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Jeff Bailey : 8/11/2005 2:02:27 AM

S&P Banks Index (BIX.X) 354.33 was down 1.88 points today, or -0.52%. Here's the conventional 5-point box. Another "sell signal" would be found on a trade at 340, while a reversing higher "buy signal" would be found at 375.

5-points too "big?" OK, change your box size to 2.5-point and bring in some noise, or a little more action at this Link ... Now, here's why I've had to discuss "yield" again. We've been through this before, but it keeps being brought up and can be very misleading. In DECEMBER (red C) the 10-year yield ($TNX.X was right around these current levels of 4.40%.


12/14/04 raised FF 25 bp to 2.25%, 02/02/05 raised FF 25 bp to 2.50%, 03/22/05 riased FF 25 bp to 2.75%, 05/03/05 raised FF 25 bp to 3.0%, 06/30/05 raised FF 25 bp to 3.25%, 08/09/05 raised FF 25 bp to 3.50%.

Now..... imagine you're a bank, you borrow at any of the above FF rates, but are now borrowing from the Fed at 3.50%. The RATE OF INTEREST YOU ARE THEN LOANING TO YOUR CUSTOMERS is likely somewhere around the 10-year YIELD.

So... since the 10-year YIELD ($TNX.X) is right around the same YIELD as it was in December do you see how the SPREAD between Fed Funds (FF) and current 10-year YIELD ($TNX.X) has narrowed? What does that do to your MARGINS? Forget for a moment how many loans you are generating from customers.

Do you see how trading the major indices off of any "yeild" can be dangerous when you leap to conclusions?

Not just "short the major indices as long as yield stays above 4.25%, or the bla-bla-simple moving average.

What if somebody said just the opposite? "go long the major indices should the 10-year yield fall below 4.25%, or the bla-bla-simple moving average.

Here's a daily interval bar chart of the 10-year yield ($TNX.X) at this Link ... remember my "refinance your mortage now al_rt" when the 10-year spiked down to 3.803% on 06/03/05 at 10:09:15?

Believe it or not, traders and investors NEED TO THINK about what goes on when houses are refinanced or business loans are consumated at various rates of interest that are TIED TO THE BOND MARKET'S yields!

Jeff Bailey : 8/11/2005 1:14:25 AM

Banks Bullish % (BPBANK) chart from www.dorseywright.com at this Link ... sector reversed up to "bear correction" status on 07/07/2005.

Now here is Dorsey's weekly distribution bell curve at this Link

Jeff Bailey : 8/10/2005 11:46:38 PM

Last 3 weeks Pivot Matrix found at this Link ... This evening I made a comment that the BIX.X has NOT traded a WEEKLY R1 since the week of 07/11-7/15 when it traded a WEEKLY R2 of 370.36.

I see some of these 4.25% (42.50) levels for the 10-year YIELD ($TNX.X)

Jeff Bailey : 8/10/2005 11:28:35 PM

Pivot Matrix for tomorrow at this Link

Jeff Bailey : 8/10/2005 10:53:10 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Stopped out of the remaining 1/4 bullish position in shares of Cisco Systems (CSCO) at the bid of $18.70 ($-0.53, or -2.76%).

Swing trade bullish call two (2) of the Wellpoint WLP Dec. $75 Call (WLP-LO) at the offer of $3.40. Targeting the $83.86-$85.72 area.

Day traded short the QQQQ at $39.40 and while targeting $39.10, was watching closely and closed out at $39.04, just prior to test of WEEKLY S2.

Swing trade bearish put three (3) of the Newmont Mining NEM Sep. $37.50 Puts (NEM-UU) at the offer of $0.50. A quick decline to $37.50 would be a target.

Jeff Bailey : 8/10/2005 10:02:49 PM

No, no, no James Cramer!!!!! ... I was just listening to James Cramer talking about options and him saying something like "options are risky, but they offer potential reward that is many times the risk. However, if you can't take the RISK, the sell, sell, sell and stick with the common stock."

I know what Mr. Cramer is trying to say, but it all comes down to POSITION SIZE and NOT overleveraging!

If you can convince me it is LESS RISKY to buy or short 300 shares of Coca Cola (KO) $43.90 (that's $13,170 of capital) than it is to BUY 3 calls for $1.00/contract (that's $300.00) or BUY 3 Puts for $1.00/contract then I'll listen.

If a trader/investor were to use a 10% stop on a $13,170 investment, then even that is $1,317.00 of RISK (if you don't get gapped).

I'm sure Mr. Cramer was talking about traders/investors that would overleverage and BUY $13,170 worth of options, but that's not proper account management.

OI Technical Staff : 8/10/2005 9:59:59 PM

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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 : 8/10/2005 5:55:24 PM

Closing U.S. Market Watch found at this Link ... 5-year yield ($FVX.X) is up 11.0 bp last 5-days, 10-year yield ($TNX.X) is up 10.4 bp last 5-days, 30-year yield ($TYX.X) up just 7.5 bp last 5-days. Curve steepend a bit today, but an unbiased observation would have the SPX.X falling from the 1,240 level, just as Crude Oil cracked to new highs.

The S&P Banks Index (BIX.X) 354.33 -0.52% has NOT traded a WEEKLY R1 since the week of 07/11-07/15.

Jeff Bailey : 8/10/2005 5:11:41 PM

Closing Internals found at this Link ... Note: Today's closing trade finds the NASDAQ's 10-day NH/NL ratio reversing lower by 3-boxes after reversing up at 25.00% on May 9.

Jeff Bailey : 8/10/2005 4:42:31 PM

Hanover Compressor (HC) $14.64 +0.61% ... said late yesterday it priced 11.44 million shares at $14.25 each. Underwiters hav an option to buy an additional 1.7 million shares to cover any overallotments. Shares of HC traded 5.94 million shares in Wednesday's action.

Jeff Bailey : 8/10/2005 4:31:25 PM

Weekly EIA spreadsheet found at this Link

Jeff Bailey : 8/10/2005 4:26:40 PM

Imperial Oil raises its purchase price for benchmark 40-degree gravity light crude oil by C$9 a cubic meter to C$506 a cubic meter. In terms of barrels, the company offering up to C$80.46 a barrel. The new purchase price indicates an export price delivered to Chicago of about $67.80 a barrel after considering transportation and import charges and foreign exchange rates.

Jeff Bailey : 8/10/2005 4:11:29 PM

Gateway (GTW) $3.87 -1.77% ... delays quarter report.

Jonathan Levinson : 8/10/2005 4:08:15 PM

QQQQ is printing above the 72 SMA for the first time since breaking below it at noon, the short cycle in an upphase here. The 30 min and 60 min cycle indicators are still above oversold territory, still synchronized with the daily and weekly downphases. Below 39.20-.22, the bias remains to the downside on an intraday basis- so far, the bounce is only on the short cycle indicators. Above 39.22, the 30 min cycle should turn up.

Jeff Bailey : 8/10/2005 4:02:32 PM

Buy Program Premium ... DIA $106.12, SPY $123.19

Linda Piazza : 8/10/2005 4:00:27 PM

It's messy, but here's an OEX daily chart showing what I see: That long-term horizontal resistance band held, and today the OEX was slapped back after a test of that band. The OEX remains within a broadening formation (although it's also possible to draw a rising regression channel off the April low), but that resistance is holding. The OEX even fell back from the rising trendline under the consolidation pattern over the last few weeks, so that we've had a retest of that trendline going on for the last couple of days, and it's failing. However, remember from the Keltner chart, I've been saying that it's possible that the OEX could chop around either between 569-574 or 565-569, so although we had a higher push, the daily chart is still essentially showing chop between 569-574. I personally believe the OEX is vulnerable to its 200-sma, following the BIX's example, but the RLX could prop it up if it decides to zoom higher, so watch for a break below the 50-sma and Monday's low as a suggestion that the 200-sma might be tested. Link

Linda Piazza : 8/10/2005 3:51:23 PM

OEX testing Keltner resistance at 571.50, with the OEX at 571.10.

Linda Piazza : 8/10/2005 3:50:04 PM

Despite the Keltner-style bullish divergence that existed at the time the SOX set a downside target at the lower Keltner line on its 15-minute channel, the SOX hit that Keltner line. It's currently at 465.31. The SOX appears to be setting up a possible bear flag in which it might climb to retest 467.31 and 468.17-468.68 resistance. Bears want that to continue to look like a bear flag as it climbs, especialy as the SOX fell to test Monday's low and is trying to climb from there.

Jeff Bailey : 8/10/2005 3:48:02 PM

Newmont Mining (NEM) $39.81 +1.42% ... was trading $39.78 at time of bearish profile.

Linda Piazza : 8/10/2005 3:41:34 PM

OEX trying to steady at 570 historical support. It's testing Keltner resistance at 570.85 on 15-minute closes, but until it produces closes above that, it remains vulnerable to 567.80. Bears want resistance here or at the Keltner line currently at 572.26.

Jeff Bailey : 8/10/2005 3:41:10 PM

Swing trade put alert ... let's take three (3) of the Newmont Mining NEM Sep. $37.50 Puts (NEM-UU) at the offer $0.50.

Disclosure: I currently hold a bearish position in NEM.

Jonathan Levinson : 8/10/2005 3:28:16 PM

QQQQ retests 39.10 again from its lower low, bouncing on a surge in volume. Link

Jonathan Levinson : 8/10/2005 3:27:23 PM

VXO 11.88, VXN 15.79

Linda Piazza : 8/10/2005 3:21:58 PM

Benchmarking impression: the advdec line certainly now looks vulnerable to -2000 and, in fact, -2100. I don't know if it can get there this afternoon, but it's trying!

Jonathan Levinson : 8/10/2005 3:21:56 PM

Next confluence is in the 38.80 area for QQQQ if 39 lets go. The 30 and 60 min cycles continue to point south, not yet approaching oversold territory.

Linda Piazza : 8/10/2005 3:20:28 PM

SOX also inching below the neckline of its H&S, with that neckline perhaps at yesterday's low. These violations are minimal as yet, but this hasn't been a good day for bulls, and I hope you took steps to protect your profits. Now bears need to be aware that these minimal violations of the necklines remain small and that bounces could still occur. I think they'll probably now be bounces to short, but . . .

Jonathan Levinson : 8/10/2005 3:18:06 PM

Volume breadth -1.07:1 on the NYSE, -2.42:1 on the Nasdaq, a big intraday reversal from higher price highs on heavier volume, QQQQ already 17M shares above yesterday's 64M closing total.

Linda Piazza : 8/10/2005 3:17:59 PM

RUT inching below that H&S neckline as I type, down to test the important 2-hour 100/130-ema's, at 653.50 and 648.06, respectively.

Linda Piazza : 8/10/2005 3:16:47 PM

The OEX has now set a downside target of 567.90, as long as it maintains 15-minute closes beneath 571.03-571.24.

Jeff Bailey : 8/10/2005 3:16:26 PM

Bearish swing trade close out alert ... let's close out that 1/2 bearish position here at $39.04 in the QQQQ.

Jeff Bailey : 8/10/2005 3:14:33 PM

03:00 Internals found at this Link

Jonathan Levinson : 8/10/2005 3:08:02 PM








Jonathan Levinson : 8/10/2005 3:06:38 PM

Big surge in volume at the lows, volume breadth faling to -2.13:1 for the Nasdaq, +1.19:1 for the NYSE. 39.20-.22 QQQQ becomes resistance.

Jonathan Levinson : 8/10/2005 3:03:36 PM

QQQQ tests Monday's lows here, 30 min channel support down to 39.10: Link

Jeff Bailey : 8/10/2005 3:03:14 PM

03:00 Market Watch found at this Link

Linda Piazza : 8/10/2005 3:02:18 PM

The SOX is setting a 464.37 downside target on its 15-minute Keltner chart. Watch Monday's 465.32 LOD for possible support. SOX at 467.47 as I type.

Jeff Bailey : 8/10/2005 3:00:54 PM

TRIN 1.01 +62.90% ...

Jeff Bailey : 8/10/2005 2:59:46 PM

S&P Banks (BIX.X) 354.34 -0.52% ... probing Monday's lows.

Jeff Bailey : 8/10/2005 2:57:31 PM

SPX with WEEKLY/MONTHLY Pivot retracement at this Link on 15-minute time intervals.

Jonathan Levinson : 8/10/2005 2:57:15 PM

In addition to the 5.5B overnight repo announced this morning, the Fed also added a bill pass of 1.244B, announced later in the morning. I missed the bill pass- the total is 3.244B added today. But the bill pass, essentially a permanent repo, adds to reserves on a permanent basis- packing more of a "punch" than a temporary repo.

Jeff Bailey : 8/10/2005 2:51:05 PM

SPX/SPY ... 1,232.19 , 123.44

Jonathan Levinson : 8/10/2005 2:50:12 PM

Volume breadth +1.54:1 on the NYSE, -1.56:1 on the Nasdaq.

Jeff Bailey : 8/10/2005 2:49:54 PM

VIX.X 12.24 -1.29% ... updated 15-min interval chart with QCharts' WEEKLY Pivot Levels at this Link

Linda Piazza : 8/10/2005 2:48:42 PM

Advdec line is trying to bounce from that Keltner support level.

Linda Piazza : 8/10/2005 2:40:01 PM

Benchmarking impressions: the advdec line is testing Keltner support that has held all week, and threatens to fall below it. If it doesn't hold near the 300-ish level and goes negative, then -2040 looks possible. For now, allow for the possibility that this will hold, though, and rise again.

Jonathan Levinson : 8/10/2005 2:39:13 PM

QQQQ's short cycle indicators are gathering in oversold territory, the current low 6 cents above Monday's lows. But both the 30 and 60 min cyle downphases are still in their early stages, and have plenty of room to run so long as price holds below that 39.35 confluence zone. Link

Linda Piazza : 8/10/2005 2:32:34 PM

OEX still only creeping down toward 571.50, rather than tumbling toward that Keltner line, as some other indices have done.

Jonathan Levinson : 8/10/2005 2:31:03 PM

Crude oil finished +1.85 or 2.93% at 64.925, .025 off the session high.

Linda Piazza : 8/10/2005 2:30:15 PM

An update of the RUT's 2-hour chart. Careful, RUT bears, as the right shoulder looks awfully stunted in comparison with the left. That may be the bulls just giving up, but there's the possibility of another bounce as the neckline level is tested or else after it's minimally broken and those 240-minute 100/130-ema's are hit. Want the neckline to hold as resistance if that latter possibility occurs: Link

Jeff Bailey : 8/10/2005 2:34:43 PM

QQQQ Option Chain sorted by most active at this Link ... Intra-day observation would show that the QQQQ Sep $40 puts were active just after 11:00 AM EDT at $0.85 and then again just after 12:00 PM EDT at $0.85. VXN.X edged below its DAILY S2 just after 11:00 AM EDT and made session low. VXN.X at DAILY Pivot 15.49 as I type, so be cognizant of PUT SELLER.

Jonathan Levinson : 8/10/2005 2:29:10 PM

Crude oil at 64.95 now, a new high with one minute to go.

Jeff Bailey : 8/10/2005 2:27:33 PM

Sell Program Premium ... DIA $106.25, SPY $123.25, QQQQ $39.21

Linda Piazza : 8/10/2005 2:27:32 PM

SOX testing 468.94 Keltner support on a 15-minute closing basis. A drop much below 468 is going to invalidate the potential inverse H&S, something that market bulls don't want to see happen, especially after that little fake-out move above the neckline this morning. The SOX's failure to lead or even follow at a close distance to the other gaining indices was one sign this morning, along with excessive advdec levels, that all was not right with the bounce.

Jonathan Levinson : 8/10/2005 2:26:27 PM

QQQQ tests S2 at 39.22: Link . 1st sign of trouble for bears will be a break above 39.32-.37, which is immediate confluence and repelled the last bounce attempt.

Jonathan Levinson : 8/10/2005 2:24:19 PM

Session high for crude oil at 64.625, +1.55, with 7 minutes left in the session, heading for a new record high close.

Linda Piazza : 8/10/2005 2:20:55 PM

The OEX pulled up just under the Keltner support that it had just violated and hasn't yet dropped to the 571.64 level that is its next Keltner support. It continues to look stronger on a Keltner basis than some other indices, such as the SOX, with the SOX hitting its congruent Keltner line a few minutes ago.

Linda Piazza : 8/10/2005 2:18:08 PM

Benchmarking impressions: advdec line now approaching support that has held all week, now at 323.56-387.02, with the QCharts-version of the line at 696. A 15-minute close beneath that support could see a steeper drop, down toward -2000, and that would be a real change in tenor for the week, but for now, perhaps we ought to allow for the possibility that the advdec line will at least attempt to stabilize, if not move higher. Don't trade on this information.

Jeff Bailey : 8/10/2005 2:15:48 PM

02:00 Internals found at this Link

Jonathan Levinson : 8/10/2005 2:15:43 PM

Crude oil +1.275 at 64.35, not backing down. Current high is 64.60.

Jonathan Levinson : 8/10/2005 2:14:40 PM

Volume breadth +1.74:1 on the NYSE, -1.42:1 on the Nasdaq. Bifurcated.

Linda Piazza : 8/10/2005 2:13:26 PM

SOX testing 469.10 Keltner support on the 15-minute chart. There's a hint of Keltner-style bullish divergence as this level is tested, but on a bounce, 473-ish resistance may now be strong. SOX at 469.41 as I type.

Jonathan Levinson : 8/10/2005 2:13:34 PM

QQQQ tests 30 min channel support here at 39.25, just above S2 at 39.22. Link The break below yesterday's low after a higher high sets up a doji reversal and a possible key outside day if the bears can close it below 39.32.

Linda Piazza : 8/10/2005 2:11:42 PM

OEX still testing mid-channel Keltner support, now down to 573.30 on 15-minute closes, but it threatens to move below that. Next support at 571.70. As I warned all morning, today's excessive advdec move suggested that bulls needed to have stops in place. Of course, I also did not participate in the bullish play at all, although I did warn those who were participating to take at least partial profits near the high of the day. Better if I'd reaped some of those gains for myself, too, but that's just not my kind of play.

While I typed away, the OEX lost that support.

Linda Piazza : 8/10/2005 2:08:39 PM

SOX perhaps headed down to that 469.26 next Keltner support level I mentioned earlier. The SOX has historical support near 470, of course, however, so could pull up ahead of a touch of that support. SOX at 470.50 as I type.

Jeff Bailey : 8/10/2005 2:05:20 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 8/10/2005 2:04:49 PM

Session low for ten year notes at 110 5/64, TNX up 1.3 bps to 4.407%.

Jonathan Levinson : 8/10/2005 2:02:53 PM







Linda Piazza : 8/10/2005 2:00:30 PM

Keep in mind that some indices--the SOX, RUT, Wilshire 5000, TRAN, and perhaps some others--are still within the right-shoulder levels for their H&S's. Keep in mind the possibility that these indices could still rattle around a bit and spike here and there above and below the right-shoulder levels before a final direction is decided. This possibility exists until they've either invalidated or confirmed the H&S's visible on 60-minute, 2-hour, or daily charts, depending on the index. So far, all is in keeping with the formation of these H&S's, and I don't deem this action bullish. Not until something changes.

Jonathan Levinson : 8/10/2005 1:59:19 PM

QQQQ 30 min channel support is down to 39.29. GE has reversed its previous gains, now down .21% at 34.08. QQQQ bears want a break below the 39.31 low from yesterday afternoon's low. So far, the bounce failed without violating the daily cycle downphase.

Jeff Bailey : 8/10/2005 1:56:51 PM

Sell Program Premium ... DIA $106.45, SPY $123.61, QQQQ $39.36

Linda Piazza : 8/10/2005 1:56:16 PM

OEX dropped to retest the neckline of its inverse H&S and also the Keltner support from 573.30-574.06. This may be strong enough to prompt a bounce. If so, now that the advdec line has thoroughly erased its breakout signal, bears would want to see resistance at 575.16 hold on 15-minute closes, or, failin that resistance at 576.29. OEX at 574.07 as I type.

Jeff Bailey : 8/10/2005 1:54:42 PM

In my opinion... broader equity market bears DO NOT want to see oil reverse today's gains.

Jeff Bailey : 8/10/2005 1:53:04 PM

10-year Yield ($TNX.X) up 1.3 bp at 4.407% ... its DAILY Pivot too! Almost like an option expiration day.

Jeff Bailey : 8/10/2005 1:52:07 PM

S&P Banks Index (BIX.X) 356.40 +0.05% ... sitting right on DAILY Pivot.

QQQQ $39.40 -0.12% ... just below its DAILY Pivot, and possible "failure" intra-day bounce in the making.

Linda Piazza : 8/10/2005 1:51:47 PM

SOX now looks vulnerable to 469.50. At 471.75 as I type, with that vulnerability remaining until it produces 15-minute closes above 473.48.

Linda Piazza : 8/10/2005 1:50:43 PM

Benchmarking impressions: The advdec line has now broken its bear-flag climb's support, then confirmed by a drop below the support level from which the bear flag rose. It's also dropped into that Keltner support level that I mentioned earlier. If it keeps falling and doesn't steady near 1400, then it looks vulnerable to a test of 312-482. As long as it now remains below about 2360-2630 on 15-minute closes, it's soundly erased its breakout status. Now at 1444 on QCharts.

Jeff Bailey : 8/10/2005 1:50:25 PM

Cisco Systems (CSCO) $18.48 -5.76% ... matching this morning's lows.

Jonathan Levinson : 8/10/2005 1:49:11 PM

Session low for GOOG here at 388.98, GE at 34.14 and ten year notes at 110 3/32. Volume breadth is down to +2.45:1 for the NYSE, -1.23:1 for the Nasdaq.

Jeff Bailey : 8/10/2005 1:47:49 PM

Bearish swing trade short alert for 1/2 position in the QQQQ $39.40 here, stop $39.75, target $39.10.

Linda Piazza : 8/10/2005 1:44:55 PM

Benchmarking impressions: Advdec line now dropping toward that 1414 level (slightly different then) that I noted in my 1:41 post. At 1627 now, on the QCharts version.

Linda Piazza : 8/10/2005 1:43:52 PM

SOX hanging onto Keltner support, at 472.54-473.21 on 15-minute closes, but it's no longer attempting to climb. It's just clinging to support. If it loses this, it looks vulnerable to 469.52. SOX at 472.44 as I type.

Jonathan Levinson : 8/10/2005 1:43:10 PM

QQQQ hit a low of 39.38 and has been unable to regain the 39.50 pivot through the short cycle upphase that followed. Bulls need a break back above the 72 SMA at 39.53 to stall the ongoing 30 min cycle downphase. Link

Jonathan Levinson : 8/10/2005 1:41:32 PM

Crude oil is holding a big gain at new record highs, currently up 1.40 at 64.475, the high 64.55.

Linda Piazza : 8/10/2005 1:41:29 PM

Benchmarking impressions: advdec line may be vulnerable to a deeper decline, perhaps to 1419 or so.

Jonathan Levinson : 8/10/2005 1:40:16 PM

Today's 13B 5-year note auction generated 2.92 bids to each awarded, and a high yield of 4.223% which set a new high for the year. Indirect bidders took 2.7B of the total, at the low end of their range but better than yesterday's weak showing. Ten year notes are negative following the results, TNX up 1 bp at 4.402% here.

Linda Piazza : 8/10/2005 1:39:47 PM

Crude currently $64.40.

Jane Fox : 8/10/2005 1:39:05 PM

Dateline WSJ Iran broke United Nations weapons inspectors' seals on the rest of its uranium enrichment plant in Isfahan, ratcheting up the tension in the global standoff over Iran's nuclear program.

Jeff Bailey : 8/10/2005 1:38:39 PM

10-year yield ($TNX.X) up 0.7 bp at 4.401% and session high.

S&P Banks (BIX.X) 357.07 +0.24% ...

Linda Piazza : 8/10/2005 1:36:12 PM

Failing another precipitous decline, we now just have to wait out the (currently appearing) bear flag climbs to see where they go and when and if they fail. Those climbs aren't anything to encourage bulls yet, but I'm not precluding some spikes here and there today, as I mentioned early this morning.

Jeff Bailey : 8/10/2005 1:33:30 PM

Atari, Inc. (ATAR) $1.38 -37.27% Link ... sets up for critical test of multi-year support after the video-game maker reported a loss of $38.2 million, or $0.27 a share, compared with a profit of $12.1 million, or $0.10 per share in the same period last year. Revenues plunged to $24.2 million compared to $108.1 million last year.

The company added that it has now failed to comply with financial covenants related to its line of credit from HSBC Business Credit, but said it obtained a waiver for the remainder of its fiscal year ending in March.

Linda Piazza : 8/10/2005 1:30:35 PM

At its highest level today, the BIX had spiked up to 358.74, below the 100-sma at 359.31 and the 200-sma at 359.64, but it's been pushed way back down to 356.68. Currently, the BIX is between nearby Keltner support and nearby Keltner resistance. That resistance isn't strong enough to totally preclude another choppy rise to retest resistance, but it does look stronger than nearby support, so that the BIX may be vulnerable to 355.35 or so, but perhaps not until it continues a bit higher in its possible bear flag climb.

Jeff Bailey : 8/10/2005 1:28:09 PM

Barbeques Galore (BBQZ) $9.15 +77.66% ... surges after the company said it will be acquired by Australian private equity firm Ironbridge Capital for $9.91 per share in cash, or $45 million.

Linda Piazza : 8/10/2005 1:18:40 PM

Have we held around at the right-shoulder heights for some of these indices that have potential right shoulders or should there be some more right-shoulder choppiness before final direction is decided? I'm not sure we've had a long enough time building those right shoulders, as they rose high enough but haven't hung near the highs long enough to have any kind of symmetry with the left shoulders. So, this could still be part of the right-shoulder choppiness on indices such as the Wilshire 5000, TRAN, SOX and RUT, among others, but those long, long upper shadows on the two-hour candles sure don't look encouraging to bulls. That could change, of course, especially as some indices are trying to steady and rise to retest Keltner resistance, but that's what shows up now. Bears would like those rises to retest resistance to be choppy, corrective-looking bounces.

Jeff Bailey : 8/10/2005 1:10:09 PM

01:00 Internals found at this Link

Linda Piazza : 8/10/2005 1:08:50 PM

OEX rising to retest 575.71-576.20 Keltner resistance, with bears hoping that resistance holds on 15-minute closes. Next resistance above that at 576.82 and then the 578.13 upside target that would have to be reset by a 15-minute close above 576.20.

Linda Piazza : 8/10/2005 1:07:13 PM

SOX still trying to steady on Keltner support at 473.02-473.22, so a retest of the neckline of that inverse H&S and of Keltner support at 474.50 and then at 475.91-476.48 may still be possible. SOX at 473.99 and rising as I type.

Jeff Bailey : 8/10/2005 1:02:04 PM

01:00 Market Watch found at this Link

Linda Piazza : 8/10/2005 1:01:59 PM

Benchmarking impressions: Getting a retest of the breakout level on the advdec line (QCharts version). Resistance can be found from 2353.5-2770.51, and those hoping the upside is finished want to see that hold as resistance on 15-minute closes. At least, if I had firmly concluded that there's a firm correspondence with the advdec line and these Keltner levels, that's what I'd want to see. Tentatively, I think there could be some correspondence, but that's just tentatively. I'm letting you decide along with me.

Linda Piazza : 8/10/2005 12:59:08 PM

Thanks, D., for reminding me to mention that crude has pressed up to $64.20 currently.

Linda Piazza : 8/10/2005 12:50:09 PM

For a long, long, interminable while we kept seeing H&S formations minimally confirmed and then a zoom up past the right-shoulder and then head levels. Is that going to happen in reverse on the SOX? There was a minimal confirmation of that inverse H&S (bigger regular H&S on the 60- and 2-hour charts) and now prices are back below the neckline again. A drop much below 468, unless quickly reversed, would invalidate the formation, although Monday's low might provide support, too. As the SOX tries to steady at Keltner support near its current 473.52 position, however, it remains possible that there will be another neckline test.

Jonathan Levinson : 8/10/2005 12:47:09 PM

Stepping away for 45 minutes here.

Linda Piazza : 8/10/2005 12:46:40 PM

The SOX has reached 15-minute Keltner support that may be strong enough to prompt a bounce, perhaps back up to retest 474.70 or even 476-476.41 Keltner resistance. Bears want that to fail, if it's retested, while bulls want the SOX to steam through it after this test of support.

However, as I type, even this support threatens to give way. It hasn't quite yet, but if it does, the next target is down at 469.46.

Jeff Bailey : 8/10/2005 12:46:28 PM

Sell Program Premium ... DIA $106.67, SPY $123.69, QQQQ $39.39

Jeff Bailey : 8/10/2005 12:45:37 PM

Networking Index (NWX.X) 222.76 -1% ... CSCO -5.45%, ELX -2.94%, FDRY -2.48%, ADCT -2.06% ... JNPR +1.97%, ALA +0.97%

Linda Piazza : 8/10/2005 12:44:24 PM

Those wanting confirmation of an OEX potential rollover would certainly like to see the OEX bounce back up to retest 576-576.10, but I'm not certain that's going to happen. Support being tested at 574.98, with the OEX below that now but perhaps just having overrun the target a little. The continued drop in the advdec line may be arguing against that conclusion. Next support at 573.88, the neckline of that inverse H&S it confirmed this morning.

Jonathan Levinson : 8/10/2005 12:43:37 PM

This drop has rolled the 30 min channel decisively lower, the 60 min still sideways. Any further weakness below 39.45, confirmed by a break of S1 at 39.40, would confirm a new 60 min cycle downphase. The intraday bias is bearish below 72 SMA at 39.60. Link

Jeff Bailey : 8/10/2005 12:43:36 PM

Cisco Systems (CSCO) $18.543 -5.45% ... sets up for retest of sessioin low ($18.48)

Linda Piazza : 8/10/2005 12:41:17 PM

Benchmarking impressions: Advdec line now below the breakout level, but that's not really enough evidence for bears yet. They need either a continued decline or a (preferred) retest of the breakout level, with that then serving as resistance, and then a rollover. Important resistance at 2280-2561. Advdec line at 1986. Remember that this is just tentative impressions as yet, and nothing to make trading decisions on. I'm benchmarking these impressions to see if it's helpful to you and to me.

Jeff Bailey : 8/10/2005 12:39:07 PM

Buy Program Premium ... DIA $106.80, SPY $123.89, QQQQ $39.51

Linda Piazza : 8/10/2005 12:38:19 PM

SOX testing Keltner support from 472.97-473.47 on 15-minute closes. SOX at 473.91.

Jonathan Levinson : 8/10/2005 12:38:16 PM

QQQQ tests 60 min channel support here at 39.45: Link

Linda Piazza : 8/10/2005 12:37:18 PM

OEX bulls, I hope you took at least partial profits near the HOD, as I suggested, and now it's time to keep your profit-protecting plans for the rest of the position in mind.

Jeff Bailey : 8/10/2005 12:36:50 PM

Sell Program Premium ... DIA $106.80, SPY 123.82, QQQQ $39.47

Linda Piazza : 8/10/2005 12:36:31 PM

OEX nearly at the downside target for that little H&S on the three-minute chart that I mentioned earlier. It came within 20 cents of hitting that target, so bears might be at least minimally in charge over the very short term, and bulls should be aware of the possibility that more declines could be possible. Bulls want to see a 15-minute close back above 576 and bears want to see a continued fall. Without that bounce, bulls might be looking at steeper declines, though, because Keltner support thins below the current level. . . . that target for the H&S was just hit and exceeded.

Linda Piazza : 8/10/2005 12:34:15 PM

Benchmarking impressions: There goes the advdec line to retest its breakout level. Bears want to see a failure below the line now currently at 2242 and then a retest of 2242-2481 that fails to move above those lines.

Linda Piazza : 8/10/2005 12:32:45 PM

The TRAN may be one important index to watch today, although the OEX has certainly been one leader of the pack. The TRAN did not yet reach its upside target on its 15-minute Keltner chart, although it did move into the right-shoulder level for its version of a H&S on its daily chart. The TRAN now, however, threatens to erase that upside target by dropping below Keltner support currently at 3773.65 on 15-minute closes, with the TRAN at 3770.68 as I type. Obviously, this 15-minute period had a while to go yet, but a 15-minute close beneath that Keltner line would erase the 3796.93 upside target and make it more likely that the TRAN might instead decline toward 3760.

Jonathan Levinson : 8/10/2005 12:31:54 PM

Session high for crude oil at 64.125, session low QQQQ just printed at 39.52.

Linda Piazza : 8/10/2005 12:25:57 PM

Benchmarking impressions: advdec line finally pulling back, but not far yet. These figures are for QCharts users, but bulls want to see support at 2177-2429 hold, while bears want to see it give way and then a retest of that former support, with it then serving as resistance. Advdec line at 2642 now, for QCharts users.

Jonathan Levinson : 8/10/2005 12:23:53 PM

QQQQ breaks 72 SMA support for the first time today, but on extremely light volume: Link . 30 min channel support is at the 39.50 pivot. the 60 min channel bottom just above it at 39.45.

Jeff Bailey : 8/10/2005 12:23:04 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 8/10/2005 12:23:14 PM

The SOX still could not produce a breakout signal and has now rolled back to first Keltner support, currently at 475.33 on 15-minute closes, with the SOX at 475.27 as I type, to see if that support holds. If it does, it may retest that resistance again. If not, a drop to 574.09 or maybe 472.94-473.20 might be in order. This all first with a right-shoulder-building action for the SOX, for the potential H&S on its 60-minute and 2-hour charts.

Linda Piazza : 8/10/2005 12:13:51 PM

I didn't want to say anything earlier, because the OEX just headed sideways after breaking below a short-term trendline I was watching this morning, but that trendline on the 3-minute chart was actually a H&S neckline. It looks now as if the OEX might be dropping to test the downside target, only at 575.30. Watching whether that target is met, not met, or exceeded will tell us something about very short-term bullish or bearish strength. OEX at 576.53 as I type, so it's certainly not dropping far, even now.

Jeff Bailey : 8/10/2005 12:12:54 PM

12:00 Internals found at this Link

Jonathan Levinson : 8/10/2005 12:12:32 PM

Volume is just over halfway to yesterday's 65M QQQQ shares at 35.5M shares traded so far.

Jeff Bailey : 8/10/2005 12:05:10 PM

12:00 Market Watch found at this Link

Linda Piazza : 8/10/2005 12:04:42 PM

Here's the RUT on a two-hour chart, showing the breakdown out of its rising regression channel, the neckline of a potential H&S and the current rise to retest the broken channel support and the right-shoulder level. RUT bulls want a move above the left shoulder and bears want a rollover at or beneath it. Could be a further slight rise and then some consolidation, whatever the ultimate direction. Link

Jonathan Levinson : 8/10/2005 12:03:54 PM

Volume breadth +4.59:1 on the NYSE, +1.41 on the Nasdaq. VXO 10.79, VXN 14.70.

Jeff Bailey : 8/10/2005 12:03:06 PM

Go $3.40 ... on the WLPs moved offer up during profile.

Jeff Bailey : 8/10/2005 12:00:32 PM

Bullish swing trade call alert ... with Wellpoint (WLP) $73.35 +2.08% ... taking two (2) of the WLP Dec. $75 Calls (WLP-LO) at the offer of $3.20

Linda Piazza : 8/10/2005 12:00:12 PM

The OEX again looks vulnerable to a pullback, to next Keltner support at 576.28, with stronger support at 575.33-575.75. However, last time, it did not pull back. Let's see if it does this time. If so, watching for a possible bounce from that support back up to 577 or so, with bulls wanting a push above that, and bears wanting a rollover at what would then be a potential H&S on the five-minute chart. Lots of "if's" there, but just something possible to watch.

Linda Piazza : 8/10/2005 11:58:16 AM

SOX still can't break out. However, it's still challenging resistance, and until it produces 15-minute closes beneath a Keltner line currently at 475.27, it's likely to do so. SOX at 576.18 as I type.

Jonathan Levinson : 8/10/2005 11:52:47 AM

Ten year notes continue to slide from the highs, TNX up to a 1.2 bp loss at 4.382%. Crude oil is up .325 at 63.40.

Linda Piazza : 8/10/2005 11:52:08 AM

The SOX really isn't creating a new upside target (would be 481.50 currently, if it had), but instead just climbs along a climbing resistance line. It needs a strong 15-minute close above that line, currently at 476.25 with the SOX at 476.35 as I type. The SOX just isn't looking as strong as some other indices have been, at least not yet.

Jonathan Levinson : 8/10/2005 11:47:25 AM

The negative divergences are going nowhere on QQQQ, with the 72 SMA up a cent to 39.61. This looks like very bullish action to me- the bears seem have been flattened on today's small gap up, with no selling evident despite toppy and divergent intraday signals. Link

Linda Piazza : 8/10/2005 11:46:53 AM

Remember that it's my impression for a while now that we might get a few hours or maybe even a few days of choppy behavior near these levels, with perhaps some spikes one direction or the other, with those reversed. Some indices are at right-shoulder levels for H&S's on their two-hour and daily charts, and it might take bulls and bears a little time to battle it out near these levels before confirmation or invalidation decisions are made. Bulls and bears both might be made as uncomfortable as possible at these levels for a while longer.

Linda Piazza : 8/10/2005 11:44:52 AM

RUT attempting a stronger breakout now, and may be setting a tentative upside target of 672.89. The RUT has been a follower and not a leader to the upside the last couple of days, however, and so we may not be able to trust that upside target.

Linda Piazza : 8/10/2005 11:43:32 AM

Benchmarking impressions: No erasure of the advdec line's breakout signal on the 15-minute chart yet. Needs a decline below 2365 and probably below 2035, and maybe then a failed retest of those levels. No sign yet that the climb in in the advdec line is over, although it remains at extreme levels both on a Keltner and an empirical basis.

Linda Piazza : 8/10/2005 11:38:41 AM

SOX trying to break above that Keltner line that it's been testing all morning, at 476.18 on 15-minute closes, with the SOX at 476.77 as I type. Bulls want a sound breakout, though, as the SOX has not been showing its usual leadership qualities. Something is a bit rotten in Denmark, I think. It may get pulled higher by the other indices, and in turn may help them if it decides to fully participate, but be wary of it meeting an upside target if the signal confirmation is a weak one. Wait, didn't I say that this morning about the OEX, too?

Jonathan Levinson : 8/10/2005 11:37:05 AM

Volume breadth is holding at +5.2:1 on the NYSE, +1.51:1 on the Nasdaq.

Linda Piazza : 8/10/2005 11:36:51 AM

New upside target on the OEX at 577.81, with the OEX at 577.35, testing nearest Keltner resistance at 577.27 on 15-minute closes. Nearest support at 576.24. Bears want to see a lower or equal high with bearish divergence, but there's absolutely nothing to show just yet that a bearish entry is a good idea and it hasn't been anything I've suggested yet. Bulls should continue to keep their stops at appropriate levels to protect their positions.

Linda Piazza : 8/10/2005 11:32:45 AM

Advdec line climbing again.

Jeff Bailey : 8/10/2005 11:32:11 AM

September Crude Oil (cl05u) here's a 15-minute interval with QCharts' weekly pivot levels at this Link

Linda Piazza : 8/10/2005 11:30:04 AM

Benchmarking impressions: advdec line still in breakout mode, looking vulnerable to a pullback to test that breakout signal, but certainly not doing so yet.

Linda Piazza : 8/10/2005 11:29:08 AM

The OEX threatened vulnerability down to 575.52-575.99 next Keltner support, but it hasn't done so, showing that bulls are still holding on so far.

Jonathan Levinson : 8/10/2005 11:27:01 AM

Crude oil bounces from a low of 62.925 to 63.325 here, +.25 for the day.

Jeff Bailey : 8/10/2005 11:25:14 AM

NASDAQ-100 Heatmap ... at this Link

Jeff Bailey : 8/10/2005 11:24:33 AM

Microsoft (MSFT) $27.30 -0.18% ...

Jeff Bailey : 8/10/2005 11:23:56 AM

Cisco Systems (CSCO) $18.68 -4.74% ... session low at this point has been $18.48.

Jeff Bailey : 8/10/2005 11:23:09 AM

QQQQ ... updated 15-minute interval chart at this Link

Linda Piazza : 8/10/2005 11:20:24 AM

TRAN threatening to drop toward 3770-3772.50 next Keltner support.

Linda Piazza : 8/10/2005 11:19:32 AM

OEX threatening to drop toward 575.51-575.99 next Keltner support, although it's trying to cling to the just-violated Keltner support just above it.

Jonathan Levinson : 8/10/2005 11:18:55 AM

72 SMA support has risen to 39.60 here, with the 30 min channel already flattening. However, a short cycle downphase, clearly weak and corrective, is roughly half done. The bears will need to press here to avoid another upside surge should the short cycle bottom early. The benefit of the doubt is still with the bulls above the 72 SMA. Link

Linda Piazza : 8/10/2005 11:17:41 AM

SOX testing the 50% retracement of the decline off the August high. It's edged a little above that 50% level at 475.83, being currently at 476.10, but it's also testing its 476.08 previous HOD and Keltner resistance at 476.04 on 15-minute closes.

Jeff Bailey : 8/10/2005 11:16:53 AM

Yesterday's Internals found at this Link

Jeff Bailey : 8/10/2005 11:16:03 AM

11:00 Internals found at this Link

Linda Piazza : 8/10/2005 11:15:12 AM

The OEX is certainly doing as much as it can to confound as many people as it can, isn't it? One thing is certain, however, and that's the role that the 240-minute 100/130-ema's have been playing as S/R for a long, long time. Bulls want to see continued bounces from these averages, and bears want to see the OEX back below them. Link

Linda Piazza : 8/10/2005 11:08:52 AM

Benchmarking impressions: Is the advdec line going to tip over now, toward a test of 2365? Watch for that possibility. Bulls don't want a decline below that level unless there's a quick bounce.

Linda Piazza : 8/10/2005 11:07:57 AM

OEX retesting first Keltner support at 577.08 on a 15-minute closing basis, with the OEX at 576.76 and with stronger support at 575.42-575.78.

Linda Piazza : 8/10/2005 11:07:18 AM

BIX immediately pulling back again after that tentative confirmation of its new upside target, back to retest support near 357.40 on a 15-minute closing basis. BIX at 357.72.

Linda Piazza : 8/10/2005 11:06:31 AM

Some indices--TRAN, Wilshire 5000, SOX, and almost the RUT--have reached or are reaching toward right-shoulder levels for H&S's on their 2-hour or daily charts. Logic and history would suggest that there might now be a steadying for a few hours at least and maybe even a chopping around near current levels with some spikes here and there for a couple of days as bulls and bears battle it out again. Logic and history don't always apply, however, but be aware of this possibility.

Jeff Bailey : 8/10/2005 11:02:35 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 8/10/2005 11:00:58 AM

Ten year notes are pulling back to a 1/8 gain at 110 5/16, TNX up to a 2 bp loss at 4.374%.

Linda Piazza : 8/10/2005 10:59:19 AM

During the last 15-minute period, the BIX tentatively set an upside target of 360.67. It looks as if this period's close will see that target maintained, but this period is currently leaving a long upper shadow behind, not a convincing statement of strength just yet. The BIX is another following index rather than leading one, today, like the SOX.

Linda Piazza : 8/10/2005 10:57:40 AM

Benchmarking impressions: This has certainly been a day when we got the sideways version of the advdec's line's blowing off of overbought status on a Keltner basis. Still, empirically, that number is in excessive territory, whether or not Keltner support is rising underneath it as it moves sideways. Need to see the advdec line below 2256 before we even begin to believe that it's pulling back, though. At 2883 as I type. I've seen days when equities were slapped back when the advdec line got to +3000 levels as it did this morning and others when gains continued all day and even into the next, so these benchmarked impressions are just one tool to use, and not a good market-timing one, perhaps.

Linda Piazza : 8/10/2005 10:53:15 AM

The SOX is certainly underperforming some other indices on a Keltner basis. It hasn't even yet set an upside target for the Keltner line that the OEX is now hitting, for example. The SOX needs a 15-minute close above 475.87 before it sets that upside target. SOX at 475.36 as I type, still testing, but definitely in a following rather than leading mode.

Jonathan Levinson : 8/10/2005 10:51:49 AM

VXO 10.55, VXN 14.71. Volume breadth is +4.81:1 on the NYSE, +1.42:1 on the Nasdaq.

Linda Piazza : 8/10/2005 10:51:50 AM

OEX now hitting its upside target on the 15-minute Keltner channel. Trying for a breakout on a 15-minute close above 577.69, with the OEX now at 577.75, but this definitely now becomes a time when bulls should be following the OEX higher with their stops, protecting their profits. It isn't necessarily a time yet in which bears should step in, however, just because the target has been met.

Jonathan Levinson : 8/10/2005 10:50:53 AM

Session high for GE, +.94% at 34.46, and for the ES and YM futures, all outperforming QQQQ and the NQ.

Linda Piazza : 8/10/2005 10:49:57 AM

RLX and TRAN are two indices whose components are helping to drive others highers. The TRAN's upside target is now 3795.19 on 15-minute closes, and the RLX's, 478.75 on 15-minute closes.

Jeff Bailey : 8/10/2005 10:49:16 AM

SPY $124.40 +0.81% ... breaks free of WEEKLY R1.

Linda Piazza : 8/10/2005 10:48:40 AM

OEX upside target 577.61 on 15-minute closes, first support at 576.72, and the OEX at 577.10.

Jeff Bailey : 8/10/2005 10:48:20 AM

S&P Banks (BIX.X) 358.15 +0.55% ... trades WEEKLY Pivot here.

Jonathan Levinson : 8/10/2005 10:46:41 AM

QQQQ's 30 min cycle has crept up after stalling overnight, but is still looking bearish-divergent unless there's a strong upside surge from here. The 60 min cycle is just entering overbought territory. Because the daily cycle downphase hasn't yet stalled, the current 60 min channel top at 39.68 should provide strong resistance. If not, 39.78, the 30 min channel top, should do it. Much higher and the daily cycle downphase will begin to reverse.

Linda Piazza : 8/10/2005 10:44:33 AM

The BIX is trying to break above Keltner resistance at 357.55 on a 15-minute closing basis, setting an upside target of 360.61, if it's successful. The BIX is at 358.03 as I type, but traders hoping for a BIX retest of its convering 200-sma and -ema's near that upside target want a strong 15-minute close above that Keltner line and not a tepid one. The BIX's inverse H&S neckline appears to be at about 358.20.

Linda Piazza : 8/10/2005 10:42:28 AM

OEX upside target now 577.54, first support at 576.48 on 15-minute closes.

Linda Piazza : 8/10/2005 10:42:01 AM

Benchmarking impressions: Advdec line moving absolutely sideways, with small-bodied candles, as support rises beneath it. Need to see the advdec line below 2250 and maybe even 2100 before a real pullback in the advdec line can be assumed. At 2875 as I type. Don't trade on this information.

Jonathan Levinson : 8/10/2005 10:39:01 AM

Session high for Oct. gold, +2.9 at 439.60. The daily cycle upphase is stalled in overbought territory, and bulls need a close above 442 minimum (preferably 444) to suggest the beginning of an upside trending move in the daily timeframe. Support at yesterday's 435 spike low is next, followed by 432-433 confluence.

Linda Piazza : 8/10/2005 10:37:47 AM

SOX still testing that neckline for that inverse H&S, still unable, as of this writing to break above next Keltner resistance at 475.70 on a 15-minute closing basis. SOX at 474.67 as I type, near the 575-578-ish right-shoulder level for a larger regular H&S on the 60-minute chart.

Jonathan Levinson : 8/10/2005 10:35:01 AM

Crude oil is negative here at 63.05, -.205. QQQQ rising back to R1 at 39.68, with 30 min channel resistance up to 39.76. Link

Linda Piazza : 8/10/2005 10:34:14 AM

TRAN climbing again. It's into the right shoulder level for its possible H&S on its daily chart now, but didn't produce a new HOD on this 15-minute period, so far. That right shoulder level is at about 3780-3800, with the TRAN at 3781.49 and with an upside Keltner target of 3794.22. I wouldn't be surprised to see the TRAN at least slow its gains now, whether it's going to ultimately invalidate or confirm that H&S.

Jonathan Levinson : 8/10/2005 10:32:54 AM

VXO 10.88, VXN 14.67

Jonathan Levinson : 8/10/2005 10:32:32 AM



Jonathan Levinson : 8/10/2005 10:32:05 AM

Crude oil dives to 63.25 on the news, +.175 for the day.

Jonathan Levinson : 8/10/2005 10:31:37 AM





Linda Piazza : 8/10/2005 10:31:34 AM

The OEX bounced from first Keltner support on its 15-minute chart, but hasn't yet reached a new HOD. It's rising to test that, though. Upside target now 577.52, with the OEX at 576.70, but be careful here, bulls.

Jonathan Levinson : 8/10/2005 10:31:01 AM

From EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 2.8 million barrels from the previous week. At 320.8 million barrels, U.S. crude oil inventories are well above the upper end of the average range for this time of year. Total motor gasoline inventories fell by 2.1 million barrels last week, putting them in the lower half of the average range. Distillate fuel inventories increased by 2.6 million barrels last week, and are just above the upper end of the average range for this time of year. A sharp increase in high-sulfur distillate fuel (heating oil) more than compensated for a decline in low-sulfur distillate fuel (diesel fuel). Total commercial petroleum inventories rose by 3.4 million barrels last week, and are above the upper end of the average range for this time of year.

Jeff Bailey : 8/10/2005 10:30:58 AM

Buy Program Premium ... DIA $107.04, SPY $124.21, QQQQ $39.67

Linda Piazza : 8/10/2005 10:30:44 AM

SOX is retesting that neckline. Sure didn't shoot up after crossing it the way some other indices did. May follow them in their actions, but hasn't yet.

Jeff Bailey : 8/10/2005 10:28:34 AM

QQQQ $39.60 +0.38% ... energy inventory data due any minute now.

Jonathan Levinson : 8/10/2005 10:27:32 AM

Ten year notes are not backing down, sliding higher with TNX down 2.8 bps at 4.366%. Crude oil has reopened and is up .70 at 63.775, 5 cents off the high.

Jeff Bailey : 8/10/2005 10:26:58 AM

iShares MSCI Japan (AMEX:EWJ) $10.70 +3.18% Link ... #11 most active. Daily bar chart at this Link and weekly at this Link

Linda Piazza : 8/10/2005 10:23:52 AM

Benchmarking impressions: Advdec line pulling back from the just-reached +3000 level (QCharts), leaving an upper shadow. I'm still expecting a pullback or sideways/sideways-slightly-down movement in the advdec line as Keltner charts tell me it might be extreme, but so far, there's only this sideways movement, with no "down" at all attached to it. Be wary, though, as we approach the release of inventories, whether in bullish or bearish positions.

Jeff Bailey : 8/10/2005 10:23:24 AM

10 Most Active ... CSCO $18.50 -5.66%, QQQQ $39.57 +0.30%, TMTA $1.43 +34.90%, INTC $27.24 +1.26%, SPY $124.13 +0.59%, MSFT $27.28 -0.29%, TWX $18.38 -0.91%, LU $2.98 +1.01%, CHT $20.67 +5.62%, SUNW $3.75 +0.80%

Linda Piazza : 8/10/2005 10:21:38 AM

OEX beginning to pull back a little now. If you read my 10:07 post and are in bullish positions, you may have already taken partial profits and reset your stop, so you know how much of a downturn you can take. The OEX tests nearest Keltner support, at 576.10 on a 15-minute closing basis, with next support below that at 574.64-574.83.

Jonathan Levinson : 8/10/2005 10:19:02 AM

Volume breadth has settled only slightly to +4.37:1 on the NYSE, +1.66:1 on the Nasdaq. This lines up with a small bearish divergence on the short cycle Macd against the higher price highs.

Linda Piazza : 8/10/2005 10:18:41 AM

Benchmarking impressions: another small-bodied candle on the advdec line's 15-minute chart during the last period, but the advdec line climbs now, reaching a new HOD, so no reversal in sight there yet. The possibility of a breakout that just continues on the advdec line exists, of course, but I haven't seen such an event lately, not even when indices were hitting their August highs. Not sure what to make of it, but be aware of the possibility that this extreme could be reversed. Not a sign of that happening yet. Don't trade on this information.

Linda Piazza : 8/10/2005 10:15:21 AM

The BIX still hasn't confirmed its inverse H&S, as have some other indices, so it's lagging them according to this measure at least. It also has not been able to break above a Keltner line currently at 357.68, at least not on 15-minute closes, so it's lagging by that measure, too. The BIX is at 357.26 as I type. The SOX also has difficulty with a congruent Keltner line, now at 475.31 on 15-minute closes, with the SOX at 474.86. This is the same line that some indices such as the OEX and RLX burst through this morning, setting those upside targets. So, we know these two indices are weaker by this measure than some others.

Jeff Bailey : 8/10/2005 10:14:51 AM

10:00 Internals found at this Link

Jonathan Levinson : 8/10/2005 10:14:06 AM

QQQQ has confluence support at 39.58, below which 72 SMA support lines up with the pivot at 39.59. The intraday bias remains to the upside above the 72 SMA line: Link

Linda Piazza : 8/10/2005 10:11:24 AM

Fortunately, we're getting the upside tests we've needed to see whether intermediate-term highs have been put in or not. The test might not be concluded yet, as some indices are just now rising up into the right-shoulder levels on daily or 60-minute charts, so that I could conceive of several 60-minute periods, at least, of chopping around the right-shoulder levels before we know whether those formations are going to be invalidated or confirmed. In this climate, the inventories numbers might assume exaggerated importance, though.

Jeff Bailey : 8/10/2005 10:08:39 AM

NYSE Composite (NYA.X) 7475 +0.92% ... all-time high alert!

Linda Piazza : 8/10/2005 10:07:43 AM

Those who are used, over the last several weeks, to trading that OEX Keltner channel from one side to another and who are in bullish plays on the move up through that channel beginning yesterday, might want to consider taking partial profits at least right here, moving stops up on the rest.

Linda Piazza : 8/10/2005 10:05:56 AM

Benchmarking impressions: advdec line still strong, still near the HOD, but produced a potential reversal signal on the last 15-minute period. No sign at all of a reversal during this period yet, but watch for a potential move down below 2165 or so by the end of this 15-minute period. No signs of that happening as I type, with the advdec line at 2920. Don't trade on this information, but this still looks extreme according to what I've seen over the last few weeks.

Linda Piazza : 8/10/2005 10:08:14 AM

SOX may have just moved across the neckline for its inverse H&S, just barely, but is currently doing battle with the 15-minute resistance at 475.16 on 15-minute closes, with the SOX currently at 475.35. It's above it but hasn't closed a period above it.

Jeff Bailey : 8/10/2005 10:02:58 AM

10:00 Market Watch found at this Link

Linda Piazza : 8/10/2005 10:01:47 AM

Shouldn't have doubted that upside target on the OEX. It's now at 577.36 and the OEX is at 576.96 as I type, approaching the 577-578 resistance that was holding last week. There's a long-term resistance band near that level, too, so protect profits if in bullish plays.

Jeff Bailey : 8/10/2005 10:00:33 AM

And they're off ... QQQQ $39.67 +0.55% ...

Linda Piazza : 8/10/2005 10:00:04 AM

The Wilshire 5000 has also climbed into a potential right-shoulder level, and it's now retraced more than 50% of the decline off the early August high. It's reaching up toward a test of the 61.8% level, with that at about 12,376 and with the DWC at 12,362.88. Strong gain so far this morning, and not bear-flag-ish at all, but let's see what happens. Bears would like to see the DWC roll over or flatten near or below 12,375-12,400.

Jeff Bailey : 8/10/2005 10:00:00 AM

Dow Transports (TRAN) 3,775 +0.95% Link ... BIG bounce underway after recent test of rising 21-day SMA.

Jonathan Levinson : 8/10/2005 9:58:39 AM

Session highs across the board, QQQQ jumping to 30 min channel resistance at 39.65: Link

Jonathan Levinson : 8/10/2005 9:58:07 AM

The Fed announced a 5.5B overnight repo to replace the 3.5B expiring, for a net add of 2B.

Linda Piazza : 8/10/2005 9:57:35 AM

SOX testing one version of a neckline for its inverse H&S, with that neckline at about 474.70 and the SOX currently at 474.51. The 50% retracement of the SOX's decline off the early August high is at about 475.83. The SOX is being a follower today, and not a leader.

Linda Piazza : 8/10/2005 9:55:59 AM

The BIX's climb is not as impressive as the RLX's, with both being indices that sometimes impact the OEX. The BIX is doing battle with the 15-minute 100/130-ema's, and has not confirmed its inverse H&S.

Linda Piazza : 8/10/2005 9:55:07 AM

RLX still climbing, although the current 15-minute period's candle is so far a small-bodied candle with a long lower shadow.

Linda Piazza : 8/10/2005 9:54:22 AM

The OEX has set an upside target of 577.22 on the 15-minute chart and still moves toward it, but hasn't produced a new HOD. Be careful, bulls, and protect profits.

Linda Piazza : 8/10/2005 9:52:32 AM

The TRAN has risen up into a possible right-shoulder development for a H&S on its daily chart, with the right-shoulder level somewhere near 3780 and the TRAN now at 3769.39. When forming the left shoulder, the TRAN zoomed up much higher, above 3800, but was quickly slapped back each of the two times it did so during that left-shoulder formation. Because of its market-leading status, the TRAN should be watched closely today as it reacts to the inventories numbers. The TRAN has a habit of zooming one direction or the other pre-inventories release, and it sometimes switches directions and sometimes continues on afterwards. If a right shoulder is going to form, the TRAN should probably steady off soon and, other than a spike that's quickly reversed, shouldn't get above 3800 again.

Jeff Bailey : 8/10/2005 9:50:30 AM

Bullish swing trade stop alert ... for the 1/4 bullish position in Cisco Systems (CSCO) $18.70 -4.53% Link here.

Linda Piazza : 8/10/2005 9:47:48 AM

The RLX has shown strong gains this morning, perhaps helping to prompt those strong gains on the OEX. The RLX is more than 5 points above yesterday's close, continuing its bounce from the bottom of its rising regression channel off the April low. The RLX has not broken out of that rising regression channel, as some indices have, although it plummeted straight down from the top to the bottom. At 474.28, it's between a 38.2% retracement of the decline and a 50% retracement. However, it's beginning the first retracement of the day and that retracement should be watched closely, as bulls do not want to see the RLX retrace more than 50% of its first 15-minute period's gain.

Jeff Bailey : 8/10/2005 9:50:57 AM

Garmin Ltd. (GRMN) $55.55 +1.00% Link ... looks set to challenge its recent earnings high.

Jane Fox : 8/10/2005 9:49:01 AM

Wouldn't the device be like a passport but will allow the border crossing to read your data and allow you through or not. This would just make it so you would not have to deal with a border patrol.

Jonathan Levinson : 8/10/2005 9:41:20 AM

Volume breadth hysterically bullish on the NYSE, +6.24:1 so far, merely strong at +1.77:1 on the Nasdaq.

Jonathan Levinson : 8/10/2005 9:40:08 AM

QQQQ is holding the top of its premarket range, no sign of weakness with the short cycle oscillators still rising but growing toppy. Bonds have pulled back slightly but hold the bulk of their gains.

Jeff Bailey : 8/10/2005 9:39:38 AM

Cisco Systems (CSCO) $18.85 -3.87% ...

QQQQ $39.56 +0.27% ... session high has been .... $39.59.

Jonathan Levinson : 8/10/2005 9:39:20 AM

Mark, by my understanding, the technology isn't limited to cars. It could embedded in a page or in a wristband, for instance.

Linda Piazza : 8/10/2005 9:37:46 AM

Benchmarking impressions: According to the 15-minute Keltner channels, the advdec line is again showing extreme upside measures for this move, and so might be expected to soon either begin a sideways move or a pop-and-drop move (on the advdec line). The last couple of days, these impressions have held true, but this is early-days in watching the advdec line this way, and they might not hold true this morning. Anyway, a drop or sideways move in the advdec line isn't always accompanied immediately by a similar move in the equities. It's possible we're getting a breakout move in the advdec line, too, something I haven't seen much, but I guess is possible. Don't trade on this information.

Linda Piazza : 8/10/2005 9:35:24 AM

Hmm. Despite STMicroelectronics being up in overnight trading, the SOX is not following some other indices higher this morning, although it turned lightly positive as I typed. The RUT is gaining, however.

Keene Little : 8/10/2005 9:35:02 AM

Jonathan, the technology of these radio tags is just like the "EZ Pass" technology that enables cars to pass through toll booths. But these tags can also be read by any number of readers on highways so I can see how foreign visitors' movements can be tracked on the U.S. highway system. Probably the only ones who would be willing to use these are honest law abiding people and it won't help in the war on terrorists so I guess it would be OK. But it certainly is one step closer to monitoring agencies (governments) keeping tabs on its people.

Linda Piazza : 8/10/2005 9:33:43 AM

The OEX is moving tentatively above the neckline of the inverse H&S on its 15-minute chart, and although it hasn't closed a 15-minute period above the Keltner line currently at 574.13, it has topped yesterday's high. Those interested in a bullish play--not me--are looking at a possible setting of a target at 577.11 with a 15-minute close above that Keltner line at 574.13. Unfortunately, the OEX may be at that target by the time the period is over.

Jeff Bailey : 8/10/2005 9:33:19 AM

Bullish swing trade stop adjustment alert ... for Cisco Systems (CSCO) $18.84 -3.82% .... let's put our stop at $18.70.

Jonathan Levinson : 8/10/2005 9:29:18 AM

That's my take on it as well, Keene. I agree with Jane's sentiment that lighter delays would be a nice thing, but the negative implications are chilling.

Keene Little : 8/10/2005 9:27:36 AM

Jonathan, I just caught your 8:41 comment. I went through Customs and across the bridges late yesterday and didn't see anything different coming into Canada. Interestingly enough, I usually find greater delays and more questions trying to get back into the States. The traffic tie ups going across the bridges and through Customs into the U.S. can take several hours on Friday through Sunday so I can see why they're trying to figure out a way to resolve that. Scary proposition though carrying radio "tags". Big brother is watching...

Linda Piazza : 8/10/2005 9:25:03 AM

Here are some levels I'm watching on the SOX today. The chart is a little messy, but this is a 2-hour chart, showing how the SOX's trading pattern has meshed with the light red 21-ema. That average was support on the climb throughout July, and has been resistance on two-hour closes for seven trading sessions now. It's at 472.66 currently. I'm also watching the Fib levels off the decline off the early August high. Bears would like to see this climb stop below the 50% retracement, at 475.83 or at least the 61.8% retracement, at 478.31, seeing up a possible right shoulder for the H&S that's visible here. Link

Jonathan Levinson : 8/10/2005 9:11:23 AM

The overnight bounce has the 30 min cycle downphase stalled for NQ, as the 60 min cycle upphase continues to press higher toward overbought territory. QQQQ is holding above 30 min channel resistance at 39.53 but below the 60 min channel top at 39.62.

Jonathan Levinson : 8/10/2005 9:08:06 AM

Ten year notes yields are down to 4.368%, -2.6 bps here. 3.5% is next support.

Linda Piazza : 8/10/2005 9:02:59 AM

Today, I will have work people in the house all day, making changes in the air conditioning system. For any who have weathered an August day in Texas without air conditioning, you know that I'm not looking forward to at least a period of time without air conditioning. There may be times when I'll be pulled away from my desk, too, but I'll try to be here as much as I can.

Jane Fox : 8/10/2005 8:52:51 AM

Jonathan that is wonderful news for me (8:41 post). I have spent many hours waiting to cross the border at the Peace Arch in Blaine (actually waiting in Canada not Blaine).

Jane Fox : 8/10/2005 8:49:51 AM

Dateline WSJ SHANGHAI - China disclosed for the first time Wednesday the composition of the basket of currencies used to set the yuan's value, saying it mainly includes the U.S. dollar, euro, Japanese yen and Korean won.

The currencies of Singapore, Britain, Malaysia, Russia, Australia, Canada and Thailand are also considered in setting the yuan's foreign-exchange rate, Zhou Xiaochuan, the central bank governor, said during a speech to launch a new operations center for the People's Bank of China in Shanghai. Mr. Zhou made no of the Hong Kong dollar or Taiwan dollar in his speech, currencies of two of China's important trading partners.

The news dispels at least some of the mystery surrounding the yuan's new exchange rate, although there was no information about the weighting of each currency in the basket

Jonathan Levinson : 8/10/2005 8:41:37 AM

Did you see anything on this, Keene?

ALEXANDRIA BAY, N.Y. (AP) - Security officials gathered Monday at a Canadian border crossing to mark the first test of a radio frequency identification system to be used by foreign visitors.

If successful, radio "tags" carried by travelers will be part of the standard registration process for those entering the United States.

The technology is like that used to speed passage at toll booths on many highways, said P.T. Wright, the operations director for the U.S. Department of Homeland Security's US-VISIT Program.

Testing began last week at the Thousand Islands Bridge crossing from Canada. It also is being done at the Peace Arch and Pacific Highway crossings in Blaine, Wash., and two crossings in Nogales, Ariz.


Jonathan Levinson : 8/10/2005 8:38:13 AM

Ten year notes are printing session highs at 11- 25/64, TNX currently down 1.7 bps at 4.375% with equities holding, but not adding to their prior gains.

Linda Piazza : 8/10/2005 8:14:15 AM

The OEX ended the day yesterday like many other indices, having formed a potential inverse H&S at the bottom of its drop off last week's high. That formation had neither been confirmed nor invalidated as of yesterday's close. As the day ended, it appeared that a 15-minute close above the Keltner line currently at 573.83 would possibly confirm that formation although I'd like to see further confirmation, on a push above yesterday's high of 574.41. That 15-minute close would then reset the 576.90 upside target, essentially setting up a retest of the 577-578-ish top of the consolidation formation in which the OEX was captured for several weeks. I'd be leery of trusting that upside target too much just yet, however, as we're waiting to see the shape the climb takes and the height to which it goes to make decisions about whether markets have or are topping out over the intermediate-term period. A lower high would be a sign that the top had been put in last week, while a higher high would be a sign . . . well, you know that. The trouble is that we don't know yet which it will be. If you want to participate in a bullish play, you know the setup now, but also be aware of the risk that a test could result in a lower high, and so targets might not be met. Futures are higher as I type. If that carries over into the cash market open, the neckline may be tested near the open.

A rollover at the neckline area suggests another test of daily Keltner support, first at 569.75 on daily closes and then at mid-channel Keltner support, from 565.91-567.09. As I've mentioned several times this week, the OEX has an unfortunate tendency to consolidate a few days, at least two, when it first touches that mid-channel level, which it did day before yesterday, before deciding on final direction, so it's possible that we'll continue to see some back-and-forth in a four or five-point range, perhaps between the 569-574-ish zone in this current version.

Whatever decision you're making pre-market and as the cash market opens, remember that inventories numbers are due out this morning, and crude futures are currently above yesterday's close. I don't know how we got so complacent about crude above $63.00, but remember the danger that we won't always remain so complacent.

Jonathan Levinson : 8/10/2005 7:51:19 AM

The official statement from FNM CEO Daniel Mudd is available at this Link

Jonathan Levinson : 8/10/2005 7:47:58 AM

Headlines from last night:

DJ Fannie Estimates Reaudit, Legal Costs To Top $420M In 05

DJ Fitch Affs Fannie Mae Sr Debt; Sub & Pfd Still On Watch Neg>

DJ Fannie To Hire 1,500 Consultants On Restatement This Yr

DJ Fannie Spent $952M On Admin Costs In First Half Of 2005

DJ Fannie: NYSE Tags Co As Late Filer, Could Delist Stock

WASHINGTON (MarketWatch) -- Mortgage finance giant Fannie Mae (FNM: news, chart, profile) said Tuesday it won't file a second-quarter earnings report with regulators as the company continues to clean up its books after an accounting scandal. Fannie Mae hasn't filed a quarterly earnings report with the Securities and Exchange Commission for a year. The company said in a statement to the SEC it expects to file its restated 2004 earnings in the second half of 2006.

Jonathan Levinson : 8/10/2005 7:40:12 AM

Equities are up, ES trading 1239.25, NQ 1610.5, YM 10676 and QQQQ +.12 to 39.57. Gold is up 1.4 to 438.10, silver +.063 to 7.099, ten year notes +5/32 to 110 11/32 and crude oil is up .45 to 63.525.

We await the 10:30 release of the EIA Petrol inventories, and at 2PM, the Treasury Budget, est.-56.7B.

Linda Piazza : 8/10/2005 7:02:17 AM

Good morning. The Nikkei climbed above 12,000 and closed at its highest level in more than a year, but other Asian bourses were mixed. European markets climb this morning, and our futures are positive. As of 6:54 EST, gold was higher by $1.80, and crude, higher by $0.48, at $63.55. More detail about Asian and European markets follows in succeeding paragraphs.

Wednesday morning, the Nikkei climbed straight up to a new recent high and closed at a more-than-year high. It closed higher by 197.76 points or 1.66%, at 12,098.08. With our FOMC's statement saying that inflation is controlled, exporters such as Honda, Toyota and Sony climbed. Domestic developments, including yesterday's government update on the economy and the Bank of Japan decision, also helped those companies dependent on domestic demand. Financials continued the gains begun yesterday, but gains extended to all sectors. Perhaps after the close, Japan's Minister of Finance asserted that high energy prices are not yet negatively impacting the Japanese economy. He urged China to take further steps in revaluing the yuan.

Other Asian markets were mixed. The Taiwan Weighted declined 0.36%, but South Korea's Kospi gained 0.46%. Singapore's Straits Times fell 0.41%, but Hong Kong's Hang Seng rose 1.98%. China's Shanghai Composite climbed 1.08%. In China, PC maker Lenova reported Q1 net profit that rose 6% year over year and revenue that more than tripled.

European markets are positive, buoyed in part by encouraging earnings results and the strength of the Nikkei in overnight trading. Despite crude prices that again creep toward this week's record highs, airline Deutsche Lufthansa's earnings report boosted that company's stock. That report included notations of increased sales and better average fares. A well-received report from insurer Alianz boosted other German insurers.

Not all reporting companies saw gains, of course. Bayer fell after reporting earnings below forecast. The company did raise 2005 earnings and sales forecasts, but a newspaper had already speculated earlier in the week that it would do so. Swiss copper mining company Xstrata PLC's stock declined in the U.K. after its earnings report, although it appeared to beat expectations on net profit. Mittal Steel declined after its net profit dropped and it said that there had been a softening of demand and prices due to inventory de-stocking in Europe and the U.S. In other news, CSCO denied that it was considering a bid for Nokia, with Nokia steady in today's European trading, and Morgan Stanley upgraded chip manufacturer STMicroelectronics, with that company's stock showing strong gains in European trading.

Economic releases included France's June Industrial Output. That number rose 0.3% month over month from a revised-lower May number, a figure that was less than the expected 0.5% rise. Year over year, the quarter declined 0.2%. The manufacturing output also climbed 0.3% month over month, also a slightly lower than expected number. Despite the slightly less-than-expected numbers, this report was deemed in line with the June manufacturing PMI, at least by one news source. The Bank of England made its inflation report today, commenting on higher inflation risks, with CPI likely to rise above the 2.0% target over the near term, and lower growth prospects than in the May inflation report in the near term but stronger in a longer-term period. Governor King warned that market watchers should not expect further rate cuts as the recent slowdown remains modest and consumer spending appears to be picking up. He believes that oil prices will moderate and that much of the inflation pressure proceeds from those oil prices.

As of 6:54 EST, the FTSE 100 was higher by 16.40 points or 0.31%, at 5,380.10. The CAC 40 was higher by 23.05 points or 0.51%, at 4,514.74. The DAX was higher by 45.46 points or 0.93%, at 4,954.94.

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