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Jeff Bailey : 5/27/2005 2:43:14 AM

Fair value for the NASDAQ-100 on Friday is $2.62. Thursday's cash close was 1,548.80.

Jeff Bailey : 5/27/2005 2:36:24 AM

Fair value for the S&P 500 on Friday is $0.91. Thursday's cash close was 1,197.62.

Jeff Bailey : 5/27/2005 2:35:12 AM

e-mini S&P (es05m) up 0.50 at 1,198.50.

Jeff Bailey : 5/27/2005 2:34:43 AM

e-mini NASDAQ (nq05m) up a bone, or 1.0 point at 1,550.00.

Jeff Bailey : 5/27/2005 2:30:57 AM

Nikkei 225 ($NIKK) up 164, or 1.49% at 11,192.

Jeff Bailey : 5/27/2005 2:21:59 AM

NASDAQ e-mini (nq05m) up 0.50 at 1,549.50. A conventional retracement from the contract high of 1,652.00 (01/03/05) to the recent low of 1,397.50 (04/29/05) would show Thursday's high hitting the 61.8% retracement and WEEKLY R1. The bearish "fitted 38.2%" retracement (38.2% fit at the 01/24/05 relative low settlement of 1,501.50) would have its 19.1% higher at 1,572.75. First sign of any meaningful softening would be a break back below the conventional 50% retracement of 1,524.75.

Jeff Bailey : 5/27/2005 1:44:12 AM

July Crude Oil (cl05n) is down $0.06 at $50.95 and has traded in a range of $50.83-$51.22.

Jeff Bailey : 5/27/2005 1:34:11 AM

e-mini S&P (es05m) up 0.25 at 1,198.25 and have traded in a tight overnight range of 1,197.50-1,198.25. Current "zone of resistance" from previously shown "fitted 38.2%" and conventional (01/03/05 high to 01/24/05 relative low) provided some near-term resistance in Thursday's trade.

Jeff Bailey : 5/27/2005 1:31:19 AM

Nikkei 225 ($NIKK) 11,163 +1.23% Link ... price deflation persists in April with the nationwide core CPI falling 0.2%. The core CPI for the Tokyo area fell 0.4% in May. Despite a sharp rise in fuel costs due to high oil prices, consumer prices were pushed down by declines in utility charges, rice and personal computers. Other economic data showed same-store sales at large stores were down 2.1% in April from a year earlier after a 4.5% decline in March.

OI Technical Staff : 5/26/2005 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The Market Monitor has been archived.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 : 5/26/2005 6:59:10 PM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+2.24 and set for program selling at $-0.42. OEX stocks that were bought the most by program trading firms on Thursday were BA Link (bullish vertical count $62 achieved), BDK Link MCD Link INTC Link , ALL Link , NXTL Link , AIG Link . NDX stocks that were bought the most by program trading firms on Thursday were CTSH Link , KLAC Link , INTC Link , MXIM Link , NXTL Link , IACI Link , ADBE Link , NVLS Link , YHOO Link , MOLX Link .

Jeff Bailey : 5/26/2005 6:38:01 PM

Global .... major economic events for Japan on Friday. For period ending April economists look for nationwide CPI to fall -0.3% year-over-year. For period ending May economists look for Tokyo CPI to fall -0.4% year-over-year.

Jeff Bailey : 5/26/2005 6:17:59 PM

Pivot Matrix for tomorrow at this Link

Jeff Bailey : 5/26/2005 5:04:20 PM

Closing U.S. Market Watch found at this Link ... July Crude Oil futures (cl05n) settled up $0.03, or +0.06% at $51.01 on the NYMEX.

Jeff Bailey : 5/26/2005 4:55:44 PM

Closing Internals found at this Link

Jeff Bailey : 5/26/2005 4:10:58 PM

Current OPEN MM Profiles at this Link Today's Activity ... Swing trade sold naked three (3) of the Pulte Home PHM Jun. $70 Puts (PHM-RN) at the bid of $0.75. Swing trade long shares of Wells Fargo (WFC) at the offer of $60.95. Targeting $62.00

Jonathan Levinson : 5/26/2005 4:03:30 PM

The failure to break the previous high leaves QQQQ's 30 min cycle oscillators in the early stages of a so-far weak downphase opposed to the ongoing 60 min cycle upphase. That upphase is just approaching overbought territory and is running out of racetrack. The daily cycle remains pinned to the ceiling, overdue for a downphase. Below 38.00, we should see the first bearish kiss emerge there, and below 37.60, the first daily cycle sell signals.

Linda Piazza : 5/26/2005 4:12:55 PM

All that trying and the OEX couldn't push above 570. The potential inverse H&S is still present.

Jeff Bailey : 5/26/2005 3:57:35 PM

Payless Shoe (PSS) $16.59 +0.18% Link ... traded a 52-weeker at the open, but still a bit tentative at early May 2004 relative high ($17.72).

Jeff Bailey : 5/26/2005 3:55:11 PM

Genesco (GCO) $34.67 +10.41% Link ... notable new 52-weeker on the big board.

Linda Piazza : 5/26/2005 3:48:01 PM

Looks as if the OEX is going to close the day just beneath or at the 570 level that's a 61.8% retracement of the decline off the March high into the April low.

Linda Piazza : 5/26/2005 3:46:58 PM

The SOX did reach a new HOD and has a chance of closing above the top of the descending regression channel in which it's traded for months. This channel fits best on a weekly chart, and we still have a day to go before the week is out. The SOX als has a chance of closing below or at that channel, currently at about 431.70-431.90, depending on how it's drawn.

Jeff Bailey : 5/26/2005 3:46:40 PM

Bulls should run the table to the close. Don't be surprised on an e-mini S&P futures settlement between 1,200-1,201.75.

Jonathan Levinson : 5/26/2005 3:46:13 PM

QQQQ never touched its previous high, but the 30 min channel is starting to edge up. Bears need to get back below 37.18 to stall this upphase before it starts. Volume breadth is strong, 4.18 advancing shares for each declining.

Jeff Bailey : 5/26/2005 3:43:51 PM

S&P 500 Index (SPX.X) 1198.41 +0.70% Link ... takes out Monday's high. Transports (TRAN) 3,638.21 +1.07% Link ... still no 3,650.

Jonathan Levinson : 5/26/2005 3:37:53 PM

Session highs for ES and YM, with QQQQ and NQ lagging their peers slightly. QQQQ is 2 cents away from the previous high, lined up with channel resistance. There are no signs of bearish divergence in the short cycle indicators.

Linda Piazza : 5/26/2005 3:35:35 PM

The OEX is up against Keltner resistance from 569.27-569.32. This is the top of the smallest channel in which the OEX has been rattling up and down. Currently it looks strong enough to old the OEX back on 15-minute closes, but I wouldn't count on anything working out the way it looks today.

Jeff Bailey : 5/26/2005 3:34:01 PM

Mentioning of Ryder Systems (R) $37.21 +0.40% Link ... on CNBC. Hmmmm.... Link ... R might be an aggressive bull's play on the "18 O" bounce.

Linda Piazza : 5/26/2005 3:26:35 PM

The SOX comes up again to test the day's high, not quite there yet.

Jeff Bailey : 5/26/2005 3:27:37 PM

Balanced Benchmark alert ... all asset classes in the Balanced Benchmark up for the quarter with lone exception being the Amex Gold Bugs Index ($HUI.X) ... Balanced Benchmark at this Link Interesting how the equity portion and P/L% looks almost like a bell curve.

Jonathan Levinson : 5/26/2005 3:22:39 PM

QQQQ is retesting its afternoon high here at 38.21, running quickly back up off the rectangle low. The short cycles are pointing back north and, breadth remains strong, but combined 30 and 60 min channel resistance is still holding at 38.26. Bulls are going to need either volume or persistance to get through it.

Jeff Bailey : 5/26/2005 3:18:26 PM

American Intl. Group (AIG) $55.57 +2.75% ... highs of the session and WEEKLY R2. As expected, the New Attorney General sues AIG and accuses 2 executives of duping investors. (see 01:22:01)

Linda Piazza : 5/26/2005 3:12:32 PM

This is getting so, so familiar. The OEX is beginning to rattle around between the boundaries of its smalles Keltner channel, less than three points wide.

Jeff Bailey : 5/26/2005 3:08:48 PM

03:00 Internals found at this Link

Jeff Bailey : 5/26/2005 3:02:11 PM

03:00 Market Watch found at this Link

Linda Piazza : 5/26/2005 3:00:47 PM

Despite a strong intra-15-minute-period dip, the BIX has been closing 15-minute periods above a Keltner line that's currently at 364.96, keeping the BIX's smallest channel climbing. No breakout signal on the BIX, though, and support beneath that Keltner line thins somewhat.

Jonathan Levinson : 5/26/2005 2:59:33 PM

QQQQ back to this morning's high, now acting as support: Link

Jonathan Levinson : 5/26/2005 2:55:31 PM

Ten year treasury yields never broke 4.1% resistance and are holding at the midpoint of today's range, with 5 minutes left of the cash session. TNX is currently up 1.1 bps at 4.082%. Daily chart at this Link

Linda Piazza : 5/26/2005 2:55:17 PM

The SOX threatens to drop below Keltner support, converting it to resistance. Nearest Keltner support below the 1:15 low is at 429.63.

Linda Piazza : 5/26/2005 2:52:46 PM

Nearest Keltner support on the OEX's 15-minute chart is from 567.55-567.88. Nearest resistance is the just-broken resistance at 568.51 and then at 569.13-569.22.

Jeff Bailey : 5/26/2005 2:51:24 PM

July Crude (cl05n) $50.95 -0.05% (30-min. delayed) ... inched red.

Jeff Bailey : 5/26/2005 2:46:25 PM

Amex Gold Bugs ($HUI.X) 179.16 -0.95% ... session lows.

Jeff Bailey : 5/26/2005 2:43:13 PM

Currency ... DJ - Euro crosses below $1.25 as dollar rally continues. SPX 1,196.27 +0.52% ...

Linda Piazza : 5/26/2005 2:39:18 PM

No new HOD for the SOX.

Linda Piazza : 5/26/2005 2:38:47 PM

On the Futures side, Marc has just expressed the opinion that something is not right. I've been feeling that way all day. It's always difficult to know whether it's something external--tiredness, other competing commitments--leading to that feeling or whether it's some clues you're picking up from the markets, but I started today's trading day thinking that both upside and downside might be limited, so not prone to believing either a bounce or a dip.

Jeff Bailey : 5/26/2005 2:35:07 PM

Wells Fargo (WFC) $60.92 +0.04% ... still off morning high of $61.06.

Jeff Bailey : 5/26/2005 2:34:22 PM

S&P Banks Index (BIX.X) 365.17 +0.70% ... edges to highs of the session.

Jonathan Levinson : 5/26/2005 2:33:50 PM

4-day 100-tick view of QQQQ at this Link with today's range looking a potential bull flag. I have no confidence in that interpretation because of the toppy daily cycle, as well as the pathetic volume this week. Nonetheless, any bearish view will need price back below 38.00. Until price stops rising, that remains the most important fact, light volume and low volatility notwithstanding.

Jeff Bailey : 5/26/2005 2:32:58 PM

Cyberonics (CYBX) $37.90 +7.97% Link ... breaks out of 5-day consolidation after 05/19/05 gap lower on disclosure of U.S. Senate committee probe. Company's CEO was "mad as hell" at Wall Street Journal, for their reporting on this issue, which some believe was leaked to WSJ by short sellers.

Linda Piazza : 5/26/2005 2:24:55 PM

I'm noticing potential continuation-form inverse H&S's on many indices, visible on their 15-minute charts. I don't view these formations as being as reliable as their bottoming counterparts, but they should still be watched. Remember that all H&S and inverse H&S's can be invalidated. In the cases of most indices, that would take declines toward yesterday's lows to do it.

Jeff Bailey : 5/26/2005 2:24:13 PM

Fedex (FDX) $90.61 +2.15% ... may be seen as benefiting to 02:22:03 post.

Jeff Bailey : 5/26/2005 2:22:03 PM

United Parcel Service (UPS) $74.97 +0.09% ... Reuters - UPS and its pilots union are unlikely to resolve their 31-month old contract dispute during a round of federally supervised mediation scheduled to conclude today, both parties said late yesterday. UPS said it will ask federal mediator to schedule additional negotiation sessions as soon as possible. A spokesman for the union representing 2,500 UPS pilots said the union was disappointed with latest round of talks. While disturbing signs have emerged from the dispute, such as this month's vote by the Independent Pilots Association near-unanimous support for a strike, both sides are bound to keep talking under a U.S. labor law that covers rails and air carriers. Only if the National Mediation Board determines that talks have stalled, and asks both parties to enter mandatory arbitration, could the dispute head toward either a strike or management lockout. If either side were to reject mandatory arbitration, a 30-day "cooling off period" would go into effect before a work stoppage became a possibility. Even then, the Bush administration could extend the imposed truce.

Jonathan Levinson : 5/26/2005 2:20:00 PM

Volume breadth has returned to its earlier highs on the Nasdaq, currently 4.23 advancing shares to each declining. The NYSE is lagging at 3.44:1. QQQQ is testing the 72 SMA at the top of a so-far hesitant short cycle rise, looking weaker than th SOX which is approaching its session highs.

Linda Piazza : 5/26/2005 2:19:46 PM

SOX reaching for a new HOD but is in triple-top territory. Needs that new HOD.

Jeff Bailey : 5/26/2005 2:12:00 PM

02:00 Internals at this Link

Linda Piazza : 5/26/2005 2:08:45 PM

OEX moving up to test 569-ish Keltner resistance.

Linda Piazza : 5/26/2005 2:03:01 PM

The SOX retests Keltner resistance, now at 432.91-433.18.

Jeff Bailey : 5/26/2005 2:01:39 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 5/26/2005 1:59:34 PM

Volume has lightened this afternoon, with 56.5M QQQQ shares traded so far today. QQQQ bounced from the lower 30 and 60 min channel support, approaching the 72 SMA now with the short cycle indicators turning up from oversold territory. 38.20 is the level to beat to kick off a new upphase, but the narrow range has tightened down upper channel resistance to 38.23-.25. It's going to take a strong, high volume move to get things moving again, but the intraday cycles have become chopped up by the narrow range. Overall, it looks like a light volume mess. Zooming out, the daily cycle remains pinned to the ceiling in suspended animation.

Marc Eckelberry : 5/26/2005 1:58:47 PM

For those who did not get my post on options a few months back, I have an automatic 50% stop loss on them. However, I very often violate that rule as fluctuation can get you in and out all over the place. For instance, we did an INTC trade at 1.25, which went as low as .50, before moving up to 2 (now of course, I wish I was still in). I also had a DELL call August 40 which went down to .20 and back up to 2. I posted a QQQQ put June 37 at .95 and that one is in the dumpster, but still live in my account, as I plan on legging into a spread on a pullback next week. Please use your judgement and pain threshold on these low priced options (under 1.50). Owning a put now is not a bad idea anyway.

Linda Piazza : 5/26/2005 1:49:16 PM

The OEX did not end that last 15-minute period above the Keltner line that's now at 568.40, but it hasn't given up testing that line yet. To me, it looks vulnerable to a pullback to 567-567.34.

Linda Piazza : 5/26/2005 1:41:35 PM

The SOX is back to the top of the descending regression channel in which it's traded for months, leaving only a candle shadow piercing the top of that regression channel. While this would look troubling if occurring at the close of the day, intraday it still could be just a retest of the channel line.

Jonathan Levinson : 5/26/2005 1:46:32 PM

The Nasdaq volatility index (VXN) made a new record low today at 14.57, currently 14.98. NDX volatility is currently 13.72, while the VXO broke below 10.75, currently printing 11.21.

Linda Piazza : 5/26/2005 1:39:14 PM

A bounce begins. Those hoping for more gains today would like to see the OEX close this 15-minute period above the Keltner line currently at 568.44. A further pullback toward 567-567.30 might be in order, however.

Jonathan Levinson : 5/26/2005 1:35:14 PM

Volume breadth remains strong despite the lurch downward, with ADV:DECV currently 3.06:1 on the NYSE and 3.76:1 on the Nasdaq. The TRIN and TRINQ have risen within neutral territory to .71 and .61 respectively.

Jeff Bailey : 5/26/2005 1:34:38 PM

Broker/Dealer Index (XBD.X) 143.39 +0.04% ... edges back green.

Linda Piazza : 5/26/2005 1:33:18 PM

The OEX's drop no longer looks like a bull flag, but we've all noticed that tendency to drop out of a bull flag, punch down to next support, an then strongly bounce as a resolution to the pullback. So far, the OEX is lacking the strong bounce, but any who might be in bearish positions on the double-top formation (not me, not brave enough today) should have profit-protecting plans near 567-567.30.

Jonathan Levinson : 5/26/2005 1:33:14 PM

Nymex crude is down to .275 gain at 51.25, off a high of 51.70.

Jeff Bailey : 5/26/2005 1:29:58 PM

10-year YIELD ($TNX.X) still midpoint of day's range. Up 0.9 bp at 4.081%.

Jeff Bailey : 5/26/2005 1:31:55 PM

Fed talk .... Fed's Moskow (Fed Reserve Bank of Chicago President) saying long-term inflation expectations contianed, but Fed can continue its "measured pace" on rates. Economy continues on "solid growth path."

Jeff Bailey : 5/26/2005 1:25:57 PM

Wells Fargo (WFC) $60.74 -0.24% ... got hit lower with that sell program.

Jeff Bailey : 5/26/2005 1:25:22 PM

Broker Dealer Index (XBD.X) 143.31 -0.01% ... slips red and session low.

Jeff Bailey : 5/26/2005 1:24:46 PM

Johnson & Johnson (JNJ) $67.50 +0.02% ... jumped as high as $68.00 at the open after giving investors first detailed review of its drug pipeline in 4 years. JNJ saying it is replenishing its portfolio through research, acquisitions and aggressive licensing and now has 17 new medicines in advanced stage of clinical testing or awaiting review, compared to just 2 in 2001.

Jonathan Levinson : 5/26/2005 1:23:57 PM

That sell program printed over 1.5M QQQQ shares within 100 ticks. The short cycle indicators are oversold, with price testing the bottom of the range. Any failure to bounce above the 72 SMA at 38.19 will see these channels begin to decline.

Linda Piazza : 5/26/2005 1:22:56 PM

Without a quick bounce back above 568.51, the OEX has conclusively erased its breakout signal. A potential retest of the descending trendline off Monday's high is possible.

Jonathan Levinson : 5/26/2005 1:20:57 PM

QQQQ breaking lower and testing channel support: Link

Jeff Bailey : 5/26/2005 1:20:20 PM

Sell Program Premium ... SPX 1,195.51, DIA $104.94, QQQQ $38.10

Jeff Bailey : 5/26/2005 1:22:01 PM

American Intl. Group (AIG) $54.49 +0.77% ... DJ - Wall Street Journal reporting that New York state authorities will file a civil complaint against AIG and former top executives later today, alleging the insurer improperly boosted its financial results and repeatedly duped regulators and investors. The suit will reportedly name Chief Executive Maurice Greenberg and former CFO Howard Smith as defendants.

Jeff Bailey : 5/26/2005 1:09:17 PM

01:00 Internals at this Link

Linda Piazza : 5/26/2005 1:06:27 PM

The SOX tests its breakout level. Needs to maintain 432.48 on 15-minute closes to maintain the current breakout signal. There's more support waiting just below, however, at 431.48-431.61, far above the 200-week sma down closer to 428.

Jeff Bailey : 5/26/2005 1:03:26 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 5/26/2005 12:58:33 PM

Session high for crude oil here at 51.675. Link

Jonathan Levinson : 5/26/2005 12:52:22 PM

Ten year treasuries are similarly flat, TNX holding a 0.1 bp loss at 4.071%. Nymex crude is up .475 at 51.45.

Linda Piazza : 5/26/2005 12:49:17 PM

The RLX held to the needed support to keep it moving higher or at least testing resistance. Support continues to thin below the 437.39 level, however, so bulls--including OEX bulls--want to see that 437.39 level hold on 15-minute closes.

Linda Piazza : 5/26/2005 12:42:37 PM

The OEX threatens to move below/close below the Keltner line now at 568.57, setting up the potential to retest that descending trendline off Monday's high. The 15-minute close below that Keltner line hasn't happened yet, though.

Tab Gilles : 5/26/2005 12:39:36 PM

EUR/USD Chart is from yesterday, today's intraday low touched 1.25 Link

Linda Piazza : 5/26/2005 12:35:32 PM

In a now-familiar scenario, the OEX is being squeezed between Keltner support and Keltner resistance. A retest of the former resistance supplied by descending trendline off Monday's high would not be surprising, but neither would a breakout toward the 570.58 upside resistance on the Keltner charts. Remember that 570 is the 61.8% retracement of the decline off the March high into the April low, so there's potential for continued strong resistance there, too.

Jonathan Levinson : 5/26/2005 12:33:00 PM

QQQQ is now holding a 3 cent range and has done so for the past 45 minutes. During that time, volume breadth has weakened, with ADV:DECV currently 3.77:1 on the NYSE and 3.75:1 on the Nasdaq with overall volume trailing off. The 30 and 60 min cycles remain opposed, with support and resistance less than 20 cents apart on the 30 min channel between 38.09 and 38.26.

Linda Piazza : 5/26/2005 12:29:06 PM

Unlike some other indices, the RLX has not created any breakout signal. Keltner support begins to thin beneath its current position. As long as it maintains 15-minute closes above a Keltner line currently at 437.24, it will be maintaining upward momentum, however.

Jeff Bailey : 5/26/2005 12:29:00 PM

Swing trade long alert ... me thinks BIX.X gets WEEKLY R1/MONTHLY R2 tomorrow. Going long shares of Wells Fargo (WFC) $60.95 here, stop $60.60, target $62.00. (WEEKLY R1 $62.11)

Jeff Bailey : 5/26/2005 12:19:52 PM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 5/26/2005 12:19:23 PM

John Snow's testimony to the Senate today at this Link

Linda Piazza : 5/26/2005 12:18:20 PM

The OEX's pullback still takes the form of a potential bull flag. It's sinking beneath some support, converting it into potnetial resistance, but so far still holds on 15-minute closes above a Keltenr line currently at 568.55.

Tab Gilles : 5/26/2005 12:11:34 PM

Murphy Oil (MUR) Right at my Price Objective of $97. Taking some money off the table here and setting a stop using the 10-ema, currently 92.50. Link Link Link

Jonathan Levinson : 5/26/2005 12:11:14 PM

Stepping away for ten minutes.

Jeff Bailey : 5/26/2005 12:09:56 PM

12:00 Internals at this Link

Linda Piazza : 5/26/2005 12:08:47 PM

The OEX is testing the level that it needs to maintain to continue upward momentum, although that's been in scant evidence since the early-morning push. It's natural for the OEX to drop back to retest that descending trendline off Monday's high to see if it now holds as support, though, so perhaps that will happen if the 568.52 support doesn't hold on 15-minute closes. That trendline now crosses at about 566.94.

Jeff Bailey : 5/26/2005 12:03:00 PM

12:00 Market Watch at this Link

Linda Piazza : 5/26/2005 11:58:47 AM

The SOX maintains its breakout signal, maintaining 15-minute closes above a Keltner line currently at 432.33. The SOX is up against potentially strong daily Keltner resistance, though. The SOX has not traded outside the channel whose top is now being tested for more than a few days since August and September of last year.

Jonathan Levinson : 5/26/2005 11:56:31 AM

The 30 min cycle indicators are overbought and starting to curl at the top of their range, while the 60 min cycle upphase continues with plenty of room to run. While QQQQ is declining here, it feels like molasses, and the short cycle downphase has been clearly corrective so far. This action feels more bullish than bearish to me, but the test will come on the next short cycle bounce. If it takes out the high, then the 60 min upphase is dominant. If it's flat or fails to break the high, then the 30 min cycle should launch its downphase. Overall, this is a great recipe for chop, but these are the intraday forces currently in play.

Linda Piazza : 5/26/2005 11:53:45 AM

The OEX drops a little below the breakout level to test next support at 568.45. The drift lower isn't a deep one just yet, but since I've been skeptical about how much upside there might be, I'm still watching closely. Bulls want that 568.45 level to hold on 15-minute closes.

Jonathan Levinson : 5/26/2005 11:44:25 AM

Ten year notes are holding near unchanged, Nymex crude is up .425 to 51.40, the SOX is edging back up after failing to break 432 and QQQQ is flatlining on the 7200 tick SMA. The 30 min cycle is trying to roll over, but until price breaks free of the 72 SMA support, direction will remain up for grabs.

Linda Piazza : 5/26/2005 11:40:50 AM

I don't like much of anything today. I'm trying to use the day's climb to exit a bull put spread, but other than that am just not tempted either direction.

Linda Piazza : 5/26/2005 11:36:08 AM

The 61.8% retracement of the OEX's fall from March's high into April's low is at just over 570.

Jonathan Levinson : 5/26/2005 11:35:09 AM

QQQQ ticking below 72 SMA support here for the first time since 2PM yesterday. 30 min channel support is at 38.10, 60 min below at 38.02. Link

Jeff Bailey : 5/26/2005 11:34:57 AM

Fedex (FDX) $90.34 +1.84% Link ... bold move above its trending lower 50-day SMA ($89.09), which had been providing some near-term resistance. Trending higher 200-day SMA ($91.27) just ahead. "double doji" gets the kick higher.

Linda Piazza : 5/26/2005 11:34:27 AM

The TRAN has not topped Monday's high. It has created an upside target that tops Monday's high, with that upside target at 3654.24. It's retesting the breakout level to see if it holds, however.

Linda Piazza : 5/26/2005 11:29:44 AM

So far, the OEX maintains its breakout signal and the pullback looks like a bull flag, but bulls want to see 15-minute closes maintained above 568.30.

Jonathan Levinson : 5/26/2005 11:21:03 AM



Linda Piazza : 5/26/2005 11:19:58 AM

OEX support may be strengthening on the 15-minute Keltner chart. The OEX needs to maintain that support, hopefully with 15-minute closes above 568.30, to maintain that 570.49 upside target.

Jonathan Levinson : 5/26/2005 11:18:07 AM

Volume breadth isn't weakening much on this corrective short cycle decline, ADV:DECV 4.16:1 on the NYSE and 4.19:1 on the Nasdaq. The 72 SMA has yet to be broken for QQQQ, or YM, ES or NQ.

Jeff Bailey : 5/26/2005 11:24:37 AM

Input/Output (IO) 6.17 +3.00% Link ... light volume here. According to recent NASDAQ short interest figures, a record 11.58 million short, average daily volume just 720,142, with days to cover at 16.08. Yesterday I noted a large block trade and may well be some shorts looking for cover. "First test of upward trend can be painful for a bear."

Linda Piazza : 5/26/2005 11:17:26 AM

Important moment for the SOX with relationship to its 15-minute Keltner chart. It's drifted down to retest this morning's breakout point, a perfectly natural thing for it to do. Now bulls want to see the SOX find support on 15-minute closes at a Keltner line currently at 432.06. Failing that, they want to see 15-minute closes above a Keltner line currently at 430.40 to preserve upward momentum.

Jeff Bailey : 5/26/2005 11:11:26 AM

11:00 Internals at this Link Yesterday's Internals found at this Link

Linda Piazza : 5/26/2005 11:08:31 AM

While the OEX maintains the signal that sets a 570.47 upside target, it sure isn't zooming up there. I'm still thinking, as I have all day, that further gains might be limited. Don't see signs that would encourage me to jump in on the bearish side, but I'm also not impressed with the risk/reward scenario for upside plays. A scan of indices on daily charts shows consolidation pattern after consolidation pattern, with few having broken out either direction. Tech-related indices have, of course, and they should be watched to see if the breakouts hold.

Jonathan Levinson : 5/26/2005 11:07:23 AM



Jonathan Levinson : 5/26/2005 11:05:13 AM

TNX is down to unchanged at 4.07%, reversing its earlier gains as ten year notes continue their climb off the lows. Nymex crude is up .375 to 51.35 here.

Jeff Bailey : 5/26/2005 11:02:50 AM

11:00 Market Watch at this Link

Linda Piazza : 5/26/2005 11:00:45 AM

The SOX is falling back inside/to the top of the descending regression channel in which it's traded for a number of months, but of course still holds above the 200-week sma. It also holds above its breakout signal line on the 15-minute Keltner chart, at least so far. Still watching.

Jeff Bailey : 5/26/2005 10:56:12 AM

Most Actives ... QQQQ $38.16 +0.92%, INTC $27.25 +0.92%, NOVL $5.79 -7.80%, ELN $8.17 +13.31%, CSCO $19.90 +1.37%, MSFT +25.90 +0.73%, SPY $119.90 +0.43%, CPN $2.80 +6.06%, JDSU $1.66 +1.21%, ORCL $12.90 +1.09%

Jonathan Levinson : 5/26/2005 10:54:56 AM

QQQQ is minutes away from the halfway point to yesterday's 76.5M share volume, currently 37.5M shares traded. This morning gap up open has yesterday's sellers trapped in an "island," and a fill of that gap would result a blowoff top/shooting star doji, and depending on the close, a key reversal to boot. It's therefore important for bulls to hold today's action in positive territory. Currently, 7200 tick SMA support at 37.14 approaches.

Jeff Bailey : 5/26/2005 10:53:11 AM

Toll Brothers (TOL) $90.58 +5.66% Link ... Home builder said net income for latest quarter came in at $170.1 million, or $2.01 per share, on revenue of $1.25 billion, which was up from $72.4 million, or $0.89 per share on revenues of $819.5 million a year earlier. The figures easily surpassed Wall Street's consensus of $1.79 per share and revenue of $1.26 billion. TOL said backlog at end of April quarter was up 57% to $5.87 billion, a company record. As such, upping guidance and now sees profitability rising 70% for fiscal 2005.

Jonathan Levinson : 5/26/2005 10:50:26 AM





Linda Piazza : 5/26/2005 10:44:59 AM

Still watching; still suspicious. The OEX maintains its breakout signal with an upside target at 570.44 on the 15-minute chart, but it's not exactly surging up toward that target.

Jonathan Levinson : 5/26/2005 10:43:04 AM

Bonds are firming, TNX down to a 0.9 bp gain at 4.081%.

Jeff Bailey : 5/26/2005 10:40:10 AM

Dow Transports (TRAN 3,638 +1.08% ... yet to re-test 3,650 at this point.

Linda Piazza : 5/26/2005 10:38:22 AM

The TRAN still hasn't made it above or to Monday's high. It's still within what appears to be a broadening formation on its daily chart.

Jonathan Levinson : 5/26/2005 10:38:17 AM

QQQQ 100 tick update at this Link , pulling back for a test of broken resistance starting at 38.20. 7200 tick SMA support is up to 38.10, below which this strong 30 min cycle upphase will stall.

Linda Piazza : 5/26/2005 10:35:24 AM

The RLX heads up toward Monday's high of 438.28, with the RLX at 437.74 as I type. It hasn't yet confirmed a breakout signal, but would have an upside target of 439.11 if it did. I don't know why I'm so suspicious of this action today, but I am. Not so suspicious that I'd jump in with a bearish play right now or suggest one to readers, of course.

Part of that comes from my reaction to the SOX's breakout. As long ago as last week, I thought it possible that the SOX would break above that important 200-week sma, but I just wasn't sure that the breakout would last beyond a week or two.

Jonathan Levinson : 5/26/2005 10:35:12 AM

Nymex crude -.125 here at 50.85, off a low of 50.75.

Jonathan Levinson : 5/26/2005 10:33:41 AM

ADV:DECV is up to 5.15 advancing NYSE shares for each declining, 4.53:1 on the Nasdaq.

Linda Piazza : 5/26/2005 10:32:28 AM

The OEX maintains its breakout signal, aiming higher toward 570.43 on the 15-minute chart.

Jeff Bailey : 5/26/2005 10:31:39 AM

Swing trade sell naked put alert ... Selling naked three (3) of the Pulte Home Link PHM June $70 Puts (PHM-RN) at the bid of $0.75. PHM $76.20 +4.09% here.

Linda Piazza : 5/26/2005 10:25:00 AM

SOX breaking higher, at 432.69 as I type. This will be an upside breakout on the 15-minute Keltner channels if it maintains that into the 15-minute close. However, the daily chart shows Keltner resistance on a daily close at 432.64, so the day's close will be important. The SOX usually holds rather closely to this particular Keltner channel line.

Jonathan Levinson : 5/26/2005 10:23:21 AM

QQQQ is violating upper 30 min channel resistance, a move which either indicates the early steps of a very bullish and very rare trending move, or a blowoff spike, most likely for the 30 min cycle upphase. If bulls can hold these levels without pullback for approx. 10 minutes, it will look like the former bullish option. Currently, volume breadth remains very strong, with the TRINQ at .5 and 4.26:1 in favor of advancing volume.

Jeff Bailey : 5/26/2005 10:22:51 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 5/26/2005 10:22:33 AM

The BIX has broken above the 200-sma again and is above yesterday's high. Important (to bulls) for the BIX to maintain prices above the 200-sma, too, I think. Otherwise, there's some question about the sustainability of the OEX's climb.

Jeff Bailey : 5/26/2005 10:21:58 AM

Jack In The Box (JBX) $41.31 +1.32% ... sets up for test of new 52-weeker/all-timer.

Linda Piazza : 5/26/2005 10:21:26 AM

The RLX hasn't been able to break above Monday's high or the bottom of January's gap. Still important to watch, I think.

Linda Piazza : 5/26/2005 10:16:34 AM

Instead of falling back, the OEX again challenges the breakout level on the 15-minute Keltner charts, and it just eked by with a 15-minute close above the Keltner line currently at 568.25. A move up to upper Keltner resistance at 570.35 is now suggested, but I'm still worried about limited upside.

Jeff Bailey : 5/26/2005 10:14:29 AM

10:00 Internals found at this Link

Jonathan Levinson : 5/26/2005 10:14:26 AM

QQQQ held 38 support and is now bouncing to the session highs at 38.10 30 min channel resistance lines up with yesterday's R2 and today's upper pivots at 38.16-.19.

Linda Piazza : 5/26/2005 10:10:36 AM

The TRAN needs to build on the early gains. The first 15-minute period produced a tall white candle and the second a doji on top of that candle, so a building is needed rather than a drop, to avoid the potential for an evening-star reversal signal.

Jonathan Levinson : 5/26/2005 10:05:57 AM

Ten year treasuries are chopping along near the lows, TNX +1.6 bps at 4.088% and so far respecting 4.1% resistance. Updated daily chart at this Link

Jeff Bailey : 5/26/2005 10:05:48 AM

10:00 Market Watch at this Link

Jeff Bailey : 5/26/2005 10:02:54 AM

VIX.X 12.12 -3.65% ... DAILY Pivot Levels ... 12.33, 12.50, Piv= 12.80, 12.97, 13.27.

Linda Piazza : 5/26/2005 10:02:24 AM

No OEX breakout this 15-minute period, either. The OEX now looks more vulnerable to a pullback. Short-term bulls want the OEX to find support on 15-minute closes above a line currently at 566.57, although there's significant support all the way down to 565.07 and then at 563.89. There's a caveat, however. The OEX's nested Keltner channels may again be settling into an equilibrium position. If so, what looks like massed support may not be, because once these channels line up inside each other and basis lines align near each other, prices sometimes move in a choppy fashion across those basis lines, as if they're not even there, while bouncing from one side of a channel to another. Price patterns narrow until an eventual breakout.

Jonathan Levinson : 5/26/2005 10:01:29 AM

Help wanted index 39 vs. 40 exp.

Jonathan Levinson : 5/26/2005 10:01:14 AM







Jonathan Levinson : 5/26/2005 10:00:34 AM

QQQQ 100 tick chart updated at this Link with 72 SMA support up to 37.92 and price back to testing 38.00 from above. The short cycles have rolled over in a downphase, but bears need a break below the 72 SMA to stall the ongoing 30 min channel upphase.

Linda Piazza : 5/26/2005 9:58:00 AM

Here's what I'm watching on the SOX, with relationship to the weekly chart: Link Massive potential resistance, which would make a sustained breakout important, too. I'd think there needs to be a pullback that doesn't retrace all the way to the bottom of that channel before a sustained breakout can occur, but no one asked me, especially the big boys and girls who will determine whether there's a breakout.

Jonathan Levinson : 5/26/2005 9:57:33 AM

Bear in mind that yesterday's coupon pass for 1.197B is deliverable today- and so it looks like a net wash from the Fed's open market desk.

Jeff Bailey : 5/26/2005 9:58:28 AM

S&P 500 Index (SPX.X) 1,193.38 +0.28% ... 61.8% conventional retracement and Monday/Tuesday closes. Session low has been 1,190.01. Bears should be "jittery" and bulls may be going for the throat.

Jeff Bailey : 5/26/2005 9:55:56 AM

U.S. Dollar Index (dx00y) 86.84 +0.56% ... 7-month highs here.

Jeff Bailey : 5/26/2005 9:54:49 AM

Amex Gold Bugs ($HUI.X) 180.20 -0.37% ... only sector in U.S. Market Watch that is in the red.

Jonathan Levinson : 5/26/2005 9:54:32 AM

Awaiting the Help Wanted Index in 6 minutes. As well, John Snow is slated to testify on the Foreign Exchange Report to the Senate Banking Committee at 10.

Linda Piazza : 5/26/2005 9:54:31 AM

No Keltner breakout yet on the OEX's 15-minute chart. This 15-minute period is not yet completed, but that Keltner resistance currently at a line at 568.10 is holding so far.

Jeff Bailey : 5/26/2005 9:54:13 AM

Dow Jone Home Construction (DJUSHB) 899.63 +2.44% ... sector winner early.

Linda Piazza : 5/26/2005 9:53:22 AM

As I scan lots of indices, I still see indices that are within the recent consolidation patterns, from this week. The Nasdaq may be one of the first or the first to challenge the top of that recent consolidation pattern, with Monday's high at 2062.94 and the SOX currently at 2062.29, just off the day's high of 2063.81. The "breakout" didn't hold, but will it later? Or will the Nasdaq roll down within that consolidation pattern?

Jonathan Levinson : 5/26/2005 9:52:50 AM

A 9.75B overnight repo from the Fed results in a modest 1.25B drain for the day.

Jeff Bailey : 5/26/2005 9:52:14 AM

PETCO Animal Supplies (PETCE) $28.61 -11.45% Link ... barked lower after the specialty pet supply retailer said Q1 earnings rose to $17.2 million, or $0.29 per share, from $15.8 million, or $0.27 per share, a year ago. Pro forma earnings were $18.7 million, or $0.32 per share. Revenue was up 12.6% to $479.6 million vs. year ago $425.9 million.

Linda Piazza : 5/26/2005 9:50:09 AM

The TRAN did finally break over the descending trendline off Monday's high, but hasn't yet been able to top the last swing high at 3636.17, with the TRAN currently at 3630.76.

Linda Piazza : 5/26/2005 9:48:14 AM

No new breakout signal for the OEX during the first 15-minute period. Keltner resistance, at a line currently at 568.08, held on the first 15-minute close. It's being tested again.

Jeff Bailey : 5/26/2005 9:47:53 AM

Patterson Dental (PDCO) $45.35 -14.38% Link ... lower after the company misses growth targets. The supplier of dental, veterinarian and rehabilitation markets said quarterly net income rose to $50.2 million, or $0.36 per share from $45 million, or $0.33 per share in the same period last year. Sale were up 17% to $627.3 million. Consensus called for a profit of $0.39 per share on revenue of $633.9 million.

Linda Piazza : 5/26/2005 9:47:21 AM

The RUT is currently testing the 61.8% retracement of the decline off Monday's high into yesterday's low. Until this morning's strong surge higher, the climb had looked bear-flag-ish, throwing some slight doubt on this morning's surge. Was this just a knee-jerk reaction to the GDP? Will it hold?

Jonathan Levinson : 5/26/2005 9:45:48 AM

Session high for silver at 7.211 just now, gold up a dime at 419, but the miners are in light negative territory, HUI 180.24 and XAU 84.21. Crude oil closed the morning session +.10 at 51.075.

Jeff Bailey : 5/26/2005 9:43:26 AM

Wind River Systems (WIND) $15.42 +14.24 Link ... software maker higher after reporting Q1 earnings of $1.85 million, or $0.02 per share. Revenues rose 17% for the latest quarter to $61.8 million from $52.8 million.

Linda Piazza : 5/26/2005 9:40:25 AM

First retracement of the day should begin soon.

Jonathan Levinson : 5/26/2005 9:40:24 AM

The Fed's open market desk has 19B in various repos expiring today, and has so far announced an 8B 14-day repo. This leaves 11B to cover with the short term 10AM announcement.

Linda Piazza : 5/26/2005 9:39:08 AM

I suspected I'd see a big surge up in the RLX when I checked it, and I did. It hasn't yet topped Monday's high, and this might be worth watching since Monday's high failed just below the bottom of the big gap down in January. That gap begins at 438.78 and Monday's high was 438.28, and the RLX is currently at 436.58. I suspect we'll see gap resistance turn the RLX back at either the bottom, middle or top of that gap, so gains might be tempered or trading choppy henceforth in the RLX. That could impact the OEX, too.

Jeff Bailey : 5/26/2005 9:43:04 AM

Cree Inc. (CREE) $30.95 +14.50% Link ... surging after the company said it has received a $200 million purchase committment for its light emitting diode product from Sumitomo Corp., its Japanese distributor.

Linda Piazza : 5/26/2005 9:36:03 AM

BIX has been challenging its 200-sma this morning, but can't yet maintain values above it. The 200-sma is at 363.53 and the BIX is currently just below, at 363.18.

Jonathan Levinson : 5/26/2005 9:35:35 AM

Very bullish volume breadth here at the open, with ADV:DECV currently 4.24:1 and 4.17:1 in favor of NYSE and Nasdaq advancing shares, respectively. The TRIN is .61, TRINQ .43, showing strong but not extreme buying pressure.

Linda Piazza : 5/26/2005 9:34:25 AM

Unlike the OEX, the TRAN does not yet challenge the descending trendline off Monday's high.

Jonathan Levinson : 5/26/2005 9:34:36 AM

QQQQ 100 tick chart update at this Link with the "GDP gains" retraced and 38.00 being tested as support. 72 SMA support is up to 37.82.

Linda Piazza : 5/26/2005 9:33:20 AM

The SOX again challenges its 200-week sma, with that average at 428.07 and the SOX currently at 428.61. Important level again for the SOX.

Linda Piazza : 5/26/2005 9:31:53 AM

The OEX immediately moves up to challenge the descending trendline off Monday's high, actually a few cents above it as I type. Bulls do not want to see the OEX roll over form the top of the channel that the OEX has been forming as it moved down off Monday's high.

Jeff Bailey : 5/26/2005 9:31:19 AM

Novell (NOVL) $6.28 ... has moved up to #1 most active and lower at $5.93 after reporting quarterly results below Wall Street forecasts. The software maker, which is now focusing efforts around Linux software, said its Q2 loss widened to $15.7 million, or $-0.04 per share, from a year earlier loss of $15.4 million. Revenue for the latest quarter rose 1.2% to $297 million, with new license revenue falling 24% to $45.8 million from $60.3 million.

Jonathan Levinson : 5/26/2005 9:26:56 AM

Ten year treasuries continue their slide, breaking yesterday's low. TNX is up 2 bps at 4.092% currently. Resistance is at 4.1%, followed by 4.14%.

Jeff Bailey : 5/26/2005 9:26:20 AM

Elan (ELN) $7.21 ... higher at $7.94 and #2 most active as company predicts that its suspended Tysabri (multiple sclerosis drug) will eventually return to the market. Chief Executive Kelly Martin told shareholders at the company's annual meeting that the company was working with its partner Biogen Idec (BIIB) $37.99 to identify the drug's real dangers. Mr. Martin added that both companies would meet with U.S. regulators to discuss the "path forward for Tysabri" once their internal review was complete by late summer. Mr. Martin assured shareholders that even if Tysabri didn't return to the market, the company was on course to break even financially in 2006.

Jane Fox : 5/26/2005 9:17:38 AM

Dateline WSJ Costco Wholesale's fiscal third-quarter profit rose 5.6% as same-store sales jumped 7%. The warehouse-club chain's revenue rose 10% to $12 billion.

Toll Brothers said fiscal second-quarter earnings more than doubled amid strong demand for luxury homes. The results were well ahead of Wall Street's forecast, and the home builder said it expects profit for the full fiscal year to rise about 70%, followed by a 20% increase in the next fiscal year.

Petco Animal Supplies shares lost ground in late trading Wednesday as the company's first-quarter earnings missed Wall Street views and it issued second-quarter guidance shy of estimates.

HJ Heinz's fiscal fourth-quarter profit climbed 5% as volume improvements helped drive a jump in sales.

Jane Fox : 5/26/2005 9:14:57 AM

Dateline WSJ The U.S. economy grew faster in the first quarter than first believed, partly because Americans did not increase their foreign purchases as much as previously thought.

Corporate-profit growth slowed sharply in the first three months of 2005 and inflation was slightly weaker than originally thought.

Gross domestic product rose at a 3.5% annual rate January through March, the Commerce Department said Thursday in its first revision of economic growth for the quarter. GDP is a measure of all goods and services produced in the economy. The median estimate of 22 economists surveyed by Dow Jones Newswires and CNBC survey was for a 3.6% increase.

The government a month ago said GDP grew 3.1% last winter, far slower than the fourth-quarter's 3.8% pace. The revision upward to 3.5% was due to a smaller surge in imports.

Jonathan Levinson : 5/26/2005 9:02:41 AM

The 30 min cycle is midway through a strong upphase, while the 60 min cycle is only now turning up. QQQQ continues to hold above 38.05, above the upper 30 and 60 min keltner channel tops. This is often a setup for a pop & drop open, but the configuration of the intraday oscillators is bullish. I would expect any decline at the open to be merely corrective, and with the 7200 tick SMA down at 37.78, it will take a strong downside move to abort the 30 min cycle upphase.

Linda Piazza : 5/26/2005 9:00:22 AM

The OEX turned lower Wednesday, piercing the 50% retracement of the decline from March's high into April's low and the 100-sma, with those at about 564.81 and 564.71, respectively. The OEX then bounced above both. It's been consolidating between the 50% and 61.8% retracement brackets on that decline, the consolidation looking a little like that in early May. Candles are indicative of waning strength in the upturn, but the possibility of a "p" accumulation pattern can't be ignored, either. As long as the OEX remains below the descending trendline off Monday's high, it still looks as if a pullback is a possibility, but first daily Keltner support has risen to 563.05, so the decline might be limited. Stronger Keltner support exists from 560-560.69. I would expect some dip-buying to kick in near 560, if not as early as 563. We saw some evidence of that dip-buying yesterday, and I had warned those in bearish positions to consider taking partial profit--and conservative traders, full profit--as the OEX was near yesterday's low. For now, the OEX remains within a descending regression channel that began forming Monday. Rollovers near the top and bounces from near the bottom look to be the best bets for those who must trade, but traders should be ready to step out of those formations quickly if either resistance or support does not continue to hold. It's possible that upside might be limited, too, so buying a breakout might be dangerous, with upside limited to the 570-572 level according to some charts. Right now, the OEX churns and trades could churn your account size, too.

Jonathan Levinson : 5/26/2005 8:33:17 AM

QQQQ is holding its "pre-release" levels of 38.05, ten year notes slightly firmer to unchanged at 4.070%.

Jonathan Levinson : 5/26/2005 8:32:15 AM






U.S. Q1 GDP UP 3.5% VS 3.1% PREV EST.




Jonathan Levinson : 5/26/2005 8:31:24 AM

Chain Deflator- Prelim +3.2% vs. +3.3% exp.

Jonathan Levinson : 5/26/2005 8:31:07 AM




Jonathan Levinson : 5/26/2005 8:30:35 AM

GDP- +3.5% vs. +3.6% exp.

Jonathan Levinson : 5/26/2005 8:27:20 AM

A sudden upward surge in equities, though the official release is 3 minutes away.

Jonathan Levinson : 5/26/2005 8:24:06 AM

Daily chart of the TNX with today's new candle starting at the top of yesterday's. The daily cycle oscillators are printing bullish kisses. Link

Jonathan Levinson : 5/26/2005 8:21:47 AM

9 minutes to go until the GDP/Initial claims data. Bonds remain weak, TNX +.6 bps at 4.078%, while QQQQ dipped but is back to 38.00.

Jonathan Levinson : 5/26/2005 7:43:36 AM

Equities are up, ES to 1195.5, NQ 1543, YM 10509 and QQQQ +.19 to 38.00. Gold is down .90 to a session low of 418, silver -.048 to a low of 7.089, ten year notes are down 3/32 to 112 20/32, and crude oil is up .125 to 51.10.

We await the 8:30 release of Initial claims, est. 325K, prior 321K, and Q1 GDP, est. 3.6%. At 10AM, the April Help Wanted Index will be released, est. 40.

Linda Piazza : 5/26/2005 7:21:43 AM

Good morning. The Nikkei coiled just above the flat-line level and below new resistance at 11,050 last night. Other Asian markets were mixed. Most European markets climb despite this weekend's upcoming referendum in France over the EU constitution, with some now predicting that France will vote no. Our futures are higher this morning, having vaulted higher near the European open. As of 7:15 EST, gold was down $0.90 and crude, up $0.11 to $51.09. More detail about Asian and European markets follows in succeeding paragraphs.

Thursday, Japan's April corporate service price index fell 0.2% from March's number and 0.4% year over year. The transportation and construction sectors gained ground, but the information service sector dropped. The Nikkei opened just above the flat-line level Thursday morning and coiled around that level the rest of the day, closing higher by 13.51 points or 0.12%, at 11,027.94. For a couple of days, the Nikkei has found resistance at former support near 11,050.

Some techs headed higher in earliest trading, but banks suffered from Wednesday's after-hours reports. Techs such as TDK Corp. and Advantest were to end higher. Some automakers ended lower.

Other Asian markets were mixed. The Taiwan Weighted gained 0.86%, and South Korea's Kospi climbed 0.28%. Singapore's Straits Times declined 0.37%, but Hong Kong's Hang Seng rose 0.06%. China's Shanghai Composite declined 1.24%. After China's close, an official spoke about inflation concerns and stated that the yuan would remain stable. This kind of parlay was expected after pressure was applied to China to revalue its currency, as China typically responds to such pressures by digging in its heels to avoid the appearance of caving in to foreign pressure.

Most European markets climb. The U.K.'s May CBI industrial trends survey revealed a strengthening in the headline order balance number, but only a slight strengthening to -22 from April's -24. Export order balance also improved, but a delving beneath these numbers showed some reason for concern on the outlook for the manufacturing sector. Output expectations fell again. The CBI cut its forecast for 2005's GDP growth to 2.5% and said that it expected the Bank of England to hold rates steady until the last quarter of 2006. Also in the U.K., bank Barclays warned that impairment losses would be bigger in 2005 than it had last led analysts to expect, and the warning hit other U.K. banks as well. The bank blamed a slowdown in the U.K. consumer credit sector and an increase in delinquencies. German banks gained, however, after new rumors about M&A activity circulated. One rumor holds that Soros has teamed with a Goldman Sachs banker to bid for struggling German mortgage bank AHBR.

Political developments captured attention. With Germany's Schroeder calling for an early election after developments showed collapsing support for his government, unemployment figures assume even more importance. A German newspaper this morning reports that German unemployment fell again, but the decrease was probably due to seasonal effects, and that seasonally adjusted unemployment may increase again after April's decline. Another battle brews in Europe over France's Sunday referendum on the EU constitution. That referendum was the topic of discussion on public radio last night and on CNBC Europe and in print articles this morning. The leader of France's ruling party reportedly has admitted off the record that the referendum will fail, although a CNBC European commentator, the president of Notre Europe, said the outcome is not yet known. There's much appeal in France to reclaiming their sovereignty, but also much discussion about what will happen in France and in currency markets as a result of a no vote. Depending on the commentator questioned, forecasts of possible results range from total catastrophe to little result at all. One immediate likely result would be a drop in the euro, of course, and a strengthening in the dollar against the euro, although some currency market commentators mention that support will keep the euro from falling too far.

In stock-specific news, Merrill Lynch upgraded STMicroelectronics to a neutral rating from its previous sell rating. That helped STMicroelectronics to a strong gain in early trading. Merrill Lynch mentioned factors such as a strengthening dollar, trimmed costs, and a gain in market share, but didn't believe that the semiconductor industry was going to see a strong upturn.

As of 7:08 EST, the FTSE 100 had gained 17 points or 0.34%, to trade at 4,988.50. The CAC 40 had gained 27.96 points or 0.68%, to trade at 4,128.23. The DAX has traded at 35.87 points or 0.82%, to trade at 4,425.41.

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