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Jeff Bailey : 7/30/2005 2:16:42 AM

SPY Option Chain 07/29/05 Close ... Friday's most active options at this Link ... A burst of volume versus open interest in those Oct. $125 Puts (10,542 : 301) and may be and "end of month" trade, and if I count August, September, October, then 1,2,3 and looks like a bit "quarterly-like" and today's big news was first glance at a quarterly GDP. To get an idea of a range I can take $125 +/- today's AvgOHLC and I come up with $122-$128. Today's time/sales/price would show 12:27:33/3,450/$3.00, 12:27:38/3,450/$3.10, some small stuff at 13:37:35 and then 02:10:55/3,600/$2.95

Those two trades close together look like a "cross" to me. Check out an intra-day SPY chart with volume turned on (1 or 2-minute intervals). SPY was trading $123.89 (give or take 5 cents). A trader that takes things to the extreme could add/subtract the $3.05 from $123.90 if they wanted to.

That last trade at 02:10:55 of 3,600 came at $124.11, just as the SPY was trading up to its QCharts' WEEKLY R1 (124.13) Turn on your DAILY Pivot levels too and note DAILY Pivot at $124.27. See how SPY fell below DAILY Pivot this morning at 10:30 AM EDT, then ranged with support at WEEKLY R1 $124.13 for 14 minutes? Once the SPY lost Weekly R1 support, then DAILY Pivot (124.27) to Weekly R1 (124.13) became a "zone of resistance" the rest of the day.

The BLUE options are the only August expirations that showed up on the 06/28/05 01:43 PM EDT screen capture.

Jeff Bailey : 7/30/2005 12:38:28 AM

VIX.X 11.57 +9.98% , SPX 1,234.18 -0.76%, SPY $123.74 -0.66%. I was reviewing some $NASI - NASDAQ Summation Index analysis from 06/28/05 11:27:08 by fellow analyst Tab Gilles and his observations/analysis today/Friday and found a screen capture of the SPY option chain that day. Link ... continued above ...

Jeff Bailey : 7/29/2005 11:12:50 PM

Educational / Recap ... Well, here's how today's trade in Hanover Compressor (HC) unfolded at this Link . This is a 10-minute interval chart, which I don't use for trading, but allows us to see the DAILY Pivot Levels and trade action without squinting.

Last night we did some work with HC, as well as some comparative work with Gardner Denver (GDI).

My focus point was trying to give traders an action plan on what we might look to do with the covered calls we had written on the underlying bullish position in HC. If you trade long enough, I will guarantee that you will be faced with a similar trade in the future.

I'd also hope that traders might learn something from this follow up.

All that is different on the above chart, from what we looked at last night is the addition of an upper 5-MRT (First 5-minute bar retracement, where we anchor the base 0% of a retracement, the "fit" the 19.1% retracement level to the top of the first 5-minute bar). This is a technique that I've taught traders in the past, and I believe it was Linda that named it the "5-MRT."

Point (A) : First thought here is... "I've got some nice bullish profits in the underlying stock, but have underestimated the bullishness and had sold covered calls ($12.50 strike). The stock has performed so well, I'm interested in "saving the position" so it doesn't get called away (If I had written NAKED calls, then I'm interested in saving my account). However, I know that in order to do so, I will have to consign a loss, in order to save the underlying bullish stock position. While bid/ask spread in any current-month in the money option may differ slightly from where the stock is trading in the case of my HC trade with covered call, a decline in the stock isn't going to hurt things this far in the money. So... based on observation of how HC traded relative to our work with conventional retracement and a resultant 80.9% bullish fitted 38.2% retracement (another technique I've taught traders in order to seek out levels that market makers and specialists will trade) the $13.97 level was a level that a trader might look to close out the covered call for a loss. Remember, a trader in the current situation is very profitable in the underlying stock. They can choose to do NOTHING (hey, if I sold the $12.50 call for $0.60, then I was saying/acting "I'm happy, willing and able, to sell the stock for $13.10." Now, what a good trader/investor doesn't want to do in this situation when buying back a loss (ie buying back, or closing out the call) is to then allow the stock to fall further. This is what traders call discipline.

Point B : Now we're roughly 40-minutes into the trade (see MM 10:02:39) and its not looking like HC is going to pull into $13.97. Do you think HC bulls are going to run it to a new 52-week high so it gets bold print in the Wall Street Journal this weekend? How about BEARS? How terrible it would be to have your friends or colleague call you up and say "I was reading the Wall Street Journal this weekend and I see HC hit a 52-week high this week. Are you still short?" There are those that think, and those that act.

Point C : That's it. I've got a hefty gain going in my underlying position, the major averages are back in positive territory. I believe there's a pretty good short position in the stock, and the gap higher on what I would consider "so, so earnings (HC lossed money in the recent quarter!) on Thursday has me thinking, BEARS don't know what is going on, they don't care at this point, and need to get things under control. So, I decide to ROUND TO FULL position (see MM 10:15:19). Help out those BEARS a bit, see if we can't get a 52-weeker by the close.

Point D: Hmmm... as the session wears on, HC gives back some gains. Now it DOES LOOK SIMILAR to the Gardner Denver (GDI) observation (see MM 12:27:35). This is where things can get tough if you're not prepared. But we were prepared, as we knew what to look for. SIMILARITY or DIVERGENCE from our GDI work. Just minutes prior to point D (see MM 01:50:07) I alert traders that I'm looking to close out the covered calls if the underlying stock traded $14.40. I was monitoring Level II trade during the session and I was trying to pick up on what the specialist might be doing (see MM 01:23:18)

Bingo! and buyers look to be back in control intra-day. New longs? Or short covering bears? Doesn't really matter, but I'm starting to see confirming DIVERGENCE at (MM 02:17:36), I've also tried to protect my underlying bullish position with a stop at $14.25 (see MM 12/27:35)

Point E: OK, I've gotten my covered calls bought back, and I consigned a $600.00 loss. But with some hard work, I've also seen the stock rise (no big deal on the "saved" 419 shares profiled, but 1,000, or 2,000... maybe) now I have to make a decision on the underlying "saved shares" that I had written those calls against. Whenever I buy back a loss as I have in the covered calls, the last thing I want to do is allow the "saved position" to see much erosion of gain. At Point E, I take the profit on the "saved position," (see MM 03:52:11), but still hold another 1/2 bullish position, stop $14.25, and can look forward to maybe getting some "bold print" in the Wall Street Journal next week.

OI Technical Staff : 7/29/2005 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.

Jeff Bailey : 7/29/2005 9:48:58 PM

Educational / Recap ... Well, here's how today's trade in Hanover Compressor (HC) unfolded at this Link . This is a 10-minute interval chart, which I don't use for trading, but allows us to see the DAILY Pivot Levels and trade action without squinting.

Jeff Bailey : 7/29/2005 8:27:56 PM

Pivot Matrix for next week at this Link

Jeff Bailey : 7/29/2005 6:33:19 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 7/29/2005 5:25:33 PM

Closing Internals found at this Link

Jeff Bailey : 7/29/2005 4:55:43 PM

Beetle's Balanced Benchmark at this Link with one month of Q3 under our belt.

Large cap growth as depicted by the QQQQ just beat out small caps this month, where bond observations suggest investors were willing to take on more risk with the "junk bond" PHF outperforming.

Jeff Bailey : 7/29/2005 4:38:14 PM

Current OPEN MM Profiles found at this Link Month of July Trade Blotter at this Link

Note: Security symbols that are BLUE were combination trades.

Linda Piazza : 7/29/2005 4:08:12 PM

Big bearish engulfing candle on the SPX. Before you bears get too excited, take a look at all the other reversal signals that can be found since the middle of May. First thing is to close this below the 10-dma at 1232.13.

Jeff Bailey : 7/29/2005 4:01:00 PM

Buy Program Premium .... DIA $106.46, SPY $123.67

Linda Piazza : 7/29/2005 4:01:21 PM

Remember that long-term resistance band I've had marked on the OEX's chart, with the OEX in a broadening formation, the reason I wasn't suggesting participating in upside breakouts on the Keltner channel as I didn't think they were good bets? Here's the chart with the resistance band in red: Link I think it's possible that the OEX will follow the BIX's example and fall further through that broadening formation, as the BIX has done.

Linda Piazza : 7/29/2005 3:54:43 PM

If the SOX closes the day near where it is now, it will have created a doji on the weekly chart, at the resistance offered by its long-term rising regression channel. Then intermediate-term bears would be looking for a pullback next week to complete an evening-star reversal pattern at this resistance. Link

Jeff Bailey : 7/29/2005 3:54:08 PM

Oil Service Index (OSX.X) 161.53 -0.56% ... lows of the session.

Jeff Bailey : 7/29/2005 3:52:11 PM

Bullish swing trade exit 1/2 position alert Let's sell 1/2 of current full position in Hanover Compressor (HC) $14.55 +2.10% here (419 share long from $11.91 on 06/17/05)

Linda Piazza : 7/29/2005 3:51:30 PM

The Wilshire 5000 punched to a new HOD this morning (less than 8 points below my projected upside short-term topping-out level, she says, patting herself on the back) and then rolled down. It's soundly negative today, creating a key reversal day, although I'm not sure that volume considerations were right for a key reversal day. Unless it bounces big in the last few minutes of trading, it will also have created a big tweezers-top reversal signal on the daily chart.

With that said, it must be emphasised that the Wilshire 5000 has produced a number of reversal signals on its way higher and they meant nothing except a single day's pullback. The Wilshire 5000 remains above its 10-sma at 12,319.34, an average it's been climbing on the way higher. It's at 12,361.42 as I type.

Linda Piazza : 7/29/2005 3:47:22 PM

RUT hasn't hit a new LOD yet.

Linda Piazza : 7/29/2005 3:46:26 PM

There's a possibility that the OEX might bounce again, as it's trying to cling to that Keltner line that has supported it so long. If it does, bears want it to find resistance below Keltner resistance at 574.69-574.86, or at least at 575.43-575.60, and then they want to see a rollover below the Keltner line currently at 573.56 and a 15-minute close beneath it. If in a bearish play, decide if you're planning on holding over the weekend and start making exit plans if you don't plan to hold. What would I do? If I'd been in a bearish play from this morning's rollover, I'd probably take about half off the plate and hold the rest, realizing that I'm risking a bigger bounce Monday morning.

As I typed, the OEX began breaking down below that Keltner line and has now set up a downside target of 570.26.

Linda Piazza : 7/29/2005 3:39:06 PM

SOX did do a quick bounce back to that former descending trendline off last week's high. Wish this one would decide where it's going.

Linda Piazza : 7/29/2005 3:38:28 PM

RLX testing its 15-minute 100/130-ema's. Hasn't closed beneath them since 7/07. They're at 484.57 and 483.68, respectively, with the RLX at 484.55.

Linda Piazza : 7/29/2005 3:34:50 PM

OEX still moving lower, but won't create a breakout signal until a 15-minute close beneath the Keltner line currently at 573.58. As I said in an earlier post, I think it's violated that H&S neckline, but not this important support, so it's an iffy thing to consider the H&S confirmed. I think there could well be a move up to retest the neckline, unless indices crater.

Linda Piazza : 7/29/2005 3:33:23 PM

The SOX has moved below the former descending trendline off last week's high. Unless there's a quick bounce back above it, that makes this move this afternoon look like a stop-running move, which was was I had a suspicion it might be.

Linda Piazza : 7/29/2005 3:28:49 PM

SOX still testing that former descending trendline off last week's high, dropping a little below it as I type.

Jonathan Levinson : 7/29/2005 3:23:32 PM

I need to leave and won't be back for the close. Currently, the 30 min cycle indicators are stalled just above oversold territory, while the 60 min indicators continue to point lower, only halfway through their range. The daily cycle indicators are still stalled at the outset of their downturn. Bears need a break below 39.20 to confirm that the daily cycle downphase is back in business, but for today, a close below yesterday's low is the first important step.

Linda Piazza : 7/29/2005 3:21:35 PM

BIX still headed lower, now less than a point away from the 200-ema at 360.90. BIX at 361.62.

Linda Piazza : 7/29/2005 3:20:19 PM

SOX back at the former trendline off last week's high. A breakdown here and move back below that trendline turns this afternoon's move into a likely stop-running move. It seems possible to me that it could be such a move, but of course we need confirmation.

Linda Piazza : 7/29/2005 3:19:13 PM

It looks to me as if the OEX has broken below that neckline, but that supporting trendline is just below, now pushed down to 573.65.

Linda Piazza : 7/29/2005 3:16:45 PM

OEX moving down toward its neckline, but I've just noticed that the right shoulder itself might be composed of a new smaller H&S, so there might be another small bounce in the making. Need a 15-minute close below 573.75 to confirm the H&S. If it should confirm and bears are already in plays, great. If it should confirm late in the day and new bears are contemplating a new position, perhaps lots of contemplating ought to go on first. Decide now, ahead of time, if you want to participate in a new late-day push lower or not.

Jonathan Levinson : 7/29/2005 3:16:41 PM

The 30 min channel has flattened as QQQQ holds below 39.65, with price currently 8 cents off the 39.54 low. Below 39.65, today's print qualifies as a key outside reversal candle. Link

Jeff Bailey : 7/29/2005 3:14:37 PM

03:00 Internals found at this Link

Linda Piazza : 7/29/2005 3:15:10 PM

I was away longer than I intended, as my broadband shut down for a few minutes. The SOX dropped away from its challenge of Keltner resistance on the five- and 15-minute charts. At 475.50 as I type, testing 475.62 next Keltner support on the 15-minute chart. May not be through with a test of resistance until it closes a 15-minute period below this . . . and the SOX rises as I type, now at 476.05. The SOX had found support on the former descending trendline off last week's high.

Jeff Bailey : 7/29/2005 3:06:58 PM

Hanover Compressor (HC) $14.54 +2.05% ... "bad tick" to $14.47 (100 shares?)

Jonathan Levinson : 7/29/2005 3:03:41 PM

Ten year note yields finished +9 bps at 4.286% just off a test of the double top at 4.3%: Link

Jeff Bailey : 7/29/2005 3:02:26 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 7/29/2005 2:59:46 PM

The short cycle inficators are showing a bearish cross, but price has yet to break the upside linear regression channel: Link . 72 SMA support is up to 39.65, and bears need a strong downside push to retrace what is currently a lower doji shadow on the daily. GE is printing new lows at 34.54, VXO printing 10.67 and VXN 13.62.

Linda Piazza : 7/29/2005 2:59:34 PM

I'm stepping away for a few minutes. I'll be watching, but I noticed as I was reading the other writers' posts that I look as if I've had a bit too much caffeine today, typing, typing away. I haven't had caffeine in 25 years, so that's not it, so I'm going to impose a short boycott on my posts to give you time to read someone else's other than mine.

Linda Piazza : 7/29/2005 2:55:32 PM

TRAN tested the neckline of this morning's small H&S and now eases away, but I don't even want to call that a pullback yet. It's too small and too corrective looking yet. TRAN at 3805.68, still above 3804-ish S/R.

Linda Piazza : 7/29/2005 2:53:34 PM

OEX back at the 50% retracement of the rally off Wednesday's low and the 15-minute 100/130-ema's, at 575.09 and 574.82, with the OEX at 575.26 as I type.

Linda Piazza : 7/29/2005 2:52:33 PM

RUT easing back from a 50% retracement of the decline off the HOD, but needs a move beneath 678.60 to confirm a lower high. RUT at 580.68 as I type.

Linda Piazza : 7/29/2005 2:50:21 PM

SOX's five-minute Keltner chart looking correlative to action right now. SOX about to test support at the black channel line: Link Bears want that support to fail: bulls want it to send the SOX back higher, and break it out above the 478-ish line.

Jeff Bailey : 7/29/2005 2:54:52 PM

Current OPEN MM Profiles found at this Link ... Note: When buying back the four (4) HC Aug. $12.50 Calls (HC-HV) at the offer of $2.10, a $600.00 loss was realized.

Linda Piazza : 7/29/2005 2:48:09 PM

OEX still turning down right on schedule for a possible H&S right shoulder. Still hasn't confirmed the formation, nor invalidated it. It's headed down into Keltner support, beginning just a few cents away and extending down to that 573.85 Keltner line that's been supporting it for so long. Need a 15-minute close beneath that to confirm the H&S.

Linda Piazza : 7/29/2005 2:46:41 PM

The SOX again closed a 15-minute period below the breakout level, but still tests it. That's now at 477.21 on 15-minute closes with the SOX at 476.66 as I type. Next support at 475.55, and there needs to be a 15-minute close beneath that before we even begin to think that the SOX is through challenging that resistance over the very short term.

Jonathan Levinson : 7/29/2005 2:43:23 PM

Volume breadth up to -1.54:1 on the NYSE and -1.26:1 on the Nasdaq.

Linda Piazza : 7/29/2005 2:41:47 PM

The BIX is still getting turned back on 15-minute closes by a Keltner line currently at 362.80. It's at 363.51 as I type, sliding down another Keltner line currently at 362.22. The BIX has been pressured all day, though, and may be vulnerable to an upside pop sometimes soon. The 200-sma will be waiting overhead if and when it does.

Linda Piazza : 7/29/2005 2:39:46 PM

OEX turning down again, from the appropriate right-shoulder level. I wouldn't consider a H&S confirmed on that 15-minute chart until there's a 15-minute close beneath the Keltner line currently at 573.84. This just-about-to-round-over period is a dangerous one in a strong market, as it's a point at which prices can shoot up and invalidate the formation. So is a neckline test, so be careful about assumptions.

Jonathan Levinson : 7/29/2005 2:38:39 PM

The short cycle indicators are looking toppy but have yet to curl, with QQQQ holding near 39.75. A strong short cycle downphase here will have support at daily S2, below which the 30 and 60 min channel downphases should begin to recover. A slow, weak/corrective downphase would confirm the 30 min channel upturn, and suggest strength into the close or on Monday AM. Link

Linda Piazza : 7/29/2005 2:38:00 PM

No new high on the RUT to match the SOX new HOD. RUT has so far stopped at the 50% retracement of the decline off the day's high.

Jeff Bailey : 7/29/2005 2:35:22 PM

02:09 Internals found at this Link

Linda Piazza : 7/29/2005 2:34:02 PM

SOX still challenging Keltner resistance. It's playing that same game the OEX did yesterday, breaking out, slipping back inside the channel, breaking out, etc. At least, that's the way it looks at this point. SOX at 477.20, breakout currently at 477.22 on a 15-minute closing basis, but that line will move up a little if the SOX does.

Linda Piazza : 7/29/2005 2:32:38 PM

OEX flattening just where it should for a H&S on its 15-minute chart, producing a doji for the last 15-minute period, but this is a really troublesome spot for bears who want to see a H&S confirmed. This is a point at which such formations are sometimes invalidated when prices suddenly shoot higher. The 50% retracement of the delcine today is at about 576.27, and those who want to see the H&S confirmed would prefer the OEX turn lower from about that level.

Linda Piazza : 7/29/2005 2:29:46 PM

SOX still not managing a convincing breakout on its 15-minute Keltner channel. Could still do so, but this channel line has served as firm resistance for the SOX. It looks like a stop-running move, to see if it would hold and catch fire, lighting up other indices in the meantime, but no such luck yet. Until there's a 15-minute close beneath a Keltner line currently at 474.87, though, Keltner evidence says that it may be likely to go on challenging that resistance. SOX at 476.65 as I type, and the resistance now at 477.13 on 15-minute closes.

Jeff Bailey : 7/29/2005 2:28:56 PM

Hanover Compressor (HC) $14.60 bid.

Jeff Bailey : 7/29/2005 2:28:11 PM

Bullish swing trade raise stop alert on 1/2 of the currently full Hanover Compressor (HC) position. To $14.50. The other half should be $14.25.

Jonathan Levinson : 7/29/2005 2:28:35 PM

QQQQ has now reversed half of its losses, leaving a downside doji shadow for the daily and repairing the key outside reversal below yesterday's low. Today's decline is certainly not bullish, but it's a lot less bearish than it was below 39.65. Price is backing away from the 30 and 60 min channel tops, but bears need to get price back below the 72 SMA before these longer intraday cycles turn decisively up. Link

Jeff Bailey : 7/29/2005 2:24:33 PM

Hanover Compressor (HC) alert $14.65 +2.80% ... high of the day. Just over 90-minutes to get bold print for the Wall Street Journal.

Linda Piazza : 7/29/2005 2:23:08 PM

OEX bears had their warning and now the OEX is bouncing strongly within that channel that's contained it so long, from the supporting line at 573.82. It's about to test a 50% retracement of its decline, at about 576.27 or so, near next Keltner resistance at 576.22. This could still be stop-running activity, so be careful here. There's a potential H&S on the OEX's 15-minute chart, and it's moving up into the right shoulder level now.

Linda Piazza : 7/29/2005 2:20:27 PM

Benchmarking impressions: Advdec line still testing resistance. No determined outcome yet, although hinting at a further climb. Don't trade on this information.

Linda Piazza : 7/29/2005 2:18:48 PM

BIX not pariticipating in a rally.

Jeff Bailey : 7/29/2005 2:18:03 PM

I say we at least may a short "pay up" at DAILY R2.

Linda Piazza : 7/29/2005 2:17:49 PM

The SOX closed the last 15-minute period minimally above the breakout level, but only by $0.27 and this from an index that's more than capable of slightly overrunning targets, as I mentioned in a previous post. That's not a convincing breakout. There's a small pullback now, but it won't be convincing, either, perhaps until a 15-minute close back below a steeply rising Keltner line that's currently at 474.89. SOX at 476.92 as I type.

Jeff Bailey : 7/29/2005 2:17:36 PM

Hanover Compressor (HC) $14.53 $1.96% ... back to DAILY R1. Seeing some GDI comparison divergence here ....

Linda Piazza : 7/29/2005 2:15:44 PM

TRAN above 3804, at 3807.09. It's risen all the way back to retest the neckline of that small H&S from this morning, with that neckline at about 3810, estimated. A climb much above that would suggest a retest of yesterday's high. A rollover beneath it would suggest that this was just a retest during a stop-running time of day, but that would need to be confirmed by a new LOD.

Linda Piazza : 7/29/2005 2:13:35 PM

The SOX rose above Tuesday's high, but not so far above it that we can't consider it as retesting that high, so possibly in an equal high area.

Linda Piazza : 7/29/2005 2:12:22 PM

Benchmarking impressions. The advdec line has risen to test the line that determines whether there's currently vulnerability to a stronger downdraft. That's at the current -878 level. Fifteen-minute closes above it and especially above -250 question that further downdraft. Don't trade on this information.

Jeff Bailey : 7/29/2005 2:11:07 PM

02:09 Market Watch at this Link

Jonathan Levinson : 7/29/2005 2:10:21 PM

QQQQ rises to test confluence from 39.70-/75, which had served as support this morning from 10:40-11AM before failing. Link . The 30 min channel has turned up, and should maintain a bullish bias so long as price holds above 72 SMA support at 39.63.

Linda Piazza : 7/29/2005 2:09:50 PM

SOX above Tuesday's high.

Linda Piazza : 7/29/2005 2:09:41 PM

Here's what the SOX's 15-minute Keltner chart suggests. It suggests that the currently challenged resistance, at 476.92 on 15-minute closes, is strong. Although the SOX nudged this resistance line higher back on Tuesday, it never really broke above it, for example. However, the SOX sometimes does overrun this particular channel by a few points, so that should be considered. If there's a strong breakout, on a 15-minute close above that 476.92 line, it suggests that a retest of the 7/22 high of 480.30 could be in the works, although I'd certainly be careful of assumptions today, and particularly before a break above the 477.44 high from Tuesday, about to be tested.

Jeff Bailey : 7/29/2005 2:09:00 PM

Buy Program Premium ... SPX 1,250 , DIA $106.90, QQQQ $39.71

Linda Piazza : 7/29/2005 2:04:52 PM

SOX continuing to climb. Just hit a new HOD. It's just below 477 now, at 476.65.

Linda Piazza : 7/29/2005 2:04:23 PM

The OEX is still tangled up in those various Keltner lines, with some uncertainty as to whether it will break to the upside or downside. The formation over the last couple of hours looks like a bear flag rising up from next support, but we'll have to see.

Linda Piazza : 7/29/2005 2:03:14 PM

Using the SMH as proxy for the SOX (I know it's not exact), it does look as if there was a big volume push during the just-concluded 15-minute period. Let's see if the SOX push holds now.

Jeff Bailey : 7/29/2005 2:01:25 PM

Correction alert .... I've been typing three (3) today. Traders should be closed out on four (4) of the HC Aug. 12.50 Calls (HC-HV)

The reason I typed "3" was that was what I had in my own account.

Linda Piazza : 7/29/2005 2:01:51 PM

So far, among the indices that I check often, the SOX is the front-runner this time, with the TRAN also trying to do its part. RLX and DWC bounced, but not to the same degree. The RUT is still within the consolidation pattern over the last hour or so.

Linda Piazza : 7/29/2005 2:00:30 PM

TRAN at 3804.06, testing that 3804-ish S/R.

Linda Piazza : 7/29/2005 1:59:30 PM

SOX now testing the top an ascending regression channel that can be drawn along its consolidation pattern over the last few days. It's too broad with respect to the previous moves to call it a bear flag, but the top is at about 476.15, with the SOX now at 475.87. It pierced that channel line and has now fallen back a little. Might be worth noting that the 15-minute Keltner channel's next resistance is at 476.75 on 15-minute closes.

Jonathan Levinson : 7/29/2005 1:56:25 PM

QQQQ bounces back above the 72 SMA to retest the prior high at 39.68 here, the 30 min channel turning up on the break back above the 72 SMA: Link . 30 and 60 min channel resistnace line up at 39.76.

Linda Piazza : 7/29/2005 1:55:32 PM

SOX not getting slapped back yet. Next swing high to be tested is Tuesday's 477.82 high. SOX at 476.05 as I type.

Jeff Bailey : 7/29/2005 1:54:40 PM

Hannover Compressor (HC) $14.40 +1.05%. This is the mid-point of today's range.

Linda Piazza : 7/29/2005 1:54:04 PM

The SOX has bumped just above that descending trendline off last week's high.

Jeff Bailey : 7/29/2005 1:59:36 PM

Swing trade covered call close out alert for the four (4) HC Aug $12.50 Calls (HC-HV) at the offer of $2.10.

Linda Piazza : 7/29/2005 1:53:41 PM

TRAN trying to bounce, too, after briefly breaking lower. Back to retest that 3804-ish resistance level. At 3802.95 as I type.

Linda Piazza : 7/29/2005 1:52:38 PM

Did the SOX get its rest and now it's ready to take over that baton for other flagging indices? I'm only half kidding here, as every day there seems to be a runup in one or two indices, catching fire in the others, and then there's another one or two that take over the next day or so.

Linda Piazza : 7/29/2005 1:51:23 PM

The SOX move is coming right during the stop-running time of day, and so is suspect until it's proven to hold, but so is the SOX failure to crater as suspect as was yesterday's failure to climb. It seems to be acting contrary to other indices the last couple of days. A test of that descending trendline off last week's high is less than a point away.

Jeff Bailey : 7/29/2005 1:50:43 PM

HC $14.37 +0.84% ...

Jeff Bailey : 7/29/2005 1:50:07 PM

Swing trade close out covered call setup alert for the HC covered calls ...let's close out/buy back the three (3) HC Aug. $12.50 Calls (HC-HV) if HC trades $14.40.

Linda Piazza : 7/29/2005 1:49:36 PM

BIX keeps stair-stepping lower.

Linda Piazza : 7/29/2005 1:47:39 PM

SOX still headed higher, toward a right-shoulder level and a test of the descending trendline off last week's high. Should be making bears nervous that the SOX won't give up this test and keeps invalidating potential H&S's. Hasn't invalidated the latest one yet, nor the bigger one on the 60-minute chart.

Jonathan Levinson : 7/29/2005 1:45:55 PM

Ten year notes have rolled over to a new low at 110 7/8, with TNX currently +8.7 bps to 4.283%.

Jonathan Levinson : 7/29/2005 1:44:44 PM

A new session low for GE, -.3 at 34.58 with volume breadth back down to -1.9:1 on the NYSE and -2.19:1 on the Nasdaq. There's still a possibility of the reverse h&s playing out intraday on the Qs, but it's looking sloppier and less likely to slingshot triumphantly above the previous high. Bulls need to regain the 72 SMA at 39.64.

Linda Piazza : 7/29/2005 1:44:12 PM

RLX testing day's low, 50% retracement of the last rally off Wednesday's low, and the 15-minute 100/130-ema's at 484.41 and 483.47, with the RLX at 484.77.

Linda Piazza : 7/29/2005 1:43:15 PM

OEX testing the day's low, with a rough H&S of its own on its 15-minute chart. I'd certainly wait for a 15-minute close below the Keltner line currently at 573.87 before I considered that formation confirmed and I'd be prepared to jump right back out of any bearish play if needed on a quick reversal, too, especially as we're approaching the stop-running time of day.

Linda Piazza : 7/29/2005 1:41:06 PM

SOX still trying to reach up and retest that trendline off last week's high.

Linda Piazza : 7/29/2005 1:40:46 PM

Benchmarking impressions: Advdec line dropping again, remaining vulnerable to a downdraft, now to -2311.49. Do not trade on this information. This signal erased on 15-minute close above -808.

Jonathan Levinson : 7/29/2005 1:32:54 PM

The short cycle bulls seem to be bobbling the ball at the reverse h&s neckline, a sharp sell spike kicking in at 39.68. This could be forming a broader right shoulder beneath a neckline in the 39.70 area, but the short cycle is going to run out of time if the price doesn't cooperate soon. Link

Jane Fox : 7/29/2005 1:30:55 PM

Dateline WSJ Reports: U.K. Police Arrest Two More July 21 Bombers British police arrested three more people in connection with the failed bombing attempts of July 21. Media reports said two of the three people arrested were suspected bombers, but the police wouldn't confirm those reports. An Italian government official said one suspected bomber has been arrested in Rome. U.K. police have one suspected bomber in custody, Somali immigrant Yasin Hassan Omar, who was arrested on Wednesday. That arrest was considered the biggest break so far in Scotland Yard's investigation of the July 21 incidents, in which four bombs in London's mass-transit system failed to detonate, and the July 7 attacks that killed 52 people and four suspected bombers.

Linda Piazza : 7/29/2005 1:29:31 PM

TRAN might be dropping, but another front-running, the SOX, is climbing up toward a test of the descending trendline off last week's high. It's not there yet, with such a test occurring at about 475.40 currently, and with that being an approximate right-shoulder level for a new possible H&S on the 15-minute chart, head at today's high. Important test going on now. SOX at 474.01 as I type.

Linda Piazza : 7/29/2005 1:26:53 PM

TRAN dropping again.

Jeff Bailey : 7/29/2005 1:23:18 PM

Just saw a cross of 73,000 shares in HC. $14.35 +0.70% ... I think that spike in volume from 12:45-50 was a long liquidation, now crossed long at 14.35.

Linda Piazza : 7/29/2005 1:19:33 PM

The OEX looks tangled up in Keltner support and resistance. It's going to require either a strong move one way or the other or some time to untangle those lines. Not sure which we'll get as we continue the lunchtime lull.

Linda Piazza : 7/29/2005 1:17:48 PM

Benchmarking: Advdec line may be trying to rise again. Resistance at -904 to -575 and then near 270. If vulnerability to a downdraft this afternoon is to remain, then resistance at that first level should probably hold. Do not trade on this information.

Linda Piazza : 7/29/2005 1:16:31 PM

The RUT didn't even retrace quite 38.2% of the rally off Wednesday's low before it began trying to bounce, so it's still stronger than many indices by this measure, the percentage of the rally it retraced before trying to bounce. It's bounce attempt isn't stellar so far, however.

Jonathan Levinson : 7/29/2005 1:16:10 PM

QQQQ is printing above the 72 SMA here and looking like a breakout on the reverse h&s pattern noted earlier: Link . Implied target is only 39.75, but suggests stall and possible upturn in the 30 min cycle.

Linda Piazza : 7/29/2005 1:14:58 PM

The RLX's rise has been tepid so far, looking corrective. Can't trust this one to stay down, though, so watching the 487 level (50% of the pullback off today's high) to see how this possible flag behaves near there, if the RLX rises that high. It bounced from a 50% retracement of its rally off Wednesday's low and from the 15-minute 100/130-ema's at 484.38 and 483.42, respectively, so those are levels to watch to the downside.

Jonathan Levinson : 7/29/2005 1:13:37 PM

Ten year notes -17/32 at 111 7/64, TNX holding above 4.26%, currently +6.7 bps at 4.263%.

Jeff Bailey : 7/29/2005 1:13:34 PM

01:00 Internals found at this Link

Linda Piazza : 7/29/2005 1:11:54 PM

SOX rising again. There's the possibility for another H&S on its 15-minute chart, a slightly larger one than the one we were watching yesterday. The head would be at today's early morning high, shoulders at about 475.10 or so. The descending trendline off last week's high now crosses just above that right-shoulder level. SOX at 473.39 as I type. This 15-minute formation looks as if it could be the right shoulder for a larger H&S, a roughly formed one visible on the 60-minute chart.

Jonathan Levinson : 7/29/2005 1:05:13 PM

Sept. crude oil down to a .25 gain at 60.20, off a session high of 61.075. 50 tick chart at this Link

Jeff Bailey : 7/29/2005 1:04:01 PM

01:00 Internals found at this Link

Jonathan Levinson : 7/29/2005 1:02:04 PM

A small reverse head and shoulders pattern here on QQQQ below 39.63-.65. It is only valid so long as the blue daily S2 line holds: Link

Linda Piazza : 7/29/2005 12:59:53 PM

The OEX is caught between nearest Keltner resistance (575.29-576.10) and support, that support currently at 573.95. On a 15-minute close beneath that supporting Keltner line, a new target of 570.22 is set. Want it to be a strong signal, though, because the OEX has had a strong affinity for levels inside this Keltner channel rather than outside it.

Linda Piazza : 7/29/2005 12:58:00 PM

Just benchmarking observations: the advdec line has not been able to get above first resistance yet, and continues vulnerability to a deeper downdraft without a climb above at least -630 and preferably -340 on a 15-minute close.

Linda Piazza : 7/29/2005 12:56:55 PM

The RLX bounced at the 50% retracement of its most recent rally, off Wednesday's low, also from just above the 15-minute 100/130-ema's. It's testing the next higher Fib level now, the 38.2% retracement. Bears want to see a downturn before about 484, the 50% retracement of today's pullback off the high. Bulls want a new high.

Jeff Bailey : 7/29/2005 12:55:38 PM

STAAR Surgical (STAA) $5.17 +33.59% ... stock gapped higher from yesterday's close of $3.89. 30-minute interval chart shows pennant forming intra-day. L/H has been $4.94-$5.74.

Jonathan Levinson : 7/29/2005 12:48:30 PM

Volume breadth has improved to -1.7:1 on the NYSE, -1.94:1 on the Nasdaq. QQQQ's 72 SMA is down to 39.65, above which a new short cycle upphase will confirm: Link

Jeff Bailey : 7/29/2005 12:46:01 PM

Global ePoint (GEPT) $7.42 +6.15% .... gapped up big on 07/21/ Might be going for the Wall Street Journal print.

Linda Piazza : 7/29/2005 12:42:32 PM

Benchmarking impressions: on an advdec line bounce, nearest strong resistance at -633 to -255.

Linda Piazza : 7/29/2005 12:41:03 PM

OEX bounce coming right on cue. Those hoping for more downside want to see 15-minute closes below 575.26-576.25.

Jonathan Levinson : 7/29/2005 12:40:11 PM

QQQQ is in a synchronous short cycle, 30 min and 60 min downphase, with only the short cycle in or near oversold territory, where it is currently trending. The strong break of yesterday's low after posting a higher premarket high is a key reversal, which could resuscitate the daily cycle in overbought territory. Overall, the benefit of the doubt goes to the bears below yesterday's low, but a short cycle upphase remains overdue.

Linda Piazza : 7/29/2005 12:38:28 PM

The Wilshire 5000 has retraced almost half of its last rally, off Wednesday's low. That 50% level is at about 12,375 with the 15-minute 100/130-ema's at 12,367.41 and 12,354.76 and the DWC currently at 12,388.08. A 50% retracement often serves as a bounce point, so watch for bounces in this index and some others. The quality of those bounces--and if they occur or not--will tell us much about market direction for the day. Maybe.

Linda Piazza : 7/29/2005 12:35:04 PM

The OEX approaches the Keltner line currently at 574.04, a line that's been supporting it on tests since 7/07. A 15-minute close beneath that line would set up a new downside target of 570.28, but those currently in bearish plays should first hope for a strong downdraft through that line to avoid a slingshot move back up through the channel. They should have profit-protecting measures in place now, as this has obviously been strong support for the OEX. We have some other indices keeling over and the OEX could, too, but as I said earlier, these generals have been marching to a different drummer for a while now, and may continue to do so.

Tab Gilles : 7/29/2005 12:34:30 PM

$NASI Nasdaq Summation ($NASI) Since late April I posted that I was bullish on the $COMPQ and specifically the $NDX via Prufunds UOPIX. (posts 4/15 9:23 AM; 4/20 2:36 PM; 5/4 8:27 AM).

Currently, even though there has not been any reversal signal on the $NASI, I believe that taking some money off the table would be prudent. I would like to see some confirmation before fully changing my bullish stance and/or becoming bearish. Link Link Link

Jeff Bailey : 7/29/2005 12:32:49 PM

Cisco Systems (CSCO) $19.25 -0.25% ... its daily Pivot Levels ... $18.99, $19.14, Piv= $19.22, $19.37, $19.45.

Low/high at this point has been $19.22-$19.40.

Linda Piazza : 7/29/2005 12:31:16 PM

SOX dropping. 10-sma at 470.87, potential support. SOX at 471.46 as I type.

Jeff Bailey : 7/29/2005 12:30:22 PM

QQQQ $39.57 -0.85% ... pretty good place for a day trade long in my opinion. Slide a stop under DAILY S2.

I've got enough open profiles on my plate right now though.

Linda Piazza : 7/29/2005 12:30:27 PM

BIX continuing lower. I had mentioned a couple of weeks ago that the 200-sma bisected the BIX's broadening formation on its daily chart, and that a drop below it might mean a drop down to test the 200-ema, now at 360.91. The BIX has shown some trading patterns in relationship to this average on the daily chart, so next potential support might be found anywhere from 361.75, the site of historical S/R down to that 200-ema. The BIX is at 362.66 as I type. A strong thrust down through that average and then the 100-sma at 359.36 might mean a retest of the bottom of the BIX's broadening formation, near 353.

Jeff Bailey : 7/29/2005 12:27:35 PM

Bullish swing trade raise stop alert ... let's raise a stop on the unerlying shares of Hanover Compressor (HC) $14.50 +1.75% ... to $14.25.

At this point, it looks juuuuust similar enough to what GDI $41.09 +0.09% did on 07/21/05.

Jonathan Levinson : 7/29/2005 12:20:12 PM

Volume breadth holds at -1.88:1 on the NYSE and -2.11:1 on the Nasdaq. Overall volume is light, with 36M QQQQ shares traded so far. Yesterday's total was 67.1M, 16M shares below average.

Jeff Bailey : 7/29/2005 12:21:13 PM

Current OPEN MM Profiles found at this Link

I've got the HCHV $1.95 x $2.20 right now. QCharts' option quotes bid/ask not always the most reliable. Could be same for other open profiles.

Linda Piazza : 7/29/2005 12:19:02 PM

Stepping away for a few minutes.

Linda Piazza : 7/29/2005 12:18:45 PM

The TRAN has not quite met its downside target for its H&S, I don't think, and is currently testing 3800, so it may not do so. This could be a possible bounce level. Still, the formation confirmed and there was follow-through, more than bears have been able to say lately.

Linda Piazza : 7/29/2005 12:17:27 PM

Benchmarking impressions: the 15-minute Keltner chart for the advdec line was correct, in suggesting that the advdec line might fall further. It's trying to steady now, but as long as it stays below -508 or so on 15-minute closes, it still looks vulnerable to -2238 or so. Do not trade on this information.

Linda Piazza : 7/29/2005 12:16:11 PM

The OEX slips closer to the Keltner channel bottom level that has supported it since 7/07. That's at 574.09 currently, with the OEX at 474.79.

Linda Piazza : 7/29/2005 12:15:16 PM

RLX still falling.

Jonathan Levinson : 7/29/2005 12:13:50 PM

So far today, month-end window dressing is a no-show. Link

Tab Gilles : 7/29/2005 12:12:43 PM

iShares Lehman 20+ Year Treas Bond (TLT) Link

Jeff Bailey : 7/29/2005 12:12:22 PM

12:00 Internals found at this Link

Linda Piazza : 7/29/2005 12:06:16 PM

Jeff, sorry, but I missed your 11:51 post earlier. Yes, I was getting funky numbers, too, but have started getting something other than the straight-across numbers now. At 40.97 as I type, just having moved down.

Jonathan Levinson : 7/29/2005 12:05:24 PM

There's a small potential bullish short cycle divergence here on QQQQ, as the last drop got ahead of the whipsaw in the oscillators. Bulls need a break from here above previous support and confluence at 39.66-.67 to start turning the indicators back up. Link

Jeff Bailey : 7/29/2005 12:04:40 PM

12:00 Market Watch found at this Link

Jeff Bailey : 7/29/2005 11:59:54 AM

Max Pain Levels for August ... looks like I'm going to be without "Max Pain" levels again this expiration. Source is working on a new data source and integrating into their software.

Linda Piazza : 7/29/2005 11:59:50 AM

Here's the RLX's broadening formation: Link

Jonathan Levinson : 7/29/2005 11:58:39 AM

SEATTLE - A judge has temporarily barred a former Microsoft executive from performing his job at Google, saying Microsoft has a well-grounded fear that leaked trade secrets could hurt its business.

Link

Jeff Bailey : 7/29/2005 11:57:15 AM

VXN.X 13.46 +6.74% ... as a benchmark to $39.60 .... (comments here with QQQQ $39.60 date back a couple of weeks when QQQQ below $39.00 and some option action I noted).

Jeff Bailey : 7/29/2005 11:55:09 AM

QQQQ $39.62 -0.72% ... kissed that $39.60 level.

Jonathan Levinson : 7/29/2005 11:54:47 AM

Session low for GOOG, breaking below 290 at 289.71. Volume breadth is -1.67:1 for the NYSE, -2.09:1 for the Nasdaq.

Linda Piazza : 7/29/2005 11:53:34 AM

Yesterday, the SOX wasn't performing as well as some other indices, but today, it's not dropping as much as some others. Bears would like to see it below 470, below the consolidation zone from the last several days, and then below Wednesday's low, still way below near 466. SOX at 472.32 as I type.

Jonathan Levinson : 7/29/2005 11:52:49 AM

QQQQ whipsaws the short cycle back down, coming in for a test of daily S2 at the 30 min channel bottom, 39.58: Link

Linda Piazza : 7/29/2005 11:52:00 AM

RLX dropping to a new LOD, testing the 38.2% retracement of its last rally, off that Wednesday morning low. That's at 485.65 with the RLX at 485.44, below that Fib level but still close enough to be testing it. The 50% level is at 484.50, with the 15-minute 100/130-ema's at 484.30 and 483.28, respectively.

Linda Piazza : 7/29/2005 11:49:49 AM

The OEX is now hitting a 50% retracement of its last rally, off the Wednesday morning swing low. Dipping a little below it as I type. OEX at 574.93.

Jeff Bailey : 7/29/2005 11:50:59 AM

Linda ... are getting "funky" Treasury yield quotes from QCharts? (intra-day charts)

My 5-year yield ($FVX.X) has been flat at 40.94 (4.094%) for about an hour.

Linda Piazza : 7/29/2005 11:48:04 AM

Wilshire 5000 is drawing close to a 38.2% retracement of its last rally, off the 15-minute swing low early Wednesday morning. That Fib level is at 12,394.50 with the DWC at 12401.65 as I type. A bounce attempt could begin anywhere near the 12,400-ish level. The 50% retracement, at 12,374.90, is now near the important (to the DWC and several other indices) 15-minute 100/130-ema's, so that would be an important test to watch, if it occurs.

Jonathan Levinson : 7/29/2005 11:46:39 AM

The SOX continues to hold its opening lows in a pattern of lower highs, looking notably stronger than QQQQ this morning. Intraday charts overlaid at this Link

Linda Piazza : 7/29/2005 11:45:33 AM

TRAN nearing a confirmation of its H&S, with this being another danger point for bears, with bulls often sending an index zooming higher to invalidate the formation from the neckline test. TRAN at 3804.90 as I type.

Linda Piazza : 7/29/2005 11:44:07 AM

The OEX gradually slides toward next support on the 15-minute chart, but it's doing it somewhat reluctantly, with small-bodied candles. Next support at 574.19-574.84, with the lower of those two Keltner lines serving as support since 7/07. There's daily Keltner support at 574.16, so it would likely take a strong downdraft to push the OEX below that level without a bounce attempt. Bears who entered on today's rollover need to have profit-protecting measure in place. That downdraft could occur--some indices are seeing them--but the OEX has marched to its own little unheard tune lately.

Linda Piazza : 7/29/2005 11:41:06 AM

Benchmarking impressions: Advdec line still looks vulnerable to a stronger downdraft, down to -2215, barring a bounce above 54 and particularly above 530-780. At -682 as I type.

Linda Piazza : 7/29/2005 11:35:24 AM

Benchmarking impressions: advdec line hasn't been able to bounce up into positive levels yet, much less toward 500. So far, a tentative vulnerability to a further downdraft, but a 15-minute close above 74 and particularly above the 400-800 zone would undo that vulnerability. Do not trade on this information.

Jeff Bailey : 7/29/2005 11:34:03 AM

Hanover Compressor (HC) $14.59 +2.38% ... sitting on BLUE #6.

Linda Piazza : 7/29/2005 11:33:32 AM

RLX also bouncing into a possible right shoulder, not quite at the top of the right-shoulder level yet.

Jeff Bailey : 7/29/2005 11:37:52 AM

Disclosure alert ... cough, cough ... I decided to "pay up" and closed out three (3) of the HC-HV at the offer of $2.30. Bid/Ask $2.05 x $2.30. I did try $2.20 and no takers. Market Maker not feeling kind today.

Linda Piazza : 7/29/2005 11:33:00 AM

TRAN pauses right where it should, but that's not good enough. As I've mentioned several times lately, this top-of-the-right-shoulder area is the very point at which prices sometimes shoot higher and invalidate the formation. Needs to punch below 3804 and preferably below 3800 soon. It's at 3809.20 as I type.

Linda Piazza : 7/29/2005 11:31:48 AM

BIX sinking again, currently testing the LOD.

Jonathan Levinson : 7/29/2005 11:28:52 AM

QQQQ's short cycle oscillators are turning up from oversold on the current bounce, which the automatic linear regression lines are characterizing as a bear flag so far. That will change above 39.75, above which the flag will be violated and 72 SMA resistance at 39.77 comes into view. Link

Linda Piazza : 7/29/2005 11:26:52 AM

SOX bouncing from those 15-minute 100/130-ema's again. At 473.86 as I type, with the descending trendline off last week's high now at about 475.75.

Jonathan Levinson : 7/29/2005 11:26:36 AM

Session high for Sept. crude oil, +.80 at 60.75.

Jonathan Levinson : 7/29/2005 11:25:38 AM

I mistakenly reported that today's 5.5B repo was a weekend repo. It is actually a 6-day repo, expiring on Thursday.

Linda Piazza : 7/29/2005 11:25:18 AM

Just benchmarking observations: The advdec line's 15-minute Keltner chart shows the potential for a stronger downdraft, but with that potential as yet needing to be tested by an attempted rise above 222-525, to see if the advdec line can plow through next resistance, with that term used loosely with respect to this indicator. Do not trade on this information.

Jonathan Levinson : 7/29/2005 11:25:51 AM

Ten year notes are recovering off their 111 1/32 lows, TNX down to a 6.9 bp gain at 4.265%, up 1.6% on the day. The weakness in equities and bonds today points to liquidity concerns, and I suspect that the additional repo expirations for next week could have something to do with it. Wednesday's 5-day 7B repo expires Monday, and last Monday's 8-day 6B repo expires Tuesday.

Linda Piazza : 7/29/2005 11:22:52 AM

The OEX is attempting a bounce. Next 15-minute resistance is from 576.04-576.36, with bears wanting to see 15-minute closes beneath those lines and bulls wanting bounces above them. The Keltner lines don't converge closely enough to give a strong view as to whether support or resistance is strongest.

Linda Piazza : 7/29/2005 11:20:40 AM

Beware H&S right shoulders that extend too long in time during a bullish market! The TRAN's hasn't done that yet, but those hoping for a pullback would like to see the TRAN maybe bounce up to the right shoulder and get slapped right back and then confirm this thing, all within the next 15-30 minutes. Otherwise, the signs are troublesome for those hoping for a H&S confirmation.

Linda Piazza : 7/29/2005 11:18:51 AM

BIX trying to steady again at Wednesday's low.

Jeff Bailey : 7/29/2005 11:14:05 AM

Hanover Compressor (HC) $14.57 +2.24% ... darts to highs of the session. Blue #6 here.

Jeff Bailey : 7/29/2005 11:13:20 AM

QQQQ $39.68 -0.57% .... most active options ... Aug $38 Put (18,043:226,652), Sep $41 Call (14,834:59,220), Sep $40 Call (12,673:157,418)

Linda Piazza : 7/29/2005 11:13:07 AM

RLX dropped to a new LOD, of course, and is currently bouncing from 486-ish support. There's potential for a H&S formation there, too, with a tounce up to 487.30 or so and a rollover from there. RLX at 486.23 as I type, and still far from the 479 value that would confirm a breakdown out of the broadening formation at the top of its 60-minute chart.

Linda Piazza : 7/29/2005 11:11:45 AM

As the European trading session winds down, the DAX and CAC 40 are both negative, but the FTSE 100 holds onto positive values, although off its HOD.

Jeff Bailey : 7/29/2005 11:11:06 AM

VXN.X ... 13.31 +5.55% .. just spiked to 13.58. Would check for any call sell/put buy action.

Jonathan Levinson : 7/29/2005 11:08:27 AM

VXO 10.53, VXN 13.33

Jeff Bailey : 7/29/2005 11:08:13 AM

11:00 Internals found at this Link

Linda Piazza : 7/29/2005 11:07:22 AM

The OEX has failed to hold support at the Keltner line currently at 576.06, setting up that downside target of 574.20-574.82 mentioned earlier. It will maintain that downside target as long as it maintains 15-minute closes beneath 576.06. The 574.20 level is the lower boundary of the Keltner channel that's been containing the OEX, so if you're in a bearish play, have profit-protecting plans in place for that test. I would expect a bounce attempt from that level, but a breaking of that zone sets a 570-ish downside target.

Jonathan Levinson : 7/29/2005 11:06:32 AM

New session lows, 30 min channel support down to 39.625 QQQQ, 72 SMA resistance down to 39.81.

Linda Piazza : 7/29/2005 11:04:24 AM

BIX can't bounce. Heading slightly lower again after a tepid bounce attempt during the last 15-minute period.

Linda Piazza : 7/29/2005 11:03:55 AM

SOX attempting a small bounce from its 15-minute 100/130-ema's.

Linda Piazza : 7/29/2005 11:03:25 AM

TRAN is attempting a bounce, moving up into a possible right-shoulder level for a H&S on its 15-minute chart. Here's where we get to see whether bulls or bears are still driving the movements. An invalidation of the H&S would show that bulls are still in control, even over the very short-term, and a confirmation--and meeting of the downside target--would say that bears have control over the very short-term.

Jeff Bailey : 7/29/2005 11:01:41 AM

11:00 Market Watch found at this Link

Linda Piazza : 7/29/2005 10:53:31 AM

The TRAN is trying to steady above its flattening 15-minute 21-ema and above the possible 3804 support region. I mentioned early today that the TRAN could try to steady near here and bounce into a right shoulder formation, perhaps up to 3812-3815 or so, but that it sometimes just did away with the whole right-shoulder thing if it was particularly weak. TRAN at 3808.47 as I type, and I'm watching to see if it forms a right shoulder or does away with it, and then if it rounds over at the appropriate place if it does bounce.

Jonathan Levinson : 7/29/2005 10:52:57 AM

Session low for QQQQ, volume breadth -1.39:1 on the Nasdaq and -1.34:1 on the NYSE, with QQQQ 30 min channel volume down to 39.66. Link

Linda Piazza : 7/29/2005 10:49:30 AM

BIX attempting a bounce on cue from near Wednesday's low. Not much of one yet.

Linda Piazza : 7/29/2005 10:48:35 AM

SOX is lower, but not enough lower to make bears comfortable. It's still clinging to the 15-minute 100/130-ema's.

Linda Piazza : 7/29/2005 10:47:13 AM

RLX hit a new LOD, but by a few cents only. The TRAN dropped toward that 3804 potential support, coming within a couple of points of that level. Wilshire 5000 dropped to a 12,410-12,415 consolidation zone from yesterday. There's some possibility for bounce attempts here, but if these give way without a bounce, the bears definitely have the upper hand over the short-term.

Jonathan Levinson : 7/29/2005 10:46:37 AM

Looks like a possible reverse h&s neckline test for Oct. gold on the move above 432: Link

Linda Piazza : 7/29/2005 10:44:30 AM

BIX dropped a few cents lower than Wedensday's low. Watching to see if it steadies and tries to bounce now. Some other indices are steepening their drops. The OEX tests Keltner support at 576.08 (on 15-minute closes). The OEX is at 575.84 with a couple of minutes left in the 15-minute period. Want to see a firm break of that on a close, though, to set a 574.18-574.78 next downside target. Too much chance of just a little overrunning of a target otherwise, especially with the BIX testing Wednesday's support.

Jonathan Levinson : 7/29/2005 10:43:17 AM

QQQQ sells down to a session low of 39.71, testing 30 and 60 min channel support now. Those levels can be expected to decline in the overdue 30 and 60 min cycle downphases, so long as price holds below the 72 SMA at 39.85: Link

Jonathan Levinson : 7/29/2005 10:41:59 AM

Thanks, Marc. You're right. The symbol is YGV5.

Jeff Bailey : 7/29/2005 10:41:38 AM

Sell Program Premium ... SPX 1,240.49, DIA $106.82, QQQQ $39.73

Linda Piazza : 7/29/2005 10:40:38 AM

BIX dropping toward a test of Wednesday's low at 363.49 with the BIX currently at 363.89. OEX players might note the possibility for a BIX bounce attempt at this potential support level. The quality of that bounce will tell us something about the BIX and maybe about the OEX, too, although other indices should be watched, too.

Jonathan Levinson : 7/29/2005 10:39:14 AM

Ten year note yields have broken this week's highs, +8.8 bps at 4.283%- a veritable bucking bronco the past 3 days: Link

Linda Piazza : 7/29/2005 10:39:09 AM

No new LOD for the RLX, but it's closer. Closer doesn't count, unfortunately.

Jonathan Levinson : 7/29/2005 10:37:17 AM

I will begin covering December gold (YGZ5 for IB users) as of Monday, as volume on the December contract now exceeds the expiring August contract.

Linda Piazza : 7/29/2005 10:35:26 AM

The OEX has now touched first Keltner support. The decline hasn't been a precipitous one so far, but a sort of measured one. A bounce might be expected, although watch other indices, because if the bottom starts falling out on one or two of those higher fliers, the OEX's decline might steepen. For now, a bounce might be attempted, with those hoping for further declines wanting to see 15-minute closes below a line currently at 576.99 and those hoping for further bounces wanting to see closes above it. Next support beneath this is 574.23-574.79.

Jane Fox : 7/29/2005 10:33:30 AM

Datelin CNN Scotland Yard confirms three men arrested in major anti-terror operation under way in London.

Jeff Bailey : 7/29/2005 10:32:54 AM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 7/29/2005 10:31:24 AM

QQQQ update at this Link with the short cycle downphase looking corrective so far within the sideways/flat 30 and 60 min cycle channels. A break of daily S1 should add some fuel, but the real test will come at the channel bottoms at 39.71.

Linda Piazza : 7/29/2005 10:29:18 AM

DJUSH dropping, back below 1100 as I type, but only by a little, at 1098.19.

Jonathan Levinson : 7/29/2005 10:27:23 AM

Session high for Aug. gold here at 429.50. 428-429 should now act as support, next resistance at 432 and then at 435.

Linda Piazza : 7/29/2005 10:26:57 AM

TRAN lower today, but above that 3804 support zone, at 3809.99 as I type.

Linda Piazza : 7/29/2005 10:26:11 AM

BIX slightly below its 200-sma.

Linda Piazza : 7/29/2005 10:23:59 AM

No new LOD for the RLX yet. RLX at 487.40 as I type, with the LOD at 486.53.

Jeff Bailey : 7/29/2005 10:23:10 AM

Hanover Compressor (HC) trade update alert 14.48 +1.61% ... intra-day and have now added 5-MRTs at this Link ... If HC were to trade our STOP, then I'm closing out BOTH the stock and OPTION Positions.

Linda Piazza : 7/29/2005 10:22:30 AM

Wilshire 5000 falling more steeply now. Wouldn't that be neat if it came within 8 points of the upside target from that fitted retracement bracket that I mentioned yesterday and then falls back? However, the Wilshire 5000 is right now testing the 15-minute 21-ema, an average that may have prompted Wednesday's bounce, so that we need to see a 15-minute close beneath that average at 12,425.01 before we believe that too much is going on to the downside here. Also remember that the Wilshire 5000 has been strong and that we might not get even a 38.2% retracement of the decline if it's going to continue its strength, with that Fib level at just under 12,400. The daily Keltner chart for the DWC says that until and unless there's a daily close below the Keltner line currently at 12,333.26, this is just a pullback.

Jonathan Levinson : 7/29/2005 10:19:43 AM

VXO 10.35, VXN 13.05

Linda Piazza : 7/29/2005 10:18:04 AM

The RLX is erasing its breakout signal on the 15-minute Keltner channels. If this holds, it suggests a drop down toward 486.19-486.62 and maybe even toward 483.30-484. A drop to 477 is possible only if the mid-channel support fails, with that support level the 483.30-484 one. RLX at 487.17 as I type, not yet at a new LOD.

Jeff Bailey : 7/29/2005 10:16:46 AM

Sell Program Premium .... SPX 1,241.64, DIA $106.85, QQQQ $39.80

Jonathan Levinson : 7/29/2005 10:16:44 AM

Sept. crude is back to the highs, +.575 to 60.525 here.

Linda Piazza : 7/29/2005 10:16:30 AM

I looked at the SOX on a 15-minute Keltner channel, but, like the OEX, the SOX has settled into an equilibrium position on that channel, and not much information can be gained. Upper resistance at 477.02 on 15-minute closes, and lower support at 469.79 on 15-mintue closes, with less firm support and resistance between those numbers.

Jonathan Levinson : 7/29/2005 10:15:26 AM

Volume breadth +1.08:1 on the NYSE, -1.04:1 on the Nasdaq with QQQQ volume light at 12.5M shares so far.

Jeff Bailey : 7/29/2005 10:15:19 AM

Swing trade round to full alert ... for Hanover Compressor (HC) $14.54 +2.04% here, stop on the entire position $14.10.

Linda Piazza : 7/29/2005 10:14:18 AM

BIX dropping, now just cents above its 200-sma. OEX bulls don't want to see that violated.

Jeff Bailey : 7/29/2005 10:14:09 AM

Yesterday's Internals found at this Link

Linda Piazza : 7/29/2005 10:13:40 AM

SOX at 475.36, still hovering just beneath that descending trendline off last week's high. Wants to retest it, it seems.

Jeff Bailey : 7/29/2005 10:11:55 AM

10:00 Internals found at this Link

Linda Piazza : 7/29/2005 10:10:32 AM

RLX has pulled back only slightly. This thing hasn't given up yet, so you OEX bears out there have to be careful.

Linda Piazza : 7/29/2005 10:09:52 AM

Wilshire 5000 pulling back from its punch up to 12,457.44. Getting close to that fitted retracement bracket top at about 12,465 that I noted as possible target yesterday. Remember that this is an inexact science, just guesswork, so don't think it's either going to hit that exactly or be immediately knocked down if it does, but it's something to watch. DWC at 12,448.71 as I type.

Jonathan Levinson : 7/29/2005 10:08:24 AM

Ten year note yields have now retraced yesterday's decline, currently printing 4.26% and retesting this week's resistance: Link

Linda Piazza : 7/29/2005 10:07:48 AM

RLX at 488.91, still within its broadening formation on the 60-minute chart.

Linda Piazza : 7/29/2005 10:07:18 AM

The OEX is having trouble staying above the Keltner line marking a new breakout on the 15-minute chart. Bulls don't want to see another 15-mintue close beneath the Keltner line currently at 577.39, with the OEX currently at 577.39 exactly.

Linda Piazza : 7/29/2005 10:06:10 AM

The SOX is also testing a right-shoulder level for a potential square-headed H&S on its 60-minute chart, with the right shoulder level probably still okay as long as the SOX stays near 477 and rounds over there. SOX dropping back a little as I type from its first retest of that descending trendline off last week's high, but not far. At 474.81 as I type.

Jeff Bailey : 7/29/2005 10:05:57 AM

10:00 Market Watch found at this Link

Linda Piazza : 7/29/2005 10:04:28 AM

SOX now testing the descending trendline off last week's high. SOX at 476.60 as I type.

Jonathan Levinson : 7/29/2005 10:04:05 AM

QQQQ bounces back to its premarket levels, currently flat at 39.91: Link

Jeff Bailey : 7/29/2005 10:03:41 AM

Green across the board.

Linda Piazza : 7/29/2005 10:03:36 AM

The OEX has come back up to challenge the breakout level again on its 15-minute chart. Needs a 15-minute close above the Keltner line currently at 577.83 but likely to have moved somewhat by the close of this 15-minute period, just begun. Upside target would be 579.33 now, but I view the target with some skepticism. Maybe I shouldn't, as the RLX is coming right back up to retest its opening level after dropping steeply in the first few minutes of trading. In fact, it's just charged to a new high as I type this, near a test of the 490-ish top of its broadening formation. At 489.32 as I type. Bears or even bulls wanting a better entry want to see that resistance hold. Bulls already in a long OEX play don't.

Jonathan Levinson : 7/29/2005 10:01:33 AM

The Fed announces a 5.5B weekend repo to replace the 5.25B expiring, for a 250M net add today.

Jeff Bailey : 7/29/2005 10:02:39 AM

Hanover Compressor (HC) $14.42 +1.19% ... thinking about a "round to full" and a Wall Street Journal print. How about you?

Jonathan Levinson : 7/29/2005 10:00:54 AM

Chicago PMI 63.5 vs. 55. exp.

Jonathan Levinson : 7/29/2005 10:00:33 AM

Ten year notes work their way lower still, TNX +4.9 bps at 4.245%.

Linda Piazza : 7/29/2005 9:59:55 AM

RUT at a new high. Again.

Linda Piazza : 7/29/2005 9:59:36 AM

SOX bouncing again, at 474.28 as I type. Doesn't want to give up that test of 475-476 resistance, does it?

Linda Piazza : 7/29/2005 9:59:05 AM

TRAN declining slightly. It's at 3811.61 as I type. Watch for a potential steadying near 3804 and then a bounce into a potential right shoulder for a H&S formation on its 15-minute chart, but be aware that the TRAN sometimes does away entirely with right shoulders if it's going to move down anyway. If it does bounce, we'd have to see if it forms that right shoulder or invalidates the potential formation to give us some idea of short-term sentiment.

Jeff Bailey : 7/29/2005 9:57:39 AM

Russell 2000 Index (RUT.X) 683.38 +0.04% ... all-time highs again.

Linda Piazza : 7/29/2005 9:57:06 AM

DWC does not touch yesterday's high, at least not yet. It's still within a possible bull-flag formation. At 12,439.74 as I type.

Linda Piazza : 7/29/2005 9:56:32 AM

BIX retesting the day's low, not below it yet, but close. The 200-sma waits just below at 364.60, with the BIX at 364.97 as I type.

Jonathan Levinson : 7/29/2005 9:54:28 AM

QQQQ has bounced back to the daily pivot and 72 SMA at 39.86 but pulled back, the short cycle downphase still in progress. Daily S1 at 39.80 remains the session low. Link

Linda Piazza : 7/29/2005 9:55:32 AM

The OEX's two-hour Keltner chart is sometimes helpful to watch. I see that the last two-hour candle was a small-bodied candle at the top of a climb, so bulls will want to see a sustained move higher to avoid the possibility of an evening-star formation being completed. However, such a formation could be somewhat discounted, since this move higher has been a brief one, barely bringing the OEX out of a recent consolidation pattern. Bears would need much more confirmation before they believed that anything other than a pullback to support was underway. The 15-minute chart shows candles displaying some indecision this morning, both with long legs, one to the downside, and the current one, so far to the upside. Indecision here, too. Combine the two and you get a long-legged doji for the first 30-minute period.

Jonathan Levinson : 7/29/2005 9:53:08 AM

Awaiting the 10AM NAPM release, as well as the disposition of the Fed's expiring 5.25B overnight repo.

Jonathan Levinson : 7/29/2005 9:52:01 AM

Michigan sentiment 96.5 vs. 96.5 exp.

Linda Piazza : 7/29/2005 9:51:30 AM

SOX doing nothing, sitting near its open.

Linda Piazza : 7/29/2005 9:51:12 AM

RLX bouncing again.

Linda Piazza : 7/29/2005 9:50:48 AM

Wilshire 5000 moving up again. Watch yesterday's 12,450.65 high for possible resistance, and then the 12,465 level, the level of the top of a fitted retracement bracket. It's attempting to break out on its two-hour chart, but needs a two-hour close above a line currently at 12,446.10 to do so. It's just above that line now, at 12,446.67, but will carry the line higher with it somewhat as it moves higher. There are some signs that the Wilshire 5000 should pull back soon, but "should" and "will" are not the same words.

Jonathan Levinson : 7/29/2005 9:47:35 AM

Consumer sentiment delayed.

Linda Piazza : 7/29/2005 9:47:23 AM

SOX bounced back from its attempt to move higher first thing and has now bounced up from its attempt to move lower, creating a long-legged first 15-minute candle. Indecision as yet.

Jonathan Levinson : 7/29/2005 9:46:46 AM

Headlines:

SNOW SAYS U.S. ECONOMY ON GOOD PATH

SNOW SEES CONTINUING ECONOMIC STRENGTH THROUGHOUT 2005

SNOW SAYS CHINA CURRENCY REVALUATION GOOD FOR ECONOMY

Jeff Bailey : 7/29/2005 9:48:53 AM

Hanover Compressor (HC) $14.26 +0.07% ... 5-MRT Blue #6 $14.59.

Bid/ask on those Aug. $12.50 Calls (HCHV) is $1.75 x $2.00. I won't pay $2.00 + $12.50 = $14.50.

Linda Piazza : 7/29/2005 9:45:31 AM

Big drop in the RLX this morning, at least in comparison to recent 15-minute candle sizes. It's far from dropping below the 479 level that confirms a drop below the support of its broadening formation on its 60-minute chart, though. It's at 487.07 as I type. A big drop--bigger than this one--in the RLX has been one thing I've been waiting to see before I'd be willing to believe that too much retracement would be possible in the OEX.

Jeff Bailey : 7/29/2005 9:44:24 AM

BBC - London Police Believe Oval Bomb Suspect Caught.

Jonathan Levinson : 7/29/2005 9:42:26 AM

VXO 9.74, VXN 12.99

Jonathan Levinson : 7/29/2005 9:42:04 AM

Volume breadth -1.16:1 on the NYSE, -1.23:1 on the Nasdaq.

Linda Piazza : 7/29/2005 9:41:20 AM

The RUT opened slightly lower, punched to a new high, and now has dropped back, but is still above its open. It's at 682.52 as I type, trying to bounce up to retest the day's high again.

Linda Piazza : 7/29/2005 9:40:09 AM

TRAN turning down slightly today, too, but like the Wilshire 5000, still within a possible bull-flag formation.

Linda Piazza : 7/29/2005 9:39:28 AM

Wilshire 5000 lower this morning, but still within a possible bull flag shaped pullback. if it drops much further than its current 12,430.22 level, though, it will drop out of that flag.

Linda Piazza : 7/29/2005 9:38:25 AM

Bears want the OEX to maintain 15-minute closes beneath the Keltner line currently at 577.30. Bulls want closes above that, or at least above next support from 575.94-576.45.

Linda Piazza : 7/29/2005 9:37:40 AM

SOX got knocked back from its 475.45 HOD, and is now at 473.65 and still falling. Needs to fall below 470.40 or so to break to the downside out of the consolidation pattern that's held for a couple of days.

Jonathan Levinson : 7/29/2005 9:37:36 AM

QQQQ breaks the premarket lows, closing a bearish divergence in the short cycle indicators, which are rolling over here as price breaks below the daily pivot. Link

Jeff Bailey : 7/29/2005 9:37:16 AM

Hanover Compressor (HC) $14.18 -0.49% ... opening 5-minute bar was $14.25-$14.17. Has Red #4 at $13.99.

Linda Piazza : 7/29/2005 9:36:38 AM

The BIX is slightly lower as I type. Not much, though, and staying just above the 200-sma, with the BIX at 365.02 and the 200-sma at 364.60.

Linda Piazza : 7/29/2005 9:35:14 AM

The SOX opened slightly lower, but climbs now, again toward the 475.03-ish top of its recent consolidation pattern and, if it gets past that, toward 476 next resistance. It's at 474.9 . . . no, shot higher as I typed, up above 475, and now drops back to 474.80. Testing that resistance.

Linda Piazza : 7/29/2005 9:33:16 AM

Just benchmarking impressions. The advdec line obviously opened low enough to erase its breakout signal. It has, however, already hit the five-minute lower channel boundary, so a bounce or steadying in the advdec line might be expected, perhaps during the first retracement of the day?

Jonathan Levinson : 7/29/2005 9:33:03 AM

Don't forget Michigan Sentiment at 9:45, est. 96.5, and at 10AM, Chicago PMI, est. 55.

Linda Piazza : 7/29/2005 9:31:53 AM

The OEX continues downward after failing to breakout again yesterday during the last 15-minute period. OEX 575.93-576.43 are next potential support.

Jeff Bailey : 7/29/2005 9:18:04 AM

Program Trading Levels ... HL Camp & Company has their computers set for program buying at $+3.46 and set for program selling at $+1.54.

Jonathan Levinson : 7/29/2005 9:11:14 AM

Session lows across the board, QQQQ to 39.86, but on low premarket volume. 30 and 60 min channel support are lined up at 39.73. The 60 min cycle appears to be cresting just below overbought, after yesterday's sideways-upward drift. The 30 min cycle oscillators still point up, but at a lower high against the higher price high. Below daily S1 at 39.80, that setup should crystallize into a bearish divergence, but it will take a break of the channel bottom at 39.73 to confirm a new downphase.

Linda Piazza : 7/29/2005 9:08:59 AM

European markets dropping out of their consolidation patterns now, with the DAX actually going negative, but by less than a point so far.

Linda Piazza : 7/29/2005 9:08:10 AM

The OEX had a strange day yesterday. Early in the morning, it created a breakout signal, but I warned readers that the risk vs. rewards of playing such an upside breakout didn't seem good to me, and that I wouldn't be recommending nor participating in such a play. All day, the OEX stair-stepped higher, creating and then erasing breakout signals. By the end of the day, the OEX had closed 2.46 points above the open, but had just more soundly broken below its breakout signal, only to rise to test it again at the close. It closed right beneath that signal. So, those who bought calls right at the open and sold right at the close might actually have profited, but that depends on how expensive options were at the open, how much participants could shave off the spread, and other factors. I didn't follow the options prices because I didn't think it a great trade. A fitted Fib bracket suggests that 579 is possible, as does the current upside target on another breakout, with that target at 579.21. I just don't know how much I believe in that target being met, however. Keltner support is thinning beneath the OEX, and I could see another fall through to 575.90 or so and maybe even to 575.10-575.60. Another 15-minute close above the Keltner line currently at 577.65 reinstates that upside target, though, but you again won't find me participating or recommending such a play. With the OEX's suspect action, I'll be looking for signs of a rollover, but there haven't been such signs yet. I warned yesterday morning that they hadn't yet appeared, and I was right about that. Now let's see if anything appears today. I think, given the strength of the markets, though, such a rollover might be a better watch-and-see-how-it-behaves move than one that would be a good idea to participate in to the downside. If markets are going to really retrace, we need to see a strong downdraft followed by a failed retest of former support. Until then, we have to presume that the general market uptrend remains intact, although the OEX has been about as trendless as it's possible to be over the last week or two.

I'm watching the Wilshire 5000, perhaps topping out or within 20 or so points of topping out over the short-term according to a two-Keltner chart and a fitted Fib bracket, and the RLX, rising yesterday to challenge the top of a broadening formation, but not quite touching it. If the RLX were to break strongly through 490 and sustain values above that, I'd find it hard to believe that the OEX would retreat too far. If the RLX were to drop steeply, especially if it were eventually to break through the 479-ish bottom of its broadening formation, I'd believe that the OEX was ready (and probably already showing signs of) a real retracement. I'm watching the SOX, and particularly now the 476 level, the site of a descending trendline off last week's high. A strong move above that, and then confirmation by a move above 477 and then above last week's 480.30 high would convert what looks like a possible H&S on the 60-minute chart into a possible bull flag with resistance broken to the upside. I'm watching the TRAN, testing last week's and December's intra-week highs and March's closing weekly highs. Is that weekly formation a broadening one, a rectangular one with a few spikes outside the rectangle, or a continuation-form inverse H&S still lacking a right shoulder? That's still to be seen, but a sustained (the TRAN moves fast and sometimes overruns targets) break outside the formation, either way, should be meaningful. Market bears or just bulls looking for better entries into these runaway markets want to see a TRAN pullback today, and a strong one. Barring that, they want to see action that turns the weekly candle into a doji at the top of the last climb, as the TRAN often honors those weekly doji candles with a decline.

The advdec line's Keltner chart suggests that there could again be some follow-through, as there was yesterday morning. However, if the advdec line gaps lower, below about 2090, that further follow-through first thing this morning might be in question. Bulls are still buying dips so far. Any dips. Even precipitous ones. And it's worked for them, so why not? Until it stops working, I can't see a reason that bulls will stop trying, but this increasing volatility now speaks of a possible change in the markets, one way or another--either another strong burst higher or a stronger downdraft. Maybe all strong rallies have strange components, such as the failure of the generals to participate and abnormally low volatility measures, but some of those signs still trouble me since something doesn't feel right.

Jane Fox : 7/29/2005 8:58:32 AM

Dateline WSJ The U.S. economy slowed a bit during the second quarter, restrained by a trimming of inventories by businesses that could lead to stronger growth this summer.

The Commerce Department said Friday that its advance reading on gross domestic product showed the economy expanded at a 3.4% annual rate in April through June, matching the median estimate of 22 economists surveyed by Dow Jones Newswires and CNBC. A revision will be issued in a month.

Inventory reductions weighed down GDP, the broadest measure of all goods and services produced in the economy. Businesses cut their stocks by $6.4 billion after elevating them by $58.2 billion in the first quarter. That drop shaved 2.32-percentage-points from second-quarter growth. In contrast, the first-quarter inventory accumulation added 0.29 percentage points to GDP.

Inventories held by U.S. businesses had gotten too heavy because the pace of production eclipsed demand. Recent data show manufacturing inventories were flat in May and April. Car dealers stuck with too much stock cleared their lots thanks to steep discounting.

Jonathan Levinson : 7/29/2005 8:49:54 AM

August gold is breaking 429 resistance here, +1.80 at a session high of 429.20, the first probe above 428-429 for this daily cycle upphase. QQQQ is back to its pre-GDP levels, currently +.03 at 39.94. The pre-GDP spike reached 40.00 for a moment before doji-ing back down. 30 and 60 min channel resistance line up at 40.00, 72 SMA support at 39.89.

Jonathan Levinson : 7/29/2005 8:43:21 AM

Ten year notes printed a low at 111 15/32 and are currently up 1/32 off the low, while TNX is back above 4.2%, currently +1.8 bps at 4.214%.

Linda Piazza : 7/29/2005 8:43:21 AM

The FTSE 100, CAC 40, and DAX have responded by dropping to the bottoms of today's consolidation patterns, with the FTSE 100 perhaps dropping a little below the bottom, but that's about it for a reaction so far.

Linda Piazza : 7/29/2005 8:36:52 AM

I couldn't sleep last night and watched CNBC Europe for a couple of hours, beginning about 3:30 EST, and commentators and guests there were thinking along the lines of much higher numbers for GDP, with whisper numbers all the way up to 4.0%.

Jonathan Levinson : 7/29/2005 8:35:37 AM

GDP 3.4% vs. 3.5% exp., prior unrevised at 3.8%.

Jonathan Levinson : 7/29/2005 8:32:56 AM

Session low for ES at 1246.75, QQQQ down to a 1 cent gain at 39.92 here. Bonds are weakening, but the reaction appears muted across the markets so far.

Jonathan Levinson : 7/29/2005 8:32:20 AM

Chain deflator 2.4% vs. 2.6% exp, prior revised up from 2.9% to 3.1%.

Jonathan Levinson : 7/29/2005 8:31:34 AM

Headlines:

U.S. 2Q CORE PCE PRICE INDEX UP 1.8%

U.S. 2Q CONSUMER SPENDING UP 3.3%

U.S. 2Q BUSINESS INVESTMENT UP 9%

U.S. 2Q INVENTORIES SUBTRACT 2.3% FROM GDP

U.S. Q2 EMPLOYMENT COST INDEX UP 0.7% VS. 0.8% EXPECTED

U.S. 2002-04 GDP REVISED LOWER TO 2.8% VS. 3.1%

U.S. 2002-04 CORE INFLATION REVISED TO 1.7% VS.1.4%

U.S. GDP REVISIONS SHOW WEAKER IT INVESTMENT 2002-04

U.S. 1Q GDP UNREVISED AT 3.8%

Jonathan Levinson : 7/29/2005 8:22:09 AM

Ten year note futures are now down 1/16 at 111 39/64, and TNX is quoted +.6 bps at 4.206%. Gold is holding a low at 427, QQQQ a gain at 39.95, with crude oil +.45 at 60.40, off a high of 60.575.

Jonathan Levinson : 7/29/2005 7:56:54 AM

Headline:

REPORTS OF SMALL EXPLOSIONS IN WEST LONDON: SKY

More at this Link .

No reaction from the futures.

Jonathan Levinson : 7/29/2005 7:19:54 AM

Equities are up, with ES trading 1248, NQ trading 1628.5, YM 10729 and QQQQ +.06 at 39.97. Gold is down 30 cents to 427.10, silver -.023 to 7.178, ten year notes -5/64 to 111 9/16 and crude oil is up .425 to 60.375.

We await the 8:30 release of the Q2 GDP, est. 3.5%, Chain Deflator, est. 2.6%, Employment Cost Index, est. .8%, then at 9:45, Michigan Sentiment, est. 96.5 and at 10AM, the Chicago PMI, est. 55.

Linda Piazza : 7/29/2005 7:01:41 AM

Good morning. The Nikkei showed much volatility early in its overnight session, then settled into straight-line mode near the middle of its day's range. Other Asian markets were mixed. European markets gain although they've been trading sideways to sideways-up all day, in a waiting mode as they digest multiple economic and earnings reports and ahead of our earnings reports. Our futures are mildly positive, above fair values. As of 6:46 EST, gold was down $0.30, and crude, up $0.46 to $60.40. More detail about Asian and European markets follows in succeeding paragraphs.

Our markets aren't the only ones showing some volatility lately. With a chart that ended up looking remarkably like our SOX's over the last few days, the Nikkei did some moving around early in the trading session and then steadied into a sideways movement. The Nikkei opened above 11,900, creating a new buy signal on the P&F chart, climbed for a few minutes, but then started dropping, heading down into negative territory and hitting a low almost 90 points below the high. It then retraced about 3/4 of its range and then spent the rest of the day oscillating around 11,880, only to see a burst of buying in the last few minutes. It ended the day higher by 41.29 points or 0.35%, at 11,899.60.

Crude was rising and the yen was firming against the dollar, but a number of other factors were at work, too. June's industrial production for Japan rose a seasonally adjusted 1.5% from May's number, with a recovery in electronics parts production helping to account for the rise. This was an in-line number and was rebounding from May's deep 2.3% drop. June's nationwide CPI declined 0.2% year over year with the core rate declining 0.2% year over year. Both numbers were in line with expectations. Also reported Friday was June's unemployment rate, dropping 4.2%, and spending by households headed by a salaried worker, dropping 1.4% from May's number and 0.8% year over year. The unemployment number surprised to the upside, but the spending number disappointed. Companies reporting earnings impacted Japanese bourses, too. Consumer-electronics manufacturer Matsushita Electric Industrial raised its forecast for profit for the first half of the year, ending in September, and gained in early trading, closing higher by 3.27%. Mitsubishi Tokyo Financial Group Inc., one of Japan's largest banks, reported higher first-quarter profit and led banks higher. Sony cut its full-year profit forecast almost 90%, noting that a decline in prices for consumer electronics led to that action and may prompt more cuts. J.P.Morgan Chase & Co. cut the company's rating Friday morning, and, during the morning session, Sony had dropped to its lowest price this year. It closed lower by 4%. Kyocera, the world's largest manufacturer of ceramic packaging for chips, disappointed when it reported that first-quarter profit dropped 61%, and it closed lower by 3.41%.

Most other Asian markets climbed with a few exceptions. The Taiwan Weighted was one of those exceptions, declining 1.00%. South Korea's Kospi rose 0.59%, and Singapore's Straits Times climbed 0.42%. Hong Kong's Hang Seng gained 0.43%. A Hong Kong newspaper speculated today that China's CNOOC would withdraw from its attempt to acquire Unocal because of pressures from the U.S. administration, with this speculation occurring amid other rumors that it would raise its offer, according to one news source. That same source reports that an unnamed Chinese advisor has claimed that there will be additional steps to the unpegging of the yuan, a claim that has recently been denied by other Chinese officials and was again today. China's Shanghai Composite fell 0.32%.

European markets are positive, although trading sideways to sideways-up in a holding pattern ahead of our economic reports. Speculation in Europe is that the U.S.'s GDP number will surprise to the upside, with CNBC guests and commentators noting that this rumor of an upside surprise has been driving some gains in the U.S. and Europe. A number of economic releases are being weighed, too. Germany's June retail sales declined 0.3% month over month, but against a revised-higher May number. Yearly growth fell to 1.9% from the previous 3.0%. The second quarter's retail sales are now presumed to be 0.9% lower than the first quarter's, and some now speculate that the private consumption will not provide the hoped-for boost to the second-quarter's GDP. In France, June's unemployed declined 28,000 and the unemployment rate fell to 10.1% from the previous 10.2%. The Finance Ministry sees improvement but noted that the fight for jobs would likely continue. July's Consumer Confidence in France was at a -30, slightly better than expected, but unchanged from the previous month's number. A little later than these releases, the Eurozone's preliminary July CPI was released, rising 2.2% year over year, with energy prices responsible for pushing the number above the target maximum high of 2%. Despite concerns about the impact of energy costs, the Eurozone's July Commission Sentiment Survey rose to 97.3. The business climate survey rose to -0.07 from the previous -0.27. Industrial sentiment, services and construction all also rose, while retail sentiment dropped and consumer confidence remained flat. This showed that business optimism remains stronger than consumer optimism.

Also in the news in Europe and much discussed on CNBC was a statement by the London Stock Exchange concerning the bidding war going on to acquire the company. Concerns about regulatory issues were voiced by the U.K.'s Competition Commission, concerns that most felt could be resolved, and LSE issued a statement that noted the exchange's ability and eagerness to act as an independent entity, but also its willingness to consider bids of benefit to its stockholders, with the wording of the statement clearly slanted toward the company's desire for a merger than to be acquired.

Although crude was above $60.00 as European markets began trading, perhaps partly in response to a Texas City refinery fire yesterday, and there was some concern about the impact of those higher costs, indices posted gains again. Oil majors were gaining as a result of higher crude and a JP Morgan upgrade of Shell, but so were automobile stocks, at least in Germany. These gains came after DaimlerChrysler collected upgrades from Lehman Brothers and CSFB after yesterday's report and Volkswagen reported earnings that cheered investors. That Volkswagen report included operating profit that climbed 62% in the first half of the year. Miners gained. Many utilities rose in early trading due to news and earnings reports, with French water utility Veolia Environnement's report pleasing investors and Germany's industrial gases and engineering company Linde's signing of a contract with some employees and a metal workers union pleasing its investors. British insurance company Royal & SunAlliance gained after it noted its intention to sell its U.S. auto business, Viking Insurance, to Sentry Insurance. Business Objects added to the positive sentiment, soaring higher by 12% in early trading after yesterday's after-the-bell earnings beat expectations. EADS was upgraded by Goldman Sachs and was gaining in early trading. In reply to EADS' comment that its outlook for the rest of the year for Airbus was cautious, GS's countered with the suggestion that the second half really couldn't be much weaker and that investors were often not paying enough attention to EADS' non-Airbus activities. Not all broker action and earnings results were positive today, though, as BT group fell after Goldman Sachs downgraded it, and British bank Lloyds TSB Group and insurer Friends Provident both fell after their earnings reports.

As of 6:40 EST, the FTSE 100 was higher by 36.30 points or 0.69%, at 5,306.60. The CAC 40 was higher by 17.50 points or 0.39%, at 4,479.76. The DAX was higher by 15.53 points or 0.32%, at 4,908.03.

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