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Jeff Bailey : 8/20/2005 12:05:59 AM

Pivot Matrix for next week at this Link

Jeff Bailey : 8/20/2005 12:02:13 AM

Closing Internals found at this Link

Jeff Bailey : 8/20/2005 12:01:46 AM

Closing U.S. Market Watch at this Link

OI Technical Staff : 8/19/2005 9:59:59 PM

The Market Monitor has been archived. You may view it and any previous days here: Link

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Jeff Bailey : 8/19/2005 9:42:21 PM

I just got off the phone with an energy analyst/friend of mine from AG Edwards. Tom has been more than kind over the years to share some of his thoughts and ideas on the energy markets and I thought it might be informative to interview Tom and pick his brain, then write up a general report from his perspective.

I've got a few questions that I'd like to try and get some answeres to.

How about you?

If you've got some questions that might be appropriate for an oil/gas analyst that has had experience not only in the field and from the production and exploration side of things with Mobil Oil Corp, but also from the fundamental analyst side of things (10+ years, good and bad times for the energy sector so he knows what to look for when a slowdown appears) then I'd invite you to send me some questions that Tom might be able to address.

In the subject line of your e-mail question, type "Energy Question for Jeff"

Get them in quick! I'm hoping to write up my interview with Tom, then publish it on Wednesday, September 7.

Linda Piazza : 8/19/2005 4:04:22 PM

Everyone have a great week next week. Just so you know, I believe that the OEX's pattern could still be a "b" distribution pattern as the OEX rattles between the converging 10- and 50-sma's resistance and the 200-sma's support. Remember that the OEX could bounce up again on Monday to retest that 50-sma, although I'd think that three days with longer upper shadows would discourage many bulls. They haven't asked me, though. A close outside of either of those MA's would perhaps change the OEX's trading range, but if the 200-sma is broken, heed the BIX's example, and consider a possible support at the 200-ema, at 562.82, and a consolidation zone between the two. I'll check in whenever I can, but Monday, I think I'll be at airports or on a plane much of the day, so may not check in at all then.

Jeff Bailey : 8/19/2005 4:02:47 PM

Merck (MRK) goes out at $28.06 -7.27% ...

Linda Piazza : 8/19/2005 3:59:14 PM

The OEX did roll down today from its test of the 50-sma, so the bearish play worked, although the word "worked" must be taken with a grain of salt. Traders might have recouped very little for their efforts this opex Friday and we still have a couple of minutes to go when almost anything can happen. With big open interest on both the 570 and 565 puts, though, I wouldn't be surprised to see the OEX end up somewhere in the middle of those two strikes, although you just can't always count on maxpain theory working.

Linda Piazza : 8/19/2005 3:54:08 PM

The OEX again shows a vulnerability to a test of the 200-sma, but it's testing the last little swing low at 566.87 on the five-minute chart, easing just below that. There could be another quick rebound. Those who didn't take partial profits earlier might want to consider doing so as the 200-sma is approached again.

A special word to those newbies in August options. The OEX is cash settled, and will settle at the value of the closing value of all the component stocks, NOT at the OEX's closing value. There might be a slight discrepancy between the numbers.

Linda Piazza : 8/19/2005 3:42:18 PM

The OEX's 15-minute Keltner resistance at 567.79 still holds as resistance. The OEX is at 567.11 as I type. The advdec line tests Keltner resistance, too.

Linda Piazza : 8/19/2005 3:27:10 PM

Advdec line flat and ringed by five-minute Keltner resistance and support. No clues there as to the last 35 minutes of trading.

Jeff Bailey : 8/19/2005 3:21:21 PM

YM/QQQQ day trader's montage at this Link

Jeff Bailey : 8/19/2005 3:13:27 PM

03:05 Internals found at this Link

Linda Piazza : 8/19/2005 3:10:23 PM

I've turned to a five-minute Keltner chart to watch the OEX. Five-minute resistance at 567.65 is currently being tested, with the OEX now at 567.67. Further and stronger resistance just above 568. Hope some of you took at least partial profit, if not all profit earlier.

Jeff Bailey : 8/19/2005 3:07:14 PM

03:05 Market Watch found at this Link

Linda Piazza : 8/19/2005 3:06:15 PM

Familiar opex stuff. I mentioned earlier that the advdec line was dropping, but approaching a level from which it might bounce and that the RSI was also indicating that it might soon steady or bounce, and the advdec line is bouncing off that now 491.50 support. Support and resistance look about equally weighted now on the five-minute chart. We have to wait for something to settle to know more.

Jane Fox : 8/19/2005 3:04:08 PM

Jeff Thanks for the update on MRK.

Jeff Bailey : 8/19/2005 3:03:17 PM

Merck (MRK) $29.40 -3.32% ... plunged to afternoon low of $28.38 after Texas jury found the company liable for man's death. (Vioxx case)

Jury awarded widow $253 million.

Linda Piazza : 8/19/2005 3:00:31 PM

So far, the OEX's retest of Keltner resistance at 567.32-567.76 on the five-minute chart is holding. OEX at 567.28 as I type. Turning back to the fifteen-minute chart, the OEX so far remains vulnerable to 566.30, but remember that 200-sma when you're deciding whether to hold onto a bearish play or take at least partial profits.

Linda Piazza : 8/19/2005 2:53:48 PM

As a reminder, the OEX's 200-sma is also near that lower Keltner boundary, at 566.32. OEX's five-minute Keltner chart suggests that it might rise up to test 567.41 or 567.71 Keltner resistance, with bears wanting five-minute closes beneath these levels.

Linda Piazza : 8/19/2005 2:52:08 PM

Okay, OEX bears. I mentioned earlier today that you needed to have profit-protecting plans in place as the lower Keltner boundary of that same old channel was approached, and that channel's lower boundary is now at 566.30, with the OEX now at 566.90. You might consider taking partial profits soon and then lowering your stops on the rest to breakeven, or, if you're conservative, you might even take full profit soon, knowing this is an opex Friday. The advdec line suggests there could be more downside, but "could" is the operative word and not "will."

Linda Piazza : 8/19/2005 2:49:55 PM

Benchmarking impressions: The advdec line is finally turning a bit lower, but approaching potential support on the five-minute chart, at 509 and then at 184. Bears want to see that support breached on five-minute closes. As that support is approached, however, the five-minute RSI approaching levels indicating a potential steadying or bounce could soon be in the making. Advdec line at 604 as I type.

Linda Piazza : 8/19/2005 2:47:28 PM

OEX dropping down to test the rising trendline off yesterday's early morning low. That trendline now crosses at about 567.44, but there's also a five-minute Keltner line currently at 567.58, offering potential support, too. OEX at 567.71 as I type. Bears need to see a new low below the last five-minute swing low of 567.37 before they believe that rising trendline has been crossed.

Jeff Bailey : 8/19/2005 2:48:01 PM

Merck (MRK) $30.14 -0.85% ... WEEKLY S1/DAILY S2 correlation here. Session low. 23rd-most heavily weighted INDU/DIA/YM component.

Linda Piazza : 8/19/2005 2:45:12 PM

Benchmarking impressions: Advdec line now pulling back from its retest of former support, with that support holding as resistance. Testing 30-minute support at 752.73 as I type, with the advdec line at 800. Those hoping for a decline into the close want to see that potential support lost. If it's not, there's a chance that the advdec line will rise up to challenge that resistance again.

Jeff Bailey : 8/19/2005 2:43:33 PM

Trader alert! ... CNBC saying Texas verdict in Merck (MRK) $30.25 -0.52% Vioxx case is eminent any moment now.

Jeff Bailey : 8/19/2005 2:41:25 PM

Current Open MM Profiles found at this Link

Linda Piazza : 8/19/2005 2:31:48 PM

We've had the usual pin-them-to-the-numbers action on this opex Friday. Will it continue into the close? It could. All day long, I've been waiting for the advdec line to complete its consolidation and move one way or another, without much luck. As I type, the resistance being retested is still holding, so a downturn is still possible, but it's difficult to assess whether possibility will turn into actuality on an opex Friday afternoon.

Linda Piazza : 8/19/2005 2:19:13 PM

In typical opex form, the SOX trades sideways. It's spending the day at Keltner mid-channel S/R, roughly between the 15-minute 100/130-ema's. This occurs after a decline from the day's high, so should break to the downside, but I'm not at all certain we'll see any break this opex Friday. Still watching the advdec lines, including the .nq one, to see if resistance is holding on a retest. So far, it is.

Linda Piazza : 8/19/2005 2:12:35 PM

Benchmarking impressions: Advdec line moving higher into Keltner resistance, up to 1155 on 15-minute closes and 1253 on 30-minute closes. Advdec line now at 1047. The advdec line hasn't made much progress today and remains vulnerable to a pullback, but this test is an important one. There was a drop below a breakout signal and now a retest of that signal and the resistance needs to hold.

Jeff Bailey : 8/19/2005 2:12:27 PM

02:00 Internals found at this Link

Jeff Bailey : 8/19/2005 2:08:27 PM

02:00 Market Watch found at this Link

Linda Piazza : 8/19/2005 2:02:58 PM

The DJUSHB's potential inverse H&S on the 15-minute chart completely fizzled out. The DJUSHB reached a slightly lower low than the one that formed the head and now trades sideways along that level. Keltner support is trying to firm under the current 965.60 value, but the DJUSHB hasn't been able to bounce.

Linda Piazza : 8/19/2005 1:53:27 PM

Since about 12:30, the SOX has been trading in a straight line, candle bodies forming right along mid-channel S/R at 563.64. The SOX is at 463.31 as I type. In the SOX's case, this sideways trading is occurring while the 15-minute RSI continues downward, suggesting that the SOX needs a deeper push before that RSI dips toward 20 if bears are to be made happy. RSI at 41.54 as I type.

Linda Piazza : 8/19/2005 1:38:48 PM

The OEX now has resistance from 568.40-569.04 on 15-minute closes and then at 570.30. That resistance isn't as firm as bears would like it to be, so that a retest of resistance remains possible, but looks firmer than nearby support. Unless a resistance tests scatters the lines differently, down looks easier than too much of a gain. There's nothing here that precludes some more chop, though. I'm watching the advdec line to see if anything happens there that would suggest a stronger move. If the resistance test on the advdec line shows that resistance is holding, that's one positive in the bears' favor. OEX at 568.12 as I type.

Linda Piazza : 8/19/2005 1:35:10 PM

Benchmarking impressions: The advdec line may need to rise up toward 930-1125 to see if Keltner resistance is going to hold, with this test perhaps needed before it falls further . . . or doesn't fall if that resistance doesn't hold. Advdec line at 835 as I type.

Linda Piazza : 8/19/2005 1:32:49 PM

For those who might have been in SOX August positions, the settlement value was 464.66 according to my broker. You can find this for yourself on next opex cycle by checking SX about mid-morning on opex Friday.

Linda Piazza : 8/19/2005 1:29:09 PM

The RLX is showing tentative Keltner-style bullish divergence with each test of the same Keltner channel that's mostly been supporting the OEX, too. If that bullish divergence is to continue, the RLX won't touch the Keltner line currently at 456.30, with the RLX now at 458.87. An RLX bounce could help support the OEX.

Linda Piazza : 8/19/2005 1:22:32 PM

Watch out for a quick reversal higher, as that isn't what bears want to see.

Linda Piazza : 8/19/2005 1:21:55 PM

Benchmarking impressions: As I suggested might happen in earlier posts (see my 12:57, for example), the advdec line's resistance finally pressured it lower. Bears would like to see a 15-minute close beneath a line currently at 928, with the advdec line currently at 731. They'd like to see the advdec line dip toward -126, but certainly to stay below 957.

Linda Piazza : 8/19/2005 1:18:33 PM

Following the TRAN's example, the OEX falls through mid-channel Keltner support and now tests last support at 567.85 on 15-minute closes, before the bottom of the channel support at 566.22. Bears need to have profit-protecting plans in place for a test of 566.22, if that test should occur, and those plans should probably--given recent history--include at least taking partial profit and resetting stops to breakeven on the rest. The OEX needs a 15-minute close beneath that 567.85 line, however, to set that downside target, and the OEX is currently at 567.55.

Jeff Bailey : 8/19/2005 1:35:04 PM

01:00 Internals found at this Link

Jeff Bailey : 8/19/2005 1:07:22 PM

01:00 Market Watch at this Link

Jane Fox : 8/19/2005 1:01:10 PM

Dateline WSJ In the first attack on a U.S. Navy ship since the 2000 bombing of the USS Cole, militants fired a rocket at the USS Kearsage and the USS Ashland, docked in the Jordanian port of Aqaba.

Linda Piazza : 8/19/2005 12:58:39 PM

TRAN looking more vulnerable to a test of 3700, but it needs a 15-minute close below last Keltner support at 3611.67 to set up that target. It's at 3610.31 as I type, with a couple of minutes to go.

Linda Piazza : 8/19/2005 12:57:23 PM

If I didn't know better, I'd say my charts are stuck. Nothing I'm watching is moving much. It appears to me that the advdec line either needs to bounce quickly and hard or else the building resistance on the 5- and 30-minute charts is going to send it lower. Bulls, beware, in case it's the latter.

Linda Piazza : 8/19/2005 12:50:14 PM

I'll be on vacation all week next week. I notice that several other writers will be, too, and so I'll try to check in when I can and give updates. I can't promise that they'll be very often, and I won't be doing the Asia/Europe report each morning. On vacation, I won't be at work until late in the night and then again at 5:15 in the morning to get that report done! In the evenings, Bloomberg.com covers Asia markets. Marketwatch.com is another source of information on both Asia and Europe, although Bloomberg does a better job of covering economic releases. It's just spotty whether you'll find the article you need on Bloomberg as they wipe them off fairly frequently. If you trade currencies, your forex news source may give the best updates on economic developments. Here's the URL to the Nikkei Net Interactive news source, but you can only see headlines with an (expensive) subscription: www.nni.nikkei.co.jp At www.timesonline.co.uk , you can click on the link to the business news and find some information. Check out CNBC Europe, too, if your provider carries the station.

Linda Piazza : 8/19/2005 12:40:30 PM

TRAN, often a market leader, pushes below mid-channel Keltner support. Testing last support at 3714.37 before a Keltner line at 3699.45. TRAN at 3716.40 as I type.

Linda Piazza : 8/19/2005 12:37:30 PM

This weekend's TradersCorner article will discuss applying some technical analysis tools to breadth and volatility measures. Here's one thing I'm watching today on the advdec line with respect to the nested Keltner channels. Don't worry about specifics here, but just glance at the advdec line's behavior with respect to the black channel lines, glancing down also to see where the RSI is on each of those tests: Link This chart and the 15-minute one suggested to me early this morning that after a pop higher, gains might be limited, and there might even be a rollover after some sideways trading. The rollover hasn't happened, but there are ever-so-slight signs on this chart that the resistance could be gaining strength and there could be a pullback. Not clear at this time, but it remains a strong possibility.

Jeff Bailey : 8/19/2005 12:31:10 PM

DIA Options Chain at this Link ... Hmmmm QQQQ $39.00, now DIA $106.00. For the YM, today's highs might well be in. For a YM bull, my thinking is that the only way to make some money at current trade time, is to try and buy a dip trap, maybe an intra-day bounce back near the high with an exit, but gravitation close back here at YM 10,616.

Linda Piazza : 8/19/2005 12:30:49 PM

The OEX is now below the mid-channel Keltner resistance, but needs a 15-minute close below 568.14 to set up the possible decline to the bottom of the Keltner channel now at 566.09. It has, however, confirmed its double-top formation on the five-minute chart, if only minimally. Wish the advdec line were cooperating, because the OEX would then look vulnerable to the bottom of that channel.

Linda Piazza : 8/19/2005 12:28:35 PM

Benchmarking impressions: The advdec line still moves sideways at the top of its range, normally a bullish event, but the RSI shows that it's at an extreme level, and the RSI isn't cycling down low enough to blow off that extreme status yet, so the advdec line could either consolidate sideways longer or pull back deeper still. That keeps me warning bulls to watch for a possible dip in the advdec line--only possible, not necessarily probable--and keeps me warning bears that there hasn't yet been any appreciable pullback of the nature that would show me that equities are ready for a real dip yet.

Linda Piazza : 8/19/2005 12:20:02 PM

The gains in components shared with the BIX have probably helped the OEX today. The BIX has risen since yesterday morning all the way up through the Keltner channel that's mostly contained it and other indices. Like the OEX, it's been testing that upper channel line today. The RLX certainly hasn't helped a lot, currently drifting down to retest the bottom support rather than top resistance of that same channel. What happens if the RLX bounces from support and the BIX simultaneously drops back from resistance? More chop, probably.

Jeff Bailey : 8/19/2005 12:16:50 PM

Blaaa! for the DIA, Aug $106 Calls are largest open interest (2,293:24:076)

Linda Piazza : 8/19/2005 12:16:09 PM

SOX dipping toward mid-channel Keltner support at 463.11-463.65, with the SOX at 464.30 as I type. Those hoping that the SOX will drift down through its trading range from late this week and through that Keltner channel ranging from 459.76 up to 466.47 want to see the SOX produce 15-minute closes below that mid-channel level. The advdec line (either regular or .nq version) hasn't yet dropped far enough that I have great confidence that the testing of overhead resistance has completed. So, there could be a bounce attempt from that mid-channel resistance without a big swoop down in the advdec line and the equities.

Jeff Bailey : 8/19/2005 12:14:56 PM

Dow Diamonds (DIA) $106.00 ... YM 10,619 benchmark.

Jeff Bailey : 8/19/2005 12:14:17 PM

12:00 Internals found at this Link

Jeff Bailey : 8/19/2005 12:06:56 PM

12:00 Market Watch found at this Link

Linda Piazza : 8/19/2005 12:03:31 PM

The OEX is tentatively dipping from the equal high level this morning, but hasn't confirmed with a drop below 568.70 (five-minute close), the trough between the two peaks. The advdec line also hasn't dipped as I would like to see it do before we believe too strongly that the OEX is pulling back from that resistance it's been testing.

Jeff Bailey : 8/19/2005 11:59:27 AM

YM/BIX intra-day montage That's right! Just turn on a BIX chart with WEEKLY/DAILY Pivots. Find the target and know the importance of what the banks mean. Especially to the ES. Link

Linda Piazza : 8/19/2005 11:55:54 AM

I had ringed the DJUSHB with al_rts to let me know when it either invalidated or confirmed that possible inverse H&S visible on its 15-minute chart. It's done neither yet, but the right shoulder is now extending so far that the formation will soon be invalidated for that reason, if no other. As I typed, prices verged on dipping low enough to invalidate it anyway. I don't think bulls are going to get the job done here, not without a quick reveral, and that tells us something about short-term sentiment in this formerly high-flying index.

Jeff Bailey : 8/19/2005 11:52:22 AM

S&P Banks (BIX.X) 357.00 +0.37% ... Making way above DAILY R1

Linda Piazza : 8/19/2005 11:50:45 AM

OEX climbing again, testing the previous HOD and Keltner resistance from 569.85 to 570.53. Bears don't want to see 15-minute closes above that higher number, the top of the channel that's contained the OEX for so long. Bulls would like to see a 15-minute close above it, but any in bullish positions now need to have their profit-protecting plans in place. I don't see a sign of a pullback yet in the advdec line, but the RSI for that line continues to show that as a possibility at any time, so it's not a given that the OEX will actually touch that upper Keltner line mentioned above. For many weeks, it's been best to take at least partial profit as the outer boundary of that same old Keltner channel is touched or approached, as is happening now and set the rest of a position to breakeven, if not to exit the whole position, so current bulls should be considering such a plan and seeing if it fits their parameters.

Linda Piazza : 8/19/2005 11:41:10 AM

SOX also testing 10-sma at 465.18 today, with the daily close needed to know if it's going to break back above it or find it holds as resistance, of course. SOX at 465.49 as I type. Further resistance from the 21- and 30-sma's at 468.54 and 470.83.

Linda Piazza : 8/19/2005 11:38:31 AM

The SOX needs to drop below a Keltner line currently at 464.52 on a 15-minute close to suggest that it's through challenging Keltner resistance from 465.87-466.39 on a short-term basis. SOX at 465.16 as I type and it looks as if it's going to challenge that resistance again.

Jeff Bailey : 8/19/2005 11:36:17 AM

YM/QQQQ intra-day montage and now bring in some observations of the QQQQ option chain on today's expiration. Why is/has the NDX/QQQQ/NQ been lagging the INDU/DIA/YM of late? Might be related to option expiration. Earlier this week I mentioned that it seemed like a "blanket" was on the majors. For the QQQQ, that blanket could well be August expire. Today, IBM, CAT and KO all give "too much" bullishness. If option expire has been a greater blanket on the QQQQ, then traders might be alert for the QQQQ to play "cath up" on performance side early next week. Link ... One "hint" we might look for is some type of "bid to the close" in the QQQQ. On Sunday, a futures trader might monitor NQ contract, and if it looks to bid, could also be a sign that NDX/QQQQ "outperforms" to upside early next week.

Linda Piazza : 8/19/2005 11:33:19 AM

Benchmarking impressions: The advdec line has refused to give up and erase its higher target. I've been looking for a sign of an RSI ghost (H&S on the RSI) or other such formation now that the RSI indicates extreme levels being reached, but I haven't seen those. Bearish value/RSI divergence does exist, but we all know that's a warning to pay attention only and not necessarily a sign of an imminent pullback. Earlier, I thought the RSI heading into that zone indicated that further gains in the advdec line, and perhaps in equities, might be tempered until that extreme was worked off, either by sideways movement in the advdec line or in an actual pullback. We've been getting the sideways movement over the last 90 minutes or so but RSI hasn't even yet dipped below 70, so there's still a lot to be worked off, either by further sideways movements or a drop. Still watching.

Jeff Bailey : 8/19/2005 11:17:35 AM

11:00 Market Watch at this Link

Jeff Bailey : 8/19/2005 11:16:53 AM

11:00 Internals found at this Link

Linda Piazza : 8/19/2005 11:13:44 AM

Benchmarking impressions: the advdec line is still not dropping as much as I'd like to see it drop before I believed too highly that the OEX was likely to pull back much from its test of the 50-sma. I'd like to see that advdec line below a line currently at 492.38, with the advdec line currently at 1096.

Linda Piazza : 8/19/2005 11:11:16 AM

SOX dropping back from that Keltner resistance it's been testing, also Wednesday's high and the 30-minute 100/130-ema's. On a Keltner basis, it needs to close a 15-minute period below 464.33, and preferably below 462.58 before bears have much faith that it's again cycling through the Keltner channel with boundaries at 459.17 on the bottom and 466.41 on the top. SOX at 464.97 as I type.

Linda Piazza : 8/19/2005 11:04:39 AM

The OEX is between Keltner resistance at 570.50 and support at 569.03. It's also just below the 50-sma at 569.54, having been testing it most of the morning. To me, the best bet on a play going into today was a bearish play on a rollover at the 50-sma, but the advdec line isn't yet cooperating by showing us a rollover in progress. Remember, too, that any such rollover might not be accomplished today, but might not even start until Tuesday, after a doji day Monday, for example.

Linda Piazza : 8/19/2005 11:00:26 AM

SOX still testing that same old Keltner resistance, Wednesday's high (I've been saying "yesterday's" in some posts, but I was looking at the wrong day) and the 30-minute 100/130-ema's. Hasn't been able to best all that resistance, but neither has it fallen back much. If bulls can't get the SOX pushed through eventually, it could pull back as it did Wednesday. I'd certainly like to see the advdec line below about 329-515 before I considered a pullback underway, though. The QCharts version of the advdec line is now at 1174.

Jeff Bailey : 8/19/2005 10:58:03 AM

QQQQ Options Chain sorted by open interest. This could be "why" the NDX/QQQQ lags today's Dow move. Futures traders that are pounding the NQ from the long side, the "max upside" today might be when/if QQQQ can trade $39.05-ish. Chain sorted by open interest at this Link

Linda Piazza : 8/19/2005 10:53:14 AM

So far, the DJUSHB has neither confirmed nor invalidated its possible inverse H&S at the bottom of its drop, the formation best seen on a 15-minute chart, perhaps. I'm watching this index because of its importance in the market and to sentiment. The DJUSHB's daily chart looks ugly, but the index does approach tentative 960-ish support, with the DJUSHB at 970.68 as I type.

Linda Piazza : 8/19/2005 10:53:13 AM

So far, the DJUSHB has neither confirmed nor invalidated its possible inverse H&S at the bottom of its drop, the formation best seen on a 15-minute chart, perhaps. I'm watching this index because of its importance in the market and to sentiment. The DJUSHB's daily chart looks ugly, but the index does approach tentative 960-ish support, with the DJUSHB at 970.68 as I type.

Jeff Bailey : 8/19/2005 10:44:43 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 8/19/2005 10:44:28 AM

SOX 15-minute Keltner resistance still holds, but the SOX isn't retreating much. SOX bears need to see it below 463.77 on a 15-minute close as a first step toward believing that it might cycle down through this Keltner channel again, toward 458.82 support at the bottom. SOX bulls of course, want a 15-minute close above the channel line being tested, at 466.28 on 15-minute closes. SOX at 465.50 as I type.

Linda Piazza : 8/19/2005 10:42:15 AM

The DJUSHB, the Dow Jones US Home Construction Index, is attempting to round up into the right shoulder for an inverse H&S at the bottom of its drop, neckline at about 978.70, head at yesterday's early morning low, shoulders at about 968.47. As you can tell from those numbers, the upside target isn't big, but I'm watching for signs that bulls are mounting at least a short-term attempt to recoup some losses in this index, or whether that attempt fails.

Jeff Bailey : 8/19/2005 10:39:25 AM

IBM (IBM) $83.26 +2.58% ... oh my! Another Dow component, this time the heavyweight also erupting.

Linda Piazza : 8/19/2005 10:34:55 AM

SOX still challenging Keltner resistance now at 466.22 on 15-minute closes, with the SOX currently at 466.07. It's also testing yesterday's 466.15 high. It's nudging the Keltner resistance higher as it continues to test it, but hasn't been able to break above it on 15-minute closes just yet. Bulls need to push harder if they're going to do so, or the presumption remains that the resistance will hold. There are some signs of tentative Keltner bullish divergence, but price/RSI shows no divergence, just equal highs on both.

Jeff Bailey : 8/19/2005 10:35:02 AM

Caterpillar (CAT) $54.88 +3.21% ... Dow component erupting after saying subsidiaries in China have signed three non-binding memoranda of understanding (MOUs) with an industrial park development company affiliated with the Shanghai Municipal Government.

Linda Piazza : 8/19/2005 10:30:12 AM

Benchmarking impressions: the advdec line's RSI might have indicated this morning that it might not reach its upward target, now revised higher to 1991.67, but the advdec is still trying valiantly to do that. RSI still indicates that a slowing of gains in the advdec line could develop over the morning, but that hasn't happened yet and neither have equities shown any sign of rolling over. This setup on the advdec line and its RSI still suggests, however, the possibility that equity gains could be limited.

Linda Piazza : 8/19/2005 10:23:54 AM

OEX pulling back slightly from its test of the descending trendline off last week's high and the test of Keltner resistance. I'd like to see the advdec line below about 372 (currently 1203) before I assumed that a real pullback was underway, but I don't know that bears are going to have all their ducks in a row this morning. I don't know that a bearish play will turn out to be the right one on this opex Friday, with the OEX now testing resistance and not pulling back yet. There are some tentative signs (Keltner resistance holding, advdec line pulling back although not yet as deeply as I'd like, tentative bearish RSI/price divergence on the 15-minute chart) but they're all tentative and can be reversed. Even as I typed this post, the OEX moved back into that resistance again. Bears want to see 15-minute closes at or beneath the Keltner line currently at 569.01 and certainly below the Keltner line currently at 570.42.

Linda Piazza : 8/19/2005 10:16:12 AM

SOX testing 30-minute 100/130-ema's still, also 15-minute Keltner resistance at 466.04 and yesterday's high at 466.15. SOX at 465.79 as I type.

Jeff Bailey : 8/19/2005 10:12:58 AM

Yesterday's Internals found at this Link

Jeff Bailey : 8/19/2005 10:11:39 AM

10:00 Internals found at this Link

Linda Piazza : 8/19/2005 10:09:30 AM

The TRAN has inched a little above yesterday's high, but soon will test the 10-sma at 3735.55. The TRAN is at 3731.25 as I type. Wednesday's high was 3733.73.

Linda Piazza : 8/19/2005 10:07:36 AM

$OEX testing 569.19 Keltner resistance on the 15-minute chart, with 570.40 next resistance above that, all on 15-minute closes. It's currently testing the descending trendline off last week's high, too. If the OEX should burst through the 570.40 resistance on a 15-minute close, the next target would be 574.69, but take these breakout targets with a grain of salt.

Linda Piazza : 8/19/2005 10:05:26 AM

SOX coming back for another test of its 30-minute 100/130-ema's at 465.04 and 464.93, respectively, with the SOX at 464.85. Keltner channels show resistance at 465.88 on 15-minute closes, with next resistance all the way up at 472.06 if that doesn't hold. The presumption would be that this resistance would likely hold, but presumption and fact don't always hold true.

Jeff Bailey : 8/19/2005 10:03:01 AM

10:00 Market Watch found at this Link

Linda Piazza : 8/19/2005 10:01:11 AM

The OEX is climbing to retest the Keltner resistance at 569.11 on 15-minute closes, with further and more important Keltner resistance at 570.35. The converging 10- and 50-sma's are at 570.01 and 569.52. You know what bulls want and what bears want. So far, the converging 10- and 50-sma's have held as resistance and so bears should look for a potential rollover from that level, but be aware that a 15-minute close above 570.35 may indicate that something more bullish than expected may be happening on the OEX. Be aware of another very real possibility--the possibility of a coiling action on the daily chart, above that 200-sma at 566.32. Decide now if you want to risk a bearish entry on a rollover, if there's the possibility of that coiling action. We can't know ahead of time if that's what will happen, but it wouldn't be unexpected on an opex Friday. The advdec line is still trying to climb, but may sometime this morning begin leveling off or pulling back as RSI is signaling an early warning. That won't preclude more gains, but at least warns bulls to begin paying attention.

Linda Piazza : 8/19/2005 9:55:05 AM

Benchmarking impressions: The advdec line's RSI is showing initial warnings that the advdec line is "overbought," although there's not necessarily going to be an immediately rollover in the advdec line. The RSI tends to lead and it may signal overbought while the advdec line still continues to move higher for a while. This may corroborate the idea that the advdec line may not climb all the way toward an upper target of 1849, however, at least not without a pullback first. Note: I don't like using unnecessary quotation marks in my writing, but the word "overbought" can only loosely be applied to a breadth indicator since the advdec line obviously cannot be bought or sold. Hence, the use of quotations there. Incidentally, this weekend's TradersCorner article will discuss the use of standard technical analysis tools with breadth and volatility measures.

Linda Piazza : 8/19/2005 9:49:52 AM

So far, the SOX is finding resistance at Keltner resistance at 463.41-464.06 on 15-minute closes, but until it closes a 15-minute period below 461.97, it's likely to go on challenging that resistance. SOX at 463.06 as I type.

Linda Piazza : 8/19/2005 9:48:13 AM

Benchmarking impressions: Bulls want the advdec line to stay above 42.70 on 15-minute closes. Bears want it to sink below that, and fall first toward potential -882 support. Advdec line at 201 as I type.

Linda Piazza : 8/19/2005 9:39:24 AM

RUT isn't gaining much this morning. Not yet anyway.

Linda Piazza : 8/19/2005 9:38:10 AM

While the SOX is testing those 30-minute 100/130-ema's, it's also testing other types of resistance, including a Keltner line currently at 465.67, with that line mostly containing upward moves. Unless the SOX is going to break out to the upside, it's likely to find resistance there, as it's seeming to do as I type. However, bears would feel easier if the SOX were to clsoe the current 15-minute period back below about 462.30, the site of the top boundary of its descending regression channel, in place most of this month. The SOX is at 463.15 as I type, pulling back from a 465.35 high of the day.

Jeff Bailey : 8/19/2005 9:40:06 AM

CDC Corp. (CHINA) $3.60 +12.5% Link ... gaps above its trending lower 200-day SMA after the company reported a profit of $36,000 (nil per share) in the recent quarter compared to a loss of $2 million, or $-0.02 in the year ago quarter. The company said revenue jumped 44% to $64.6 million from $44.9 million.

Linda Piazza : 8/19/2005 9:34:51 AM

The SOX has driven through its 15-minute 100/130-ema's to test the 30-minute versions, at 465.06 and 465.96, respectively. The SOX is at 464.96 as I type.

Linda Piazza : 8/19/2005 9:32:57 AM

As expected, the OEX climbs in early trading, testing Keltner resistance at 567.83 on 15-minute closes, with the next resistance at 569.09, the site of the descending trendline off last week's high. The OEX is at 568.44 as I type, with many minutes left in this 15-minute period.

Jeff Bailey : 8/19/2005 9:31:40 AM

Coca Cola (KO) $43.53 Link ... higher at $44.30 after UBS upgrade to "buy" from "neutral," with the firm saying it believes there are opportunities for the company to turn up its sales.

Jeff Bailey : 8/19/2005 9:27:35 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+2.82 and set for program selling at $+0.68.

Linda Piazza : 8/19/2005 9:24:51 AM

Yesterday, the OEX spent another day consolidating between the resistance offered by the converging 10- and 50-sma's at 570.18 and 569.49, respectively, and the support offered by the 200-sma at 566.21. For the time being, entering bearish positions on bounces to and rollovers from the 50-sma look like the best entries offered. Those who want to test a breakdown play on a drop through the 200-sma can try those, although breakdown plays have not had good records lately, but those participating in such a play will quickly want a confirming 15-minute close below the Keltner line currently at 565.42. Those already in bearish plays would like to see that, too. Anyone playing a breakdown play will want to keep fingers on the trigger to exit the play, too, if the OEX again bounces up through that same old Keltner channel. I'm not recommending long plays just now, not while the OEX is in a possible "b" distribution pattern on the daily chart.

Futures are higher this morning. If there's follow through at the cash open, then there may be another test of mid-channel Keltner resistance, up to 567.83 on 15-minute closes, or even 568.77-569.04 resistance. If that's breached, then the OEX will likely head up to the upper boundary of that same old Keltner channel that's been containing most moves, with that upper boundary at 570.23 on 15-minute closes. Watch for a potential rollover at one of those levels, but if the OEX should produce 15-minute closes above the Keltner line currently at 570.23, something more bullish may be going on. This is opex Friday, however, with all kinds of shenanigans possible, so consider whether you want to trade at all.

Linda Piazza : 8/19/2005 6:52:44 AM

Good morning. The Nikkei declined last night, although it closed well off its low of the day. Other Asian markets were mixed. European markets climb today. As of 6:38 EST, our futures were higher. At that same time, gold was down by $0.10, and crude, up $1.15 to $64.42. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei gapped below the 12,280 support level from the last three days, confirming a H&S on intraday charts. At one point in the early morning, it had dropped almost 90 points off Thursday's close, but it managed to spring up and close only 15.64 points or 0.13% in the red, at 12,291.73. That spring constituted a retest of the H&S neckline, with the outcome to be decided next week.

Yesterday, both Goldman Sachs and Merrill Lynch had raised estimates for crude costs for next year. As reported yesterday morning, GS raised its estimates to $60.00 for the long-term. Merrill Lynch has now raised estimates to $56.00, and some mentioned those forecasts as pressuring the Nikkei. Exporters declined in early trading. Last night, a Japanese newspaper poll showed that Prime Minister Koizumi's approval rating stands at 49.9%, with support for an LDP government led by Koizumi at more than 55%, and support for Koizumi's postal privatization bill at almost 64%. While Koizumi's rating had sunk from Sunday's number, support for an LDP government that he leads has risen. Later in the trading day or perhaps after the close, Japan's July book-to-bill ratio for chip-making equipment companies was reported at a preliminary 1.08 number, down slightly from June's 1.09. Despite three months of numbers above the benchmark 1.00, monthly orders have still not caught up with the year-ago levels.

Other Asian markets were mixed. Taiwan Semiconductor fell in early trading. The Taiwan Weighted lost 0.74%, and South Korea's Kospi dropped 0.26%. Singapore's Straits Times rose 0.16%, but Hong Kong's Hang Seng dropped 0.72%. China's Shanghai Composite gained 0.19%.

European markets gain, with CNBC commentators touting this as the first gaining day after six days of losses. Today, France's second-quarter preliminary GDP was unrevised from the previous flash estimate. The quarter grew 0.1% over the previous quarter and 1.2% year over year. Household consumption, investment and business investment all fell. Exports rose, although imports rose faster, so that net trade figures reduced growth by 0.1%. Insee does not expect to see growth in the second half, and expects FY 2005 growth at 1.2%. These were seen as weak results.

Yesterday, an article reported that the Royal Bank of Scotland was leading a consortium, with that investment giving the Royal Bank of Scotland a 5% position in the Bank of China, but a separate article this morning details more about the plan. The consortium will take a 10% position, with the Royal Bank of Scotland having control of the entire position on behalf of the other consortium members, Merrill Lynch and Li Ka-shing. In other company-specific news, transportations and travel company TUI affirmed its intention to buy CP Ships, a spin-off from the former Canadian Pacific Ltd. TUI was dropping in Europe. Other deal-related news came from the U.K.'s Shire Pharmaceuticals, with that company saying that it was in early discussions with Barr Pharmaceuticals, a company it is currently suing to stop the launching of a generic version of Adderall SX, to allow Barr to introduce the generic version earlier than 2018. In other news, the head of DaimlerChrysler's Chrysler Group detailed his plans to offset rising costs and promotional discounts in a newspaper article. In separate news relating to the company, Mercedes Car Group will see a change in the executive lineup. DaimlerChrysler was gaining in Europe.

As of 6:46 EST, the FTSE 100 was higher by 38.10 points or 0.72%, at 5,307.40. The CAC 40 was higher by 29.26 points or 0.66%, at 4,459.33. The DAX was higher by 49.71 points or 1.02%, at 4,900.98.

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