jeff Bailey : 5/3/2005 12:36:24 PM

Ford (F) $9.41 +2.06% ... said April sales fell 2% as weaker truck/sport utility sales offset gain in car sales. Brief recap at this Link

Jeff Bailey : 5/3/2005 12:33:35 PM

Daimler Chrysler (DCX) $39.33 -0.05% ... April sales press release with table at this Link

Jonathan Levinson : 5/3/2005 12:31:08 PM

The Treasury has an 8B t-bill auction in progress, the results of which will be posted shortly after 1PM. Currently, TNX is down .2 bps at 4.192%. Bonds feel like tumbleweeds and dust breezing by at high noon in Dodge City. If the auction results don't get things moving at 1PM, the volatility should start around 2PM ahead of the FOMC.

Jonathan Levinson : 5/3/2005 12:23:43 PM

QQQQ is pinned to the 7200 tick SMA, with a short cycle downphase in progress and so far looking corrective. The 30 min channel has stalled and is moving sideways, with resistance up at 35.32 and support holding at 35.10.

Linda Piazza : 5/3/2005 12:16:45 PM

Remember in high school biology when you used to set up those charts with the different alleles for certain characteristics? One parent with blue eyes and one with brown and what are the chances that a child will have blue eyes: that sort of thing? I keep trying to sort out the different possible combinations of results of the Fed meeting today and the market reaction, but there's no easy chart or predictable relationship. No rate change and measured language kept, and will markets then tank because the economy must be weaker than thought? Big rate change and removal of measured language and will the market tank because the Fed is overdoing it or soar because the economy must be stronger than we thought? See what I mean? I keep coming up with more reasons for the markets to tank, but there's just not that same one on one relationship.

Jonathan Levinson : 5/3/2005 12:10:52 PM

Session low for June gold here at 428.50, with silver at a session high of 6.915.

Jeff Bailey : 5/3/2005 12:09:30 PM

12:00 Internals at this Link

Linda Piazza : 5/3/2005 12:08:44 PM

I've mentioned that the TRAN's support appears to be weakening, and the TRAN drops slightly to test next support, possibly at 3460 or so. Stronger support is lower, from 3438-3442.

Jeff Bailey : 5/3/2005 12:02:33 PM

12:00 Market Watch at this Link

Linda Piazza : 5/3/2005 11:58:54 AM

The TRAN, RLX and SOX are among the indicator indices I watch, as they sometimes move ahead of other indices. Today, they're showing mixed evidence, with the TRAN near recent highs but showing some signs of weakening; the RLX at a recent high after confirming an inverse H&S on its 15-minute chart; and the SOX drifting lower, but perhaps drifting into support. No wonder the OEX trades sideways.

Jonathan Levinson : 5/3/2005 11:54:41 AM

QQQQ is back to testing the 7200 tick SMA at 35.20, with the 30 min cycle flattening at the top of its run. A break of that level will kick off a new 30 min cycle downphase on a move past 35.10 support. Link

Linda Piazza : 5/3/2005 11:44:20 AM

And the OEX continues sideways. As Keene said earlier on the Futures side of the Monitor, the longer we get sideways trading, the more unreliable the signals are going to be. That's true of Keltner signals, too, as the channels flatten in an equilibrium position.

Jeff Bailey : 5/3/2005 11:42:16 AM

Swing trade long alert ... for 1/2 bullish position in Stillwater Mining (SWC) $6.94 to $7.00 limit, stop $6.70, target $7.85.

Jonathan Levinson : 5/3/2005 11:39:51 AM

The US Dollar Index has been weak this morning Link , and euros and CAD futures are green, with June euros +.23% here at 1.2906, off a high of 1.2915. Gold is holding below 430 at 429.50, but silver is at a session high, -.035 at 6.907. Bonds remain directionless here, TNX up .2 bps at 4.196%, still refusing to break 4.2% resistance.

Jeff Bailey : 5/3/2005 11:39:02 AM

Stillwater Mining (SWC) $6.93 +2.81% ... N. American Palladium (PAL) $5.44 +0.74% ...

Jeff Bailey : 5/3/2005 11:37:37 AM

June Palladium (pa05m) ... $193.50 -0.07% (30-minute delayed) ...

Jeff Bailey : 5/3/2005 11:35:25 AM

Ford (F) $9.42 +2.16% ...

Linda Piazza : 5/3/2005 11:35:37 AM

The RLX has looked stronger than some other indices today, building on yesterday's gains. Currently at 405.25, it's set an upside Keltner target of 408.66. If reached, that would bring the RLX up just under the 410-ish level that's been resistance for almost a month, the top of its consolidation zone. It would constitute a retest of that resistance.

Jeff Bailey : 5/3/2005 11:35:05 AM

General Motors (GM) $27.58 +1.54% ...

Jeff Bailey : 5/3/2005 11:34:24 AM

DaimlerChrysler (DCX) $39.72 +0.63% ... jumping on much stronger-than-expected April sales figures.

Jonathan Levinson : 5/3/2005 11:32:12 AM

QQQQ bounced from the 7200 tick SMA and is holding below the previous session high. The TRIN/TRINQ opposition continues, with the NYSE weak and the Nasdaq strong, but bulls need to see the previous 35.30 high broken to avoid a short cycle downphase commencing.

Jeff Bailey : 5/3/2005 11:31:38 AM

Germany's DAX up 17.83 points, or 0.42% at 4,241.85. 20-point box at this Link

Linda Piazza : 5/3/2005 11:31:21 AM

The TRAN is forming a sort of continuation-form inverse H&S, a loose one, on its 15-minute chart, but in the process, it's falling beneath former Keltner support, turning it into possible resistance, with other support continually looking weaker. A mixed picture, but the TRAN currently looks vulnerable to a pullback.

Jeff Bailey : 5/3/2005 11:33:14 AM

SAP Aktiengesell (SAP) $39.61 +0.30% Link ... RS chart of SAP vs. $DAX at this Link

Jeff Bailey : 5/3/2005 11:25:33 AM

Oracle (ORCL) $11.55 -0.43% ... has been "chatter" that ORCL might be interested in buying SEBL.

Jeff Bailey : 5/3/2005 11:24:06 AM

Siebel Systems (SEBL) $9.76 +9.53% ... jumps to #2 on most active.

Linda Piazza : 5/3/2005 11:18:53 AM

The OEX has begun trading sideways along a Keltner line that's currently at 554.11, just below the 200-sma. The OEX may have settled into that pre-FOMC sideways trading already, although support continues to soften just a bit.

Jonathan Levinson : 5/3/2005 11:17:50 AM

QQQQ 100 tick chart at this Link with price pulling back to test rising 7200 tick support at 35.17.

Jeff Bailey : 5/3/2005 11:09:09 AM

11:00 Internals at this Link

Linda Piazza : 5/3/2005 11:04:01 AM

The SOX was not able to hold onto the higher highs, falling back again. Keltner support and resistance are ringing it tightly now as the SOX's Keltner channels settle into an equilibrium position. (See my Traders Corner article from this weekend for a description and chart showing equilibrium.) We may have a boring few hours now into the FOMC meeting, although prices can break out of these equilibrium positions at any time. They just mean that it's difficult to predict the direction that will be taken.

Jeff Bailey : 5/3/2005 11:02:08 AM

11:00 Market Watch at this Link

Jonathan Levinson : 5/3/2005 11:01:28 AM

Volume breadth is mixed, with the TRINQ showing solid buying pressure for the Nasdaq at .63, the TRIN showing selling pressure for the NYSE. Advancing volume leads declining volume on the Nasdaq 1.84:1, declining volume leads advancing 1.15 on the NYSE.

Linda Piazza : 5/3/2005 10:50:37 AM

The TRAN is kind of bumbling along near the day's high. It didn't quite hold to the Keltner line currently at 3477.08 on recent 15-minute closes, but it's trying to punch above that again. It dipped down to the 200-sma and -ema and is trying to rise above them again. It's sorta holding where it should, but not really inspiring me to think it's showing signs of great strength.

Jonathan Levinson : 5/3/2005 10:50:35 AM

QQQQ tested 35.30 and is pausing, with 30 min channel resistance up to 35.33 now and the 60 min channel just getting in gear as well. The short cycles are trending in overbought territory, but bears will need to see price below the 7200 tick SMA at 35.14 to signal a new (overdue) downphase in that shortest of cycles. In the meantime, price remains bullish. Link

Marc Eckelberry : 5/3/2005 10:49:36 AM

INTC June 22.50 calls now at 1.55. We are +.10, although INTC at stiff resistance, 50% fibs and ex-trendline.

Jeff Bailey : 5/3/2005 10:49:03 AM

Intel (INTC) $23.80 +1.06% ... reclaims its 50-day SMA ($23.54). #3 most active (TYC $27.82 -9.4%, QQQQ $35.27 +0.42% are #1 and #2)

Linda Piazza : 5/3/2005 10:47:46 AM

Careful, bears. The SOX is breaking higher. Or attempting to.

Jeff Bailey : 5/3/2005 10:45:46 AM

QQQQ intra-day 5-minute interval chart with QCharts' DAILY Pivot levels and some 5-MRT retracements.

Jonathan Levinson : 5/3/2005 10:44:09 AM

Session low here for Nymex June crude at 49.925.

Linda Piazza : 5/3/2005 10:42:24 AM

So far, the OEX still finds support on 15-minute closes at a Keltner line currently at 554.01. On a 15-minute chart, the OEX appears to be coiling into a symmetrical triangle (if you lop off a candle shadow or two), which wouldn't be unexpected on a FOMC day. Those expecting to see a rollover today--and there are enough that it actually makes me a little nervous when looking at sentiment on a contrarian basis--want to see the OEX begin producing 15-minute closes below that Keltner line and to break out of that symmetrical triangle to the downside. I still think there may be some chopping around to go based on Keltner evidence, and corroborated by usual pre-FOMC-decision behavior, before we know final direction.

Jonathan Levinson : 5/3/2005 10:37:01 AM

Session low for ten year bonds, TNX up 0.5 bps to 4.199% here.

Jeff Bailey : 5/3/2005 10:36:09 AM

QQQQ $35.23 +0.31% ... session highs here. Yesterday, the QQQQ kissed DAILY R1 and that was it for the session. If you're a day trader trading some size, just take note.

Jonathan Levinson : 5/3/2005 10:36:20 AM

QQQQ is testing and just broke the previous 35.22 high: Link with 30 min channel resistance up to 35.30 and the 60 min channel turning up. 7200 tick SMA support rises to 35.12.

Jeff Bailey : 5/3/2005 10:34:26 AM

FOMC Notes ... just a reminder that after today's FOMC meeting, the committee is not scheduled to meet until late June.

Jeff Bailey : 5/3/2005 10:27:09 AM

Current OPEN MM Profiles at this Link with various May expiration "Max Pain Theory" levels for current OPEN Positions.

Linda Piazza : 5/3/2005 10:25:49 AM

This is an obvious place to attempt a bearish OEX play for those so inclined, but there's not a lot of evidence to support such a play just yet. There's tentative Keltner-style bearish divergence, but tentative. There's the possibility of a double-top formation, but that's far from confirmed. There's a tentative softening of support, but not really all that much of a softening just yet. If inclined to test the waters today as futures writers note trendlines being tested (on the OEX, too), be sure you're ready to jump right back out if proven wrong. Know ahead of time how you'll handle the FOMC decision--jump out beforehand, widen stops, narrow them . . .

Jonathan Levinson : 5/3/2005 10:24:00 AM

QQQQ is drifting lower from its 35.22 high, currently up 3 cents at 35.15. Volume is so low that the overbought short cycle oscillators aren't rolling over- the tick-driven indicators are running slower than usual because there are fewer ticks to drive them.

Linda Piazza : 5/3/2005 10:22:48 AM

The OEX is far from confirming its potential double-top formation at the 200-sma and other resistance, but support may be showing the slightest sign of softening. I still expect to see some bumping around this morning, but bulls would certainly have felt more comfortable with a decided punch higher this morning. The advdec line is declining, so keep a watch on that.

Linda Piazza : 5/3/2005 10:20:12 AM

Potential double-top formation on the OEX, too.

Jonathan Levinson : 5/3/2005 10:20:01 AM

Bonds have weakened, with TNX back up to 4.192%, -0.2 bp here.

Linda Piazza : 5/3/2005 10:19:07 AM

Tab's 2:06 and 2:07 posts were in response to a reader question about the relationship of the China's action with respect to the yuan and gold and interest-rate sensitive issues. Thanks, Tab, for burning the midnight oil.

Linda Piazza : 5/3/2005 10:13:50 AM

The TRAN did punch through to a slightly higher new high (than yesterday's). The upside target that it's created is at 3500.60, and it could keep trying for that upside target as long as it's producing 15-minute closes above a Keltner line currently at 3476.86. Watch the TRAN for the possibility of a rollover from near 3500, especially if it drops below the trough level at yesterday's low, as a sign of a failed breakout on this index that sometimes leads other indices. The TRAN sometimes overruns targets a bit, so if a rollover is going to occur, it could even occur from slightly above 3500. Sustained 15-minute closes above the Keltner line currently at 3500.86 would constitute an upside breakout. Since the TRAN so seldom breaks outside this Keltner line, that seems a less likely scenario based on Keltner evidence.

The TRAN is also challenging its converged 200-sma and -ema, of course, with those averages at 3479.29 and 3473.24, respectively, and with the TRAN at 3481.03 as I type. The daily chart shows a CCI inverse H&S, so the possibility exists on the traditional daily chart that the TRAN could push higher. The April high was 3518.44, so I wouldn't consider an upside break confirmed until a move above that level.

Jeff Bailey : 5/3/2005 10:09:38 AM

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

Jonathan Levinson : 5/3/2005 10:06:57 AM

Nymex crude has reopened and is down .75 at 50.175.

Jonathan Levinson : 5/3/2005 10:03:24 AM

QQQQ 100 tick chart at this Link , testing 35.20 resistance with a high to 35.22. The 30 min channel top is up to 35.25, but it will continue to rise so long as price holds above the rising 7200 tick SMA, currently up to 35.10.

Jeff Bailey : 5/3/2005 10:01:46 AM

10:00 Market Watch at this Link

Jonathan Levinson : 5/3/2005 10:01:38 AM












Linda Piazza : 5/3/2005 9:59:47 AM

The OEX isn't giving up on its test of the 200-sma, the 50% retracement of the decline off the April 12 high, and Keltner resistance. As long as it continues to find support on 15-minute closes on the Keltner line currently at 553.82, it's likely to go on challenging that resistance. Right now, resistance and support (lower, nearer 552) look about equally weighted, with support perhaps looking a touch stronger than resistance. Perhaps it's not enough stronger to keep the OEX from knocking around between support and resistance until it weakens one or the other.

Jeff Bailey : 5/3/2005 9:58:53 AM

VIX.X alert 15.07 -0.33% ... must have been a "bug" in early readings. Not unusual, but stayed up there a little longer than usual. Quick checks of SPY/SPX option action didn't really "confirm" the higher reading.

Jonathan Levinson : 5/3/2005 9:57:15 AM

The Fed has announced a 4.5B overnight repo to refund 10.75B in expiring repos, for a large net drain of 6.25B.

Jonathan Levinson : 5/3/2005 9:56:23 AM

5 minutes to Factory Orders, est. -1.2%, prior +.2%.

Jeff Bailey : 5/3/2005 9:54:19 AM

SPX 1,160.44 -0.14% ... early most active options ... May 1,120 Put (SPT-QD) $3.40 (1,001:8,265) and May 1,140 Put (SPT-QH) $7.20 (300:25,731).

Linda Piazza : 5/3/2005 9:52:56 AM

Here's what the Dow shows on a Keltner basis, 15-minute chart: The Dow is currently testing Keltner resistance (on a 15-minute closing basis) at 10,258.12. A possibility for a pullback exists, with first support currently at 10,237.01, but stronger perhaps at 10,202-10,216. If the Dow should begin producing 15-minute closes above that Keltner resistance it's now facing, it will set a tentative upside target of 10,327.76, but I'd take those upside targets with some skepticism in the face of likely choppy trading pre-FOMC decision.

Jeff Bailey : 5/3/2005 9:51:12 AM

VIX.X alert .... 17.67 +16.86 ... DAILY Pivot Levels ... 14.61, 14.85, Piv=15.32, 15.56, 16.03.

Jeff Bailey : 5/3/2005 9:49:27 AM

SPY $116.10 -0.25% ... 4,000 contracts traded in the SPY $111 Puts (SPY-UG) with OI at 13,089. 2,000 each trade at $2.20.

Linda Piazza : 5/3/2005 9:49:20 AM

The TRAN is testing a double-top area this morning. It hasn't confirmed that double-top by falling below the trough between the two tops, however, so a higher high is still possible.

Linda Piazza : 5/3/2005 9:47:44 AM

So far, I agree with Jonathan's 9:44 assessment that we'll likely see chop this morning.

Linda Piazza : 5/3/2005 9:47:02 AM

While the OEX managed a first 15-minute close above the Keltner line currently at 553.71, it's turning down below it again as I type, again toward the stronger support currently at 551.66-552.60.

Linda Piazza : 5/3/2005 9:45:03 AM

Seen on the daily chart, the OEX is turning down from the 200-sma, into a congestion zone from the last month. Not much to be concluded from that, except that the OEX is still having difficulty with resistance, still trying to break through it.

Jonathan Levinson : 5/3/2005 9:44:14 AM

QQQQ is holding above 7200 tick SMA support at 35.05, with the 30 min channel moving higher, resistance up to 35.20, and the 60 min downphase beginning to stall with resistance at 35.16. Volume is light so far, and barring a strong move above yesterday's high, my guess is that we'll see rangebound chop this morning. Link

Jonathan Levinson : 5/3/2005 9:41:01 AM

June gold is holding its losses, trading 429.80 off a low of 428.50. The dail cycle downphase is in progress and will so remain below 433, with trendline resistance above at 437. Next support is at 424-425, followed by 418. Daily chart at this Link

Linda Piazza : 5/3/2005 9:38:55 AM

Instead of falling all the way toward 551.62-552.42 Keltner support, the OEX is trying to pull back above the overshot support at 553.71 before the first 15-minute close.

Linda Piazza : 5/3/2005 9:35:03 AM

As I said earlier, the Keltner channels suggested a decline first thing this morning, but they hadn't worked so well yesterday morning when they showed the same thing. Today, they do, with the OEX falling swiftly toward next Keltner support at 551.62-552.42. In the process of declining this morning, price action confirmed Keltner-style bearish divergence. Don't get married to a belief in follow-through this morning, though, ahead of the FOMC decision.

Jeff Bailey : 5/3/2005 9:31:18 AM

Teva Pharmaceuticals (TEVA) $31.14 ... lower at $30.25 and #3 on the pre-market most active list. Reported Q1 profit of $259 million, or $0.38 per share, compared with a loss of $428 million or $1.44 per share in the same period last year when it took a large acquisition-related charge. Teva's bottom line figures were inline with consensus estimates of $0.38 per share.

Jeff Bailey : 5/3/2005 9:27:27 AM

Tyco Intl. (TYC) $30.72 ... lower at $28.14 and #2 on pre-market most actives. The manufacturing conglomerate reported quarterly net income of $192 million, or $0.09 per share, which was down from $783 million, or $0.37 per share in the same quarter last year. Latest quarterly earnings included charges totaling 37 cents per share, consisting of 26 cents for the early retirement of debt, 9 cents for asset impairment charges in a unit of the plastics and adhesives business, and 2 cents to establish a reserve for resolving the regulatory investigation that began in June 2002. Excluding charges, TYC said it would have earned $0.48 per share. Consensus among analysts was for earnings of $0.47 per share.

Jonathan Levinson : 5/3/2005 9:22:55 AM

Bonds have firmed slightly, with TNX declining to a .8 bp loss at 4.186%. 4.2% is key resistance here, just below the declining daily trendline at 4.22%. Daily chart update at this Link with today's candle just under 1 hour old.

Tab Gilles : 5/3/2005 9:05:55 AM

Cigna (CI) Health insurer Cigna is expected to report earnings of $1.51 per share on revenue of $4.02 billion. A year ago, the company reported earnings of $1.86 per share on revenue of $4.72 billion. Cigna report 5/4. Link Link

Linda Piazza : 5/3/2005 9:02:23 AM

Monday, the OEX ended right on the 50% retracement of the decline off the April 12 high. The OEX broke tentatively out of a descending regression channel, but did not break above the 200-ema nor the actual descending trendline off the March high, indicated in red on this chart: Link Because the OEX spent about a month testing the support of the 200-ema and fell rather easily through the 200-sma after that support finally broke, I'm using the 200-ema at 556.90 as marker for a breakout. Hasn't happened yet, although it certainly looks closer. So does a potential rollover.

Here's where the OEX is on a daily chart and why this point could also be a rollover point: Link My opinion is that we have to assume that the OEX's action is still likely part of a bearish correction while the OEX remains below that 200-ema, with the possibility remaining of an upside breakout. If the OEX does break to the upside, the going could still be tough. There are Fib retracements off the decline off the March high to be faced, as well as the congestion from mid-March through mid-April, to name two types of resistance. The OEX won't even have retraced 38.2% of that decline until about 559.62. On any upside breakout, you should know ahead of time how you'll protect your play at that level.

While I can convince myself of the possibility that there could be the fits-and-starts kind of upward move, with brief, fast moves that are then abruptly halted while the OEX consolidates or pulls back, a difficult trading pattern, I can't yet convince myself that we'll see a smooth, trending rise that makes for a tradable pattern with OEX options. I'll have to see some evidence that such a move is underway before I fully believe it.

What about this morning? First, I'd be careful ahead of the FOMC meeting and even immediately afterwards, when the first reaction is sometimes reversed. With that caution in mind, here's what the 15-minute Keltner chart shows. As it was yesterday morning, the OEX is jammed up against Keltner resistance that usually stops it, but this time it's above the 200-sma rather than just below it. Continued 15-minute closes above the Keltner line currently at 554.80 sets a potential upside target of 558.64, but I personally feel some skepticism about that upside target with the 200-ema in between the OEX's current position and the target. A bout of short-covering or strong buying could obviously propel the OEX past all kinds of resistance, but that just doesn't seem a likely event when it took the OEX a month to finally break through that averages. A pullback seems likelier based on chart evidence alone, with nearby support on 15-minute closes at 553.70, but more strongly at 551.59-552.70. The same chart setup was visible yesterday morning, though, and the first move was a bounce.

Jonathan Levinson : 5/3/2005 8:44:11 AM

Ten year bonds have held their light gains, with TNX down 0.1 bps at 4.193%. QQQQ has slid to 35.06, -.06. The 30 min cycle downphase is stalled at the bottom of its range, while the 60 min cycle is just at the beginning of its downphase. With the daily cycle in an upphase, the various cycles are poised for directionless chop. With the FOMC announcement still hours away, I'd add that it will likely be on light volume.

Jonathan Levinson : 5/3/2005 7:38:45 AM

Equities are lower, ES trading 1162, NQ 1426.5, YM 10242 and QQQQ -.02 at 35.10. Gold is trading 429.80, silver 6.875, ten year notes +1/8 to 111 17/32 and crdue oil -.50 to 50.425.

We await the 10AM release of Factory Orders, est. -1.2%, and at 2:15, the FOMC announcement.

Linda Piazza : 5/3/2005 7:16:09 AM

Good morning. Japanese and Chinese markets were closed overnight, and other Asian markets saw mixed trading patterns. European markets gain, and the FTSE 100 tries to catch up for yesterday's missed opportunity for gains, rising more on a percentage basis than other European markets. Our futures showed some weakness as European markets opened and dipped toward the flatline, with futures trying to recover as European markets bounced. As this report is prepared, Nasdaq futures are unchanged, and Dow and S&P futures are negative. As of 6:40 EST, gold was up $0.20, and crude down $0.76 to $50.16. More detail about Asian and European markets follows in succeeding paragraphs.

Japanese and Chinese markets were closed for Golden Week holidays last night. Among those bourses open, computer-related stocks performed well in early trading. Other Asian markets were mixed. Taiwan's computer manufacturer Acer rose, reacting to Friday's after-the-close report of better-than-expected profit for the first quarter. The Taiwan Weighted was flat. South Korea's Samsung Electronics and Hynix Semiconductor rose in early trading, but the Kospi dropped 0.50%. Singapore's Straits Times gained 0.56%, but Hong Kong's Hang Seng fell 0.11%.

European markets gain, with the FTSE 100 making up for yesterday's holiday, with its percentage gains bigger than that seen on other bourses. This occurs despite the fall of the U.K.'s April manufacturing PMI below the benchmark 50, to 49.5 from March's 51.6. European bourses also work against earnings disappointments by major banks UBS and Commerzbank. UBS noted a 15% gain in Q1 net profit but trading revenue that dropped 19%. The bank claimed that the drop in trading revenue would be offset by other revenues. The company did not provide an outlook for the year, saying it was difficult to predict how the year might unfold. Commerzbank's Q1 net profit grew 60.6%, with bad debt provision dropped 16.8%. Due to a restructuring, the bank said, trading profits fell 16.6%. As part of its statement, Commerzbank called the economic outlook gloomier than it had been and said the business climate remained difficult. Those banks' stocks dropped and so did many financial sector stocks in Europe. U.K. insurer Friends Provident gained, however, after posting a 41% gain in sales.

Company-specific developments included BMW's gains after the company missed and repeated expectations for flat earnings for the year, blaming higher costs for materials, currency issues, and increased competition. German retailer Metro Ag dropped after releasing earnings and confirming its previous guidance for the year. Another retailer, Henkel, also reported, noting that the Western European economic environment remained difficult, but Henkel gained. Adidas-Salomon garnered two upgrades to buy ratings, from Merrill Lynch and Deutsche Bank. Steelmaker Arcelor gained after reporting.

As of 6:28 EST, the FTSE 100 had gained 56.70 points or 1.18%, to 4,858.40. The CAC 40 had gained 14.72 points or 0.37%, to 3,953.49. The DAX had risen 13.81 points or 0.33%, to 4,237.83.

Market Monitor Archives