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Jeff Bailey : 8/17/2005 1:47:24 AM

September Crude Oil (cl05u) up 10 cents, or +0.15% at $66.18.

e-mini S&P (es05u) up 1.25 points at 1,222.75.

e-mini NASDAQ (nq05u) up 1.00 point at 1,584.00.

mini Dow (ym05u) up 17 points at 10,550

Jeff Bailey : 8/17/2005 1:44:30 AM

Program Trading Levels for Wednesday ... HL Camp & Company has their computers set for program buying at $+3.13 and set for program selling at $+0.75.

OI Technical Staff : 8/16/2005 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The Market Monitor has been archived.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 : 8/16/2005 7:17:14 PM

Pivot Matrix for Wednesday at this Link ... Note: BIX.X gets trade at WEEKLY R1 (PINK SQUARE) then CLOSES below WEEKLY Pivot (little PINK SQUARE). What "went wrong" and the major averages didn't follow the BIX's trade? Why did BIX give back WEEKLY R1? 10-year YIELD ($TNX.X) LOWER.

Note: Today's 10-year YIELD notes from MM 01:42:14.

Scenario for HIGHER YIELD and 10-year YIELD Support at 41.75/41.72 correlation, bank rally, broader market rally might be if ENERGY Prices reverse sharply.

Is the LOWER YIELD trade because of "inflation?" Or is it "defensive" as investors scramble for some higher yields in Treasuries? What's our "junk bond" Pacholder High Yield (PHF) Link been doing of late? I can see buying PHF for its yield, but if concerned about INFLATION and slowing economy, there's no way MARKET participants would want to take on such risk as it relates to the risk scale of fixed income. Yet they have.

I did note today that Citigroup (C) $44.14 +0.79% Link was the only percentage gainer in the Dow today (03:01:09). JP Morgan (JPM) $34.58 -0.20% was also positive (+0.57%) at those notes (MM 03:01:09).

Hmmm.... OEX and BIX heavyweight ... Bank of America (BAC) $43.72 +1.25% Link has been a real drag on the BIX.X of late.

Jeff Bailey : 8/16/2005 5:53:00 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 8/16/2005 5:00:54 PM

Closing Internals found at this Link

Table of internals dating back to 06/23/05 at this Link where I'm looking at some of the recent NASDAQ daily New Low numbers.

A seemingly "climactic" number of 80 lows were found on 06/24/05. The COMPX closed 2,053.27 that day, then 2,045.20 the following session (06/27/05). For those that are following the possible reverse h/s pattern on the daily interval charts, you will associate the late-June lows with the "right shoulder." COMPX daily interval chart at this Link and the narrower QQQQ at this Link

Jeff Bailey : 8/16/2005 4:11:40 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... I did not profile any new trades today.

Marc Eckelberry : 8/16/2005 4:09:33 PM

QQQQ has a July gap to close at 38.39. If you bought those 39 September puts with me a few weeks ago, that would be a preliminary target.

Jeff Bailey : 8/16/2005 4:07:33 PM

IBM (IBM) $81.30 -1.45% Link ... flat in early extended session.

Jeff Bailey : 8/16/2005 4:07:15 PM

Hewlett Packard (HPQ) $23.70 -1.61% Link ... pops to $24.58 on headline numbers. Q3 financials at this Link

Linda Piazza : 8/16/2005 3:59:30 PM

The SOX still hangs onto 458.25-ish support. The 15-minute Keltner channel suggests that it's got a downside target of 456.23 and daily Keltner channels show a downside target of 454.64-455.56, but that 458.25-ish level from mid-July is still tentively holding up.

Linda Piazza : 8/16/2005 3:47:26 PM

Making the decision whether to hold a bearish position overnight or not as the OEX approaches or has approached its 200-sma should include information about account size, the expiration month of the options involved and other factors. Often, as an important level is tested, I expect some choppiness around that level. If I'm in a longer-term position and I've got the ability to do it (because of size of the position, partial profits already taken, expiration month, cushion), I'll widen my stop a little and sit back and let that choppiness unfold. If I'm in a front-month position, however, and particularly during opex week, I'm more likely to take all or almost all of my profit and then let the choppiness unfold and re-enter later.

Linda Piazza : 8/16/2005 3:42:07 PM

The OEX's 200-sma test coming up. At times, the 200-ema is at 562.69, and sometimes that average is more important to OEX behavior. OEX bears need to know how they'll handle this test of the 200-sma.

Jeff Bailey : 8/16/2005 3:36:26 PM

VIX.X 13.55 +10.52% ... WEEKLY R1 here.

Linda Piazza : 8/16/2005 3:36:12 PM

I've been saying for a while now that I thought it likely that the OEX would follow the BIX's example and fall through its broadening formation to retest its 200-sma, and today's the day that's happening. OEX at 566.68 and 200-sma at 565.95. The OEX might be expected to at least attempt to steady there, so bears need to make a decision about what they'll do about that test of this average.

Linda Piazza : 8/16/2005 3:33:57 PM

The SOX is now inching down toward the bottom of its ascending regression channel off the spring low, and toward the 240-minute 100/130-ema's that mark the bottom of that channel, with those averages at 453.72 and 448.51, respectively. The SOX is at 457.62 as I type, approaching that potential support. These steep ascending regression channels off the spring lows have already toppled for other indices, such as the RUT and RLX, but all are now testing their 240-minute 100/130-ema's somewhat congruently.

Jeff Bailey : 8/16/2005 3:33:13 PM

Chicago Merchantile (CME) 269.00 -1.9% ... reverses earlier gains and breakings below yesterday's lows.

Linda Piazza : 8/16/2005 3:27:22 PM

BIX negative, back below the 10-dma at 356.58.

Linda Piazza : 8/16/2005 3:26:32 PM

RLX below its 50-sma for the first time since May 17. It's now dropped down into a test of the 240-minute 100/130-ema's at 461.30 and 457.17, respectively, however, with those averages having prompted an RLX bounce in June. RLX at 459.78 as I type. This could be a potential bounce point, although now it would likely be a bounce up to test broken support.

Jeff Bailey : 8/16/2005 3:25:27 PM

BIX.X 355.62 -0.26% ... session low

Jeff Bailey : 8/16/2005 3:24:39 PM

Sell Program Premium ... DIA $105.37, SPX 1,220.97, QQQQ $38.80

Linda Piazza : 8/16/2005 3:23:41 PM

The OEX is dropping below the breakdown level again, with that tentative upside break above the Keltner line currently at 568.63 not meaning much after all. Bears need to follow the OEX lower with their stops, however, and have a profit-protecting plan in place for a test of the new 565.86 downside target.

Linda Piazza : 8/16/2005 3:22:30 PM

SOX testing those mid-July S/R levels that I mentioned earlier.

Jeff Bailey : 8/16/2005 3:20:25 PM

Coca Cola (KO) $43.45 -0.20% ... Just seeing that the company's Greek bottler Coca Cola HBC raised its 2005 EPS and volume growth targets after meeting quarterly expectations and citing strong volume growth in the first half of the year. Reuters story at this Link

Sure hasn't helped the KO bullish trade at this point though.

Jonathan Levinson : 8/16/2005 3:16:35 PM

I have to step away and won't be back before the close. Updated intraday QQQQ chart at this Link , invalidating the potential reverse h&s noted earlier.

Jeff Bailey : 8/16/2005 3:12:11 PM

03:00 Internals found at this Link

Linda Piazza : 8/16/2005 3:09:25 PM

For the first time today, the OEX closed tentatively above the Keltner resistance line at 568.79. The close during the last 15-minute period was just above that Keltner line, so the change in tenor is tentative only, but bears would rather it not have happened at all. If you took partial profit earlier today and then reset stops to breakeven, you may have since had an opportunity to reset them a bit lower as the OEX sank. Keltner lines are now more widely scattered, so that it's difficult to pinpoint which resistance might hold, but next resistance is at 569.48-570.05.

Jeff Bailey : 8/16/2005 3:03:35 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 8/16/2005 3:01:48 PM

A wavelet upphase is starting from a higher price low, setting up a sloppy reverse h&s that projects to the 39.07 level. With the 30 and 60 min cycles pointing lower and breadth holding negative, this looks like a very iffy justification for a long play here. Link

Jeff Bailey : 8/16/2005 3:01:09 PM

Citigroup (C) $44.36 +1.30% ... hmmm... only Dow component showing a gain of 1% or better. Breadth negative at 24:6.

WMT -3.11%, CAT -2.35%, HD -2.01%, INTC -1.62%, HON -1.62% ... JPM +0.57%, VZ +0.36%

Linda Piazza : 8/16/2005 2:58:00 PM

SOX still maintains its downside target of 456.52, or it will with a 15-minute close beneath the Keltner line currently at 459.25.

Linda Piazza : 8/16/2005 2:56:14 PM

The RLX is currently just off its LOD, now at 461.32, trying to bounce from its 50-sma at 460.71. HD of course is not gaining today as I previously noted. I've been looking at components of two different indices today and got HD mixed up with another gaining stock on another index. Beats me how my brain thought HD and DAL were similar, other than that both were seeing news-related action today, but somehow, that's what I did.

Linda Piazza : 8/16/2005 2:49:27 PM

And the OEX prompted erased its breakdown signal. It's currently still finding resistance on 15-minute closes on a Keltner line that's currently at 568.73, however. The OEX is at 568.66 as I type. Bears would prefer to see a new breakdown signal, but the 8/08 decline was accomplished in much this way, with tentative breakdown signals erased just after they had been completed, but with the OEX continuing to find resistance at that same Keltner line, then at different levels, of course, and to follow the supporting line lower.

Jeff Bailey : 8/16/2005 2:43:33 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 8/16/2005 2:41:47 PM

RUT again today approaching the 50-sma at 655.48, with the RUT at 657.56. The previous two days, the RUT has approached this average, but bounced both times. RUT bears probably need to break the RUT below this average soon and confirm the H&S on its daily chart, or the continued bounces will begin to encourage bulls instead.

Jonathan Levinson : 8/16/2005 2:41:02 PM

QQQQ is working on 38.95 from below as the short cycles try to turn up, and this may well be a good setup, but it looks very similar to the same action earlier on the bounce to 39.12-.15. Other than for a scalp, bulls will need to see 39.05 regained, but volume is so far very light on the bounce: Link

Jonathan Levinson : 8/16/2005 2:39:23 PM

Crude oil finished -.15 to 66.125, off a high of 66.825.

Jonathan Levinson : 8/16/2005 2:33:20 PM

QQQQ bad tick here to 39.05, price holding 38.93.

Linda Piazza : 8/16/2005 2:32:03 PM

The OEX has produced a tentative--very tentative--new downside target of 566.11. OEX bears need to see a steeper drop to make them believe it, however, as the OEX sometimes minimally drops below the breakdown signal and then comes right back up. OEX at 568.19 as I type, and bears would like to see it continue 15-minute closes below 568.27.

Jonathan Levinson : 8/16/2005 2:25:56 PM

Volume breadth -4.24:1 for the NYSE, -1.94:1 for the Nasdaq.

Jonathan Levinson : 8/16/2005 2:20:33 PM

Bulls will be hoping that this is just a throwunder beneath the prior 38.95 lows. 1st sign of trouble for bears will be a break above it. Link

Linda Piazza : 8/16/2005 2:17:14 PM

SOX inching just a bit below the 458.69 previous LOD. The SOX is at 458.48 as I type.

Jonathan Levinson : 8/16/2005 2:16:19 PM

Bears who took the QQQQ 39.45 break short should consider lowering stops to 39.15 here, just above 30 min channel resistnace.

Jeff Bailey : 8/16/2005 2:14:07 PM

02:00 Internals found at this Link

Linda Piazza : 8/16/2005 2:10:37 PM

Benchmarking impressions: The advdec line hasn't been able to rise, so remains vulnerable to a deeper decline. A move above about -2450 would perhaps change that outlook. The Q-Charts version is now at -2728.

Jonathan Levinson : 8/16/2005 2:10:32 PM

The current low should coincide with a 30 min cycle low, but the 60 min cycle downphase has plenty of room to run so long as price holds below 39.15 QQQQ. We often see sideways chop for a few hours as the 60 min cycle makes its turn, and in this case, it's nowhere near oversold. Bulls can try to jump on now with a stop at 38.85, but it looks very high risk to me. Session lows printing as I type.

Jeff Bailey : 8/16/2005 2:05:02 PM

02:00 Market Watch found at this Link

Linda Piazza : 8/16/2005 2:02:02 PM

The SOX has created a tentative downside target of 456.69, although it's currently testing the day's low and Friday's, and that support obviously has to break first. So, I think the downside target is still a tentative one.

Linda Piazza : 8/16/2005 2:01:09 PM

OEX testing Keltner support/breakdown level again at 568.47 on a 15-minute close. OEX at 568.57 as I type, with a new 15-minute period just begun.

Jeff Bailey : 8/16/2005 2:02:46 PM

Educational (10-year YIELD / Futures) ... now here is an 08/10/05 futures benchmark at this Link

An 08/11/05 futures benchmark at this Link

An 08/12/05 futures benchmark at this Link

An 08/15/05 futures benchmark at this Link

And an intra-day 08/16/05 futures benchmark at this Link

A good example of why you may want to TRADE futures, but NOT SIMPLY based on some YIELD level, or DIRECTION of that YIELD.

Jonathan Levinson : 8/16/2005 1:59:12 PM

38.95 support being tested here.

Jonathan Levinson : 8/16/2005 1:53:10 PM

QQQQ's breaking rising support, but channel support is unanimous at QQQQ 38.95: Link

Linda Piazza : 8/16/2005 1:48:40 PM

OEX Keltner resistance at 569.16 still holds on 15-minute closes and the OEX might be expected to go on challenging Keltner support at 568.52 as long as that resistance holds. Be cautious, though, as one prime stop-running time of day approaches.

Jeff Bailey : 8/16/2005 1:42:14 PM

10-year YIELD ($TNX.X) ... here a Stockcharts.com daily interval chart at this Link ... from a purely technical basis, I looked for YIELD BUYERS at the 4.40% level at what looked to be a "right shoulder." That 44.35 (4.435%) yield high came on 08/09/05. Now, here's how my "futures benchmark" (from 08/05/05 benchmarking) looked at that time. Link ... Now here's the 10-year YIELD ($TNX.X) chart with WEEKLY/MONTHLY Pivot retracement at this Link ... What is YOUR opinion of the BIX.X at this point? Why MIGHT the BIX.X find buyers and move higher? ONLY two reasons I can think of. WHY MIGHT the BIX.X continue to exhibit weakness? Only two reasons I can think of (slowing economy brings DEFENSIVE BUYING to Treasuries and MARGINS get squeezed further, too HIGH a YIELD and not enough loan generation even as MARGINS expand vs. Fed Funds).

Linda Piazza : 8/16/2005 1:37:35 PM

The SOX has nearest Keltner support at 459.63-459.91 and nearest resistance at 460.66, all on 15-minute closes. The SOX is squeezed between support and resistance, at 460.20, with short-term direction as yet unclear.

Jonathan Levinson : 8/16/2005 1:31:46 PM

Closeup of rising support off the low: Link

Linda Piazza : 8/16/2005 1:28:38 PM

The OEX has been challenging Keltner resistance at 569.31 on 15-minute closes, with the OEX currently at 569.19 as I type and with several minutes to go into the end of this period. A climb much higher than this would risk seeing the OEX start a stronger climb up through that same old Keltner channel, but the advdec line hasn't been able to erase its downside target yet, so it's unclear whether this climb is sustainable just yet. That leaves those in both bullish and bearish positions in limbo.

Jonathan Levinson : 8/16/2005 1:26:03 PM

QQQQ update at this Link , with no progress in the sideways short cycle upphase. Volume is running heavier than yesterday, breadth still -1.7:1 on the Nasdaq, and bearish positions from 39.45 QQQQ are still comfortable well above the action with stops at 39.30.

Jeff Bailey : 8/16/2005 1:18:18 PM

01:00 Internals found at this Link ... So... what do YOU think about 10-year YIELD ($TNX.X) 4.25% being bullish/bearish for stocks? What do you think about "lower yield good for stocks?" What do you think about "higher yield bad for stocks?"

Maybe 4.25% on the benchmark bond was a coincidence?

Stay tuned .... I'm not through ...

Jonathan Levinson : 8/16/2005 1:10:39 PM

Ten year note yields are down to 4.209%, -6.1 bps or 1.43% for the day.

Linda Piazza : 8/16/2005 1:09:40 PM

So far, Keltner resistance at 569.28 still holds on 15-minute closes.

Jeff Bailey : 8/16/2005 1:06:27 PM

01:00 Watch found at this Link

Jonathan Levinson : 8/16/2005 1:04:46 PM

The 4-week t-bills fetched a high-rate of 3.26%, bid-to-cover or 2.52. Foreign central banks took a small 1.34B of the 16B total.

Jonathan Levinson : 8/16/2005 12:58:33 PM

QQQQ's 30 min cycle downphase is just approaching oversold territory, while the 60 min has barely made it to its midpoint. This remains a synchronous 30/60 min/daily/weekly cycle downphase, and no wonder the short cycle bounce is so weak. Below 38.95, this bounce would be a bear flag, and could project potentially 50-60 cents lower. Bears who didn't enter on the 39.45 failure would scope to get short on the next wave down, or on the bounce following the initial break. Link

Linda Piazza : 8/16/2005 12:56:44 PM

The SOX is approaching levels that require either a strong downside push to move it or that might allow a stronger bounce if that push doesn't occur. It's been testing a mid-July S/R zone. Below that is the bottom of the rising channel off the spring lows, and the 240-minute 100/130-ema's, so that 453.50-458 might provide multiple types and levels of support.

Jeff Bailey : 8/16/2005 12:53:17 PM

10 Most Active ... QQQQ $39.07 -0.93%, SPY $122.77 -0.84%, CSCO $17.78 +0.39%, INTC $26.11 -1.58%, TMTA $2.08 +22.35%, MSFT $26.96 -0.62%, SUNW $3.70 -1.59%, WMT $47.49 -3.27%, GTW $3.11 -20.05%, ORCL $13.29 (unch)

Jonathan Levinson : 8/16/2005 12:44:48 PM

Ten year notes have extended their gains further, TNX now down 5.4 bps at 4.216%. The Fed's big repo drain combined with the rally in Treasuries continues to hurt equities. We'll see if that changes after the 1PM release of the 4-week bill auction results. Lately, foreign central banks have been more reticent with the short-dated auctions.

Linda Piazza : 8/16/2005 12:41:39 PM

OEX 569.47 Keltner resistance still holding on 15-minute closes.

Tab Gilles : 8/16/2005 12:36:14 PM

Cisco Systems (CSCO) Link

Jonathan Levinson : 8/16/2005 12:35:23 PM

Session high for gold and silver here, +2.60 at 447 and +.071 at 7.041. HUI is up .48 at 216.2.

Linda Piazza : 8/16/2005 12:30:18 PM

OEX still refusing to create a new breakdown signal. It is, however, finding resistance at a Keltner line currently at 569.56. As long as it does that, it's likely to go on challenging the support currently at 568.70. The OEX is at 569.03 as I type.

Linda Piazza : 8/16/2005 12:26:26 PM

Benchmarking impressions. The advdec line still looks vulnerable to deeper declines, perhaps to -3446, as long as it hasn't maintained values back above -2284. QCharts version at -2790 as I type.

Linda Piazza : 8/16/2005 12:22:36 PM

Back on 7/13-7/18, SOX 458.25-458.69 was obvious S/R. Today's SOX low has been 458.69, dipping right to that support from July. The bounce off that support so far looks like a bear flag, but I do continue to be worried on behalf of bears because each SOX dip over the last week has stopped at a higher distance away from the bottom of the SOX's August descending regression channel. Today's has so far stopped at the midline of that channel. This can be a form of bullish divergence if one swing low hits the bottom of the channel, the next not quite, the next the midline, etc. So far, this potential bullish divergence hasn't amounted to anything, but SOX bears would really like a trip down to the bottom of that channel, currently at about 451, to undo that potential bullish divergence.

Jonathan Levinson : 8/16/2005 12:21:35 PM

Volume breadth holds negative at -3.66:1 for the NYSE, -1.84:1 for the Nasdaq. QQQQ bulls need a break above the 72 SMA at 39.14, but 39.20-.25 resistance looms large with the short cycle upphase so weak during the past hour. Link

Linda Piazza : 8/16/2005 12:10:44 PM

OEX bears, the OEX did hit a new LOD, but the Keltner chart shows obvious evidence that it's trying to pull up toward the 568.74 Keltner support line and maintain that support into the close of this 15-minute period, avoiding the setting of the new downside target. Well, actually, the OEX isn't doing this. It's the OEX investors, of course. OEX at 568.75 as I type.

Jeff Bailey : 8/16/2005 12:17:25 PM

Yesterday's Internals found at this Link ... When 5-day NH/NL ratios and 10-day NH/NL ratios are turning lower, I like to monitor the number of new lows with time and see if strength/weakness at the bottom is taking place. "Strength" at the bottom during a lower major index trade is FEWER or STEADY new lows. "Weakness" at the bottom is like a soggy cardboard box, with new lows building.

It "makes sense" that the number of new highs during a lower trade in the majors would take place.

Remember my "inchworm" analogy. How does an inchworm move up and down a tree trunk?

Then think of a bell curve. What does a bell curve look like?

Jeff Bailey : 8/16/2005 12:08:28 PM

12:00 Internals found at this Link

Jonathan Levinson : 8/16/2005 12:07:04 PM

QQQQ 30 min channel support declines to 38.95, resistance to 39.20: Link

Jane Fox : 8/16/2005 12:03:48 PM

That drop in the VIX was an abberation. Link

Linda Piazza : 8/16/2005 12:03:22 PM

OEX bears do not want to see a quick and high bounce after this new LOD. Have a profit-protecting plan in place for a test of 566.21.

Jeff Bailey : 8/16/2005 12:02:32 PM

12:00 Market Watch found at this Link

Linda Piazza : 8/16/2005 12:02:30 PM

OEX threatens a breakdown and a setting of a 566.26 downside target, but threatens and actually doing it are quite different. The OEX is hitting the previous LOD as I type, and might attempt to mount a double-bottom bounce, with many minute to go in the current 15-minute period. . . . OEX just hit a new LOD as I typed.

Linda Piazza : 8/16/2005 11:59:20 AM

VIX doing a lot of zooming around, now back near the HOD. Jane said we should be watching for a bounce back after that quick drop I mentioned earlier. Let's see if this one holds. VIX at 12.97 as I type.

Linda Piazza : 8/16/2005 11:58:12 AM

Those who might have ventured a bullish play on the thought that the OEX might roll up through that channel again don't want to see a new LOD on the OEX. I didn't think that a good risk vs. reward bet, but then I didn't think so the last few times the OEX rolled up through that channel. Those in bearish plays who took partial profit (I hope some did) near the current 568.74 level and reset stops on the rest obviously do want a new LOD. Former LOD was 568.62.

Jane Fox : 8/16/2005 11:57:31 AM

Same here Jonathan.

Jeff Bailey : 8/16/2005 11:57:23 AM

SPX/SPY option action might be centered around the Sep 1,200 Put $7.30 and Sep 1,220 Put $12.30.

Lower VIX.X action would indicate some type of "sell induced" trade in one or the other.

If selling 1,200 strike, then 1,200 - 7.30 = 1,192.70, if selling 1,220 Put then 1,220 - 12.30 = 1,207.70.

Jonathan Levinson : 8/16/2005 11:56:48 AM

IB is down for me.

Jonathan Levinson : 8/16/2005 11:55:15 AM

So far the short cycle upphase has been very weak beneath the weight of the synchronous 30 and 60 min cycle downphases. Bearish stops at 39.30 should be fine at this rate, and a rollover from here should provide an aggressive test of that 38.95-39.00 support zone.

Linda Piazza : 8/16/2005 11:54:09 AM

On a Keltner basis, the RLX has already broken below the analogous support that the OEX tests. The bear flag rise on the RLX has been up to test that former support, and it so far holds now as resistance.

Linda Piazza : 8/16/2005 11:52:53 AM

OEX support to watch is at 568.94 on 15-minute closes. OEX at 569.36 as I type.

Jeff Bailey : 8/16/2005 11:49:21 AM

SPX Option Chain found at this Link ... a little more mixed at the put/call than the SPY observation.

Tab Gilles : 8/16/2005 11:48:16 AM

iShares Lehman 20+ Year Treas Bond (TLT) Link

Jeff Bailey : 8/16/2005 11:45:02 AM

VIX.X 12.54 +2.28% ... sharp little drop from the 12.99 reading at 11:25-11:30 AM EDT (call buying/put selling).

With volume turned on, do see 420 contracts cross the wire from 11:15-11:20 in the SPY $123 Calls (SPY-HS) at $0.55 (2,759:46,345). This option is #4 active in the SPY chain. Top 3 are all puts Aug. $122 (11,504:81,731), 124 (5,173:54,250), 123 (3,041:64,706).

Linda Piazza : 8/16/2005 11:39:15 AM

Climbs still look like like bear flags on many indices, including the OEX, but the OEX's have looked that way typically when they first start bouncing off the lower Keltner support now at 568.99. That's not definitive evidence of anything then.

Tab Gilles : 8/16/2005 11:39:04 AM

Tech Select Spyder (XLK)weekly chart Link

Jonathan Levinson : 8/16/2005 11:37:22 AM

Sure do. I've gotten into the habit of separating anything longer than intraday action into "daily and longer," and I generate my bias there and don't reconsider intraday unless it breaks the widest range levels. Within that bias, the intraday stuff makes more sense, and interestingly, most of our techniques reach the same conclusions beyond the intraday timeframes. But, it's tough to keep it all together when the market moves. Practice, and growing accustomed to our little team here, has made it much easier than it used to be.

Linda Piazza : 8/16/2005 11:32:47 AM

Next OEX Keltner resistance at 570.20 on 15-minute closes.

Linda Piazza : 8/16/2005 11:30:23 AM

VIX just dropped a lot. QCharts intraday charts have a lot of false values on the VIX recently, it appears, so I don't know if that's just an aberration, something related to opex, or a real indication of what internals are right now.

Jonathan Levinson : 8/16/2005 11:29:09 AM

QQQQ - Exit Point Alert -

Out QQQQ long at 39.12, wavelet oscillator rolling over now.

Jonathan Levinson : 8/16/2005 11:26:45 AM

QQQQ bears short from 39.45 would hold their lowered stop at 39.30, protecting a 15 cent profit above declining 30 min channel resistance.

Linda Piazza : 8/16/2005 11:25:41 AM

So far, the OEX is holding support at the bottom of the channel that's supported it for most of the last month. That Keltner line is currently at 569.02, with the OEX at 569.36. Those bears who heeded my advice have already taken partial profit and reset stops on the rest, so have some peace of mind now unless wondering whether they should be switching to a long position and watching for a possible move up through that channel again, toward 573.37. As I said earlier, those who are nibbling on longs have history on their side, but the possibility still exists that the advdec line will roll down again and it's just not my kind of play. There's also the possibility that the VIX will turn down again, but right now, it's near the HOD and not encouraging me to change my view toward a bullish position.

Jonathan Levinson : 8/16/2005 11:22:37 AM

QQQQ - Stop Loss Adjustment Alert -

QQQQ long at 39.03, raise stop to breakeven. We don't want to get nailed should the toppy wavelet upphase reverse back down.

Jonathan Levinson : 8/16/2005 11:20:20 AM

Mark, that's the rationale for combining multiple timeframe price channels and oscillators on the same crowded screen. I used to go nuts cycling the different timeframes with quote.com. Now it's nearly all captured with the intraday chart: Link

Tab Gilles : 8/16/2005 11:18:54 AM

Murphy Oil (MUR) Link

Linda Piazza : 8/16/2005 11:17:12 AM

The SOX violated the right-shoulder level for its possible inverse H&S, but now it's trying to steady near Friday's low. SOX at 460.01 as I type. The bottom of the SOX's rising regression channel off its late-April low appears to be at about the same level as the 240-minute 100-ema, at 453.63, with the 130-ema at 448.31, so the SOX would need to violate that 130-ema to have confirmed a breakdown out of the channel. In fact, the actual rising trendline off that April low is at about 446.41, rising into the 130-ema. It was this rising regression channel that brought the SOX up through a larger rising regression channel seen on its weekly chart, up to test the upper resistance of that bigger channel when it hit the early August high. So, as I type, the SOX has not even violated the channel off the April low yet, although some other indices have violated similar channels.

Jonathan Levinson : 8/16/2005 11:12:22 AM

This is an underwhelming bounce considering how oversold the short cycle indicators were. The wavelet cycle upphase is almost done here, and the long play has 4 cents to show for it.

Jonathan Levinson : 8/16/2005 11:08:05 AM

No worries, Mark- I don't disagree with you, but the short cycle indicators want a bounce right here. If I was more confident, the stop would be another dime wider.

Jonathan Levinson : 8/16/2005 11:01:18 AM

QQQQ - Entry Point Alert -

Long QQQQ at 39.03, stop 38.95

Bears short from 39.45 would lower stops to 39.30

Jonathan Levinson : 8/16/2005 10:54:20 AM

Crude oil +.45 at 66.725.

Linda Piazza : 8/16/2005 10:53:51 AM

The OEX tests Keltner support that has held up on most tests over the last few weeks. I just counseled that it was time for profit-protecting measures to be enacted, with some bears perhaps considering taking at least partial profit and resetting stops to breakeven on the rest. Those who think there might be more downside might keep a partial position open with those reset stops. Those who believe that the OEX might roll up through that channel again might be nibbling on longs. History is on your side if you're doing that nibbling, but I'm just not sure that's a good idea yet as I see a possibility that the advdec line could drop further. Use your own judgment, but it's not a play for me.

Jonathan Levinson : 8/16/2005 10:51:50 AM

Note as well that the Fed executed a large drain, and bonds are rising. I don't expect there to be much money left to lift stocks along with bonds, and so the liquidity bias is to the downside as well.

Bears who entered short on the 39.45 break can lower stops along the descending 30 min channel top, now at 39.35 QQQQ.

Tab Gilles : 8/16/2005 10:50:55 AM

QQQQ/$NASI 4 month chart. Link

Linda Piazza : 8/16/2005 10:50:54 AM

OEX just cents above the Keltner channel support that has bounced it on most occasions through the last few weeks. Time to be thinking about your profit-protecting plan, talked about early this morning. Somewhere between the current level and 569.19, some might consider taking partial profit and then resetting their stops to breakeven levels, unless the OEX just crashes through that support.

Jonathan Levinson : 8/16/2005 10:49:54 AM

Short cycle traders would try longs right here for QQQQ, but because the 30 and 60 min cycle downphases have room to run, it's still too early to try for more than a scalp bounce.

Linda Piazza : 8/16/2005 10:48:55 AM

For reference, the RUT's low last Friday was 655.26, with the RUT currently at 657.66. The RUT's 50-sma is at 655.48.

Linda Piazza : 8/16/2005 10:45:53 AM

SOX is dropping below the appropriate right-shoulder level, down to a retest of Friday's low.

Linda Piazza : 8/16/2005 10:43:25 AM

OEX less than a point away from the 569.28 support (on 15-minute closes) of the channel that's contained most movements.

Jonathan Levinson : 8/16/2005 10:42:37 AM

Potential short cycle divergences are popping up here at the QQQQ lows, but the oscillators need to turn up first: Link

Linda Piazza : 8/16/2005 10:39:48 AM

If the SOX drops much further, it will drop below the appropriate right-shoulder level. SOX at 460.51 as I type.

Linda Piazza : 8/16/2005 10:37:28 AM

RUT drifting toward the bottom of its recent consolidation zone, but remains above its 50-sma.

Linda Piazza : 8/16/2005 10:35:35 AM

The mid-channel Keltner level is still holding as resistance for the OEX so far. The OEX is at 570.57. Bears need to have profit-protecting plans in place for a test of 569.35 if it's hit.

Jonathan Levinson : 8/16/2005 10:35:01 AM

QQQQ breaking 39.20 now, reaching for 30 min channel support next at 39.10. Bears who entered short on the 39.45 break would lower stops to the top of the declining 30 min channel at 39.40.

Linda Piazza : 8/16/2005 10:30:40 AM

SOX still trying to steady at the right-shoulder level for the possible inverse H&S on its 15- to 60-minute charts, but it isn't doing much bouncing above that level. SOX at 462.01 as I type.

Linda Piazza : 8/16/2005 10:25:37 AM

So far, the expected retest of mid-channel S/R on the OEX's 15-minute chart has resulted in the resistance holding. OEX at 571.11, with that resistance ranging up to 571.88 on 15-minute closes.

Jonathan Levinson : 8/16/2005 10:25:14 AM

Session high for crude oil at 66.55 here. Note that QQQQ has yet to break its opening low at 39.204. But the short cycle upphase is getting zero traction- 39.45 feels miles above from here. A failure would set up a retest of yesterday's 39.00 lows, but given the support there yesterday and last week, and the opex gyrations noted by Marc, that support would have a good chance of holding if tested from here. Link

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

I have to step out for a couple of hours to take Mr. Drake in for a checkup. I shall return!

Linda Piazza : 8/16/2005 10:10:12 AM

The OEX is rising to retest Keltner mid-channel S/R, now spanning up to 571.89 on 15-minute closes. The OEX is at 571.65 as I type, and bears would like to see 15-minute closes below that mid-channel level.

Jonathan Levinson : 8/16/2005 10:10:08 AM

Session high for ten year notes, GE and Oct. gold here, QQQQ testing the upper end of its sideways range off the low: Link

Jeff Bailey : 8/16/2005 10:09:35 AM

10:00 Internals found at this Link

Linda Piazza : 8/16/2005 10:07:47 AM

SOX still trying to steady at the right-shoulder level for an inverse H&S.

Jonathan Levinson : 8/16/2005 10:05:55 AM

Ten year notes -3.8 bps to 4.232% here, crude oil up to a .125 loss at 66.15.

Jonathan Levinson : 8/16/2005 10:03:08 AM

Volume breadth has improved to -1.64:1 on the Nasdaq, NYSE still weaker at -2.24:1. The short cycles are ticking up toward a new upphase, but so far there's been no traction in the wavelet bounces, suggesting that this sideways range is a bear flag. 30 min channel resistance is down to 39.45 QQQQ.

Jeff Bailey : 8/16/2005 10:02:05 AM

10:00 Market Watch found at this Link

Linda Piazza : 8/16/2005 10:02:00 AM

Yesterday, the RLX again retested its former ascending regression channel, building since its April low. It's pulled back again, and this morning sinks into the swing highs from late last year and this spring, retesting their support. I think the RLX needs to fall beneath the 240-minute 100/130-ema's before bears can feel that the RLX is breaking support, however, with those at 461.40 and 457.19, respectively, and with the RLX at 466.22.

Linda Piazza : 8/16/2005 9:58:49 AM

Benchmarking impressions: Unless the advdec line can increase above -1772, the advdec line looks vulnerable to a deeper decline, to -3333.

Jonathan Levinson : 8/16/2005 9:58:13 AM

That's the whole thing, Linda, as there are never any temporary operations announced once the overnight announcement has been released.

Jeff Bailey : 8/16/2005 9:58:20 AM

Wal-Mart (WMT) $47.90 -2.48% Link ... lower after the world's largest retailer said Q2 profits rose 6% year-over-year to $2.8 billion, or $0.67 per share, with sales up 10.2% to $76.8 billion. Consensus was for a profit of $0.65 a share and revenue of $77.46 billion.

Wal-Mart's Chief Executive blamed higher gasoline prices for the company's sales coming in below expectations.

Looking forward, Wal-Mart projected it would earn between $0.55-$0.59 per share for Q3 and $2.63-$2.70 for the year. Consensus among analysts was $0.60 and $2.66.

Linda Piazza : 8/16/2005 9:55:27 AM

That's a pretty big drain, isn't it, Jonathan? Is that all their operations for today?

Jonathan Levinson : 8/16/2005 9:54:59 AM

The Fed announces a 2B overnight repo for a net 7.5B drain. Recall that yesterday's coupon pass is delivered today, which brings the drain down to 6.1B.

Linda Piazza : 8/16/2005 9:52:04 AM

SOX still trying to firm up at the appropriate right-shoulder level for an inverse H&S on its 15- through 60-minute charts. Keep a watch on this, although a similar try at an inverse H&S last week ultimately saw the formation rejected after a modest neckline confirmation. This neckline is near 470, with the SOX now at 463.15.

Linda Piazza : 8/16/2005 9:48:51 AM

So far, the OEX downturn through the Keltner channel that spans from 569.47 on the bottom to 573.68 on the top is proceeding as expected, but the OEX may be trying to rise up and retest resistance during this first retracement of the morning. It's not getting far, if it is. OEX at 571.23, with resistance spanning up to 572.02 on 15-minute closes.

Linda Piazza : 8/16/2005 9:46:40 AM

The RUT turns down sharply today, but turns down within the right-shoulder level for its regular H&S visible on its daily chart. I said yesterday that bears needed to get that neckline violated or else that right shoulder was going to extend too long in time and bulls were going to be encouraged that repeated tests of the support, near 657.85 and then again at the 50-sma at 655.54, were finding that the support holds. So, I think today may be an important day, a sort of edge-of-the-cliff day, although I don't usually think of Tuesday's as being that kind of day. RUT (and market) bears want to see the RUT below that 50-sma then. The RUT is at 660.25 as I type.

Jonathan Levinson : 8/16/2005 9:45:14 AM

The bulls have remarkably little firepower here despite the maxxed out short cycle downphase trying to turn. It might take the Fed's repo announcement regarding its 9.5B overnight repo expiring to get things moving- announcement due just before 10AM.

Linda Piazza : 8/16/2005 9:41:16 AM

SOX trying to steady at the appropriate right-shoulder level for an inverse H&S.

Linda Piazza : 8/16/2005 9:38:25 AM

Still looking okay so far for those OEX traders who bet yesterday on another rollover through that same old channel that's been containing the OEX so long.

Linda Piazza : 8/16/2005 9:37:38 AM

Steep drop on the RUT, SOX and RLX, three high-flying indices of late, but the TRAN's drop is more modest.

Linda Piazza : 8/16/2005 9:36:26 AM

SOX falling sharply away from the top of the descending regression channel in place this month as well as from the 30-minute 100/130-ema's that it tested all day yesterday. Bears, be aware of a potential inverse H&S at the bottom of the SOX's drop, though, with the right-shoulder level at about 462.75 or so and the SOX now at 464.08, having dropped to 463.39 before beginning to bounce. In other words, the SOX is testing this potential right-shoulder level this morning. Bears don't want to see a SOX move above 470. They instead want to see a drop below Friday's low.

Jonathan Levinson : 8/16/2005 9:35:25 AM

Declining volume leads 1.51:1 on the NYSE and 1.84:1 on the Nasdaq.

Jonathan Levinson : 8/16/2005 9:34:41 AM

Current session low QQQQ 39.257.

Linda Piazza : 8/16/2005 9:34:05 AM

The OEX did open deeper into mid-channel Keltner support on the 15-minute chart, but rises immediately to test the gap. It's at 571.97 as I type.

Jonathan Levinson : 8/16/2005 9:27:25 AM

The short cycle oscillators are oversold as the 30 and 60 min cycles roll over. If 39.25 QQQQ breaks, then they will begin trending in oversold. The more likely setup is for a corrective short cycle bounce to fail below yesterday's afternoon range. Look for resistance at 39.45 and 39.55. A failure from either level should be good for short entries to capture the 30 and 60 min cycle downphases.

Jonathan Levinson : 8/16/2005 9:15:44 AM

Headlines:

U.S. JULY INDUSTRIAL PRODUCTION UP 0.1% VS. 0.5% EST.

U.S. JUNE INDUSTRIAL OUTPUT UP REV. 0.8% VS. 0.9%

U.S. JULY CAPACITY UTILIZATION 79.7% VS. 80% IN JUNE

U.S. JULY AUTO PRODUCT OUTPUT DOWN 2.9%

Jonathan Levinson : 8/16/2005 9:02:03 AM

Crude oil is up to a 25 cent loss at 66.025.

Linda Piazza : 8/16/2005 8:59:19 AM

The OEX spent yet-another day rolling through that same old Keltner channel, spanning from 569.49 on the downside to 573.69 on the upside, and the best bet for now continues to be for the OEX to roll from one side of that channel to the other. In the early afternoon yesterday, the OEX hit the top of that channel and started down again, although it dropped rather timidly yesterday and stopped on 15-minute mid-channel support. Still, if you're betting on another rollover through that channel, you'll hope that the current weakness in futures will carry through to the cash open and that weakness will open the OEX below that mid-channel support, extending down to 571.54. The bottom of the channel is now at 569.49, and bears need to have profit-protecting measures in place for tests of that level. At the least, they need to consider taking partial profits and setting a breakeven stop for the rest of the position. Almost always lately, taking partial or whole profits at a channel boundary for this same old channel has been the only profit attained. As always, those hoping for a deeper pullback will probably take the "partial profit and set stop to breakeven on the rest" route so that they can participate in further gains if they occur. The same goes for tests of the upper boundary for those thinking that markets are bullish and will soon break out. Because of several signs in the markets--the pullback on the SOX, a potential H&S on the TRAN's daily chart, etc.--I haven't been recommending in participating in the rise up through the channel again with bullish plays, especially since there had been a series of lower highs on the OEX, but the OEX has nevertheless been rolling up through that channel. If bottom support is hit again, I'll take a look at internals and see what I see, but this time of year doesn't give me warm feelings about bullish plays in general. One possibility is that some indices are hitting and maintaining some support levels and so should be watched for stronger bounce potential.

As a further note, the OEX ended the day yesterday just above 570.18 daily support and just below 572.53 daily Keltner resistance.

Jonathan Levinson : 8/16/2005 8:56:48 AM

QQQQ's 30 min cycle has rolled over and the 60 min cycle upphase has stalled. Price currently tests the 30 and 60 min channel bottoms, but if the weakness holds through the cash open, we can expect to see the 39.25 QQQQ confluence tested next.

Bears who shorted the 39.45 break have a small cushion, and would seek to stay short below the 72 SMA at 39.53. However, the longer term prospects are still up for grabs until we see a retest of yesterday's 39.00 low. Below 38.95, there will be the fisrt indication that the longer weekly cycle downphase is finally kicking in, and bears will be able to get more aggressive. If 38.95 is not broken, there will be the possibility of an early end to the ongoing daily cycle downphase.

Jonathan Levinson : 8/16/2005 8:50:38 AM

Google (GOOG) has suffered what appears to be a potentially serious setback with Geico winning a trademark infringement case against GOOG: Link .

Jonathan Levinson : 8/16/2005 8:38:16 AM

QQQ drops to 39.38 on the correction.

Jonathan Levinson : 8/16/2005 8:37:56 AM

Headline:

CORECT U.S. JULY CORE CPI UP 0.1%

Jonathan Levinson : 8/16/2005 8:31:06 AM

QQQQ bounces to 39.43 on the news, ten year note yields are now down .4 bps at 4.269%.

Jonathan Levinson : 8/16/2005 8:31:30 AM

Headlines:

U.S. JULY CPI UP 0.5% VS. 0.4% EXPECTED

U.S. JULY CORE CPI UP 0.2% AS EXPECTED

U.S. JULY ENERGY PRICES RISE 3.8%

U.S. CPI UP 3.2% OVER PAST YEAR

U.S. CORE CPI UP 2.1% OVER PAST YEAR

U.S. JULY NEW CAR PRICES FALL 1%

U.S. JULY SHELTER PRICES UP 0.4%

U.S. REAL EARNINGS DOWN 0.5% IN PAST YEAR

U.S. JULY SINGLE-FAMILY PERMITS 1.69M UNITS, NEW RECORD HIGH

U.S. JULY BUILDING PERMITS AT HIGHEST LEVEL SINCE FEB. 1973

U.S. JUNE STARTS REVISED UP TO 2.045 M VS 2.004 MLN

U.S. JULY HOUSING STARTS DOWN 0.1% TO 2.042 MLN

Jonathan Levinson : 8/16/2005 8:23:44 AM

Ten year note yields open higher by .9 bps at 4.279%.

Jonathan Levinson : 8/16/2005 7:45:36 AM

Equities are down, ES trading 1236, NQ 1603.5, YM 10643 and QQQQ -.016 to 39.43. Gold is down 1.5 to 442.90, silver up .029 to 6.999, ten year notes are down 3/32 to 110 55/64 and crude oil is down .40 to 65.875.

We await the 8:30 release of the CPI and Core CPI, est. .4% and .2%, Housing Starts and Building Permits, est. 2.025M and 2.104M, then at 9:15, Industrial Production and Capacity Utilization, est. .5% and 80.3%.

Linda Piazza : 8/16/2005 6:53:33 AM

Good morning. The Nikkei closed at a four-year-high according to one source. Other Asian markets were mixed, however, with more lower than higher. European markets are mixed, too, with the FTSE 100 struggling after inflation data confirmed a number that was higher than the one wanted. As of 5:47 EST, our futures were slightly negative, gold was down $1.50, and crude, down $0.37 to $65.90. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei coiled around 12,300 Tuesday, closing higher by 59.12 points or 0.48%, at 12,315.67. Marketwatch.com calls this a four-year closing high. Advantest was one of the early market leaders, but banks fell, pressured by a Goldman Sachs mention on Monday that it might change the sector's weighting to an underweight one. During early trading, crude had eased from record highs and crude-related issues dropped. A 6.8-7.2 (sources differ) magnitude earthquake hit northern Japan, but that didn't stop the Nikkei from closing at a new recent high. June's Leading Index was revised higher to 63.6 from the preliminary 60.00 and the Coincident Index stayed steady at the previous 100. These revisions were in line with expectations, but continue the impression that a Japanese recovery is underway and that quantitative easing could end sooner than had previously been anticipated. Speculation that Koizumi's party may be weakening and the resultant possible political upheaval doesn't seem to be impacting the markets, although Koizumi has been sometimes credited with leading Japan's economy out of the doldrums.

Other Asian markets were mixed. The Taiwan Weighted lost 0.04%, and South Korea's Kospi fell 1.18%. Singapore's Straits Times rose 1.12%, but Hong Kong's Hang Seng declined 0.15%. China's Shanghai Composite dropped 0.82%.

Many European markets rise, but the FTSE 100 struggles more, perhaps due to the impact of inflation data out today. CPI rose 2.3%, with energy mentioned as a factor in the rise, of course. Deal talk drives many stocks today. News circulates this morning that Europe's Credit Suisse is in talks with Fidelity, Lehman and Citi to buy a stake in the Philly Exchange. Other deal talk includes speculation that there may be a Russian deal for Heineken, with Heineken rising. In the U.K., telecommunications company O2 falls as Deutsche Telekom and KPM back out of their bid. Cable & Wireless declines after it confirms a bid for Energis.

As of 6:51 EST, the FTSE 100 was lower by 5.60 points or 0.10%, at 5,338.60. The CAC 40 was higher by 18.98 points or 0.42%, at 4,485.56. The DAX was higher by 27.47 points or 0.56%, at 4,949.81.

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