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OI Technical Staff : 5/23/2005 9:59:59 PM

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Linda Piazza : 5/23/2005 3:57:06 PM

I'm going to be out much of tomorrow. I won't be doing the Asia/Europe report. I'll return sometime in the morning, but I'm not sure I'll be here by the open. Then I'll have to leave again in the afternoon.

Linda Piazza : 5/23/2005 3:52:58 PM

The OEX is just below a daily Keltner line rather than breaking out above it, at least if it closes the day below 567.83. This doesn't mean that it won't still eventually head toward 576.05, but it does mean that it might be possible for the OEX to drop back to test the 559-561 support, too, possibly before heading higher. The OEX pierced that line and has fallen back, showing that the resistance might be important. It was for today. We'll see about tomorrow. I, for one, would like to see that test of 559-561 as we head into the summer doldrums and see if it's going to hold.

Linda Piazza : 5/23/2005 3:47:05 PM

The SOX has come almost within a point and a half of its 200-week sma, but hasn't quite touched it today. A dangerous level here for both bulls and bears.

Jonathan Levinson : 5/23/2005 3:44:02 PM

I blinked and QQQQ took out the previous low, testing 37.85 now with the 30 min channel actually showing a downtick. Suppot is down to confluence at 37.80.

Linda Piazza : 5/23/2005 3:37:35 PM

And the OEX comes right back up to retest the three-minute Keltner resistance that had looked so much stronger than support. It did, however, also test the first support. I feel compelled to keep warning those in bullish positions to protect those positions, but it's been a warning that hasn't been needed. I've also been stating that it wasn't time yet for new bearish positions, which was a good warning to offer this morning, but also saying that a push above 567 wouldn't necessarily be a good new breakout bullish position. I still don't think it was, not when it was occurring early on an opex Monday, when options prices would stil be inflated. I didn't track option prices this morning, though, since I wasn't recommending a position, so I can't be sure.

Jonathan Levinson : 5/23/2005 3:36:49 PM

QQQQ is bouncing from a higher low above 37.87, with another weak short cycle downphase stalling. 30 and 60 min channel support converge at 38.03, with 7200 tick SMA support up to 37.90: Link

Linda Piazza : 5/23/2005 3:30:19 PM

On a three-minute chart, the OEX's Keltner resistance now looks far stronger than support, and a test of the 568.25 or maybe even 567.40-567.60 level looks possible.

Linda Piazza : 5/23/2005 3:23:42 PM

About 570 is the 61.8% retracement of the decline off the March high into the April low. This is typically another important Fib level, but I haven't thought that the OEX has adhered particularly well to the Fib levels related to that drop off the March high. The 38.2% Fib level was at about 559.60, for example, and the OEX condolidated near that, but didn't really open, close, or reach highs or lows much at that level. It moved rather readily across the 50% retracement, at about 564.80, too.

Jonathan Levinson : 5/23/2005 3:15:23 PM

Stepping away for 10 minutes.

Linda Piazza : 5/23/2005 3:09:56 PM

If the OEX closes above 567.93 today, it will have set an upside goal of 576.07 as long as it continues daily closes above 561.20. Doesn't mean that it would get there right away. Have to see first where the OEX closes, though, before we start talking about 576, and the daily Keltner chart is kind of begging for a retest of the 559-561 support zone.

Linda Piazza : 5/23/2005 3:06:19 PM

Keltner-wise, the BIX just isn't joining the party today.

Linda Piazza : 5/23/2005 3:12:03 PM

I had obviously (at least, I hope it was obvious) transposed two numbers in my 3:02 post. The 60-minute Keltner target was 1201.15, not 2101.15.

Linda Piazza : 5/23/2005 3:00:13 PM

Remember the SOX's 200-week sma at 428.06. Watcha wanna bet there's at attempt to run it up above that long-term resistance this week? The SOX isn't so far away, at 426.33 as I type.

Jonathan Levinson : 5/23/2005 2:57:51 PM

QQQQ 100 tick chart update at this Link with 30 min channel resistance rising to 38.04 and 7200 tick SMA support up to 37.85. Aside from the light volume, there's no sign of weakness. ADV:DECV is up to 3.24:1 on the NYSE, 2.84:1 on the Nasdaq.

Linda Piazza : 5/23/2005 3:02:28 PM

SPX 1200 test less than three points away. The 60-minute Keltner chart gives an upside target of 1201.15 as long as the SPX holds 60-minute closes above a Keltner line currently at 1192.35.

Linda Piazza : 5/23/2005 2:54:30 PM

The OEX is charging higher again, having created a new breakout signal. Rolling up to a 60-minute chart shows an upside target of 571.74 as long as the OEX maintains 60-minute closes above a Keltner line currently at 567.05. There's that old historical 567 S/R coming into play again.

Linda Piazza : 5/23/2005 2:44:55 PM

The SOX's 15-minute chart had predicted that it would hit the 424.60 level, and it did, exceeding that by moving up to challenge the day's high, which it has now done. The five-minute Keltner chart suggests that as long as 425.54 holds on five-minute closes, the SOX might continue to challenge the day's high.

Jonathan Levinson : 5/23/2005 2:33:27 PM

July crude oil closed +.475 at 49.125.

Jonathan Levinson : 5/23/2005 2:31:31 PM

QQQQ 100-tick chart updated at this Link with price holding a sideways range as 30 min channel resistance rises to 37.99. Support remains at the pennant apex. While the short cycle oscillators are overobught, volume is declining in this flag, suggesting upside continuation. Bears need a break of 37.80 to confirm any hint of weakness.

Linda Piazza : 5/23/2005 2:31:09 PM

The OEX is attempting another Keltner upside breakout, with that requiring a 15-minute close above the Keltner line currently at 568.50. As I typed, the OEX closed the last 15-minute period three cents above that. That's a tentative breakout at best, but what does it matter? A climb on top of the Keltner breakout signal or below it, is still a climb.

Jonathan Levinson : 5/23/2005 2:23:28 PM

OEX volatility index (VXO) currently 11.10, off a low of 11.06 today.

Jonathan Levinson : 5/23/2005 2:22:05 PM

Nymex July crude is up to 49 here, +.35, off a high of 49.50 today.

Jonathan Levinson : 5/23/2005 2:20:12 PM

Price is king, but volume is awfully light, with just 56.4M QQQQ shares. Friday was light as well at 66.7M, compared with the 107.04M daily average.

Linda Piazza : 5/23/2005 2:19:58 PM

The OEX is still not creating new breakout signals on the 15-minute Keltner chart, still climbing the underside of the rising Keltner resistance. Current bulls still need to have profit-protecting plans in place, with no new imminent sell signal, but with gains potentially limited, so new bearish or bullish entries seeming like a good bet just yet. This can't keep rising forever without a pullback. Or can't it?

Jonathan Levinson : 5/23/2005 2:13:29 PM

ADV:DECV has risen to 2.41:1 for the NYSE and 2.56:1 for the Nasdaq.

Jonathan Levinson : 5/23/2005 2:12:55 PM

QQQQ pennant break: Link

Linda Piazza : 5/23/2005 2:11:30 PM

The OEX's 30-minute CCI is turning up again after having just confirmed the CCI ghost. Glad I cautioned that this was just a sign to watch for price action as you would with bearish divergences. No follow-through to the downside, obviously.

Linda Piazza : 5/23/2005 2:09:47 PM

I've switched to a five-minute chart for watching the SOX, as it appears to have significant relevance and explains some things I was seeing on the 15-minute chart. That chart suggests that if the SOX ends the current five-minute period above a line currently at 425.11, which it seems likely to do, its next upside target is 426.66.

Jonathan Levinson : 5/23/2005 2:07:44 PM

Sharp move above the upper apex resistance here, session highs across the board.

Jonathan Levinson : 5/23/2005 2:04:39 PM

QQQQ dojied back within the pennant apex, and rising 7200 tick SMA support now overlaps the rising support line, actually 1 cent below it. There's not much to the current 30 min channel upphase and a failure here would be quite bearish, closing the door for those multiple bearish divergences being discussed. But until that happens, it's tough to miss the pattern of rising lows off today's higher low. There's still a higher high and higher low for the day. The fact remains that until the sellers actually do some actual selling, the current overbought move will continue to become more overbought.

Jonathan Levinson : 5/23/2005 1:56:46 PM

Volume breadth is holding steady in light positive territory, ADV:DECV currently running 1.78:1 on the NYSE and 1.98:1 on the Nasdaq.

Jonathan Levinson : 5/23/2005 2:01:52 PM

QQQQ pennant update at this Link , breaking below rising support. Confirmation of the break should come below 37.73, with the 30 min channel bottom at 37.67.

Linda Piazza : 5/23/2005 1:49:24 PM

The OEX's 30-minute CCI ghost (H&S on the CCI) is looking as if it might have confirmed now, but this 30-minute period hasn't been completed yet, so that's not official. This is just a sign, too, like bearish divergence, and not a promise of declines to come.

Linda Piazza : 5/23/2005 1:40:56 PM

The OEX's 30-minute potential CCI ghost still rounds down into a possible right shoulder. There's not much else to watch, so I'm watching that.

Jonathan Levinson : 5/23/2005 1:36:16 PM

Session low for June gold here, -1.10 at 416.70, silver down to a .022 gain at 6.974 as equities and bonds advance.

Linda Piazza : 5/23/2005 1:30:58 PM

Keltner resistance keeps holding on 15-minute closes on the OEX, but the OEX still keeps cimbing the underside of that Keltner resistance. The OEX's 15-minute cnadles have not looked particularly strong over the last couple of hours, but so far, they hold near the day's high.

Jonathan Levinson : 5/23/2005 1:28:07 PM

Session high for 10-yr notes here, TNX -5.4 bps at 4.071%, a 1.31% decline for the day. Nymex crude is up .15 at 48.80, off a high of 49.50.

Jonathan Levinson : 5/23/2005 1:26:11 PM

QQQQ is back above 37.81, coiling itself into a broad pennant with the short cycle oscillators chopped up and directionless here: Link

Linda Piazza : 5/23/2005 1:24:58 PM

Another push higher across many indices. The OEX pushes toward resistance that stretches up to 568.17 on 15-minute closes.

Linda Piazza : 5/23/2005 1:21:33 PM

We're beginning to see all kinds of bearish diverences on many indices, but will those be worked off with a continued sideways move? So far, price action has not confirmed by any impulsive moves lower.

Linda Piazza : 5/23/2005 1:19:30 PM

The BIX is beginning to show vulnerability to 363.80. Like the SOX, it kept setting up this vulnerability all day Friday, too, but never touched that mid-channel level. We'll see if today is different.

Linda Piazza : 5/23/2005 1:10:37 PM

As I think Jane has already noted on the Futures side, as some indices were hitting equal highs on their five-minute charts, the advdec line was hitting a lower high.

Jonathan Levinson : 5/23/2005 1:07:07 PM

Demand was weak at the 32B Treasury auction, with the 13 week notes generating a bid-to-cover ratio of 1.98, high rate of 2.895%, while the 26-week generated 2.04 bids for each accepted, high rate 3.11%. Foreign central banks took a solid 9.25B of the 32B total.

Jonathan Levinson : 5/23/2005 12:58:18 PM

QQQQ tested 7200 tick SMA support from above and dojied back off it, but needs to clear 37.80 to re-establish the short cycle upphase. Currently, the VIX, VXO and VXN are all resting just above their session lows with price pulling back from the highs. Link

Linda Piazza : 5/23/2005 12:56:38 PM

The SOX again looks vulnerable to 418.11-418.72, but we know where that's been getting us, don't we?

Linda Piazza : 5/23/2005 12:50:13 PM

The SOX couldn't maintain its push higher, and is now back testing Keltner support. Hmm. Cratered at first Keltner resistance, but when I look at the Friday morning action, I see it did the same thing then, too, before finding support again and pushing up into Friday's close. I'm not suggesting that the SOX will push up into a new daily high, although it wouldn't greatly surprise me. What I am suggesting is that we not make too much of a bearish case for this resistance having held. Not just yet.

Linda Piazza : 5/23/2005 12:47:56 PM

For reference, the OEX's 30-minute 21-ema is now at 565.86, and the OEX has been bouncing off this average for several days. The CCI ghost on this chart has neither confirmed nor been invalidated. There's a hint of rounding at the right-shoulder level, but nothing definitive. Bulls, just keep your profit-protecting measure in place. Nothing else to be suggested just yet.

Tab Gilles : 5/23/2005 12:44:57 PM

Newmont Mining (NEM) Weekly chart. Link

Jonathan Levinson : 5/23/2005 12:41:07 PM

Treasuries have weakened off their highs, TNX up to a 4 bp loss at 4.085%. Awaiting the results of the 13-week and 26-week treasury auctions. Link

Linda Piazza : 5/23/2005 12:38:31 PM

The OEX currently tests Keltner resistance form 567.56-568.04, and as it has done since Friday morning, that resistance looks as if it might hold. The OEX apparently can't break out again, but it can climb the underside of those rising lines, and that's what it's been doing since Friday morning.

Linda Piazza : 5/23/2005 12:36:48 PM

I said the SOX's action was reminiscent of Friday's and it has now done just what it did Friday: erased vulnerability to the mid-channel level. Sigh. This is getting old unless you've been in bullish positions and have just hung on. I've got sitting orders to buy-to-close sold puts on some bull put credit spreads (not on the OEX--couldn't get enough premium) and maybe those will at least execute, although I don't think so, so early in June's opex cycle. Otherwise, I'm just watching the same action unfold day after day.

Jonathan Levinson : 5/23/2005 12:35:29 PM

QQQQ broke above as I was posting that last, now running for 37.85. Volume breadth has firmed, 1.97:1 in favor of advancing shares on the NYSE, 2.06:1 on the Nasdaq.

Jonathan Levinson : 5/23/2005 12:32:43 PM

QQQQ has been turned back from 37.80 for the past half hour, finding resistance at a lower high. If it breaks, 30 and 60 min channel resistance converge at 37.85. Link

Linda Piazza : 5/23/2005 12:29:37 PM

There's potential for a CCI ghost (H&S on the CCI) again, this time on the OEX's 30-minute chart. It hasn't rounded over into a right shoulder, and might not, but I'm watching that for a heads-up in a change in behavior. Since this is a 30-minute chart, it could take a while to confirm or invalidate that CCI ghost. CCI, like RSI, can sometimes lead rather than just corroborate, but since both are sensitive tools, they can also give false signals. RSI has been trending lower since the 18th on the 30-minute chart, showing bearish price/RSI divergence.

Linda Piazza : 5/23/2005 12:23:21 PM

SOX still trying to hold on while Keltner support catches up, erasing its vulnerability to 417.93-418.65. Still hasn't quite erased it yet, though, but this is reminiscent of Friday's action.

Jonathan Levinson : 5/23/2005 12:20:56 PM

Session high for crude oil here at 49.475, up 82.5 cents.

Linda Piazza : 5/23/2005 12:10:50 PM

Back. The SOX is once again doing its best to erase its vulnerability to 471.85-418.54, but hasn't quite done that yet.

Tab Gilles : 5/23/2005 12:05:50 PM

EUR/USD Link

Commitement of Traders link .... Link

Newmont Mining Link

Jonathan Levinson : 5/23/2005 11:58:17 AM

QQQQ update at this Link with the young short cycle upphase locking horns with the young 30 min cycle downphase.

Linda Piazza : 5/23/2005 11:56:16 AM

Stepping away for a few minutes.

Linda Piazza : 5/23/2005 11:55:38 AM

Keltner charts so far look much as they did late last week. We keep having the moves back below the breakout levels, but no great conviction to the downside. No impulsive moves, as Keene might say (don't want to put words in his mouth) with the possible exception of the SOX.

Linda Piazza : 5/23/2005 11:50:58 AM

The TRAN is rising again to test the breakout level. We have the BIX flat-lining, the SOX dropping, the RLX beginning to flat-line just under a double-top zone, and the TRAN trying to push higher again. No conviction either direction just yet. Noting that the OEX's 30-minute 21-ema is at 565.54, with the OEX at 566.37, and there's yet been no test of this MA, much less a 30-minute close beneath it.

Jonathan Levinson : 5/23/2005 11:49:21 AM

Session high for Nymex crude at 49.40 here, +.75.

Linda Piazza : 5/23/2005 11:49:17 AM

The BIX is doing a flat-line thing today.

Linda Piazza : 5/23/2005 11:46:11 AM

The SOX remains vulnerable to 417.75-418.51.

Tab Gilles : 5/23/2005 11:39:26 AM

Newmont Mining (NEM) Is NEM undervalued? Here's a chart of NEM/$GOLD/$USD. Link

Jonathan Levinson : 5/23/2005 11:38:12 AM

Bonds remain firm, TNX currently down 5 bps at 4.075%, engulfing Friday's gains and approaching Thursdays: Link . The Treasury auctions, 32B being sold, should prove interesting. I'll report the results when they're released at 1PM.

Jonathan Levinson : 5/23/2005 11:33:18 AM

QQQQ testing 72 SMA resistance here with the short cycle oscillators turning up. A break above the 72 SMA targets 37.80, the location of the current declining 30 min channel top: Link

Linda Piazza : 5/23/2005 11:32:27 AM

Several key indices slip back below their Keltner-style breakout levels, but still no conclusive proof of a pullback in the making just yet. Watching the SOX to see if it's going to once again erase vulnerability to a decline to the mid-channel level, currently at 417.69-418.50. A 15-minute close above the Keltner line currently at 423.03 would do erase it.

Linda Piazza : 5/23/2005 11:27:52 AM

To me, the SOX's 200-ema has seemed more important lately than the 200-sma, or at least as important: Link That 200-ema is now at 416.19, only about 6 points away from the SOX's current level. Bulls would like to see that MA's support hold on any retest. Otherwise, that questions the breakout.

Tab Gilles : 5/23/2005 11:25:17 AM

Murphy Oil (MUR) Looking more and more bullish. Entry point (BUY ZONE) was at $83/$87. Today's chart and some from last week. Link Link Link

Jonathan Levinson : 5/23/2005 11:23:50 AM

ADV:DECV remains soft for QQQQ, 1.24:1 in favor of advancers with thte TRINQ up to .90 off a low of .45, while on the NYSE there are 1.48 advancing shares for each declining, TRIN .89.

Linda Piazza : 5/23/2005 11:21:38 AM

The OEX stays above the 30-minute 21-ema at 565.45, at least for the moment.

Linda Piazza : 5/23/2005 11:20:42 AM

The TRAN is again erasing its breakout signal, but not below the Keltner line that supported it all week, currently at 3615.09.

Linda Piazza : 5/23/2005 11:13:34 AM

The SOX is maintaining vulnerability to 417.54-418.39.

Jonathan Levinson : 5/23/2005 11:13:18 AM

Nymex crude is up .525 here at 49.175, current high 49.325.

Jonathan Levinson : 5/23/2005 11:05:29 AM

Session low for QQQQ here at 36.60, testing the 30/60 min channel bottoms as the short cycle indicators enter oversold territory. These channels should begin long-overdue downphases and should see followthrough provided that any bounce holds below 72 SMA resistance at 37.75. Link

Linda Piazza : 5/23/2005 11:02:47 AM

The OEX heads toward a test of the 30-minute 21-ema at 565.39.

Jonathan Levinson : 5/23/2005 11:00:03 AM

Most Actives QQQQ +0.02 +0.04% INTC -0.03 -0.11% SPY +0.22 +0.18% MSFT +0.11 +0.43% ORCL +0.14 +1.12% ABRX -1.7 -23.64% AAPL +1.3 +3.46% SIRI +0.08 +1.5% AMAT +0.01 +0.06% CSCO -0.06 -0.31%

Jonathan Levinson : 5/23/2005 10:58:54 AM

QQQQ is working on support at Friday's high: Link

Jonathan Levinson : 5/23/2005 10:57:33 AM

That was a very steep drop on the SOX. 3-min chart at this Link

Jonathan Levinson : 5/23/2005 10:52:31 AM

ADV:DECV is still positive, but down to 1.71:1 on the NYSE and 1.37:1 on the Nasdaq.

Linda Piazza : 5/23/2005 10:51:21 AM

With a 15-minute close beneath the Keltner line currently at 422.01, the SOX would threaten vulnerability to 417.47-418.42, as long as it continued producing 15-minute closes beneath that breakdown level. Late last week, it kept producing such signals, but then bouncing right back up again.

Jonathan Levinson : 5/23/2005 10:49:06 AM

QQQQ reverses all of its gains since the cash open, diving below 7200 tick SMA support: Link

Linda Piazza : 5/23/2005 10:47:48 AM

The OEX's 30-minute 21-ema is now at 565.34, with that average prompting bounces late last week.

Jonathan Levinson : 5/23/2005 10:44:35 AM

Nymex crude trying to hold in positive territory, currently up .05 at 48.70.

Linda Piazza : 5/23/2005 10:42:26 AM

RLX still holding to its new breakout signal, but it's also still holding just below the bottom of January's huge gap lower. Important test for this important index, too.

Jane Fox : 5/23/2005 10:41:58 AM

Those 10 are ALTR, AMAT, BRCM, INTC, KLAC, LLTC, MRVL, MXIM, NVLS AND XLNX, which obviously have quite an impact on the NDX.

Jonathan Levinson : 5/23/2005 10:41:39 AM

I see bearish divergences in the short cycle indicators for QQQQ, but this is within the still-rising and still-overbought 30 min cycle. A break below 37.72, the current location of the rising 72 SMA, will stall that longer upphase, but it will take a move below 37.60 to actually generate some downside in these longer intraday cycles.

Linda Piazza : 5/23/2005 10:40:59 AM

The OEX still tests the breakout level, but from the underneath side this time.

Linda Piazza : 5/23/2005 10:40:19 AM

Keene, that's what I'm betting, too. (See Keene's 10:33 post, perhaps on the Futures side.) I'm literally betting on it with an OTM bear call spread on the SOX, initiated last week. However, this exuberance proves a little worrisome.

Jane Fox : 5/23/2005 10:39:02 AM

Linda and Keene here is how the SOX has traded compared to NQ (the NAZ futures). The only day I see where there was a divergence was on the May 19th when the SOX was declining and NQ advancing. I also took a look at how many of the SOX stocks were in the NAS - 100 and from what I can find there is 19 stocks in the SOX index of which only 10 are in the NAS-100 as well. Link

Linda Piazza : 5/23/2005 10:37:36 AM

SOX dropping heavily.

Linda Piazza : 5/23/2005 10:37:20 AM

Here's another important test going on today, with the mid-cap index showing potential for a H&S but currently testing the right-shoulder level: Link There was the requisite bearish divergence as the head was formed, but if the MID shoots up past the right shoulder level, the formation may be rejected.

Jonathan Levinson : 5/23/2005 10:36:17 AM

ADV:DECV is currently 3.07:1 for the Nasdaq and 2.66:1 for the NYSE, TRINQ .51, TRIN .75.

Keene Little : 5/23/2005 10:33:30 AM

Linda, the SOX has also run into its downtrend line from January 2004. Make or break time for the SOX but with the daily in overbought I'm leaning towards a failure from here. The close today will be important. Link

Linda Piazza : 5/23/2005 10:31:58 AM

OEX attempting to breakout again. Next resistance at 567.63, but still turning higher.

Jonathan Levinson : 5/23/2005 10:31:43 AM

Session highs across the board. QQQQ's channel is holding at 37.90 resistance for now: Link

Linda Piazza : 5/23/2005 10:29:07 AM

The BIX is getting in sync with some other indices and is climbing now, finally, but is far from producing any breakout signal on the Keltner chart.

Linda Piazza : 5/23/2005 10:27:26 AM

Oh, my. If Marc were here, he'd be noting that the SOX's weekly 200-sma is at 428.06 and the SOX's high has been 426.06. A while ago, Marc noted that the SOX has been pressured by this MA since January 2002, although it pierced it on an intra-week basis in February of this year. Important, important test going on here.

Linda Piazza : 5/23/2005 10:24:10 AM

The OEX is one of those indices that is showing some tentative Keltner-style signs of a pullback. It kept doing that late last week, too, pulling back only to a line that's currently at 565.03 and sometimes stopping its decline before it even touched that. The 30-minute 21-ema has been prompting bounces and that's currently at 565.23, so that 565.00 area may be one to watch.

Jonathan Levinson : 5/23/2005 10:22:58 AM

Looks like we're in sync, Mark :)

Jonathan Levinson : 5/23/2005 10:22:35 AM

A moment of silence for GOOG shorts. I don't know GOOG's weighting in the NDX, but it's up again to new highs, adding another 7.18 points here to the high 248s, another nearly 3% gain for this bear-killer.

Linda Piazza : 5/23/2005 10:21:50 AM

I'm noticing a pickup in emails touting some BB or OTC stock. Who acts on those pump-and-dump tips? Someone must, or they wouldn't keep coming.

Jonathan Levinson : 5/23/2005 10:20:58 AM

Linda, at the 2002 lows I observed the same thing about the subterranean TRINQ readings. This should indicate the tippity top of a normal sized wave- but, in rare cases, it indicates the bottom of a huge, out of the ordinary wave. The indicators are saying that they've reached a normal deviation from the mean- in normal conditions, that should mark the top. In a tsunami, however, "high" can get a lot higher. If this is a trending move, then those keltners will lag, but should begin to shift sharply higher. This is a very important week for the market.

Linda Piazza : 5/23/2005 10:18:57 AM

Jonathan, I don't remember a recent episode when Keltner-style breakout signals have been maintained for this long without a pullback to the central channel support. Early February was the last time that we saw anything approaching this long an upper-channel violation (at least the way I've got my channels set) and even that didn't rival this. I'm seeing some tentative signals of a possible pullback on some indices, but saw the same ones last week without any pullback occurring.

Jonathan Levinson : 5/23/2005 10:17:52 AM

Crude oil is holding a 32.5 cent loss at 48.325, off a low of 48.05. OPEC stated, with slight dissent, that they intend to continue pumping heavily despite recent strong inventory builds. More on OPEC and the crude oil picture in tonight's market wrap.

Jonathan Levinson : 5/23/2005 10:14:30 AM

The 7200 tick SMA has risent to 37.70 here, with the top of the 30 min channel up to 37.88. The short cycle channel is trying to roll over, but it looks like noise above that 72 SMA support. Link

Linda Piazza : 5/23/2005 10:11:25 AM

Out of the indicator indices that I watch frequently--the SOX, TRAN, RLX and BIX--to sort of watch some different sectors and see how they might impact the OEX's behavior, only the BIX has failed to produce a slightly new short-term high this morning.

Jonathan Levinson : 5/23/2005 10:10:40 AM

Good point, Linda. My guess is for a short covering blowoff following the op-ex call exercises, but that should be obvious to the rest of the market as well.

Linda Piazza : 5/23/2005 10:09:37 AM

$TRAN turning lower immediately after confirming a new breakout, retesting the breakout level. I don't want to microanalyze but this is an opex Monday and some indices have been preserving breakout signals for a long, long time, and so I'm hyper-aware of the possibility of a pullback. So is everyone else, which may be one reason that it might not happen.

Linda Piazza : 5/23/2005 10:07:55 AM

In addition to confirming an inverse H&S on the daily chart, the OEX also last week confirmed one visible on the 15- and 30-minute charts. It has now far exceeded the upside target of that formation. It's been bouncing from the 30-minute 21-ema, currently at 565.23, so it would take a 30-minute close beneath that -ema to show a change in that trend.

Jonathan Levinson : 5/23/2005 10:06:52 AM

Session high for 10-yr notes, with TNX down 4.6 bps to 4.079%.

Jonathan Levinson : 5/23/2005 10:05:32 AM

Nymex crude oil has reopened, -.375 at 48.275 here.

Linda Piazza : 5/23/2005 10:03:47 AM

The RLX also maintained a new breakout signal through the last 15-minute close.

Jonathan Levinson : 5/23/2005 10:03:47 AM

Volume breadth has firmed, advancing shares beating declining 2.13:1 on the NYSE and 2.77:1 on the Nasdaq.

Linda Piazza : 5/23/2005 10:03:08 AM

The TRAN did maintain its breakout signal through the last 15-minute candle.

Linda Piazza : 5/23/2005 10:02:29 AM

The 4/12 high was 567.04, so the OEX is above that now. The 11/17 high was 568.67. The 2/22 low was 567.20. The 12/17 low was 567.36. This is an important S/R level with lots of swing highs and lows.

Jonathan Levinson : 5/23/2005 10:02:21 AM

Session highs across the board, gold and silver as well, QQQQ at 37.84 and testing upper 30 and 60 min channel resistance. An overbought trending move from here would be very bullish.

Linda Piazza : 5/23/2005 9:59:52 AM

OEX testing that important 567 level. Without a pullback and testing of support, I don't see a new bullish entry here, although this is an important level. As I said earlier, and seems as if I've been saying forever now, this is a time for current bulls to have their profit-protecting measures in place and to follow the OEX higher with their stops. Haven't seen conclusive evidence of an imminent rollover, either, although perhaps this current test will give us more evidence.

Jonathan Levinson : 5/23/2005 9:56:20 AM

Session highs across the board here, QQQQ up to 37.79.

Linda Piazza : 5/23/2005 9:55:47 AM

The BIX still can't make any headway this morning.

Jonathan Levinson : 5/23/2005 9:54:06 AM

QQQQ tests upside 60 min channel resistance here, 30 min channel resistance rising to 37.80: Link

Linda Piazza : 5/23/2005 9:52:17 AM

The OEX is coming up not to test the 566.71-567.38 Keltner resistance. Nearest support is 564.95. They look almost equally weighted, so that it's difficult to say which will hold.

Jonathan Levinson : 5/23/2005 9:52:03 AM

The Fed has replaced 4B in weekend repos expiring with 7B via overnight repo, for a net add of 3B today.

Jonathan Levinson : 5/23/2005 9:49:41 AM

Bear in mind that op-ex week isn't done, with traders adjusting and resetting their positions following the May expiry. My guess is that calls got exercised, with traders who didn't cover getting assigned short positions that are under water. This could lead to a short squeeze, but whether it carries through or not and attracts the bulls will be another story. The trend favors the upside- but followthrough for the next few hours should prove to be a crucial test.

Linda Piazza : 5/23/2005 9:49:07 AM

New upside breakout on the TRAN, if it holds through this 15-minute period. MACD is not going along for the ride just yet, though.

Linda Piazza : 5/23/2005 9:43:29 AM

Some indicator indices I watch--RLX and TRAN--still rise or hold near the day's high, while some--still drop or hold near the day's low. No consensus just yet.

Jonathan Levinson : 5/23/2005 9:39:29 AM

QQQQ continues to flirt with the 72 period SMA, still no break below: Link . It feels like it wants to, but the long engulfing candle could be in either direction, and the trend has been relentlessly up from last week.

Linda Piazza : 5/23/2005 9:38:56 AM

SOX still dropping, now testing the Thursday-morning high levels.

Linda Piazza : 5/23/2005 9:38:02 AM

The TRAN is trying to push higher as I type, but also showing some tentative signs of Keltner-style bearish divergence.

Linda Piazza : 5/23/2005 9:37:33 AM

The BIX turns down this morning.

Linda Piazza : 5/23/2005 9:37:20 AM

The RLX tests 435.02 Keltner resistance this morning and pulls back just a little. It's at 434.22 as I type. It's near the breakout level this morning again, but showing some signs of Keltner-style bearish divergence. We'll have to see if that means anything, with the RLX important to watch, too, in my opinion.

Linda Piazza : 5/23/2005 9:35:30 AM

Keltner resistance on the OEX begins at 566.57 and extends to 567.31, this on the 15-minute chart. Closest support is just under 565.

Linda Piazza : 5/23/2005 9:32:42 AM

Nothing much happening on the OEX just yet. SOX inching just off its open to test Keltner support bunched just beneath that opening level.

Jonathan Levinson : 5/23/2005 9:19:17 AM

Premarket Percent Losers: BCGI -2.81 -58.42% ABRX -2.01 -27.96% AAI -0.95 -9.8% PACT -0.7 -9.15% ALGN -0.59 -7.43% USU -0.93 -7.19% KNSY -1.58 -5.94% PFS -5.36 unch% GMAI -0.47 -4.94% NFLD -0.59 -4.34%

Jonathan Levinson : 5/23/2005 9:18:48 AM

Premarket Percent Gainers: NGRU +0.66 +60.7% EMRG +0.2 +36.36% IMNR +0.18 +25% SGH +0.37 +14.18% RCOME +13.75 unch% MTLK +0.42 +9.77% CTIBE +8.82 unch% HMY +0.6 +8.66% OMG +1.63 +7.62% GERN +0.53 +7.21%

Jonathan Levinson : 5/23/2005 9:13:08 AM

Session high for ten year bonds, TNX now down 2 bp at 4.105%, completely reversing their earlier gains and engulfing all of Friday's range to boot. Here's the updated daily chart: Link

Jonathan Levinson : 5/23/2005 9:07:12 AM

Equities have edged back to just above unchanged, QQQQ 4 cents in the green at 37.70 after spiking to 37.75 this morning. Current 30 and 60 min channel resistance line up at 37.76. Both the 30 and 60 min oscillators are overbought and showing bearish divergences, but this has been the theme for much of last week's rally. QQQQ bears need to see a break of 37.65 to stall the upphases, and a break below 37.50 to kick off new downphases. Until that occurs, the bearish divergences are only potential, and can just as easily indicate bullish trending action from the oscillators. Above 37.65, the benefit of the doubt goes to the bulls.

Jonathan Levinson : 5/23/2005 8:41:40 AM

Treasury yields are up at the cash open, with TNX currently trading +.8 bps at 4.133% and holding above Friday's range. It's been a strong bounce sicne the test of 4.04% support, but so far every strong bounce for the TNX has been strongly reversed since the March high. Updated daily chart at this Link with today's young candle a small green smudge atop Friday's.

I heard part of an interview on Friday in which the technician said that the market is "littered with the corpses of those who have tried to short treasuries." I didn't get the context in which he said it, but with yields holding multidecade lows, it's clearly an apt and colorful observation. Immediate trendline and confluence resistance here is at 4.14%-4.16% on the TNX.

Linda Piazza : 5/23/2005 8:22:35 AM

Last week, the OEX broke above the 200-sma and -ema. It confirmed one version of an inverse H&S on the daily chart. On the daily nested Keltner chart, the OEX broke above the mid-channel level. Now Keltner support converges beneath the OEX at that mid-channel level, at 559.05-560.38.

We'll be looking for a retest to occur at some time or another, to see if that former resistance now holds as support. It looks as if it might hold on first test if still configured as it is now by the time it's tested, but there's a possibility that the daily chart is settling into an equilibrium position, with all channels lining up inside each other. When that happens, what looks like massed S/R in the mid-channel area doesn't either support or resist, and prices move back and forth across it quite easily, bumping from one side to another of a channel that's now about 13 points wide, about 6-7 points above the mid-channel level and about that many below, too. So, there's the possibility that the support won't hold.

First, though, we have to question when the OEX is going to pull back. It's been looking overbought on a short-term Keltner basis for some time now. Other indices such as the SOX, BIX and RLX began showing some signs of an imminent pullback late Thursday, but there just wasn't any follow-through on the SOX or OEX, and bulls or short-covering bears reversed those signals whenever they occurred. The OEX's 15-minute CCI shows a possibility of a CCI ghost (a H&S on the CCI), with such formations sometimes preceding or accompanying pullbacks, so we'll watch that CCI ghost to see if it confirms. A burst over 567 might start another bout of short-covering, but if that doesn't happen, we'll look for signs of a rollover. This time, we'll want to see a drop and 15-minute below a Keltner line currently at 564.73 or else another move up toward 567 with some kind of signs that a rollover is imminent, including internals that support such a conclusion. Otherwise, we're looking at the possibility of a burst through that level, to the next resistance level. If there is a pullback early this week, the 15-minute Keltner chart suggests that 561.74-562.76 should be a first place for profit-protecting measures for short-term bears.

For now, until those signs of a rollover appear, the Keltner chart breakouts still suggest that short-term bulls follow the OEX higher with their stops.

Jonathan Levinson : 5/23/2005 7:37:09 AM

Equities are trading session highs, ES at 1192, NQ 1532.5, YM 10495 and QQQQ +.05 at 37.71. Gold is up .2 at 418, silver +.053 at 7.005, ten year notes are down 1/16 at 111 31/32 and crude oil is down .40 at 48.25.

There are no economic reports scheduled for today. The Treasury is auctioning 32B of 13- and 26-week bills, the results of which will be released at 1PM.

Linda Piazza : 5/23/2005 7:13:20 AM

Good morning. The Nikkei coiled in the morning, but financials helped the techs to lead the index higher in the afternoon. All other Asian markets typically covered in this report slipped lower. European markets gain, with German utilities benefiting from Chancellor Schroeder's call for an early general election after he lost key support, an election he is currently anticipated to lose. Our futures trade near the flat-line levels. As of 6:59 EST, gold was up $0.20, and crude, down $0.47. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei coiled in a tight range between 11,060 and 11,080 in earliest trading Monday, but climbed all afternoon, closing higher by 121.36 points or 1.10%, at 11,158.65. Exporters gained during earliest trading, and techs in particular were noted as leading gains into the close. Banking stocks rose in the afternoon after Mizuho Financial Group released earnings for the last year, running through March. News in the banking sector also included Shinsei Bank's announcement that it would begin some services in the U.K.

Other Asian markets were mixed, but the ones typically covered in this report all declined. The Taiwan Weighted lost 1.16%, and South Korea's Kospi slipped 0.12% lower. Singapore's Straits Times was closed. Hong Kong's Hang Seng fell 0.13%, and China's Shanghai Composite tumbled 2.59%. China revised its previous estimate of first-quarter GDP to a 9.4% year-over-year rate, down slightly from the preliminary 9.5%. Lower industrial production led to that revision, but one source notes that April's industrial production had again risen. In addition, the combined profits for industrial firms rose 15.6% for the first five months of the year, with this growth 30.1 percentage points from the growth in the same period last year. Also in China, Vice Premier Wu commented on the yuan reform, saying that while China anticipates that reform, it will not succumb to external pressures and will undertake that reform only when the time is right for China. Wu cancelled a planned meeting with Koizumi of Japan in Tokyo. The International Monetary Fund's Rato was quoted in an interview with Spain's El Mundo newspaper, saying that China was ready to adopt more flexibility in the yuan, but that several considerations included putting in some controls against speculative attacks.

Most European markets currently trade higher. One economic number showed that cell phone services has seen a growth slowdown. In the U.K., miners gains. In Germany, political developments have led Chancellor Schroeder to call for an early general election after he lost a key election in the German state with the highest population. Most theorize that the country's continued high unemployment rate has undercut his support. Equities are seen as rebounding as a result, with utilities leading the gains in anticipation that a new government would support the traditional utilities sector, doing away with some of the current energy incentives. A solar energy company's stock plummeted as a result.

As of 7:01 EST, the FTSE 100 was up 8.50 points or 0.17%, at 4,980.30. The CAC 40 was down 8.15 points or 0.20%, to 4,104.33. The DAX is up 39.88 points or 0.91%, at 4,400.56.

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