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Jeff Bailey : 7/7/2005 2:35:56 AM

August Crude Oil (cl05q) ... my updated bar chart with "new" bullishly fit 38.2% (PINK) as new highs dictate new upper levels. Bar chart at this Link ... On Friday, I thought oil rallied on "terrorist trade" into U.S. Independence Day weekend. Tuesday morning's trade "suspicious" at $59.15 and it would appear that "HURRICANE FEAR" is front and center. Note how the RED retracement levels (Bearish fit 38.2%) have been in play as support last few sessions. That in itself may be sign of SHORT covering. Overhead supply is non-existant. Bulls and bears know it. You and I can see it. Here's the $WTIC chart at this Link

Jeff Bailey : 7/7/2005 2:10:49 AM

"Fear" works both ways (up and down) and as you and I have discussed in the past, commodity traders are a slightly different breed than equity traders. Right now, the "fear" trade works in an energy commodity trader's favor.

Jeff Bailey : 7/7/2005 2:08:19 AM

Marc ... about now, any trader short is most likely thinking $100.00. Any trader long is holding on for dear life. The equity side of energy was obviously "taking profits and asking questions later" today.

Jeff Bailey : 7/7/2005 2:01:48 AM

Current OPEN MM Profiles at this Link ... In BLUE I've tried to reflect accurate bids and current Profit/Loss of positions.

Wednesday's Activity ... Day traded long shares of Wellpoint (WLP) at the offer of $70.55 and exited above profiled target of $71.20 at $71.25 ($0.70, or +0.99%).

We were stopped on the swing trade long in shares of Wells Fargo (WFC) at the bid of $60.90 ($-0.58, or -0.94%).

Marc Eckelberry : 7/7/2005 1:41:20 AM

Jeff, fib projections (from june H/L) for CL. How about $66 oil?: Link

Jeff Bailey : 7/7/2005 1:23:30 AM

Pivot Matrix for Thursday at this Link ... Observations at this point (add to that today's WFC trade) is that banks are still feeling some squeeze from the flattening yield curve. The rise in oil/energy commodities has had more of a "flight to quality" or market participants parking some cash in Treasuries, as if oil provides the "tax," that may eventually put the Fed on hold with Fed Funds.

Jeff Bailey : 7/7/2005 12:42:36 AM

China 1Q GDP growth revised up to 9.4% annual rate according to National Bureau of Statistics. In March, the research bureau had forecasted an 8.7% rise in GDP for the whole year.

Tab Gilles : 7/6/2005 11:07:38 PM

Murphy Oil (MUR) guides higher. Link

Let's see if the $55 resistance level holds? Link

OI Technical Staff : 7/6/2005 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.

Tab Gilles : 7/6/2005 6:27:05 PM

To Recap on $NASI as per 6:14PM yesterday and today's 2:45 PM post. Now...yesterday after the close the $NASI reversed trend by going bullish. If you are trading the Profund Ultrashort OTC fund (USPIX) , you could not sell it until todays close NAV I entered USPIX on 6/28 @ $18.17 the day after the $NASI signal SELL. Exited at today's NAV of $18.45 [+1.54% in one week]. Entered Ultra OTC (UOPIX) at $20.87, will stay long until trend reverses. Link Link

Jeff Bailey : 7/6/2005 4:30:26 PM

Closing Internals found at this Link

Jeff Bailey : 7/6/2005 4:19:00 PM

Closing U.S. Market Watch found at this Link

Linda Piazza : 7/6/2005 3:54:35 PM

The OEX looks as if it's going to end the day near the bottom of the recent consolidation zone. If you entered a bearish play yesterday on the rollover and haven't yet taken partial credit, I'd consider doing that now in case tomorrow sees the OEX bounce right back up through that formation rather than fall through its support. Reset stops on the rest.

Linda Piazza : 7/6/2005 3:50:45 PM

New (or is that "renewed"?) target of 556.83 on the OEX. As I said earlier today, bears should be wary as the OEX more closely approaches recent support in its newest consolidation pattern.

Jonathan Levinson : 7/6/2005 3:49:08 PM

The intraday SOX has a head and shoulders look to it, but bears need a break of 429 to suggest anything more than a corrective pullback within today's impressive gains. Link

Linda Piazza : 7/6/2005 3:44:56 PM

This morning, I commented that RUT bulls wold not want to see the RUT close the day back within the channel line then at 646.85 and particularly below the one then at 642.77. Those lines are now at 647.09 and 642.43, with the RUT's decline having pushed them lower, too. The RUT is at 647.83 as I type.

Jonathan Levinson : 7/6/2005 3:42:27 PM

QQQQs 30 min cycle indicators have been chopped up in the midpoint of their range from the sideways range today. But the 60 min cycle has made its turn and is currently in the first stages of a downphase that should hold for most of tomorrow, provided that price holds below 37.20 from here. The 30 min cycle will maintain a bearish bias below the 72 SMA, currently at 37.08. 30 min channel support is down to 36.82.

Jane Fox : 7/6/2005 3:41:34 PM

Dateline CNN Judge orders New York Times reporter Judith Miller jailed for refusing to divulge source who revealed CIA operative.

Linda Piazza : 7/6/2005 3:40:53 PM

A new LOD for the OEX would probably reset the downside target of 556.92, but there needs to be a 15-minute close beneath a line currently at 559.33.

Linda Piazza : 7/6/2005 3:33:35 PM

The Dow hasn't yet broken below the support of the consolidation formation in which it's traded after the early June steep descent. It did test the ascending trendline off the 6/27 low, with that trendline just at or just below today's LOD, depending on how it's drawn. That break would need to be confirmed by a break below the 6/27 low of 10,253.64. Earlier, the Dow tentatively set a downside target of 10,247.21, but it's bounced back above the breakdown zone, although just barely.

Linda Piazza : 7/6/2005 3:29:37 PM

The SOX is back inside the descending regression channel in which it's traded since late May.

Jonathan Levinson : 7/6/2005 3:29:23 PM

August crude oil is ticking down in the evening session, -.025 at 61.25 here off a high of 61.35.

Jeff Bailey : 7/6/2005 3:26:02 PM

UnitedHealth (UNH) $54.05 +1.54% ... released for trade (fast market).

Jeff Bailey : 7/6/2005 3:24:44 PM

PacifiCare (PHS) $78.50 +7.85% ... released for trade (fast market).

Linda Piazza : 7/6/2005 3:22:05 PM

The current OEX climb looks like a bear flag, with Keltner resistance at 560.48 and 561.43-561.93 on 15-minute closes.

Jonathan Levinson : 7/6/2005 3:14:09 PM

Volume breadth ticked back positive for the Nasdaq when QQQQ crossed 37. Overall volume remains very light despite the spike on the pop just now, 66.7M shares traded so far. QQQQ bulls need to get above 37.10 to stall the downturn in the 30 min cycle. Updated 2 day QQQQ chart at this Link

Jeff Bailey : 7/6/2005 3:14:34 PM

United Health (UNH) $52.96 -0.50% ... still halted and announces agreement to buy PacifiCare (PHS) $82.25 +13.16% (still halted). Terms of agreement have PHS shareholders receiving UNH stock at a fixed exhange ratio of 1.10 shares for each PHS share, plus $21.50 in cash. Total consideration for the transaction comes out 111.6 million UNH shares and $2.2 billion in cash.

Linda Piazza : 7/6/2005 3:11:41 PM

The OEX continues to test the breakdown level on the 15-minute Keltner chart. It's easing a little above that as I type, but the 15-minute period is not yet over, of course. When I told readers that the OEX was hitting potential support and a bounce remained a possibility at any time, this was what I was watching. Bears would prefer continued 15-minute closes below a Keltner line currently at 559.49, but, if that doesn't happen, 15-minute closes beneath a Keltner line currently at 560.63, which is also just below the 200-sma.

Jeff Bailey : 7/6/2005 3:09:33 PM

03:00 Internals found at this Link

Linda Piazza : 7/6/2005 3:04:59 PM

Wilshire 5000 at 11,950.70.

Linda Piazza : 7/6/2005 3:04:14 PM

After attempting to break out yesterday and today above 450, the RLX has instead dropped back into January's gap. Yesterday, I posted a chart that showed that the RLX appears to be forming a possible diamond shape that's centered along the parameters of that gap. It's still inside that diamond.

Jeff Bailey : 7/6/2005 3:02:01 PM

03:00 Market Watch found at this Link

Jeff Bailey : 7/6/2005 2:52:12 PM

August Crude Oil (cl05q) $61.00 +2.36% (30-minute delayed) ... breaks above its 06/27/05 highs.

Linda Piazza : 7/6/2005 2:53:06 PM

Remember that the OEX is heading toward the bottom of its recent consolidation zone. A further breakdown out of that formation is possible, and the fact that this consolidation zone might be the bulb portion of a bearish "b" distribution pattern seconds that thought, but recent experience says the OEX is nearing a strong support level. Watch the Dow, too, for clues, as the Dow's formation looks more clearly like a "b" distribution pattern than do other indices, as I mentioned earlier. The OEX's pattern also looks a bit like a "b" distribution pattern, but it's forming along the 200-sma and -ema's and not below them, as is the Dow.

Jeff Bailey : 7/6/2005 2:50:55 PM

Weather Watch DJ - Forecasters see Dennis as "Minimal Hurricane." Currently on route that would take it near the Alabama-Florida border by this weekend. "It is a minimal hurricane right now," though its winds were four mph under the official hurricane strength, said the Martin Nelson, lead forecaster at the U.S. National Hurricane Center in Miami.

Linda Piazza : 7/6/2005 2:49:10 PM

On the 15-minute chart, the OEX did create a new downside target of 557.07, but only tentatively. The OEX rises now to retest the 559.60 breakdown level. Bears want to see continued 15-minute closes beneath than level.

Tab Gilles : 7/6/2005 3:58:54 PM

$XLE Bearish divergence??? Link

Murphy Oil (MUR) Having been stopped out at 10-ema, however, it is still finding $55 level stiff resistance. MACD/RSI suggest weakness. Link

To follow up on last nights 6:14PM post on $NASI. Sell USPIX and BUY UOPIX. $NASI yesterday reversed to bullish bias. Link Link

Jonathan Levinson : 7/6/2005 2:44:04 PM

QQQQ bears need to hold below 37.00 resistance. The 30 min cycle should work its way lower so long as price holds below the 72 SMA at 37.10, but we've seen price cross that line easily in both directions all day. Volume picked up on the drop and is waning on the bounce, but volume breadth remains only slightly negative, 1.09:1 currently on the Nasdaq. Updated 3 min chart of the QQQQ at this Link

Linda Piazza : 7/6/2005 2:39:07 PM

The RUT has confirmed the nicely formed H&S on its 15-minute chart. Now let's see if it meets its 645.50-ish downside target. Being able to confirm a H&S shows that bulls aren't quite as strong today as yesterday, but are bears strong enough to drive it down to its downside target?

Linda Piazza : 7/6/2005 2:35:38 PM

Those traders who entered a bearish play yesterday on the OEX rollover beneath the 554 zone might consider partial profits as the OEX approaches the bottom of the recent consolidation zone, and resetting stops on the rest. Some might prefer to wait to take partial profits until the OEX makes a closer approach to yesterday's low, but the OEX is now testing Keltner support, too, so there's a possibility of a bounce attempt at any time.

Jonathan Levinson : 7/6/2005 2:31:46 PM

Nasdaq volume breadth is ticking negative for the first time today, QQQQ printing a new low at 36.97. The Nasdaq remains far stronger than the Dow, however, only now breaking its flat intraday range. The Dow has been walking its way lower since this morning. Currently, QQQQ's 30 min channel support is being broken below 36.95, 60 min channel support at 36.90.

Jeff Bailey : 7/6/2005 2:30:59 PM

30-year ($TYX.X) down 2.7 bp at 4.335% ...

Jeff Bailey : 7/6/2005 2:30:39 PM

10-year ($TNX.X) down 2.3 bp at 4.076% ....

Jeff Bailey : 7/6/2005 2:30:17 PM

5-year ($FVX.X) down 3.3 bp at 3.866% ...

Jeff Bailey : 7/6/2005 2:29:34 PM

Bullish swing trade stop alert ... for Wells Fargo (WFC) $60.92 -0.45% ... traded $60.90.

Linda Piazza : 7/6/2005 2:25:01 PM

New LOD for the OEX, too, of course. Potential first downside target between 559.50-560. A 15-minute close below 559.89 sets a new downside target, but be careful, bears, as the OEX is moving deeper into the support of the recent consolidation zone.

Linda Piazza : 7/6/2005 2:23:07 PM

OEX below the 200-sma again.

Linda Piazza : 7/6/2005 2:22:29 PM

The RUT is rounding down, as if it might confirm that H&S on its five-minute chart, but after yesterday, I don't quite trust that. Smile. The neckline looks to be at about 649.55.

Jonathan Levinson : 7/6/2005 2:22:17 PM

QQQQ breaking 72 SMA support here as August crude breaks 61.00, current high 61.05. Advancing Nasdaq volume is down to a 1.13:1 lead.

Jeff Bailey : 7/6/2005 2:22:06 PM

Sell Program Premium ... SPX 1,199.02, DIA $103.08, QQQQ $37.08.

Jonathan Levinson : 7/6/2005 2:16:21 PM

Headlines:

STORM SHUTS 12.7% DAILY OIL OUPUT IN GULF: GOV'T DATA

AUG CRUDE TAPS $60.95 TO MATCH JUNE 27 RECORD HIGH

Linda Piazza : 7/6/2005 2:09:55 PM

For benchmarking purposes, the previous LOD for the OEX was 560.66. Fifteen-minute mid-channel resistance as so far held on the OEX, but there's that pesky (to bears) 200-sma waiting near today's low, too, at 560.74.

Jeff Bailey : 7/6/2005 2:08:54 PM

02:00 Internals found at this Link

Linda Piazza : 7/6/2005 2:07:00 PM

Wilshire 5000 at 11,991.97. Thirty-minute Keltner support at 11,958.27-11,977.07. Next support at 11,958.27.

Jonathan Levinson : 7/6/2005 2:04:31 PM

August crude oil is back the prior highs, printing a session high +1.275 at 60.875.

Jeff Bailey : 7/6/2005 2:02:54 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 7/6/2005 2:02:33 PM

QQQQ failed on the upside keltner breach, but finds support above the prior range. The short cycle upphase is approaching overbought territory, with the 30 and 60 min channel tops holding in the 37.30-.32 area: Link

Linda Piazza : 7/6/2005 2:05:55 PM

I just plain forgot to check the Wilshire 5000's chart today. The DWC pierced 12,000 today, dropping to a low of 11,973.23, but it's now back above 12,000, at 12,003.20 as I type. It's still negative for the day. Oops. Dropped back below 12,000 as I typed, but only by a few cents.

Jeff Bailey : 7/6/2005 2:00:31 PM

BP Amoco (BP) $65.84 -0.25% ... announces it is evacuating non-essential staff from eastern Gulf of Mexico operations.

Linda Piazza : 7/6/2005 1:58:55 PM

RUT holding at the right-shoulder level for its potential H&S on the five-minute chart. It hasn't confirmed or invalidated that formation. Yesterday, we kept seeing these formations set up and then prices would zoom higher, invalidating the formation. Watching to see if that's happening today, too, to get a measure of underlying short-term bullishness or bearishness.

Jonathan Levinson : 7/6/2005 1:53:47 PM

Ten year note yields are up to unchanged, TNX currently -0.1 b ps at 4.098%, still within yesterday's range below 4.1%. Updated daily chart at this Link

Jeff Bailey : 7/6/2005 1:51:57 PM

Global Energy ... DJ - Russia and Kazakhstan reportedly set to sign a $23 billion agreement to develop a Caspian Sea oil field with an estimated 980 million tons of known oil and gas reserves. The two nations' presidents will attend a signing cereony later today.

Linda Piazza : 7/6/2005 1:50:02 PM

Doji for the SOX's last 15-minute candle. On that chart, the SOX's formation looks a bit like a rising wedge today, but we've seen some of those break to the upside in a straight-up move over recent years, so their bearishness cannot be assumed. The SOX is right at the top of a descending regression channel that it began forming in late May.

Jeff Bailey : 7/6/2005 1:48:53 PM

General Motors (GM) $34.39 -1% ... a federal court ruled in favor of GM in its bid to recover as much as $253 million from the federal government for one of its underfunded pension plans. The decision was the first of its kind and may precipitate similar moves by other government contractors.

Jeff Bailey : 7/6/2005 1:46:39 PM

CIT Group (CIT) $43.25 +1.52% ... said it sold $900 million in aircraft leases and loans to General Electric (GE) $34.55 -0.48% in a deal said to rid CIT of some lower-profit assets and marks another large-scale acquisition for GE's commercial finance unit.

Jeff Bailey : 7/6/2005 1:43:44 PM

Power Outage (update) ... DJ - Motiva Norco refinery restarting.

It is a rather light news day

Jeff Bailey : 7/6/2005 1:41:08 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 7/6/2005 1:36:17 PM

RUT has a possible H&S on its five-minute chart, but if it rises much higher than 652.50, it may invalidate the formation. It's at 651.77 as I type.

Jonathan Levinson : 7/6/2005 1:34:12 PM

QQQQ is printing above upper 30 min channel resistance here, reaching for 60 min channel resistance just below daily R1 at 37.32. Volume is surging as price pops higher, despite still-low volune overall today. Volume breadth never went negative for the Nasdaq, and is currently back up to 1.76:1 positive.

Linda Piazza : 7/6/2005 1:33:35 PM

The OEX produced a 15-minute close above the Keltner line currently at 561.91 and now moves above 15-minute Keltner resistance at 562.13. It's moving into a band of daily Keltner resistance.

Jeff Bailey : 7/6/2005 1:33:47 PM

Interesting observation though Jonathan (01:23:20) ... however, with Fed Funds at 3.25% and some dollar strength vs. major currencies of late, can't say that a 3% excites me too much.

Linda Piazza : 7/6/2005 1:31:39 PM

The dollar is rising today, at least against the yen, as our markets stall. We watch the equities against the 100/130-ema's, and I watch the dollar/yen pair against them, too. The dollar/yen pair has begun weekly closings above the weekly 100/130-ema's for the first time since late 2003. I'm not Warren Buffett, obviously, but there have now been two weekly closes above the 100/130-ema's, and I wonder if he's still short the dollar.

Jonathan Levinson : 7/6/2005 1:26:56 PM

Biotechs (BTK) are having a great day, +.56% at 576.52 and holding above the April highs. The SOX is back to the highs, +1.7% here at 433.11.

Linda Piazza : 7/6/2005 1:26:30 PM

Jonathan's reporting of Poole's comments (thanks, Jonathan, for updating us) reminds me of worry I've heard voiced lately. I mentioned that worry about a month ago, too. Some economy watchers are concerned because the end of Greenspan's tenure will closely coincide with the the end of the Fed's rate-raising, and some speculate that will increase the uncertainty in the markets, and you know how markets feel about uncertainty.

Jeff Bailey : 7/6/2005 1:27:26 PM

Treasury ... Awarded $12.0 billion in four-week bills at a high rate of 3.0%. Treasury received bids totaling $39.31 billion and accepted $12.0 billion, including $73.41 billion of noncompetitive. The dollar price was 99.766667 and the investment rate, or bond-equivalent return, was 3.049%. Bid-to-cover ratio was 3.28. The Federal Reserve purchased $4.38 billion for its own account. When the auction was announced, Fed held $17.86 billion of maturing bills. In Tuesday's auction, the Fed purchased $13.48 billion in 3 and 6-month bills.

Jonathan Levinson : 7/6/2005 1:23:20 PM

Addendum to my earlier post about the 4-week t-bill results: Indirect bidders (foreign central banks) took a mere 875.46M of the 12B total. It is noteworthy because it's far less than their usual 20%-30% of the total, as well as the high discount rate at which the notes were auctioned. This looks like an another anomaly, along with yesterday's huge repo add from the fed.

Linda Piazza : 7/6/2005 1:21:20 PM

The last OEX 15-minute close was below the Keltner line currently at 561.82, but the OEX has now bounced above that line to challenge further 15-minute resistance at 562.13. This is also near the neckline of that double-headed H&S or confirmation level of the double-top formation, so this constitutes a retest of that broken support to see if it holds now as resistance. Bears would have preferred that the lower Keltner line hold as resistance, but this 15-minute period is far from over, and so there's still a possibility that it might. Remember that we're looking at the possibility that the OEX could still produce a doji day or could edge lower through the recent consolidation pattern.

Jeff Bailey : 7/6/2005 1:21:01 PM

Power Outage ... DJ - Power outage shuts Motiva Norco refinery unit.

Jonathan Levinson : 7/6/2005 1:18:43 PM

Headlines:

FED'S POOLE: GREENSPAN LEGACY IS POLICY PREDICTABILITY

POOLE: GREENSPAN'S UNDERSTANDING OF ECONOMY UNMATCHED

POOLE: GREENSPAN'S SUCCESSOR MUST BUILD OWN CREDIBILITY

Jonathan Levinson : 7/6/2005 1:16:15 PM

Session high for QQQQ, testing 37.20. 30 min channel resistance is at 37.25, 60 min at 37.30. Link

Jeff Bailey : 7/6/2005 1:11:30 PM

01:00 Internals found at this Link

Linda Piazza : 7/6/2005 1:07:26 PM

The SOX isn't sharing the difficult day seen by some indices. At 432.48, it has risen to the top of a descending regression channel that it began establishing at the end of May. There was a big move out of that channel on 6/23, but then the SOX retreated to close back inside the channel by the end of the day. Will there be another breakout and will it be more successful? The top of that channel looks to be at about 433.40, although that's up for interpretation and perhaps fine-motor skills, as one guesses where to hold the cursor.

Jonathan Levinson : 7/6/2005 1:06:40 PM

QQQQ has popped back above 72 SMA resistance on the release of the 12B 4-week t-bill auction results. The bid to cover was a strong 3.28, the best demand since May 10th. The high-rate was 3.0%, the highest since 2001.

Jeff Bailey : 7/6/2005 1:02:41 PM

01:00 Market Watch found at this Link

Linda Piazza : 7/6/2005 1:00:35 PM

The OEX is holding above its 200-sma, but here's what the OEX's 15-minute Keltner chart shows: The OEX is attempting to bounce up to test Keltner resistance, now from 561.81-562.68. That resistance near 561.81-562.14 looks firm. As long as 15-minute closes remain below the line currently at 561.81, it looks vulnerable to 560, but I wouldn't count on that being hit and I wouldn't count on a big drop below 558.25-560. It's a possibility, but lower downside targets haven't been set yet, and the OEX will be approaching the bottom of its recent consolidation zone by then, if it should get past the 200-sma.

Jonathan Levinson : 7/6/2005 12:56:31 PM

August crude oil is holding a .95 gain at 60.55, 30 cents off its session high. Ten year notes are holding light gains, TNX -1.5 bps at 4.084%. QQQQ tested the 37.00 low, printing a low at 36.995, currently bouncing back to test declining short cycle channel resistance.

Jeff Bailey : 7/6/2005 12:54:14 PM

Southwest Airlines (LUV) $13.72 -0.43% ... June traffic 8% with 6.9 million revenue passengers vs. 6.4 million a year earlier. June RPMs were 5.4 billion, up from 4.96 billion same period last year. Capacity increased 13.5% to 7.1 billion from 6.3 billion last year. Meanwhile, passenger load factor fell to 76.2% from 78.8% in the year-ago period (June).

Jeff Bailey : 7/6/2005 12:47:45 PM

Republic Airways (RJET) $13.63 -1.80% Link ... June traffice up 43.9%. June RMPs (revenue passenger miles) 391.4M. Load factor 72.9%.

Linda Piazza : 7/6/2005 12:44:21 PM

As I noted in my 10:08 post this morning, I am not surprised to see an OEX downturn through the most recent consolidation pattern, although this test of the 200-sma may result in a bounce that ends up producing a doji or small-bodied candle for the day. That wouldn't surprise me, either, but as I said in a later post, I would have been surprised to see a big breakout move to the upside. That's still possible, too, of course, but a continuation of the range seemed the most likely result for today.

Jeff Bailey : 7/6/2005 12:42:49 PM

Mohawk Industries (MHK) $86.48 -1.16% ... Moody's places Mohawk's Baa2 Sr. unsecured debt on review for possible cut. Approx. $700 million of rated debt could be affected. Moody's comment comes after the company entered into a definitive agreement to acquire Unilin Holding NV for $2.6 billion (eur2.2 billion).

Jonathan Levinson : 7/6/2005 12:38:47 PM

QQQQ tests 37.00, NQ 1510 and the SOX 430.75. 30 min channel support for QQQQ is at 36.96, 429.90 for the SOX. Updated QQQQ intraday chart at this Link

Jeff Bailey : 7/6/2005 12:36:44 PM

Dow Industrials (INDU) 10,319 -0.50% ... darts to session lows. HD $39.43 -1.62%, XOM $59.24 -1.52%, GM $34.35 -1.20% and UTX $51.02 -1.20% pace decline. HPQ $24.13 +1.72% and IBM $75.60 +1.13% buck weakness.

Linda Piazza : 7/6/2005 12:36:31 PM

The OEX currently tests the 200-sma at 560.74.

Jeff Bailey : 7/6/2005 12:33:01 PM

Pacificare (PHS) $82.25 +13.16% ... was halted at 12:13:18.

United Health (UNH) $52.96 -0.50% ... was halted at 12:12:38

Linda Piazza : 7/6/2005 12:32:04 PM

The OEX has confirmed its two-headed H&S or else the double-top formation, if you will. The downside target is about 559.60, but the OEX has 15-minute Keltner support at 560.

Jeff Bailey : 7/6/2005 12:29:43 PM

HMO Index (HMO.X) components at this Link ... list keeps getting smaller and smaller as mergers continue. HUM, HNT and SIE are "small caps" and could be likely candidates for further merger.

Linda Piazza : 7/6/2005 12:27:26 PM

RLX coming down to test the neckline of its H&S. Not there yet, but a confirmation and follow-through would not be good for the OEX.

Jonathan Levinson : 7/6/2005 12:26:16 PM

Session lows for Dow and S&P futures, QQQQ dwn to 37.05 on a small burst of volume.

Linda Piazza : 7/6/2005 12:23:28 PM

Lots of potential H&S's setting up today--there's one on the RLX, too. We saw some yesterday, too, with no downside resulting, obviously.

Jonathan Levinson : 7/6/2005 12:22:34 PM

The short cycle indicators are on the cusp of a sell signal for QQQQ- a move below 37.09 should be enough to do it- for another attempt on 37.00 support.

Linda Piazza : 7/6/2005 12:16:31 PM

The OEX has a sort of double-headed H&S formation on its 15-minute chart. The neckline of that formation is at about 561.90.

Jeff Bailey : 7/6/2005 12:14:56 PM

12:00 Internals found at this Link ... Correction: At 10:00 AM and 11:00 AM EDT, the 5-day and 10-day NH/NL data were still measuring yesterday's readings. 12:00 PM EDT readings are correct.

Jonathan Levinson : 7/6/2005 12:11:24 PM

QQQQ volume is extremely light even by recent standards, 29.4M shares traded as we approach halftime. Volume breadth is still mixed, positive on the Nasdaq and negative on the NYSE.

Jeff Bailey : 7/6/2005 12:02:59 PM

12:00 Market Watch found at this Link

Linda Piazza : 7/6/2005 12:02:09 PM

On a 15-minute Keltner basis, the Dow has been looking somewhat weaker this morning than it did yesterday. It's being pressured downward (on 15-minute closes) by a Keltner line currently at 10,352, but clinging to a Keltner line now at 10,348.31, with 15-minute candles forming along that lower Keltner line. It has produced some 15-minute closes beneath that lower Keltner line, but just isn't falling away from it, so it hasn't convincingly fallen beneath its support. That's always troublesome to bears when that kind of beharior is observed, but as long as the OEX continues printing 15-minute closes beneath the higher of those two lines, it will likely continue to ping away at that support. A more convincing drop, perhaps to a new LOD, would set up the potential for a fall through to 10,307.27, but that comment should be tempered by the very real likelihood that markets won't do much of anything today. The Dow has recently shown some Keltner-style bullish divergence with respect to the line currently at 10,309.12, so the Dow shouldn't do more than skim that now-rising line if it does reach down to test it. A deep penetration will erase that bullish divergence, Keltner-style.

Jonathan Levinson : 7/6/2005 11:56:56 AM

The SOX is on a bull run, far outperforming QQQQ today, +1.61% at 432.73. On the daily chart, the 50 day SMA is above the 200 day SMA at 414.87, price currently testing daily R2 at 433 where it meets the rising 30 min channel top.

Jeff Bailey : 7/6/2005 11:55:36 AM

Bullish day trade target alert ... for Wellpoint (WLP) $71.30 +1.35% ... exit here at upper keltner and BLUE #5.

Jonathan Levinson : 7/6/2005 11:53:34 AM

Text-only advisories on Tropical Storm Dennis can be found at this Link .

11 AM EDT WED JUL 06 2005

...DENNIS A LITTLE STRONGER AND NEARING HURRICANE INTENSITY... ...HURRICANE WATCH EXTENDED WESTWARD TO INCLUDE PORTIONS OF CENTRAL CUBA...

A HURRICANE WARNING IS IN EFFECT FOR JAMAICA AND FOR THE SOUTHWESTERN PENINSULA OF HAITI FROM THE DOMINICAN REPUBLIC BORDER.

A TROPICAL STORM WARNING IS IN EFFECT FOR THE SOUTHERN COAST OF THE DOMINICAN REPUBLIC FROM BARAHONA WESTWARD TO THE HAITI-DOMINICAN REPUBLIC BORDER.

Jeff Bailey : 7/6/2005 11:50:29 AM

Bullish day trade long alert for shares of Wellpoint (WLP) $70.55 +0.28% here, stop $70.30, target $71.20.

Linda Piazza : 7/6/2005 11:46:50 AM

The RUT has 30-minute Keltner support that looks significant, with that support ranging down to 649.20 and starting at 650.84 (on 30-minute closes). So far, it's been staying above that 650.84 line on 30-minute closes, so a change in that pattern might be the first sign of a change in tenor, but remember that there's more support beneath it, too.

Jeff Bailey : 7/6/2005 11:46:17 AM

HMO Index (HMO.X) 1,586 +0.86% ... surging here.

Jeff Bailey : 7/6/2005 11:45:13 AM

Pacificare (PHS) $80.20 +10.2% ... jumps from $73 on Dow Jones report that United Health (UNH) $52.73 -0.93% about to make an offer to buy the company.

Jonathan Levinson : 7/6/2005 11:44:03 AM

August crude has pulled back but is holding a 1.47% gain here at 60.475. The National Hurricane Center is tracking Tropical Storm Dennis in the Northwestern Carribean. Link

Jeff Bailey : 7/6/2005 11:29:33 AM

ADE Corp. (ADEX) $23.00 -20.77% Link ... percentage loser at the NASDAQ after the semiconductor test equipment maker released Q4 results and cut its outlook for Q1.

Jonathan Levinson : 7/6/2005 11:28:24 AM

August crude oil hit a session high at 60.85, currently back to 60.55, +.975. The CRB is currently up 2.89 to 312.65, led by heating oil, natgas and crude oil futures.

Linda Piazza : 7/6/2005 11:28:13 AM

The RLX is slightly lower today, but not back inside January's huge gap lower. It dipped toward that gap, but bounced from the top-of-the-gap level.

Jonathan Levinson : 7/6/2005 11:26:19 AM

QQQQ has taken out the intraday high range at 37.12, now working on 37.16. It's rare to see support/resistance struggling in 2 and 3 cent increments, but that's how slow the action is with volume up to 25.9M shares here. The morning highs have yet to be breached at 36.19, but short cycle resistance is at 37.20 here, 30 min resistance up to 37.25. So far, the Fed's big repo drain is having no discernable effect for either stocks or bonds. Updated 3-min closeup of QQQQ: Link

Jeff Bailey : 7/6/2005 11:25:29 AM

Magellan Petroleum (MPET) $3.30 +23.59% Link ... recent 06/30/05 press release at this Link . PnF chart at this Link

Linda Piazza : 7/6/2005 11:23:22 AM

Recently several indices had possible H&S's on their daily charts. The SPX has not yet rejected that formation, and today's downturn, even if it results in nothing more than a doji or other small-bodied candle, fits with the possibility of a right shoulder being formed. That's far from a confirmation of the H&S, but it does mean that it hasn't yet been rejected.

Jeff Bailey : 7/6/2005 11:17:49 AM

Semiconductor Index (SOX.X) 430.95 +1.19% ... breaks to highs of the session and moves above its trending lower 21-day SMA (428.00).

Linda Piazza : 7/6/2005 11:19:53 AM

The OEX still tests 15-minute Keltner support, down to 562.00, with the OEX currently at 562.31. So far, I haven't seen anything that varies too much from the usual pattern since 6/24. Big move/doji day/big move/doji day, etc. If we did get a big move today, I probably would be surprised if it was to the upside, but not particularly if it was to the downside. That doesn't mean I'm long-term bearish, but rather than I see the continuation of the range as a strong possibility over the near term. I'm afraid that I'm still a "chopper," rather than a bull or a bear, and will remain that way until the OEX stops moving and then hunkering down into a range, moving and hunkering down into a range.

Jeff Bailey : 7/6/2005 11:15:47 AM

Weather Watch ... DJ - Tropical Storm Dennis strengthens to 70 MPH, may become hurricane. At 11:00 AM EDT, the center of the storm was about 225 miles south-southeast of Port Au Prince, Haitii, and was moving to the west-northwest near 15 miles per hour.

Linda Piazza : 7/6/2005 11:14:03 AM

RUT still negative. The decline isn't serious, but it will be more so if the RUT were to close the day below a daily Keltner line currently at 646.85 and particularly if it closes below a line currently at 642.77. Such closes would erase the current upside target. I would expect bounce attempts today at the round-number 650 but perhaps more so at 644-646 support, so watch for that possibility.

Jeff Bailey : 7/6/2005 11:11:05 AM

11:00 Internals found at this Link

Jeff Bailey : 7/6/2005 11:06:03 AM

Sell Program Premium ... SPX 1,202.17, DIA $103.45, QQQQ $37.10

Linda Piazza : 7/6/2005 11:03:14 AM

Stepping away for a few minutes.

Jeff Bailey : 7/6/2005 11:02:07 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 7/6/2005 11:00:03 AM

QQQQ is back above 72 SMA, drifting back above it on lighter volume and so far finding resistance at a lower high. This intraday action is very weak (in either direction), but the good news (for bulls) is that it's occurring during the 30 min cycle downphase, during what should be prime time for bears. The bears need the 60 min cycle to get some traction when/if it gets into its downphase. So far, the intraday action is sideways and trendless.

Jeff Bailey : 7/6/2005 10:58:58 AM

Catuity (CTTY) $15.65 +33.89% Link ... atop the percentage gainers list for a second-straight session. Mentioned this one a couple of weeks ago as it surged from the $4.00 level.

Linda Piazza : 7/6/2005 10:58:15 AM

The BIX is not helping the OEX today, either, but like the OEX, its decline hasn't been strong, either. The BIX may be building a bearish right triangle with lower support at about 361.60, and with the BIX currently at 361.86.

Linda Piazza : 7/6/2005 10:54:25 AM

RLX still below 450. About 20 minutes ago, it confirmed that lopsided H&S on its five-minute chart, but then immediately bounced back above the neckline again. It's now coming down to retest that neckline and perhaps the day's low. There's considerable Keltner and recent historical support near 447.20, and that may be slowing the decline for the RLX. Yesterday, the shared components of the RLX and OEX were helping to buoy the OEX, but WMT at least isn't helping to buoy the OEX today.

Jonathan Levinson : 7/6/2005 10:52:43 AM

Volume breadth is solidly mixed, NYSE declining volume leading 1.21:1 while Nasdaq advancing volume leads 1.25:1. QQQQ volume is light, 22.9M shares traded so far, just over 1/4 of yesterday's below-average 79.3M shares.

Linda Piazza : 7/6/2005 10:48:01 AM

Like the RUT yesterday, the TRAN has its own version of a continuation-form inverse H&S, this on the TRAN's 15-minute chart. Although I don't trust these to meet targets if confirmed, I do watch these for what they show about underlying sentiment. The neckline of the TRAN's version is at about 3537.30, although those necklines are always open to a little interpretation. The TRAN is currently at 3541.70, a little above that neckline. For the last three candles on the 15-minute chart, the TRAN's prices have been zig-zagging across that neckline. The TRAN has significant daily Keltner resistance just overhead and up to 3571.86, and a look at the daily chart gives a completely different picture. On that chart, the TRAN may be forming a continuation-form regular H&S, with the TRAN's rise off the 6/27 low part of a right-shoulder-building move. We're always at risk of choppy markets when we see conflicting formations like these, but it should be noted that the 3600 or so upside target, if reached, of the intraday inverse H&S would not invalidate the H&S on the daily chart.

Jeff Bailey : 7/6/2005 10:45:15 AM

10 Most Active ... ORCL $13.45 +1.35%, QQQQ $37.11 (unch), MSFT $24.98 (unch), SUNW $3.69 +1.37%, SPY $120.32 -0.14%, INTC $26.79 +0.41%, CSCO $19.02 +1.06%, PFE $26.85 -0.73%, KRB $25.50 -0.11%, EBAY $34.01 +1.40%

Jonathan Levinson : 7/6/2005 10:45:12 AM

Session high for ten year notes, ZN futues +19/64 at 112 29/64. TNX is down 3.1 bps at 4.068%, still within yesterday's range. Daily chart of the TNX at this Link

Jeff Bailey : 7/6/2005 10:42:40 AM

Oracle (ORCL) $13.43 +1.13% Link ... Atop this morning's most actively traded. The software maker said it plans to acquire privately held ProfitLogic for an undisclosed sum. PrifotLogic makes inventory management software for the retail industry.

Jonathan Levinson : 7/6/2005 10:40:54 AM

August gold is up 1.10 to 425 here, HUI +1.46% at 199.51 and XAU +1.53% at 92.32. The previous 2 sessions wiped what remained of June's gains, finding support above 422. A failure here would target the May lows at 415. The daily cycle downphase is just approaching the midpoint of its range. Bulls would need a move above the key 432-433 confluence to stall and reverse it from here.

Jeff Bailey : 7/6/2005 10:38:02 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 7/6/2005 10:36:56 AM

OEX still testing Keltner support on the 15-minute chart as well as the confirmation level for the double-top formation. Getting closer, but hasn't confirmed it yet.

Jeff Bailey : 7/6/2005 10:30:51 AM

Various Energy Futures at this Link

Linda Piazza : 7/6/2005 10:30:34 AM

RUT declining and now negative. On a daily basis, it would have to close the day below the Keltner line currently at 646.76 to erase that upside target now set on the daily chart. The RUT is at 651.33 as I type.

Linda Piazza : 7/6/2005 10:29:05 AM

The OEX just tested the confirmation level for its potential double-top formation, but is bouncing from Keltner support, just above that 561.89 confirmation level. The LOD has been 562.08. The bounce could have been expected, but now bears want to see the OEX continue to produce 15-minute closes beneath a Keltner line currently at 563.02, continuing to hammer away at that Keltner support. A 15-minute close beneath the Keltner line currently at 561.93 suggests a downside target of 559.76, but I'd also require that the move be below that double-top confirmation level before I began believing too much in that first downside target being met. Please take these comments in the context of the possibility of a choppy doji day on many indices.

Jonathan Levinson : 7/6/2005 10:27:18 AM

August crude oil +.95 here at 60.55, off a high of 60.625. Updated 50-tick chart at this Link

Jeff Bailey : 7/6/2005 10:26:00 AM

Workers returning to Gulf platforms ... multiple energy companies reporting that their workers are returning to Gulf of Mexico platforms.

Linda Piazza : 7/6/2005 10:25:12 AM

RLX soon to test the neckline for a lopsided H&S on its five-minute chart, neckline at about 448.58 and the RLX currently at 449.04, but still testing 15-minute Keltner support.

Jonathan Levinson : 7/6/2005 10:23:19 AM

30 and 60 min channel support are declining now, currently at 36.90-.93, and the latest break below the 72 SMA has that key average pointing south. There's no guidance from the short cycle indicators, but the 30 and 60 min cycle setup discussed earlier suggests that a break below 37.00 on volume should see some directional followthrough. Closeup of the break below yesterday's rising support at this Link

Jeff Bailey : 7/6/2005 10:19:24 AM

Bullish swing trade raise stop alert ... for EMC Corp. (EMC) $14.46 +1.11% ... to $14.10.

Linda Piazza : 7/6/2005 10:16:56 AM

Unlike the BIX and TRAN, the Dow is below the 50-sma, 200-ema, and 200-sma, consolidating in what looks like a "b" distribution pattern below these averages. On other indices, because of potential support below the most recent consolidation pattern, it's more questionable as to whether that's a bottoming formation or a "b" distribution pattern, but on the DOW, the bearish interpretation appears more likely because of that river of MA's just overhead. Perhaps then, we should be closely watching the Dow for either a rollover or an unexpected upside break through the resistance, invalidating the formation. That's going to require a move up through the 200-sma, at least, and maybe higher, above the 100-sma at 10,490.56.

Linda Piazza : 7/6/2005 10:13:01 AM

The TRAN also remains above its 50-sma and 200-ema, but below the 200-sma. Also trapped, so far.

Jeff Bailey : 7/6/2005 10:11:35 AM

Tuesday's Internals found at this Link

Jeff Bailey : 7/6/2005 10:10:25 AM

10:00 Internals found at this Link

Linda Piazza : 7/6/2005 10:10:23 AM

BIX holding above the 50-sma and 200-ema, below the 200-sma. Trapped.

Linda Piazza : 7/6/2005 10:09:46 AM

RLX just above 450 again, at 450.10 as I type. It's not moving far either direction today, though. Oops, dropped to 449.89 as I typed.

Jonathan Levinson : 7/6/2005 10:09:17 AM

August crude is up .80 to a session high of 60.40.

Linda Piazza : 7/6/2005 10:08:40 AM

I just would not be hugely surprised to see the OEX form a doji or near doji today at the top of yesterday's range, either piercing or testing the 100-sma, which it's already done (the testing, anyway). I also would not be surprised to see a downturn through the recent consolidation pattern, as either would preserve that pattern. Breaking patterns would be a change of pace for the OEX lately, and that would require a sustained move up above the 100-sma, currently at 564.61. The 30-sma is above that, at 566.23, near historical S/R.

Linda Piazza : 7/6/2005 10:05:30 AM

The RUT does continue to rise, but the last two 15-minute candles have been small-bodied candles at the top of a rise. This one needs to be stronger.

Linda Piazza : 7/6/2005 10:04:16 AM

OEX rising to retest yesterday's high(s?), but testing daily Keltner resistance as it's doing so, and already pulling back slightly as I type. Not much reaction yet as market watchers delve into the components of the ISM number.

Jonathan Levinson : 7/6/2005 10:03:13 AM

QQQQ tested yesterday's high on the ISM spike and has pulled back, currently holding above 72 SMA support and within yesterday afternoon's range. 30 and 60 min channel resistance are up to 37.29. Link

Jeff Bailey : 7/6/2005 10:02:51 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 7/6/2005 10:01:58 AM

Headlines:

U.S. JUNE ISM SERVICES 62.2% VS. 58.4% EXPECTED

U.S. CHALLENGER JOB CUTS UP 14% YEAR-TO-DATE

U.S. CORPORATE JOB REDUCTIONS AT 17-MONTH HIGH

U.S. JUNE JOB CUTS UP 35% TO 110,996: CHALLENGER

Jonathan Levinson : 7/6/2005 10:01:40 AM

ISM services 62.2 vs. 58.9 exp.

Jonathan Levinson : 7/6/2005 9:55:59 AM

The Fed announces a 6B overnight repo, resulting in a net drain of 6B for the day.

Jonathan Levinson : 7/6/2005 9:52:51 AM

Awaiting the Fed's repo update, Challenger jobs and ISM services in the next 10 minutes.

Jeff Bailey : 7/6/2005 9:52:00 AM

VIX.X 11.67 -0.08% ... DAILY Pivot Levels ... 11.10, 11.39, Piv= 11.82, 12.11, 12.54.

Linda Piazza : 7/6/2005 9:52:23 AM

SOX still gaining. RUT still maintaining its breakout signal on the daily chart, with the upside target at 670.59, at least so far, but not looking strong on a candlestick basis, in the form the candlesticks are taking. The RLX retreats from 450. The TRAN turns lower from 3535-ish Keltner resistance, looking vulnerable to 3517-3520, at least. The BIX turns lower this morning, too, toward a Keltner line that supported it yesterday on 15-minute closes, with that line now at 361.02. Nothing major going on in either direction to give us clues this morning ahead of the 10:00 reports.

Jonathan Levinson : 7/6/2005 9:43:08 AM

QQQQ bounces from 37.00 to retest yesterday afternoon's rising support from below: Link . 72 SMA resistance is at 37.11.

Linda Piazza : 7/6/2005 9:40:23 AM

The SOX has moved back above the 200-week sma. The SOX doesn't appear to be using this so much as ultimate S/R, but is stringing weekly candles along that MA and also along the top of the descending regression channel in which the SOX has been moving since late last year. This could be a type of bull flag on the weekly chart but if it strings out too much longer, that possibility will dim.

Jonathan Levinson : 7/6/2005 9:36:43 AM

Volume breadth is neutral to positive, advancing volume matching declining volume on the NYSE, positive on the Nasdaq 1.23:1.

Linda Piazza : 7/6/2005 9:36:29 AM

The OEX turns down at the open, but hasn't confirmed its double-top-ish (not exact) formation yet. That would come on a drop below 561.89, and there's possibly significant Keltner support from 561.76-562.12 on the 15-minute chart. For now, the OEX is finding at least temporary support on a Keltner line currently at 562.95, and bears would like to see that fail by the first 15-minute close. The OEX is a little below that as I type. Remember that the OEX is also testing daily Keltner resistance that looks strong, but that the recent pattern has been big move/doji day/big move/doji day, and we're due for a doji day. The daily Keltner chart suggests that a rollover might be possible, but the traditional charts suggest that the OEX is just mired in yet-another consolidation formation.

Jonathan Levinson : 7/6/2005 9:31:30 AM

QQQQ gaps below yesterday's afternoon lows, reversing all the gains since noon. 30 and 60 min channel support are lined up at 36.95, but 37.00 has yet to break.

Jeff Bailey : 7/6/2005 9:27:28 AM

Program Trading Levels ... HL Camp & Company has their computers set for program buying at $+5.32 and set for program selling at $+3.06.

Jonathan Levinson : 7/6/2005 9:06:45 AM

From the Mortgage Bankers Association:

WASHINGTON, D.C. (July 6, 2005) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending July 1. The Market Composite Index, a measure of mortgage loan application volume, was 853.4, an increase of 9.6 percent on a seasonally adjusted basis from 778.4 one week earlier. On an unadjusted basis, the Index increased 9.5 percent compared with the previous week and was up 23.2 percent compared with the same week one year earlier. The seasonally-adjusted Purchase Index increased by 9.1 percent to 520.8 from 477.4 the previous week whereas the Refinance Index increased by 10.2 percent to 2788.2 from 2529.2 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which increased 9.1 percent to 1278.7 from 1172.4 the previous week, and the Government Index, which increased 18.8 percent to 143.9 from 121.1 the previous week.

Jonathan Levinson : 7/6/2005 9:03:25 AM

August crude oil is up .60 at 60.20. Ten year note yields are extending their decline, now down 2.1 bps at 4.078%.

Jonathan Levinson : 7/6/2005 9:03:56 AM

QQQQ's 30 min cycle downphase is underway, but the price is being held flat by the 60 min cycle which continues to point up, the 600 min stochastic just entering overbought territory. We often see rangebound chop as the 60 min cycle takes its slow turn, but it usually follows the faster 30 min cycle.

Bears will need to capitalize on the potentially bearish setup for today in order to avoid a likely daily cycle upturn. As yesterday, the action today may be dictated by the open market desk's repo decisions during the next hour. The bullish intraday cycle setup was doing its thing, but only lit the 10AM afterburners when the Fed announced its massive adds.

Linda Piazza : 7/6/2005 9:00:35 AM

Four times since 6/24 (6/24, 6/28, 6/30 and yesterday), the OEX zoomed from one side of the recent range to the other. Each of those other three days was followed by a doji or near-doji created when there was some follow-through but then a pullback or bounce. Then the next day would see the OEX zoom the other direction. Down, doji or near-doji, up, doji or near doji, down, etc. With that pattern, we should see a doji day today, with prices perhaps rising up to test or pierce the important 100-sma before falling back.

That view is oversimplified, of course, but not by much, since the OEX has spent the last couple of months ranging from one side to another of some type of a consolidation pattern. The point is that we can no more take yesterday's action as the affirming final sign that the OEX is going to climb and climb and climb than we could take Thursday's action as an affirmation that it was going to drop and drop and drop into forever. The OEX could climb straight from here into a new high, but we haven't even seen the barest of confirmations yet. That would come on a daily close above the 100-sma, currently at 564.73, and even that barest of confirmations would just move the OEX back into May's consolidation zone.

Yesterday morning, the Keltner charts were showing a likelihood of a bounce although futures were saying otherwise. Let's see what the Keltners are showing now. First, the OEX ended the day jammed against daily Keltner resistance, a little above some lines, a little below another, so unless there's a gap this morning above 564.04 and then a holding of that level into the close, we're not going to get much information from that daily chart, with its channels in equilibrium position. At the close yesterday, the OEX had just risen to retest the early afternoon high and had fallen back. That action left a slight suggestion of Keltner-style bearish divergence, but divergence that could still be erased. Futures are slightly lower this morning, but basically flat-lining, so they don't give many clues. Bears would like to see a confirmation of the double-top formation on the five-minute chart, with that confirmation coming with a drop past the trough between the two highs, with that trough at 561.89. Bulls would like to see a 15-minute close above 563.87 and then a move above the 100-sma at 564.73. Both bulls and bears should be aware of 10:00 economic releases and the recent pattern of big move, doji day, big move, doji day. If inclined to buy a bullish breakout, something that doesn't tempt me yet, remain wary of the possibility of that "breakout" actually being part of a doji's formation and be willing to exit if the play doesn't perform as expected. Keep an eye on the RUT and the RLX, two indices that were leading to the upside yesterday, to see if they're still performing that leadership role.

Jonathan Levinson : 7/6/2005 8:44:16 AM

Equities are now negative, QQQQ down 4 cents at 37.07, NQ -.5 at 1513. Ten year notes are up, with TNX -1.1 bps to 4.088%, retracing part of yesterday's big gain. Gold is at a session low of 424.30, up 40 cents.

Linda Piazza : 7/6/2005 7:49:47 AM

London will host the 2012 Olympics.

Jonathan Levinson : 7/6/2005 7:46:02 AM

Equities are mixed to higher, ES trading 1209.5, NQ 1514.5, YM 10393 and QQQQ -.02 at 37.09. Gold is up 1.2 at 425.10, silver +.054 at 6.934, ten year notes +19/64 at 9/64 and crude oil +.45 at 60.05.

We await the 10AM releases of the Challenger jobs report, and ISM services, est. 58.9. The EIA's oil report normally scheduled for today at 10:30 will be released tomorrow due to the 4th of July holiday.

Linda Piazza : 7/6/2005 7:15:35 AM

Good morning. The Nikkei posted a modest loss last night, with other Asian markets mixed. European markets gain this morning. Our futures trade near the flat-line. As of 7:10 EST, gold was up $1.80, and crude, up $0.42 to $60.01. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei opened in positive territory and punched up to a new recent high within the first few minutes of trading, but then trended down the rest of the day. It closed lower by 13.17 points or 0.11%, at 11,603.53. Throughout Asia, exporters tended to gain after the dollar firmed against some other currencies and yesterday's U.S. report on manufacturers' orders. That didn't translate into gains in Japan, however, as Japanese investors were also reacting to economic news, including Japan's index of leading economic indicators for May. That number stood at 40.00, an expected result, but still one remaining below the benchmark 50. In addition, Governor Fukui of the central bank reiterated the bank's intention to keep its quantitative monetary easing policy in place as long as deflation risks continue. Another blow to sentiment was NEC Electronics Corp.'s update. Poor chip sales resulted in an expectation for a net loss of 6.5 billion yen for the first quarter and a lowering of the company's full-year profit forecast. The Japan Automobile Importers Association also reported sales figures for imported cars, with those sales rising due to strong sales of vehicles at foreign car makers, with sales of vehicles imported by Japanese automakers proving weaker.

Other Asian markets were mixed. The Taiwan Weighted declined 0.54%, but South Korea's Kospi rose 0.02%. Singapore's Straits Times climbed 0.52%, and Hong Kong's Hang Seng gained 0.18%. China's Shanghai Composite fell 0.53%.

European markets gain. There's some excitement in Europe as this report is prepared as the IOC makes a decision about the site of the 2012 Olympics, with New York, Moscow and Madrid having been eliminated this morning. The choice narrowed to London and Paris, and an announcement is due shortly. One report notes that food, beverage and technology stocks help to lead European indices higher in earliest trading, while drug manufacturers, oil and airlines led the FTSE 100 higher. With crude flirting again with $60.00 as this report was prepared, airlines might not continue their gains. M&A news in Europe involved a California-based company, Stentor. Philips Electronics will buy the U.S. medical equipment company, involved in picture archiving and communications systems for digital radiology images. In other M&A news, banking group ABN Amro Holding NV has extended the time period for its offer to buy Italy's Banca Antonveneta SpA.

In company-specific news, Peugeot declined after giving an earnings update for the year. French catering group Sodexho Alliance rose after reporting on nine-month sales and updating expectations for fiscal year sales. This French company might also benefit if the IOC decision later this morning is in favor of Paris, so the earlier 2.6% gain might be at least in part a momentum move in front of that IOC decision. Broker upgrades included Deutsche Bank upgrades of Cadbury Schweppes to hold from sell, U.K. hotel and restaurant group Whitbread PLC to buy from hold, and French aerospace and defense contractor Safran SA to hold from sell.

As of 7:02 EST, the FTSE 100 had gained 43.30 points or 0.83%, to trade at 5,233.40. The CAC 40 had gained 33.55 points or 0.79%, to trade at 4,286.30. The DAX had gained 28.24 points or 0.61%, to trade at 4,631.89.

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