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Jeff Bailey : 7/22/2005 1:48:35 AM

Can't remember who made up this chart, but it was a honey. Link

Jeff Bailey : 7/22/2005 1:08:38 AM

Keene - Per your futures post of 10:44:27. I like your theme though. Wave theory and the moon. Hey, if you can make money off it, I'm all for it.

I know for fact, based on observation, that wild animals will "act" different depending on the phase of the moon.

I thought Moonbeam Keene was a catchy handle.

No matter what handle may fit any of us, it was George Bernard Shaw that may have said it best. "Make money and the whole nation will conspire to call you a gentleman."

Jeff Bailey : 7/22/2005 12:30:12 AM

Program Trading Levels for Friday HL Camp & Company has their computers set for program buying at $+4.67 and set for program selling at $+1.65.

OI Technical Staff : 7/21/2005 9:59:59 PM

The Market Monitor has been archived.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

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

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

Marc Eckelberry : 7/21/2005 6:35:03 PM

Looks like Cramer is striking out on the big four pushes he had: INTC, YHOO, MSFT and GOOG.

Jeff Bailey : 7/21/2005 5:07:05 PM

Pivot Matrix for Friday found at this Link

Jeff Bailey : 7/21/2005 4:25:17 PM

Closing Market Watch found at this Link

Jeff Bailey : 7/21/2005 4:20:45 PM

Closing Internals found at this Link

Jonathan Levinson : 7/21/2005 4:21:41 PM









MSFT trading down .39 at 25.80.

Jeff Bailey : 7/21/2005 4:08:27 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Day traded long shares of Coca Cola (KO) at $44.15, but was stopped at $44.02 ($-0.13, or -0.29%).

Jonathan Levinson : 7/21/2005 4:04:51 PM

Session highs for GOOG here at 320.41 just printed. Almost a 10% swing in under 5 minutes.

Jonathan Levinson : 7/21/2005 4:03:46 PM

GOOG's report at this Link .

Google reported record revenues of $1.384 billion for the quarter ended June 30, 2005, up 98% year over year. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs or TAC, the portion of revenues shared with partners.

Jonathan Levinson : 7/21/2005 4:02:40 PM

And back to 306.

Jonathan Levinson : 7/21/2005 4:02:16 PM

GOOG plunges to 296.06 just now. Link

Jeff Bailey : 7/21/2005 3:56:19 PM

Reebok Intl. (RBK) $43.96 +4.39% Link ... reports Q2 EPS of $0.60 a shares vs. year-ago $0.35.

Linda Piazza : 7/21/2005 3:54:21 PM

Today's Wilshire 5000 candle's body engulfs the body from yesterday's candle, but not quite all the candle shadows from yesterday. It was almost, but not quite a bearish engulfing candle, depending on the closing minutes. The DWC printed a couple of potential reversal signals last week, too, though, so either it was just revving up to reverse or else we still cannot trust these. I think the DWC would have to drop below the 12,200 level (currently at 12,270.32) before any real downside got going and then there would likely be support at the 30-sma, now at 12,049.55. That's also near support for its rising regression channel. So, although there's a pullback and a strong one, erasing more than yesterday's gains (from the previous day's close), on an intermediate-term basis, this is not really bearish action yet. It may get there, but it's not there yet, so bears, although probably really breathing for the first time this week on today's action, really can't relax just yet.

Linda Piazza : 7/21/2005 3:46:12 PM

RLX still not so very far from its 485-ish HOD, at 481.56. I don't trust that one, and keep watching.

Linda Piazza : 7/21/2005 3:44:31 PM

And so the OEX will possibly end the day inside that same old 15-minute, now horizontal Keltner channel that's been containing it all week. This certainly has not been the index to watch or trade this week, although I guess that's not true. Trades from one side to the other have been okay trades as long as they were exited automatically as the other side of the channel was approached. Now, the OEX appears to be narrowing its pattern, as it sometimes does when settling into an equilibrium position, so I'm not sure that such trades would be good any longer. I've mentioned this tendency earlier in the week, and thought it would begin earlier, but not until today.

Linda Piazza : 7/21/2005 3:40:40 PM

As of this moment, the SOX is sitting right on the upper boundary of that rising regression channel on its weekly chart. Tomorrow could see the SOX drift back inside that channel, so that only a candle shadow pierced it this week or it could see a steadying at this level, so that the weekly candle body springs up from this resistance. Still a day and 20 minutes to go: Link

Jeff Bailey : 7/21/2005 3:41:11 PM

MSFT Link looks a bit like the 10-year yield Link (relative to 200-day and 50-day SMAs)

Jeff Bailey : 7/21/2005 3:37:59 PM

Furniture Stocks .. FBN, STLY, BSET, HVT, HOFT (I'd suggest looking to see who has screamed the loudest about Chinese imports)

Jeff Bailey : 7/21/2005 3:36:49 PM

Microsoft (MSFT) $26.39 +0.76% ... #3 most active. Making way from its 200-day ($25.75)

Jeff Bailey : 7/21/2005 3:33:50 PM

Sell Program Premium .... SPX 1,228.54, DIA $106.35, QQQQ $39.49

Jonathan Levinson : 7/21/2005 3:34:31 PM

QQQQ grinds its way higher, challenging the 72 SMA from below, while volume breadth holds barely negative at -1.06:1 on the Nasdaq, compared with -2.55:1 on the NYSE. Closeup of today's intraday action at this Link

Linda Piazza : 7/21/2005 3:34:49 PM

Reader Question: You are so meticulous in your patterns. You often mention what price, time would invalidate the formation, but how do you determine them? I think I see a nice inverted H&S on the ebay daily chart, but it isn't as pretty as some!

Response: Thanks for the question. For those of you who would like to ask questions, just specify the writer to whom the question should be asked, and we'll be glad to answer. Your question is a great one, and one I thought might be timely for the MM, since we writers have been H&S and inverse (or reverse, depending on the writer) H&S-ing a lot lately.

I know that L already knows her stuff, so some of what I write here will be for the newbie and not directed particularly at this subscriber. First, I think all my co-writers would agree that it's dangerous to assume that a H&S or inverse H&S is going to confirm just because it appears that the formation begins rounding over in to a right shoulder. We all agree that a bottoming inverse H&S and a topping H&S are more reliable than continuation-form ones, although my texts indicate that they're sometimes valid continuation formations. One that forms in the midst of a consolidation zone shouldn't be counted as valid at all. However, I believe that those not-as-valid formations can sometimes be helpful to watch, as they tell us something about short-term bullish or bearish sentiment. Are bulls able to confirm an inverse formation or do bears push prices to a new low, below the head level? That sort of thing can be helpful to watch even if you don't count on any targets being met.

Other than finding bottoming or topping formations more reliable, we also find it helpful if there's bearish price/oscillator divergence as the head is formed on a regular H&S and if there's bullish price/oscillator divergence as the head is formed on an inverse one. That's no guarantee, either, but it's helpful to see.

Beyond that, most of us can recognize the shape of a H&S, although I agree with this subscriber that I sometimes have difficulty finding the H&S that others see. Then there's the whole question of where the neckline should be, one that comes up with the eBay inverse H&S that you mentioned. A little artistry and judgment are sometimes needed. I could have found two separate necklines for the one that you mentioned, but perhaps this one fits best. Link With an unfilled gap below today's price bar and with the price target in the middle of another gap, so that eBay has to fight gap resistance, I'd be really cautious here with my bullish gains as eBay approaches its 200-sma, making sure I protected my profits or took partial profits at least. Seriously, each trader has to make his or her own trading decisions, but if I had been lucky enough to take in some money on that eBay play, I'd be taking some or all off the table tonight. My own personal preference is that when I see a fight ahead and I'm sitting on profits, to take something or all off the table, and then plan to get back in after the fight is over, but other traders might choose a hedging strategy. They might sell all their position and use only part of the profits to buy a slightly OTM or ATM position, to allow them to pocket some money but still participate if the play continues their direction. That sort of thing.

Jeff Bailey : 7/21/2005 3:29:50 PM

Not seeing too many 1,2, or 3-lettered stock symbols doing the gap higher and drive to the close though.

Jeff Bailey : 7/21/2005 3:29:20 PM

Thought KO would do something similar to EBAY on an intra-day basis. Gap then drive, gap then drive.

Jonathan Levinson : 7/21/2005 3:20:57 PM

VXO 10.53, VXN 13.41

Jeff Bailey : 7/21/2005 3:15:14 PM

03:00 Internals found at this Link

Jeff Bailey : 7/21/2005 3:12:54 PM

Buy Program Premium ... SPX 1,227.60, DIA $106.37, QQQQ $39.45.

Jonathan Levinson : 7/21/2005 3:12:44 PM

Today's volume is the heaviest we've seen in many sessions for QQQQ, up to 112.4M shares now, and the last high made a lower high against the premarket spike. A break of the session lows from here would add to the bearish case, but that toppy daily cycle won't flip sides until the previous day's lows begin to get broken.

Linda Piazza : 7/21/2005 3:04:46 PM

The OEX now sits, once again, on daily Keltner support, part of what's keeping it from breaking out of that channel in which it's been trading. That daily Keltner channel line is at 571.86 on a daily close, and would then suggest a pullback to 567-568 next support. On the 15-minute chart, however, the OEX would need a 15-minute close below the Keltner support currently at 570.84 to set that target. The OEX tries to firm at nearest Keltner support at 571.85 as I type.

Jeff Bailey : 7/21/2005 3:02:51 PM

03:00 Market Watch found at this Link

Linda Piazza : 7/21/2005 3:00:24 PM

The RLX turns down from its HOD, this time having dipped decisively below the previous peak, something it really hasn't done over the last week. Bears watching the RLX to see if it's still going to try to entice other indices higher and keep sentiment high will likely be noting that the RLX hasn't even yet dropped below an ascending trendline off the 7/07 low, though, and won't do so until it's below about 476.42. The 19.1% retracement of the RLX's climb off its 6/27 low (see my 1:55 chart) is at 475.63, however, so I'd sure wait until the RLX was below that before I considered a break below that trendline confirmed. The RLX is way above both right now, at 481.21.

Jonathan Levinson : 7/21/2005 2:56:13 PM

30 min channel support lines up at 39.34 QQQQ, on daily S1, a key level for bulls and bears as price slips below the daily pivot and 72 SMA, stalling the 30 min channel upphase. Link

Jonathan Levinson : 7/21/2005 2:49:38 PM

Sept. crude oil finished -.875 at 57.15, off a low of 56.60. Ten year notes are down at 111 3/64, just off the session low, with TNX up 10.6 bps at 4.283%.

Linda Piazza : 7/21/2005 2:46:05 PM

The RUT is back at the midline of its rising regression channel, here as seen on the two-hour chart: Link It has daily Keltner support currently at in the 665-ish zone, so bears would like to see that breached by the close. So far, though, the RUT, pullback or not, remains safely enconced within its long-term rising regression channel. What market bears really need is a breakout of that channel. Until then, we're just looking at a pullback.

Jeff Bailey : 7/21/2005 2:41:18 PM

Ladish Co. (LDSH) $15.40 +28.87% ... forged and cast metal component engineering firm. Jumped from $12.00 intra-day after reporting Q2 sales of $66.5 million, a 24.9% improvement over $53.3 million of sales in the second quarter of 2004. The Company had a net income of $4.63 million, resulting in diluted earnings per share of $0.33 for Q2 versus net income of $2.18 million and $0.17 a share in the same period of 2004. First half 2005 sales of $131.6 million reflect a 26.6% growth over 2004, with $7.29 million of net income, $0.53 per share, in contrast to $1.75 million of net income, $0.13 per share, in 2004.

Linda Piazza : 7/21/2005 2:40:06 PM

BIX at 366.55: 200-sma at 364.56.

Linda Piazza : 7/21/2005 2:34:43 PM

The OEX currently tests support near 572. Bottom channel support for the OEX now at 571.03. If some of you entered new bearish positions on that last test of the descending trendline off the 7/07 high or are still in them from this morning, have profit-protecting measures in place. You've seen what can happen. Bears want a 15-minute close below the Keltner line now at 571.03.

Jonathan Levinson : 7/21/2005 2:32:37 PM

Nasdaq volume breadth goes negative, -1.15:1 here, -2.89:1 on the NYSE.

Linda Piazza : 7/21/2005 2:31:51 PM

Hmm. I posted this chart of the SOX late yesterday, with a fitted retracement bracket, with the annotations yesterday's: Link

Jonathan Levinson : 7/21/2005 2:30:05 PM

QQQQ testing 72 SMA support now, at the daily pivot.

Jonathan Levinson : 7/21/2005 2:29:37 PM

WASHINGTON (MarketWatch) -- China's move to de-link the value of its currency, the yuan, from the dollar isn't a reason for concern about the market for U.S. Treasury bonds, Treasury Secretary John Snow said Thursday. Snow was asked in an interview on Bloomberg TV if he's concerned about the effect of the move on bonds, and replied, "no, I'm not." In addition to scrapping the dollar peg, China strengthened the exchange rate to 8.11 yuan to the dollar, from 8.277 yuan.

Jonathan Levinson : 7/21/2005 2:24:54 PM

QQQQ's short cycle downphase is so far failing to strike terror into the hearts of bulls, edging sideways-lower following the sharp upside channel break that preceded it. 72 SMA support hasn't even been tested yet, and the 30 min channel continues to point north. Bears need a break of 39.47 to challenge this bullish picture. Link

Jeff Bailey : 7/21/2005 2:29:17 PM

I wasn't planning on profiling a trade today, but the "China currency" was too much to resist (creates uncertainty).

I thought, and still do, that Coca Cola (KO) Link a very interesting and bullish trade as it not only breaks the "head and shoulder top" pattern, but gaps it on good volume.

KO reported earnings today, that were above estimates. $0.72 a share vs. consensus of $0.64.

Some notes from the company's call was that the Asian region remained the "weak spot," but demand for Coke's dring jumped 22% in China, perhaps signaling a turn higher from trend.

Volumes were up 9% in Latin America, buoyed by an 8% rise in Mexico, and 1% in North America (30% of KO's revenues). But sales in the company's East Asian, South Asian and Pacific Rim markets were down 4%.

India was a particularly sore spot for Coca-Cola. Sales in the Asian nation fell 14%, hurt by the impact of price increases for Coke soft drinks. The company also underperformed in the Philippines, where sales dropped 6%.

Now ... In last night's Market Wrap I thought we might start to see some easing of gas prices at the pump. 7-Eleven's CEO often cites higher gasoline prices being a negative for their other retail offerings. Yes... you dump $60 to fill up the SUV and you just want to leave and get back on the road. No softdrink, candy bar, whatever your vice.

Linda Piazza : 7/21/2005 2:16:48 PM

TRAN back below 3800, but not much below. It hit its 2-hour upside target and pulls back, but not even to next 2-hour support yet, with that support just under 3770. Link

Jeff Bailey : 7/21/2005 2:14:24 PM

02:05 Internals found at this Link

Linda Piazza : 7/21/2005 2:12:40 PM

The SOX may still be in a right-shoulder building exercise. No confirmation and no invalidation of the H&S on the 15-minute chart. These days, even the sight of a potential H&S at this point in the formation is a scary thing for bears, because it's often been at about this point, just as the shoulder is on the verge of rounding over, that prices shoot higher in invalidation of the formation, into a new high as surprised shorts bail.

Linda Piazza : 7/21/2005 2:08:10 PM

For those without a television, Snow is on CNBC, and that sometimes does strange things to the dollar and, thereby, to equities. The television is not in this room, so I'm not sure what he's saying, except that I heard him say something about it being a positive for global economies.

Jeff Bailey : 7/21/2005 2:07:37 PM

02:05 Market Watch at this Link

Jonathan Levinson : 7/21/2005 2:04:14 PM

Ten year notes are grinding lower in the wake of the FOMC release, TNX now up 10.2 bps at 4.279%, QQQQ testing lower short cycle channel support at 39.51, 5 cents above the 72 SMA overlapping the daily pivot.

Linda Piazza : 7/21/2005 2:02:54 PM

TRAN 3799.21, with the first peak of the day at 3798.24. So far, just pullback territory to retest broken resistance, but I'm watching.

Linda Piazza : 7/21/2005 2:01:52 PM

The SOX is still in a possible right-shoulder-building exercise on its 15-minute chart. It has an ascending neckline roughly congruent to the 15-minute 100/130-ema's at 467.47 and 465.66, which makes it handy to pinpoint when there's been a breakdown and get double the confirmation. The SOX is at 471.06 as I type.

Jonathan Levinson : 7/21/2005 2:01:19 PM








Jeff Bailey : 7/21/2005 2:00:54 PM

Bullish day trade stop alert for Coca Cola (KO) $44.02

Jeff Bailey : 7/21/2005 1:59:14 PM

Sell Program Premium ... SPX 1,231.29 , DIA $106.59, QQQQ $39.58.

Jonathan Levinson : 7/21/2005 1:57:46 PM

QQQQ surpassed yesterday's volume during the past hour, with 96.5M shares traded so far, compared with yesterday's 91.9M. There are currently 1.21 advancing for each declining.

Linda Piazza : 7/21/2005 1:55:02 PM

Look at this 60-minute RLX chart in its purest form, with no MA's or oscillators and with only price bars and a Fib bracket off the rise so far: Link Doesn't that rise look scary and more and more tenuous? And yet the RLX keeps rising, its zig-zagging course narrowing, and we know good and well that it could just shoot higher again, as it did this morning out of a rising bearish wedge that had been forming nicely. Speaking of "nicely," though, this bracket fitted on the climb corresponds nicely to various consolidation periods, doesn't it? Does that accumulated evidence mean that the RLX is about to topple? Wish it were that easy. I'd vote that it looks wobbly to me, but I probably would have said the same just before it settled into that consolidation just above the 50% mark on this chart, and all it did then was consolidate a while.

Jonathan Levinson : 7/21/2005 1:54:57 PM

Awaiting the 2PM release of the FOMC minutes.

Jeff Bailey : 7/21/2005 1:53:09 PM

KO $44.08 +1.73% ... intra-day range has been $44.57-$44.00.

Jeff Bailey : 7/21/2005 1:50:06 PM

Sell Program Premium .... SPX 1,231.36, DIA $106.59, QQQQ $39.56.

Jonathan Levinson : 7/21/2005 1:50:00 PM

Session low for ten year notes at 111 5/64, TNX now up 9.8 bps or 2.35% at 4.275%.

Jeff Bailey : 7/21/2005 1:49:26 PM

QQQQ Jan07 38 Call (VCQ-AL) ... today's trade (I had al_rt set at $5.25) was 10 at 5.20, then 10 at $5.50. Not enough volume to spend a lot of time on at this point.

Jeff Bailey : 7/21/2005 1:44:18 PM

QQQQ Jan07 38 Call (VCQ-AL) found the comment at 1:29:56 AM Link

Jonathan Levinson : 7/21/2005 1:42:55 PM

QQQQ continues to meander lower, the short cycle indicators printing a sell signal from overbought territory: Link

Linda Piazza : 7/21/2005 1:42:55 PM

TRAN 3804.29, approaching 3800 and the first peak of the day, just below that.

Linda Piazza : 7/21/2005 1:38:59 PM

TRAN pulling back from its two-hour target and resistance, but its pullback looks corrective so far and is bringing the TRAN back to a test of the first high and 3800 round-number possible support. TRAN at 3806.75 as I type. I think the TRAN would have to get below the previous 3798.24 HOD's potential support before anything at all got started to the downside on this index.

Jeff Bailey : 7/21/2005 1:35:54 PM

QQQQ Jan07 38 Call (VCQ-AL) $5.50 alert. See 06/22/05 MM.

An alert I had set here. Can't remember why. I'll go check.

Jeff Bailey : 7/21/2005 1:30:10 PM

Thinking ... furniture ... haven't some U.S. Mfg. been complaining about Chinese imports of furniture hurting their business?

Jonathan Levinson : 7/21/2005 1:28:51 PM

Volume breadth remains mixed, -1.81 on the NYSE and +1.08:1 on the Nasdaq.

Linda Piazza : 7/21/2005 1:27:27 PM

OEX turning down from within its 15-minute Keltner channel that's been containing its moves today. It's still just rattling around within that Keltner channel, with no breakout either direction. Guess it would have been okay to buy the touch of that bottom channel line this morning, as long as you were willing to exit automatically on a test of the top of the channel again, with the OEX not quite touching the top this time. Not yet. Unfortunately, internals and the actions of the RUT and SOX did not suggest that such a play had good odds. And, when the top of the channel was tested, the action of the RLX and TRAN did not suggest that a bearish play was high odds to be profitable, either. So far, we can continue to say, however, that the descending trendline off the 7/14 high has held as resistance on 15-minute closes except for two 15-minute closes late yesterday.

Tab Gilles : 7/21/2005 1:27:29 PM

Longterm chart of $INDU & $TRAN from 1982 to present. Link Link

Jonathan Levinson : 7/21/2005 1:18:59 PM

QQQQ update at this Link , pulling back from upper 60 min channel resistance and a rising trendline from yesterday's lows. A failure here from a higher intraday low will spell trouble for the 60 min cycle, as it would confirm a top and subsequent rollover. Bears need a break back below 72 SMA support at 39.42 to stall the upturn in the 30 min cycle.

Linda Piazza : 7/21/2005 1:15:57 PM

Oh, forgot to mention a potential H&S on the SOX, not invalidated as the RUT's was.

Linda Piazza : 7/21/2005 1:14:39 PM

Don't know what to make of this. Are bears being given a gift in the form of a new entry on the OEX, at the test of the descending trendline off the 7/14 high? Or is the OEX about to break to the upside? The BIX bounced, but only up to the confirmation level of the double-top on its five-minute chart. At least, so far. The RLX hit a new HOD, though, climbing higher above the breakout level on its daily chart, although it's the close that's important in setting a breakout signal and not intraday action. The RLX eases as I type, but not seriously yet. The TRAN zoomed all the way up to the two-hour Keltner target and pauses near that target as I type. The SOX zoomed up to a 61.8% retracement of its decline off yesterday's high, and now pulls back to retest the 50% retracement. Mixture of evidence.

Jeff Bailey : 7/21/2005 1:10:40 PM

01:00 Internals found at this Link

Jeff Bailey : 7/21/2005 1:02:56 PM

01:00 Market Watch at this Link

Jeff Bailey : 7/21/2005 1:01:50 PM

Buy Program Premium ... SPX 1,234.35 , DIA $106.95, QQQQ $39.68

Linda Piazza : 7/21/2005 1:00:16 PM

The OEX pulls back slightly from its test of the best-fit descending trendline off the 7/14 high, but I don't know how much credibility to give to that pullback since I don't know what caused the spike.

Linda Piazza : 7/21/2005 12:55:02 PM

OEX back at that former descending trendline off the 7/14 high, testing it at the current 575.55 level.

Jonathan Levinson : 7/21/2005 12:53:30 PM

60 min channel resistance is at 39.71, and the 60 min channel has yet to turn up despite price leading the 30 min channel higher: Link

Linda Piazza : 7/21/2005 12:53:18 PM

New HOD for the RLX.

Linda Piazza : 7/21/2005 12:51:50 PM

The RLX also broke out of its coiling pattern to the upside, and currently tests the almost 484 HOD.

Linda Piazza : 7/21/2005 12:50:58 PM

Danger, bears. New HOD for the TRAN. It's at 3803.18, moving up toward the current 3814.33 target on the two-hour chart. That target is moving higher as the TRAN does.

Jonathan Levinson : 7/21/2005 12:49:28 PM

Volume breadth is -2.00:1 on the NYSE, just going positive on the Nasdaq at +1.09:1. VXO is down to 10.21, VXN 12.69.

Jeff Bailey : 7/21/2005 12:51:00 PM

Dow Transports (TRAN) 3,800 +0.88% Link ... X gets the square.

Linda Piazza : 7/21/2005 12:47:21 PM

OEX just rattling around in that channel on the 15-minute chart, with the channel boundaries now from 571.07 to 576.22, with the OEX currently at 574.24. This isn't what bears wanted to see happen. No direction predicted from that chart, at this moment. I'd watch the TRAN for sure, as it's threatening a higher high.

Jonathan Levinson : 7/21/2005 12:38:00 PM

3-day 3-min view of the break above 72 SMA and channel trendline resistance: Link . The move has just violated upper 30 min keltner resistance, generally where the bears push back- but lately, those pullbacks have been shallow and slow.

Linda Piazza : 7/21/2005 12:37:51 PM

Unless this spike is quickly reversed, the RUT has probably moved too high for that H&S scenario to play out on the 15-minute chart.

Jonathan Levinson : 7/21/2005 12:36:25 PM

VXO 10.27, VXN 12.71

Jeff Bailey : 7/21/2005 12:37:06 PM

QQQQ $39.57 +0.30% ... Jonathan should be getting some bullish fiz!

Jeff Bailey : 7/21/2005 12:38:48 PM

Coca Cola (KO) $44.17 +1.93% ... Let's "shake it up a little." I want some FIZZZZZZ

Jonathan Levinson : 7/21/2005 12:33:13 PM

QQQQ breaks channel resistance for a potential bull flag breakout: Link

Jeff Bailey : 7/21/2005 12:32:43 PM

Dow Diamonds (DIA) $106.55 -0.13% ... edging back above its DAILY Pivot.

Jonathan Levinson : 7/21/2005 12:27:41 PM

QQQQ tests 72 SMA resistance here at 39.42.

Jonathan Levinson : 7/21/2005 12:27:16 PM

Session low for Sept. crude oil at 57.075. TNX is up 8.2 bps at 4.259%, a 1.96% gain for the day.

Linda Piazza : 7/21/2005 12:23:47 PM

The SOX coils at the bottom of its drop today.

Linda Piazza : 7/21/2005 12:22:40 PM

The OEX is still testing mid-channel resistance on its 15-minute Keltner chart, nothing determined either direction.

Linda Piazza : 7/21/2005 12:21:26 PM

Will we get a "good news is bad news" reaction from the Philly Fed (because of rate hikes) or a "good news is good news" one? Watch the charts. So far, there's been a continued bounce attempt on some indices, but they were in the works already, perhaps. Have to see how far they go. The RUT has a potential H&S on its 15-minute chart, but it needs to roll over again soon if that's going to play out, as it had a tiny left shoulder in comparison with the head. Don't know how valid that formation is. Remember how many discussions there were a couple of years ago about the enormous head on a DOW H&S on a monthly chart, I believe?

Linda Piazza : 7/21/2005 12:18:10 PM

Still keeping a watch on the TRAN, with the TRAN still climbing off its LOD. Also still watching the RLX, with the RLX still coiling at the top of its long, long climb. Bears needs these two, who have taken the baton from the RUT and SOX, to keel over, too.

Jonathan Levinson : 7/21/2005 12:15:25 PM

QQQQ continues to chop sideways-lower beneath the upper descending channel resistance line, with the short cycle upphase hesitating. Volume breadth is -3.3:1 on the NYSE and -1.64:1 on the Nasdaq. Bulls need a break of 39.41 to regain the 72 SMA and break out from the descending channel.

Jonathan Levinson : 7/21/2005 12:13:42 PM




Jeff Bailey : 7/21/2005 12:13:03 PM

12:00 Internals found at this Link

Jonathan Levinson : 7/21/2005 12:12:36 PM




Jonathan Levinson : 7/21/2005 12:10:28 PM



Linda Piazza : 7/21/2005 12:10:10 PM

So far, the OEX is finding resistance at the mid-channel level on its 15-minute Keltner chart, and its bounce looks corrective, but that's really not enough to pacify bears. They need to see a new LOD and a 15-minute violation of the channel line now at 571.06.

Jonathan Levinson : 7/21/2005 12:07:37 PM

Still waiting to see the mainstream coverage of the Philly Fed number, but I'm finding nothing.

Tab Gilles : 7/21/2005 12:07:07 PM

Murphy Oil (MUR) Further weakness in MUR. Link

Jonathan Levinson : 7/21/2005 12:05:20 PM

Session low for Sept. crude oil at 57.175.

Jonathan Levinson : 7/21/2005 12:05:01 PM

Schwab reports the Philly Fed 9.6 vs. 10 exp. Awaiting confirmation from other sources.

Jeff Bailey : 7/21/2005 12:04:44 PM

12:00 Market Watch found at this Link

Jeff Bailey : 7/21/2005 12:02:03 PM

Introgen Therapeutics (INGN) $6.68 +5.46% .. finds a bid.

Jonathan Levinson : 7/21/2005 12:01:52 PM



Linda Piazza : 7/21/2005 12:01:26 PM

The SOX's bounce today also came at a touch of its 15-minute 100/130-ema's, with those now at 466.80 and 464.92. Bears want a confirmed 15-minute low below these averages. Bulls want a new high with this bounce.

Linda Piazza : 7/21/2005 11:59:13 AM

The RUT is trying to steady near yesterday's open, but also at the 15-minute 100/130-ema's that have been so important on many indices lately. Those averages are at 667.75 and 666.83, respectively. This is also near the 50% retracement of the climb off the low of the 18th, with that 50% level at 667.97. It's also the midline of its long-term rising regression channel and just above daily Keltner support, so the RUT obviously had many reason to attempt a bounce here. Market bulls want to see this bounce be as strong as the decline was and not corrective. So far, it looks corrective. Bulls want the RUT to retrace more than 50% of the decline off yesterday's high, with that level at about 672.42, and they want a new high. Market bears want a corrective climb that rolls over, preferably at or below 672.42.

Tab Gilles : 7/21/2005 11:55:49 AM


$GOX Link

Jonathan Levinson : 7/21/2005 11:54:43 AM

Awaiting the Philly Fed at noon, est. 10.00, prior -2.2.

Jonathan Levinson : 7/21/2005 11:53:21 AM

QQQQ tests descending channel resistance: Link

Linda Piazza : 7/21/2005 11:52:29 AM

TRAN climb getting steeper.

Jeff Bailey : 7/21/2005 11:51:04 AM

Bullish day trade long alert ... for Coca Cola (KO) $44.15 +1.91% here, stop $44.02, target $44.70.

Linda Piazza : 7/21/2005 11:50:43 AM

The TRAN retraced about 30% of the steep rise off the last 15-minute low yesterday morning and now rises. So far, its rise looks corrective, but market bears would feel more comfortable if there was a rollover to a new LOD and then a steeper decline beyond a 50% retracement, at about 3714.20. Until then, the TRAN is vulnerable to at least a test of, if not an exceeding of, the HOD.

Linda Piazza : 7/21/2005 11:47:28 AM

I'm watching the RLX, coiling in a possible neutral triangle at the top of its rise.

Tab Gilles : 7/21/2005 11:42:42 AM

TLT chart to previous post. Link

Tab Gilles : 7/21/2005 11:41:59 AM

When it rains...it pours.

With the Nasdaq hitting 4 year highs and the $TRAN rallying yesterday, you thought "don't miss the train"... How 1 day and different the market looks today, or does it? China, London and Greenspan news all at once is alot for the market to digest. In London the news there has apparently had no effect on the FTSE, DAX and CAC all up. With Fed Chairman Greenspan stating that he sees continued growth and low inflation, however maintaining attention on labor costs and energy prices. The Fed appears to raise Fed Funds rates to 4% by years end. With the $TYX currently at 4.48%. The China news to revalue the yuan to 8.11 US Dollar should be a positive to the equity markets and a negative for bonds. Since a fall of the dollar against other currencies generally makes dollar-traded commodities less expensive and encourages funds to seek alternative investment vehicles. If China needs capital to revalue their currency they just might liquidate their US Treasury holdings.

TLT Link Options Link Link

Jonathan Levinson : 7/21/2005 11:37:49 AM

Zooming out, bears still have a long way to go to challenge yesterday's low at 38.90. Today's low setup a parallel descending trendline, to form a potential bull wedge against the head and shoulders top noted earlier: Link . Currently, the 30 min cycle downphase is still early in its run, and should maintain a bearish intraday bias so long as price holds below the 72 SMA.

Linda Piazza : 7/21/2005 11:35:20 AM

OEX bears who entered on a possible double-top scenario today are still doing okay, although the OEX may be forming itself into a flag-like formation that climbs. Bears want to see a new LOD and especially a 15-minute close below the Keltner line currently at 571.10. They actually want to see a pronounced violation of that Keltner line because there have been just way too many tepid breakdowns that are soon reversed. Bears should be careful of a move back up to the top of that channel and particularly watchful of a 15-minute close above the top of that channel, now at 576.35.

What about buying tests of the bottom of that channel since its support has so far held all this week? Not with the advdec line where it is and the SOX and RUT doing what they're doing. The advdec line may actually be getting a bit extreme, but we know from the upside extremes we were seeing that such extremes can't be trusted to signal an immediate turnaround.

Jonathan Levinson : 7/21/2005 11:27:39 AM

Ten year notes printed a low at 111 1/8, with TNX up 7.8 bps to 4.255% here.

Jonathan Levinson : 7/21/2005 11:25:39 AM

Volume breadth currently -3.31:1 on the NYSE, -1.54:1 on the Nasdaq as price fails to regain the pennant apex at the broken neckline. But bears need to see price back below daily S1. Link

Jeff Bailey : 7/21/2005 11:25:12 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 7/21/2005 11:24:55 AM

An updated daily Keltner chart for the RUT: Link Note: The annotations should have read that "bears want a decided daily close below that black channel line." The line in question might not be clear without that clarification.

Jeff Bailey : 7/21/2005 11:19:56 AM

Sell Program Premium SPX 1,227.69, DIA $106.33, QQQQ $39.36

Jeff Bailey : 7/21/2005 11:18:50 AM

Market Guage at this Link

Linda Piazza : 7/21/2005 11:17:22 AM

SOX bouncing from the top of its rising regression channel, weekly chart, and OEX bouncing from 571.20-ish Keltner support, and RLX trying to steady at 480, and RUT trying to steady at the midline of its long-term rising regression channel, and TRAN bouncing from just above an ascending trendline off the 5/23 high. Here are the bounces we have to watch to see how much bullish fervor is still left in the markets and whether bears remain in control for the day, much less for longer.

Jeff Bailey : 7/21/2005 11:15:28 AM

Dow Jones Home Construction (DJUSHB) 1,080.09 -3.16% Link ... is correct price/%

Jonathan Levinson : 7/21/2005 11:13:38 AM

WASHINGTON (MarketWatch) -- The change in China's exchange rate regime announced Thursday is just the first of many adjustments, predicted Federal Reserve chief Alan Greenspan. "I look at it as a first step in a number of further adjustments as they invariably increase their participation in the world trading markets. And so I think it's a good start," Greenspan told the Senate Banking Committee. The People's Bank of China said earlier that it is dropping its yuan-dollar peg in favor of one vs. a basket of currencies. The government also lifted the value of the currency by more than 2%.

Jonathan Levinson : 7/21/2005 11:12:58 AM

QQQQ breaks above daily S1 here, rising toward 72 SMA resistance at 39.47. The broken neckline is at 39.42: Link

Jeff Bailey : 7/21/2005 11:12:14 AM

Pfizer (PFE) $26.85 -0.77% Link ... plans to file its investigational new drug SUTENT for metastatic renal cell, gastrointestinal stromal cancer in August.

Jonathan Levinson : 7/21/2005 11:07:42 AM

Volume breadth -4.04:1 on the NYSE and -1.75:1 on the Nasdaq currently.

Linda Piazza : 7/21/2005 11:05:34 AM

Stepping away for a few minutes.

Jonathan Levinson : 7/21/2005 11:03:22 AM

Off-topic, but this closeup of the lunar landing sites is amazing. Be sure to zoom in to the max- courtesy of GOOG: Link

Jonathan Levinson : 7/21/2005 11:02:32 AM

QQQQ volume is declining here as price bumps along near the lows. The oversold short cycle indicators havfe yet to turn up within the declining 30 min channel. Link

Jeff Bailey : 7/21/2005 11:01:59 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 7/21/2005 11:01:24 AM




Jeff Bailey : 7/21/2005 10:58:11 AM

Sierra Health Services (SIE) $69.75 -5.62% Link ... percentage loser among HMO.X components, though all broadly lower.

Linda Piazza : 7/21/2005 10:54:43 AM

The OEX does attempt a bounce from the 571.21-ish Keltner support on its 15-minute Keltner channel chart. Other than yesterday's late-day blip up out of that channel, the OEX has mostly stayed within that channel all week, so a downside break, if more significant than yesterday's brief two-period upside break, would be a change in tenor for the week. Until then, there hasn't been such a change on the OEX, as it's been chopping around all week. Obviously, other indices, such as the SOX and RUT, currently having erased yesterday's gains and retraced much of yesterday's range, including the morning dip, the tenor does look different. Even the RUT, however, remains within that ascending regression channel on its 2-hour chart, climbing off the April low within that channel.

Jonathan Levinson : 7/21/2005 10:54:33 AM




Jonathan Levinson : 7/21/2005 10:48:19 AM





Linda Piazza : 7/21/2005 10:45:00 AM

OEX bears who entered on a potential double-top scenario this morning need to be aware that the OEX now tests Keltner support that has held all week. That support is at 571.21 on 15-minute closes, currently at least, and I would expect a bounce attempt, at least. Know where your stops should be or whether you even want to take part of your profit off the table. A 15-minute break through that level would set a new target of 567.58.

Jonathan Levinson : 7/21/2005 10:44:50 AM

Ten year notes (ZNU5) have broken to new lows for the week: Link

Linda Piazza : 7/21/2005 10:40:57 AM

The SOX is at the top of the ascending regression channel on the weekly channel, after piercing it during the intra-week period. This is a potential bounce point, though, bears, so be watchful.

Jonathan Levinson : 7/21/2005 10:40:17 AM



Jeff Bailey : 7/21/2005 10:39:14 AM

Sell Program Premium ... SPX 1,227.11, DIA $106.16, QQQQ $39.27.

Jeff Bailey : 7/21/2005 10:38:43 AM

Marc ... yes! Just remembering that August Oil has rolled. I'll fix for 11:00 AM EDT.

VIX and VXO is arguable. Most CBOE traders I know feel VIX.X is more reliable. To each their own. I find the VIX more reliable.

Jonathan Levinson : 7/21/2005 10:37:48 AM




Jonathan Levinson : 7/21/2005 10:37:29 AM

Sept. crude oil -.675 here at 57.35, off a low of 57.20.

Jonathan Levinson : 7/21/2005 10:36:41 AM

QQQQ is bouncing to test daily S1 from below, above which is the broken rising neckline at 39.41. The short cycle indicators will will print buy signals on a break back above the 72 SMA at 39.50, which is also upper descending trendline resistance: Link

Jonathan Levinson : 7/21/2005 10:35:03 AM

Session low for ten year notes at 111 5/16, TNX up to 4.247%, a 7 bp or 1.68% gain today.

Jonathan Levinson : 7/21/2005 10:30:25 AM

August gold is up 2.5 at 424.60, silver at 7.173. The 426-428 resistance zone has yet to break, but the bear wedge has been invalidated by today's pop, as the daily cycle upturn discussed yesterday strengthens: Link

Linda Piazza : 7/21/2005 10:29:39 AM

TRAN HOD so far 3798.24, just below its 2-hour Keltner target. The TRAN threatens to create a tweezers-top reversal signal on its 30-minute chart. Watch the TRAN. When it moves, it can really move. I think of it as a stodgy old index, but that's not the way it moves. Market bulls want to see a measured pullback if there is to be one. Market bears want a plunge that erases more than 50% of yesterday's outlandish move.

Jeff Bailey : 7/21/2005 10:29:01 AM

Currency snapshot at this Link

Linda Piazza : 7/21/2005 10:27:55 AM

RLX turning down again, but not far. Hasn't retraced 50% of the first 30-minute candle yet.

Jeff Bailey : 7/21/2005 10:24:41 AM

Canadian National Rail (CNI) $65.00 +0.46% Link (see last night's Market Wrap) ...

Jonathan Levinson : 7/21/2005 10:21:28 AM

VXO 10.48, VXN 13.46

Linda Piazza : 7/21/2005 10:20:59 AM

The OEX has confirmed its H&S on its 15-minute chart (although that's a formation in the midst of consolidation, and so not reliable), and now is testing 573-573.50-ish Keltner support. It's possible to see a bounce from this level, perhaps up to recheck the neckline. Next support below this is 571.53, and a breakdown there on a 15-minute close would set a 567.80 downside target. That's getting a bit ahead of ourselves, though, as the OEX has tended to bounce from that 571.53 channel line.

Jonathan Levinson : 7/21/2005 10:20:43 AM

QQQQ loses the rising neckline support and is now below daily S1 on a surge of volume, 30 and 60 min channel support flat at 39.20. Volume breadth is now -2.4:1 on the NYSE and -1.47:1 on the Nasdaq.

Linda Piazza : 7/21/2005 10:17:33 AM

The SOX is now below first daily Keltner support, quickly approaching the top of the ascending regression channel seen on its weekly chart. SOX bulls do not want a weekly close back inside that channel, although that alone is not a bearish thing. It just shows that the SOX is adhering to the support and resistance of that rising channel, which is still, in fact, rising. The top of that channel is at about 468.25, give or take a point since it's a long-term channel on a weekly chart. The SOX is at 469.90 as I type.

Jonathan Levinson : 7/21/2005 10:16:03 AM

Session lows as QQQQ tests lower rising support: Link

Linda Piazza : 7/21/2005 10:15:24 AM

RLX still not giving up. No new HOD yet, but neither has there been any attempt at a confirmation of that potential reversal signal. No pullback at all as this 15-minute period draws to a close.

Jeff Bailey : 7/21/2005 10:14:30 AM

Yesterday's Internals found at this Link

Jeff Bailey : 7/21/2005 10:12:39 AM

10:00 Internals found at this Link

Linda Piazza : 7/21/2005 10:10:55 AM

See what I mean about bulls running relays with the various indices? Former front runners RUT and SOX are pulling back a little, RLX and TRAN surging forward to take their spots and buoy bullish sentiment.

Jonathan Levinson : 7/21/2005 10:10:29 AM

Sept. crude reopens, -.275 at 57.725, off a low of 57.20. I would guess that a higher yuan would be bullish for oil in USD, particularly if Asian demand for oil remains constant or expands.

Linda Piazza : 7/21/2005 10:09:18 AM

TRAN drawing ever closer to that two-hour upper Keltner target, although that target is getting nudged higher as the TRAN climbs. Currently at 3812.26, with the TRAN at 3795.09. The TRAN has a history of overrunning targets, so you'd need to watch the two-hour close and not just an intra-period push above that line to see if it holds as resistance or not.

Jonathan Levinson : 7/21/2005 10:09:04 AM

Session low for ten year notes at 111 21/64, TNX at 4.24%, testing yesterday's high: Link

Jeff Bailey : 7/21/2005 10:08:02 AM

VIX.X 10.58 +3.42% ... DAILY Pivot Levels ... 9.26, 9.70, Piv= 10.32, 10.76, 11.37.

Linda Piazza : 7/21/2005 10:06:22 AM

The RLX produced a small-bodied candle in the last 15-minute period, after a strong white candle in the previous one. Instead of confirming the reversal signal, the RLX is trying to move higher to retest the day's high. This is not what bears want to see. They want to see the RLX drop and definitely not produce a new HOD. The previous HOD was 483.88 and the RLX is now at 482.88, easing just a little as I typed. Bears want it to close this 15-minute period below 480.80, the midpoint of the first 15-minute range.

Jonathan Levinson : 7/21/2005 10:05:41 AM

This pattern is either a neutral pennant, which, as a continuation pattern, would be bullish- or a head and shoulders. Look for a burst of volume on the trendline break for confirmation: Link

Jeff Bailey : 7/21/2005 10:03:12 AM

10:00 Market Watch found at this Link

Linda Piazza : 7/21/2005 10:03:53 AM

H&S-ish type formation on the OEX, neckline just above the 573.86-574.06 next Keltner support. Those who might have entered a bearish play this morning on a potential double-top scenario want to see that formation confirmed and then see some follow through. Next support below that at 573.18 and then at the bottom of the current Keltner channel in which the OEX trades, at 571.62.

Jonathan Levinson : 7/21/2005 10:01:24 AM

The Fed has announced a big 13.5B overnight repo, which results in a net 2B drain for the day.

Linda Piazza : 7/21/2005 10:01:11 AM

The RLX's daily Keltner target was 479.67 on a daily closing basis, with the RLX currently at 482.67. The RLX is either working on a breakout signal on the daily Keltner chart, or just piercing that channel line on an intraday basis, to fall back by the close and confirm that resistance. We won't know until the close, unfortunately. The last time the RLX produced a daily Keltner breakout (confirmed on a daily close, remember) was last November, when it spent the month producing a H&S with a neckline on the breakout channel line, and then tumbled all the way down to April's low. It did continue moving higher for about two weeks after that breakout, so market bears or even bulls wanting new entries might hope that there's no confirmed breakout today at the close.

Jonathan Levinson : 7/21/2005 10:00:47 AM





Linda Piazza : 7/21/2005 9:55:34 AM

Remember the possibility for a small-range day today. The pre-market action may have blown that possibility out of the water, with more volatility perhaps coming today than might have been seen, but keep the possibility on your radar screen as you make decisions.

Jonathan Levinson : 7/21/2005 9:55:01 AM

QQQQ has traded 28.6M shares so far, much heavier volume than we've been seeing at this time of day in recent sessions.

Linda Piazza : 7/21/2005 9:54:10 AM

Today, the SOX has been testing daily Keltner support, at 472.49 on a daily closing basis. These daily Keltner lines do have relevance for the SOX, so watch for a potential bounce up toward the 483.97 current daily target or a sustained fall beneath that 472.49 level, suggesting, if such a dip holds on a daily close, a potential dip back to the 461-ish level.

Jeff Bailey : 7/21/2005 9:53:53 AM

Internet Initiative Japan (IIJI) $10.44 +5.35% ... finds a bid.

Jonathan Levinson : 7/21/2005 9:53:11 AM

QQQQ 3 min chart updated with premarket data included at this Link . 39.40 is currently short cycle channel and trendline support.

Jeff Bailey : 7/21/2005 9:53:04 AM

Union Pacific (UNP) alert $68.60 +4.04% Link ... unleashed a "bullish triangle" with a trade at $68. The company said Q2 profits jumped 47% with net income coming in at $233 million, or $0.88 per share. Operating income rose 30% to $468 million from $359 million. Revenues were up 10% to $3.34 billion from $3.03 billion in the year-ago quarter.

Union Pacific noted that its operating margin rose to 14% from 11.9% in the year-earlier quarter, even as the cost of fuel in the quarter ballooned 44% year-over-year.

Jonathan Levinson : 7/21/2005 9:51:10 AM

Awaiting Leading Economic Indicators and the Fed's repo decision in 10 minutes.

Linda Piazza : 7/21/2005 9:50:50 AM

The TRAN's two-hour Keltner target is 3810.57 currently, and it's certainly pushing hard to reach that target. Watch for a potential pullback from that level. Or don't, as pullbacks seem non-existent.

I wanted to show the RUT's daily Keltner chart, showing where the RUT is with respect to the test of the upper Keltner channel, also tested last week. There's no guarantee that the current pullback from that channel line will continue, but it's obviously resistance that held once, and so should be watched. So should that black channel line, support on the last pullback. Link

Jonathan Levinson : 7/21/2005 9:47:44 AM





Linda Piazza : 7/21/2005 9:46:29 AM

Charts are running slow today. Of course. I'm running on super speed, having just discovered that the reason for my sleeplessness and other symptoms is that I'm running fever. I'm going to try to stay on board as much as possible today, but can't guarantee that I'll be posting as frequently past the early morning activity.

I wanted to note that two high-fliers lately, the TRAN and the RLX, continue yesterday's gains, with the RLX posting a spectacular first 15-minute candle bursting out of a rising wedge. The TRAN is at 3783.94 as I type, a few cents off the day's high. This morning, it dropped right down to first Keltner support at a line currently at 3762.35 (a little lower when tested) and bounced from that, so that bulls and bears want to watch the TRAN with respect to tests of that Keltner line. I'll update from time to time.

Jonathan Levinson : 7/21/2005 9:45:27 AM

Volume breadth is mixed, -1.68:1 on the NYSE and +1.22:1 on the Nasdaq.

Jonathan Levinson : 7/21/2005 9:44:52 AM

VXO 10.25, VXN 13.09

Linda Piazza : 7/21/2005 9:40:41 AM

The RLX bounced from the midpoint of its day's range, but isn't back at the high.

Linda Piazza : 7/21/2005 9:39:32 AM

The OEX is back inside that 571.50 to 576.44 channel in which it's spent this week while other indices were breaking out. Yesterday's last 30-minute breakout was suspicious because the OEX had turned right back down, and this morning's action confirms that. Those of you who might have entered a bearish play, testing the double-top theory, need to have stops in place and adhere to them. The OEX approaches 573-574 potential Keltner support, although that support is somewhat soft, and could attempt a bounce during the typical first retracement period of the day. Today, such bounces could be volatile due to pre-market action. You're not in the clear with bearish plays, although the strong thrust lower seems good on the surface.

Jonathan Levinson : 7/21/2005 9:39:31 AM

QQQQ hovers below 72 SMA resistnace at 39.50, as the 30 min cycle channel edges lower, support lined up with 60 min channel support at 39.20. The short cycle downphase has upper resistance at 39.60, if price can clear the 39.50 level: Link

Linda Piazza : 7/21/2005 9:36:31 AM

The top of that long-term rising regression channel best seen on the SOX's weekly chart is at about 468.25, give or take a point, since this is a weekly chart. I've mentioned a couple of times that we have to wait to see how the week ends to know for sure if the SOX really did break out of that channel. The SOX is drifting lower this morning, at 472.76 as I type, but still above that trendline. Watching it, though.

The RLX has pulled way back off its early morning high, about to test the 50% mark of its morning's range.

Linda Piazza : 7/21/2005 9:34:21 AM

The OEX drops down now to test that descending trendline off the 7/14 high, dropping through it as I type, but dropping for next Keltner support at 575.40. If it maintains 15-minute closes above that Keltner line, then it's possible it will at least attempt a bounce. Otherwise, it's vulnerable to at least about 574, but take these pronouncements with a grain of salt ahead of more economic news and due to pre-market action. . . oh, dropping as I typed.

Jonathan Levinson : 7/21/2005 9:34:18 AM

WMT down 1.5% at 49.25 at the open.

Linda Piazza : 7/21/2005 9:32:26 AM

The RLX bursts out of a "bearish" (wink, wink) rising wedge on its 15-minute chart, to the upside.

Jonathan Levinson : 7/21/2005 9:18:25 AM

Delayed, refreshable US Dollar Index chart at this Link

Linda Piazza : 7/21/2005 9:22:17 AM

As I've mentioned before, I usually write my OEX updates after the market close the previous day, when I'm away from market action and can hopefully remove the heat-of-the-moment bias. Obviously, this morning, we've had events (Chinese yuan unpegging, London blasts) that have turned the futures "every which way," as my Louisiana relative might say. This urges caution in considering any position at all, and obviously, any premarket interpretation of the charts might be worse than useless with all these forces to assimilate into market sentiment. If you're already in positions, know ahead of time how you'll deal with those positions and whether you'll widen stops or narrow them. Make your plan ahead of the market open, when you can think and aren't acting out of panic.

Here goes: Yesterday, during the last 30 minutes of trading, the OEX finally followed the other indices above the descending trendline off the 7/14 low. In the last 15-minute period, it was already descending to retest that trendline, so that's the first thing to watch today, especially in consideration of this morning's events. A plunge straight through that trendline again will obviously not be a sign to buy a touch of that trendline. Goes without saying. As I mentioned yesterday morning, when other indices have broken above similar trendline's, it's meant something and there has been bullish carry through. The OEX has been late to the party, though, so you'll want to make sure that those high flying indices are still flying high and supporting the OEX before you even consider buying a bounce from that trendline, especially if it's a tentative one. We've seen strong and--in the case of the TRAN yesterday--even wild gains, and there have to be some weak bulls that make these gains vulnerable if there's the least provocation. The SOX, RLX, TRAN and RUT are some of the indices to watch, although I'm sure there are others. Their action has been so riveting that it's been difficult to look away.

On several charts, 577.40-578.60 or so shows up as resistance, including both traditional and Keltner charts. During the last 30 minutes of the trading day yesterday, the OEX thrust up to 577, but honored that resistance zone again. It did breach the 7/14 high, although not even on a 30-minute closing basis. Still, in my study of previous strong climbs along a 60-minute 10-sma, that was a sign that the bullishness still might have some running time, so this week's apparent lower high thesis has now been undone. An equal or double high may still be possible, but that will require confirmation, especially in this market. As of yesterday, I would have said that buying the dips remained the tactic du jour, but as I've been saying this week, that's risky to me with the OEX just beneath a long-term resistance band and futures have seen much volatility.

Resistance, you say? What's that? That may be a point, because few indices are paying attention to resistance, as the low volatility indices indicate, but will they today with the post-yuan-announcement bump being slapped back before the London news even hit, or will the post-yuan-announcement bump mark an upside target that's going to b sought? If you know how to factor in all this information pre-market, then you're a better psychic than I am, but I'd exercise extreme caution in protecting profits if long, with the Nikkei and Asian bourse behaving as they did overnight (diving off their first-90-minute highs) and with our indices nicely plumped up recently, and with futures behaving in such a volatile manner.

If you're buying the dips, though, be on the outlook for signs that your play needs to be exited. The OEX is not trending up nicely along some 15-minute 100-sma or some other easily identifiable MA as have some other indices, so I can't even give you an MA to watch to make sure the trend continues.

The daily Keltner chart shows resistance extending up to 580.32, but that's on a Keltner line that many indices have broken this week. So, although the OEX's so-far failure to follow through with other indices has been concerning, and although there's that strong resistance band just ahead, it may just drive through that resistance with an outlandish climb a la the TRAN.

I'm having trouble believing that, though. After two days of absolutely wild gains on many indices, it may be time for a doji day or even a pullback, something I believed even before the London news hit. The TRAN, for example, often has a small-range day or a pullback after a white candle that spans the 80-100-point range and yesterday's was bigger than that. Glad I didn't have a bear call spread on the TRAN!

What about a bearish play, especially on a pop this morning and rollover or just on a flat opening and a rollover from the possible double-top level? I'm going to sound wishy-washy, but what I really am is definitely urging caution ahead of the open and ahead of a sorting out of the various forces. There are going to be those looking at futures action and saying, we're zooming high, and those saying the opposite. Believe me, I think markets desperately need to retrace, even if it's just a minimal one before a new move higher, but 1999 and 2003 taught us that they don't always do so on command. So, if you want to try such a position with known resistance overhead, then go ahead and do so, but set an appropriate stop and absolutely adhere to it, because that modestly higher high late yesterday threw some doubt in to the viability of such a play. This morning's action may have undone everything accomplished late yesterday, but I'm just not sure of that.

Jonathan Levinson : 7/21/2005 9:06:39 AM

The Fed has 21.75B in various repos expiring today, and has so far replaced 9B in 14-day repos with a 6B 14-day repo, leaving 15.75B with which to deal at the 10AM announcement.

Jonathan Levinson : 7/21/2005 9:01:10 AM



Jonathan Levinson : 7/21/2005 8:56:39 AM

Ten year notes have pulled a "Crazy Ivan" to the downside, TNX back up above 4.18% and 4.2% resistance, +4 bps at 4.219% here.

Jonathan Levinson : 7/21/2005 8:38:42 AM

This is a report of a new incident:



Our hearts are with our friends in London during this awful time.

Jonathan Levinson : 7/21/2005 8:37:20 AM

LONDON (MarketWatch) - Three subway stations in London were evacuated Thursday, reports said, just two weeks after attacks on three stations and a bus attacks killed more than 50 people. Sky News and the BBC News said Oval, Warren Street and Shepherd's Bush stations have been evacuated. The Sky News reported quoted an eyewitness at the Warren Street station as seeing smoke coming out of one of the stations, and saw passengers panicking. Police and emergency services were on route, the British transport police said incidents were "ongoing."

Jane Fox : 7/21/2005 8:32:18 AM

I see Jonathan has already posted this but here is the WSJ take on the issue. China announced suddenly its long awaited change to its currency policy, saying it will no longer peg the yuan to the U.S. dollar but instead let it float in a tight band against a basket of foreign currencies.

The yuan has been strengthened, effective immediately, to a rate of 8.11 to the U.S. dollar -- compared to the 8.28 it has been set at for more than a decade. The new trading regime will begin Friday, the government said in an announcement on state television.

Jonathan Levinson : 7/21/2005 8:30:54 AM







Jonathan Levinson : 7/21/2005 8:28:34 AM

QQQQ dropped to 72 SMA support at is bouncing back. But with the various bearish divergences and the toppiness now in the daily cycle, bulls will want to exercise renewed caution after the party that has been the past two weeks. Here's a preopen chart of QQQQ: Link

Jonathan Levinson : 7/21/2005 8:25:01 AM





Jonathan Levinson : 7/21/2005 8:20:56 AM

Hearing of evacuations in London. Scoping for confirmation.

Jonathan Levinson : 7/21/2005 7:43:08 AM

Session low for ten year notes at 111 3/8, with TNX quoted at 4.189%.

Jonathan Levinson : 7/21/2005 7:41:17 AM

LONDON (MarketWatch) -- The People's Bank of China said it'll [sic] dropping its yuan-dollar peg in favor of one vs. a basket of currencies. The daily trading price of the dollar vs. the yuan will continue to be allowed to float within a band of 0.3%, while the trading prices of non-U.S. dollar currencies will be allowed to move in yet-to-be announced bands. "The People's Bank of China will make adjustment of the RMB exchange rate band when necessary according to market development as well as the economic and financial situation. The RMB exchange rate will be more flexible based on market condition with reference to a basket of currencies," it said.

Jonathan Levinson : 7/21/2005 7:32:07 AM

Awaiting the preopen prints for WMT, which closed at 50, in the wake of the currency news.

Jonathan Levinson : 7/21/2005 7:31:32 AM

Awaiting the 8:30 release of initial claims, est. 326K, LEI, est. .5%, and at noon, the Philly Fed, est. 10. The FOMC minutes are scheduled to be released at 2PM.

Jonathan Levinson : 7/21/2005 7:30:28 AM

Equities are spiking along with foreign currencies, gold and silver, ES up 6.25 to 1242.75, NQ +11 to 1619.5, YM +58 to 10743 and QQQQ +.29 to 39.75. Gold is up 2.7 to 424.80, silver +.077 to 7.14, ten year notes -13/32 to 111 23/64 and crude oil -.425 to 57.60 CAD futures and swiss francs are at session highs, ditto euros, at .8261, .7864 and 1.2262 respectively.

Linda Piazza : 7/21/2005 7:15:52 AM

Yuan no longer being pegged to the dollar, according to a just-announced report on CNBC. Dollar just dove against the yen. Apparently, it will be allowed to float in a 0.3% band, to be eventually expanded. This is not a wide band as CNBC commentators note.

Linda Piazza : 7/21/2005 5:38:51 AM

Good morning. The Nikkei hit its day's high, a gain of nearly 80 points, early in the session and then fell sharply through the rest of the day. Other Asian markets were mixed, with many showing the Nikkei's pattern and closing either modestly positive or modestly negative. This report is being prepared a couple of hours earlier than usual, and European markets are currently showing strong performances despite mixed earnings and economic news. Our futures are modestly positive, having traded sideways to sideways down into the European open and then seeing a slight improvement. As of 5:22 EST, gold was up $1.50, and crude, down $0.56 to $57.46. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei soared in early trading Thursday, up to test levels not seen since March. In just over an hour, the Nikkei had posted gains of almost 80 points, but then the Nikkei keeled over and declined through the rest of the day. After piercing to a new recent high, it closed in the red, if only by 2.62 points or 0.02%. It closed at 11,786.73, leaving a shooting-star candle behind for the day's trading pattern.

Early factors included gains in blue-chip tech stocks, auto manufacturers and bank stocks. Releases before or shortly after the market open included July's Telerate Tankan, measuring business conditions DI for major manufacturers, which fell to +16, and non-manufacturers, which rose to +18. The October outlook is expected to be +25 for manufacturers and +17 for non-manufacturers. More correspondents believe that the economy will begin improving after the fourth quarter than previously believed so. In another economic release, June's Trade Surplus fell 23.5% year over year, with this result better than expected but still characterized by one commentator as showing that crude costs were undermining the country's recovery. Exports rose again, as they have been doing for 19 months, and imports increased 11%, up for 16 months. Crude costs of course contributed to the increased imports, as did more steel and auto imports. The surplus with the U.S. increased, and that with the EU and Asia fell. Exports to China declined, contributing to the faster rise of imports as compared to exports, with lower prices for Japanese products also contributing.

In company news, JFE Steel and BHP Billiton have reportedly reached a deal for JFE to buy more than $4 billion in iron ore from BHP Billiton. Japan's four blast furnace steelmakers have announced plans to cut production in the just-begun quarter with China's high volume of steel production forcing this decision. Mizuho Financial Group rose after leaving its estimate for current profit and operating income but raising its financial year (March to March) parent net profit forecast.

Other Asian markets showed mixed closes, with many bourses showing Japan's pattern, falling after an early-day high. The Taiwan Weighted lost 0.46%, but South Korea's Kospi gained 0.02%. Singapore's Straits Times rose 0.05%. Hong Kong's Bank of China raised its full-year estimate for Hong Kong's GDP to 5%, up from its previous 4.5%, citing improving consumer demand and wealth, China's growth, and other factors. The Hang Seng rose 0.04%. China's Shanghai Composite declined 0.04%.

European markets gain this morning, although CNBC Europe characterized the day as a mixed one as far as earnings results are concerned. Ericsson gains after its report, but SAP declines after the company noted a decline in German license revenue and Merck falls after reporting Q2 net income that declined 32%. Economic releases have also been mixed. Among economic releases is the Swiss Trade Balance, rising in June. In France, June's Household Consumption rose 0.5%, both month over month and year over year. Economists had expected a higher gain, especially given that May's number was revised lower, but still this number contradicts to some degree a falling consumer confidence index number, dropping from May's -29 to -30. Italy's July Consumer Confidence fell to its lowest level in a year with the core number also falling. Market watchers interpret the various components, especially weakness in spending on durable goods, as signaling concerns about consumer spending and Italy's continued emergence from a recession in the second quarter. May's retail sales were also released, with those sales having shown the spending rising 0.7% month over month and 0.9% year over year, the strongest gain in almost a year. However, this was measured against a weak April figure and more recent interpretations of consumer spending. In the U.K., June's retail sales rose 1.3% month over month and 1.6% year over year, with this release surprising to the upside. The timing of summer sales, moved forward, was one factor in the improvement, but still the improvement might factor into whether the central bank considers a rate cut, one source speculated. Good weather also contributed, with CNBC Europe commentators mulling over how much of a factor that had been. This number is more cheery than recent takes on consumer spending.

In early trading, European metal and mining stocks led the gainers. Much attention focuses on whether PepsiCo will make that bid for Groupe Danone and how regulators and the company will react. According to CNBC reports, French officials note that they want the company kept in French hands. Groupe Danone declined, giving back some of its recent gains. SAP competitor Business Objects said it would buy a privately held software company, with SAP flat during early trading.

As of 5:23 EST, the FTSE 100 had gained 27.10 points or 0.52%, to trade at 5,242.30. The CAC 40 had gained 16.78 points or 0.38%, to trade at 4,435.17. The DAX had gained 37.53 points or 0.78%, to trade at 4,822.03.

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