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Jeff Bailey : 8/18/2005 12:18:32 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $+3.10 and set for selling at $+0.72.

Jeff Bailey : 8/17/2005 11:57:38 PM

Week-to-week Sector Bell Curve from Dorsey/Wright at this Link ... HOUS is HOUShold products. BUIL is BUILding/building products.

Jeff Bailey : 8/17/2005 10:50:12 PM

Pivot Matrix for Thursday at this Link

Jeff Bailey : 8/17/2005 10:06:16 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing trade long 1/2 bullish position in shares of General Electric (GE) at $34.25, stop goes $33.70 to begin, with initial target of $35.75.

OI Technical Staff : 8/17/2005 9:59:59 PM

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Jeff Bailey : 8/17/2005 9:52:30 PM

Weekly EIA data at this Link

Jeff Bailey : 8/17/2005 4:54:12 PM

Cosing U.S. Market Watch found at this Link

Tab Gilles : 8/17/2005 4:50:32 PM

Energy Select Sector (XLE) Link

Tab Gilles : 8/17/2005 4:41:06 PM

$WTIC Link

Murphy Oil (MUR) Link

XLE Link

Jeff Bailey : 8/17/2005 4:29:15 PM

Closing Internals found at this Link

Jeff Bailey : 8/17/2005 4:12:19 PM

Network Appliance (NTAP)

Linda Piazza : 8/17/2005 3:59:43 PM

OEX still looks vulnerable to 566.38.

Linda Piazza : 8/17/2005 3:59:20 PM

SOX dropping to test 464 historical support. At 464.09 as I type, with the five-minute 100/130-ema's at 464.12 and 463.93, respectively.

Linda Piazza : 8/17/2005 3:54:16 PM

TRAN pulling back after a retest of the day's high, but it hasn't pulled back far yet, and certainly hasn't confirmed a double-top formation by falling below the trough between the two peaks. That would require a dip below 3716.53. One note of caution to bears: The TRAN had a nicely formed regular H&S on its five-minute chart. It looks as if it either tested the neckline or perhaps minimally broke through it, only to see prices shoot up into this slightly higher high and invalidate the formation. This is the kind of action we've been used to seeing lately, and in no way indicates that bulls are quite done over the very short term. This is perhaps more significant because this double-top area is in the area of or slightly above the neckline for the regular H&S that the TRAN has already confirmed on its daily chart. Bears don't like to see an immediate reversal back above a violated neckline, like today's reversal back above it. Bears would prefer that the TRAN close below about 3723.98, that likely neckline area, with the TRAN now at 3729.72.

Jeff Bailey : 8/17/2005 4:11:18 PM

03:00 Internals at this Link

Linda Piazza : 8/17/2005 3:45:48 PM

Yesterday near the close, I suggested that those in bearish OEX plays with August puts give strong consideration to taking profits as the OEX was dropping to test the 200-sma. I thought it likely that today would see choppy consolidation or a bounce attempt, and today we kind of got a combination: a choppy bounce attempt. This doesn't look alarming to bears, but it would have done a number on August puts, certainly. The OEX has spent much of the day testing resistance and coils now. So far, the OEX has not been able to maintain values above the midpoint of yesterday's range, so the bounce would still be considered a likely bear flag. Those who have watched the OEX range from one side to the other of a Keltner channel currently at 566.45 on the bottom and 571.03 on the top know that many of the bounces up through that channel have begun by formations that look like bear flags, however. So, today has been kind of a wash, with neither bullish nor new bearish plays presenting themselves.

Jonathan Levinson : 8/17/2005 3:31:24 PM

Op-ex week.

Linda Piazza : 8/17/2005 3:31:00 PM

Jonathan, this is a day of competing regular and inverse H&S's, as I can now find a rough regular H&S on the OEX's 15-minute chart, with the formation mostly encapsulated inside what might also be a right shoulder for the OEX's bigger inverse H&S, forming since yesterday. I hate days like this.

Linda Piazza : 8/17/2005 3:28:43 PM

Benchmarking impressions: Potential H&S on the advdec line, too. Advdec line's RSI confirmed a H&S at about 1:30, with the RSI sometimes confirming ahead of the line. This potential H&S on the advdec line might be watched in conjunction with the SOX's more roughly formed one, with the hope that they would both confirm together or both reject the formations together.

Jonathan Levinson : 8/17/2005 3:22:48 PM

Linda, on QQQQ, the equivalent is around 39.18. Link

Linda Piazza : 8/17/2005 3:19:27 PM

While the SOX is working on a possible H&S at the top of the day's rise, the OEX is working on a possible inverse H&S at the bottom of the decline off yesterday's low. It's been working on it a lot of the day, however, and so far unable to maintain values above the neckline, with one neckline version at about 569.60.

Linda Piazza : 8/17/2005 3:17:47 PM

The SOX is rising into a possible right shoulder for a rough H&S formed on its 15-minute chart, at the top of today's climb. The left shoulder saw a spike that was actually the highest-high of today, but it was quickly reversed, leaving only a spike, so that the form still is roughly that of a H&S. The neckline would be at about 463.95-463.97.

Jonathan Levinson : 8/17/2005 3:11:30 PM

QQQQ's 30 min cycle upphase has reached overbought territory, still room to run though it's at the same level from which it reversed on the last upphase, being Monday's close. The 60 min cycle still rises and is just crossing its midpoint, while on the keltner chart, both cycles have already flattened. The upside for QQQQ looks dubious beyond 39.18-.22, but the oscillators suggest an upward bias at least into the close today. Despite today's upward drift, price is less than 20 cents above its 1st hour highs, and the action still feels corrective after yesterday's strong/high volume decline. Link

Linda Piazza : 8/17/2005 3:04:36 PM

The SOX pulls back a little after its test of the 15-, 30- and 60-minute 100/130-ema's today. Other types of resistance is being tested, too. There's the potential for a small H&S at the top of the 15-minute chart, wiht a right shoulder still to be formed, so another rise up toward 465.30 or perhaps a little higher would fit with that scenario.

Jeff Bailey : 8/17/2005 3:04:08 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 8/17/2005 2:57:49 PM

Session low for ten year notes at 110 31/32, TNX up 4.6 bps at 4.273%.

Linda Piazza : 8/17/2005 2:50:23 PM

Benchmarking impressions: The advdec line is testing potential support at about 20 (QCharts) on 30-minute closes, with next support in the -570 level. If it can't pull up above that 20 level by the end of this 30-minute period, it may be vulnerable to a deeper decline. As I began typing this report, the advdec line was down near -100, though, and it's climbed to -71 since then, so it's trying to bounce.

Linda Piazza : 8/17/2005 2:47:49 PM

The OEX continues to produce 15-minute closes below the Keltner line currently at 568.25, so it continues to look vulnerable to 566.60, the bottom support of the Keltenr channel that's contained most of the OEX moves over the last month. If the OEX should instead begin producing closes above 568.77, that vulnerability will be erased.

Jonathan Levinson : 8/17/2005 2:46:51 PM

NYSE volume breadth is back to -1.09:1, Nasdaq still deep green at +2.24:1.

Jeff Bailey : 8/17/2005 2:46:17 PM

Cisco Systems (CSCO) $17.90 +1.53% ...

Jeff Bailey : 8/17/2005 2:45:53 PM

Networking Index (NWX.X) 218.65 -0.04% ... slips red.

Jonathan Levinson : 8/17/2005 2:44:21 PM

Big drop here (relatively speaking) for QQQQ, the bids gapping down on the 100 tick chart. Link

Linda Piazza : 8/17/2005 2:35:31 PM

The TRAN, too, tries to build an inverse H&S at the bottom of its descent, with the head at this morning's low, the shoulders small and at about 3715-3720 and the neckline an ascending one at about 3733. The TRAN is at 3723.10 as I type, with mid-channel Keltner resistance at and just above that confirmation level, so that I'd wait for a 15-minute close above the Keltner line currently at 3740.51 before I considered that TRAN inverse H&S confirmed.

Jonathan Levinson : 8/17/2005 2:32:13 PM

Sept. crude oil closed -2.85 or 4.31% at 63.225, a dime above the session low. Session high was 66.55. 4-day 50 tick chart at this Link

Jonathan Levinson : 8/17/2005 2:25:54 PM

Make that -4.35% or 2.875 for crude oil, still diving into the 2:30 close.

Linda Piazza : 8/17/2005 2:23:28 PM

SOX still trading sideways.

Jonathan Levinson : 8/17/2005 2:19:40 PM

Crude oil -2.5 or -3.78% here at 63.575, off a low of 63.525 with 11 minutes remaining in the day session.

Linda Piazza : 8/17/2005 2:16:26 PM

The OEX has hit one level of potential Keltner support (see my 2:03 post) and may still be vulnerable to the Keltner line now at 566.76 as long as it's producing 15-minute closes beneath 568.53-568.87.

Linda Piazza : 8/17/2005 2:14:19 PM

Benchmarking impressions: The advdec line did begin pulling back as the Keltner chart suggested it would, but now approaches potential support at just above the zero level and then at -580 or so. These are all QCharts values. The value is now 146.

Jeff Bailey : 8/17/2005 2:13:00 PM

02:00 Internals found at this Link

Jonathan Levinson : 8/17/2005 2:12:43 PM

The Qs broke the 72 SMA support line, volume picked up, but price has stalled out. The 30 and 60 min cycle upphases have stalled, but there's no followthrough. My guess is that price will continue to revert to 39.00, whether it breaks above or below, for the opex Friday print. Link

Linda Piazza : 8/17/2005 2:06:01 PM

Same old resistance is holding for the SOX, but it's still up there challenging it.

Jeff Bailey : 8/17/2005 2:04:54 PM

02:00 Market Watch found at this Link

Linda Piazza : 8/17/2005 2:03:39 PM

The OEX is sinking beneath Keltner resistance that it had been challenging, looking vulnerable to a pullback to 567.99 or perhaps even 566.82, as long as its 15-minute closes remain below a line currently at 568.92.

Jeff Bailey : 8/17/2005 1:58:49 PM

S&P Banks Index (BIX.X) 30-minute interval chart at this Link

Jeff Bailey : 8/17/2005 1:57:42 PM

10-year YIELD ($TNX.X) 30-minute chart with WEEKLY/MONTHLY Pivot retracement at this Link

Linda Piazza : 8/17/2005 1:57:11 PM

I wanted to start mentioning that I'll be out all next week. I intend to take a real vacation this time, actually taking some time off from the computer if I can get away from this market addiction. I'm not even entering new trades for the September opex cycle, just so I can relax while I'm gone, although I'm not at all certain that I will be able to keep myself from dabbling in a few positions.

Linda Piazza : 8/17/2005 1:53:12 PM

Benchmarking impressions: Based on recent action, the advdec line is showing signs that it's perhaps had most of its run to the upside, unless there's to be a real breakout day today.

Linda Piazza : 8/17/2005 1:51:43 PM

Are we sure today isn't really Thursday? This action is reminiscent of an opex Thursday after about 10:00 or 10:30.

Linda Piazza : 8/17/2005 1:49:59 PM

The TRAN has now retraced more than 50% of its decline off Monday's high, and is now between that 50% retracement and a 61.8% retracement, at about 3735.62. Mid-channel resistance on the 15-minute chart is at 3733.61 and 3740.69, and the TRAN's behavior does sometimes have some congruence with the levels on the 15-minute Keltner chart. TRAN at 3725.60 as I type, sinking back to test that 50% level.

Linda Piazza : 8/17/2005 1:43:34 PM

Here's what I've been watching on the SOX's 60-minute chart: Link

Jonathan Levinson : 8/17/2005 1:43:20 PM

QQQQ tests 72 SMA support at 39.05, below which the 30 min cycle upphase will stall. Below 39.00, it will reverse.

Linda Piazza : 8/17/2005 1:38:30 PM

SOX still trades sideways, still under the 60-minute 100/130-ema's, the descending trendline off the early August high, and the converging 10- and 30-sma's, both of those just under 467. The SOX is at 465.13 as I type.

Jonathan Levinson : 8/17/2005 1:31:03 PM

At this point the short cycles are opposed after that fakeout to 39.17, with no trend apparent even on the shortest wavelet cycle. The 30 and 60 min channels are still rising, but the price feels heavy and selling volume is on the rise. Link

Jeff Bailey : 8/17/2005 1:27:25 PM

Oh My! .... BE Aerospace (BEAV) $17.00 +1.91% ... after a morning low of $16.50 and brief piercing of WEEKLY Pivot. Looked at "the BEAV" last night as DFX.X was still holding near the highs. Should'a, would'a, could'a.

Linda Piazza : 8/17/2005 1:26:15 PM

Benchmarking impression: Advdec line (QCharts version) now climbing right up to possible resistance, now at 926 on a 30-minute closing basis, with the advdec line at 814. Unless there's going to be a breakout day in the making on the advdec line, upward movement should slow soon. These are iffy conclusions in the middle of the Keltner channels here and not at the outside boundaries, so really don't trade based on this information.

Jeff Bailey : 8/17/2005 1:26:09 PM

Defense Index (DFX.X) 283.96 +0.90% ... new 52-weeker!

Jonathan Levinson : 8/17/2005 1:21:23 PM

QQQQ - Exit Point Alert -

Out QQQQ short at 39.15

Linda Piazza : 8/17/2005 1:21:02 PM

The OEX consolidates at the top of today's climb, typically bullish. The OEX consolidates immediately after or just before confirming an inverse H&S on its 15-minute chart, either not able to capitalize on a confirmation or else extending the right shoulder out way too far, and that's not typically bullish. Mixed evidence.

Jonathan Levinson : 8/17/2005 1:18:02 PM

Low volume, tight range, indicators in suspended animation- it must be opex week. Crude oil is down 2.05 to a new low at 64.025, volume breadth for the indices remains positive, but price has stopped dead. QQQQ is still testing 39.12.

Linda Piazza : 8/17/2005 1:13:24 PM

Nothing much is changing. The SOX still tests resistance from many sources in the 467-468 region. The OEX tests the mid-point of yesterday's range and the 50-sma. The RUT tests 658-ish resistance. The TRAN is at the neckline of its H&S on the daily chart, retesting that. Lots of testing going on and on and on and on. Days like these are necessary to see if former support is now resistance.

Jeff Bailey : 8/17/2005 1:09:04 PM

01:00 Internals found at this Link

Jeff Bailey : 8/17/2005 1:02:32 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 8/17/2005 12:57:57 PM

The bulls haven't exactly scattered despite the maxxed out short cycle readings. Also, the 60 min cycle channel has turned up and appears to be forming a reverse h&s for the Qs. Bears willing to press on can leave the stop in place at 39.23. I'm snugging it down to 39.18. Link

QQQQ - Stop Loss Adjustment Alert -

QQQQ short 39.14, lower stop to 39.18

Linda Piazza : 8/17/2005 12:56:33 PM

SOX still testing a double-top level on an intraday chart. It's been retesting the day's high. Keltner channels don't give strong evidence as to whether that test will continue for a while, but does suggest that the upside is limited over the short-term. Next Keltner resistance at 465.93-466.68 on a 15-minute closing basis.

Jonathan Levinson : 8/17/2005 12:52:23 PM

Session low for crude oil at 64.125, -1.95 for the day.

Jeff Bailey : 8/17/2005 12:50:27 PM

Disk Drive Index (DDX.X) 116.68 +1.52% ... matched Monday's highs of 117.07. Trading WEEKLY R2 (116.88) here though.

Linda Piazza : 8/17/2005 12:48:44 PM

The OEX still tests Keltner resistance at 468.43 on a 15-minute closing basis, still rising in what looks like a bear flag, still slightly below a 50% retracement of yesterday's range.

Jeff Bailey : 8/17/2005 12:44:52 PM

S&P Banks (BIX.X) 356.06 +0.32% ... little "pop" back above WEEKLY Pivot about 25 minutes ago.

Jeff Bailey : 8/17/2005 12:43:59 PM

10-year YIELD ($TNX.X) up 2.4 bp at 4.251%, but still within our WEEKLY/MONTHLY Pivot retracement "zone of yield resistance" 42.46-42.59.

Linda Piazza : 8/17/2005 12:43:54 PM

The SOX is underneath the 60-minute 100/130-ema's at 467.60 and 466.84, and under the actual descending trendline off the early August high, with that trendline between the two MA's. The SOX is at 465.28, still testing this and other resistance.

Jonathan Levinson : 8/17/2005 12:41:23 PM

QQQQ briefly pierced upper 30/60 min channel resistance on that surge, the short cycles maxxing out in their upphase, but the drop that can usually be expected to follow is taking its time. If the bulls can hold it here, the next surge should again be to the upside, but resistance to 39.22 looks pretty formidable for the moment. Link

Linda Piazza : 8/17/2005 12:40:56 PM

Benchmarking impressions: Advdec line again approaching resistance, now just above 900 on a 30-minute closing basis, with the advdec line currently at 675. This might suggest that without a breakout day, the short-term move is approaching overbought levels.

Linda Piazza : 8/17/2005 12:36:34 PM

SOX approaching double-top level on the five-minute chart. Previous HOD was 466.15, with the SOX now at 465.48.

Jonathan Levinson : 8/17/2005 12:33:11 PM

QQQQ - Entry Point Alert -

Short QQQQ at 39.14, stop 39.23

Linda Piazza : 8/17/2005 12:32:11 PM

The OEX's 15-minute chart now reveals an inverse H&S at the bottom of the decline off Monday's high. The neckline is somewhat difficult to pinpoint, but one version might be at about 568.85 and another at about 569.30. The OEX is at 568.91 as I type. Remember when the markets were on the way higher, regular H&S's were routinely confirmed, minimally, and then prices reversed and invalidated them. If the new trend is down, that could happen in the opposite direction, with a minimal confirmation then met with a reversal and a drop.

Linda Piazza : 8/17/2005 12:27:10 PM

The RUT more closely approaches that 658 level that marks one neckline version of its confirmed H&S on its daily chart. The RUT is at 657.15 as I type. Although such a retest is an expected action, I won't feel confident that the H&S is fully confirmed until the RUT is below the 240-minute 100/130-ema's at 654.70 and 649.64, respectively.

Linda Piazza : 8/17/2005 12:20:34 PM

Benchmarking impressions: Advdec line has resistance at 858, with the advdec line at 397.

Jeff Bailey : 8/17/2005 12:19:59 PM

Cancel prior setup alert for the 1/2 bullish General Electric (GE) entry point of $34.10 (11:56:06 AM EDT).

Jeff Bailey : 8/17/2005 12:18:38 PM

Swing trade long take it alert for the 1/2 bullish position in General Electric (GE) $34.25 here.

Linda Piazza : 8/17/2005 12:16:47 PM

I said earlier that I thought the SOX might not be through testing resistance, and it's trying to steady and rise to retest it now. That's at 466.62 on a 15-minute closing basis on the Keltner channels, and at the converging daily 10 and 30-sma's, at 466.96 and 466.83, and at the 60-minute 100/130-ema's, at 467.65 and 466.87, respectively. The SOX is at 465.04 as I type.

Jeff Bailey : 8/17/2005 12:14:02 PM

YM/NDX day trader's montage at this Link

Jonathan Levinson : 8/17/2005 12:10:23 PM

QQQQ testing the previous high here at 39.05. 30 and 60 min channel support are holding at 39.14, 72 SMA support at 38.96: Link

Jeff Bailey : 8/17/2005 12:09:50 PM

12:00 Internals found at this Link

Linda Piazza : 8/17/2005 12:07:15 PM

The OEX's climb still looks like a bear flag, and the OEX still remains below the 50-sma and the mid-point of yesterday's range. The 50-sma is at 569.47. The 50% retracement is a little below that, and the 61.8% retracement is at about 570.06. The OEX is currently at 568.17.

Jonathan Levinson : 8/17/2005 12:06:55 PM

Volume breadth still bifurcated, but the NYSE is resolving it to the upside, currently -1.05:1 on the NYSE and +2.57:1 on the Nasdaq.

Linda Piazza : 8/17/2005 12:04:09 PM

SOX trading sideways.

Jeff Bailey : 8/17/2005 12:02:00 PM

12:00 Market Watch found at this Link

Jeff Bailey : 8/17/2005 11:56:06 AM

Bullish swing trade long setup alert for 1/2 bullish position in shares of General Electric (GE) $34.20 +0.94% ... go long should GE trade $34.10, stop at $33.70, target $35.75.

Jonathan Levinson : 8/17/2005 11:51:26 AM

The short cycle indicators have rolled over again, but that's pretty common behavior for a trending cycle. Bears need a break below 38.90 to confirm a new short cycle downphase that will be less likely to whipsaw to the upside. This op-ex week action is troublesome for cycle models, because it extends price moves beyond their usual time horizon.

Linda Piazza : 8/17/2005 11:49:31 AM

Hard to tell for certain, but the SOX may not quite be through testing resistance. The 15-minute Keltner chart shows a potential for it to steady from 462.27-464.57, and then rise up to test 465.66-466.57 resistance again. Not certain that will happen, but the Keltner charts suggest that it's a possibility. SOX at 464.39 as I type.

Jonathan Levinson : 8/17/2005 11:37:54 AM

QQQQ is net unchanged from its 10AM levels, the short cycle upphase still toppy and trending. Session low for ten year notes at 111 5/64, TNX +2.7 bps at 4.254%.

Linda Piazza : 8/17/2005 11:34:58 AM

The RUT is still trying to bounce from its 240-minute 100-ema, with that average at 654.69. This is to-be-expected action, with this bounce moving the RUT toward a retest of the 658-ish former support level to see if it holds as resistance now. I consider that 658 level the most likely site of the neckline for the RUT's H&S, but as I've said, I won't consider that formation finally confirmed until the RUT has lost the support of the 240-minute 100/130-ema's.

Linda Piazza : 8/17/2005 11:31:31 AM

The SOX continues to test the 60-minute 100/130-ema's from the underside, with those averages at 467.71 and 468.90 on 15-minute closes. The SOX is at 464.50 as I type, with a high of 466.15. The last 60-minute candle was a doji after a tall white candle, however, and SOX bears want to see follow-through with a long red candle this period, moving down from the current level.

Linda Piazza : 8/17/2005 11:28:42 AM

Next Keltner resistance on the OEX at 569.03-569.11 on 15-minute closes, with next support at 567.78 on 15-minute closes. The OEX is at 568.21.

Jonathan Levinson : 8/17/2005 11:28:32 AM

Headlines:

[GE] GE UNIT TO BUILD HYBRID FUEL CELL-GAS TURBINE SYS FOR DOE

[GE] GE UNIT RECEIVES $83M CONTRACT FROM DEPARTMENT OF ENERGY

GE +.35 at 34.23.

Linda Piazza : 8/17/2005 11:24:57 AM

Benchmarking impressions: The advdec line may be approaching resistance at 830 on 30-minute closes, with a high so far of 640 and the advdec line currently at 445.

Jonathan Levinson : 8/17/2005 11:23:44 AM

The 30 min cycle bounce is still looking corrective, the 30 and 60 min channel tops only up to 39.15. 72 SMA support is up to 38.95. Link

Linda Piazza : 8/17/2005 11:15:41 AM

The OEX moved above Keltner resistance at 567.58, but since doing so, it's been printing small-bodied candles with upper shadows, and now it drifts down to retest that Keltner line. As I said earlier, there's nothing for OEX bears to do but to adhere to their already-decided-upon plans after the 200-sma was tested, with plenty of warning to set up those plans as the OEX drifted toward that average yesterday afternoon. I didn't see a good risk vs. reward entry for bullish entries today, although I've been known to be wrong about that before. The OEX did hit the bottom of a descending regression channel that began forming about August 9, and started the bounce from that, so that it might be presumed to be moving up at least to the midline, now at about 569, but I'm in a wait-and-see mode and not sure that upside targets will be met. Or I wasn't. With the OEX moving up as I typed, and now at 568.44, there's a strong possibility that midline will be tested.

Jeff Bailey : 8/17/2005 11:09:21 AM

11:00 Internals found at this Link

Jonathan Levinson : 8/17/2005 11:05:57 AM

Session low for crude oil at 64.85.

Linda Piazza : 8/17/2005 11:03:00 AM

TRAN testing Keltner resistance at 3702.81 on 15-minute closes, with the TRAN at 3702.15 as I type. The TRAN remains below the neckline of its confirmed H&S and any bounce now is presumed to be a bounce into a retest of that neckline.

Jeff Bailey : 8/17/2005 11:02:36 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 8/17/2005 11:01:09 AM

QQQQ's 30 min cycle upphase is crossing the midpoint of its range as the 60 min cycle only now begins to uptick from oversold territory. So far, this has been far less of a 30 min cycle bounce than the downphase which preceded it. If the 60 min cycle is going to turn up strongly, then that could change, but for the moment it looks corrective. Link

Jeff Bailey : 8/17/2005 10:59:35 AM

Nordstrom (JWN) $34.14 +9.70% Link ... posted Q2 earnings of $148.9 million, or $0.53 a share, up from $106.9 million, or $0.37 a share, a year ago. Earnings beat the consensus of $0.48 a share. Sales rose 7.8% to $2.1 billion, and same-store sales increased 6.2%.

Linda Piazza : 8/17/2005 10:59:21 AM

The midpoint of yesterday's OEX range is roughly congruent to the 50-sma, at 569.46. Bears would like to see the OEX stay below that level, while bulls would like to see it sustain values above it, erasing more than half of yesterday's losses. The OEX is at 567.86 as I type.

Jonathan Levinson : 8/17/2005 10:54:43 AM

Session low for crude oil, -.775 at 65.30, QQQQ testing 39.00.

Jeff Bailey : 8/17/2005 10:55:21 AM

S&P Retail Index (RLX.X) 461.99 +0.63% ... hovering at rising 50-day SMA. WEEKLY Pivot Levels ... 456.66, 462.94, Piv= 470.21, 476.49, 483.76.

Abercrombie & Fitch (ANF) $57.45 -6.17% Link ... reported Q2 earnings of $57.4 million, or $0.63 a share, up from $42.9 million, or $0.44 a share, a year ago. Analysts were looking for earnings of $0.69 a share. Total sales rose 42% to $571.6 million as same-store sales rose 30% from last year.

Jeff Bailey : 8/17/2005 10:50:23 AM

S&P Banks (BIX.X) 354.91 (unch) ...

10-year YIELD ($TNX.X) up 0.8 bp at 4.235%.

Jeff Bailey : 8/17/2005 10:49:31 AM

Semiconductor Index (SOX.X) 465.99 +1.70% ... best levels of the session. Sets up for re-test of WEEKLY Pivot.

Linda Piazza : 8/17/2005 10:48:55 AM

Next Keltner resistance for the OEX at 568.96-569.11. Nearest support at 567.52 and then at 566.67, all on 15-minute closes. OEX at 568.18 and perhaps headed up toward that next resistance as I type.

Jeff Bailey : 8/17/2005 10:47:49 AM

10 Most Active ... AMAT $18.13 +5.59%, HPQ $26.18 +10.46%, QQQQ $38.97 +0.41%, SPY $122.46 +0.18%, INTC $26.05 +0.15%, CSCO $17.93 +1.70%, MSFT $26.84 +0.37%, TMTA $1.93 -6.76%, DELL $37.02 +0.87%, SUNW $3.66 -0.54%

Linda Piazza : 8/17/2005 10:47:43 AM

SOX still near the high of the day, still just below the top of its descending regression channel building most of this month, still below the 60-minute 100/130-ema's that turned it back on Monday, with those averages now at 467.71 and 468.90 on 15-minute closes. No outcome yet on these tests, as the SOX has neither rolled over beneath these averages and the top of its descending regression channel nor climbed above them.

Jonathan Levinson : 8/17/2005 10:45:00 AM

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute said motor gasoline inventories fell by 5.1 million barrels for the week ended August 12 -- in line with the decline reported by the Energy Department. Crude inventories fell 1.1 million barrels and distillate stocks were up 2.8 million barrels, the API said. September unleaded gasoline climbed to a record $2.029 a gallon and was last at $2, up 1.64 cents.

Jonathan Levinson : 8/17/2005 10:38:44 AM

QQQQ bulls need to see a strong break of 39, bears below 38.76. This area's a blender, and my guess is that the intraday cycles (30/60) are trying to get it together for their overdue upphase. The bottom of the next short cycle should be a good spot to scope for a long to ride that bounce, but so far, the op-ex tractor beam has been skewing the action.

Linda Piazza : 8/17/2005 10:38:23 AM

TRAN so far maintaining its breakdown signal on the 15-minute chart, but consolidating above important support, so that I wouldn't be surprised to see some choppy consolidation or even a bounce attempt either at the current 3693.96 level or after a steeper dip to the 240-minute 100/130-ema's at 3674.05-3658.36.

Jeff Bailey : 8/17/2005 10:38:15 AM

Buy Program Premium ... DIA $105.56, SPX 1,220.83, QQQQ $38.93.

Linda Piazza : 8/17/2005 10:34:58 AM

There went the OEX, too, along with other indices, just hitting a minimal new LOD. It's bouncing right back up again, into the bear flag shape.

Jonathan Levinson : 8/17/2005 10:34:35 AM

Volume breadth still bifurcated, -1.47:1 on the NYSE and +1.27:1 on the Nasdaq.

Jonathan Levinson : 8/17/2005 10:31:33 AM

Headlines:

U.S. DISTILLATE STKS UP 1.2 MLN BRLS: ENERGY DEPT

U.S. GASOLINE STKS DOWN 5 MLN BRLS: ENERGY DEPT

U.S. CRUDE STKS UP 300,000 BRLS LAST WK: ENERGY DEPT

Jonathan Levinson : 8/17/2005 10:31:16 AM

From the EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.3 million barrels from the previous week. At 321.1 million barrels, U.S. crude oil inventories are well above the upper end of the average range for this time of year. Total motor gasoline inventories dropped by 5.0 million barrels last week, putting them near the bottom end of the average range. Distillate fuel inventories increased by 1.2 million barrels last week, and are above the upper end of the average range for this time of year. Most of the increase was in low-sulfur distillate fuel (diesel fuel), although high-sulfur distillate fuel (heating oil) inventories increased slightly. Total commercial petroleum inventories fell by 3.3 million barrels last week, and are just above the upper end of the average range for this time of year.

Jeff Bailey : 8/17/2005 10:30:51 AM

Sell Program Premium ... DIA $105.55, SPX 1,220.29, QQQQ $38.93.

Jonathan Levinson : 8/17/2005 10:29:47 AM

QQQQ chart updated at this Link , still looking like a reverse h&s at the bottom of yesterday's decline, but the short cycle indicators are looking more bearish than bullish at this point. Below 38.88, the pattern will begin to abort.

Linda Piazza : 8/17/2005 10:28:27 AM

The RLX is back minimally above the 50-sma after closing below it yesterday. It's essentially testing the important 240-minute 100/130-ema's, with those at 461.29 and 457.25, respectively. These averages bounced the RLX back in June into the recent high, and dip-buyers might deem this place to try buying RLX stocks again. This is the kind of action I expected on many indices as they test these averages--either choppy consolidation or a bounce attempt.

Linda Piazza : 8/17/2005 10:24:09 AM

SOX still near its HOD, still below the top of its descending regression channel in place this month, and below the 60-minute 100/130-ema's, at 467.77 and 466.92, respectively.

Jonathan Levinson : 8/17/2005 10:23:19 AM

QQQQ - Exit Point Alert -

Out QQQQ at 38.98

Negative divergences showing in the short cycle oscillators ahead of the EIA report.

Linda Piazza : 8/17/2005 10:21:50 AM

The OEX has again broken above the Keltner line that created the 565.20 downside target, now testing the 567.40 Keltner resistance (on 15-minute closes). The OEX is at 567.42, with that resistance so far essentially holding but with several minutes to go in this 15-minute period. There's not much to go on here except that bears should follow their exit plans, whatever they were. I'm not recommending long positions.

Jeff Bailey : 8/17/2005 10:17:52 AM

Pan Pacific Retail Property (PNP) $66.93 -0.34% Link ... S&P Rating Services raised it corporate credit rating on PPT to "BBB+" from "BBB." Outlook remains stable. The rating action affects $554 million of outstanding senior unsecured debt as well as Pan Pacific's proposed $100 million senior unsecured offering.

Jeff Bailey : 8/17/2005 10:14:09 AM

Yesterday's Internals found at this Link

Jeff Bailey : 8/17/2005 10:13:07 AM

10:00 Internals found at this Link

Linda Piazza : 8/17/2005 10:11:31 AM

In addition to approaching the 240-minute 100/130-ema's, the TRAN has been testing daily Keltner support at 3681.25. The TRAN is at 3688.13 as the inventories release approaches.

Linda Piazza : 8/17/2005 10:06:59 AM

The SOX still tests mid-channel Keltner resistance, at 464.55 and 465.75 on a 15-minute close. SOX at 464.00.

Linda Piazza : 8/17/2005 10:03:59 AM

The OEX still tests the signal line that creates a downside signal of 565.35. That signal line is at 567.12 on 15-minute closes. So far, the downside target is maintained, but remember the 200-sma at 566.08.

Jeff Bailey : 8/17/2005 10:02:57 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 8/17/2005 10:02:49 AM

Crude oil -.275 at 65.80, off a low of 65.725.

Linda Piazza : 8/17/2005 9:58:55 AM

The TRAN often does some zooming around ahead of inventories numbers on Wednesday mornings, with the direction sometimes continuing after that release and sometimes reversing. Today, it's zooming to the downside, having created a breakdown signal on the 15-minute chart. The TRAN has most definitely confirmed a well-developed H&S on its daily chart, no matter where you draw that neckline. I draw it at about 3724, and the TRAN has dropped to 3686.46 this morning. Keltner channels were designed to identify breakdowns or breakouts, and so a breakdown isn't necessarily a sign that a reversal will occur, but the TRAn does approach those important 240-minute 100/130-ema's, at 3673.92 and 3658.25, and may be hitting them about the time of the inventories release. A choppy consolidation or a bounce attempt would make sense from a technical sense. The TRAN sometimes doesn't bother to complete consolidation, so I think we just have to wait to be sure, but that's a possibility. At this point, I would consider any bounce attempt a retest of that neckline.

Jonathan Levinson : 8/17/2005 9:58:44 AM

QQQQ - Entry Point Alert -

Long QQQQ at 38.92, stop 38.82

Jonathan Levinson : 8/17/2005 9:54:35 AM

A generous 7.5B overnight repo from the Fed adds a net 2B against the 5.5B expiring.

Linda Piazza : 8/17/2005 9:54:24 AM

SOX still testing that mid-channel resistance on the 15-minute chart.

Jeff Bailey : 8/17/2005 9:52:02 AM

Beverly Enterprises (BEV) $12.45 -3.78% Link ... agrees to be bought by North American Senior Care for $12.80 a share, or $1.9 billion including debt.

Jonathan Levinson : 8/17/2005 9:51:25 AM

Looks like a reverse h&s here off the lows for QQQQ, neckline being tested now: Link

Linda Piazza : 8/17/2005 9:49:07 AM

With the SOX rising so strongly this morning, the expectation might be that the RUT is, too, but it's not. The RUT is between the important 240-minute 100/130-ema's at 654.60 and 649.53, respectively, testing them and 650 historical support. RUT at 652.58 as I type.

Linda Piazza : 8/17/2005 9:47:57 AM

SOX holding below mid-channel resistance on the 15-minute nested Keltner charts, with that resistance at 464.53-465.42 on 15-minute closes.

Jeff Bailey : 8/17/2005 9:45:42 AM

Applied Materials (AMAT) $18.10 +5.35% Link ... sharply higher and atop this morning's most active list after the world's largest chip-equipment maker reported third-quarter net income of $369.6 million, or $0.23 a share, on $1.63 billion in sales. That was down from a year ago, when the company earned $440.6 million, or $0.26 a share, on $2.24 billion in sales.

The Q3 results included a favorable tax adjustment of $132 million, or $0.08 a share, due to the resolution of a multiyear tax examination.

Excluding tax adjustment, Applied Materials' earnings still came in one penny higher than the consensus estimate of $0.14 a share.

Jonathan Levinson : 8/17/2005 9:44:34 AM

Oct. gold is dusting itself off after a drop to 443.50 support, now back above 444 at a 2.5 loss, 445.70 last.

Linda Piazza : 8/17/2005 9:44:10 AM

OEX traders: The OEX so far finds resistance at that same channel line that has mostly supported it for so long. If that resistance, at 567.28 on 15-minute closes, continues into the end of this current 15-minute period, the 565.44 downside target and potential support is preserved. Remember that 200-sma's support, too, and have profit-protecting measures in place. Do not let a winning play turn into a losing one if a 200-sma-induced bounce gets away from you. Don't know that there will be one, but it would be logical to expect.

Jonathan Levinson : 8/17/2005 9:43:02 AM

From the Mortgage Bankers Association website:

WASHINGTON, D.C. (August 10, 2005) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 5. The Market Composite Index - a measure of mortgage loan application volume - was 745.0, a decrease of 0.9 percent on a seasonally adjusted basis from 752.1 one week earlier. On an unadjusted basis, the Index decreased 1.3 percent compared with the previous week but was up 20.8 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index increased by 0.9 percent to 498.8 from 494.5 the previous week whereas the Refinance Index decreased by 3.3 percent to 2176.5 from 2250.3 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 0.7 percent to 1122.2 from 1130.1 the previous week, and the Government Index, which decreased 4.9 percent to 115.3 from 121.3 the previous week.

Jonathan Levinson : 8/17/2005 9:42:01 AM

Rising support off the QQQQ 3:30PM low is at 38.83. Link

Linda Piazza : 8/17/2005 9:42:27 AM

The top of the SOX's descending regression channel in which it's traded lower this month is also the site of the 60-minute 100/130-ema's, so those can be used as benchmarks for the top of that channel. They're at 467.72 and 466.88, respectively. The bottom support of this descending channel and converging bottom support of a rising channel off the April low are benchmarked by the 240-minute 100/130-ema's, at 453.90 and 448.69, so you have some good parameters to watch for the SOX. There is, of course, a much larger ascending regression channel on the weekly chart.

Jonathan Levinson : 8/17/2005 9:40:41 AM

Volume breadth +2.45:1 on the Nasdaq and -1.79:1 on the NYSE. Bifurcated.

Jeff Bailey : 8/17/2005 9:38:17 AM

Goldcorp (GG) $17.33 -1.53% Link ... cut to "equal weight" from "overweight" at Orion.

Jonathan Levinson : 8/17/2005 9:37:09 AM

The short cycle upphase is not yet overbought, but that 38.95 QQQQ overhang continues to hold it back. A rollover below it would set up a high likelihood of aggressive test of yesterday's low. Link

Linda Piazza : 8/17/2005 9:34:11 AM

Big bounce in the SOX this morning, but still within its descending regression channel in place this month. The top of that channel is at about 466.90. SOX at 463.78 as I type.

Linda Piazza : 8/17/2005 9:32:52 AM

Benchmarking impressions: The advdec line begins the day above the midline of its nested Keltner channels, and so has lots of room to run before becoming either oversold or overbought. RSI indicates its nearer to overbought than oversold, though, but impressions formed in this mid-channel area are iffier than those at the outer boundaries.

Linda Piazza : 8/17/2005 9:31:33 AM

At the open, the OEX maintains its target and possible support at 565.54, and will as long as it maintains 15-minute closes beneath a Keltner line currently at 567.37.

Jonathan Levinson : 8/17/2005 9:30:35 AM

From Marketwatch re: today's 10:30 Petrol report:

Fimat and Wachovia Corp. expect a 2.2 million-barrel buildup in crude inventories. Platts sees a rise closer to 1.5 million.

For gasoline supplies, expectations mainly called for a drawdown. Wachovia predicts a decline of 2.5 million barrels and Platts bets on a fall of 1.45 million barrels. But Fimat expects an increase of 250,000 barrels.

Distillates probably climbed in the latest week -- likely by 1.8 million barrels, according to Wachovia; by 1.25 million, according to Fimat; and by 1.7 million, according to Platts.

Jonathan Levinson : 8/17/2005 9:17:14 AM

Don't forget the petroleum inventory data scheduled for 10:30 AM.

Jonathan Levinson : 8/17/2005 9:11:52 AM

It's looking like those bottomy intraday cycles may mean business on the QQQQ this morning. QQQQ bears from the 39.45 break can snug down their stops from 39.15 and either take profits now, or on a break back above yesterday's S1 at 39.03. I will be waiting for a post-opening drop to evaluate a long play- but it will only for the purposes of catching a 30/60 min cycle upphase. The longer cycles are looking increasingly bearish, and selling the top of the next 30/60 min cycle upphase will be the bigger priority when it comes around.

Linda Piazza : 8/17/2005 9:05:29 AM

The OEX broke lower Tuesday, finally following the BIX's example by falling toward the middle of its broadening formation on the daily chart, where the 200-sma waited as possible support. Based on the BIX's similar chart pattern and leading decline, I had been saying for a while that I thought the OEX was vulnerable to a test of the 200-sma, but the OEX held up much longer than the BIX. The next step for the BIX was a decline below the 200-sma and some chopping around between the 200-sma and 200-ema, and the OEX has sometimes been known to chop around between those MA's, too. The OEX's 200-sma is at 565.95 and the 200-ema is at 564.25.

But that may be putting the cart before the horse. The OEX hasn't fallen beneath its 200-sma just yet. The 15-minute Keltner chart suggests a decline to at least 565.56, if not the 200-ema, but that might not occur today. The OEX did closely approach its 200-sma yesterday and the presence of that MA may be enough to steady the OEX for a day or so. If there's a steadying and a bounce, I'm in a wait-and-see mode this morning. Those already in bearish positions should have followed the OEX lower with their stops. Those in August options need to give some thought to stopping out if their options should begin leaking too much premium if the OEX just consolidates, too.

Jane Fox : 8/17/2005 8:47:08 AM

Dateline WSJ Rival computer hackers exploited a newly disclosed flaw in Microsoft Corp.'s Windows operating system to attack dozens of companies in what security experts said was an Internet-crime turf war.

Among the companies hit hard by fast-spreading computer worms were a number of media outlets, including Time Warner Inc.'s CNN unit, New York Times Co. and ABC, a unit of Walt Disney Co. Computers crashed at Kraft Foods Inc. yesterday afternoon and United Parcel Service Inc. reported that a "very small" number of computers in various locations were affected by a worm.

Mike Aberlich, a spokesman for DaimlerChrysler AG's Chrysler Group, said the worm hit 13 of the auto maker's manufacturing plants for five minutes to 50 minutes. It didn't cause major production problems, he said, adding that some of the company's financial-services operations may have been affected for a longer period.

The worms, small computer programs with instructions for replicating themselves, clogged computer networks as they sought out new machines to infect. Some companies reported that their computers sought to continually restart themselves.

Jonathan Levinson : 8/17/2005 8:33:56 AM

QQQQ had squeezed up to the 38.98 level before the data, and dove to a low of 38.85, currently bouncing to 38.89. Bonds are at session lows, with TNX up 2.4 bps to 4.254%. For QQQQ, a 30 min cycle upphase is growing overdue as the 60 min cycle downphase continues, only now approaching oversold territory. The intraday bias is still down, but will be due to shift to the upside by noonish at the latest. The more bearish scenario would imply an intraday downside trending more- usually the less likely/more extreme scenario.

Jonathan Levinson : 8/17/2005 8:30:34 AM

Headlines:

U.S. JULY PPI 1% VS. 0.5% GAIN EXPECTED

U.S. JULY CORE PPI FALLS RISES 0.4% VS. 0.1% GAIN EXPECTED

U.S. JULY PPI ENERGY PRICES UP 4.4%

U.S. PPI UP 4.6% YEAR-OVER-YEAR VS. 3.6% IN JUNE

Jane Fox : 8/17/2005 8:29:43 AM

Dateline WSJ When America's housing boom finally ends, don't expect a loud pop.

"It's not going to be a big dramatic event," says William Apgar, senior scholar at Harvard University's Joint Center for Housing Studies.

Unlike stock prices, the housing market can't collapse in a few days. People can dump their stocks almost instantly, but it often takes months to sell a house.

In past housing busts in California, New England and elsewhere, many owners who couldn't get what they considered a reasonable price yanked their houses off the market. The number of transactions plunged but prices fell only gradually, often over several years.

Still, that's little reassurance for Americans who are worried that they bought at the top of the market or for those waiting for prices to ease before jumping in. And the end of the boom is likely to be painful for many people. Among the most vulnerable: people who may have to sell in a weak market because of a job loss or transfer; those with little or no equity in their homes and big mortgages; and those counting on big gains in home equity to make up for a lack of retirement savings.

Jonathan Levinson : 8/17/2005 8:22:21 AM

Ten year notes hold a fractional gain with TNX quoted -.7 bps at 4.22%. 4.18%-4.2% is strong support, but the daily cycle setup suggests that it will fail. If so, 4.15% is the next significant confluence zone. To the upside, 4.3% is confluence resistance.

Jonathan Levinson : 8/17/2005 8:19:36 AM

LONDON (Reuters) - Oil cartel OPEC nudged up its forecast for world oil demand growth in 2006 on Wednesday and predicted OPEC supplies would have to offset lower-than-expected output from non-OPEC countries.

OPEC now expects world oil demand to grow by 1.57 million barrels per day (bpd) in 2006, an upward revision of 30,000 bpd and little changed from this year's growth rate.

Link

Jonathan Levinson : 8/17/2005 7:39:47 AM

Equities are up, ES trading 1222, NQ 1583.5, YM 10547 and QQQQ +.13 to 38.94. Gold is down 1.20 to 447, silver -.018 to 7.027, ten year notes +1/16 to 111 25/64 and crude oil is down .15 to 65.925.

We await the 8:30 release of the PPI and Core PPI, est. .5% and .1%.

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

Good morning. The Nikkei hit a new recent high but then dropped almost 100 points off that high to close in negative territory. Other Asian markets were mixed. European markets decline. As of 6:53 EST, gold was lower by $2.00, and crude, down by $0.05 to $66.03. As of that same time, our futures ranged from unchanged to slightly above the flat-line level. More detail about Asian and European markets follows in succeeding paragraphs.

Although it opened in negative territory, below 12,300, the Nikkei was soon moving into new recent highs again during the morning sessions. Banks led early gains. Another early gainer was Softbank Corp., climbing strongly after a newspaper reported on its efforts to boost profits. Those efforts included targeting small businesses and trimming the marketing budget for some fixed-line services for individuals. The afternoon session told a different story, however, as the Nikkei curved over and toppled. It fell back within three points of its open and almost 100 points off its high of the day, leaving a shooting star candle for the day's candle. The Nikkei ended lower by 42.55 points or 0.35%, at 12,273.12. Wal-Mart's Japan affiliate, Seiyu Ltd., bucked the negative trend and soared after announcing that it plans to open supercenters next year that might carry the Wal-Mart Stores name.

Early positive influences had included a monthly survey by Merrill Lynch that pointed to interest in Japanese equities by global fund managers, more than those of any other country. Some firms such as Morgan Stanley also upgraded their assessment of the economy's expansion this business year. Twenty six percent wanted to be overweight in Japanese equities. The number expecting Japan's economy to strengthen this next year rose from a net 50% in July to a net 73% in August. Another poll showed Koizumi's LDP party gaining support, and Koizumi's approval rating rising. The gains in the Nikkei certainly haven't hurt those ratings. The former LDP policy chief announced plans last night to begin a new party, but it's not expected to be a major force in the September 11 elections. Most of the 37 LDP members who were ousted because they did not vote for the postal bill will run as independents, one source says.

Other Asian markets were mixed. The Taiwan Weighted lost 0.01%, and South Korea's Kospi fell 0.33%. Singapore's Straits Times fell 1.09%, but Hong Kong's Hang Seng rose 0.04%. China's Shanghai Composite rose 1.32%. Trade representatives from China and the U.S. will conclude their meeting today, with that meeting intended to resolve trade disputes over textiles.

European markets decline, with disappointments from Nestle and Adecco contributing to the malaise engendered by poor performances on U.S. bourses yesterday. France's Trade Deficit for June widened slightly from May's, as imports fell 2.5% and exports fell 2.8% month over month. Some now speculate that Friday's GDP will show an easing in consumer spending and exports that subtract from GDP growth. In the U.K., the Bank of England minutes from the August 3-4 meeting were scrutinized after some recent hawkish comments. Those minutes did reveal a hawkish tenor despite the ultimate decision to ease rates during that meeting. That easing came with a split 5/4 vote, and the hoped-for additional easing this year may not occur. An additional negative influence in the U.K. was that several companies' stocks began trading without dividend rights.

M&A speculation impacted several companies. Danish telecommunications carrier TDC jumped higher after speculation that it might receive a private equity bid. Deutsche Telekom eased after talk that it was still interested in bidding for the U.K.'s O2, even after KPN pulled out of the joint-bid deal. O2 was rising in early trading. Broker action also impacted some companies, with Deutsche Bank downgraded U.K. fund manager Schroders, and that stock declining; and ABN Amro upgrading Cable &Wireless and Rank Group to buy, with C&W declining and Rank rising in early trading.

As of 6:50 EST, the FTSE 100 was lower by 22.40 points or 0.42%, at 5,299.90. The CAC 40 was lower by 20.10 points or 0.45%, at 4,424.47. The DAX was lower by 25.05 points or 0.51%, at 4,858.76.

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