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OI Technical Staff : 6/24/2005 9:59:59 PM

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Marc Eckelberry : 6/24/2005 8:48:53 PM

Thanks Jeff! And I enjoy our friendly banter on China. I think it's all bluff anyway, they will back off and equities will rally big time. I still have a target of 62 (100% May projection, see link last post futures) on QM/CL though, and that could give a scare. And the VXO has room to grow here.

Jeff Bailey : 6/24/2005 6:26:37 PM

Closing U.S. Market Watch found at this Link ... floor trade high for Oct. Crude (cl05q) was $59.95.

Jeff Bailey : 6/24/2005 4:18:05 PM

I don't know Linda. It's the title section. The montage is the one that is messed up. Happens for stocks sometimes too.

Jeff Bailey : 6/24/2005 6:16:36 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 6/24/2005 4:02:58 PM

Jeff, I wonder what's up with that option chain? Here's one from QCharts and everything is labeled appropriately for the OEX: Link

Linda Piazza : 6/24/2005 3:59:16 PM

Those in OEX bearish positions have a difficult decision this afternoon, although I think if I had July options, I'd know my decision. The OEX looks as if it could end the day below the broadening formation's lower trendline, but perhaps at or above the 200-sma and -ema. So, there could be a breakdown out of that formation but not a confirmation of the breakdown. I think I'd lighten up positions if I weren't willing to take my profit and start fresh Monday morning.

I'm not personally in OEX puts right now. I have a number of credit spreads on various indices, including bear call credit spreads on the OEX, and am invested all I want to be right now, but that's what I'd be doing if I were in puts right now.

Linda Piazza : 6/24/2005 3:52:06 PM

The Wilshire 5000 bounced from the 30-sma with some modest historical support also near the day's low. The 30-minute Keltner chart shows that the Wilshire is currently testing Keltner resistance at 11,875.51 on 30-minute closes, and then stronger near 11,902.

Jeff Bailey : 6/24/2005 3:49:43 PM

OEX Option Chain at this Link ... These are OEX options. QCharts titles them as BBH...

Linda Piazza : 6/24/2005 3:43:52 PM

The OEX now attempts a bounce from its 200-sma. As I type, it looks as if it's moved back to the descending trendline that forms the bottom of its broadening formation. You know what that means, don't you? If the OEX ends the day at or above the current 561.93 level, it has not broken down out of that broadening formation. As I noted in my first OEX-related post this morning, such a breakdown would require confirmation by a close below its 200-sma and -ema's, I think. This is one of the problems with a broadening formation. When is a breakout or breakdown real? The other problem is the unpredictable trading patterns while prices are inside it.

Linda Piazza : 6/24/2005 3:35:33 PM

The DJUSHB isn't bouncing, at least not yet.

Linda Piazza : 6/24/2005 3:34:33 PM

BIX rising to test its 200-sma again, with that average at 364.13 and the BIX currently at 363.71. I have to say, though, that over the last couple of months the BIX hasn't so much found support or resistance at the 200-sma as it has used it as a tightrope to balance along. It's now about in the middle of the two-month consolidation pattern.

Jim Brown : 6/24/2005 3:32:23 PM

QC Ticks just pushed over +1000.

Jeff Bailey : 6/24/2005 3:33:03 PM

AAPL Oct. $40 Put is currently bid/offer $4.50. (see 03:28:37) MM trade profile. Combined, traders have the RIGHT to sell $40, and the OBLIGATION (covered put) to buy $35 - $1.05 = $38.95 between now and August 19.

Jeff Bailey : 6/24/2005 3:28:37 PM

Swing trade sell covered put alert ... sell one (1) of the Apple Computer AAPL Aug. $35 Puts (AAQ-TG) at the bid of $1.05. AAPL $37.85 -2.67% here.

Linda Piazza : 6/24/2005 3:28:01 PM

Is the BIX building a higher low? It's trying, but it hasn't been successful yet. Needs to climb successfully over the 200-sma and stay there to confirm that higher low. Look out for the possibility that it's forming a bear flag, however, a tight pattern of higher highs and higher lows after a steep fall.

Linda Piazza : 6/24/2005 3:25:24 PM

Unlike the Dow, the RUT still isn't falling toward its 60-minute target. Resistance still looks firm near 631.

Linda Piazza : 6/24/2005 3:23:56 PM

The Dow has reached the 10,300 level. The 60-minute Keltner channel now has a downside targetof 10,291.50, but the Dow approached close enough to that target and has fallen so far now over the last few days that bounce potential remains, too.

Jeff Bailey : 6/24/2005 3:23:53 PM

At the money naked call sellers ... if you were like me yesterday and today and were selling some AT THE MONEY NAKED CALLS, I would strongly consider taking some profits today before the close. My thoughts here are that some shorts will be thankful for comments made yesterday from our elected politicians.

Jim Brown : 6/24/2005 3:21:28 PM

Jane, would you like to make a friendly wager on that +/- 1000 tick prediction?

Jim Brown : 6/24/2005 3:17:23 PM

EBAY - Another reason EBAY has been beaten up so badly is the entry of GOOG into the Russell indexes. This requires fund managers to sell EBAY, YHOO, etc to adjust their weighting by adding GOOG. Again, I believe this is a buying opportunity for Ebay.

Jeff Bailey : 6/24/2005 3:14:49 PM

03:00 Internals found at this Link

Jim Brown : 6/24/2005 3:13:01 PM

EBAY - Ebay has taken a serious hit over the last three days on fears that they will warn for Q2. I believe these fears are vastly overblown. The EBAY annual convention happened this week and there was lots of positive news coming from Ebay and its major players.

Next week (June-29th) CNBC's David Faber is doing a special on Ebay like he did on WalMart. I believe this will point up all the positive points and new opportunities Ebay is facing.

This weeks sell off represents a very strong buying opportunity in my mind. I am speculating with the July $35 options XBA-GG at 85 cents. This is the front month and it only gives us four weeks to play. However, it will benefit from any short covering prompted from the Ebay special and the positive feedback from the convention. Buyer beware because of the short time frame. Chose the month you like best.

Linda Piazza : 6/24/2005 3:12:32 PM

Nasdaq dropping beneath the 6/09 low of 2052.96, but still within the range that it might be considered testing that support. If it drops much further, however, we can consider a double-toppish formation confirmed. I would rather not have such confirmation come last thing on a Friday afternoon, however, as that presents the possibility of a mere overrunning of support. Unless the drop steeps quickly, of course.

Jeff Bailey : 6/24/2005 3:11:40 PM

Jane's 02:05:31 FM post ... for who? Better yet... WHY?

Linda Piazza : 6/24/2005 3:04:49 PM

The OEX's 60-minute Keltner target is 556.69. The OEX hasn't yet created a 30-minute breakdown signal, however. It could still bounce from that 30-minute support.

Jeff Bailey : 6/24/2005 3:02:46 PM

03:00 Market Watch at this Link

Linda Piazza : 6/24/2005 3:01:47 PM

While the DOW has dropped quickly toward its 60-minute downside target, the RUT once again seems reluctant to follow other indices lower. It's of coruse dropped today and yesterday, but it's just not reaching the same Keltner levels at the same time, as many other indices are doing.

Linda Piazza : 6/24/2005 3:00:21 PM

Keltner 60-minute target for the Dow is now 10,292.12, although that Keltner line turns lower at a slope that suggests it won't be much support at all.

Jeff Bailey : 6/24/2005 2:58:11 PM

I will try my best to get an SPY, OEX, QQQQ/NDX posted before the close.

Jeff Bailey : 6/24/2005 2:57:43 PM

SPX Option Chain just captured at this Link ... by the time I sorted and updated heading, the 1200 calls saw activity.

Linda Piazza : 6/24/2005 2:55:24 PM

The TRAN is getting pushed closer and closer to that historical support area, approaching 3400 now.

Jeff Bailey : 6/24/2005 2:45:55 PM

Oil/SPX comparisons found at this Link ... is it oil, or the market's dislike of uncertainty regarding tariffs? If you believe tariffs against China are good, I would exercise some caution here.

Linda Piazza : 6/24/2005 2:39:17 PM

The RUT doesn't look as if it's going to get too far if it does bounce without a strong buy program to propel it through strong resistance. Here's a look at the 60-minute Keltner chart. Note all the lines converging near 628.70-631? Notice that there's nothing below the RUT until 617.20? Link That suggests that unless the RUT can be bounced back above that 631 level on 60-minute closes, it's vulnerable to that 617-620 historical support level. This is how the Dow's 60-minute chart looked earlier today, when it was trading near 10,375 and I mentioned that the Keltner chart was setting a potential downside target of 10,300-10,301. It hasn't quite reached that, at least not yet, but did reach a LOD of 10,315.41. Sometimes Kelner charts amaze me. There will be that big target and I know good and well that various forms of support or resistance are between the current position and the downside or upside target, but the target is reached anyway. So, we don't know for sure that the RUT will meet that downside target or the DOW the 10,300 level (10,294.70 currently), but the Keltners are showing vulnerabilities to those levels unless there's a strong bounce up through Keltner resistance. The Dow's Keltner resistance doesn't look as strong as the RUT's, so it may be able to bounce now that it approached that target.

One more interesting point. I've sometimes noticed a tendency of prices to reach the original target when the breakout signal was given, rather than the adjusted one as prices move toward the target. The Dow's original target was 10,312.19 when there was the first 60-minute close giving the breakdown signal.

Linda Piazza : 6/24/2005 2:21:54 PM

BIX turning down a little from its 200-sma, but temporarily at least finding support at Keltner lines currently at 363.31-363.55. That support looks a little tenuous, but is holding so far on 15-minute closes. The BIX, like other indices, might need to form a higher low or equal low with bullish divergence before bulls find courage to step in.

Jeff Bailey : 6/24/2005 2:31:13 PM

Bullish swing trade stop call alert for PETsMART $28.44 ... PETM Jan. $30 Calls (QPT-AF) bid $2.00. I currently hold these calls in my personal account and will continue to do so until expiration. However, I do drop coverege in MM profiles at this point.

Jeff Bailey : 6/24/2005 2:17:32 PM

02:00 Intervals at this Link

Linda Piazza : 6/24/2005 2:10:45 PM

OEX trying to bounce from 30-minute Keltner support, now at 561.08 with the OEX at 561.57. Next 30-minute resistance at 563.18 with resistance above that at about 564.50 looking strong.

Jeff Bailey : 6/24/2005 2:03:42 PM

QQQQ $37.06 -0.88% ... MONTHLY Pivot here. I can't say an institutional computer would be a big buyer here with current risk of tariffs in the wings.

Jeff Bailey : 6/24/2005 2:02:18 PM

02:00 Market Watch found at this Link

Linda Piazza : 6/24/2005 1:59:49 PM

TRAN approaching historical support. BIX holding its bounce, just under the 200-sma. These indices gave us a warning of downside to come earlier this week. If the TRAN bounces, too, will they be warning us to protect those bearish profits? Keep a watch on these among the other key indices you watch.

The OEX now tests the bottom support of its broadening formation. It has not broken through it, and now the 50-sma and 200-sma and -ema's are all waiting just beneath. Will the OEX break through as the Dow did?

Jeff Bailey : 6/24/2005 1:58:33 PM

S&P 100 (OEX.X) 561.77 -0.48% ... full of multi-nationals at session low.

Jeff Bailey : 6/24/2005 1:57:52 PM

In Wednesday's Market Wrap I discussed the thought that stocks needed some cash. Some money coming out of the dollar today (going overseas), but plowing further into Treasuries.

Linda Piazza : 6/24/2005 1:53:52 PM

RUT continuing to fall. It's testing 30-minute Keltner support. A 30-minute close beneath the Keltner line currently at 627.12 will have me dialing up to a 60-minute chart to get a new target. currently, that one is looking as if that 617-620 level might be a possibility. I mentioned earlier that the RUT looked far away from strong support, near the 617-620 level and that's what the 60-minute Keltner chart is showing. That 30-minute breakout signal has not been set yet, however.

Jeff Bailey : 6/24/2005 1:54:15 PM

Apple Computer (AAPL) $37.77 -2.87% ...

Jeff Bailey : 6/24/2005 1:52:02 PM

Dow Industrials (INDU) 10,329.59 -0.88% ... Not quite 100 at this point. Marc has to be wondering if Mr. Kudlow's thoughts regarding tariffs aren't in play.

Linda Piazza : 6/24/2005 1:51:06 PM

The Dow's 60-minute Keltner target is now 10,296.44.

Linda Piazza : 6/24/2005 1:49:49 PM

Dialing up to the OEX's 30-minute chart to get a Keltner target suggests a target of 561.16, just below the 561.23 number that's the 38.2% retracement of the entire bear-market decline. Earlier today, I had suggested that aggressive bearish traders might try to milk a little more premium out of a portion of their bearish trades after taking profit on a portion, while conservative ones might go ahead and exit. As I said then, however, don't let a bearish gain turn into a loss. Keep following the OEX down with your stops. It's approaching that 200-sma and -ema.

Jeff Bailey : 6/24/2005 1:42:22 PM

I agree with some investors comments regarding a "no tariff" stance. Has anyone considered China's role with North Korea? Is that help at risk if some politicians get their way? This is something even I (anti-tariff) did not consider and may also be weighing on the equity markets.

Jeff Bailey : 6/24/2005 1:33:16 PM

01:00 Internals found at this Link

Linda Piazza : 6/24/2005 1:31:43 PM

The way QCharts draws the Dow's ascending regression channel off the April low, the Dow has broken below that rising channel, just as the TRAN did. The TRAN approaches potential historical support near 3400, down to about 3385, with the TRAN currently at 3417.02.

Linda Piazza : 6/24/2005 1:21:12 PM

The OEX closed yesterday below the 100-sma and now today has come down to test the 100/130-ema's, at 563.47 and 562.50, respectively.

Linda Piazza : 6/24/2005 1:17:47 PM

BIX still steadying at/just below its 200-sma, its bounce off the LOD looking corrective. No big move either direction, though. Just a prolongation of the test.

Jeff Bailey : 6/24/2005 1:11:21 PM

01:00 Market Watch found at this Link

Linda Piazza : 6/24/2005 1:09:12 PM

SOX trading absolutely sideways near 430, at 430.21 currently, with the 200-week sma below at 424.79.

Jeff Bailey : 6/24/2005 1:04:32 PM

Jonathan! ... I saw your 06/23/05 11:14:16 post yesterday. Last night I was listening to King Of Agriculture radio. A caller from Texas called in and said that his way around his state's like views was to... put a lien on his own property that equated to fair market value. That way, if the state of Texas wanted his property, they had to pay off the lien first to get it! An example of fighting fire with fire?

Linda Piazza : 6/24/2005 1:03:29 PM

The Dow's 60-minute Keltner chart now shows a downside target of 10,300.33, but I'd have profit-protecting plans in place for bearish plays, for the current level on down.

Linda Piazza : 6/24/2005 1:02:20 PM

If the indices can't even mount a decent corrective bounce, I may have to change my outlook for the day and afternoon. BIX still testing its 200-sma, though.

Jeff Bailey : 6/24/2005 12:57:42 PM

President Bush veto power? ... I do believe, but am not certain, that President Bush has veto power on trade tariff decisions. Something called "fast track" I think.

Linda Piazza : 6/24/2005 12:53:30 PM

The OEX did not of course confirm that inverse H&S that had been visible on the 5-minute chart, but instead dropped to a new low, producing bullish price/MACD divergence as it did so. I'm still looking at the possibility that we might see a small-range day or one that produces a candle showing indecision. As one of the Futures writers just noted, though, if institutional buyers step in, we won't see a corrective climb of the type I'm expecting, too, but a stronger one.

First Keltner resistance at 563.67 and then at 564.22-565.50. Above that, resistance thins.

Jeff Bailey : 6/24/2005 12:45:52 PM

Southwest Air (LUV) $13.72 -0.57% Link ... broke upward trend yesterday. In Aug/Oct of last year, Oct. Heating Oil (ho05u) $1.69 -0.58% was trading approximately $1.05.

Linda Piazza : 6/24/2005 12:42:10 PM

BIX bouncing. Since it was one of the first indices to show some bearish signs, it should probably be watched now that it's trying to bounce. It's so far retraced just over 19.1% of the steep decline, with a 38.2% retracement at about 365.59. The BIX currently tests its 200-sma, though, with that average at 364.13 and the BIX at 364.17.

Jeff Bailey : 6/24/2005 12:38:29 PM

Airline Index (XAL.X) 47.34 -2.79% ... important near-term support here. Currently below 21-day, 200-day and now 50-day SMA's. Link

Linda Piazza : 6/24/2005 12:30:55 PM

The DJUSHB's action last Friday was suspicious. I had been watching it that day for the possibility of a key reversal day, which didn't happen, but the index's quick drop, partially reversed, looked as if a lot of sellers were lurking after it topped 1000. Currently, it's at 968.10, trying to steady. Depending on how you draw the line, it may have just violated today a steep ascending trendline off the 5/13 low. Bulls want to see it quickly bounce back above that trendline, perhaps at about 973.85. The DJUSHB is at 967.51 as I type.

Jeff Bailey : 6/24/2005 12:46:08 PM

While politicians focus on import tariffs, investors and economists will (SHOULD) also weigh the risks to export ramifications and revenue derived should a trade war unfold. Monthly trade update Link

Linda Piazza : 6/24/2005 12:26:19 PM

OEX at 15-minute Keltner resistance at 563.74 on 15-minute closes, with resistance above that at 564.62.

Linda Piazza : 6/24/2005 12:25:41 PM

The Russell 2000 still hasn't been able to effectively settle into a formation that will allow it to bounce. I believe that's because it has little nearby Keltner or MA support, although it is clinging to modest historical support.

Jeff Bailey : 6/24/2005 12:22:04 PM

Industry Trade Figures (U.S. Govt.) found at this Link

Jeff Bailey : 6/24/2005 12:19:05 PM

12:00 Internals found at this Link

Jeff Bailey : 6/24/2005 12:05:31 PM

12:00 Market Watch found at this Link

Tab Gilles : 6/24/2005 12:26:27 PM

Those who have been following my Summation Index charts as far a buy and sell signals know I've been long the Nasdaq since late April/ early May. On the weekly chart it has not signaled a sell as of yet, however on a daily chart is did reverse yesterday. What does this mean? I would say that one day does not set a trend, but the Nasdaq has had a nice run and taking some money off the table would be a wise thing to do. All depending on ones risk tolerance. Then letting some remain waiting for the weekly $NASI chart to signal sell and take the remaining money off and to bet against the index.

Weekly $NASI. Link

Daily $NASI. Link

$NYSI Link Link

I was looking Monday at a 3 year SPX chart, interestingly I found several Inverse H&S patterns. With oil at $60, may go slightly higher ($64) and a pullback on the indexes. Foolwed by a drop down to the low $50's, which could spark an equity rally scenario. Link Link

So much for CSCO breaking out over $20. Jim Cramer called for his viewers to BUY CSCO and MSFT on CNBC's MAD Money program. Link

Jeff Bailey : 6/24/2005 12:03:17 PM

American Companies in China ... may be helpful .... Link ... when I select the Beijing link ... and then the "A" Link ...

Linda Piazza : 6/24/2005 12:00:59 PM

Nasdaq dropping closer to the confirmation level for its double-top, but as I mentioned earlier, it's got to deal with the sometimes-important 30-sma first. Bulls need to try to support it here as it inches just below that MA, in advance of a test of its 6/09 low at 2052.96. The Nasdaq is at 2059.50 as I type.

Linda Piazza : 6/24/2005 11:56:39 AM

The OEX now drops further toward the about 561.70-ish downside support for its broadening formation. Just below that are the 50-sma, 200-sma and 200-ema, all layered down to 559.38, so I would expect a bounce attempt somewhere through there, as I mentioned earlier today.

Marc Eckelberry : 6/24/2005 11:55:08 AM

Jeff, China's growth is completely tied to the US. I think the bluff will work, because it's really ony a big poker game. In the end, the Chinese will float, not right now (to save face) but they will. This is the biggest poker game around right now, and we will win it. India is waiting.

Jeff Bailey : 6/24/2005 11:54:08 AM

As the OEX makes a new intra-day low, I'm trying to find some information on those companies that may have operations in China and substantial amounts of investment capital. Protectionism can work both ways.

Jeff Bailey : 6/24/2005 11:51:54 AM

Legal Considerations for Doing Business in China ... Link ... I would think portions of #9 could change considerably if the U.S. implements harsher tariffs on Chinese imports.

Linda Piazza : 6/24/2005 11:49:16 AM

The RUT hasn't been particularly successful in bouncing just yet, but it does look as if it's trying to form a bear flag, at least. Although there's some historical S/R for the RUT at the current level, on a Keltner and MA basis, there's just not too much to support the RUT right here and the 620 level looks like an eventual possibility, althoug I'm not certain whether that would happen today.

Small-range or indecision-type candles remain possible on the RUT and many other indices today.

Linda Piazza : 6/24/2005 11:33:09 AM

On a 30-minute chart, the Nasdaq's climb so far looks bear-flag-like. Next resistance at 2063.41 on 30-minute closes and then at 2069-2070.40. A 38.2% retracement of the steep drop is all the way up at 2078.

Linda Piazza : 6/24/2005 11:29:56 AM

If you dial down to a five-minute chart on the OEX, you see a potential inverse H&S at the bottom of the steep decline. It's a small one and not yet confirmed, which would happen with a five-minute close above 564.53. The upside target would be just under 566, if confirmed. Sometimes these resolve into bear flag formations.

Linda Piazza : 6/24/2005 11:14:17 AM

OEX challenging the first Keltner resistance on its 15-minute chart, at 564-564.35. Next resistance at 565.60, but then it thins, so that it's difficult to tell where the OEX might stop a bounce once it got past 566 on a 15-minute close. It could end at 567-568 or perhaps closer to 570 or could just zoom right up through the broadening formation again. That's what's difficult about these broadening formations. This could be the time when the OEX breaks to the downside (although I would suspect that might be delayed until next week, if it's going to happen) or we could just see this two-month pattern of zooming from one side to the other repeated.

Jeff Bailey : 6/24/2005 11:14:08 AM

11:00 Internals found at this Link

Jeff Bailey : 6/24/2005 11:01:59 AM

11:00 Market Watch found at this Link

Linda Piazza : 6/24/2005 10:56:37 AM

If in a short-term bearish OEX position from the breakdown yesterday and if you haven't already taken partial profits, I'd certainly be doing that now and resetting my stop. If conservative, I'd be exiting the play. If aggressive, I'd still exit part of the position and then hope the OEX might squeeze through to lower values, closer to the 200-sma and -ema's but would keep lowering my stop. I absolutely would not let a winning bearish play turn into a losing one.

Linda Piazza : 6/24/2005 10:50:25 AM

OEX trying to firm. First Keltner resistance at 564.33-564.51 and then again at 565.74. Above that, Keltner resistance thins.

Jeff Bailey : 6/24/2005 10:46:34 AM

S&P 100 (OEX.X) 563.60 -0.17% ...

Linda Piazza : 6/24/2005 10:44:05 AM

SPX bouncing to test 1200 from the underside. Keltner resistance at 1199.34 on 15-minute closes, then at 1200.63 and stronger at 1203-1203.70.

Jeff Bailey : 6/24/2005 10:43:07 AM

Bearish swing trade naked call alert ... sell five (5) of the S&P 100 OEX July 580 Calls (OEB-GP) for $0.55 at the bid. ($0.55 x $0.75)

Linda Piazza : 6/24/2005 10:38:01 AM

Dow trying to steady where Futures writers suggested it might. First mild Keltner resistance at 10,385.84, but that resistance has been mostly holding the Dow back on 15-minute closes since yesterday's dive began. Next resistance at 10,413.72, but stronger resistance at 10,441.58-10,458.55, and that currently looks strong enough to give the Dow serious trouble on a bounce.

Jeff Bailey : 6/24/2005 11:46:57 AM

Per Marc's 07:32:34 post from yesterday ... Well Marc, it looks like we disagree on some of the issues currently in play with China. I agree that China should adhere to international monetary standards, and they are moving in that direction (at a slow and cautious pace). A communist government is always going to be slow and cautious to change. I have had long talks with several people from the "Russian block" and the one overriding theme is .... "capitalism is hard and you feel like you're alone with nothing to fall back on." Yes, it is time for change, but I do agree with Mr. Greenspan Link and Mr. Snow's thoughts on this subject.

Linda Piazza : 6/24/2005 10:30:31 AM

Futures writers are mentioning potential support for the DOW. It's created breakdown signals on every intraday Keltner chart through the 60-minute one. That one suggests a downside target of 10,306.63, far below the potential targets that the Futures writers are finding. As I've been cautioning with other indices, have those profit-protecting plans in place here, as Futures writers are mentioning many levels of potential support near the current Dow 10370.56 level.

Linda Piazza : 6/24/2005 10:26:22 AM

New LOD on the OEX. Not long now until it hits the bottom of the broadening formation, with the 200-sma and -ema just below that, at 560.17 and 559.38, respectively. Keep those profit-protecting plans in place if in bearish positions. Unless we're just going to just cascade lower all day, cutting through multiple support layers, the OEX pounds more on potential support and may hit something firm enough to start a bounce attempt.

Linda Piazza : 6/24/2005 10:23:28 AM

RUT still dropping.

Linda Piazza : 6/24/2005 10:23:12 AM

Nasdaq 30-sma, sometimes relevant to trading behavior is at 2062.61, just below the Nasdaq's current 2064.06 level. A confirmation of the double-top formation would come on a break below the 6/09 low of 2052.96. I'd expect the 200-sma and -ema and historical S/R to provide some support near the 2015-2028 levels even if the Nasdaq were to confirm the double-top formation. This would all still be consistent with the potential inverse H&S on the Nasdaq, as uncomfortable as it might be for Nasdaq bulls to watch (I wouldn't be in it, still in long positions) a drawback to that depth. I don't think we know yet whether the Nasdaq is just going to chop around inside that appropriate right-shoulder level for a while longer. Nothing on the chart tells me that it's impossible for that to happen and some things suggest it's possible, so I'm reserving judgment about how deep a pullback will be.

Linda Piazza : 6/24/2005 10:17:07 AM

The RUT gapped lower this morning and still declines. Key MA and Fib levels are far below (except for 10-sma, breached yesterday), not providing any support.

Jeff Bailey : 6/24/2005 10:13:51 AM

Yesterday's Internals found at this Link

Linda Piazza : 6/24/2005 10:12:45 AM

TRAN still diving this morning, just off its LOD as I type. It's way extended to the downside on the 15-minute Keltner chart, a chart that typically has some relevance for the TRAN, though. If these indices don't at least mount some kind of bounce attempt, then things are worse than expected and we maybe all ought to pull out our hardhats. Daily Keltner support on the TRAN at 3410.37, but I don't find the TRAN adhering to these daily levels particularly well.

Linda Piazza : 6/24/2005 10:10:00 AM

DJUSHB trying to bounce from 977.38 mid-channel 30-minute Keltner support. The 15-minute chart suggests that the 985.70-987.70 zone might be tough resistance, though, if the DJUSHB gets that far. Kind of iffy as yet whether the bounce will get going.

Linda Piazza : 6/24/2005 10:08:04 AM

Looking at the Nasdaq on a 30-minute Keltner chart, which seems to have more relevance on this index, there's Keltner resistance currently at 2071.96 on 15-minute closes, with the Nasdaq having set a downside target of 2048.21 during the previous 15-minute period. That signal setting was tentative, and the Nasdaq needs a new LOD, I'd think, to confirm it. Be careful, though, bears, guarding your profits.

Linda Piazza : 6/24/2005 10:03:07 AM

OEX trying to bounce. First resistance at 564.76-565.40. Next resistance at 566.40.

Linda Piazza : 6/24/2005 9:57:21 AM

Big range days yesterday on the OEX. Now it's at what should be key support, but will bulls have the courage to send it right back higher again after yesterday's severe drop? Will we instead see some kind of tight-range consolidation day? Maybe a bounce and then a downturn that stops somewhere near the current level? Just something to consider.

Linda Piazza : 6/24/2005 9:54:05 AM

For those who didn't catch his post late yesterday, Jonathan will be out today. He'll be missed.

Linda Piazza : 6/24/2005 9:53:46 AM

The OEX is at mid-channel support on its daily Keltner chart, adding that support to other levels of potential support that might be found here. A daily close beneath a daily Keltner line currently at 562.88 would be significant.

Jeff Bailey : 6/24/2005 9:52:39 AM

VIX.X 12.27 +1.15% ... DAILY Pivot Levels ... 10.59, 11.31, Piv= 11.67, 12.39, 12.75

Linda Piazza : 6/24/2005 9:51:25 AM

Daily Keltner look at the SOX: Link

Linda Piazza : 6/24/2005 9:43:46 AM

Here's the OEX's broadening formation, with the 100-sma, showing the role it had played on daily closes until yesterday. Yesterday was a change in tenor. Does that predict a breakdown out of what is usually a bearish formation? We just don't know yet. Look how many other times the OEX zoomed from one side to the other of this broadening formation. Now is a time to protect bearish profits, but perhaps not to exit all positions. Be aware that the 200-sma and -ema are not far below, either, as explained in my first OEX update. Link

Marc Eckelberry : 6/24/2005 9:41:55 AM

NDX 1515, 50%

Linda Piazza : 6/24/2005 9:39:01 AM

If you're in a short-term bearish OEX position entered yesterday at the breakdown, now might be a good time to consider taking partial profits and lowering your stops to BE on the rest.

Linda Piazza : 6/24/2005 9:33:53 AM

BIX slipping just below its 200-sma, with potential Keltner support now at 363.20 and the BIX now at 363.71.

Linda Piazza : 6/24/2005 9:32:43 AM

OEX drops further into the 564-566 support zone. The bottom of its broadening formation actually extends lower, as I mentioned in the first OEX update. Be protective of short-term bearish profit, though, as a bounce could begin any time. Bears want to see such a bounce fail somewhere near 565 or else at next resistance, at 567-568.

Linda Piazza : 6/24/2005 8:51:06 AM

The OEX finally broke out of the neutral triangle it had established on the 15-minute chart, and when it broke, it really broke. It confirmed the breakout by a 15-minute close beneath the Keltner channel that had been containing most moves on most indices. The BIX's action had before yesterday had warned that all might not be as bullish as it seemed, with the BIX important to the OEX's performance, too. The DJUSHB's action had been somewhat suspicious last Friday, too, although it had held just below 1,000 most of this week. Even yesterday, the OEX's breakdown was preceded by strange market action: the TRAN and BIX diving, the RUT sitting almost completely still, and the SOX szooming right up to daily Keltner resistance. I began warning that short-term SOX bullish plays were usually living on borrowed time when the SOX hit that Keltner resistance, as that channel usually contained the SOX on daily closes, but the bifurcation among the indices kept the OEX's action choppy for a while longer. Then the TRAN lost its effort to bounce and the SOX's bull flag pullback slipped into a deeper decline and it was all over. In addition, the Wilshire 5000 lost 12,000 and other indices lost key levels.

By the time the day was over, the OEX had dropped all the way into the 564-566 S/R zone, familiar from the last two months. This time, there was a difference, though. This time, the OEX closed beneath the 100-sma that had been supporting it on those tests of this zone the last couple of months. Other days, the OEX had closed at or above that MA. Still, this could have been a last-minute overrunning of support and the OEX did not violate the support of its broadening formation. Market participants might expect at least a bounce attempt.

And here's an important point about that broadening formation, not yet violated to the downside: broadening formations are typically bearish formations, but we've seen so many typically bearish formations break to the upside over the last few years that we should no longer think we know which way something will break. I've been warning for weeks about the unpredictability of trading within a broadening formation, and we've certainly gotten that. The bottom trendline of that broadening formation is now at about 562, if I've drawn the line correctly. The OEX has been bouncing from that trendline since the middle of May, and that trendline is just above the 561.23 level that's a 38.2% retracement of the entire bear-market decline. Profit-protecting measures are probably important for that zone, too, if it's reached. The 200-sma and -ema's are both near 560, another level of potential support. A daily close below those averages would be needed to confirm a breakdown out of the broadening formation, I would think. Until then, be careful with your bearish profits. There has been some fast bearish action now, but we saw what looked like confirming bearish action many other times while the OEX zigged and zagged inside that broadening formation.

For now, the OEX ended yesterday on potential Keltner support. The OEX may be ready for a bounce attempt. If so, bears want to see a measured distribution type of move and they want to see continued 15-minute closes beneath a Keltner line currently near 567. If the shape of any such bounce and internals support it, those not already in bearish positions could look for rollover entries there as long as they're aware that the OEX is still within a notoriously difficult to trade broadening formation and we could see the OEX zag back the opposite direction that it zigged yesterday, and just as violently. As Keene noted last night in his Wrap, be protective of your profits.

Jane Fox : 6/24/2005 9:44:34 AM

Dateline Bloomberg U.S. orders for durable goods rose in May by the most in more than a year, solely reflecting a surge in aircraft bookings, a government report showed. Demand declined for business equipment, suggesting corporate investment isn't improving.

Bookings for expensive items made to last at least three years increased 5.5 percent, the biggest rise since March 2004, after a 1.4 percent gain in April, the Commerce Department said today in Washington. Excluding transportation equipment, orders unexpectedly dropped 0.2 percent in May, the third decline in the last four months

Linda Piazza : 6/24/2005 7:03:05 AM

Good morning. The Nikkei gapped lower, but managed to erased some of its losses by the close. Other Asian markets opened lower, too, but some managed to climb into positive territory, leaving Asian markets mixed. European markets turn lower. Our futures traded sideways most of the evening, with the usual bump higher near the European open, this one slight and soon erased. Futures are unchanged or slightly higher as this report is prepared. As of 6:55 EST, gold was up $1.60, and crude, up $0.38 to $59.80. More detail about Asian and European markets follows in succeeding paragraphs.

Hurt by performance in the U.S. indices and rising crude prices yesterday, the Nikkei gapped almost 100 points lower in overnight trading. Exporters dropped, and transport-related stocks fell, too, echoing the drop in the U.S. transports. Suddenly, investors have done a double-take and noticed the impact that crude might have on those transport-related issues. Oil-related issues rose in early trading. The Nikkei climbed most of the rest of the day, however, reclaiming the 11,500 level and erasing some of its losses. It closed lower by 39.72 points or 0.34%, at 11,537.03.

Other Asian markets were mixed, with most opening down but some erasing losses by the close. The Taiwan Weighted dropped 0.52%, and South Korea's Kospi fell 0.83%. Singapore's Straits Times rose 0.01%, and Hong Kong's Hang Seng climbed 0.28%. China's Shanghai Composite gained 0.75%. This weekend, the Chinese premier will address other countries' attendees at a meeting, with a private meeting with Japan's minister of finance also arranged for this weekend.

Most European markets decline. Airlines and auto manufacturers were lower in early trading. British Airway raised fuel charges again. Steel manufacturers fell as a result of Alcoa's announcement that declining demand from auto manufacturers would force it to cut 6,500 jobs. Micron Technology's Q3 loss hit chipmakers. Some insurers dropped, with Prudential noting its intention to buy Phoenix Life & Pensions Ltd.'s annuities book, and Fortis detailing its growth plan. The drug sector saw an increase in speculation about deal making or unmaking, with Germany drug company Stada Arzeimittel denying a report that it was seeking a buyer, biotech Xenova fielding an offer from Celtic Pharma, and Gilead Sciences seeking to end a license agreement with Roche for the drug Tamiflu after what Gilead qualifies as a material breach of their agreement. Roche was dropping, but both Stada and Xenova were rising in early trading. Other individual stocks reacted to their updates on their outlooks, with U.K. gas utility Centricia PLC rising as a result and retailer Tesco easing.

Several German states reported June CPI figures, with all three noting an in-line-with-expectations 0.2% month over month rise. Transport costs, food and beverages were responsible for the increased prices. Three more states have yet to report.

As of 6:50 EST, the FTSE 100 has lost 26.20 points or 0.51%, at 5,088.20. The CAC 40 has dropped 38.61 points or 0.91%, at 4,201.57. The DAX has fallen 48.34 points or 1.04%, to 4,579.14.

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