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Jeff Bailey : 7/16/2005 2:09:46 AM

Pivot Matrix for Monday at this Link

OI Technical Staff : 7/15/2005 9:59:59 PM

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Jeff Bailey : 7/15/2005 6:37:18 PM

Real quick ... here's Dorsey's Distribution Curve for Transports / Non Air as of Thursday's close. List of symbols should include many of the rails. Link ... buggers are getting green since we last looked aren't they?

This Distribution Report takes the stocks in a sector and places them in a bell curve style table with the far right being 100% overbought on a weekly distribution and the far left being 100% oversold on a weekly distribution. Weekly distributions are calculated at the end of each week. A symbol that is in UPPER CASE indicates that the RS chart is on a Buy Signal. If the background is Green then the item is in a Positive Trend and if it is Red then it is in a Negative Trend. White background indicates that the chart has not yet given a Trend Signal.

Jeff Bailey : 7/15/2005 6:30:56 PM

I'll work on some of these RRs later. Got to run.

Jeff Bailey : 7/15/2005 6:30:27 PM

Norfolk Southern (NSC) Link ... PnF chart looks incorrect. I don't see a trade on the bar chart in January at $33. Stockcharts.com may show it due to their penalizing the stock for paying a dividend.

Those of you with Dorsey/Wright charts will see that the stock achieved its bullish vertical count of $31.50. So really, a bull would want to see the stock trade $29, give the triple bottom sell signal, but with the BPTRAN still rising, have NSC whip back higher, create a "bear trap" and THEN get the reversing higher PnF buy signal at $34 and establish a new bullish vertical count.

Note: Bar chart would show the 200-day SMA rising at .... $33.96.

Jeff Bailey : 7/15/2005 6:19:28 PM

James Cramer was talking about GE's earnings. Didn't catch it all as I'm getting ready for a meeting, but "train/carload" got my attention. I'll have to go back and look, but within the past three or four days, I read some news item that a "railroad" company just bought a bunch of cars, or leased them.

Remember some conversations from YELL's Ceo several months ago about how poor the railroads had been in providing service, and that business was going to the truckers? Perhaps it is the railroad carriers now getting back to capacity that brings them a cycle boom. Might have been mentioned/noted in GE's earnings and outlook.

Jeff Bailey : 7/15/2005 5:19:59 PM

Hmmm.... I see Tweeter Home Entertainment (TWTR) $3.09 +19.76% Link on the percentage gainer list. I was looking at it yesterday as a "fundamental" play on recent refinance boom.

Note: on 01/29/04 I liked this stock as long at $10.42, but was stopped out at a loss on 02/02/04 at $10.20. Stock did go on to trade $11.50 as the holiday shopping season numbers came through, but that was it.

Jeff Bailey : 7/15/2005 5:00:32 PM

Closing Internals found at this Link

Jeff Bailey : 7/15/2005 4:47:57 PM

Current OPEN MM Profiles found at this Link ... July's CLOSED trades found at this Link ...

Today's Activity ... Day traded long shares of LSI Logic (LSI) at the offer of $9.71, exited at target of $9.85 ($0.14, or +1.44%)

Day traded long shares of Internet Initiative (IIJI) at the offer of $8.83, stopped out at $8.71 ($-0.12, or -1.36%).

At today's expiration, the prevopis;u sold naked El Paso (AMEX:EP) July $10 Puts (EP-SB) expired worthless ($+0.10, or 100%).

Linda Piazza : 7/15/2005 4:00:53 PM

The RUT, a recent market leader, may be tiring, printing a doji at the top of a climb for a weekly candle. Remember before you make too many assumptions, though, that the RUT remains within a steeply ascending regression channel off the late April low, and even attempting a bounce off the midline of that channel today.

Linda Piazza : 7/15/2005 3:57:19 PM

No new high on the OEX, but no confirmation of a lower high yet, either, so we don't know yet if there's going to be that setup that I mentioned in the 9:06 post.

Linda Piazza : 7/15/2005 3:55:51 PM

The Wilshire 5000's potential H&S on its 15-minute chart, something to watch on Monday for either confirmation or invalidation: Link Note: this link doesn't appear to be working, but trust me, the H&S is there.

Jeff Bailey : 7/15/2005 3:54:47 PM

LSI Logic (LSI) $10.10 +0.79% ... this trade was close out, but OI analysis much better. Good intra-day setup too. Short interest (noted a couple of days ago) probably doesn't hurt today's comeback.

Jeff Bailey : 7/15/2005 3:52:52 PM

IIJI $8.81 -3.71% .... INX.X 198.81 ... here's where I'd probably sell if wanting to get flat, or reduce $10,000.00 full position over weekend. I should have analyze the OI a little better before I profiled a day trade long.

Linda Piazza : 7/15/2005 3:50:14 PM

The SOX is moving up to challenge the descending trendline off the 3:00 high, the last little possible bull flag on the five-minute chart. That 3:00 high was at 463.74, but the SOX hasn't broken over the bull flag resistance yet. The SOX is dealing with both 15-minute and 30-minute Keltner resistance, looking a little better on the 30-minute chart than on the 15-minute one, but still not quite free of that resistance. The 15-minute resistance looks strong enough to hold the SOX back, but from this point on, I don't think it's about what the charts say but about what opex actions are accomplished.

Jeff Bailey : 7/15/2005 3:47:06 PM

QQQQ July $38 Calls get some action at $0.90. Hmmmm.... $38.90. That's that "bad tick" level. Any bets on today's close? Only trader buying those is probably one that can't, or doesn't want to deliver.

Jonathan Levinson : 7/15/2005 3:46:12 PM

QQQQ's 30 min cycle has turned up from the midpoint, but the oscillators have yet to break the descending trend in place since Monday. The 60 min cycle downphase has stalled but not reversed, while the daily cycle upphase continues. 30 min channel support is up to 38.72, 72 SMA holding at 38.80, while the channel top is up to 39.01.

Linda Piazza : 7/15/2005 3:43:09 PM

The OEX is attempting a bounce from the top of the descending regression channel in which it traded lower from yesterday's high. This is just above the location of the 60-minute 10-sma. There's no resolution yet to the lower high or higher high question, and I'd be reluctant to trust it if it occurred this late on an opex Friday. I think it might be better to wait until Monday, but at least there might be a good setup for Monday.

Jeff Bailey : 7/15/2005 3:40:14 PM

IIJI ... here was a Level II screen capture just before being stopped out. Link ... What I was thinking was ... IF the morning lows held and today's trade WAS expiration related and $8.75 was the settlement (10 to 7.75 mid-point), then extended session might see an artificial "relief bounce" up toward NFSC and MLCO. Can still monitor, might get feel going into Monday. Test against INX.X 198.74 -0.39%.

Jeff Bailey : 7/15/2005 3:33:52 PM

Bullish day trade stop alert ... for Internet Initiative (IIJI) $8.71.

Linda Piazza : 7/15/2005 3:33:14 PM

Wilshire 5000 turning lower, but it hasn't broken through the neckline of its new H&S. The 15-minute 100/130-ema's, from which it bounced earlier today, are now at 12,211.37 and 12,193.90, respectively, so I wouldn't consider the formation confirmed until a drop below both. The DWC is at 12,245.41 as I type.

Jonathan Levinson : 7/15/2005 3:27:45 PM

Session low for GOOG at 300.06, ticking to 299.95 as I type. The Yahoo board must be going berzerker.

Jeff Bailey : 7/15/2005 3:28:23 PM

Nope .... see those IIJI July $10 puts (IQD-SB) trading $1.20? $10 - $1.20 = $8.80. I don't think it makes sense to be buying those today, do you?

Linda Piazza : 7/15/2005 3:25:29 PM

Wilshire 5000 still at the right-shoulder level, turning down a little, but not that much yet.

Jonathan Levinson : 7/15/2005 3:24:31 PM

NYSE volume breadth slides back to neutral, Nasdaq still +1.46:1 with QQV back down to 12.69. Volume is still very light overall. QQQQ's short cycle indicators are starting to roll, but will need a break of 38.80 to kick off the next downphase.

Jeff Bailey : 7/15/2005 3:24:27 PM

Yahoo! Inc. (YHOO) $36.65 -0.56% ... #1-#3 July Open Interest ... July $37.50 C (yesterday's high was $37.50), July $30 Put, July $35 C.

Linda Piazza : 7/15/2005 3:22:07 PM

Lower high in the making on the OEX? Perhaps, but watch the 60-minute 10-sma at 574.75 for possible support.

Jeff Bailey : 7/15/2005 3:21:10 PM

INX.X 199.01 -0.26% ...

Jeff Bailey : 7/15/2005 3:20:10 PM

Internet Initiative (IIJI) $8.76 -4.26% ... doesn't look like it is going anywhere today. I can assume expiration, but can't count on it.

So... we're day trade long a full position, and I'm going to at least get rid of half, maybe entire position into the close (MM Profiles).

YOU might want to do this. IF you're a trader that likes to be flat over the weekend, but think the stock is artificially pinned lower today due to expiration, then perhaps you hold some shares over the weekend IF the INX.X can get a close above 200.00, and show some type of "bullish bias" at what may well be an expiration pinning.

Linda Piazza : 7/15/2005 3:16:07 PM

Wilshire 5000 still in the right-shoulder level.

Linda Piazza : 7/15/2005 3:15:39 PM

Watching for confirmation of a lower high on the OEX, which would come on a break below 573.42. Or for a break above yesterday's 576.70 high.

Jeff Bailey : 7/15/2005 3:12:10 PM

03:00 Internals found at this Link

Linda Piazza : 7/15/2005 3:10:49 PM

Perhaps we'll have to go to the close or early next week before we know for certain if we're getting a confirmed lower high on the OEX or a higher high.

Jonathan Levinson : 7/15/2005 3:10:38 PM

3-day view of QQQQ with price retreating from 39.00, just below today's R1 and back within the upper keltner channels. The short cycle indicators aren't maxxed out, but they're overbought and running out of racetrack. Link

Linda Piazza : 7/15/2005 3:05:33 PM

SOX above a descending trendline off yesterday's high. No new high for the SOX, though. Not yet, anyway.

Jeff Bailey : 7/15/2005 3:04:05 PM

03:00 Market Watch found at this Link

Linda Piazza : 7/15/2005 3:03:46 PM

Wilshire 5000 still testing the right-shoulder level, at 12,264.23 as I type. It's also at 15-minute Keltner resistance at 12,265.83 on a 15-minute close. Next resistance at 12,291.96.

Jonathan Levinson : 7/15/2005 3:03:24 PM

Volume breadth has firmed to +1.21:1 on the NYSE and +1.46:1 on the Nasdaq, but overall volume is very light, QQQQ at 54M shares, just over half yesterday's total. The QQV is as low as I've ever seen at 12.63.

Jeff Bailey : 7/15/2005 3:01:19 PM

Internet Initiative (IIJI) $8.80 -3.82% ... option chain at this Link ... today's negative might well be that the 2nd-most heavy OI is at $7.50. If stock IS pressured by expiration, then might expect bigger bounce on Monday. Still, let's hang in here, as market maker might want to work on the $10 puts a bit. He/she isn't getting much reaction from the $7.5 call holders.

Linda Piazza : 7/15/2005 2:59:27 PM

DWC (The Wilshire 5000 is close to the right-shoulder level for its new H&S with a horizontal neckline. Hasn't invalidated the formation nor confirmed it yet.

So far, the OEX's action today is playing out just as expected. (See my 9:06 post.) Unless I missed an example, every single time for a year that there had been such an extended climb along the 60-minute 10-sma, there was always a retest of the recent high after that average had been broken on a 60-minute close. A lower high and rollover, and a 38.2% retracement (from the high and not the lower high) was in the works in almost all cases, but with a stop set above that recent high in case a seeming rollover wasn't a rollover after all. A higher high, and bears should stand aside and wait for a better entry. Stand aside for a long time in some cases. Just before the May/June consolidation, neither of these patterns played out well, though, and the OEX just settled into that prolonged consolidation on the daily chart. That was the only time that happened, though.

Jeff Bailey : 7/15/2005 2:55:03 PM

Qcom (QCOM) ... bears could be dialing 911 here.

Jeff Bailey : 7/15/2005 2:54:41 PM

QQQQ $39.00 ... didn't budge on intra-day test of neckline of massive reverse head/shoulder pattern. Link

Jonathan Levinson : 7/15/2005 2:53:12 PM

It's shaping up to be a long hour and 24 minutes for July QQQQ 39 call writers, QQQQ rising to 38.97 as I type. This move has exceeded the upper 30 and 60 min keltner tops, a move which reverses most of the time. But it needs to do so soon, or else it will signal a less common/more bullish upside trending move shaping up.

Jeff Bailey : 7/15/2005 2:51:18 PM

e-mini NASDAQ (nq05u) alert 1,588 ... 10-minute delayed

Jonathan Levinson : 7/15/2005 2:44:54 PM

QQQQ is at a new high for the week on a surge of volume, with volume breadth jumping to +1.76:1. The NYSE is still at -1.11:1, YM not yet at the morning's high.

Linda Piazza : 7/15/2005 2:44:18 PM

Next 15-minute Keltner resistance for the OEX at 575.82.

Linda Piazza : 7/15/2005 2:41:54 PM

I mentioned earlier today a phenomenon that sometimes happens with H&S's with an ascending neckline such as the Wilshire 5000's. Sometimes prices come down to the beginning of the left-shoulder level and then bounce again into a new right shoulder, converting the former right shoulder into part of the head formation and the neckline into a horizontal one. I mentioned that I wouldn't be surprised to see the Wilshire 5000 do just that, bouncing from about the 12,200 level, which it did do. If the DWC to form another right shoulder and then confirm the new H&S with a horizontal neckline, then it should probably find resistance somewhere around 12,260 or not far above that. The DWC is at 12,243.36 as I type. I haven't backtested to see whether this phenomenon means that the new H&S is more or less likely to be confirmed or more or less likely to be invalidated, so I just don't know that information. All we can do is watch the new right shoulder level for a potential rollover or just a flattening and then a new climb that invalidates the formation.

Jonathan Levinson : 7/15/2005 2:35:32 PM

QQQQ chart updated at this Link with price edging back from its upside 30 min channel touch. The 72 SMA is now lined up with the pivot at 38.77, the first goal for bears.

Linda Piazza : 7/15/2005 2:34:38 PM

The OEX is still testing the top of its descending regression channel.

Jeff Bailey : 7/15/2005 2:33:10 PM

IIJI $8.84 ... July $10 C still had 4,919 OI and the July $7.5 C had 4,725 OI. Now... if I split the difference ($2.50 * 0.5= $1.25) and subtract from $10.00, I get $8.75.

Now,,, the July $10 Puts had just 1,478 OI, and those are in the money. Don't want them to get "too far in the money" if I'm the market maker of those options.

Linda Piazza : 7/15/2005 2:30:19 PM

RLX HOD at 466.59; yesterday's HOD at 466.79. Will it move into a higher high or roll over from a lower high? Currently at 466.11. Watching it to see what we might expect from the OEX, too. Although their patterns aren't always analogous, of course, the retailers have been helping to lead the OEX higher.

Jonathan Levinson : 7/15/2005 2:28:58 PM

QQQQ just tagged Thursday's high, while YM didn't come close.

Jeff Bailey : 7/15/2005 2:26:54 PM

LSI Logic (LSI) $10.05 +0.29% ... I don't believe it.

Linda Piazza : 7/15/2005 2:26:21 PM

OEX headed up to the top of its flag-like formation. This is to be expected, if the OEX is to follow its pattern over the last year, when the OEX has followed its 60-minute 10-sma average up in a straight-up climb for so long. Every instance I saw during that year (may have missed some) when the climb had been that strong and prolonged, there was a retest of the previous high before a rollover, if one was to occur. A higher high told bears to stand aside.

Jeff Bailey : 7/15/2005 2:25:46 PM

Internet Initiative (IIJI) $9.79 -3.93% ... DAILY S1 $8.85, Piv= $9.16. Should be "lifting offers." I'm thinking we're far enough away from the $10.00 strike to get a bounce.

Jonathan Levinson : 7/15/2005 2:25:39 PM

GE back up to unchanged, session high for gold, QQQQ 2 cents away from the morning high. August crude is down to a .05 gain at 57.85.

Jeff Bailey : 7/15/2005 2:23:22 PM

CBEO Internet (INX.X) 198.92 -0.30% ... edges back above DAILY S1, DAILY Pivot is 200.01.

Jonathan Levinson : 7/15/2005 2:20:35 PM

QQQQ clears the daily pivot for the first time today since breaking below at 9:45. Upside 30 and 60 min channel resistance are at 38.84-.87.

Linda Piazza : 7/15/2005 2:19:27 PM

Now that the OEX moved sideways long enough for the midline of its descending regression channel to drop beneath it, so that it's now above that midline, it's trading sideways long enough for the top resistance to move down toward it, too. Smile. Actually, the OEX is attempting to rise to test that, but it's not being successful so far. Top resistance now at about 575, and a breakout now, long awaited, would give us the retest of yesterday's high, teling us whether we'll see a lower or higher high. Oh, a bigger bounce as I typed. $0.25 can look like a big move after all these miniscule 15-minute candles.

Jeff Bailey : 7/15/2005 2:17:05 PM

02:00 Internals found at this Link

Linda Piazza : 7/15/2005 2:16:12 PM

When I find that a stock is moving and I don't know why, I sometimes go onto boards to see if anyone has linked a news article or offers insight. Every time I look, though, I see the same thing I used to see years ago. This thing is going to $500 and stuff like that.

Jonathan Levinson : 7/15/2005 2:15:11 PM

QQQQ's 30 and 60 min cycles are holding in their tractionless downphase. This has been the picture all week. It's either one very big bearish divergence against the daily cycle upphase, projecting a sharp drop for next week, or a very weak, extended correction to the formerly maxxed out 30/60 min cycle upphase, to be followed by an impulsive blast to the upside. The widest 60 min cycle band has QQQQ support at 38.59, resistance at 38.87, and a high volume break through either should give the first indication of direction for the next move.

Jeff Bailey : 7/15/2005 2:11:33 PM

Day trade long alert ... for Internet Initiative (IIJI) $8.83 here, stop $8.71, target $9.10

Linda Piazza : 7/15/2005 2:09:51 PM

I guess those traders forgot that we're supposed to set our emotions aside when trading, Jonathan. (See Jonathan's 2:07 post.) I, on the other hand, am always in control of my emotions when trading. Smile.

Linda Piazza : 7/15/2005 2:08:40 PM

The OEX looks as if it finally made it above the midline of its descending regression channel, but not by rising: by sitting still while the midline of that descending regression channel fell beneath it. Hey, any way you can get there, right? Still, bulls might have liked a stronger move higher. The OEX may be trying to confirm a double-bottom formation on the 15-minute chart, with that confirmation level on a move above 574.64, the peak between the two troughs. The OEX is at 574.23 as I type. A move back down will turn that potential double-bottom formation into a rectangular trading range at the bottom of a descent, and that's a lot less bullish. Still waiting for a so-far-non-existent retest of yesterday's high.

Jonathan Levinson : 7/15/2005 2:07:15 PM

I took a moment to check out the Yahoo message board entries on GOOG at yesterday's close, as the bludgeoned July 300 call writers and the giddy put shorts/ call longs traded insults. The level of frustration, hate, fear, profanity and panic was beyond anything I can remember reading- it was as close to utter mayhem as can be imagined in print. Haven't checked it out today, though.

Jeff Bailey : 7/15/2005 2:02:32 PM

02:00 Market Watch found at this Link

Linda Piazza : 7/15/2005 1:58:29 PM

I was hoping we'd see a retest of the OEX's recent high and get it over with today, so we'd know whether we were looking at a new high or a lower high. Now, we may not see that test completed until next week, or if it occurs on an end-of-day move, we may not be able to trust it.

Jonathan Levinson : 7/15/2005 1:56:42 PM

In a chess match, this would be the time to just stare at the opponent until s/he tips over the king.

Linda Piazza : 7/15/2005 1:55:09 PM

The RUT's climb still looks bear flag-ish.

Jeff Bailey : 7/15/2005 1:50:18 PM

Semiconductor Index (SOX.X) 459.72 -0.90% ... still hanging out at DAILY S1.

Jeff Bailey : 7/15/2005 1:49:37 PM

That bugger! ... LSI $9.96 -0.59% ... getting back close to $10.00.

Jeff Bailey : 7/15/2005 1:48:14 PM

Taser Intl. (TASR) ... Option Chain sorted by open interest, broken down by July, Aug, Sep, Dec. strikes.

PINK arrows would be a strike closest to where TASR would give a "buy signal." Interested traders might want to start monitoring changes in open interest.

Not overly unusual, but interesting is the 390 contracts traded in the Dec. $10 Puts today. (buyer, or seller?) If a SELLER, then the bet is that TASR does NOT trade/settle below $8.10 by year's end.

Linda Piazza : 7/15/2005 1:47:23 PM

The OEX has 2-hour Keltner resistance at 574.98 and 575.59 on two-hour closes.

Linda Piazza : 7/15/2005 1:44:24 PM

The OEX is still having trouble with the midline of the descending regression channel that may or may not be a bull flag.

Linda Piazza : 7/15/2005 1:41:26 PM

Stepping away for a few minutes.

Jonathan Levinson : 7/15/2005 1:40:43 PM

Session high for August gold here at 421.50, +1.3-. Crude oil is up .50 at 58.30, and ten year notes are back to negative, TNX +.8 bps at 4.188%.

Jonathan Levinson : 7/15/2005 1:37:57 PM

QQQQ failed again at the pivot, edging back toward the 72 SMA. Link Price has been reverting to current levels since yeterday's open, yesterday's opening gap unfilled. The real question is whether all the buyers since then will get trapped in an island top on Monday, or whether the bulls will be able to break it away. The 30 and 60 min cycles vote for the former, the daily cycle for the latter.

Linda Piazza : 7/15/2005 1:35:04 PM

So far, the SOX is still bounded by its five-minute 100/130-ema's on bounces.

Linda Piazza : 7/15/2005 1:30:43 PM

The RUT is now between a 38.2% and 50% retracement of the bounce off last Thursday's low. Those levels are 661.06 and 656.89, respectively. The RUT is now at 661.07, having inched just above that 38.2% retracement as I typed, but still testing the level. The bounce looks a little bear flag-ish, but we'll see. The RUT more than met its downside target for the H&S confirmed yesterday, sitting at the top of its climb and visible on the 15-minute chart.

Jeff Bailey : 7/15/2005 1:27:31 PM

Taser Intl. (TASR) $10.08 -1.56% Link ... Late yesterday, company announced that a wrongful-death lawsuit filed against it in the U.S. District Court for the Eastern District of California has been dismissed.

I was sorting TASR's option chain by open interest, and then by month. $10.00 looks to be a gravitation level. I accidently re-sorted the chain and messed everything up, will re-do with time, but might be some trades to the close.

Look at TASR's PnF chart. Hasn't given a "buy signal" since giving a "sell signal" at $25. Now... I think the recent bombing in London is going to re-focus some of the Homeland Security budget, toward more inner-city infrastructure. We might begin to see local police, and international police picking up their orders of stun guns. It may be a positive (not reflected into expiration) that this wrongful-death lawsuit was dismissed.

Jonathan Levinson : 7/15/2005 1:23:17 PM

August crude oil +.525 here at 58.325. Price is coiling within a pennant at teh bottom of the decline from Wednesday afternoon, suggesting the potential for downside followthrough on a break of trendline support currently at 58: Link

Linda Piazza : 7/15/2005 1:23:00 PM

The OEX is currently testing the midline of its descending regression channel, a possible bull flag, but so far, it still can't break above it. That midline is now at about 574.40. The top of the channel is now at about 575.43. A breakout there would signal a retest of yesterday's high, a retest I've been expecting but haven't seen. The 60-minute 10-sma, formerly support since last Thursday morning, is now at 574.71, but some of the retests over the last year have broken up through that 60-minute 10-sma and still produced lower highs, so that's what bears will want to see happen. Bulls want a higher high, of course. We may not get anything much at all on an opex Friday.

Linda Piazza : 7/15/2005 1:19:23 PM

The SOX is testing its five-minute 100/130-ema's from the underside, with those averages serving as the topside boundaries of its consolidation pattern since the first steep fall. They're at 460.41 and 460.15, respectively, with the SOX at 459.98 as I type.

Jonathan Levinson : 7/15/2005 1:12:54 PM

QQQQ update, testing upper descending pennent resistance as I type, with volume slowed to a crawl. Breadth has recovered, however, with declining volume leading just 1.14:1 on the Nasdaq. Next resistance is immediately overhead at the daily pivot. Link

Jeff Bailey : 7/15/2005 1:10:53 PM

01:00 Internals found at this Link

Linda Piazza : 7/15/2005 1:09:58 PM

Since its first decline this morning, the OEX has not been able to move back above the midline of its descending regression channel on the top of its climb. It's rising again and may be giving that effort another try. The midline is at about 574.40 as I type.

Jeff Bailey : 7/15/2005 1:03:10 PM

01:00 Market Watch found at this Link

Linda Piazza : 7/15/2005 12:59:18 PM

The SOX's consolidation pattern since its first steep fall is literally bounded on the topside by the five-minute 100/130-ema's and on the bottom side by the 10-minute versions. Some are buying the 10-minute ones and some are selling the five-minute ones.

Jonathan Levinson : 7/15/2005 12:58:24 PM

Stepping away for 10 minutes.

Linda Piazza : 7/15/2005 12:56:39 PM

After the first steep fall this morning, the SOX has traded sideways. The TRAN has fared a little worse, falling, climbing in a bear flag, falling again, and now climbing in another probable bear flag. The RLX, another mover to the upside over the last weeks and oftentimes market leader, has been moving up into a retest of recent highs. The BIX fell with other indices this morning, but then bounced up into a new recent high, with both the BIX and RLX action being a danger signal to OEX bears. We're still waiting for that retest of recent highs on the OEX, to see whether there's a lower or higher low, after the OEX's close below the 60-minute 10-sma this morning. So far, it looks more inclined to drop than to rise to a new high, but it's trying to stabilize. Not so sure how successful it will be. There's a mixture of evidence, so I'm watching these ongoing tests.

Jonathan Levinson : 7/15/2005 12:47:42 PM

Ten year notes bounced from their 111 7/16 low to a lower high here at 111 11/16, with TNX back down 1.1 bps at 4.169%. 4.8% continues to act as a magnet, with the test of 4.2% resistance blowing off in a doji reversal so far. The daily cycle has reached overbought territory, and 4.2% continues to appear as substantial resistance. Daily chart of the TNX at this Link

Jeff Bailey : 7/15/2005 12:44:44 PM

Tyson (TSN) $19.67 +6.20% ... yes... here's an article ... Link

Jeff Bailey : 7/15/2005 12:43:31 PM

Tyson Foods (TSN) $19.66 +6.15% Link ... the rooster crows and cow moos! Might be related to news that our friends to the north might be exporting cattle to U.S.

Jonathan Levinson : 7/15/2005 12:34:32 PM

Volume breadth is holding in the red, -1.64:1 on the NYSE and -1.24:1 on the Nasdaq, but given the overall light volume, it could turn on a dime. The TRIN is just above neutral, 1.08, TRINQ .97.

Linda Piazza : 7/15/2005 12:30:34 PM

Still waiting for that retest of the recent high I expected to see on the OEX after it broke through the 60-minute 10-sma. Not seeing that retest.

Linda Piazza : 7/15/2005 12:28:31 PM

Wilshire attempting a bounce from a few points above its 15-minute 100/130-ema's. Not too successful yet, but still trying.

Jeff Bailey : 7/15/2005 12:30:50 PM

Host America (CAFE) $10.23 +27.39% Link ... will get bold print in this weekend's Wall Street Journal (52-week highs).

I'm going to add to personal account position here.

Jeff Bailey : 7/15/2005 12:25:42 PM

LSI Logic (LSI) $9.84 ... did trade its "dynamic" 50% of $9.895. Bulls from $9.71 entry want to have taken profits as a day trade short may defend.

Linda Piazza : 7/15/2005 12:24:41 PM

Here's what the OEX's 15-minute Keltner chart shows: As long as the OEX continues making 15-minute closes beneath Keltner lines currently at 573.87 and 574.03, it's vulnerable to 571.18-571.82. On 15-minute closes above 574.03, it will encounter first resistance near 574.78 and then 575.93-567.43. So, on a break above the 574 level on a 15-minute close, we might be expected to see a test of the flag's upside resistance. If the OEX instead drops to 571.18-571.82, particularly if such a drop should occur quickly, the OEX would be dropping out of that flag formation and questioning whether that's what it really is.

Jonathan Levinson : 7/15/2005 12:23:34 PM

Another bounce between S1 and the daily pivot for QQQQ, with the short cycle channel sliding sideways within the flat 30 and 60 min channels, no sign of thrust in either direction: Link

Jeff Bailey : 7/15/2005 12:19:43 PM

LSI Logic (LSI) $9.85 target alert ... day trader's chart at this Link

Linda Piazza : 7/15/2005 12:14:52 PM

Dropping, with only the RLX retesting its recent high, of the indices I watch. Others didn't get that far. The RLX is still in testing range and hasn't confirmed a lower high. However, as the SOX drops to test the previous LOD, it's also dropping toward potentially strong 60-minute Keltner support, so the bounce for the SOX at least, may still be ahead. The Wilshire 5000 just dropped to a new LOD, but only a minimal one, and a drop that's bringing it down to test 12,200 and the 15-minute 100/130-sma's at 12,203.14 and 12,183.74, respectively. I've mentioned these 15-minute 100/130-ema's a lot this week and that's because they played a pivotal part in last week's bounce. On the Wilshire 5000, for example, the Wilshire 5000 formed an inverse H&S at the bottom of the drop, with the neckline at the 15-minute 100/130-ema's. It was the climb above those and simultaneous inverse H&S confirmation that started the rally into this week, and this will be the first retest of those averages. Link

Tab Gilles : 7/15/2005 12:13:26 PM

Sepracor (SEPR) Link

I'm looking at $WTIC to pullback to the $50 level and MUR back to the 100/150-ema entry level. Link Link

An inverse play to oil on any pullback would be the airline sector, specifically AMR. Link

Jeff Bailey : 7/15/2005 12:12:27 PM

LSI Logic (LSI) $9.79 -2.29% ... back to Red #6.

Jeff Bailey : 7/15/2005 12:11:36 PM

12:00 Internals found at this Link

Jeff Bailey : 7/15/2005 12:05:10 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 7/15/2005 12:03:43 PM

Session low for ES and YM here, QQQQ down .07 at 38.70 here and back below the 72 SMA.

Jonathan Levinson : 7/15/2005 11:59:30 AM

QQQQ continues to drift along the 72 SMA, the short cycle indicators drifting higher without any traction on the upside either. This feels like op-ex tractor beam action to me, with price parked firmly in a narrow range, volume exremely light (30.7M shares so far, less than what changed hands in the first hour yesterday), and volatility subterranean, QQV -.49 at 13.18. Volume breadth is negative, -1.74:1 on the NYSE, -1.31:1 on the Nasdaq.

Linda Piazza : 7/15/2005 11:55:58 AM

The RUT has certainly dropped since hitting its high a few days ago. Reversal? I know what I think needs to happen, but we sure can't assume so yet: Link

Linda Piazza : 7/15/2005 11:51:56 AM

If that advdec line's rise was really a bear-flag type climb, as I idly speculated earlier, then the flag's support has been broken. This occurs as the TRAN breaks through to a new LOD.

Jeff Bailey : 7/15/2005 11:49:46 AM

Bullish day trade long alert for shares of LSI Logic (LSI) $9.71 here, stop $9.66, target a bounce back to $9.85.

Linda Piazza : 7/15/2005 11:50:03 AM

Big if, but if the SOX were to close the day where it is now, it will have created a tweezers-top reversal signal on the daily chart. There's always a question as to whether a first reversal signal should be trusted after a strong trend, however. The trend has definitely been up, and such countertrend reversals often signal only consolidation or a shallow pullback. The daily Keltner channel shows the SOX currently just above first support, at 458.64, with further and perhaps stronger support at 452.48 and then at 448.49. A daily close below the line currently at 452.48 would erase that new upside target and breakout signal on the SOX, but the SOX has stayed above the breakout level longer than it has since late 2003, so I think our first assumption should be that any pullback might be just a pullback to test that broken resistance, to see if it holds as support now. If the SOX instead shows more weakness, bears will know that they're in control.

How likely is the SOX to end the day where it is now? Dialing down to a 60-minute Keltner chart shows first that the SOX's pattern looks as if it might be a "b" distribution pattern. However, this forms above Keltner support that looks strong from 457.03-458.01, so it might be highly likely that the SOX would stabilize there or attempt a bounce from there. A steep fall through that level on a 60-minute close would make the SOX vulnerable to that steeper pullback to test daily Keltner resistance in the 448-452 zone. A bounce might send the SOX up into a retest of yesterday's high. You know what bears want and what bulls want.

Jonathan Levinson : 7/15/2005 11:40:37 AM

August crude oil +.20 here at 58.00, off a low of 57.325, high of 58.925. 50 tick chart at this Link

Linda Piazza : 7/15/2005 11:40:25 AM

The SOX looks as if it's breaking down out of its latest bear flag as seen on the five-minute chart, but it hasn't confirmed by producing a new LOD yet. Current LOD 458.53, with the SOX at 459.15.

Linda Piazza : 7/15/2005 11:38:56 AM

The advdec line is rising, although still deep in negative territory, but not many indices I watch are responding yet in a positive way, and I wonder if we're not seeing a sort of bear-flag climb on the advdec line, too. That climb makes me surprised at the tepid nature of bounces or bounce attempts on the OEX and SOX. Thought we'd see a pretty quick rebound back to test and maybe even exceed those 60-minute 10-sma's on both, as these indices retested recent highs and either produced lower or higher highs. The OEX so far can't even make it back above the midline of its descending regression channel, the possible bull flag. The OEX currently looks more likely to fall out of that flag than to break out to the upside. However, the 15-minute Keltner chart shows potential support being approached from the current 574-ish level, down to 573.46, with stronger support at 571-571.74, so perhaps the bottom-of-the-channel support will hold after all.

Jonathan Levinson : 7/15/2005 11:31:12 AM

Volume breadth is up to -1.01:1 for the Nasdaq, while QQQQ's short cycle indicators turn up and price tests the daily pivot at 38.78. 30 and 60 min channel resistance are holding at 38.90 here, the 72 SMA support at 38.73. Link

Linda Piazza : 7/15/2005 11:31:05 AM

Looks as if they've ratcheted down the indices about right on time on an opex Friday. Wonder if they can be held here the rest of the day? Some indices are moving, however. I'm watching the SOX, not so far off the day's low, and the RLX, moving up into a retest of yesterday's high, among other indices. The TRAN bears watching, too, as it's consolidating at the bottom of a steep drop today. The pattern looks a little like a "b" distribution pattern when viewed on a five-minute chart, so the TRAN may still have a ways to fall, if it drops out of that pattern. Dialing down to a 1-minute chart shows that the TRAN had set up a nice-looking inverse H&S at the bottom of that steep fall, but it wasn't able to maintain a breakout above the neckline and now the formation has fizzled, with the TRAN just chopping around within a rectangular zone.

Linda Piazza : 7/15/2005 11:26:25 AM

The RLX looks as if it's broken above the top (best fit) trendline of its neutral triangle on the top of its climb along the 60-minute 10-sma. It's headed up into a retest of recent highs.

Linda Piazza : 7/15/2005 11:25:30 AM

SOX not bouncing or rather not holding its bounce.

Linda Piazza : 7/15/2005 11:24:23 AM

The OEX's descending trendline off yesterday's high is at about 575.70 if I've drawn it correctly. A break above that would look like a break above a potential bull flag. Such a break would not undo the potential scenario from my 9:06 post, since there usually is a retest of the previous high after a breakdown through the 60-minute 10-sma, after such a strong climb along it. It's whether that retest results in a lower or higher high that's important. That average is being tested now, with the OEX at 574.56 and the 10-sma on that chart at 574.69. A move back above the average as that recent high was retested was not uncommon.

Jeff Bailey : 7/15/2005 11:22:44 AM

11:00 Internals found at this Link

Jonathan Levinson : 7/15/2005 11:20:10 AM

QQQQ clears 72 SMA resistance here at 38.73, the short cycle indicators perking up.

Jonathan Levinson : 7/15/2005 11:14:56 AM

August gold is up .80, off a lower low at 418.10 and trading 421. HUI is down 1.02% at 194.98, silver up .67% at 7.04. The daily cycle for gold continues to hold in oversold territory, with 416-418 support holding so far.

Jeff Bailey : 7/15/2005 11:12:55 AM

SIMO $10.24 +1.68% ... might be a bull play. Recent IPO about to announce earnings. Usually want to have some "good news" after you IPO.

Jeff Bailey : 7/15/2005 11:11:19 AM

See how the warrants make the new highs prior to common?

Jeff Bailey : 7/15/2005 11:10:22 AM

Host America (CAFE) $9.70 +20.79% ... on Wednesday, I bought 200 shares of the common right in here, then stock got hit by pretty good seller. He/she might have been long liquidator, or bear. Be alert for volume and further directional move.

Risk arbitrage perspective would have been a "short the common" and long the warrants.

Jeff Bailey : 7/15/2005 11:07:23 AM

11:00 Market Watch found at this Link

Linda Piazza : 7/15/2005 11:04:09 AM

The Wilshire 5000 did steady where expected, or actually just a few points above the expected 12,200 level. The DWC (Wilshire 5000) has been retesting that broken neckline for its H&S, but I wouldn't be surprised to see it rise into another right-shoulder formation, turning the former ascending neckline into a horizontal one. On the Wilshire 5000, this would constitute a retest of the recent high after a break through the 60-minute 10-sma. I didn't test the DWC's pattern over the last year as I did the OEX's, so I'm not sure if that pattern I've been mentioning today holds true for the Wilshire 5000, too.

Jeff Bailey : 7/15/2005 11:03:41 AM

Oh my! ... $4.43 ... Link

Jonathan Levinson : 7/15/2005 11:02:39 AM

QQQQ's 30 and 60 min indicators are pointing down from lower highs, as they've several times this week. As has also been the case all week, there's no downside traction, a very bullish picture that suggests trending in these timeframes. If the bears can't do better than this, then the next upphase should be strong. The caveat is that this is op-ex week- poor cycle traction tends to be more the rule than the exception.

Linda Piazza : 7/15/2005 10:59:33 AM

We haven't gotten the expected bounce yet after the OEX closed a 60-minute period below the 10-sma. Usually after such a strong climb along that average, there's a retest of the previous high, with that being the signal to either enter bearish (lower high) or stand aside (higher high), but I said this morning that it would be my luck to have done all that research last night, and this would be the one time when that pattern wasn't followed. As I type, it looks as if the OEX is breaking down out of the last little bear flag on the one-minute chart.

Jeff Bailey : 7/15/2005 10:58:57 AM

Host America -Warrants- (CAFEW) $4.11 +33.87% ... darned market makers. Used a hard stop order entry and they came and got me at $3.68.

Jonathan Levinson : 7/15/2005 10:49:42 AM

Ten year notes hang 0.2 bps above unchanged, whith crude oil down to a .45 gain at 58.25, and QQQQ back at 38.70. Volume is very light at 22.7M QQQQ shares so far, just over half of what it was at this time yesterday, with breadth still -1.45:1 for the Nasdaq.

Jeff Bailey : 7/15/2005 10:45:05 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 7/15/2005 10:42:25 AM

The OEX is bouncing up, now, as expected--see my earlier comments. Remember that the OEX's pattern still looks like a bull flag, so a break over the flag's resistance should have would-be bears standing aside to see whether there's a lower or higher high.

Jonathan Levinson : 7/15/2005 10:37:35 AM

QQQQ has broken the descending triangle resistance on the move above 38.70, currently testing 72 SMA resistance again at 38.73. The short cycle indicators continue to decline, but they're nearing oversold territory, with the wavelet oscillator turning up. Link

Linda Piazza : 7/15/2005 10:31:52 AM

A first OEX 60-minute close beneath the 10-minute sma since last Thursday. See my 9:06 post. If the pattern follows, it will at some point retest the recent high.

Jeff Bailey : 7/15/2005 10:28:20 AM

LSI Logic (LSI) $9.84 -1.79% ... never certain with option expiration, but stock did reverse sharply from the $10.70 level yesterday morning. (see Tuesday's MM and option chain)

Jonathan Levinson : 7/15/2005 10:25:53 AM

QQQQ is declining toward daily S1 after bouncing from a pattern of lower intraday highs, for a possible bearish triangle: Link

Jeff Bailey : 7/15/2005 10:24:57 AM

Host America -Warrants- (CAFEW) $4.06 +32.24% ... I bought 2,000 warrants late yesterday at $3.35, too some heat. Sold 1,500 this morning on bid to $3.58-$3.60, have a trailing stop on 500 at $3.70.

Daily Pivot Levels ... $2.03, $2.55, Piv= $3.48, $4.00, $4.93.

Linda Piazza : 7/15/2005 10:20:55 AM

Update of this morning's OEX 2-hour Keltner chart: Link

Jeff Bailey : 7/15/2005 10:19:14 AM

VIX.X 10.75 -0.55% .... Daily Pivot Levels ... 10.22, 10.57, Piv= 10.85, 11.20, 11.48.

Jeff Bailey : 7/15/2005 10:18:12 AM

TRIN 0.91 +30% ... DAILY Pivot Levels ... 0.21, 0.45, Piv= 0.59, 0.83, 0.97

QCharts cleaned up their TRIN intra-day trade late yesterday after I had populated the Pivot Matrix.

Linda Piazza : 7/15/2005 10:17:56 AM

The OEX's first 60-minute period has not completed, of course, but barring a bounce in the next 15 minutes, the OEX will close this period below its 60-minute 10-sma. If the OEX follows other patterns over the last year, it will at some point then bounce into a retest of that high, either into a lower or a higher high. Well, I guess it could be an equal one, too. Smile. Strangely, though, I didn't see any of those in the action after the OEX had followed the 60-minute 10-sma so long and then broke through it. It was either the to-be-expected lower high or else a refutation of the weakness and a zoom past the previous high.

Jeff Bailey : 7/15/2005 10:16:36 AM

10:00 Internals found at this Link

Linda Piazza : 7/15/2005 10:15:13 AM

Like the Wilshire 5000, the SOX's H&S on its 15-minute chart had an ascending neckline. The SOX has now dropped to the 459.10-ish level that would mark a neckline if that neckline had been horizontal, so it's possible the SOX might bounce here, into a new right shoulder, reforming the H&S into one with a horizontal neckline. I've seen that happen other times, so that you think a H&S is confirmed and then find that it's not after all, but that what you thought was a right shoulder transformed into part of the head formation. We'll see soon as the SOX is testing that horizontal level.

Jonathan Levinson : 7/15/2005 10:14:23 AM

Session high for August crude here at 58.825, +1.025 or 1.77%.

Linda Piazza : 7/15/2005 10:11:37 AM

We have had a 30-minute close, and the OEX's 30-minute Keltner chart shows a weaker 30-minute close than the OEX has seen since Friday. As long as it's producing 30-minute closes beneath a Keltner line currently at 574.57, it looks vulnerable to 572, but that doesn't preclude bounces up to test that Keltner line currently at 574.57. Note that's also near the 60-minute 10-sma, and it was actually the reason I began studying the 60-minute 10-sma last night, wanting to isolate the one MA that was prompting bounces. Keltner lines are based on MA's.

Jonathan Levinson : 7/15/2005 10:08:18 AM

QQQQ bounced on S1 support as the Fed was announcing its weekend repo, currently back to testing the 72 SMA from below.

Linda Piazza : 7/15/2005 10:07:20 AM

The OEX is below its 60-minute 10-sma at 574.45, with the OEX at 573.85. No 60-minute close below this average yet, of course, and the OEX's pattern at the top of its climb could still be a bull flag. If the OEX should close the first 60-minute period below this average, the last year's patterns suggest that it would still retest the recent high, with bears hoping for a rollover from a lower high and bulls for a new high. Of course, now that I did all that study last night, this would be the one time when there isn't a retest of the recent high and prices would just fall straight down. We haven't seen that 60-minute close yet, though, so that's getting ahead of things.

Jonathan Levinson : 7/15/2005 10:04:08 AM

An even more massive 12.25B weekend repo from the Fed results in a 1.25B net add for the day.

Linda Piazza : 7/15/2005 10:04:33 AM

Wilshire 5000 still maintaining its break of the H&S neckline. Here's a possibility that I've seen worked out before when there's a H&S with a slanting neckline. Sometimes, prices drop down to the far edge of the left shoulder, then bounce again into a right shoulder, turning the former right shoulder into a part of the head formation. If so, the Wilshire 5000 might bounce from the 12,200 level into another right shoulder, perhaps up to 12,260 or so. With the Wilshire 5000 at 12,212.54 as I type, we'll soon find out.

Jonathan Levinson : 7/15/2005 10:03:37 AM

Declining volume leads 1.62:1 on the NYSE, 1.72:1 on teh Nasdaq. QQQQ bears need to take out yesterday's low at 38.51 to go for a gap fill to 38.40 and turn the 30 min cycle decisively lower.

Jeff Bailey : 7/15/2005 10:03:18 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 7/15/2005 10:02:34 AM

Still waiting to see what the Fed's going to do with it's massive 11B overnight repo expiring today. No word yet.

Linda Piazza : 7/15/2005 10:02:08 AM

The RLX slipped below the supporting trendline of its neutral triangle at the top of its climb, but it's bouncing right back up to test that trendline. Bulls want to see a quick move higher and an upside break now, turning that downside break into the almost-required trap. Bears want to see a rollover as former support now holds as resistance. That trendline is just above 462, and the RLX is at 461.88.

Linda Piazza : 7/15/2005 9:58:42 AM

The Wilshire 5000 has just confirmed its H&S, but still close to that neckline so that a bounce is possible. This is what a market bear wants to see after yesterday's bearish Wilshire 5000 daily candle. What a bear doesn't want to see is a quick reversal now.

Linda Piazza : 7/15/2005 9:59:47 AM

Big drop on the SOX, with the SOX having a sort of H&S on its 15-minute chart, too, although a rough one, and having just confirmed the formation, it appears. The SOX is below its 60-minute 10-sma, but it's pierced this average earlier in the week and even closed on it, but then bounced again. Somehow, since the Wilshire 5000's action yesterday, I've just felt more confident that there should be a pullback in the works. We have to see some confirmation by chart action, however.

Jonathan Levinson : 7/15/2005 9:55:13 AM

Ten year notes are recovering off the lows, with TNX back down to a 1.1 bp gain at 4.191%. QQQQ is edging back down to 72 SMA at 38.74, the short cycle indicators stalling below overbought territory. QQQQ chart at this Link

Linda Piazza : 7/15/2005 9:54:37 AM

So much for the bounce attempt. The Wilshire 5000 is only about 6 points away from a neckline test for its possible H&S on the 15-minute chart.

Linda Piazza : 7/15/2005 9:53:36 AM

We've seen lots of days lately when weakness was soon erased, and, as the SOX and OEX test their supporting averages for this climb and the Wilshire 5000 rattles around in a right-shoulder area, and the RLX coils, we probably should expect a bounce attempt to continue, although it hasn't been impressive so far during this usual first reversal of the day. On the OEX's 15-minute chart, the OEX faces Keltner resistance just overhead, near 575, and then again, just above 576. Support is near 574. The pattern on the 15-minute chart could be a bull flag. The OEX currently tests its 60-minute 10-sma, having pierced it once this morning but bounced slightly above it. Nothing's been decided just yet.

Jonathan Levinson : 7/15/2005 9:48:49 AM

Michigan sentiment 96.5 vs. 94.5 exp.

Linda Piazza : 7/15/2005 9:47:09 AM

SOX also testing the 60-minute 10-sma.

Linda Piazza : 7/15/2005 9:46:46 AM

OEX falling slightly below, but still testing, the 60-minute 10-sma.

Linda Piazza : 7/15/2005 9:46:19 AM

RLX coiling at the top of its climb, having dropped below its 60-minute 10-sma yesterday, and having punched to a quickly reversed higher high. It's using that average at support now.

Jeff Bailey : 7/15/2005 9:49:38 AM

Newmont Mining (NEM) $37.01 -0.93% Link ... darts lower and breaks below WEEKLY S2.

Linda Piazza : 7/15/2005 9:44:57 AM

SOX already attempting a small bounce from its 60-minute 10-sma.

Linda Piazza : 7/15/2005 9:44:24 AM

I mentioned a H&S-ish pattern on the Wilshire 5000's 15-minute chart late yesterday. The Wilshire is still trading within the right-shoulder range, having neither invalidated nor confirmed that formation. The neckline currently looks to be at about 12,220, if I've drawn it correctly, with the Wilshire 5000 at 12,238.14 as I type. A climb above 12,300 would likely invalidate that formation.

Jonathan Levinson : 7/15/2005 9:44:13 AM

QQQQ holds above 72 SMA support at 38.73, with 30 and 60 min channel resistance lined up at 38.90 with the short cycle indicators up but nearing overbought territory.

Jeff Bailey : 7/15/2005 9:44:07 AM

Garmin Ltd. (GRMN) $49.20 +2.32% ... 200-day SMA alert.

Jeff Bailey : 7/15/2005 9:48:25 AM

General Electric (GE) $35.11 -1.45% Link ... reported a 24% increase in quarterly profit as its energy business and steady growth at financial units bolstered profits. Net income rose to $4.65 billion, or $0.44 a share, in the second quarter, from $3.75 billion, or $0.36 a share, a year earlier. Quarterly sales rose 13% to $41.56 billion from $36.78 billion last year. Orders increased 13%. Analysts had expected GE to earn $0.44 a share before extraordinary items on revenue of $41.85 billion.

Jonathan Levinson : 7/15/2005 9:42:54 AM

Volume breadth is -1.01:1 for the NYSE, +1.14:1 on the Nasdaq. Awaiting Michigan sentiment in the next few minutes.

Linda Piazza : 7/15/2005 9:41:44 AM

Wilshire still flat. Both OEX and SOX are testing those important 60-minute 10-sma's. If you're strongly bullish, you'll probably already be considering new bullish entries if a bounce gets started, but I'm not going to be joining you, with the Wilshire 5000 not yet giving any clues as to whether it's goin to confirm or reject its potential reversal signal, and the OEX jammed right underneath a resistance band I've had marked on my charts for a long, long time.

Linda Piazza : 7/15/2005 9:38:15 AM

SOX just cents away from its 60-minute 10-sma at 461.70, with the SOX low at 461.78 and currently at 461.95.

Linda Piazza : 7/15/2005 9:37:04 AM

Test of the OEX's 60-minute 10-sma at 564,53 just a few cents away now, with the OEX at 574.64. The OEX has pierced this average on intra-hour periods, but hasn't closed below it since last Thursday. We're still far away from a 60-minute close anywhere, above or below.

Linda Piazza : 7/15/2005 9:33:40 AM

Flattish open for the OEX. The RUT gapped down below the 38.2% retracement of the bounce off last Thursday's low, but bounces immediately. SOX still above its 60-minute 10-sma at 461.81, with the SOX at 462.99, but the SOX is slightly negative. The Wilshire 5000 has a flattish open.

Jonathan Levinson : 7/15/2005 9:28:43 AM

TNX is testing 4.2% resistance here, up 2 bps.

Jeff Bailey : 7/15/2005 9:35:14 AM

Mylan Labs (MYL) $19.76 Link ... large block of 1,000,000 shares crosses the wire at 08:00:22. The deadline for the company's stock buyback ($1.25 billion) is midnight tonight and is a part of a larger plan for suggesting to Carl Icahn that the company doesn't want him around.

Jonathan Levinson : 7/15/2005 9:19:54 AM

GE trades -.39 or 1.09% at 35.24 following the release of its quarterly numbers.

Jeff Bailey : 7/15/2005 9:18:48 AM

Investors Financial Services (IFIN) $41.52 Link ... atop this morning's most actively traded list and lower at $34.41 after the company said it now expects a 10% increase in 2005 earnings from the $2.09 a share it reported in 2004. The company added that on a diluted per-share basis, which excluded certain items, earnings per share would be flat. In January, the company had said it was confident of a 25% increase in 2005 earnings per share.

IFIN provides services to money managers.

Jonathan Levinson : 7/15/2005 9:16:03 AM

Headlines:

U.S. JUNE INDUSTRIAL PRODUCTION UP 0.9% VS 0.4 EST.

U.S. JUNE INDUSTRIAL PRODUCTION HIGHEST SINCE FEB. 2004

U.S. JUNE CAPACITY UTILIZATION 80% VS 79.4% IN MAY

U.S. JUNE CAPACITY UTILIZATION HIGHEST SINCE DEC. 2000

U.S. Q2 INDUSTRIAL PRODUCTION UP 2.1% ANNUALIZED

Jeff Bailey : 7/15/2005 9:08:49 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+4.71 and set for program selling at $+2.15.

Linda Piazza : 7/15/2005 9:06:35 AM

Yesterday, the OEX tried mightily to break out on its 2-hour Keltner chart, but didn't quite do it: Link As we know, a small-bodied candle such as a spinning top that follows a tall white candle can be the second of a three-candle reversal signal, especially when it occurs at resistance. However, the last time the OEX charged straight up from the bottom of the black two-hour channel to the top of that channel was in early November, and the OEX also produced a small-bodied red candle at the breakout level. In that case, the OEX opened higher the next day and climbed straight through that resistance, tacking on five or six points before it traded sideways/sideways down into support and then chugged all the way up to the top of the purple channel. So, although there was a small-bodied red candle after a strong white candle, at resistance, we absolutely cannot assume that the OEX will roll over from here. We would have to see confirmation today from a tall red candle. A open above Wednesday's close of 575.62 would immediately lessen the reversal potential's outlook.

Until the OEX starts violating this red 60-minute 10-sma on 60-minute closes, the trend has not even begun to let up: Link So, that's what we'll be watching.

There is potential for a reversal, though, and that showed up in the Wilshire 5000's behavior yesterday. Any of you reading my commentary yesterday knows that I was watching the Wilshire 5000 closely for the potential for a key reversal day. Conditions for that include a punch to a new high early in the session, with the first few minutes of trading seeing a climb that's as large as or bigger than that usually seen in a whole day of trading. That condition was met. There are volume considerations, too, and yesterday morning's climb was accomplished with lots of volume. Then, there's a decline and a red close. That didn't quite happen. The Wilshire 5000 avoided that by about 11 points, but the candle it produced was still a bearish one and still one showing a potential for a reversal. That potential that must be confirmed, and remember how risky a reversal signal against trend is when a market has been strongly trending. Watch the Wilshire 5000 today, because a strong climb will erase that potential. Watch the SOX, too, also bouncing from its 60-minute 10-sma.

Today is an opex Friday, so all should be cautious. Breakdowns or bounces may appear to be imminent, and then nothing happens. I've checked other instances, back through July of last year, when the OEX followed the 60-minute 10-sma up so strongly. I'm talking about the kind of straight-up prolonged climb we've seen and not just a few periods of climbing this average. In those instances I discovered, when the OEX finally broke through that MA, it usually did retest the high reached just before it broke through that average. It sometimes moved back above the average as it retested that high. Some of those times, the OEX reached a lower high. When it did, it usually retraced at least 38.2% of the rally that preceded the lower high. Sometimes, when the OEX moved up into a retest, it moved to a higher high, and those were definitely times to step aside for a better entry. For example, in August and November (sound familiar?) of last year, and February of this year, the OEX saw similar straight-up climbs, bouncing from the 60-minute 10-sma. In each of those three instances, the OEX broke through that average and then retested the high, but instead of a lower high, it reached a higher high. In the November example, the previous high was broken on a gap-higher open after a somewhat tepid break of the 60-minute 10-sma. The OEX was in the process of moving higher, eventually forming a double-top formation on the 60-minute chart. That August higher high was part of a H&S formation in late August of last year. In February of this year, that previous high was also breached on an opening 60-minute candle, but the OEX was to move considerably higher into the March high. Exuberance was to carry the OEX far farther than a trader would have wanted to hang onto a losing bearish play. In at least one instance, after the OEX climbed a moving-straight-up 60-minute 10-sma for a long time, the breakdown through that average didn't signal consolidation before a new high or a rollover. It signaled May and June's long period of consolidation beginning.

To sum up, after such a strong climb along a 60-minute 10-sma, the OEX always retested the high reached before that break, at least in all the instances I found. It sometimes temporarily broke back above the average during that retest, but when it produced a confirmed lower high, it almost always retraced at least 38.2% of the rally that preceded that action. If it broke to a higher high, it was a sign to step aside and wait for a better entry. Stops were definitely needed. So what do you do if there's a break of that average on a 60-minute close? You could do nothing, because it's opex Friday and the trend has been strong, and any bearish play would be a countertrend and risky play. You could elect to test the waters with a bearish entry, setting your stop above the last high. You could wait for a retest of the previous high, and enter on a rollover. Depends on your risk tolerance and your trading style.

Whether you consider entering a bearish play on a break of the 60-minute 10-sma on a 60-minute close or wait until there's a failed retest of the previous high, be ready to jump out if proven wrong. For today, there may be no proof of anything, although I certainly hope we get some kind of pullback some time or another so we can see whether this thing is real or not. Jim has been predicting that it will be next week that we'll see next direction, and that may be true, but there's potential today, too. If a bearish play gets started, absolutely know what you'll do if a 38.2% retracement is hit, either today or next week, as the OEX could bounce quickly if this is the real thing.

So what about going with the trend and buying a dip? The RUT's and Wilshire 5000's behavior make me a hesitant to suggest that, but those who want to try it anyway could always look for another test of the 60-minute 10-sma, setting a stop just below it or basing a stop on a 60-minute close below it, depending on trading style. Sorry, but with the OEX jammed right underneath a long-term S/R band I've had marked on my charts for many months and with the climb so extended, I'm not going to be recommending this, but then I've missed most of the climb higher, so take that advice with a grain of salt. I will, of course, continue my bulls want/bears want commentary. I prefer that rather than siding with only one half of our readership, the ones on only one side of a trade.

Jonathan Levinson : 7/15/2005 8:48:22 AM

Equities have given back their gains and bonds have flipped negative, TNX now up .8 bps at 4.188%. ZN futures are at a session low of 111 1/2.

Jonathan Levinson : 7/15/2005 8:35:30 AM

Session lows for euro and swiss franc futures at 1.2081 and .7766 respectively, ditto silver at 6.979. Equities are pulling back slightly.

Jonathan Levinson : 7/15/2005 8:33:26 AM

Equities popped into positive territory on the news, while bonds have increased their gains, TNX down 1.2 bps to 4.168% and QQQQ +.04 to 38.81, up a nickel from its pre-data print. NQ is up to unchanged, while YM futures are up 8 to 10663.

Jonathan Levinson : 7/15/2005 8:32:12 AM

Headlines:

U.S. PPI UP 3.6% YEAR-OVER-YEAR VS. 3.5% IN MAY

U.S. JUNE PPI FLAT VS 0.4% GAIN EXPECTED

U.S. JUNE CORE PPI FALLS 0.1% VS. 0.2% GAIN EXPECTED

U.S. JUNE PPI ENERGY PRICES UP 2%

U.S. JUNE INTERMEDIATE GOODS PRICES UP 0.1%

U.S. MAY BUSINESS INVENTORIES RISE 0.1%

U.S. MAY BUSINESS INVENTORIES BELOW EXPECATIONS

U.S. JUNE CRUDE GOODS PRICES FALL 3.3%

U.S. JUNE CORE INTERMEDIATE GOODS PRICES FALL 0.8%

U.S. JULY EMPIRE STATE INDEX HIGHEST LEVEL THIS YEAR

U.S. JULY EMPIRE STATE INDEX 23.9 VS REV 10.5 IN JUNE

U.S. JULY EMPIRE STATE INDEX WELL ABOVE CONSENSUS 11.6

U.S. JULY EMPIRE STATE EMPLOYMENT INDEX 1.4 VS 5.5 JUNE

Jonathan Levinson : 7/15/2005 8:24:25 AM

Cash bonds open in the green, with TNX losing 4.18% support and trading down .6 bps to 4.174%. ZN futures are up 3/64 at 111 43/64. With the slew of data due for release in the next 10 minutes and continuing until 9:45, we can expect plenty of action in the bond pits. Key support is the 4.14%-4.16% confluence, while 4.18% is 1st resistance, with the stronger line at 4.2%.

Jonathan Levinson : 7/15/2005 7:29:12 AM

NEW YORK (MarketWatch) -- General Electric Co., (GE: news, chart, profile) the Fairfield, Conn., conglomerate, reported second-quarter net income rose 24%, in line with analyst estimates, on 13% higher revenue. The company, with interests in aerospace, power generation, financial services, medical imaging, and more, reported net income reached $4.65 billion, or 44 cents a share, from $3.75 billion, or 36 cents, in the year-earlier period. The consensus estimate of analysts surveyed by Thomson First Call was 44 cents. Revenue reached $41.56 billion from $36.78 billion. First Call's estimate: $41.6 billion. All 11 businesses reported double-digit earnings growth, GE said.

Jonathan Levinson : 7/15/2005 7:26:26 AM

Equities are fractionally lower, ES trading 1231.25, NQ 1583, YM 10654 and QQQQ +.03 at 38.80. Gold is flat at 420.20, silver +.018 at 7.011, ten year notes +9/64 at 111 49/64, and crude oil is up .325 at 58.125.

We await the 8:30 release of the Empire State Index, est. 9, Business Inventories, est. .4%, the PPI and core PPI, est. .4% and .1% respectively, and at 9:15, Industrial Production and Capacity Utilization, est. .4% and 79.6%. At 9:45, it's Michigan Sentiment, est. 94.5.

Linda Piazza : 7/15/2005 7:16:17 AM

Good morning. The Nikkei reached a new recent high last night, but fell heavily in the last few minutes of trading, closing slightly in negative territory. Other Asian markets were mixed, as are European markets this morning. Our futures are modestly negative. As of 6:54 EST, gold was unchanged, and crude, up $0.60 to $58.40. More detail about Asian and European markets follows in succeeding paragraphs, with this report made long by various economic and earnings releases. There is also an unconfirmed report of a small bomb exploding in Barcelona, with no other details available, and the report by a source that sometimes reports rumors that are later refuted.

The Nikkei opened higher by more than 60 points, climbing above 11,800, but soon fell to test the flat-line level. It bounced again, but then saw a spectacular sell-off in the last few minutes of trading, with the sell-off attributed to profit-taking ahead of a three-day holiday. It closed down 5.58 points or 0.05%, at 11,758.68. Since April, 2004, the Nikkei has been forming a large neutral triangle at the top of its climb off the 2003 low. If I've drawn the trendline correctly, the upside trendline now crosses at about 11,920-11,940. The last minor swing high for the Nikkei was in April, and produced a high of 11,911.90, with early March's high of 11,975.46 more important to top. The Nikkei has been getting close to an important test, then, of that descending trendline. Last night's candle will have produced a dark cloud cover potential reversal signal, but the Nikkei has produced several of those on the way to its ever-higher climb lately without reversing.

Exporters had seen gains at the open. Chip-related stocks gained at the open, with more than half of the computer-related companies slated to release earnings in July. Trading companies Mitsui and Mitsubishi, both part owners of Sakhalin Energy, fell after Shell, a 55% owner, announced an eight-month delay of liquefied natural gas deliveries from the Sakhalin field and said that that higher contractor fees and metal prices may double the development costs.

Other Asian markets were mixed, with most either negative or only modestly positive. The Taiwan Weighted lost 0.12%. South Korea's Samsung fell 0.9% after its earnings report. The company said that semiconductor and flat-panel display prices declines led to a second-quarter drop in net income of 46% from the year-ago level. Operating profit and sales both declined, but the results were in line with expectations. The chief executive said that demand should pick up in the second half. That statement was considered an optimistic sign by at least one commentator, especially since the executive used the words "sharp recovery" when describing the expected pickup in prices of dynamic random access memory chips, according to one article. The chief executive also expects a recovery in NAND semiconductors for consumer electronics. LCD divisional sales dropped 14%, however, and the company thinks supply will exceed demand by 0.2% in the third quarter, while there will be a shortage in the fourth quarter. The company raised its estimates of industry-wide shipments for LCD's for the full year. The telecommunications division did not meet expectations, and either all did not believe in that projected sharp recovery or else there was a sell-the-news effect, because of Samsung's negative ending. The Kospi fell 0.22%. Singapore's Straits Times was nearly flat, up 0.01%, and Hong Kong's Hang Seng rose 0.09%. China's Shanghai Composite fell 1.37%.

European markets are mixed, with the FTSE 100, light on techs but heavier on oil-related issues, taking a hit from its oil majors. European airlines benefit from yesterday's decline in crude, however. One energy-related issue that is rising is British utility Centrica, gaining after it announced that it will take 40% equity stake of a North Sea exploration license and participate in an exploration well to be drilled next year. The company noted the high current wholesale price of gas, making such exploration worthwhile. The company also announced that it has become a party in a liquefied natural gas project, with the project's purpose to transform a liquefied petroleum gas terminal into one that can receive liquefied natural gas.

In other news, Ericsson declined in early trading after an earnings report on its joint venture with Sony. The joint venture announced rising sales, but declining pretax profits that missed expectations. Pharmaceuticals Novartis and Schwarz Pharma moved opposite directions, with Novartis gaining after it announced intentions to buy the consumer-medicines business operations of Bristol-Myers Squibb Co., and Schwarz Pharma declining after it announced that it's buying the rights it doesn't already own to rotigotine, paying Aderis Pharmaceuticals 58 million euros for those rights. The company also announced that its loss for 2005 will now be an equal amount, according to a Marketwatch.com article. After its VP left this week, EADS was upgraded to a buy rating by UBS, and was rising in early trading. U.K. homebuilder Barratt Developments fell after warning that if the traditional uplift in sales didn't occur this fall and next spring, home completions would not grow during fiscal 2006. U.K. property developer British Land was gaining, however, after noting declining office sector vacancy rates and providing an upbeat outlook ahead of its annual shareholder meeting. Bank HBOS was cut to a neutral rating by CSFB, with the firm having a negative view of retail banks because of the possibility that the current climate will create an increased number of insolvencies, and HBOS and peer Northern Rock both eased in early trading.

As of 6:56 EST, the FTSE 100 was down 25.50 points or 0.48%, to 5,234.20. The CAC 40 was down 3.94 points or 0.09%, to 4,374.82. The DAX had fallen 15.07 points or 0.32%, to 4,714.34.

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