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OI Technical Staff : 7/18/2005 9:59:59 PM

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Jeff Bailey : 7/18/2005 6:13:41 PM

Program Trading Levels for Tuesday ... HL Camp & Company has their computers set for program buying at $+4.51 and set for program selling at $+2.25.

Jeff Bailey : 7/18/2005 6:11:39 PM

NASDAQ NH/NL ratio chart found at this Link

Jeff Bailey : 7/18/2005 6:06:54 PM

NYSE NH/NL ratio chart found at this Link

Jeff Bailey : 7/18/2005 5:58:19 PM

Pivot Matrix for Tuesday at this Link

Jeff Bailey : 7/18/2005 5:05:34 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/18/2005 5:00:40 PM

Closing Internals found at this Link

Linda Piazza : 7/18/2005 4:34:46 PM

We have a lot of economic releases overnight tonight, including Japan's BoJ minutes release, Japan's leading indicators, and Germany's important ZEW indicator. Japan will be trading the first time after a three-day holiday.

Jeff Bailey : 7/18/2005 4:29:09 PM

IBM (IBM) $81.81 -0.69% ... $84.55 here.

Jeff Bailey : 7/18/2005 4:27:28 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ...

Bullish swing trade stopped on the 1/4 bullish position in shares of U.S. Energy (USEG) at $3.45 ($-0.27, or -7.26%)

Swing traded long 1/2 bullish in shares of Internet Initiative (IIJI) at $9.63, target $12.50. Have raised stop to $9.80.

Swing traded long 1/2 bullish in shares of Geron Corp. (GERN) at $10.78. Stop at $10.40, targeting $12.90.

Naked put closed out the one (1) Apple Computer AAPL Aug. $35 Put (AAQ-TG) at the offer of $0.05 ($+1.00, or +95.24%).

Jeff Bailey : 7/18/2005 4:09:09 PM

IBM (IBM) went out at $81.81 -0.69% ... lurching to $82.90 on headline numbers. Q2 net income of $1.83 billion, up 5.4% vs. $1.74 billion. Q2 revenue comes in at $22.27 billion , down 3.6% vs. $23.10 billion same period last year.

Jeff Bailey : 7/18/2005 4:05:05 PM

Bullish swing trade raise stop alert ... let's raise the stop on Internet Initiative (IIJI) $10.60 +20.04% .... to $9.80.

Jeff Bailey : 7/18/2005 3:59:55 PM

Internet Initiative (IIJI) $10.52 +19.13% Link ... "X gets the square."

Linda Piazza : 7/18/2005 3:58:58 PM

The Wilshire 5000 just confirmed (reconfirmed?) its 15-minute H&S, BUT the RUT remained within its rising regression channel today, not even challenging the bottom support yet. The SOX's decline was a small one, in keeping with a corrective-type pullback so far. The RLX posted a strong climb.

Jonathan Levinson : 7/18/2005 3:57:13 PM

VXO 10.06.

Jonathan Levinson : 7/18/2005 3:56:14 PM

QQQQ volume is currently 54.05M shares, well below Friday's very low volume of 67M shares, volume breadth -1.75:1.

Jonathan Levinson : 7/18/2005 3:54:49 PM

Session lows for YM and ES, but QQQQ hangs 3 cents above the 38.689 low.

Linda Piazza : 7/18/2005 3:54:11 PM

OEX Keltner support sinks further and the OEX sinks a bit with it, but it hasn't yet created that breakdown 567-568 signal. Bears who entered on a rollover have a decision to make if there's no breakdown this afternoon. Do you want to hold overnight on that condition? Depending on the close, of course, the OEX has produced a strong reversal signal just under strong resistance I've had marked on my daily chart for many months and maybe many years. The confirmed lower high on the 60-minute chart, after such a strong climb, met conditions that suggest that the decline could be down to 568. Yet, on a 15-minute Keltner basis, the OEX hasn't set up that downside target, depending on how the day ends. Most who entered this morning on the rollover could exit at a small profit or breakeven after commissions, depending on the time of entry and the strike bought, so exiting remains a viable tactic for bears out there who might have entered this morning. Remember that this strong reversal signal isn't a guarantee of a strong decline. Sometimes the only decline is the one needed to create the reversal. So far, bears are seeing the OEX drop as expected, but there's no guarantee that it will continue to do so tomorrow morning.

Jeff Bailey : 7/18/2005 3:52:03 PM

CBOE Internet Index (INX.X) 198.92 +0.17% ...

Jonathan Levinson : 7/18/2005 3:50:42 PM

Just out:

NEW YORK, Jul 18, 2005 (BUSINESS WIRE) -- The CNBC report that Sandy Weill is leaving as Chairman of Citigroup is wrong.

Citigroup (C), the leading global financial services company has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com

Link

Jeff Bailey : 7/18/2005 3:45:20 PM

IIJI $10.22 +15.51% ... most active options now ... Aug. $7.50 C (1,905 : 1,492), Aug. $10 C (1,772 : 2,198), Aug. $10 P (572 : 992).

Jonathan Levinson : 7/18/2005 3:42:49 PM

QQQQ's 30 min cycle downphase added another hesitant tick lower today, not yet oversold, ditto the 60 min cycle approaching the midpoint of its range. Nothing has changed, with price levitated above 1578 NQ/ 38.60-.70 QQQQ. The daily cycle continues to point higher, just reaching overbought territory now but with room left to run. QQQQ bears need a break of the session low confirmed by a move below 38.60, the current 60 min channel bottom and daily S1, while bulls need to take out Friday's high to maintain the higher high/higher low requirement for the daily cycle upphase.

Jeff Bailey : 7/18/2005 3:42:13 PM

Internet Initiative (IIJI) alert $10.14 +15% ... finds a bid toward the close.

Jeff Bailey : 7/18/2005 4:45:10 PM

New Equity Issues expected to price this week ...

Accentia Biopharma - 6.3 million shares via Jefferies. (Wednesday) - range $8-$10.

Adams Respiratory Therapeutics - 7.1 million shares via Merrill Lynch and Morgan Stanley. (Wednesday) - range $14-$16.

Consolidated Communications - 15.7 million shares via Credit Suisse. (Thursday) - range $14-$16.

Diamond Foods - 5.3 million shares via Merrill Lynch. (Wednesday) - range $14-$16.

Genco Shipping & Trading - 11.5 million shares via Jefferies and Morgan Stanley. (Thursday) - range $24-$27.

Maidenform Brands - 10 million shares via UBS and Credit Suisse. (Thursday) - range $14-$16.

Hittite Microwave - 4.5 million shares via Lehman Bros. (Thursday) - range $14-$16.

TransCommunity Financial - 2.3 million shares via Sandler O'Neill. (Tuesday) - range $8-$11.

Linda Piazza : 7/18/2005 3:41:11 PM

The BIX still trails lower. Some of these formations are beginning to look a bit like falling wedges, which are presumed to be bullish formations. Rising wedges don't work at all lately to predict the direction of the breakout, though, and I don't think we should count on falling wedges to do so, either. Just watch for the direction of the break. All day, we've had the BIX and the RLX pulling the OEX different directions.

Linda Piazza : 7/18/2005 3:34:55 PM

RLX immediately turning lower again to retest that neckline without ever confirming by creating a new HOD. So far, the bullish sentiment has not been able to accomplish that goal. This RLX has been something lately, with today's upside move a breakout above January's intraday high, if it holds. Retail bulls don't want to see it drop heavily into the close, but it's not showing any signs of that although also not following through to a new HOD.

Linda Piazza : 7/18/2005 3:28:54 PM

RLX turning higher again in the last few minutes. Depending on how you draw that neckline for its inverse H&S at the top of its climb, a not-particularly-trusted location, the RLX may have broken above that neckline. However, it hasn't confirmed by a new move above the day's high and currently is just below 470, at 469.77. The previous HOD is 470.09. Remember that these aren't particularly trustworthy formations, but can give us a measure of short-term bullish interest.

Jonathan Levinson : 7/18/2005 3:28:41 PM

YM tests the session low at 10600, QQQ still 5 cents above the low.

Jonathan Levinson : 7/18/2005 3:28:15 PM

August crude oil has reopened in the red, -.225 at 57.10, a low for the evening session.

Jonathan Levinson : 7/18/2005 3:26:16 PM

I have yet to see it hit the wire, but I'm hearing trader chatter to the effect that C's Sandy Weill has joined outgoing president Robert Willumstad, who resigned on Thursday. There's also a rumor, entirely unconfirmed and which I don't believe, to the effect that Weill's departure had to do with his refusal to massage this quarter's earnings report, released today. Even if it is true, I doubt that a story like that will ever get out.

Linda Piazza : 7/18/2005 3:26:04 PM

The SOX now looks perfectly balanced between Keltner support and Keltner resistance on the 15-minute chart, a visual representation of the indecision brought on by hours of sideways trading. It's just turning back from three-minute resistance, perhaps back to retest that descending trendline it just broke above, with that trendline now at about 460.20-460.25, depending on how it's drawn.

Linda Piazza : 7/18/2005 3:18:28 PM

The Wilshire 5000 still hovers near its 15-minute 100-ema.

Jeff Bailey : 7/18/2005 3:22:13 PM

Toro Corp. (TTC) $38.63 -0.66% Link ... upgraded to "buy" from "neutral" at Janney Montgomery. Firm had downgraded to "hold" from "buy" on 12/08/04 at $37.51. Firm had upgraded to "buy" from "hold" on 8/27/04 at $32.68. Upgrade/downgrade history at this Link

Jonathan Levinson : 7/18/2005 3:18:08 PM

No effective change to volume breadth, which is a little stronger but still negative at -1.56:1 on the NYSE and -1.44:1 on the Nasdaq as QQQQ tests the top of its 4 hour+ sideways channel at 38.80. Link

Linda Piazza : 7/18/2005 3:17:34 PM

After a brief and tentative piercing of the bottom support of its neutral triangle, the SOX then turned higher and has now pierced the upside resistance. Bears want to see this move quickly reversed. Bulls don't.

Jeff Bailey : 7/18/2005 3:09:24 PM

03:00 Internals found at this Link

Linda Piazza : 7/18/2005 3:08:54 PM

If you're a conservative (and scared) OEX bear and you didn't take partial or full profit, or, more likely, exit at breakeven with commissions, when the OEX was last testing 572, you might do it again. The OEX looks as if resistance is building, but if the OEX pops above that, you could lose your chance at exiting at breakeven or a small profit. The descending trendline off last week's high is now at just a touch over 576.

Jonathan Levinson : 7/18/2005 3:04:54 PM

Ten year note yields have finished at their session highs, +4.8 bps at 4.223%.

Linda Piazza : 7/18/2005 3:04:19 PM

On a 15-minute close below the Keltner line currently at 571.54 (but being nudged slightly lower as the OEX drifts lower), the OEX will have set a downside target of 567.50. The OEX is now at 571.56 as I type.

Jonathan Levinson : 7/18/2005 3:02:36 PM

QQQQ update at this Link with the short cycle ticking down from its weak drift higher. The bulls ran the clock on the bears, but it's looking like the bears have just returned the favor- but we'll need to see a break of the session lows for confirmation.

Jeff Bailey : 7/18/2005 3:02:03 PM

03:00 Market Watch found at this Link

Linda Piazza : 7/18/2005 2:54:38 PM

The OEX tests Keltner and 15-minute 130-ema support. The SOX tentatively breaks below the support of that neutral triangle I mentioned in my 2:49 post, but it hasn't confirmed by a new LOD yet, nor a drop below the late-week support. The 15-minute 100/130-ema's are at 458.21 and 456.40, respectively.

Jonathan Levinson : 7/18/2005 2:50:53 PM

Bonds continue to drop, TNX breaking 4.2% and now +3.5 bps at 4.208%, ZNU5 down to 111 9/16 at the low.

Linda Piazza : 7/18/2005 2:49:59 PM

The SOX is trading right out to the apex of its neutral right triangle at the bottom of today's drop. Best-fit upper and lower trendlines cross at about 460.25 and 459.55, but that's a judgment call.

Linda Piazza : 7/18/2005 2:47:41 PM

The RLX just won't give up. It's got a potential inverse H&S right at the top of the climb. While we know we don't trust these formations to meet their upside targets or even confirm, I think they're still useful to watch as a measure of bullish or bearish sentiment. if the RLX drops now to retest the 468.40 level, a support level since mid-morning, then that inverse H&S transforms into a bearish right triangle at the top of the climb.

Linda Piazza : 7/18/2005 2:43:29 PM

I return to find the OEX still coiling, still between the 15-minute 100/130-ema's. The 15-minute Keltner chart shows the OEX being squeezed between strong nearby suppor tand possibly strong nearby resistance.

Jonathan Levinson : 7/18/2005 2:38:31 PM

Session low for ten year notes, back to the morning low, -3/32 at 111 39/64 with TNX up 2.6 bps at 4.201%, testing key resistance.

Jonathan Levinson : 7/18/2005 2:28:59 PM

Volume breadth -1.43:1 on the NYSE, -1.53:1 on the Nasdaq.

Jonathan Levinson : 7/18/2005 2:24:36 PM

Crude oil is down .775 at 57.325 with 5 minutes to go until the Nymex close.

Jonathan Levinson : 7/18/2005 2:21:30 PM

QQQQ is bouncing from a higher low at the 72 SMA here, the short cycle indicators drifting higher as price holds between the 72 SMA and the daily pivot. Volume is no heavier than it's been all day, but the inability of bears to get more out of Friday's overbought readings on weak volume is looking bullish to me. A 25 cent drop from here would change that, but so far the session lows have proven resilient. Link

Jeff Bailey : 7/18/2005 2:21:43 PM

Swing trade close out naked call alert ... closing out the one (1) Apple Computer AAPL Aug. $35 Put (AAQ-TG) at the offer of $0.05.

Not worth the risk of making an additional $0.05 per contract with a month of expiration. Especially if naked 5 or more.

AAPL $41.72 +0.40% here.

Jonathan Levinson : 7/18/2005 2:17:00 PM

Headline:

HURRICANE EMILY CUTS 0.9% OF DAILY GULF OIL OUTPUT: MMS

Jonathan Levinson : 7/18/2005 2:14:20 PM

It's strange to hear so much from Fed Chairman Greenspan about oil and energy prices, generally to the exclusion of the energy secretary.

Jonathan Levinson : 7/18/2005 2:13:34 PM

Headlines:

GREENSPAN COMMENTS COME IN WRITTEN Q&A WITH CONGRESS

GREENSPAN: HIGH OIL PRICE CUTS '05 GDP BY 3/4% POINT

GREENSPAN: ECONOMY COPING 'PRETTY WELL' WITH OIL PRICE

Keene Little : 7/18/2005 2:12:06 PM

Hey Jonathan, if stock prices take a nasty spill over the next few months I suspect Greenspan will next be saying that a stock sell-off is not always a bad sign either. What a goof ball.

Jeff Bailey : 7/18/2005 2:09:10 PM

02:00 Internals found at this Link

Jonathan Levinson : 7/18/2005 2:06:57 PM

Headlines:

GREENSPAN: YIELD CURVE HINTS AT STEADY GDP GROWTH AHEAD

GREENSPAN: FLATTENING YIELD CURVE NOT ALWAYS BAD SIGN

Jeff Bailey : 7/18/2005 2:02:36 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 7/18/2005 2:01:30 PM

Stepping away for 5 minutes.

Jeff Bailey : 7/18/2005 1:58:50 PM

Geron (GERN) $10.85 +26.16% ... according to NASDAQ, June 15 short interest was 6.8 million shares. Average daily volume stood at just over 1 million shares per day, putting days to cover at 6.8.

Jonathan Levinson : 7/18/2005 1:56:26 PM

August crude oil is up to a .85 loss, tracing a very narrow range off the lows on lighter volume today. Updated 50 tick chart at this Link

Jeff Bailey : 7/18/2005 1:53:55 PM

Swing trade long alert ... for 1/2 bullish position in shares of Geron Corp. (GERN) $10.78 +25.34% here, stop $10.40, target $12.90.

Jonathan Levinson : 7/18/2005 1:53:37 PM

QQQQ has just surpassed 2/3 of Friday's very light volume, breadth still hanging negative with price 3 cents back below the daily pivot. Bonds have weakened slightly, ditto gold, but it's all running in slomo here. Definitely summer trading upon us.

Jonathan Levinson : 7/18/2005 1:41:53 PM

QQQQ is peeking its head above the pivot, breaking the prior bounce high here on a surge of volume. 30 min channel resistance is at 38.86.

Jeff Bailey : 7/18/2005 1:41:30 PM

Prem.x 4.05 ... SPX 1,224.77, DIA $106.10, QQQQ $38.81

Linda Piazza : 7/18/2005 1:32:31 PM

The BIX's previous LOD is now being tested. The Wilshire 5000 still coils, now between the 15-minute 100-ema and 130-ema. The OEX holds just above its previous LOD. So far, not any big changes.

I'm going to be away for about an hour. Those in bearish positions on this morning's confirmation of a lower high will want to see a new LOD, but be careful of a stop-running move ahead during a prime stop-running time of day coming up soon. Those who entered such a play but are now worried could get out now for breakeven or a small (very small) profit, depending on commissions, with no harm done. . . . OEX dropping lower as I type. If this is not a stop-running move, soon reversed, then there's historical support down to 570, and then again strongest near 567-568, with the 15-minute Keltner chart setting a downside target of 567.37 if there are 15-minute closes beneath a Keltner line currently at 571.75. Bears don't want to see a quick and strong bounce up through the 15-minute 100-sma now, with that average at 572.65 unless such a move were quickly reversed, but the 15-minute Keltner chart shows nearest resistance up to 573.49.

Jonathan Levinson : 7/18/2005 1:30:12 PM

Volume breadth remains negative, 1.79:1 for declining volume on both exchanges. Price continues to hold its morning range, however, and the CBOE total put to call ratio remains high, printing consistently between 1.0 and 1.1 since this morning.

Linda Piazza : 7/18/2005 1:20:03 PM

The RLX has been dropping over the last twenty minutes or so, and OEX bears and bulls need to keep a watch on that, in conjunction with the BIX's action. The BIX just broke down out of a small bear flag, but it hasn't confirmed with a new LOD.

Jonathan Levinson : 7/18/2005 1:19:19 PM

QQQQ is back to the low end of its range. Adjusting for the most recent test of the daily pivot, descending triangle resistance is at 37.78 here, 2 cents above the 72 SMA line: Link

Linda Piazza : 7/18/2005 1:14:54 PM

The BIX may be falling out of its last bear flag, but it also has yet to confirm by a new LOD and another drop below the 15-minute 130-ema. The previous LOD was at 368.52, with the BIX now at 568.69.

Jonathan Levinson : 7/18/2005 1:14:47 PM

Ten year treasuries have weakened in the wake of the auction announcement, with TNX up 1.3 bps at 4.188% here, still within today's narrow range. 4.2% is key resistance for TNX bulls/ten year note bears.

Linda Piazza : 7/18/2005 1:13:49 PM

OEX below last five-minute low now, but not below the LOD and the 15-minute 130-ema, with that ema at 571.89.

Jeff Bailey : 7/18/2005 1:17:01 PM

Diamond Offshore (DO) $52.85 +1.43% Link ... saying its Board of Directors has doubled its quarterly cash dividend to $0.125 per share. Company also saying it is considering an additional dividend in first quarter 2006 as offshore drilling business continues to show strength.

Jeff Bailey : 7/18/2005 1:09:48 PM

01:00 Internals found at this Link

Jonathan Levinson : 7/18/2005 1:09:16 PM

The Treasury auctioned 18B of 13-week bills and 16B of 26-week bills. The 13-week bills had a high-rate of 3.22%, a new 5 year high, and a bid to cover of 1.95, the lowest since May 16th. The 26 week auction had a high-rate of 3.42%, a new 4 year high, and a bid to cover ratio of 1.93, the weakest this year. Foreign central banks took 9.15B of 34B total.

Jane Fox : 7/18/2005 1:06:02 PM

Dateline WSJ The National Association for Business Economics joined the [stock market] optimistic chorus today, saying 103 business executives surveyed recently expect the economy to stay strong, as businesses hire and spend more. Though survey respondents thought prices would rise, they also thought interest rates would stay low. Goldilocks would be proud. Barry Ritholtz, chief market strategist at the Maxim Group, was somewhat less enthusiastic, telling clients the executives have a bad track record "predicting their own behavior."

Jeff Bailey : 7/18/2005 1:01:55 PM

01:00 Market Watch found at this Link

Linda Piazza : 7/18/2005 12:57:41 PM

One moment, I think that if the bears can't get this done and break this coil to the downside, bulls are going to become emboldened. The next, I think that if bulls can't get the OEX bouncing, bears are going to become emboldened. I guess that kind of thinking, multiplied by all the traders out there, is what produces the coiling action, so I'm trying not to think too much and just watch.

Linda Piazza : 7/18/2005 12:47:44 PM

I would post a chart showing how the OEX turns down beneath a long-term resistance band that I've had marked on my charts for a long time, except that this is a daily chart, and the day's close perhaps will have changed the pattern. However, so far, that's what's there.

So far, the OEX still coils at the bottom of the day's range, above/at the 15-minute 100/130-ema's.

Jonathan Levinson : 7/18/2005 12:41:56 PM

Stepping away for 5 minutes.

Jeff Bailey : 7/18/2005 12:48:56 PM

Internet Initiative (IIJI) ... option chain sorted by Open Interest/Month with 1-5 most active contracts noted at this Link ... no news that I can find and would have to think stock may have been "artificially" pinned lower into last week's option expiration. (see recent option analysis)

Linda Piazza : 7/18/2005 12:37:41 PM

Still just waiting.

Jonathan Levinson : 7/18/2005 12:33:50 PM

The bounce to the 72 SMA never broke above and got clipped pretty hard on a surge of volume. Link Price set a nominal new low at 39.688 QQQQ, and price has recovered to the midpoint of its earlier range. The short cycle continues to tick up in oversold territory, but bulls will want to see at least a move above the daily pivot at 38.80 before believing the bounce.

Linda Piazza : 7/18/2005 12:32:07 PM

The TRAN is at 3638.73, and the 200-sma is at 3591.39. Currently, the TRAN is balanced between nearby Keltner support and resistance, not giving much insight as to next direction.

Linda Piazza : 7/18/2005 12:30:12 PM

The BIX was not able to steady at its previous LOD, as it had been trying to do, but instead has dropped to a new LOD about 20 minutes ago.

Linda Piazza : 7/18/2005 12:28:51 PM

Stop-running move? The OEX has already erased most of that bounce without ever breaking out of that coiling pattern.

Linda Piazza : 7/18/2005 12:27:34 PM

No confirmation on the OEX or Wilshire 5000 by a new LOD or a downturn through the 15-minute 130-ema, and both now bounce back above the 100-ema. For the OEX, at least, the RLX's behavior has been a warning and the RLX's bounce is strong so far. The RLX has not topped its previous HOD, however, and so hasn't confirmed its strength any more than the bears were able to confirm weakness in the weaker of the indices.

Jonathan Levinson : 7/18/2005 12:25:35 PM

QQQQ bounces to test the 72 SMA here at 38.79: Link

Jeff Bailey : 7/18/2005 12:21:49 PM

S&P 500 Prem ($PREM.X) ... intra-day high/low has been ... $+4.02 / $+2.56.

Jeff Bailey : 7/18/2005 12:18:17 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 7/18/2005 12:12:31 PM

Wilshire 5000 at 12,203.88, just above the 12,198.58 LOD and the 15-minute 130-ema at 12,197.76. If the Wilshire 5000 continues its so-far-tepid confirmation of its H&S, it has a downside target of at least 12,115.40. It may be much lower, but there was that early morning spike that was soon reversed, and I don't know whether to count that in the target.

Jonathan Levinson : 7/18/2005 12:12:02 PM

It could be a descending triangle above 38.69 QQQQ, but if so, the decline is being done with impressive stealth as the volume is so low. A break of the session low on a surge in volume will confirm it- but so far, the weak volume and slow action after the upside blasts on Friday afternoon suggest that the underlying strength is still present. The bears should be able to do better than a mere -1.63:1 volume on this trending short cycle downphase.

Jeff Bailey : 7/18/2005 12:09:04 PM

12:00 Internals found at this Link

Linda Piazza : 7/18/2005 12:09:03 PM

The RLX did not confirm a reversal signal on its 15-minute chart, at least not in my opinion. Instead, it's been pulling back in a tight pattern of lower highs and lower lows: a possible bull flag. Still watching.

Jeff Bailey : 7/18/2005 12:01:47 PM

12:00 Market Watch found at this Link

Linda Piazza : 7/18/2005 12:01:28 PM

Coiling, coiling, coiling. That's what the OEX, DWC (Wilshire 5000), and SOX are doing, but the BIX just broke through a similar coiling formation to drop toward a retest of the day's low. It moved a little below the previous LOD and is now attempting a bounce. Maybe watch the BIX. The dollar started a bounce attempt, too, at the same time, at least as seen against the yen.

Linda Piazza : 7/18/2005 11:55:48 AM

OEX back at its 15-minute 100-ema, but bears want to see a new LOD and a move below the 130-ema at 571.80.

Linda Piazza : 7/18/2005 11:55:05 AM

Wilshire 5000 again violating the neckline of its H&S and the 15-minute 100-ema, but hasn't confirmed by printing a new LOD or a drop through the 15-minute 130-ema at 12,197.78.

Linda Piazza : 7/18/2005 11:53:31 AM

The RUT is at 658.43 as I type, with the support of its rising regression channel at about 652, currently. This channel is drawn on a 2-hour chart, and seems to match fairly closely. On a continued downdraft, then, RUT traders would want to watch that 650-652 zone for potential support. Support also lies from 640-643.43 with that latter number being the 30-sma.

Jonathan Levinson : 7/18/2005 11:52:13 AM

Exchange volume has weakened along with price here, -1.91:1 on the NYSE and -1.61:1 on the Nasdaq. But QQQQ volume is still very light, 30.1M shares traded so far.

Linda Piazza : 7/18/2005 11:46:52 AM

The RLX's 15-minute chart showed a shooting star candle on the last 15-minute period and it now pulls back from that, so that the RLX could be producing a very short-term pullback signal. Since the RLX has been pulling the OEX a different direction than the BIX, though, that might be important to watch. The BIX still consolidates at the bottom of its steep decline today, not breaking out either direction, but certainly not showing a convincing bounce attempt so far. The TRAN has been bouncing, but really just chopping around. And the SOX consolidates at the bottom of today's range, too, so far holding above the late-week lows and the 15-minute 100/130-ema's, at 457.74-455.68. The SOX is at 459.26 as I type. Looking at all these, I have a feeling that the RLX has a lot riding on its shoulders and that some other indices better see some bullish action or they're going to look decidedly unbullish today. Nothing has been decided yet. Lots of consolidation.

Jonathan Levinson : 7/18/2005 11:46:47 AM

Session high for August gold here, +1.40 at 422.70, stalling a 30 min cycle downphase as the 10-day stochastic prints a bullish cross in oversold territory. A break above 423 will target 429 resistance. Support is at 420, followd by 417.

Jeff Bailey : 7/18/2005 11:46:13 AM

Swing trade long alert ... for 1/2 bullish position in shares of Internet Initiative (IIJI) $9.63 +9% here, stop $8.45, target $12.50.

Disclosure I currently hold bullish position in shares of IIJI.

Jonathan Levinson : 7/18/2005 11:41:30 AM

August crude oil trades -.975 at 57.175. Updated 3 day 50-tick chart at this Link

Linda Piazza : 7/18/2005 11:39:51 AM

Wilshire 5000 dropping closer to the neckline and 15-minute 100/130-ema's, at 12,213.34 and 12,198.02, respectively, with the DWC now at 12,213.26.

Jonathan Levinson : 7/18/2005 11:39:49 AM

Ten year notes continue to not move, ZN down 1/64 at 111 11/16 and TNX up .7 bps at 4.182%. Hopefully the lunchtime Treasury auctions will provide a catalyst.

Jeff Bailey : 7/18/2005 11:36:38 AM

CBOE Internet Index (INX.X) 198.76 +0.09% ...

Jeff Bailey : 7/18/2005 11:32:20 AM

Internet Initiative (IIJI) $9.14 +3.51% ... gets a "pop" on volume.

Linda Piazza : 7/18/2005 11:30:52 AM

The OEX's pattern off the day's low still looks like either a "b" pattern or a bear flag, both distribution patterns, but we've been oh-so-fooled by these before, so I'm not drawing any conclusions. Keltner resistance thins, but Keltner support drops, to 572.49 but with stronger support down to 571.96-572.09.

Jonathan Levinson : 7/18/2005 11:27:59 AM

While no doubt skewed by repositioning following this month's op-ex, the put to call ratio has been running high this morning, with the CBOE reporting an opening low for the total put to call ratio of .96, followed by the 2nd half hour's reading of 1.0, and the most recent at 1.05 with another reading due shortly. DTN reports a realtime reading of 1.09. Ordinarily, this would be a bullish reading based on a contrarian interpretation of too much speculation in puts- but this secondary indicator is even more difficult to read for direction when under the influence of option expiration, as it is now.

Jonathan Levinson : 7/18/2005 11:21:40 AM

Volume breadth continues to hold lightly negative on light volume overall, -1.49:1 on the NYSE and -1.52:1 on the Nasdaq. QQQQ traded just over 67M shares on Friday, very light, and total has seen 27.2M shares so far. It looks and feels like we're not yet free of the op-ex tractor beams.

Linda Piazza : 7/18/2005 11:20:57 AM

The OEX's rise so far looks corrective, but we've been fooled by these before, and I keep watching that RLX, still zooming higher. So far, the OEX finds resistance on 15-minute closes at Keltner resistance from 573.49-574.39, but that resistance may be thinning somewhat.

Jonathan Levinson : 7/18/2005 11:14:54 AM

QQQQ is coiled in a pennant here Link but even assuming a continuation, it's difficult to guess which direction should prevail (other than sideways). The short cycle upphase is getting zero traction, while the 30 min cycle channel continues to point south, support down to 37.60.

Linda Piazza : 7/18/2005 11:13:52 AM

The Wilshire 5000 is still consolidating just above the neckline for its H&S and the 15-minute 100/130-ema's. If you're bearish, you're thinking that consolidation looks like a "b" distribution pattern. If you're bullish, then it's bullish that the Wilshire bounced so strongly after piercing support and bullish that it continues to hold above 12,200 and that support. I'm just watching to see which ways it breaks.

Jeff Bailey : 7/18/2005 11:10:14 AM

11:00 Internals found at this Link

Linda Piazza : 7/18/2005 11:08:24 AM

The RLX and BIX are pulling the OEX opposite directions this morning, with the RLX consolidating near the day's high after a strong climb and BIX consolidating near the day's lower after a strong drop. The RLX has climed to a new high, topping the January high of 466.68 and last week's test of that high, with last week's test of that high at 466.99. The RLX is at 469.45 as I type. The BIX has erased all of Friday's gains. Like the OEX, the BIX has a pronounced broadening formation on its daily chart, and also like the OEX, the BIX is so far turning down ahead of a touch of that top broadening line.

Jonathan Levinson : 7/18/2005 11:03:30 AM

Stepping away for 10 minutes.

Jeff Bailey : 7/18/2005 11:03:29 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 7/18/2005 10:55:24 AM

The short cycle upphase has just stalled, QQQQ testing lower channel support at 38.75. The 30 min channel bottom is down to 38.62, one cent above daily S1.

Linda Piazza : 7/18/2005 10:50:44 AM

So far, the OEX is finding resistance near Friday's support. Still too early to be sure that will hold, though, as Keltner support is trying to strengthen.

Jonathan Levinson : 7/18/2005 10:50:32 AM

The short cycle indicators crossed up from oversold territory and are still pointing north, though looking weaker as price slipped back below the 72 SMA on lighter volume. The short cycle bias is still to the upside, but it could prove a weaker upphase than we've been seeing for the past week because the 30 min cycle channels have turned down: Link . If the upphase doesn't abort here, there's a good chance that it will be sideways-up/corrective.

Linda Piazza : 7/18/2005 10:49:37 AM

The TRAN is benefiting from the drop in crude, now positive by a couple of points after bouncing off the morning's low, but this bounce certainly isn't particularly strong yet. In fact, the TRAN hasn't been able to convincingly turn up toward 3668.07 next Keltner resistance on the 60-minute chart just yet, and has lost a little ground as I typed.

Jonathan Levinson : 7/18/2005 10:41:56 AM

Crude oil is down .975 at 57.125, off a low of 56.90. OPEC has lowered its demand forecast for this year by 150,000 bpd, citing slower economic activity in some regions.

Jeff Bailey : 7/18/2005 10:41:08 AM

Bullish swing trade stop alert for shares of U.S. Energy (USEG) $3.49 -3.05% Link ... after trade at $3.43 (profiled stop). Breaking below its rising 200-day SMA ($3.54) today.

Linda Piazza : 7/18/2005 10:38:07 AM

The expected bounces have come where bears might have expected them to come, which won't make a bounce any more comfortable to weather for bears in a countertrend position. This is why I warned that bears should know how they would treat that 570-572 level, if tested. So far, the OEX produces 15-minute closes beneath Keltner lines currently at 573.75-574.07. As long as it does so, it's likely to go on challenging the 570-572 support zone. If it breaks above that 573.75-574.07 level on 15-minute closes, 574.85 is next resistance and then 576.15, the site of the descending trendline off last week's high. If it convincingly breaks below 571.99 on 15-minute closes, then a stronger descent might be possible, down to test 567-568.

Jeff Bailey : 7/18/2005 10:37:53 AM

Intermix Media (AMEX:MIX) $11.73 +9.42% ... agrees to be acquired by News Corp. (NWS) $17.41 -0.34% for $580 million in cash. The deal values Intermix at $12.00 per share.

Jeff Bailey : 7/18/2005 10:34:07 AM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 7/18/2005 10:31:01 AM

Volume breadth has firmed within negative territory, -1.81:1 on the NYSE and -1.3:1 on the Nasdaq, QQQQ printing its first 3 min candle above the 72 SMA on a surge of volume and filling the morning's gap down. Overall volume is very light at 19.5M QQQQ shares so far.

Jonathan Levinson : 7/18/2005 10:24:40 AM

QQQQ has bounced back to the 72 SMA resistance, still flat at 38.82, the wavelet cycle topping within the bottomy short cycle. A break above the 72 SMA should kick off a new short cycle upphase. Link

Jeff Bailey : 7/18/2005 10:23:40 AM

Host America (CAFE) $13.49 +32.9% Link ... WEEKLY Pivot Levels 0.18, 5.14, Piv= 7.91, 12.87, 15.64.

Linda Piazza : 7/18/2005 10:20:04 AM

The Wilshire 5000 is retesting that neckline and 15-minute 100-sma, and the SOX is below 460 again, although barely. The SOX is so far finding resistance at Keltner lines currently up to just under 461. As long as it's producing 15-minute closes below that Keltner line, it looks vulnerable to 456.01-457.24, mid-channel Keltner S/R.

Jeff Bailey : 7/18/2005 10:21:42 AM

Host America -Warrants- (CAFEW) $8.10 +55.47% Link .... percent gainer again today!

WEEKLY Pivot Levels ... 0.00, $2.17, Piv= $3.84, $6.86, $8.52.

Jeff Bailey : 7/18/2005 10:16:14 AM

10 Most Active QQQQ $38.80 -0.26%, SPY $122.38 -0.37%, INTC $28.21 -0.31%, C $45.37 -2.26%, LU $3.11 -0.32%, SIRI $6.94 +2.05%, MSFT $25.71 -0.31%, GERN $10.90 +26.74%, CAFE $13.06 +28.66%, AAPL $41.72 +0.40%

Linda Piazza : 7/18/2005 10:13:23 AM

Caution, bears. The Wilshire 5000 did pierce its neckline for its H&S, visible on its 15-minute chart, and did pierce its 15-minute 100-sma, but then bounced more than 10 points after doing so. Keep a watch. It's retesting both as I type.

Also, the SOX bounces, and is back above 460 as I type.

Jeff Bailey : 7/18/2005 10:12:24 AM

Friday's Internals found at this Link

Jeff Bailey : 7/18/2005 10:11:13 AM

10:00 Internals found at this Link

Linda Piazza : 7/18/2005 10:09:12 AM

Here's what the OEX's 15-minute Keltner chart now shows: The OEX now tests mid-channel support that looks firm enough to prompt a bounce, but it's not bouncing yet. If it does, next resistance on this chart is near 574, and as long as the OEX continues producing 15-minute closes below that level, it's more likely to go on testing support. If it breaks above that 574-ish level on 15-minute closes, then it might head up to test the descending trendline off last week's high, with that descending trendline now at about 576.22. Fifteen-minute closes below a line now at 571.98 suggest a potential downside target near 567, within that second 567-568 support zone I mentioned earlier.

Linda Piazza : 7/18/2005 10:05:28 AM

OEX moving down into a test of the important 570-572 S/R zone. Those of you in bearish trades on the confirmation of the lower high should know how you'll treat this test. Partial profits before a possible bounce? Lower stops?

Jeff Bailey : 7/18/2005 10:05:08 AM

VIX.X 10.96 +6.09% ... DAILY Pivot Levels ... 9.68, 10.00, Piv = 10.45, 10.77, 11.22

Jeff Bailey : 7/18/2005 10:03:22 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 7/18/2005 10:03:00 AM

Session lows across the board, QQQQ retesting the 38.69 low.

Jonathan Levinson : 7/18/2005 9:57:33 AM

The Fed announces a 10.25B overnight repo to replace the 12.25B expiring, resulting in a net drain of 2B for the day.

Jonathan Levinson : 7/18/2005 9:56:59 AM

QQQQ's 30 min cycle channel has turned down, and the short cycle indicators are as oversold as they've been in at least a week, still plenty of time left if they're going to start trending. Howeverm with price resting on the 30 min channel bottom, some kind of pause or bounce could be expected, at least to retest the 72 SMA at 38.82 from below. A break of Friday's 38.65 should be enough to signal the start of a trending move. Link

Jeff Bailey : 7/18/2005 9:54:50 AM

3M (MMM) $75.52 -1.23% Link ... reported Q2 net income of $776 million, or $1.00 per share, which was up from $773 million, or $0.97 a share in the same period a year ago. Excluding a charge from the company's reinvestment of $1.7 billion in foreign earnings, 3M said it earned $1.09 a share in the latest quarter. Sales were up 5.6% to $5.29 billion. Consensus among analysts was for the company to earn $1.09 per share (before items).

Linda Piazza : 7/18/2005 9:52:11 AM

SOX dropping today, but not below Friday's low yet.

Linda Piazza : 7/18/2005 9:51:40 AM

Wilshire 5000 on that neckline now.

Linda Piazza : 7/18/2005 9:51:21 AM

Bounce attempt came right where expected on the OEX, with the OEX dropping down to test the 15-minute 100-sma and bouncing from that. Just because it's expected doesn't mean that bears are in the clear, though, because it's what the OEX does with that bounce that's important. Right now, it's not able to hold the bounce, so that's good, but there's further support down to the 15-minute 130-ema, at 571.67. OEX dropping down to retest the 100-ema again as I type.

Jeff Bailey : 7/18/2005 9:50:41 AM

Bank of America (BAC) $45.50 -1.04% Link ... reported a 12% gain in Q2 earnings versus a year ago. The banker said earings rose to $4.3 billion, or $1.06 a share, on revenue of $14.21 billion. Analysts were looking for $1.01 per share on revenue of $14 billion.

Jonathan Levinson : 7/18/2005 9:50:38 AM

Volume breadth is currently negative, -1.88:1 on the NYSE and -1.47:1 on the Nasdaq. The VXO is up to 10.47, VXN +1.2 at 14.54. DTN reports the total put to call ratio at .71.

Jeff Bailey : 7/18/2005 9:47:23 AM

Citigroup (C) $45.55 -1.87% Link ... the nation's largest bank said Q2 earnings from continuing operations fell 7% from a year ago with lower loan profitability and a rise in bankruptcy filings providing a drag. The company said it earned $5.07 billion, or $0.97 per share, on revenue of $20.17 billion. Consensus was for $1.02 per share on $21.41 billion in revenue.

Linda Piazza : 7/18/2005 9:46:38 AM

Wilshire 5000 still testing the neckline of its H&S on its 15-minute chart, a well-formed H&S, but with the neckline right below the 15-minute 100-ema on that chart. The neckline is now at about 12,209.45, with the 100/130-ema's at 12,212.60 and 12,195.74, respectively, so a bounce attempt might be expected here during the first retracement of the day. The DWC is currently at 12,224.25.

Jonathan Levinson : 7/18/2005 9:43:45 AM

QQQQ tests its lower 30 min channel support for the first time since last Monday, gunning for Friday's low to challenge the daily cycle upphase. Updated 3 min chart of QQQQ at this Link

Jonathan Levinson : 7/18/2005 9:42:16 AM

Ten year notes continue to hold their miniscule loss, TNX up 0.8 bps at 4.183%. Crude oil finished the overnight session -.275 at 57.825, off a low of 57.60.

Linda Piazza : 7/18/2005 9:41:53 AM

Those who might have entered a bearish OEX play on a confirmation of a lower high now need to be considering where an appropriate stop should be. That should be an account-appropriate amount above last week's high, perhaps allowing for a retest of that high, with a few cents (but very few) higher high. Those in such a bearish play should be aware that for now, it's a countertrend play and should be careful to guard profits. They should expect a bounce attempt soon during the first retracement of the day, especially as the OEX is testing the important 15-minute 100/130-ema's. They should definitely know how they'll treat a test of 570-572 and then 567-568, as either might be strong support.

Jeff Bailey : 7/18/2005 9:39:27 AM

Exxon/Mobil (XOM) $58.12 -0.06% Link ... announces early startup of its third major development offshore Angola. The energy giant said oil production should exceed 550,000 barrels a day.

Linda Piazza : 7/18/2005 9:37:36 AM

The OEX has dropped down below Friday's low, confirming a lower high.

Linda Piazza : 7/18/2005 9:37:12 AM

The Wilshire 5000 hasn't confirmed its H&S on its 15-minute chart, although it is turning lower this morning.

Jonathan Levinson : 7/18/2005 9:37:07 AM

WASHINGTON (MarketWatch) - Foreign capital inflows to the United States increased to $60 billion in May, the Treasury Department reported Monday. It was the strongest inflow since February's $79.6 billion. Inflows totaled $40.5 billion in March and $47.8 billion in April. Foreign central banks purchased $13.2 billion in long-term U.S. assets in May, up from $11.5 billion in April and net sales of $14.4 billion in March. Central banks bought $6.8 billion in U.S. Treasury bonds and notes in May, about half of April's $13.9 billion.

Linda Piazza : 7/18/2005 9:35:28 AM

I would expect a steadying attempt on the OEX near Friday's low, with that having just been tested or at the 15-minute 100/130-ema's, but unless the OEX bounces above 574.31 on the first 15-minute close, it looks vulnerable to 571.96-572.34, so at least vulnerable to a test of those 15-minute averages.

Jonathan Levinson : 7/18/2005 9:34:04 AM

QQQQ opens below the daily pivot and 72 SMA at 38.82, with 30 min channel support at 38.75 and resistance at 39.05.

Linda Piazza : 7/18/2005 9:31:58 AM

The OEX drops this morning. Confirmation of a lower high comes on a drop below 373.42, but the 15-minute 100/130-ema's are at 572.63 and 571.64, with those averages proving important on some other indices late last week.

Jeff Bailey : 7/18/2005 9:28:05 AM

Host America (CAFE) $10.15 Link .... second-most active and jumping to $11.97. Only "news" I can find is a Wall Street Network investment update. Link

Jeff Bailey : 7/18/2005 9:28:43 AM

Geron Corp. (GERN) $8.60 Link ... atop this morning's most active list and higher at $10.31 after the company said it signed a collaboration and licensing deal with Merck (MRK) Link to develop a cancer vaccine targeting telomerase, an enzyme active in most cancer cells.

Jonathan Levinson : 7/18/2005 9:23:30 AM

Emily was upgraded to a category 4 hurricane, with windspeeds of 135 mph as it hit Mexico's coast. It is currently forcing the evacuation of tourists in Mexico's Carribean beach resorts. Thankfully, there have been no reports of injury or death, and Emily has slowed somewhat, currently downgraded to a Cat 2 hurricane. Forecasters expect it to gather new strength as it passes over the Gulf of Mexico later today, however. Check out the infrared dynamic satellite loop at this Link .

Jonathan Levinson : 7/18/2005 8:59:31 AM

QQQQ/NQ continues its intraday vs. daily cycle divergence, with the 30 min cycle indicators edging back down within a trending decline that has been tracing since last Monday. The indicators continue this negative divergence as price grinds higher within the daily cycle upphase. The interpretation of this pattern is either of an extremely weak/sideways 30/60 min cycle downphase to be followed by a strong/impulsive upphase, or of a very strong 30/60 downphase (if it ever gets started) to challenge the daily cycle up. I can't recall ever having see such a divergence last longer than a day or two, let alone for an entire week. My own guess as to which way it breaks has changed twice since Wednesday, and this morning it looks more bearish than bullish to me- always provided, or course, that the price actually stops rising. Daily cycle bears need to see at least a day or two of lower lows and lower highs to suggest anything more than an intraday correction. With the daily cycle continuing higher but nearing overbought territory, the bulls should be running out of racetrack this week.

First intraday support is at 38.75 QQQQ. I await the cash open to generate the intraday keltner bands. 72 SMA resistance is at 38.82.

Jonathan Levinson : 7/18/2005 8:52:02 AM

Headline:

S&P 500 PENSION FUNDS STILL UNDERFUNDING IN 2004: S&P

Jonathan Levinson : 7/18/2005 8:32:37 AM

Session lows for gold, crude oil and GOOG, as QQQQ ticks up to 38.80 here.

Jonathan Levinson : 7/18/2005 8:31:03 AM

WASHINGTON (MarketWatch) -- Citigroup Inc. (C: news, chart, profile) reported second-quarter net income of $5.07 billion, or 97 cents a share, up from $1.14 billion, or 22 cents, earned in the year-ago period. The financial-services giant's quarterly revenue eased 3% to $20.17 billion from $20.89 billion. Income from continuing operations came in at $4.73 billion, or 91 cents a share, for the latest quarter, up from the prior year's $916 million, or 17 cents a share. "The capital markets environment was one of the worst we have seen in years," said CEO Charles Prince. Analysts, on average, had been looking for earnings of $1.02 a share for the latest quarter, on revenue of $21.41 billion.

Jonathan Levinson : 7/18/2005 8:28:08 AM

Treasuries are holding flat, just south of unchanged, with ZN futures -1/32 at 111 43/64. TNX is unchaged at 4.175% at the cash open, between 4.16% support and light 4.18% resistance. Bond bears need a break above 4.2%, but so far the level has been firm, with the daily cycle upphase starting to curl within overbought territory.

Jonathan Levinson : 7/18/2005 8:15:08 AM

NEW YORK (MarketWatch) -- 3M (MMM: news, chart, profile) reported second-quarter earnings of $776 million, or $1 a share, up from $773 million, or 97 cents a share in the same period a year ago. Excluding non-recurring charges, earnings would have been $1.09 a share, matching the average analyst estimate compiled by Thomson First Call. Revenue rose 5.6% to $5.29 billion from last year's $5.01 billion, vs. analyst forecasts of $5.3 billion. The company revised its 2005 adjusted earnings estimate to $4.20 to $4.25 a share from $4.15 to $4.25 a share.

Linda Piazza : 7/18/2005 8:15:49 AM

Friday, the OEX broke through the 60-minute 10-sma, an average that it had been scaling as it climbed off the 7/07 low. After a search of a year's worth of strong climbs along that particular average, I had noticed a pattern emerge. Although it's possible that I missed an example or two, all instances I located invariably showed a retest of the previous high after a 60-minute close back below that average. On a confirmed lower high, the OEX usually retraced at least 38.2% of the rally. A higher high meant that the rally wasn't over, although in one instance, the higher high was just a head for a H&S formation. In only one instance was the retest not a good sign for either a bearish or a bullish position, but instead preceded a settling into the prolonged May/June consolidation period.

I waited most of Friday for that retest of the previous high reached before a 60-minute close back below the 60-minute 10-sma. Finally, late in the day, the retest began, but the day ended without a higher high or a confirmation of a lower high. Those who believe markets are overbought and are interested in a bearish play should watch for confirmation of a lower high, on a drop below 573.42, before a higher high is reached, but they should be aware that they're in a play that would currently be considered a countertrend play. Stops should be set, perhaps just above last week's high, and traders should know enough about their trading styles to know that they'll adhere to those stops. Profit-protecting plans should be in place for a test of the 38.2% rally off the 7/07 low, with that level at 567.88, if that should be tested. Those who feel confident of extended moves after the OEX's possible bear flag formed Thursday and Friday would want a break above Thursday's high, but should be aware that the OEX then moves into a resistance zone that's been marked on my charts for a long, long time. Daily Keltner resistance exists at 579.18, and profit-protecting plans should be put in place for a test of that level, if the OEX should reach that high.

For guidance, watch the Wilshire 5000. This index punched to a new high Thursday, then fell back strongly into the close, presenting a potential reversal signal. Friday's candle looked stronger, particularly since it sprang up from daily Keltner S/R at 12,211.13, so evidence remains mixed on this index. The Wilshire 5000 has a potential H&S on the 15-minute chart, with a neckline near the 15-minute 100/130-ema's, at 12,212.14 and 12,194.38, respectively. Watch for a confirmation of the Wilshire 5000's H&S as a sign that markets weaken, at least temporarily. An invalidation of that H&S would be a sign that bulls remain stronger than bears, at least temporarily. Also watch the RUT, declining late last week, but remaining within the steep ascending regression channel in which it's traded off the late April low. As of Friday's close, it was trying to bounce from the midline of that channel. RUT 650 is bottom support for the channel, depending on how QCharts draws them. As Jim said this weekend, 640 is important support. Watch to see if the RUT drops through and out of that steep channel or rises up through it again. The SOX and RLX should also be watched.

Jonathan Levinson : 7/18/2005 7:31:01 AM

Equities are lower, ES trading 1228.75, NQ 1582.5, YM 10633 and QQQQ -.11 at 38.78. Gold is up 60 cents to 421.90, silver +.036 to 7.03, ten year notes +3/64 at 111 3/4 and crude oil -.325 to a session low of 57.775.

There are no major economic reports scheduled for release today.

Linda Piazza : 7/18/2005 7:16:34 AM

Good morning. The Nikkei was closed last night for a holiday. The Taiwan Weighted was closed due to a typhoon, but other Asian markets were mixed. European markets are mixed, too, turning lower when U.S. futures did. Our futures fell after Citigroup missed expectations. As of 7:01 EST, gold was up $0.30, and crude, up $0.04 to $58.13, down from its overnight high. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei was closed for a three-day holiday Monday. Other Asian markets were mixed. The Taiwan Weighted was also closed Monday as the country braced for a typhoon. South Korea's oil refiner SK Corp. dropped in early trading after United Arab Emirates-based Sovereign decided to sell its position in SK Corp after it did not succeed in booting the company's chairman. The Kospi climbed 0.27%. Singapore's Straits Times fell 0.10%, and Hong Kong's Hang Seng rose 0.43%. China's Shanghai Composite dropped 1.37%. Bidding heats up for the U.S.'s Unocal Corp., with the board of directors reportedly meeting again to consider CNOOC's offer. The board had previously recommended that ChevronTexaco's offer be considered. In Jim's Wrap this weekend, he mentioned political efforts being made to block Unocal from accepting CNOOC's offer. Also in the U.S., Whirlpool has made an offer for Maytag, joining the bidding war with a Chinese group trying to buy Maytag.

European markets are also mixed this morning, with European markets hit by Citigroup's miss. Tensions have risen between the U.K. and Pakistan, with Pakistan doing some finger pointing and blaming the U.K. for recent terrorist activities in the U.K. and calling the U.K. a breeding ground for terrorists. Today, June's final Eurozone CPI was reported as rising 2.1% year over year, with May's number also revised higher. Despite multiple calls for the ECB to lower rates, the ECB has so far refused to do so, and this inflation data supports the ECB's decision. Energy prices are of course to blame for the higher prices, with the core rate unchanged over May's and representing an only 1.4% year-over-year rise, and with some pointing to that tame core rate as indicating that domestic demand has not yet increased.

In company-specific news, Philips Electronics declines after reporting earnings and saying that it's cautious on its business outlook. Germany's Infineon dropped after a company exec resigned this weekend after some payments made relating to motor sport sponsoring were pinpointed as the source of "severe allegations," according to a Marketwatch.com article. Also in the tech sector, Morgan Stanley downgraded Cap Gemini but raised its price target by a couple of euros, with Cap Gemini dropping in early trading. In the U.K., respected Marks & Spencer director will leave to accept another position, and MKS dropped in early trading as a result. The U.K.'s ITV dropped after its purported pension deficits derailed plans by a consortium to bid for the British television company. In other M&A activity, Tele2 has announced plans to buy telecom Versatel, with Apax then to buy Versatel's German operations after the deal is completed.

As of 6:47 EST, the FTSE 100 was down 1.90 points or 0.04%, at 5,228.90. The CAC 40 was higher by 0.86 points or 0.02%, at 4,371.74. The DAX was higher by 19.45 points or 0.41%, at 4,718.72.

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