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Jeff Bailey : 8/12/2005 2:23:25 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+3.15 and set for program selling at $+0.85.

Jeff Bailey : 8/12/2005 1:53:45 AM

Pivot Matrix for Friday at this Link

Jeff Bailey : 8/12/2005 12:14:25 AM

Correction to Thursday's stopped price on the three (3) Newmont Mining NEM Sept. $37.50 Puts (NEM-UU). This trade should have been filled at the bid of $0.30, not $0.35 as I had reported. Result ($-0.20, or -40.00%).

OI Technical Staff : 8/11/2005 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The Market Monitor has been archived.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 : 8/11/2005 7:50:44 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing trade stopped on the three (3) Newmont Mining NEM Sep. $37.50 Puts (NEM-UU) when NEM traded $41.00. Options were bid $0.35 ($-0.15, or -30.00%).

Jeff Bailey : 8/11/2005 7:36:29 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 8/11/2005 7:27:59 PM

Closing Internals found at this Link

Keene Little : 8/11/2005 4:30:06 PM

Jonathan, I'm catching up on the Market Monitor comments and found your 2:24 one. You really do need to write a novel. I'll be one of your first buyers of your book.

Linda Piazza : 8/11/2005 3:55:06 PM

The SOX got above the 468.50-ish resistance area but not yet above this morning's 469.90 high. It's at 569.14 as I type, with next Keltner resistance at 470.52 and then 472.11 and with the 15-minute 100/130-ema's at 470.04 and 470.72, respectively. The top of the SOX's current descending regression channel, in place this month, is at about 472 now. By the way, here's how the SOX looks with respect to that ascending regression channel on the weekly chart, in place since last summer: Link Keep in mind that it's possible to position that regression channel tool just a smidgen off one way or another and get a slightly different angle on that channel, but this is the one that seems to fit best. It suggests that the channel's resistance has held, but the pullback so far is flag-ish and not precipitous, and so the SOX could find support somewhere and shoot up again to retest the channel. Bears would like to see the kind of precipitous decline that happened last fall.

Linda Piazza : 8/11/2005 3:48:45 PM

Advdec line pausing at/just under next Keltner resistance. No pullback yet.

Linda Piazza : 8/11/2005 3:42:57 PM

The RLX is bouncing from its test of the swing highs from late last year and from this spring, back up to retest the rising neckline of its continuation-form H&S (15-minute chart) and the former support of its long-term ascending regression channel. Those are from 469-470.08, with the 15-minute 100/130-ema's at 470.07 and 470.82, respectively.

Linda Piazza : 8/11/2005 3:39:24 PM

Benchmarking impressions: advdec line headed for 2181-ish next Keltner resistance. Next is 3091 if this resistance should fail. Some signs of Keltner-style bearish divergence on that chart, so the 3091 level might not be touched, if that holds. On the last retest, that resistance currently near 2181 held.

Jonathan Levinson : 8/11/2005 3:35:56 PM

QQQQ's short cycles resolved their funk to the upside, and the surge was enough to print above the 30 min keltner top for a moment, usually signalling a short cycle high. The drift from that print has been sideways. Pricewise, this looks like a bull flag, while cyclewise, it should be the prelude to a short cycle downphase. Because the daily cycle still points down, this bounce will be suspect below yesterday's high. But bears need to see at least a break below 39.25, and confirmation below 39.15, before getting the benefit of the doubt. The bulls are in control above 39.30.

Linda Piazza : 8/11/2005 3:34:40 PM

I've mentioned before that I wondered if the RUT were still going to have up into a more substantial right shoulder at some time or another to give a real retest of the broken support of its long-term ascending regression channel. That rising trendline now crosses at just under 679.20, but the RUT could encounter resistance at yesterday's high of 668.20 or at the 30-minute 100/130-ema's at 666.91 and 667.97, respectively. Keltner-wise, it's just testing Keltner resistance at 665.41 on a 15-minute closing basis, with the RUT at 665.46 and with 14 minutes left to go in this period. A breakout here would set a 671.40 upside target, but the RUT sometimes overruns boundaries a bit, so it's always iffy to know whether a close is enough above a resistance line to count. So far, scary as this is for bulls and bears both to endure, and boring as it is (I hate that scary/boring combination, don't you?), this all still fits with the right-shoulder-building exercise. I've said these formations needed bigger right shoulders before we could find out whether the formations would be invalidated or confirmed, so this should be no surprise (to me, at least), but that doesn't make it comfortable. For bulls, there's the knowledge that on some indices, there are well-formed potential H&S formations. For the bears, there's the uncomfortable knowledge that these formations have been invalidated right and left through the rally period.

Linda Piazza : 8/11/2005 3:27:30 PM

SOX headed up to the 468.50-ish resistance zone. Testing 15-minute Keltner resistance at 468.31 on 15-minute closes, and also testing my originally drawn neckline for the SOX's H&S (now have a lower one) at about 468.91, with this morning's 15-minute closes all being below that neckline when it was being tested. SOX at 468.46 as I type.

Jonathan Levinson : 8/11/2005 3:25:46 PM

Crude oil is trading a low for the evening session, -.075 at 65.725 after its new record close at 65.80.

Linda Piazza : 8/11/2005 3:22:25 PM

The OEX now tests the 574-ish resistance zone, with Keltner resistance at 575.26 on 15-minute closes, closer to the 574.90 HOD. OEX at 574.06 as I type.

Linda Piazza : 8/11/2005 3:21:10 PM

Since August 1, it's possible to snap a descending regression channel on the SOX's movements, with the top of that descending regression channel now nearly coinciding with the broken bottom support of the longer-term ascending regression channel. That's at about 472.36-473.75 or so, depending on how steady my hand was when placing the cursor. Bears want that resistance to hold, and bulls want a breakout back above it. The SOX's right-shoulder level for a roughly formed H&S might appropriately extend all the way up to 477-478, but bears would like it better if the SOX never got that far again.

Linda Piazza : 8/11/2005 3:17:50 PM

For the first time since about 1:30 yesterday, the SOX has closed a 15-minute period above the 15-minute 21-ema, finding resistance on closes until now. That might suggest a climb up to retest the 15-minute 100/130-ema's, at 470.06-470.76, but be careful of any assumptions as the attempted breakout is already fading a bit as I type.

Linda Piazza : 8/11/2005 3:16:22 PM

RUT climbing this time, too. Retesting the 15-minute 100/130-ema's as I type, at 663.64 and 664.76, respectively.

Jonathan Levinson : 8/11/2005 3:15:45 PM

Cyclewise, the picture couldn't be muddier. With the daily and weekly downphases still in progress on QQQQ, the 30 min cycle upphase aborted early and the 60 min downphase aborted early, with these 2 cycles perfectly opposed as the short cycle slides sideways. The break above 39.30 should resolve the intraday congestion to the upside, as it seems to be doing here, but bulls will need to hold that support and preferably clear 39.42 to seal it. A close above yesterday's 39.70 would begin to stall the ongoing daily cycle downphase.

Linda Piazza : 8/11/2005 3:13:47 PM

Although it was different last week, the OEX appears to be one of the first indices now to react when the advdec line moves up, as it's doing now.

Benchmarking impressions of the advdec lie: Next Keltner resistance at 1400, then at about 2100. Still coiling as of this time.

Linda Piazza : 8/11/2005 3:05:51 PM

OEX, TRAN, Dow, SPX, SOX: all still coiling.

Jeff Bailey : 8/11/2005 3:05:41 PM

03:00 Market Watch at this Link ... This is the 03:00 Benchmark, not 02:00 as in the "title."

Linda Piazza : 8/11/2005 2:58:22 PM

I tried switching to five-minute Keltner charts to see if they provided any more insight. Nope. Just have to wait out this coiling action.

Jonathan Levinson : 8/11/2005 2:49:31 PM

Session high for ten year notes as QQQQ breaks 39.30 resistance. 30 min channel resistance is at 39.39, just below the 39.40-.42 confluence. Volume breadth is +1.12:1 on the Nasdaq. Link

Linda Piazza : 8/11/2005 2:48:15 PM

I'm still here, still watching, but many of the indices I watch are still coiling and so there's little new to say. The advdec line is trying to move higher, so although coils at the bottom of a drop might be expected to break to the downside, I'm watchful for the possibility that they'll instead break to the upside if the advdec line continues to climb. Hasn't happened yet, though, and many teeter on the edge of breakdowns. The OEX is moving up from the trendline off Monday's low, bouncing now toward 572.68-572.85 next resistance.

Jane Fox : 8/11/2005 2:37:20 PM

Dateline WSJ The Federal Reserve has been moving interest rates higher for more than a year. Will it know when to quit?

By a narrow margin, economists surveyed in the latest Wall Street Journal Online forecasting survey say they think there's a greater risk the Fed will go too far in its campaign of rate increases than it will stop short of what's needed. About 54% said they see a greater risk of the Fed moving too aggressively in the next year, while 46% say the bigger concern is rates will be kept too low.

The Fed is expected to continue to move interest rates higher until the federal-funds rate, a key short-term rate that helps determine rates throughout the economy, reaches 4.5%, based on the median estimate of the 56 economists who were surveyed Aug. 5-9. Earlier this week, the Fed lifted the fed-funds rate by a quarter percentage point to 3.5%, the 10th such increase since last June.

Jonathan Levinson : 8/11/2005 2:33:49 PM

Sept. crude oil finished +.95 at 65.85, off a high of 66.00.

Linda Piazza : 8/11/2005 2:33:07 PM

Benchmarking impressions: Advdec line moving up, but within a sort of coiling formation of its own, too. It's still ringed by Keltner support and resistance, without a clue as to direction.

Jonathan Levinson : 8/11/2005 2:30:00 PM

QQQQ bounces back to the 72 SMA here at 39.24. A failure there would set up a more aggressive retest of the 39.15 line, but while a break above the 39.30 confluenc top would kick off the overdue short cycle downphase. Link

Linda Piazza : 8/11/2005 2:24:38 PM

OEX still testing the rising trendline off Monday's low. Needs a 15-minute close below 570.19 to confirm a breakdown below that trendline. It's at 570.51 as I type.

Jonathan Levinson : 8/11/2005 2:24:32 PM

Just after 10AM, Bernanke clutches the yoke as he pulls a hard out of his turn, a steely grimace in his teeth as the chopper blades kick up a trail of airborn debris at the corner of Water & Wall below. He notes distractedly that the bird's riding light after deploying its payload of repo money on the exchange, wonders distractedly about what that might have done to the price of oil and other commodities valued in dollars, and then brushes those thoughts aside, keeping them well-contained and "on the ground" as the rush of a high-speed chopper run through the city invigorates him yet again.

He radios in to central, and Greenspan's voice crackes through the chopper's Noisefoe headphones, direct from the Marriner S. Eccles building: "All good? Over."

"They got the whole load, Chief. The big 14-day and the permanent bill pass. The works. Over," replies Bernanke.

"That's good. That ought to reassure our friends for the 10-yr auction this afternoon, over," replies The Maestro.

Linda Piazza : 8/11/2005 2:22:55 PM

BIX still looks vulnerable to the bottom of its broadening formation, at 350.65, but it needs to drop below yesterday's low to confirm that vulnerability.

Linda Piazza : 8/11/2005 2:20:33 PM

SOX did not confirm its breakdown out of the coil, but instead bounces right back up.

Jonathan Levinson : 8/11/2005 2:19:52 PM

Another bounce from 39.15 QQQQ, below the secondary intraday rising support line. Bulls need to hold that support: Link

Linda Piazza : 8/11/2005 2:17:44 PM

LOL. I just realized that I've been calling some of my 240-minute charts, 2-hour charts. Where is the brain of the woman who used to study quantum physics and love it? Let's see: 240/60 = 4, not 2.

Linda Piazza : 8/11/2005 2:15:51 PM

SOX breaking out of the coil to the downside, as expected by the position and prior action of the coil, but that hasn't been confirmed by a new LOD, so be careful of assumptions. Looks good so far.

Linda Piazza : 8/11/2005 2:14:43 PM

OEX dropping to test the ascending trendline off Monday's low. A 15-minute close below the Keltner line at 570.24 will confirm that trendline break. OEX at 570.53 as I type.

Linda Piazza : 8/11/2005 2:08:49 PM

Benchmarking impressions: advdec line on Keltner charts is in the mid-channel region, ringed by support and resistance, so no clue there.

Linda Piazza : 8/11/2005 2:01:26 PM

Well, I've been saying for a couple of days now that I didn't think the indices that had possible H&S's on their 60-minute to daily charts had done enough right-shoulder building yet. (I'm not talking about the small continuation-form H&S's on some 15-minute charts.) I guess today indices are doing some of that right-shoulder building. The RUT still isn't doing much as far as height is concerned, not yet able to rise into a substantial right shoulder, so that I'm still left wondering if it will do so. The TRAN's right-shoulder building is taking the form of a coil, and the formation is left looking somewhat ragged on the two-hour chart but a bit better-looking on the daily one, if still stunted in comparison to the left shoulder. The Wilshire 5000's formation always took a little imagination, but the DWC remains within that right shoulder. The SOX still looks as if it needs a bit longer, time-wise at least, before it matches the left shoulder. The SOX's is also difficult to see, but has a neckline perhaps near 465.50, perhaps a bit higher. The possibility of an invalidation of these formations still exits, so bears need to be wary of that possibility.

Jonathan Levinson : 8/11/2005 1:47:59 PM

Session high for ten year note futures at 110 41/64, TNX down 7 bps at 4.334% here. Below 4.3%, 4.2-4.22% is next confluence support.

Jonathan Levinson : 8/11/2005 1:44:57 PM

Volume breadth flips to -1.08:1 on the Nasdaq, too close to call, with price dipping within the range of the past 2 hours. The short cycle upphase is stalling in the early going, but it's just noise above 39.15/ below 39.30. Link

Linda Piazza : 8/11/2005 1:41:44 PM

TRAN coils.

Linda Piazza : 8/11/2005 1:39:55 PM

The OEX still coils above the ascending trendline off Monday's low and Keltner support at 570.43 on 15-minute closes. A 15-minute close beneath that would set a downside target of 567.51.

Jeff Bailey : 8/11/2005 1:34:31 PM

Keene ... are you saying that to irritate me? (grin)

Linda Piazza : 8/11/2005 1:33:01 PM

The RLX has spent the last couple of hours testing the swing highs from late last year and this spring, as it's still doing. RLX at 466.40, with Monday's low at 463.93.

Jonathan Levinson : 8/11/2005 1:27:52 PM

Ten year notes have edged back off their highs, TNX back above 4.35% at 4.359%. Crude oil is down to a .475 gain at 65.375, while QQQQ is holding within the 39.25-.30 confluence zone. Bears need a break below 39.15, bulls above 39.30. That range has been holding since before noon.

Jeff Bailey : 8/11/2005 1:27:40 PM

01:10 Internals found at this Link

Linda Piazza : 8/11/2005 1:28:07 PM

SOX still coiling, but coiling at the bottom of a drop. The usual presumption is that the breakout will occur to the downside, but we're still waiting to see if that holds true.

Jeff Bailey : 8/11/2005 1:24:29 PM

Gold Bugs ($HUI.X) 217.25 +4.41% .. exploding!

Jeff Bailey : 8/11/2005 1:23:34 PM

01:10 Market Watch found at this Link

Linda Piazza : 8/11/2005 1:11:22 PM

Even the advdec line coils.

Keene Little : 8/11/2005 1:11:20 PM

The uptrend line from July 7th marks support for now (currently near 1229) and the downtrend line from August 3rd is resistance (currently near 1243). The larger trend is still up and therefore the uptrend line is more dominant in my opinion and therefore a break of it would be telling. Until either line is broken though, expect choppy price action. Link

Jonathan Levinson : 8/11/2005 1:08:01 PM

Foreign central banks jumped all over the 10 year note auction, taking 6B of the 13B total. The bid to cover ratio was 2.59, the strongest demand since the Dec 2004 auction, and the high-rate 4.25%, the highest since the March 2005 auction. TNX down to 4.348%, breaking 4.5% support on a strong drop.

Linda Piazza : 8/11/2005 1:07:03 PM

OEX coiling, too.

Jonathan Levinson : 8/11/2005 1:03:19 PM

Short cycle upphase trying to form here for QQQQ, but price needs to clear 39.30 resistance for it to confirm. 72 SMA resistance is at 39.32. Link

Linda Piazza : 8/11/2005 1:02:38 PM

SOX still coiling.

Jeff Bailey : 8/11/2005 1:01:52 PM

Pivot Matrix Traders ... here's something traders might be picking up on. INDU/YM at the top, NDX/QQQQ/NQ at the bottom. Link

Jonathan Levinson : 8/11/2005 12:58:59 PM

Session high for ten year notes here at 110 3/8, TNX down 2.6 bps at 4.378%.

Linda Piazza : 8/11/2005 12:57:01 PM

The OEX has shown definite trading patterns in relationship to its 240-minute 100/130-ema's, finding resistance at them in mid-April through mid-May, support until mid-June, resistance until early July, and then support again Monday. Those averages are at 569.59 and 568.63 on a 2-hour closing basis, and the OEX needs to get below them on a closing basis before too much bearish action can occur. Even then, the pattern the whole time has been to form consolidation patterns that either find resistance or support on those averages. Will it do the same if it drops down this time, with the daily 200-sma and other support waiting in the 564-565 region? Link Just noticed that I chopped off part of this chart, with those averages now at 569.59 and 568.64.

Jonathan Levinson : 8/11/2005 12:46:54 PM

Stepping away for 10 minutes.

Linda Piazza : 8/11/2005 12:42:05 PM

Some observations on the RUT: Link Note that the 240-minute 100/130-ema's could provide support when tested or at least be the place at which some continuation pattern forms.

Jonathan Levinson : 8/11/2005 12:41:56 PM

Crude oil +.65 at 65.55, +1%.

Linda Piazza : 8/11/2005 12:36:42 PM

Benchmarking impressions: the advdec line is at Keltner support, but looking vulnerable to a drop to -24 or so. If it drops much below that or particularly closes 15-minute periods below that, it then looks vulnerable to -2100, and this day would perhaps not be looking too bright for bulls. Hasn't happened yet, though, and these are just tentative observations using a new combination that I've been watching.

Linda Piazza : 8/11/2005 12:34:45 PM

RLX still testing swing highs from late last year and this spring, and remains so far just above Monday's low.

Linda Piazza : 8/11/2005 12:33:40 PM

SOX bulls still haven't given up and the SOX coils at the bottom of the drop off yesterday's high.

Jeff Bailey : 8/11/2005 12:33:09 PM

NASDAQ NH/NL ratio chart found at this Link ... Analysis ... For the first time since early May (blue 5) bullish leadership on an intermediate-term basis is taking a rest as the 10-day NH/NL ratio reverses 3-boxes to 84% (three red O's). For you QQQQ traders that have been following my trades and observations, I think we would begin to associate $39.60 as a point of near-term resistance, that is going to be tough to break to the upside, until ....

the shorter-term 5-day NH/NL ratio firms up. Where might we look for some firming? My thought is somewhere around 66%.

Jonathan Levinson : 8/11/2005 12:30:14 PM

The Qs now test combined 30 and 60 min channel support at 39.15, +.04 for the day. QQQQ bears need to see price hold below the 39.25-.30 confluence.

Linda Piazza : 8/11/2005 12:29:49 PM

The OEX is now headed toward 570.53 next Keltner support, with that support also congruent with a rising trendline off Monday's low. A drop through that and a 15-minute close below it will set a 567.48 downside target, but Monday's 568.51 LOD might provide support, too. I've been saying for a while that I think the OEX is vulnerable to the BIX's pattern, so to a drop through its broadening formation to test its 200-sma, at least, but the OEX is moving in the most chopped-up manner possible if it's going to go there.

Jonathan Levinson : 8/11/2005 12:24:41 PM

Nasdaq volume breadth is down to 1:1, perfectly even, NYSE down to +1.38:1.

Linda Piazza : 8/11/2005 12:23:27 PM

OEX testing 571.44 Keltner support, a little below it now, but the 15-minute period has not yet ended, of course. However, on a 15-minute close below 571.44, it looks vulnerable to 570.53 and could even drop before the 15-minute period ends. Doesn't look as if it will currently, but it's a possibility.

Linda Piazza : 8/11/2005 12:20:49 PM

On a drop below yesterday's 353.09 low, the BIX then looks vulnerable to the bottom of its broadening formation on the daily chart, at about 350.65 currently. Actually, I think it looks vulnerable to that already, but yesterday's LOD may provide a bounce point.

Jeff Bailey : 8/11/2005 12:19:11 PM

12:00 Internals found at this Link

Linda Piazza : 8/11/2005 12:18:53 PM

RLX dropping further. Threatening to create a new downside target of 463.55, although this 15-minute period is far from over and so the signal is tentative only. That would constitute a retest of Monday's low, though, if the RLX did drop that low. Monday's low was 463.93, I believe. RLX at 466.05 as I type.

Linda Piazza : 8/11/2005 12:17:14 PM

SOX 468.50-ish resistance holds (although the Keltner channel suggests next resistance at 568.98-569.45). The SOX still looks as if it's forming some kind of consolidation formation or measured retracement formation, somewhat unformed as yet. It could just keel over right here, but it looks as if bulls haven't quite given up yet.

Jonathan Levinson : 8/11/2005 12:15:51 PM

QQQQ is backing away from below 39.40, testing a rising trendline off yesterday's final-hour low. A break below 39.29 will target the 39.25 low set at 11:30 with channel support at 39.15. A surge of volume on the trendline break could signal a fast retest of those levels, below which yesterday's low is the key test. Link

Linda Piazza : 8/11/2005 12:12:57 PM

Benchmarking impressions: the advdec line falls now, with next support at 852 and then at widely spaced intervals, at 479.53, 33.22 and then -2089. Resistance at 1185-1337, with the advdec line (QCharts version) at 1056.

Jeff Bailey : 8/11/2005 12:11:30 PM

12:00 Market Watch found at this Link

Linda Piazza : 8/11/2005 12:06:29 PM

SOX perhaps rising toward a retest of 468.50-ish trendline resistance, but Keltner resistance is higher, at 569.51 on 15-minute closes. SOX at 467.81 as I type.

Jeff Bailey : 8/11/2005 12:06:16 PM

Swing trade put stop alert on the three (3) Newmont Mining NEM Sep $37.50 Puts (NEM-UU) at the bid of $0.30 ($0.30 x $0.35)

NEM $40.90 after trade at $41.05.

Linda Piazza : 8/11/2005 12:05:18 PM

The RLX has now minimally confirmed the H&S on its 15-minute chart, now testing the swing highs from late last year and this spring. (See my 8:57 post for a chart.) This neckline cross is one point in the favor of bears, but they need a drop below Monday's low and then should expect a bounce or steadying attempt from the 240-minute 100/130-ema's, now at 460.47 and 456.05.

Keene Little : 8/11/2005 12:01:53 PM

Jonathan, re: your 11:44 comment, I've heard, and agree, with the brick wall idea. I've heard similar comments about interest rates. At some point the bond market will lose its complacency and become worried about the economy. Bonds will then spike down (yields up) and that will kill the housing market (which appears to be getting a whiff of this scenario, having sold off sharply recently). The dumper in the housing market will then finally hit the equity market. The big question in all this talk of the brick wall is of course where is that wall. It's like we're all running full speed in the dark and wondering where that brick wall is. We know it's out in front of us and we (the market) are beginning to slow down a little and act defensively (arms out in front) as we prepare to hit it and fall down.

Jonathan Levinson : 8/11/2005 11:57:56 AM

Gold took out 444 resistance and is now up 6.80 to 445.70, a dime off the session high with HUI up 3.12% at 214.51. Gold is in a bullish daily cycle trending move above 444 support.

Linda Piazza : 8/11/2005 11:55:36 AM

Benchmarking impressions: No clear next direction on the advdec line, any more than on some the indices.

Jeff Bailey : 8/11/2005 11:54:55 AM

Intel (INTC) $26.49 -1.45% ... stock is weak today after Goldman Sachs downgrade to "neutral" saying margins could be peaking.

Goldman Sachs admitted the downgrade reflects an intermediate-term assessment and still predicts a strong midquarter update in September. The broker noted that when Intel's margins peak on a gross, operating and EBITDA basis, this "has historically coincided with a peak in the stock."

Jonathan Levinson : 8/11/2005 11:54:29 AM

Crude oil pulls back to 65.375 here, +.475, while QQQQ bounces back above the 72 SMA at 39.33. It never broke below 39.25 support. Link

Linda Piazza : 8/11/2005 11:53:36 AM

Charts are a mess. TRAN at mid-channel Keltner levels on the 15-minute chart. Ditto the Wilshire 5000, OEX, Dow, and SPX. The RUT is just settling into a tight range at the bottom of its fall, not a particularly bullish event. Watching the SOX, BIX and RLX among others for some clues as to the next direction.

Linda Piazza : 8/11/2005 11:48:22 AM

The SOX still doesn't look as if it's given up yet, to me. It looks as if it's possible that it's just reforming into a broader flag from which to climb up from this morning's low. We'll perhaps see if there's another test of 468.50.

Jeff Bailey : 8/11/2005 11:45:23 AM

As soon as those BIX.X edged red, gains faided among the majors did'nt they.

10-year ($TNX.X) now down 1.1 bp at 4.393% ...

Jonathan Levinson : 8/11/2005 11:44:30 AM

Keene, I've heard an alternative argument to the effect that current account borrowing has enabled US markets to overcome the rise in oil- but that as the deficit approaches the theoretical savings rate of the entire world- the common guess is $1T per annum- then they will hit a brick wall. I have no clue if this is so, just repeating the argument as I've understood it.

Jane Fox : 8/11/2005 11:44:03 AM

Dateline CNN U.N. nuclear watchdog agency adopts resolution calling on Iran to halt nuclear fuel development.

Tab Gilles : 8/11/2005 11:41:09 AM

IEA report Link

Jonathan Levinson : 8/11/2005 11:40:43 AM

Session high for crude oil at 65.95, +1.05.

Linda Piazza : 8/11/2005 11:40:05 AM

OEX dropping toward 571.75 next Keltner support, with 570.59 next support below that. If that lower channel support breaks on a 15-minute close and with a confirming move below 570, a new target of 567.51 will be set, but that's still a way off. As I said earlier, I don't see anything too bullish happening today on the indices as relates to an intermediate-term outlook, but the possibility remains.

Linda Piazza : 8/11/2005 11:37:43 AM

RLX verging on confirmation of its H&S forming along its rising regression channel, with a drop below 467.36, and with the RLX currently at 468.00. A drop below that neckline would be confirmation of that formation, and one small sign, but those wanting to see the RLX pull back need the confirmation of a drop below Monday's 463.93 low, too. Otherwise, there's just too much chance of an immediate reversal. I'd expect some kind of bounce attempt back to retest resistance from near Monday's low.

Jonathan Levinson : 8/11/2005 11:35:58 AM

QQQQQ loses 72 SMA support here and is now testing 39.25-.30 from above. 30 min channel support is in play, and if this level breaks, the 30 min cycle will whipsaw to the downside.

Linda Piazza : 8/11/2005 11:35:19 AM

Like many other indices, the Wilshire 5000 climbed this morning, and that climb brought it up to test the 240-minute 21-ema, at 12,315.05, with the DWC now at 12,311.21. Like some other indices, the DWC is clinging to the support of its long-term rising regression channel, with a possible roughly-formed continuation-form H&S forming along that channel line. I'd wait for a decline below Monday's low of 12,210.92 before I believed that the channel was being violated, though. The neckline is a little higher than that.

Linda Piazza : 8/11/2005 11:31:16 AM

So far, OEX 574 holds as resistance again. The OEX is back at the mid-channel level on its 15-minute chart, with that at 573.13 on 15-minute closes and with the OEX right there as I type. A failure below this on 15-minute closes suggests a decline to 571.12 and then to 570.74 if that doesn't hold, so essentially, more rattling around within that 569-574-ish consolidation zone.

Jeff Bailey : 8/11/2005 11:30:52 AM

11:00 Internals found at this Link ... Had posted them over in the Futures Monitor by accident.

Tab Gilles : 8/11/2005 11:30:02 AM

NEM & AA up today, taking a look at XLB. Link

AA Link NEM Link

XLB Link Link

Linda Piazza : 8/11/2005 11:25:49 AM

Benchmarking impressions: The advdec line did drop beneath the 1952 S/R, now at 2011, and now looks vulnerable to 1450 or so, and perhaps lower. No real direction predicted here, either, as neither support nor resistance is converging, but down may look slightly more likely than up.

Linda Piazza : 8/11/2005 11:24:07 AM

The OEX is still just jittering around, still testing 574. It's at the midline of the 15-minute Keltner channels, so there's really no prediction just yet as to next direction.

Jeff Bailey : 8/11/2005 11:23:31 AM

S&P Banks Index (BIX.X) 354.23 -0.02% ... has edged into the red.

5-year yield ($FVX.X) is down 0.5 bp at 4.232%, 10-year yield ($TNX.X) is down 0.6 bp at 4.398% and 30-year is lower by 0.5 bp at 4.575%.

Bank of America (BAC) $42.56 -0.44% ...

SPX 1,235.09 +0.48% ...

Jonathan Levinson : 8/11/2005 11:19:24 AM

Session high for crude oil at 65.45 here, +.55. Despite the sharp decline in QQQQ, the volume is light and breadth is still strong on the Nasdaq at +1.62:1. Below 39.20, that should change, but so far, price hasn't even broken the 72 SMA at 39.32.

Linda Piazza : 8/11/2005 11:11:40 AM

OEX still testing the 574-ish zone at the top of its consolidation zone. RLX still testing the 15-minute 100/130-ema's. SOX still testing the 468.50-ish zone, although a little above it currently. The SOX is finding resistance on 15-minute closes at the 15-minute 21-ema. All this zooming higher on the advdec line has so far just brought indices up to retest these resistance levels. Nothing too bullish yet, but it remains possible that the bulls could wrest control yet over intermediate-term developments if they could somehow invalidate those H&S's on some indices.

Tab Gilles : 8/11/2005 11:08:53 AM

Murphy Oil (MUR) Breaking over resistance. Link Link

Let's see if it comes back and retests $55 level as support. Link

Linda Piazza : 8/11/2005 11:04:08 AM

Benchmarking impressions: the advdec line did find support, at least temporarily, above the line now at 1952, and is not trying to rise into a retest of the one now at 2346.45. If it rolls over beneath 1952 on 15-minute closes, 1437 is next support.

Jonathan Levinson : 8/11/2005 11:02:58 AM

Volume breadth still a strong +3.92:1 on the NYSE, +1.89:1 on the Nasdaq.

Jonathan Levinson : 8/11/2005 11:01:21 AM

Session low for GOOG at 282.15 here, despite Fed's small net repo add.

Jonathan Levinson : 8/11/2005 11:00:51 AM

QQQQ found support at 39.40 on the drop from very overbought short cycle readings- so far, this decline is far from what bears need to see in order to stop the strong impulsive 30 min upphase. A lower high on this little wavelet bounce will set up another test of 39.40 support. If it breaks the 39.54 high, then the short cycle will be in a bullish trending move. Link

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

Sept. crude is back up to a 5 cent gain at 64.95, off a new record high at 65.325.

Linda Piazza : 8/11/2005 10:57:15 AM

RLX still testing the 15-minute 100/130-ema's, the right-shoulder level of its potential H&S. Everything is still testing something.

Linda Piazza : 8/11/2005 10:55:07 AM

The OEX is testing the 574-ish zone that's the top of its latest 569-574-ish consolidation pattern.

Linda Piazza : 8/11/2005 10:52:38 AM

SOX testing 468.50-ish level.

Linda Piazza : 8/11/2005 10:51:43 AM

TRAN still climbing.

Jonathan Levinson : 8/11/2005 10:46:23 AM

The Qs have pulled back from the upper 30 min keltner breach, and the toppy short cycle indicators are rolling over. But bears need to slam the price back below 39.25 support to avoid what looks like a strong 30 min upphase from confirming.

Linda Piazza : 8/11/2005 10:46:51 AM

Benchmarking impressions: That Keltner resistance referred to before continues to hold on the advdec line. If that line should fall below 1916 on 15-minute closes, it might be vulnerable to a bigger drop, to 1115 or so, or maybe nearer the flat-line level if that 1100 level doesn't hold. If instead the 1916 level holds as support, a retest of 2236 might be next, with further resistance at 2996. From a Keltner perspective, the advdec line looks as if it should be slowing its advances soon, maybe after one more push higher, or maybe beginning now. Don't trade on this information.

Linda Piazza : 8/11/2005 10:43:36 AM

The SOX is now retesting the first neckline I drew for its H&S, back when the first shoulder and head had been formed, with that at about 468.50 now. I've since redrawn it into a more horizontal neckline, at about 465.75, but the way the 60-minute candles are stopping at that former one makes me believe it might have been the more accurate one after all. Anyway, the SOX at least temporarily is just retesting necklines and not even getting into the proper right-shoulder area on this formation visible on 60- and 240-minute charts, but be cautious, bears, if it zooms far into that right-shoulder area, watchful of the possibility it might invalidate the formation. I don't think that's happening, but recent history certainly suggests that it can and does happen, so while I don't think it is, I'm certainly worried that it might.

Linda Piazza : 8/11/2005 10:39:26 AM

Benchmarking impressions: So far, 2336.12 (QCharts) advdec resistance is holding, but it's a tentative hold only, with further resistance at 2996.74.

Jonathan Levinson : 8/11/2005 10:39:20 AM

Ten year notes easing off their highs but still strong, TNX -2.5 bps at 4.379%.

Jonathan Levinson : 8/11/2005 10:34:40 AM

The US Dollar Index has extended its overnight weakness, probing 87.10 support: Link

Linda Piazza : 8/11/2005 10:34:25 AM

Although I see the possibility for a bounce getting away from the bears, I really don't see anything terribly bullish about what's going on, on the intermediate term. On the very short-term, of course, all bounces are good. Smile. It's just a holding-your-breath kind of morning to me, because it looks as if the bears have temporarily wrested some intermediate-term control of the situation, but there's a danger of them losing that control this morning if those right shoulders get breached on some of those key indices.

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

TRAN did make above a 50% retracement of yesterday's range, but now comes down to retest it.

Linda Piazza : 8/11/2005 10:31:53 AM

Benchmarking impressions: The advdec line is now hitting the Keltner line I indicated as a target earlier, with that now at 2322.95 on 15-minute closes. If the advdec line gets above this on closes, 2985.29 looks like the next target, but there's a possibility this one may hold and the advdec line may pull back a bit. Uncertain as yet.

Jeff Bailey : 8/11/2005 10:30:54 AM

AMEX Gold Bugs ($HUI.X) 213.82 +2.76% ... sector winner early.

Just about EVERYTHING is strong this morning.

Jonathan Levinson : 8/11/2005 10:30:12 AM

Headline:

BA SUSPENDS ALL FLIGHTS FROM HEATHROW TERMINAL 4: SKY NEWS

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

RLX still in a possible right-shoulder forming exercise for a small continuation-form H&S, but It's threatening to break above the appropriate right-shoulder level. It's testing the 15-minute 100/130-ema's, with those at 471.55 and 472.15, respectively, with those roughly marking the right-shoulder area. A break above 474 would likely invalidate the formation.

Jeff Bailey : 8/11/2005 10:30:01 AM

Well Tab, I see that 1.25 on the euro and it better hold as resitance if the NEM Puts are to have a chance. Live currency quotes at this Link

Jonathan Levinson : 8/11/2005 10:28:44 AM

Huge volume just piled in, breaking the highs.

Jonathan Levinson : 8/11/2005 10:28:19 AM

Volume is dropping here at the top of the 30 min channel, usually the spot where bears push back. R1 is at 39.50, above which is the reverse h&s target at 39.64.

Jonathan Levinson : 8/11/2005 10:27:03 AM

Volume breadth is a whopping +4.15:1 on the NYSE, +1.8:1 on the Nasdaq, TRIN .64 and TRINQ .87.

Linda Piazza : 8/11/2005 10:26:01 AM

SOX still climbing. Knew I didn't trust that neckline break. This climb is okay for bears as that right shoulder just didn't seem fully formed yet, but they don't want it to get too far.

Jeff Bailey : 8/11/2005 10:24:50 AM

11:00 Market Watch found at this Link

Linda Piazza : 8/11/2005 10:24:33 AM

This feels a bit like a don't-dare-step-away-from-the-computer morning, but some of those fizzle and nothing happens.

Jonathan Levinson : 8/11/2005 10:24:16 AM

Session highs across the board, QQQQ breaking 30 min channel resistance at 39.39 here.

Linda Piazza : 8/11/2005 10:22:50 AM

The RLX is doing some rattling around, too, all within a possible right-shoulder zone for a H&S on its 15-minute chart. See my 10:04 and 8:57 posts about the RLX for more info.

Linda Piazza : 8/11/2005 10:21:05 AM

The OEX is now tangled up in mid-channel Keltner S/R on the 15-minute charts. Bears would have liked to have seen the OEX roll over by now and certainly want it soon, although I believe the OEX is still just rattling around in a consolidation zone from 569-574. I don't think anything particularly bullish is happening yet, just this rattling around.

Jeff Bailey : 8/11/2005 10:20:10 AM

Yahoo! Inc. (YHOO) $34.68 +1.43% ... those $35.00 puts might just go "poof" at expiration.

Linda Piazza : 8/11/2005 10:16:22 AM

Benchmarking impressions: Advdec line's Keltner setup makes it look possible that the advdec line could continue rising, perhaps toward 2210 and maybe 2899 if that first resistance doesn't hold. A close beneath 1480 would change that outlook. Currently 1615. Don't trade on this information.

Jonathan Levinson : 8/11/2005 10:15:37 AM

Note that the Fed's bill pass is deliverable today- which results in an effective net add for the day of 244M.

Tab Gilles : 8/11/2005 10:14:54 AM

EUR/USD Last week... Link

Today... Link

Linda Piazza : 8/11/2005 10:14:38 AM

TRAN finding resistance at the mid-point of yesterday's range and at the 15-minute 100/130-ema's, on 15-minute closes. It pierced all of those levels intra-period, but is having more trouble on closes, at least so far. Midpoint at about 3760.61 and TRAN currently at 3757.48.

Jeff Bailey : 8/11/2005 10:13:50 AM

10:00 Internals found at this Link

Jonathan Levinson : 8/11/2005 10:13:10 AM

QQQQ tests the 39.25-.30 confluence again, bouncing from the 72 SMA. A break above 39.30 should kick off a retest of 39.40-.42, with the possibility of a reverse h&s break for good measure. Look for a surge of volume for clues as to whether it's the latter. Link

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

SOX immediately reversing to retest the broken neckline. Beware, bears, if there's a quick zoom up and through the right-shoulder area, as this has been a pattern for many months--minimal confirmation and then a zoom up that invalidates a H&S. I don't think that's what's happening. In fact, I think the SOX needed to do some more right-shoulder building anyway, but it's a possibility that must be kept on the radar screen. I just haven't liked the way the SOX broke down today. Keltner-wise, the SOX is just rising to retest a channel line near 466.30, with bears wanting to see continued 15-minute closes beneath that line. SOX at 465.77 as I type.

Jeff Bailey : 8/11/2005 10:09:14 AM

Garmin Ltd. (GRMN) $55.93 +1.35% ... continues to impress.

Tab Gilles : 8/11/2005 10:04:57 AM

$NDX Link

Linda Piazza : 8/11/2005 10:04:45 AM

The RLX's last 15-minute candle erased all the previous candle's gains and then some, but the RLX is trying to bounce again as I type. This could be part of the right-shoulder formation for a H&S visible on the 15-minute chart, with a right shoulder at the 15-minute 100/130-ema's. It looks as if this could use a bit more time building a right shoulder, but a drop below Tuesday's low of 467.36 would confirm it, although there's potential support at Monday's low of 463.93, too. This is a continuation-form H&S, but it's building along an important trendline, so I think it bears watching anyway.

Jeff Bailey : 8/11/2005 10:03:22 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 8/11/2005 10:02:42 AM

Headlines:

U.S. JUNE BUSINESS SALES UP 0.7%

U.S. JUNE RETAIL INVENTORIES FALL 0.4%

U.S. JUNE INVENTORIES FLAT VS. 0.1% GAIN EXPECTED

U.S. JUNE INVENTORY-SALES RATIO RECORD LOW 1.29

Linda Piazza : 8/11/2005 10:00:44 AM

SOX dropping through that neckline now. Potential historical support near 559-560 and perhaps also at the 30-sma at 461.33. SOX at 461.34 as I type.

Tab Gilles : 8/11/2005 10:02:12 AM

Oil Inflation adjusted chart from InflationData.com Link

T. Boone Pickens recently raised his upside target for crude to $75.

Jonathan Levinson : 8/11/2005 9:57:08 AM

QQQQ pulls back down to the 72 SMA at 39.12 as the Fed announces a 2.5B overnight repo, for a net drain of 1B.

Linda Piazza : 8/11/2005 9:56:14 AM

So far, the OEX is still just rattling around in its latest building consolidation zone. This thing moves, consolidates a LONG time, moves, repeats the process. I noted early in the week that the OEX tended to consolidate once it touched mid-channel Keltner levels on the daily chart, and that's what it's been doing again, but doing in a choppy fashion. The OEX has just not been a good trading vehicle unless you're the kind of person who can scalp a few points here and there once a range is likely or clear.

Jeff Bailey : 8/11/2005 9:54:39 AM

That was a "bad tick" to $14.93 on Hanover Compressor (HC) $14.70 +0.40% ...

Linda Piazza : 8/11/2005 9:54:08 AM

TRAN rising more strongly, approaching a 50% retracement of the drop off yesterday's high into yesterday's low. That 50% retracement is at about 3760.60, with the TRAN at 3758.73 as I type.

Jonathan Levinson : 8/11/2005 9:53:48 AM

Session low for GOOG at 282.85 here.

Linda Piazza : 8/11/2005 9:52:23 AM

RUT's climb is tepid again this morning.

Linda Piazza : 8/11/2005 9:50:14 AM

SOX dropping a little more. It is suspicious, though, that the SOX couldn't even mount the tepid bounce that some other indices did, isn't it?

Jeff Bailey : 8/11/2005 9:50:00 AM

Yes Joe, it could be both. Higher oil prices result of strong global economy, but also a drag/tax on that growth.

Linda Piazza : 8/11/2005 9:49:39 AM

The RLX couldn't maintain all of its bounce and turns down from the 15-minute 100/130-ema's, right near the right-shoulder level. It hasn't confirmed its H&S on its 15-minute chart, yet, with the neckline roughly congruent to the supporting trendline of its rising regression channel.

Linda Piazza : 8/11/2005 9:47:22 AM

Not sure what to say about the SOX. It's teetering on a confirmation of its H&S on its 60-minute and 2-hour charts, but not diving beneath the neckline and that right shoulder still looks stunted to me. On the daily Keltner chart, which does have some relevance for the SOX, it looks vulnerable to 460.41 or maybe even 454.35, but only if it doesn't close a day above 470.86 and nothing on the daily chart precludes a test of that resistance. I'm always wary when a tentative confirmation doesn't see follow-through, so right not I'm just not trusting that neckline break. We need to see some follow-through before it's believable.

Jonathan Levinson : 8/11/2005 9:47:21 AM

Don't forget Business Inventories at 10AM, est. .1%.

Jeff Bailey : 8/11/2005 9:43:46 AM

Wellpoint (WLP) $73.96 +1.06% ... this what I WAS expecting! For strength, want WLP to work its way to another all-time high and through that "zone of resistance" from our fitted retracement of $74.33-$75.20.

Linda Piazza : 8/11/2005 9:42:45 AM

SOX still maintains a 463.62 downside target on the 15-minute Keltner channels.

Linda Piazza : 8/11/2005 9:41:53 AM

The OEX has made it past the first level of Keltner resistance, but the first 15-minute period hasn't closed yet. That's at 572 on 15-minute closes, with further resistance at 573.09-573.44. Bears need to see that higher resistance hold, or the OEX is just cycling back up through the same channel that's been containing most of its movements for a while.

Jonathan Levinson : 8/11/2005 9:40:44 AM

30 and 60 min channel resistance will line up at 39.30 QQQQ, which is the top of 39.25-39.30 confluence resistance. A break avove it could also be a reverse h&s neckline break, projecting to the mid 39.60 area: Link

Jeff Bailey : 8/11/2005 9:41:26 AM

Newmont Mining (NEM) $40.51 +1.65% Link ... this is NOT what I was looking for this morning. I was looking for the Dollar Index (dx00y) 87.26 -0.39% to bounce HIGHER from WEEKLY S1 after global participants digested the budget numbers overnight.

Jonathan Levinson : 8/11/2005 9:37:06 AM

Session high for Oct. gold at 443.50, in range to test 444 resistance, a close above which should cause the daily cycle upphase to begin trending in overbought territory.

Linda Piazza : 8/11/2005 9:36:11 AM

RLX climbing from the bottom of its rising regression channel. Knew it likely was before looking at it because of what the OEX was doing. The RLX has a small sort of H&S forming along the bottom trendline of that rising regression channel, a continuation-form one, but I give this perhaps a little more credit since it's forming along that supporting trendline of the long-term rising regression channel. Shoulder at about 472.27, head at yesterday's high, neckline confirmation at about 467.36, but then there's the support from the 8/08 low of 463.93. RLX at 470.87 as I type.

Jonathan Levinson : 8/11/2005 9:36:09 AM

Volume breadth +1.8:1 on the NYSE, +1.25:1 on the Nasdaq.

Linda Piazza : 8/11/2005 9:33:09 AM

SOX testing that neckline for its H&S on its 240-minute chart. It actually may be a little below that neckline, being also a little below yesterday's low, but I think it's still in a testing zone.

Jeff Bailey : 8/11/2005 9:33:37 AM

TiVo (TIVO) $5.50 -8.18% Link ... gaps below its 200-day SMA ($5.60) after a Reuters report saying that DirecTV (DTV) will stop marketing TiVo's recorders this year.

Linda Piazza : 8/11/2005 9:32:00 AM

I wasn't sure the OEX was through attempting to climb within a possible bear flag, and it wasn't. It's rising up toward 571.87 first Keltner resistance. OEX at 571.43 as I type.

Jonathan Levinson : 8/11/2005 9:31:57 AM

30 min cycle indicators are nearing oversold territory, the 60 still continuing lower. QQQQ 38.93-.95 is 30 min support, and the question is whether the longer cycles will be able to push it lower. Bears need to see the price below 72 SMA support at 39.12. Link

Jeff Bailey : 8/11/2005 9:24:18 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $+3.34 and set for program selling at $+1.00.

Jonathan Levinson : 8/11/2005 9:17:26 AM

The Fed has 16.5B in expiring repos today, and has so far announced a 13B 14-day repo, leaving 3.25B with which to deal at the 10AM announcement.

Linda Piazza : 8/11/2005 9:15:48 AM

Near the close yesterday, I made the following notations about the OEX. That long-term horizontal resistance band that I've pointed out many times, carried over from the monthly chart, held, and the OEX was slapped back after a morning test of that band. The OEX remains within a broadening formation similar to the BIX's (although it's also possible to draw a rising regression channel off the April low). The OEX even fell back from the rising trendline under the consolidation pattern from the last few weeks, so that we've had a retest of that trendline going on for the last couple of days, and the OEX can't close back above that trendline. 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 yesterday that was reversed, 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 the RLX. For a chart of the RLX's rising regression channel, see my 8:57 post. On the OEX, watch for a break below the 50-sma and Monday's low as a suggestion that the 200-sma might be tested. Here's the chart I posted at the close yesterday, in case you didn't see it: Link

As of yesterday's close, the 15-minute Keltner chart showed that the OEX might not yet be through testing resistance. As the supporting line of that channel that's contained most OEX movements over the last month was tested yesterday, there was Keltner-style bearish divergence. I won't bore you with the details, but it was there, and the OEX erased its new 567.77 downside target. What bears would most like to see is another 15-minute close beneath a Keltner line currently at 570.78 and then a move below 570, resetting that downside target, but I'm not completely sure that the OEX is ready yet to break down out of that bear flag that it looks as if it's forming. I still think it's a bear flag, at least as of now.

Failing a rollover beneath 570 this morning, the OEX may again attempt a climb through that channel then, with the OEX then hitting Keltner resistance at 572.01 and then 573.10-573.33. If it does bounce this morning, bears want to see a measured bounce, and not a zoom higher, although that zoom didn't ultimately help the bulls yesterday. They want to see a rollover, preferably from near 572, but perhaps from near 573-574. Beyond that, and bears should stand aside again, waiting to see where it stops, but I think we're seeing a topping out pattern in some indices. We should keep a watch on all those potential H&S's on the SOX, RUT, Wilshire 5000 and some others, however, for right-shoulder violations, as that might be a our first evidence that this topping-out theory is going awry. I'm also not sure that these indices are through building their right shoulders, as they're stunted in comparison with left shoulders, but the SOX this morning may give us a first clue after the GS downtrade that Marc mentioned. We'll see if there's a buy- or sell-the-news effect.

Jonathan Levinson : 8/11/2005 9:05:25 AM

Session high for ten year notes here at 110 11/32, TNX down 3.2 bps at 4.372%.

Linda Piazza : 8/11/2005 8:57:54 AM

Many of you know I've been saying that the RLX is a sometimes-ignored index that I believe we ought to be watching more closely, particularly those trading the OEX. Apropos of Jonathan's 8:31 post on retail sales figures, here is a 240-minute chart of the RLX: Link

Jane Fox : 8/11/2005 8:38:49 AM

Dateline WSJ WASHINGTON -- Consumers shrugged off rising gasoline prices and binged on discount-priced cars during July, giving retail sales another big gain and delivering a jolt to an already brisk economy.

Retail sales increased a seasonally adjusted 1.8%, after climbing an unrevised 1.7% in June, the Commerce Department said Thursday. May sales sank 0.3%.

The increase came short of expectations. The median estimate of 22 economists surveyed by Dow Jones Newswires and CNBC was for a 2.2% advance in retail sales, a closely watched gauge of how people in the U.S. spend money.

Demand at retail outlets excluding the bustling auto sector was also weaker than expected as sales tumbled at furniture stores and building material retailers despite the sizzling housing market.

Consumer spending is a pivotal part of the equation used to figure out how the economy is faring. Spending makes up about two-thirds of gross domestic product.

Jonathan Levinson : 8/11/2005 8:32:46 AM

Equities and ten year notes are unchanged from their pre-data levels, equities printing session lows as I type, QQQQ down to a 4 cent gain at 39.15.

Jonathan Levinson : 8/11/2005 8:31:35 AM

Headlines:

U.S. JULY RETAIL SALES UP 1.8% VS. 1.9% EXPECTED

U.S. JULY RETAIL SALES EX-AUTOS UP 0.3% VS. 0.6% EXPECTED

U.S. JULY RETAIL SALES EX-AUTOS, EX-GAS UNCHANGED

U.S. JULY AUTO SALES UP 6.7%

U.S RETAIL SALES UP 10.3% YEAR-OVER-YEAR, BEST IN 11 YRS

U.S. MAY, JUNE RETAIL SALES UNREVISED

U.S. JULY GASOLINE SALES UP 2.4%

Jonathan Levinson : 8/11/2005 8:30:45 AM

Headlines:

U.S. INITIAL JOBLESS CLAIMS FALL 6,000 TO 308,000

U.S. INITIAL JOBLESS CLAIMS LOWER THAN EXPECTED

U.S. 4-WEEK AVG. JOBLESS CLAIMS FALL 7,250 TO 309,250

U.S. CONTINUING JOBLESS CLAIMS FALL 8,000 TO 2.57 MLN

Jonathan Levinson : 8/11/2005 8:25:58 AM

Ten year note futures (ZNU5) are down 1/16 at 110 1/8 ahead of the data, TNX also down 0.2 bps at 4.402%. Equity futures have pulled back to just below unchanged, QQQQ at a 39.17 session low, +.06 from the close.

Jonathan Levinson : 8/11/2005 7:45:46 AM

Equities are up, ES trading 1235, NQ 1597.5, YM 10643 and QQQQ +.12 to 39.23. Gold is up 1.9 to 440.80, silver +.025 to 7.105, ten year notes +5/64 to 110 7/64, and crude oil is flat at 64.90.

We await the 8:30 releases of Initial Claims, est. 315K, Retail Sales, est. 2%, and Retail Sales ex auto, est. .6%. At 10AM, it's Business Inventories, est. .1%.

Linda Piazza : 8/11/2005 6:58:12 AM

Good morning. Last night, the Nikkei hit its highest level since August, 2001. Other Asian markets were mixed, and European markets trade lower. Our futures are modestly positive. As of 6:37 EST, gold was higher by $1.90, and crude, lower by $0.42 to $64.48. More detail about Asian and European markets follows in succeeding paragraphs.

Nothing's stopping the Nikkei lately. It gapped higher and then climbed, hitting its highest value in four years. As of mid-afternoon, the Nikkei had gained 670 points since Monday afternoon, a gain of 5.8% in three trading days. It closed a little off the HOD, but still higher by 165.24 points or 1.37%, at 12,263.32. Banking stocks led the way. July's Tokyo office vacancies had dropped to the lowest figures in more than three years, and property developers joined other gainers. Many other domestic-demand-related issues also gained. A poll had shown that Prime Minister Koizumi's Cabinet's rating improved 4 points, increasing chances that his party will win the September 11 election. According to an article in Japan Business News Online, Koizumi will try to replace all 37 (previously reported as 51) party members who voted against his postal privatization bill by new candidates in that election. The Ministry of Finance announced that June's current account surplus showed an unadjusted decline of 15.3% from the year-ago level. Economic Minister Takenaka had encouraging things to say about the economy, stating that the country was tracking toward an achievement of the government's 2% target for nominal GDP growth and that he didn't think that rising long-term yields would wreck the recovery. He also added some warnings about deflation, however, saying that money supply had to grow before deflation ends, and that the positive CPI, CGPI, and positive deflator don't mean that deflation has been overcome without that money-supply growth.

Other Asian markets were mixed. The Taiwan Weighted lost 0.05%, but South Korea's Kospi gained 1.71%. Singapore's Straits Times declined 1.39%, but Hong Kong's Hang Seng rose 0.64%. China's July trade surplus widened again, with exports surging and import growth slowing. The number was much higher than expected. July CPI came in higher than expected, up 1.8% year over year from the previous month's 1.6% rise. Higher gasoline and diesel prices at the pump, as well as increased costs of vegetables and health care drove the number higher. The January-July rise of 2.2% was still deemed acceptable, however, as July's rise had been the first in five months. Also, the IEA has trimmed its forecast for Chinese demand for crude this year, seeing signs of a slowdown in demand in the third quarter. The IEA doesn't see this as immediately lessening price pressure on crude, however. The Shanghai Composite rose 1.59%.

European markets decline. In Germany, the Q2 preliminary GDP dropped to 0.8% quarter over quarter from a revised lower Q1 0.8%, showing the first half to be somewhat weaker than had been expected. One article noted that net trade was solely responsible for the rise in the first quarter, so that exports had boosted that figure, but in the second quarter, domestic demand boosted the figure while exports declined. The annualized figure showed a 1.5% growth in Q2 against the Q1 0.3% contraction. Other economic releases by the DIW Institute and Bundesbank have previously warned of a slowing in the second quarter. In another release, July's CPI increased 0.4% month over month and 1.9% year over year, against June's 1.8% year-over-year growth. In a number that met expectations, the Eurozone's Q2 GDP grew 0.3% quarter over quarter and 1.2% year over year, against Q1 figures of 0.5% and 1.4%, respectively. The pattern seen in Germany was expected to repeat, with exports having been responsible for growth in the first quarter, but with domestic demand taking over in the second while exports retreated somewhat. A separate release saw the European Commission keep its forecast for the third quarter's GDP growth at 0.2-0.6%, forecasting that growth would increase to 0.4-0.8% in the fourth quarter. In addition to these numbers, today saw the ECB release its monthly bulletin for August, but that bulletin just seemed to follow the text of recent statements, with the rates deemed low and supportive of economic expansion. The central bank doesn't see inflation pressures from domestic growth, but is watchful of the effect of crude prices, import prices, and second-round effects. It's also watchful of the housing market, low consumer confidence, and global imbalances and their impact on the European economies.

CNBC Europe has focused much attention this morning on government selling of European telecoms, and the likely implications on deregulation and credit ratings for the affected telecoms. Deutsche Telekom reported today, with second quarter earnings rising 63% and the company adding nearly a million new customers. Germany's fixed-line sales were of concern, however and the company's stock eased in early trading. ING was another reporting company, with the stock declining afterwards and being one of Europe's leading stocks to the downside. Aegon also dropped after its forecast. EADS was another European decliner. Broker news included Societe Generale's lifting of airline Lufthansa's rating, and Morgan Stanley's raising of Danone's. Credit Suisse may need to increase its legal reserves, one report noted.

As of 6:40 EST, the FTSE 100 was lower by 16.40 points or 0.30%, at 5,361.10. The CAC 40 was lower by 21.62 points or 0.48%, at 4,505.49. The DAX was lower by 37.17 points or 0.74%, at 4,953.40.

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