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Jeff Bailey : 6/4/2005 2:35:56 AM

Thanks Tab ... I read the fund's info when you first introduced it to us. I thought, and still do think, that it offers investors and EXCELLENT asset class to monitor, and is the reason I added it to the U.S. Market Watch. It is broadly thought that it WISE for bond investors to shorten their maturity duration when RATES are perceived to be moving higher. This would come under the backdrop of a tightening Fed. What didn't make sense to me today was "I'm expecting this stock to rise up to $19 range, it appears that the Fed is done, or at least near done with rate hikes." And then ... "I'm playing the short-term maturity using EVV in relationship to the $FVX.X (five-year yield). Reasoning that short-term moves are more tradable then longer rates." I didn't remember seeing anything about technical analysis. BUT ... If I (or any other trader) did trade purely the technicals as you see bullish (and they certainly look bullish) then the technicals may not match the FUNDAMENTAL scenario stated. I know you were focusing on EVV in some of your comments (though 5-year Treasury was used as reasoning), but if a TREASURY trader stepped in and bought 5-year notes this morning, thinking (OK to buy shorter-term maturity) because Fed may be done raising rates, then that doesn't necessarily make sense. At least to me. Again... I'm not, nor was I questioning your TECHNICAL analysis of the EVV. In LINK #2 Link EVV explains why they had to cut the fund's dividend (curve flattening) by $0.0084 per share (6.2%) lower than the $0.1345 per share monthly dividend paid by the Fund since it began paying dividends in July 2003. This is a RISK that comes with MANY BOND FUNDS when the YIELD CURVE is flattening. "How" does a YIELD CURVE flatten?: SHORTER-TERM YIELDs are RISING faster than longer-term yields. Or LONGER-TERM yields are FALLING faster than shorter-term yields. "Why" would a YIELD CURVE flatten?: #1) If we're seeing shorter-term rates rise FASTER than longer-term rates, many analysts believe that the MARKET believes inflation (which can come with economic growth) as being more ramped NEAR TERM than it sees longer-term. YIELDS rise with BOND SELLING. #2) If we're seeing LONGER-TERM yields FALLING faster than shorter-term yields (likely when late stage fed tightening). Investors anticipate no more rate hikes from the Fed and scamper to buy the HIGHER YIELDS of the longer-dated maturities. A good test for this is to simply look at where Fed funds are currently at. 3.0%. Now look at where the 5-year YIELD ($FVX.X) is or was at today. Where the belly of the curve is, or was at today (10-year $TNX.X). And where the long end of the curve (30-year $TYX.X) is, or was at today.

Tab Gilles : 6/4/2005 1:21:00 AM

Eaton Vance Limited Duration fund (EVV) Jeff:(In reference to your 6/3/2005 7:12:27 PM post)

My entry into EVV was strictly based on the charts signaling a buy. As part of my diversified portfolio I'd been looking for a well managed high yielding conservative investment with some possible capital appreciation.

Here are some links to the fund hopefully it may answer some of your questions. Link Link

Jeff Bailey : 6/4/2005 1:29:51 AM

Here's a 4-chart montage I put together which encompasses the past several weeks of trade. Oil + 10-year + Dollar = SPX.X Link With these four securities all open/close at different times, I have to try and adjust the time intervals to get things somewhat lined up as to dates. SPX is 60-minute interval. $TNX.X is also 60-minute interval. Crude Oil is 40-minute interval. Dollar is 100-minute interval. The retracement brackets are for PRICE REFERANCE ONLY, but I do try and "benchark" to OIL's highs. From this I should learn "there is no one indicator" that explains the SPX.X direction! However... on 04/15/05 it would be VERY obvious that there was a major disconnect between what we may have been hearing as the "key drive indicators" for stocks and that day's news. Did you read the 04/15 Market Wrap for quick review of what was going on then? Now looking at 05/17/05 and the SPX.X, something really happened there. Did you read that Market Wrap as review? Now... I also make note of the 05/12 and 05/13 action. That was somewhat of a "watch out below!" move for the SPX.X. Good Gravy! You know what my MM Profiles trade blotter looked like during those couple of days. Smeared with RED and LOSSES! Now I look at my trade blotter and its smeared with GREEN. Some of it came from 05/12 to 05/17 entries. But there does seem to be "some tie" to OIL above $55.41 that just doesn't sit very well with the SPX. OIL at $55.41 doesn't necessarly = SPX 1,190, but of all the "indicators" it would perhaps provide the tie. Today's bond trade is crazy isn't it? A "weak Nonfarm" and the initial reaction is "buy bonds, buy bond, the Fed is done for sure!" However, I think it was a "come too far too fast" and smart money was already in the trade and it turned into a "sold to you" with a 3.8% handle. Certainly we can see how the 10-year YIELD last kiss of 41.58 (38.2% retracement) and decline lower could have LIFTED equities, or at least OFFSET the recent sharp RISE in OIL from the $48.00 level. Let's call this relationship (lower yield, higher oil) a "wash" where equities can still perform nicely. So... this week (06/06-06/10) I tend to think OIL and YIELD will be the key ingredients. Let's face it. The 10-year YIELD has been lower since late March, and when it suddenly "jumps" on some weak nonfarm data, it sure shouldn't have risen like it did. Unless of course the "smart money" that was buying said that was enough. Why have bond yields fallen in the past two months? Answer #1) Investors were looking for safety into the EU vote. #2) Investors sniffed out a weaker nonfarm number. #3) With inflation still contianed, and oil trending lower, a 4.4% yield or higher was CANDY! #4) The economy is going into the tank and investors sell stocks and buy Treasuries. The problem with #4 is that demand for OIL appears to be rather stable, and if the economy were going into the tank, then who in their right might is buying dollars? Remember it was dollar weakening in 2001 (below the 110.00 level) that was reportedly a sign the U.S. economy (and assets) were no longer attractive when the Euro first began trading above "par" against the greenback.

Jeff Bailey : 6/4/2005 12:16:18 AM

What was the news of the day on 04/15/05? Did something happen? What about 05/17/05 in afternoon? Let's go back and read the Market Wraps.

Jeff Bailey : 6/3/2005 10:23:31 PM

Last 3 weeks pivot matrix at this Link ... includes a week-to-week point change and percentage change. Outside the index/stock you are focused on, I think the direction of OIL (oil up, negative for stocks), then BOND YIELD, (yield down can offset rise in oil, if up and OIL up then equity selling after massive bull run) then DOLLAR (yes a rising dollar can be negative for U.S. business that exports, but also a sign of confidence in U.S. assets. Inverse also true) is what market participants are keying off of.

OI Technical Staff : 6/3/2005 9:59:59 PM

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

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

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

Jeff Bailey : 6/3/2005 9:40:09 PM

Pivot Matrix for next week at this Link

Jeff Bailey : 6/3/2005 7:39:35 PM

Closing Internals found at this Link

Jeff Bailey : 6/3/2005 7:12:27 PM

Tab ... Good discussion today regarding the EVV (limited maturity). The main reason I was wondering why I (and perhaps others) should buy EVV was that I thought the reason you brought this asset class to our attention was that it should perform well under the backdrop of a tightening Fed. That made a lot of sense as a bond trader/investor would want to stay at the short-end as the Fed tightens (as your bonds mature at par, you simply roll to new bonds that should offer adjusted higher coupons to reflect the Fed's tightening). My question today was if the scenario has changed (Fed is done/near end of tightening) then is limited maturity the strategy to be in? Also... I (Jeff Bailey) don't see inverted yield curve. Do you? If so, are you still bullish the NASDAQ? I agree with you that the EVV should be less volatile. That's what SHORTER-DATED maturity should do. i.e. ... the less amount of time until maturity, the less risk (volatility) I need to stomach because when the bond MATURES it MATURES at par. Hey, I don't care what the price does as the short time frame should hold LESS RISK than a longer-dated maturity, and in the meantime I collect the smaller interest the bonds kick off.

Jeff Bailey : 6/3/2005 6:36:20 PM

Closing U.S. Market Watch at this Link

Jeff Bailey : 6/3/2005 6:14:32 PM

10-year YIELD ($TNX.X) WEEKLY Interval chart (where we've been, where we are) with updated WEEKLY Pivot matrix. Link

Jeff Bailey : 6/3/2005 6:39:30 PM

What? Cramer's bearish on Apple (AAPL) again. I thought the other night he said "no, no... don't sell it back above $40.00." Can't keep up with him. Nice call on the CMGI from last night though as he "rung the register."

Jeff Bailey : 6/3/2005 8:01:06 PM

Jim: Just seeing your 10:13:02 post. Yes! I thought of your son and daughter today. Man! Can you imagine a mortgage broker showing their client a point and figure chart as well as a bar chart with the pivot analysis on it as a sales tool to convince their client to "lock in" and do business with me!!! So Jim: What are you going to do with an extra $300 per month? Put it in the bank (buy dollars), buy/lease a new car with the freed up cash flow? Buy a flat panel TV? Fund the retirement account? Pay off that trip to Italy? Pay down credit? Lots of things investors can do with this freed up cash! I don't want Jim to answer any of the questions. It is none of my business what he does with the extra cash flow he now has. Just remember today.

Jeff Bailey : 6/3/2005 5:41:43 PM

Just got off the phone with Hank Camp from HL Camp & Company. Very informative conversation. Would anyone be willing to join me in Palm Beach some weekend for one of their seminars? Hank is pretty convincing to the point that futures traders "must" know about premium levels. What surprised me in talking with Hank is that it isn't so much "the level" as it is the time of day to look for market tops and bottoms. I covered the QQQQ short about an hour too soon. Hank said "excellent trade," but me being a pivot matrix trader, if I had "known" the TIME of day to look to cover, then maybe I'd of held out for the WEEKLY Pivot.

Jeff Bailey : 6/3/2005 4:35:36 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Closed out the 1/2 bullish position in PETsMart (PETM) at the bid of $31.80. ($-0.60, or -1.85%) Swing traded shorted a full position in the QQQQ at $38.59. 1/2 was closed out at target of $38.20, other 1/2 closed out at $38.23. Respective ($0.39, or +1.01%) and ($0.36, or +0.93%) Closed out the three (3) NAKED PHM Jun $70 Puts (PHM-RN) at the offer of $0.35. ($0.40 per contract, or +53.33%) Weekly Trade Blotter of CLOSED trades at this Link

Jeff Bailey : 6/3/2005 4:13:32 PM

$38.18

Jeff Bailey : 6/3/2005 4:13:20 PM

QQQQ went out at $38.10. Guess where it is you pivot matrix followers.

Jeff Bailey : 6/3/2005 4:11:23 PM

Premium stuck at 2.48

Jeff Bailey : 6/3/2005 4:10:15 PM

It's a dinger!

Jeff Bailey : 6/3/2005 4:09:50 PM

Buy Program Premium ... DIA $104.71, SPY $102.06

Linda Piazza : 6/3/2005 4:09:45 PM

BIX ended the week within its consolidation pattern that's been building for more than two weeks. The OEX ended the week within the broadening formation it's been building. The SOX had an inside day, though, so those who believe in inside-day trades will be watching for a low lower than today's or a high higher than today's. The RLX, however, had a great big bearish engulfing day, and the components the OEX shares with the RLX make this index important to the OEX's behavior.

Jeff Bailey : 6/3/2005 4:08:59 PM

Buy Program Premium ... SPY $120.03, DIA $104.69

Jeff Bailey : 6/3/2005 4:06:10 PM

Buy Program Premium ... DIA $104.68, SPY $120.04

Linda Piazza : 6/3/2005 3:49:50 PM

The BIX is trying to move up toward the 200-sma again, still within the consolidation pattern it's been building for more than two weeks.

Linda Piazza : 6/3/2005 3:48:52 PM

The SOX isn't catching any of that shortcovering that some other indices are seeing.

Jeff Bailey : 6/3/2005 3:44:22 PM

10-year YIELD ($TNX.X) finished up 8.9 bp at 3.979%. WEEKLY Pivot levels for next week are 36.98, 38.39, Piv = 39.43, 40.84, 41.88.

Linda Piazza : 6/3/2005 3:41:32 PM

Just the slightest hint of a bullish falling wedge on the SOX's 5-minute chart. Could also classify it as a continuation-form H&S with a descending neckline, though.

Jonathan Levinson : 6/3/2005 3:39:06 PM

QQQQ's 30 min cycle is buried in oversold as deeply as it's been in a month, the 60 min oscillator following behind. The 38 level acted as support on Tuesday and last Thursday, prior to which it was resistance early last week. The 30 and 60 min charts suggest a bounce from that support on Monday. On the bearish side, today's key outside reversal candle/bearish engulfing on the daily chart, combined with those trending overbought indicators, project more pain to follow. A corrective bounce from 38 on Monday would suggest a failure from a lower high to complete the right shoulder area of a head and shoulders on the intraday charts. A straight plunge directly from here would be less likely and more bearish.

Linda Piazza : 6/3/2005 3:37:13 PM

A bounce on the OEX up toward 565.41 Keltner resistance.

Linda Piazza : 6/3/2005 3:31:55 PM

Now the OEX just has to get past Wednesday's early morning low of 564.15 to head down toward the target of 562.86. Bears need to decide soon whether they'll hold over if the OEX does reach that downside target or if it does not. If it's reached that target, think about the possibility of taking at least some of the profits off the table. If it can't get below Wednesday's low, maybe do the same because there's the possibility of bulls trying to send it higher Monday morning in a feeling that a double-bottom had been reached. In fact, I think I'd take at least some profits off the table in any circumstances.

Jonathan Levinson : 6/3/2005 3:29:41 PM

Volume breadth is holding near the lows, with declining volume leading 3.69:1 on the Nasdaq and 2.03:1 on the NYSE, with the TRIN at 1.58 and the TRINQ 1.93. Total Nasdaq+NYSE volume is on the light side at 2.493B shares so far, with QQQQ trading 85.2M shares compared with yesterday's 76.1M and the 94.9M daily average.

Jeff Bailey : 6/3/2005 3:29:39 PM

SPY.X 1,194.56 -0.80% ... testing WEEKLY Pivot here.

Jeff Bailey : 6/3/2005 3:28:59 PM

Buy/sell program premiums since the sell premium at the cash open, not a single buy/sell premium so far this session.

Linda Piazza : 6/3/2005 3:23:20 PM

OEX Keltner resistance at 575.55 continues to hold, but the OEX continues to hold on 15-minute closes above the 564.70-564.80-ish support, too. One or the other should blow, but I wonder if it will before the close?

Jeff Bailey : 6/3/2005 3:20:32 PM

QQQQ $38.08 -1.50% ... session low $38.05 at this point. Might expect some "old bears" shorting against $38.00 in late May to be breathing a sigh of relief and scaling back positions. If like me at this point, maybe looking for a bounce back near $38.44 or so to try a short there.

Linda Piazza : 6/3/2005 3:13:20 PM

OEX again testing the Keltner resistance at 565.67. Either this resistance line or the 564.70-574.80 zone are going to fail, but so far, neither is.

Jeff Bailey : 6/3/2005 3:12:01 PM

03:00 Internals found at this Link

Jeff Bailey : 6/3/2005 3:04:47 PM

03:00 Market Watch at this Link

Jonathan Levinson : 6/3/2005 3:03:39 PM

Ten year yields (TNX) finished higher by 8.9 bps at 3.979%, a 2.29% gain for the day. Daily chart at this Link

Linda Piazza : 6/3/2005 2:56:13 PM

OEX now below the LOD and perhaps headed toward the 6/01 early morning low of 564.15 and then perhaps toward 563. Lots of emphasis on "perhaps," though, as there's that daily 100-sma and 50% retracement of the March-April slide, all near the new minimal LOD.

Jeff Bailey : 6/3/2005 2:55:52 PM

July Crude (cl05n) $55.00 +2.55% (30-min. delayed) ...

Linda Piazza : 6/3/2005 2:54:21 PM

SOX dropping heavily to the LOD, setting up that target at 432.71-433.43. SOX bears need to know how they'll handle that test, if the SOX can maintain levels below the LOD and keep moving toward it.

Jonathan Levinson : 6/3/2005 2:49:29 PM

QQQQ session low at 38.12 here, with 30 and 60 min channel support currently lined up at 38.05. The short cycle indicators are rolling over, however, and a failure to bounce above 38.22 (current 72 SMA resistance) during the next few minutes will see the 30 min channel bottom resume its earlier decline.

Linda Piazza : 6/3/2005 2:43:24 PM

While the OEX did close the last 15-minute period minimally above the first Keltner resistance, it was only minimally above it and the move left a long candle shadow for that period. The OEX is still challenging that resistance as I type, with the outcome not yet known. It's at 565.86 currently. Resistance lines separate a bit above this level, so bears don't really want the OEX to move above it, but the OEX could still move a bit higher and still be legitimately inside a bear flag.

Jeff Bailey : 6/3/2005 2:39:49 PM

Lehman Bros. (LEH) $92.48 -0.67% ... speaking of phones ringing off the hook. I wonder what Lehman's bond desk is like today.

Jonathan Levinson : 6/3/2005 2:37:41 PM

No reprieve for 10-year treasuries, with ZN down 39/64 to 112 31/32 and TNX up 9.1 bps at 3.981%, a 2.34% gain today. Updated daily chart at this Link , testing former support turned resistance.

Jeff Bailey : 6/3/2005 2:34:53 PM

EMC Corp. (EMC) $14.30 (unch) ... hanging tough, but looking at some call options. No profile at this point, but when I think the time is right. QCharts' option montage at this Link

Jonathan Levinson : 6/3/2005 2:31:55 PM

July crude has finished at 55, +1.375 or 2.56%, off a high of 55.10. 100 tick chart at this Link

Linda Piazza : 6/3/2005 2:30:42 PM

Speaking of 100/130-ema's (Jim just did on the Futures side), the RUT has just risen to test its five-minute 100/130-ema's, currently at 622.45 and 622.51 for the first time since breaking through those averages early this morning. Late yesterday, they had promped the RUT's bounce that was to eventually result in a H&S on the five-minute chart. So, this just constitutes a retest of broken support. So far. The RUT is turning down below that support. Also so far.

Jeff Bailey : 6/3/2005 2:28:25 PM

July Crude (cl05n) $54.60 +1.80% (30-min delayed) ...

Jeff Bailey : 6/3/2005 2:27:18 PM

02:16 Internals at this Link

Linda Piazza : 6/3/2005 2:20:40 PM

No quick new LOD, so OEX bulls are going to try to send it higher instead. I've been warning today once the OEX approached its LOD that bears needed to have profit-protecting plans in mind and they need to be enacted now if stops are hit. This could be just a stop-running move, with important resistance near 567 soon to be tested, but we just don't know yet. Next Keltner resistance at 566.73 (if the OEX does manage a 15-minute close above the Keltner resistance just below 566, something we don't know yet). Above that, resistance may be a bit stronger at 567.51-567.75.

Jeff Bailey : 6/3/2005 2:18:51 PM

02:16 Market Watch at this Link

Jeff Bailey : 6/3/2005 2:19:18 PM

Verifone (PAY) $15.96 +19.19% ... I think this is the asset that HPQ sold off years ago. Coincidence here ... last night I was paying for dinner with credit card and thought ... "what a gold mine this should be."

Jonathan Levinson : 6/3/2005 2:15:12 PM

Current session high for July crude is 55.00, up 1.325 here at 54.95.

Jonathan Levinson : 6/3/2005 2:15:49 PM

Another high volume sell spike has QQQQ back to the lows, but the short cycle upphase has yet to reverse. The 30 min channel bottom continues to hold at 38.05, and the 72 SMA has fallen to 38.23. A move above that level would give the short cycle upphase a change to progress beyond its current corrective state, but so far the range at the bottom of this morning's decline is choppy and weak. A failure to clear the 72 SMA would be very bearish- a corrective short cycle bounce would most likely be followed by a strong downphase. Link

Linda Piazza : 6/3/2005 2:12:29 PM

Here's one type of support for the OEX today, one that bears need to see breached: Link

Jeff Bailey : 6/3/2005 2:08:52 PM

Introgen Therapeutics (INGN) $7.16 +0.42% ... not doing much today.

Linda Piazza : 6/3/2005 2:06:14 PM

SOX still has a potential downside target of 432.66-433.33, but, like the OEX, it needs to see a new LOD fairly quickly to get things going.

Linda Piazza : 6/3/2005 2:04:06 PM

The OEX turns down now from that Keltner resistance. Bears need that new LOD and a low below Wednesday's early morning low of 564.15 before they can feel better about the possibility of that Keltner 563.14 target being met. Right now, the OEX is just turning down within a possible bear flag.

Jeff Bailey : 6/3/2005 2:01:12 PM

Swing trade naked put close out alert ... let's close out those three (3) naked puts for the PHM Jun $70 Put (PHM-RN) at the offer of $0.35.

Linda Piazza : 6/3/2005 2:00:07 PM

Looks as if there will be another 15-minute close beneath the OEX's Keltner line currently at 565.96. So far, so good for bears, but they really, really need to see a drop to a new low and a quick drop. There's just so much potential support beneath the OEX that it's going to need a strong thrust through that support to breach it.

Jeff Bailey : 6/3/2005 1:59:05 PM

QQQQ $38.20 -1.18% ...

Jeff Bailey : 6/3/2005 1:58:44 PM

July Crude Oil (cl05n) $54.80 +2.18% ... this is getting "much above" $54.70 (see yesterday's commentary)

Jeff Bailey : 6/3/2005 1:57:49 PM

You mortgage brokers that locked in your clients this morning, be ready for some phone ringing the next couple of days. You should be getting a few referrals. If you also hold a securities license, don't stop there. Find out what your client would like to do with excess cash they now have on hand. They might want to buy a new car, a new computer, take a vacation (all can be stimulative to economy), but same may be looking for a "safe" fixed income investment that churns out some cash each month, or quarter. If tax sensitive client, talk to them about MUNI bonds for double-tax benefit.

Linda Piazza : 6/3/2005 1:49:29 PM

The OEX closed the just-finished 15-minute period below the Keltner line currently near 566, but it's trying to push above it as I type. Is is minimally above it, but the candle spans it and the OEX hasn't really broken clear. Bears wold prefer to see this 15-minute period close below that line, currently at 565.99 and would really prefer the close to be below 565.81.

Jonathan Levinson : 6/3/2005 1:48:27 PM

QQQQ's 30 min cycle has reached oversold territory, and a short cycle upphase is in progress with price testing the 38.23-.25 confluence. The 60 min channel continues to point south, and QQQQ needs a break above the 72 SMA at 38.26 to turn the 30 min channel up. Volume breadth is negative but strengthening, currently 3.05:1 in favor of declining Nasdaq shares. QQV is down to a 0.02 gain at 13.88.

Jeff Bailey : 6/3/2005 1:47:39 PM

10-year YIELD Option Chain screen capture taken minutes ago at this Link ... sorted by most active.

Linda Piazza : 6/3/2005 1:40:43 PM

The OEX has climbed to test Keltner resistance near 566, specifically at 565.98 on 15-minute closes. So far, it's holding, but we're approaching/in a typical stop-running time of day.

Jonathan Levinson : 6/3/2005 1:38:35 PM

Session low for ten year notes here at 113 1/32, TNX now up 7.6 bps at 3.966%. Link

Jeff Bailey : 6/3/2005 1:37:27 PM

QQQQ updated 30-min interval chart at this Link

Jonathan Levinson : 6/3/2005 1:37:03 PM

A number of bad ticks to 38.70 here- 3 in a row just now. Quotetracker users can delete them by clicking the chart and pressing CTRL-Shift-H until they disappear.

Jeff Bailey : 6/3/2005 1:34:44 PM

Bearish swing trade close out other 1/2 position alert ... for the QQQQ $38.23 -1.13% here.

Linda Piazza : 6/3/2005 1:34:16 PM

Treasury Secretary Snow apparently appeared on Bloomberg TV (didn't see it) and discounted the disappointing number, saying that they bounce around a lot.

Jonathan Levinson : 6/3/2005 1:24:51 PM

So far, QQQQ's short cycle bounce attempts have been doing nothing, with the recent upticks just slammed by a high volume sell spike. Link 30 min channel support is down to 38 (discounting the keltner distortion caused by the bad tick to 38.70), and the intraday bias remains bearish below the 72 SMA, currently down to 38.30. First resistance is at 38.23.

Linda Piazza : 6/3/2005 1:23:42 PM

If the RLX were to end the day at or below its current 441.74 level, it will have created a tweezer-top formation within January's huge gap, but I'd think that it would need to get below 440 or maybe even the bottom of tha gap near 438.78 before bulls got too worried.

Jonathan Levinson : 6/3/2005 1:20:08 PM

Nymex July crude +.875 at 54.50 here, off a high of 54.70. Updated 50 tick chart at this Link

Jeff Bailey : 6/3/2005 1:12:48 PM

01:00 Internals found at this Link

Linda Piazza : 6/3/2005 1:12:28 PM

The BIX tested the 5/25 low of 361.67, coming within one penny of it before attempting the current bounce, now only up to 361.98. Further support from 358.95-360.40.

Jonathan Levinson : 6/3/2005 1:06:19 PM

Volume breadth is holding negative on both exchanges, 2.29:1 for declining NYSE volume, 3.66:1 on the Nasdaq.

Jeff Bailey : 6/3/2005 1:04:15 PM

01:00 Market Watch at this Link

Jeff Bailey : 6/3/2005 1:01:56 PM

Tab ... the question is LIMITED MATURITY. Remember when EVV cut its dividend recently? WHY did this happen? I explained my thoughts at the time. Do I want to be buying LIMITED MATURITY if the Fed is done raising rates? Once the fund manager sees bonds retired at par, he has to go find something else to buy. If the Fed is nearing its end of tightening, what am I buying in the form of any PRICE (risk) vs. YIELD (return) that a limited maturity strategy offers? Answer in my opinion: NOT MUCH!

Keene Little : 6/3/2005 12:56:27 PM

Thanks for QT update Jonathan (12:45). I'll try the Java flush. You're right--Jerry Medved has always responded (as well as his tech support) immediately to questions. None of that 24-48 hour response time stuff, more like 15 minutes. It's a great program and support.

Linda Piazza : 6/3/2005 12:56:24 PM

The SOX is bouncing but its bounce does look corrective, as bulls would want. Test coming up of the Keltner resistance currently at 435.80-435.92, and bears want to see that hold on 15-minute closes if it's approached. SOX bears need to have plans for protecting profit near 432.50-433.20 if that's approached.

Jeff Bailey : 6/3/2005 12:54:20 PM

Semiconductor Index (SOX.X) 435.11 -1.12%

Jeff Bailey : 6/3/2005 12:53:32 PM

Sirius Satellite (SIRI) $5.99 -0.16% ... #12 most active.

Jeff Bailey : 6/3/2005 12:53:05 PM

Internet Initiative Japan (IIJI) $10.19 +15.27% ... #11 most active.

Jeff Bailey : 6/3/2005 12:52:29 PM

Most Actives .... QQQQ $38.18 -1.24%, MSFT $25.41 -1.47%, SPY $119.89 -0.72%, INTC $27.34 -0.9%, SUNW $3.71 -2.11%, ORCL $12.66 -2.46%, CSCO $19.59 -1.45%, AAPL $37.90 -5.34%, TTN $22.45 -1.49%, SMH $34.86 -0.71%

Linda Piazza : 6/3/2005 12:47:55 PM

This chart is messy with formations and moving averages, as well as a Fib bracket, but I wanted to show the various types of support the OEX now tests: Link Yesterday, I said I wasn't a bull or a bear but a chopper, and this formation is one reason why. I said that for the couple of weeks, selling 570 was a good trade as long as automatic profits were taken near 566 and buying 566 had been a good trade as long as profits were automatically taken near 570. I also said I wasn't sure how long that would continue. I'm just not sure today, and I wouldn't feel good about recommending a bullish entry, but I do feel good about telling bears to protect profits using whatever method they prefer (partial profits, as I've already suggested), resetting stops, etc.

Jonathan Levinson : 6/3/2005 12:45:51 PM

Keene, a friend had the same problem regarding the Quotetracker sync with IB. I believe he contacted Jerry M. at Quotetracker, who had him flush his java cache and restart, which solved the problem. Unfortunately, that's all the detail I have, but QT's support is usually very responsive.

Jonathan Levinson : 6/3/2005 12:44:12 PM

Today's TNX reversal is holding a big gain of 5.3 bps here at 3.943%, the daily candle printing a tall bullish engulfing hammer and key outside reversal: Link . The Lehman 20+ year treasury I-share (TLT), -.44 at 95.60, has almost quadrupled its average daily volume today.

Tab Gilles : 6/3/2005 12:43:32 PM

Jeff...I look at the daily and weekly charts and with EVV. Link You're getting a good yield as well as possible appreciation. The charts indicated to buy in the mid to low $17 range/ currently up $0.10 today at $18.17 Link . You could see the $FVX hold steady here for the next several weeks and have EVV still rise. Granted you bring up a valid question...Why should you buy corporates? EVV has some in its portfolio, but this manages it by trading 2 to 4 year maturaties so, it is hedged if rates do rise. I find it a more conservative sector play. I would also say that having profits currently one should set stops at their own risk levels. Link

Linda Piazza : 6/3/2005 12:40:52 PM

The SOX still looks vulnerable to 432.47-433.11, perhaps after a bounce sometime up to test Keltner resistance now at 435.82-436.06. If the SOX is going to set up Keltner-style bullish divergence, it won't pierce that 433.11 level or only minimally. If it does, no Keltner-style bullish divergence. Doesn't mean the SOX won't bounce from that level if it's approached, but just that it won't produce bullish divergence. Of course, if the SOX bounces too high, above that resistance, it will erase the vulnerability to the mid-channel level and that whole discussion is moot.

Linda Piazza : 6/3/2005 12:35:51 PM

So far, the OEX is maintaining its vulnerability to a Keltner target now at 563.20. However, it's hesitating on the 60-minute 100/130-ema's, just below the OEX's current 565.10 level, as well as on the myriad other forms of support near here that I've already named. The OEX should bounce here, and bulls want it to be a strong thrust higher while bears don't want it to bounce at all, but want a flag-ish type bounce that finds resistance at 566.54 if it's going to bounce.

Jeff Bailey : 6/3/2005 12:27:44 PM

5-year yield ($FVX.X) up 7.2 bp at 3.714%

Tab Gilles : 6/3/2005 12:23:42 PM

Follow-up charts to my 12:10:27 AM post. SMH Link $SOX Link

Linda Piazza : 6/3/2005 12:21:31 PM

The SOX near its LOD. May be time to bounce, though, with the Keltner chart showing next resistance at 535.87-536.35. The SOX is at 434.97 as I type, and shows vulnerability now to 432.47-433.08 as long s it continues producing 15-minute closes beneath that resistance.

Jonathan Levinson : 6/3/2005 12:21:13 PM

Stepping away for 10 minutes here.

Jeff Bailey : 6/3/2005 12:36:02 PM

Tab ... flattening yes, inversion NO!!!! Now... what's your point here. I'm eager to know why I should be buying shorter-dated/limited maturity corporates?

Jonathan Levinson : 6/3/2005 12:17:27 PM

Current session low is 38.13 QQQQ, with the 30 min channel bottom down to 38.07, old resistance on the way up, where it lines up with the short cycle channel's support as well. The bounce attempt failed below 38.23. Link

Jeff Bailey : 6/3/2005 12:13:40 PM

12:00 Internals found at this Link

Linda Piazza : 6/3/2005 12:12:44 PM

OEX 60-minute 100-ema at 564.95.

Linda Piazza : 6/3/2005 12:12:13 PM

Here's a good place for the most conservative of you short-term OEX bears to take at least partial profit if you haven't already. The OEX looks vulnerable on a Keltner basis to 563.31, and to reaching that level rather quickly, but it's approaching lots of potential support. I'd suggest partial profits and setting of the stop to breakeven, and then perhaps watching, but you want a quick decline.

Jonathan Levinson : 6/3/2005 12:09:53 PM

Session low for 10-yr bond futures here at 113 7/32 (basis June ZN), with TNX now up 4.2 bps at 3.932%. Link

Linda Piazza : 6/3/2005 12:08:20 PM

The OEX currently tests the 50% retracement of the March-April decline (564.81), the 100-sma (564.72) and the 60-minute 100/130-ema's. As well, it's approachingthe bottom of its recent broadening formation. Also not bullish, but the OEX hasn't broken out of its formation yet, so there's no breakout either direction. OEX bears need to have profit-protecting plans in place.

Linda Piazza : 6/3/2005 12:06:32 PM

I couldn't get a chart for the BIX earlier today. My charting service thought I didn't need to look at it. It's back below the 200-sma, currently testing the recent lows of its consolidation pattern. Not great behavior and not bullish, but if the BIX does break below the 5/25 low of 361.57 (BIX at 362.16 currently), there's Keltner and MA support just above and below 360, so I'm not sure how much further it will fall.

Jonathan Levinson : 6/3/2005 12:05:41 PM

Volume is heavier than we've seen recently, QQQQ currently at 51.8M shares and a combined 1.37B NYSE and Nasdaq shares traded so far. Yesterday's total QQQQ volume was 76.1M shares.

Jeff Bailey : 6/3/2005 12:04:43 PM

12:00 Market Watch found at this Link

Tab Gilles : 6/3/2005 12:00:57 PM

Jeff.....do you see a flattening or inverted yield curve? Link Link Link Link

Jonathan Levinson : 6/3/2005 11:58:09 AM

QQQQ and NQ tested their 30 min channel bottoms and the short cycle indicators are buried in oversold in an oversold trending move, but with no bullish divergences yet. A break above 38.23-.26 would target intraday confluence resistance at 38.35, but so far every tick up is being hit by sellers.

Linda Piazza : 6/3/2005 11:57:44 AM

Yesterday, I mentioned that the SOX had been in a pattern in which it rolled over from a Keltner level that it was then testing and moved down to mid-channel support, now at 432.44-433.00 but a bit lower yesterday afternoon when I mentioned this tendency. I mentioned that the SOX might be beginning that rollover, but that not much could be trusted. Well, it was rolling over, as I suggested it might be. Although it's currently testing a higher level of Keltner support, it does perhaps still look vulnerable to the mid-channel level, perhaps after a bounce back to test 435.93 or 437.06 resistance. Bulls absolutely do not want that to fail to hold as support.

Jeff Bailey : 6/3/2005 11:50:52 AM

Hey Marc! That's pretty close to your rising 21-day SMA.

Linda Piazza : 6/3/2005 11:50:14 AM

A 15-minute OEX close below the Keltner line currently at 566.66 would set a potential downside target of 563.44. There are other types of potential support other than Keltner between the current level and that level, so keep on your toes and don't obstinately hang onto a position if it changes tenor.

Marc Eckelberry : 6/3/2005 11:50:04 AM

I mention QQQQ 38.26 because it is 61.8% 2004/2005 and corresponds to NQ 1555 which has been a fulcrum on the futures side. Level to watch for techs.

Jonathan Levinson : 6/3/2005 11:49:43 AM

Session lows across the board, QQQQ testing S1 with 30 min channel support declining steeply, now down to 38.15. TNX is up 2.9 bps at 3.919%, and Nymex crude is up 1 at 54.625.

Jeff Bailey : 6/3/2005 11:49:28 AM

Bearish swing trade exit 1/2 position alert ... let's close out 1/2 of the bearish QQQQ here at $38.20.

Jeff Bailey : 6/3/2005 11:48:42 AM

Let's see ... 3% from $38.66 would be about ... $-1.16. $38.66 - $1.16 = $37.50.

Jeff Bailey : 6/3/2005 11:46:34 AM

Bearish swing trade exit alert ... Let's exit just 1/2 of the bearish QQQQ at $38.20 if achieved. QQQQ $38.22 and session low here.

Linda Piazza : 6/3/2005 11:44:07 AM

The OEX tests the 567 level. The OEX might bounce from 566.75 or so, with next Keltner resistance then at 567.25 and 568-568.23.

Marc Eckelberry : 6/3/2005 11:44:31 AM

Peter, I haven't forgotten. I won't use a spread for that old QQQQ 37 put, instead I will just exit at 20 dma, which should be tested in the coming days if QQQQ stays below 38.26. 20 dma now at 37.23.

Jonathan Levinson : 6/3/2005 11:40:36 AM

The NYSE has finally joined the Nasdaq: 1.48 declining NYSE shares for each advancing, 3.5 declining Nasdaq shares for each advancing.

Jonathan Levinson : 6/3/2005 11:39:04 AM

QQQQQ plunging to the bottom of the 30 min channel, now lined up with daily S2 at 38.20: Link

Jane Fox : 6/3/2005 11:38:30 AM

Its been a long time since the bears have been able to feast their eyes upon this picture. Link

Jeff Bailey : 6/3/2005 11:43:01 AM

TRADERS !!! Be willing to play these "mind games" (psychology) as it relates to what the bearish bloggers will be saying in coming weeks, but use what YOU KNOW TO BE TRUE as it relates to supply/demand and dollar + bond + oil = equity to stay informed!!!!

Linda Piazza : 6/3/2005 11:37:12 AM

OEX approaching 567.40-567.00 potential support. Bears need to know how they'll handle this.

Jeff Bailey : 6/3/2005 11:35:31 AM

Tab .... Well, I'm glad I didn't buy the 5-year YIELD this morning. It's up 3.0 bp at 3.672% and my account would be taking a hit. If the Fed is done, there's going to be a scramble at the longer-dated area. For corporates, I noted last night that there was a flury of activity. Remember my note that Daimler Chrysler was SELLING a new issue? Remember Toll Brothers retiring some longer-term debt at HIGHER interest rate. What are they doing? I'm thinking they are going to step it OUT in maturity.

Jane Fox : 6/3/2005 11:34:25 AM

Due to technical problems, there was an industry-wide outage affecting all AMEX index data from 11:06 AM ET to 11:19 AM ET. Data dissemination has resumed, however, the will be a permanent gap in the data for the period in which the outage occurred.

Tab Gilles : 6/3/2005 11:30:29 AM

Marc thank you for the link on EIA.

Jeff...great question! I'm playing the short term matuarity using the EVV in relationship to the $FVX. Reasoning that short term moves are more tradable then longer rates. $FVX Link $TNX Link

Interesting how the 30 year rate is nearing decade lows. Link Link Link

Jeff Bailey : 6/3/2005 11:30:22 AM

We're going to need this info in the future, so I'll start now. Understand what is taking place in the bond market (refinance your mortgage call) and understand where we've been, and where we were this morning (way overdone on the buy side for Treasuries, you lock in a 30-year mortgage and very low rates). OK ... so "smart money" that had been long takes HUGE gains, and part of this morning's move is from some bears. The dollar ... where's it been, and where is it now? Answer: MASSIVE amounts of foreign capital has come back to the dollar of late, and first place it goes is Treasuries (drives yields lower). In Wednesday's wrap, I made mention that sources close have infiltrated the bear camp and after bears left their "strong dollar bad for stocks" scenario, they will only now realize the bond market's roll in an economy. Should equity bear bloggers begin chirping that the selling in Treasuries (result in higher yields) is then doom for equities, it will be important to monitor the dollar! Why? If dollar is stable (where's it been, where is it now) then the supply/demand equation could simply be a reallocation of asset. The cash is still here in the U.S. (dollar firm) and can easily be allocated to other assets. (cash, Treasury bonds after selling takes place, corporates, junk bonds, and of course.... EQUITIES!)

Linda Piazza : 6/3/2005 11:29:40 AM

The RLX looks as if it's breaking below a H&S neckline, but only tentatively so far. This is as seen on the three- and five-minute charts. Perhaps WalMart's meeting isn't going so well? WMT of course contiues to drop but is trying to steady ahead of the LOD.

Linda Piazza : 6/3/2005 11:24:09 AM

Like the SOX, the RUT broke above a QCharts drawn descending regression channel off December's high, but is far from breaking above the actual hand-drawn descending trendline. It's not even as close as the SOX came to its analogous trendline. Still, the pullback is minimal so far.

Jonathan Levinson : 6/3/2005 11:22:06 AM

QQQQ's testing the previous low here, rolling over below daily S1 and the 72 SMA resistance above at 38.51. Link

Linda Piazza : 6/3/2005 11:21:25 AM

New test of the OEX's LOD. Bears need to see this break and probably rather soon or bulls will become emboldened. For right now, Keltner resistance appears fairly strong above the OEX, beginning at about 568.20 and extending up to 568.78 and then again near 569.35. The OEX continues to look vulnerable to a Keltner line that's now at 566.86, but it better not begin to look like too hard work to get it there or else OEX bulls are going to start buying.

Tab Gilles : 6/3/2005 11:41:27 AM

Looking at the relationship between the price of gold and the price of gold-mining shares. This relationship is most evident between the price of gold and the price of gold-mining averages, like the Philadelphia Gold and Silver Index $XAU and GOLD $GOLD If you divide the price of gold by the price of the XAU, you will see this relationship as the $GOLD\$XAU ratio. The ratio cycles between 3.8 times on the low side when mining stocks are relatively expensive compared with the price of gold and 5.4 on the up side when precious metal shares are inexpensive relative to the price of gold. That said...one has to look at the $USD and its impact on gold. Has it bottomed or will the lows be retested? Gold has held up fairly well, only falling about 9% from its December high. The real damage has been in the mining shares, NEM for example. Link Link

Back on 5/13 I'd pointed out that $XAU was stuck in a range and to watch for a bounce. Link Link

Jeff Bailey : 6/3/2005 11:16:38 AM

11:00 Internals at this Link

Jonathan Levinson : 6/3/2005 11:13:00 AM

The TNX has flipped positive, +2.6 bps at 3.916% in a big intraday reversal- a key reversal after this AM's lower low: Link

Jonathan Levinson : 6/3/2005 11:08:21 AM

Nymex July crude is up .60 at 54.225, 20 cents off today's high. Updated 50 tick chart at this Link

Jeff Bailey : 6/3/2005 11:04:25 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 6/3/2005 11:01:16 AM

No reprieve for the bifurcated volume breadth, advancing shares leading declining 1.26:1 on the NYSE while declining volume leads 2.76:1 on the Nasdaq. Both TRINs are in bear territory, however, the TRIN just above neutral at 1.17 and the TRINQ up at 1.88.

Linda Piazza : 6/3/2005 10:57:21 AM

The OEX is so far finding resistance at a Keltner line currently at 568.74.

Jeff Bailey : 6/3/2005 10:57:00 AM

30-year yield ($TYX.X) down 3.8 bp at 4.191%. (holds a bid better with thought Fed might be done?)

Jeff Bailey : 6/3/2005 10:56:08 AM

10-year yield ($TNX.X) down just 1.3 bp now at 3.877% (as mortgage refinance phones ring off the hook!)

Jeff Bailey : 6/3/2005 10:55:28 AM

5-year yield ($FVX.X) up 0.1 bp now at 3.643%

Jonathan Levinson : 6/3/2005 10:54:22 AM

QQQQ is bouncing off its 38.31 low, so far on declining volume and approaching yesterday's pivot. This looks and feels like a "b" distribution bear flag, but a move above 38.45 would change that. Declining 72 SMA resistance is above at 38.52. Link

Jeff Bailey : 6/3/2005 11:20:10 AM

Tab (per 10:45:08) ... do you think short-term maturity strategy is place to be if Fed is done?

Linda Piazza : 6/3/2005 10:49:40 AM

The SOX broke above a QCharts drawn trendline for the descending regression channel in which it's traded since December, but found resistance, so far, below the actual trendline drawn off that December swing high. The downturn has not been dramatic so far.

Marc Eckelberry : 6/3/2005 10:48:04 AM

Tab:
...if consumer demand is high for a seasonal product, such as gasoline, refiners may delay producing heating oil for the winter, which may lower inventories at the start of the heating season. Such was the case in the summer of 2002, when re- finers produced more gasoline to supply high gasoline demand. As a result, the 2002-2003 heating oil season started with low inventories... Link

Tab Gilles : 6/3/2005 10:45:08 AM

Murphy Oil (MUR) continues its climb. After taking some money off the table at the $97, I stated on 5/26 11:34 PM, I've been using the 10-ema as a stop. MUR appears to want to test it's highs and the 10-ema is at $97. Heard something interesting on CNBC this morning that was unusual for the oil market, that home heating oil is trading at 1 cent above gasoline???? HUH!!! That doesn't sound right....going' into the summer? Link

Eaton Vance Limited Duration (EVV) I'm expecting this stock to rise upto the $19 range, it appears that the Fed is done or at least near done with rate hikes. Link Link

Linda Piazza : 6/3/2005 10:40:15 AM

The OEX tests Keltner resistance near 568.20 to see if it holds. Bears need to see the OEX continue to break lower or bulls are going to become emboldened. The OEX has set a Keltner downside target of 566.90, and yesterday's last swing low at 566.92 will possibly lend its support. There's also historical S/R in that area.

Linda Piazza : 6/3/2005 10:40:04 AM

The OEX tests Keltner resistance near 568.20 to see if it holds. Bears need to see the OEX continue to break lower or bulls are going to become emboldened. The OEX has set a Keltner downside target of 566.90, and yesterday's last swing low at 566.92 will possibly lend its support. There's also historical S/R in that area.

Jeff Bailey : 6/3/2005 10:38:04 AM

QQQQ ... updated 30-min interval chart with WEEKLY/MONTHLY Pivot retracement as well as the ever changing Keltners. Link

Jonathan Levinson : 6/3/2005 10:37:33 AM

Stepping away for 5 minutes.

Jeff Bailey : 6/3/2005 10:31:59 AM

Current OPEN MM Profiles found at this Link ... correction to QQQQ share amount. For $10,000.00, should only be short 259 shares, not 280.

Jonathan Levinson : 6/3/2005 10:27:14 AM

Ten year treasuries are selling as well, TNX now up to a 3.8 bp loss at 3.852%, a -.98% change for today.

Linda Piazza : 6/3/2005 10:25:19 AM

OEX bears should be particularly careful near OEX 567.

Jonathan Levinson : 6/3/2005 10:25:03 AM

NDX volatility remains surprisingly low, QQV +.11 or .79% at 13.97 here.

Jeff Bailey : 6/3/2005 10:24:17 AM

Pacholder High Yield (PHF) $9.31

Jeff Bailey : 6/3/2005 10:24:02 AM

Bearish swing trade lower stop alert ... on the QQQQ $38.35 -0.80% ... to break even.

Jonathan Levinson : 6/3/2005 10:23:29 AM

QQQQ's now testing lower 30 min channel support as the short cycle indicators approach oversold territory. 38.45 was important support yesterday and should now act as resistance. 30 min channel support is down to 38.30, and the 30 min channel will maintain its bearish bias so long as price remains below the 72 SMA at 38.53.

Linda Piazza : 6/3/2005 10:16:59 AM

Next OEX Keltner resistance at 569.09 and it's testing next suport now, near 568.20.

Jeff Bailey : 6/3/2005 10:16:10 AM

10:00 Internals found at this Link

Jonathan Levinson : 6/3/2005 10:14:43 AM

Volume breadth has deteriorated on the Nasdaq to 2.05:1 in favor of declining shares, while the NYSE remains positive, 1.32:1 for advancing volume.

Jim Brown : 6/3/2005 10:13:02 AM

Jeff, I got a mortgage refinance quote yesterday that is going to lower my payment -$300 a month. 30yr 5.125% fixed. One of my sons is a mortgage broker and he has been very busy this week. With 10yr notes yielding 3.82% the lenders are going crazy.

Linda Piazza : 6/3/2005 10:12:17 AM

The OEX did pause at Keltner support, and has bounced, but only tepidly. The OEX needs to break below a Keltner support level now at 568.20 on a 15-minute closing to set up a potential retest of 567.

Jeff Bailey : 6/3/2005 10:09:15 AM

Refinace that mortgage alert ... 10-year yield ($TNX.X) 3.830% .... if the numbers work out. Lock in these rates. If you mortgage broker for a living, do some of your old cutomers a favor and give them a call if you haven't been prospecting them like crazy the past month!

Jonathan Levinson : 6/3/2005 10:07:39 AM

Session high for Nymex July crude, +.675 at 54.30.

Jeff Bailey : 6/3/2005 10:07:29 AM

Pacholder High Yield (PHF) $9.30 +1.08% .... bears had better keep their stops tight.

Linda Piazza : 6/3/2005 10:04:17 AM

The OEX has Keltner support near 568.30, and in today's climate, that could certainly be good for a bounce. The OEX is reluctant to maintain downside breakouts.

Jonathan Levinson : 6/3/2005 10:03:34 AM

QQQQ broke the 72 SMA at 38.56with authority on that move, but is now dojying back up. The drop stopped at 38.487, and S1 at 38.45 confluence continues to appear as significant support.

Jeff Bailey : 6/3/2005 10:02:37 AM

10:00 Market Watch found at this Link

Linda Piazza : 6/3/2005 10:02:22 AM

The OEX again falls through the bearish rising wedge's supporting trendline. Be careful around 567.

Jonathan Levinson : 6/3/2005 10:03:58 AM

Headlines:

U.S. MAY ISM NONMANUFACTURING 58.5% VS. 61.7% APRIL

U.S. MAY ISM SERVICES NEW ORDERS UP TO 59.7 VS. 58.8%

U.S. MAY ISM SERVICES PRICES PAID 57.9% VS. 62.9% APRIL

Linda Piazza : 6/3/2005 9:56:17 AM

OEX still within its rising bearish wedge.

Jonathan Levinson : 6/3/2005 9:55:26 AM

The Fed has just announced a 2.5B overnight repo, for a net 1.75B drain against the 4.25B expiring.

Linda Piazza : 6/3/2005 9:55:06 AM

Crazy action on the SOX, jumping all around.

Jeff Bailey : 6/3/2005 9:53:34 AM

VIX.X 11.60 -2.02% ... DAILY Pivot Levels ... 11.40, 11.63, Piv= 12.02, 12.25, 12.64.

Linda Piazza : 6/3/2005 9:53:28 AM

The OEX is still inside its rising bearish wedge.

Jonathan Levinson : 6/3/2005 9:51:22 AM

The Fed has 4.25B in overnight repos expiring today- awaiting the 10AM announcement to see whether they'll be draining again or not. I assume/guess that the recent strength in the various markets despite Fed draining has been result of a flight from the Euro into US denominated assets.

Jonathan Levinson : 6/3/2005 9:46:21 AM

Don't forget ISM Services at 10AM, est. 60.

Jonathan Levinson : 6/3/2005 9:45:56 AM

Volume breadth is again mixed, a theme that we've been seeing on choppy days like yesterday. This time the Nasdaq is the weakest link, 1.64 declining shares for each advancing compared with 1.12 advancing shares for each declining on the NYSE. The TRINQ is up at 1.16, however, TRIN 1.2.

Jeff Bailey : 6/3/2005 9:43:58 AM

QQQQ $38.55 -0.28% ... Daily Pivot holds buyers early.

Linda Piazza : 6/3/2005 9:43:29 AM

Jumping around not finished yet apparently, at least on the OEX. That bearish wedge was violated to the downside, but the OEX promptly bounced right back up. Reminiscent of the dollar's action this morning. The OEX still tests the wedge's support.

Jeff Bailey : 6/3/2005 9:41:15 AM

All-time high alert ... Healthcare Index (RXH.X) 474.17 +0.34% ...

Jonathan Levinson : 6/3/2005 9:41:03 AM

QQQQ dropped straight to the 72 SMA and is holding there, the short cycle oscillators rolling over. Any bounce should fail at a lower high beneath the 30 min channel top at 38.72. Below 38.45, intraday cycles will begin confirming to the downside. Link

Jeff Bailey : 6/3/2005 9:39:39 AM

Dang! ... Apple Computer (AAPL) $38.21 -4.57% ... wanted to get back on some puts, but not on this gap lower.

Jeff Bailey : 6/3/2005 9:38:17 AM

Bullish swing trade stop alert ... for PETsMart (PETM) $31.80 -0.31% ...

Jeff Bailey : 6/3/2005 9:35:31 AM

All-time high alert HMO Index (HMO.X) 1,447.37 +0.26%

Jeff Bailey : 6/3/2005 9:34:55 AM

Treasuries are surging higher with yields plunging. 10-year ($TNX.X) down 5.7 bp at 3.833%. Now we have to keep an eye on PHF, it should bid, and right now, not overly so. $9.22 +0.21%. I would have thought above $9.30.

Jeff Bailey : 6/3/2005 9:33:08 AM

Swing trade short alert the QQQQ $38.59 here, stop $38.71, target $38.20

Linda Piazza : 6/3/2005 9:31:27 AM

OEX testing/violating the rising trendine of the bearish rising wedge.

Jim Brown : 6/3/2005 9:28:26 AM

It confuses the heck out of me that investors would be excited about an obviously slowing economy. The ISM was only barely in positive territory along with sharp drops in most of the regional surveys. Jobless claims are rising sharply and May jobs were less than 1/3 of April. March was revised down -24,000.

I understand that investors typically begin buying one rate hike before the end of a cycle but I believe we are clearly headed for a recession. Just because the Fed is getting closer to a one-and-done or maybe a two-and-through is not a blanket reason to buy stocks. It could just be possible that the Fed will quit because the economy is going into the tank rather than inflation has been whipped. Greenspan would like to go out a winner instead of pushing us into one more recession and that could temper future Fed plans.

Still, investors are conditioned to buy the end of hikes and that is quickly approaching. Eventually the real economic picture will win out over expectations and the market will adjust to that reality. Volatility will likely increase until after the June-29th Fed meeting as the various factions adjust their investment views.

Linda Piazza : 6/3/2005 9:25:44 AM

I'm afraid that I may be called away from the market near the open. Futures have worsened in the last few minutes, so the roll down from OEX 570 may be worth a try as long as internals are supportive of such a trial and as long as you're the "have to" kind of trader. More conservative traders might do best to wait it out, and I'm keeping the dollar's reaction--zooming one direction and then another--in mind as I make that recommendation. Remember we have further numbers coming. Services ISM numbers in Europe have been discouraging, but if we get a bad number here, will that be a good thing or a bad thing?

Jonathan Levinson : 6/3/2005 9:21:52 AM

Session low for June euros here, -.58% at 1.2218. Gold is up 1.30 at 426.10, silver +.008 at 7.559, and TNX is down 5.7 bps at 3.853%.

Linda Piazza : 6/3/2005 9:14:26 AM

I was trying to wait to see a direction in the futures so I could gauge whether we were going to get a bad-is-good reaction to this morning's report or not. I'm waiting in vain, although there's some slight weakness as I type, so here goes. Yesterday morning, I suggested the OEX might chop around. Clues included the typical behavior after prices begin zooming from one side to another of a broadening formation, and that's what had happened on Tuesday and Wednesday. Prices had zoomed from one side to another of a broadening formation on the OEX's daily chart. Often after that begins, prices settle down and chop in a narrower range. Yesterday that happened, with the OEX printing a doji just under 570, the 61.8% retracement of the March-April slide and the top of the recent consolidation pattern. It was a choppy day. Fundamentals had also suggested that might be what we'd get ahead of this morning's numbers.

The choppy action still keeps the 15-minute Keltner chart from giving much information about direction, and we shouldn't trust it if it did as it was produced before this morning's economic numbers were released. The daily chart suggests that there's upper Keltner resistance at 572 and then again at 576.76. As long as daily closes continue to be above a line currently at 566.49--the location of next daily Keltner support--the OEX might still continue climbing with the broadening formation toward daily Keltner resistance. So far the last couple of weeks, selling resistance near OEX 570 has been a good tactic as long as automatic profit was taken on all or part of the position near 566 and stops reset to breakeven on the rest, but will it continue to be? We're gonna find out. The OEX's 60-minute pattern shows a bearish rising wedge shape, and that's a shape that's been morphing for a couple of days from one formation into another. Bearish rising wedges haven't been reliably bearish for a couple of years, either, as they seem to break to the upside just as often as the downside. The rising supporting trendline is now at about 569, and a sustained (key word, there) break of that trendline might at least suggest a retest of 567, although nothing is really trustworthy at this point. The ascending trendline is currently just over 570, and an upside break of that could sent the OEX up to test Wednesday high, although that's not particularly reliable, either.

Crude is higher, but not quite back to the $54 level as this level was prepared, which some global market watchers are mentioning as the new benchmark. How far we've come from the time when $50 would panic investors, right? The dollar can't decide where it's going. It plunged (against the yen) after the 8:30 numbers, immediately bounce right back up, fell again and now is zig-zagging its way back up again. Sheesh. Wouldn't touch a currency trade right now, and I'm wondering whether we should be thinking about any equity ones, either, at least before the 10:00 numbers. Be careful.

Jonathan Levinson : 6/3/2005 9:00:19 AM

Ten year treasuries giving back part of their gains, TNX currently down 4.8 bps (a 1.23% move) at 3.842%. Daily chart at this Link

Jonathan Levinson : 6/3/2005 8:54:32 AM

QQQQ's 30 min cycle has rolled over from overbought territory while the 60 min cycle is on a buy signal just approaching the top of its range. 30 min channel support is at 38.44, followed by the 60 min bottom at 38.40. 72 SMA support is at 38.53, and despite the oscillator signal, the 30 min channel still points up. Bears will want to see a break of the rising trend confirmed by a move below 38.45 confluence support before trusting the downside. Because of the relentless dip-buying we saw yesterday, picking short cycle and wavelet tops is a recipe for frustration- yesterday each and every one of those signals turned out to be false as the price ground its way higher throughout the day.

Jonathan Levinson : 6/3/2005 8:33:05 AM

And now session highs for QQQQ and NQ, breaking the overnight highs.

Jonathan Levinson : 6/3/2005 8:32:03 AM

Euqities dove on the release and then recovered, currently slightly deeper red with QQQQ back to flat at 38.66. Ten year note yields dove, -6.6 bps here at 3.824%.

Jonathan Levinson : 6/3/2005 8:31:13 AM

Headlines:

U.S. MAY NONFARM PAYROLLS UP 78,000 VS 186,000 EXPECTED

U.S. MAY JOBLESS RATE FALLS TO 5.1%

U.S. MAY AVERAGE HOURLY WAGES RISE 0.2%

U.S. MAY AVERAGE WORKWEEK REMAINS AT 33.8

U.S. MAY FACTORY JOBS FALL 7,000

U.S. MARCH, APRIL NONFARM PAYROLLS REVISED DOWN 24,000

U.S. MAY PAYROLLS WEAKEST SINCE AUG. 2003

U.S. PAYROLL GAINS SEEN IN HEALTH CARE, CONSTRUCTION

U.S. MAY TOTAL HOURS WORKED RISES 0.1%

Jonathan Levinson : 6/3/2005 8:25:16 AM

Equity futures are holding their light losses with QQQQ down to a 3 cent gain at 38.69. Ten year yields are higher by 1.3 bps at 3.903% approaching the employment report, but so far there have been no big moves such as we sometimes see ahead of major data.

Jonathan Levinson : 6/3/2005 7:18:21 AM

Equities are down, ES trading 1203.5, NQ 1571, YM 10549 and QQQQ +.06 at 38.72. Gold is up 70 cents to 425.5, silver + .029 at 7.58, crude oil +.475 to 54.10 and ten year notes down 3/64 at 113 17/32.

We await the employment report at 8:30, with the unemployment rate, est. 5.2%, hour earnings, est. 2%, average workweek, est. 33.8 and nonfarm payrolls, est. +175K. At 10AM, it's ISM services, est. 60.

Linda Piazza : 6/3/2005 7:12:22 AM

Good morning. Asian and particularly European markets have had much news to digest overnight. This report was already so long with broader market news that I'm limiting it to that news rather than including information about individual Asian and European stock news and reactions. The Nikkei spent much of the day underwater, but zoomed up in the last few minutes of trading to close 20 points higher. Most other Asian bourses climbed, but China's fell. China has confirmed its attendance at the upcoming G7 meeting. European markets are digesting retail sales and services PMI numbers, as well as statements about the future of the European Union from various officials. Our futures are slightly lower, treading water ahead of this morning's economic announcements. As of 6:58 EST, gold was up $0.70 and crude, up $0.52 to $54.15, after some gyrations overnight. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei's trading pattern was wild last night. The Nikkei performed another quick rise and quick drop in early trading Friday, just as it had Thursday, but last night's pattern was an upside-down-V shape rather than Thursday's upside-down-U shape. By early afternoon, the Nikkei had fallen to a level more than 40 points in the negative, about 60 points off the HOD. It stayed there most of the afternoon, but then zoomed up just before the close, closing higher by 20 points or 0.18%, at 11,300.05. Some exporters fell in early trading, and Sony ended lower.

Almost all other Asian markets climbed, with China's the exception. The Taiwan Weighted gained 1.13%, and South Korea's Kospi climbed 0.54%. Singapore's Straits Times rose a more tepid 0.05%, and Hong Kong's Hang Seng's gain was tepid, too, at 0.03%. China's Shanghai Composite fell 0.24%. Last night, China's commerce minister said that the government didn't want to hold large incremental forex reserves and that doing so was detrimental, leading some to speculate that China was nearing a move on the yuan. Such speculation has arisen before, though, without a move following. China has confirmed that it will attend the upcoming G7 meeting, and the U.K.'s chancellor has said he will discuss the global economic with China's representatives at that meeting. Some speculate that the European political upheavals have taken the focus off China, allowing them to revalue the yuan and not appear to be caving in to political pressure.

European markets are mixed, trading somewhat hesitantly ahead of the U.S. economic numbers and as they adjust to May services PMI and eurozone April retail sales numbers being released throughout Europe. Chip-related stocks did rise in early trading, however. Spain's services PMI rose to 53.2 in May, but Ireland's fell further, to 47.3. France's rose to 59.0, up from April's 57.7. Important in France was the increase in the employment outlook component to 54.3 and a tame inflation outlook. Germany's number increased to a seasonally adjusted 52.6. The employment outlook wasn't as good in Germany as in France, with that component dropping to 48.2 in Germany. One source credits the expectations-related components as causing Germany's increase and said the numbers worry more than encourage. The eurozone's May services PMI climbed to 53.5 from April's 52.8, to its highest number in eight months, but the breakdown shows that expectations were again responsible for the climb. Outstanding business, new business and employment components all fell. Outstanding business dropped into the sub-50 level while the other two remained above it. In the U.K., May's services PMI fell to 55.1 from May's 56.5. Components showed a troubling dip in employment, and the overall results were deemed a weaker-than-expected result. Some speculate that the tightening cycle may be completed in the U.K.

The eurozone retail sales data showed a much-worse-than-expected 1.2% drop, which will likely increase rancor toward the European Union project. One Italian official today reportedly blamed the ECB's Trichet for the recent drop in the euro and urged Italy to consider leaving the EMU. The article mentioning this unfortunately failed to identify the official other than as an Italian ministry official. This official joins German ones who have worried about the future of the EMU. Today, the Luxembourg prime minister commented that the looming need to agree to a budget for the eurozone could heighten the crisis. The ECB's Issing and BBK's Weber have also spoken, attempting to calm the waters by saying that growth and inflation measures have converged for the member states and that the financial market integration would proceed.

As of 7:09 EST, the FTSE 100 was down 6.60 points or 0.13%, at 4,998.40, having been just above 5,000 as this report was begun. The CAC 40 was higher by 1.40 points or 0.03%, at 4,185.12. The DAX was higher by 6.00 points or 0.13%, at 4,538.17.

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