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OI Technical Staff : 9/1/2005 9:59:59 PM

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Tab Gilles : 9/1/2005 4:36:32 PM

$USD/$CRB/$TYX Link Link

Keene Little : 9/1/2005 4:14:10 PM

Jonathan, you nailed it on the head. The Fed's actions with the rate changes is just jawboning the market. He really controls actions through the money supply. I believe they're printing money like there's no tomorrow and the US dollar is going to suffer because of it. As for what the Fed does with rates, they're between a rock and hard place and probably realize it. There's nothing they can do--the market will do what it's going to do and a big correction is coming.

Jane Fox : 9/1/2005 4:05:02 PM

This from the WSJ Paul McCulley, managing director at PIMCO Bonds, told CNBC that the Fed would have to pause, in order to avoid the risk, however low, that further rate hikes could trigger a recession. "The Fed is finished," he said.

Jonathan Levinson : 9/1/2005 4:03:55 PM

Marc, to drop rates would cream the USD and drive commodity prices through the roof. I don't see how it could be an option for the Fed, even if they wanted to do it. It should be easier for them to add liquidity each morning via repos.

Jonathan Levinson : 9/1/2005 3:57:44 PM




Classic line, that.

Linda Piazza : 9/1/2005 3:57:14 PM

Bulls, give some consideration to whether you want to hold overnight or perhaps take at least partial profit. Important economic numbers tomorrow morning. Potential reversal signal. Tomorrow could see lots of gains, but that long-legged doji on the daily chart gives a stark and visual representation of the uncertainty in the markets. Bulls just weren't all that certain today and didn't stand pat. Neither were bears all that certain, either. If you're certain, you're a better technician than I am, so just go with your own impression. Usually, such indecision at the top of a climb is more bearish than bullish, but a tentative reversal signal is tentative only until confirmation the next day.

Jonathan Levinson : 9/1/2005 3:59:30 PM

Jane, that he suspended certain provisions of the Jones Act to facilitate the movement of fuel from port to port. I don't believe it makes it any easier for foreign vessels to enter from abroad- but now allows them to transfer fuel from one US port to another. At least, that's my understanding of it.

Jane Fox : 9/1/2005 3:54:10 PM

This is also unfortunately a prime opportunity for terrorists because Bush has eased up the HomeLand Security Rules on foreign ships in our ports.

Tab Gilles : 9/1/2005 3:47:08 PM

Oil Service Holders (OIH) Link CandleGlance... Link

Linda Piazza : 9/1/2005 3:46:08 PM

What was that book we all read in high school? About the boys trapped on the island and the way their behavior disintegrated? You always think it wouldn't really be that way. (This is related to Jane's note about a hospital coming under sniper fire as it was being evacuated.)

Linda Piazza : 9/1/2005 3:44:20 PM

Coiling, coiling, coiling, and there's that big old long-legged doji at the top of a climb on the OEX's daily chart. It represent indecision, and so doesn't necessarily say that there will be a reversal, but it wouldn't be unusual to see at least another doji day tomorrow if not an actual downturn. Of course, I'm getting a little ahead of myself here, though, because the day hasn't concluded yet. The OEX is more than capable of shooting up toward that 200-sma or down toward the 200-ema by the close.

Jonathan Levinson : 9/1/2005 3:43:42 PM

Jane, it certainly makes moral relativism a tough "ism" to justify. Sounds more like pure evil to me.

Jane Fox : 9/1/2005 3:40:47 PM

Jonathan - who would be so cruel?

Jonathan Levinson : 9/1/2005 3:40:16 PM

The short cycle upphase is rolling over beneath overbought territory, the 30 and 60 min cycle channels flat and due for a decline as the 60 min completes its very slow turn. Upper channel resistance lines up at 39.10, just above the breakeven stop for swing QQQQ bears off the 39.09 entry. Link

Jonathan Levinson : 9/1/2005 3:38:30 PM

Jane's 3:35 has me stumped. There are no words.

Jane Fox : 9/1/2005 3:35:14 PM

Dateline CNN New Orleans hospital halts patient evacuations after coming under sniper fire, a doctor who witnessed the incident says.

Jonathan Levinson : 9/1/2005 3:31:12 PM

Session low for GE here at 33.05, -1.65%.

Linda Piazza : 9/1/2005 3:30:36 PM

Caught on the telephone.

Linda Piazza : 9/1/2005 3:27:54 PM

So which will it be in the last 30 minutes of trading? Will the OEX zoom back up to the 200-sma or fall down to 200-ema or just stay right where it is? No way of predicting, but I wouldn't be surprised at any of the above, especially not the stay-where-it-is version.

Linda Piazza : 9/1/2005 3:25:42 PM

The axis around which the OEX coils is that 38.2% retracement of the decline off the August 10 high, with that coil tightening around that central line. Now small-bodied candles are forming right along that line, with candle shadows spiking either direction. RSI near neutral level. There's absolutely no way of predicting which way it's going to break unless you have a particular market bias, and then you have a 50/50 chance of being right.

Jonathan Levinson : 9/1/2005 3:22:29 PM

Evening session high for natgas, +1.06% at 11.88. Crude oil is down .075 at 69.40. Ten year note yields closed down .1 bp at 4.019%, while the 13 week bill rate was down 6.5 bps at 3.365%.

Linda Piazza : 9/1/2005 3:12:31 PM

OEX coiling. Advdec line coiling. The OEX's coil is happening at the top of a climb, and that's normally going to predict an upside break, but it's currently producing that long-legged doji on the daily chart, and that's not so great. However, I still think an effort will be made to close this thing at or above the 200-sma. I just don't have a clue--with all this coiling--whether that effort would be successful. It may be that the effort has been made all afternoon to drive it up, and it's just not going to get there. Having trouble staying above that 38.2% retracement of the decline off the August 10 high. I'd be prepared for anything into the close, however.

Jonathan Levinson : 9/1/2005 3:12:22 PM

So far, this has been a very weak short cycle upphase, net +.09 for QQQQ since it kicked off from the 2:15PM low: Link

Linda Piazza : 9/1/2005 3:09:29 PM

The first book I ever had published incorporated a lot of research about the great hurricane that hit Galveston, killing an estimated 6,000-7,000 people. While I haven't heard figures rivaling that for this hurricane, I have heard the Louisiana governor say that thousands may have been killed. You just don't think something like this can happen in modern times in our country. That Galveston storm resulted in a new form of city government, needed as forces were marshaled to rebuild the city. They jacked up houses, retail and government buildings and pumped sand underneath them. I keep wondering what kind of changes this hurricane will bring in policies.

Linda Piazza : 9/1/2005 3:04:57 PM

BIX holding near the high of the day, trying to break up to retest that high of the day, but struggling with the 10-sma at 351.68. BIX just a bit above that as I type. Note: Began moving higher, and is now at 352.12.

Linda Piazza : 9/1/2005 3:01:55 PM

OEX trying to remain above that 38.2% retracement of the decline off the August 10 high.

Jonathan Levinson : 9/1/2005 2:56:46 PM








Editorial aside: I have no idea as to Greenspan's expertise in oil, natgas or any other energy matter. Didn't he talk down the oil rally at $40 or $50? Same with natgas 2 years ago, if memory serves. Since when are central bankers energy experts?

Linda Piazza : 9/1/2005 2:54:11 PM

I have to say that if the OEX prints a big old long-legged doji today, as it's been threatening to do and as I thought it might, I will not consider that a bullish development. While it might not be a bearish one, I'd certainly lean more toward it being bearish than bullish. The OEX doesn't always honor such potential reversal signals with a reversal, but it often does with at least another doji or a single red-candle day. I wouldn't be surprised to see an effort to drive up back up to the 200-sma again and close it there, though.

Linda Piazza : 9/1/2005 2:45:51 PM

On the five-minute chart, the OEX's pattern looks like a potential H&S with the right-shoulder level currently being tested. Bulls want to see this possibility quickly invalidated, while bears want to see the OEX flatten and then roll over from somewhere below 566.40 or so. OEX at 565.30 as I type.

Jonathan Levinson : 9/1/2005 2:43:17 PM

Swing QQQQ bears with their stops at 39.09 would look to either ride this short cycle bounce out, or take a 14 cent profit here. This short cycle upphase should be corrective (just as it should have been this morning) within the sideways 60 min topping phase. The 30 min channel has yet to turn up either, though the decline is stalled with price above the 72 SMA. Link

Linda Piazza : 9/1/2005 2:37:02 PM

The OEX has risen to retest the rising regression channel off Tuesday's low, or perhaps has broken back inside it, depending on just how you angle QCharts' regression tool.

Linda Piazza : 9/1/2005 2:32:04 PM

The OEX is just under the 38.2% retracement of the decline off the August low, also just under the 100-sma. It's coiling, coiling, and meanwhile producing that long-legged doji on the daily chart.

Jonathan Levinson : 9/1/2005 2:31:18 PM

Crude oil finishes +.35 at 69.30, natgas +.295 at 11.765.

Jonathan Levinson : 9/1/2005 2:29:41 PM




Jonathan Levinson : 9/1/2005 2:24:48 PM

Note how QQQQ got slammed down, leaving two 100-tick gravestone dojis below the 72 SMA. The longer intraday cycles are still bearish: Link

Jonathan Levinson : 9/1/2005 2:22:55 PM

QQQQ is catching a bid, the short cycle downphase stalled and ticking up from oversold territory. Crude oil is up .40 cents at 69.35, natgas +.205 at 11.68 as we approaching the 2:30 Nymex close.

Jane Fox : 9/1/2005 2:16:20 PM

The problem is now we seem to have so many "bad" things happening around us it is hard to trust charts that are bullish.

Jonathan Levinson : 9/1/2005 2:12:42 PM

Agree, Jane. There's no substitute for technical analysis.

Linda Piazza : 9/1/2005 2:09:23 PM

Bulls don't want the advec line below about -180 and especially not below -500. Advdec line testing Keltner support currently. Value now 308.

Jonathan Levinson : 9/1/2005 2:07:52 PM

Volume breadth -1.11:1 for the NYSE and -1.46:1 for the Nasdaq.

Tab Gilles : 9/1/2005 2:07:05 PM

iShares Lehman 20+ Year Treas Bond (TLT) Link

Eaton Vance Limited Duration Income Fund (EVV) Link

Jonathan Levinson : 9/1/2005 2:03:31 PM

Session low for GOOG here at 285.40, the "flight to quality" trade still holding well above last Friday's close.

Linda Piazza : 9/1/2005 2:03:23 PM

Keltner charts say the OEX is vulnerable to 562.94-563.70. Just noticed that the rising regression channel off Tuesday's low is drawn differently on two charts of different time periods. On the 15-minute, it looks as if it's already been violated.

Jonathan Levinson : 9/1/2005 2:00:08 PM

Yesterday's 7.75B repo add didn't really kick in on the equity tape until around 2:15PM. Today, there's a small 750M net drain. We'll see if there's a downside correlation.

Jonathan Levinson : 9/1/2005 1:58:24 PM

Amazingly, the 60 min cycle hasn't turned down yet. The short cycle is flattening just above oversold territory, and could still bounce to retest the highs without jeopardizing the expected turn in the 60 min cycle. A break below the lows should seal the deal and kick off a synchronous decline for the 30/60 min cycles for the Qs.

Linda Piazza : 9/1/2005 1:55:46 PM

OEX is spending way too much time below its 38.2% retracement of the decline off the August 10 high for bulls' comfort. It's coming down now to retest bottom support for its rising regression channel, with that now at about 563.65. That, of course, could be a possible bounce point, but if it's lost, the OEX may be breaking down out of its rising regression channel off Tuesday's low. If that happens, it's entirely possible that 562-562.30 support will hold long enough to send the OEX back up into a retest of the channel's support to see if it now holds as resistance. That would be a possible right-shoulder formation for a H&S. If all that plays out, we won't know until the retest if the OEX will find resistance there and confirm the H&S or will invalidate it. However, that's all a bit early, because the OEX hasn't even broken down out of its rising regression channel and may bounce from its support.

Jonathan Levinson : 9/1/2005 1:54:01 PM

Swing trade shorts from the 39.09 can lower their stops to breakeven here, which the current level of the declining 30 min cycle channel for QQQQ.

Linda Piazza : 9/1/2005 1:51:29 PM

See that long-legged doji on the OEX's chart. I thought that could happen today. See my 10:06:19 post. Lots of day left, though, and it could change again.

Jonathan Levinson : 9/1/2005 1:50:25 PM



Linda Piazza : 9/1/2005 1:47:21 PM

The OEX has now dropped below the 38.2% retracement of the decline off the August 10 low. It has not yet breached the support of its rising regression channel, with that support now at about 563.60. This is a prime stop-running time of day, so watch for a potential quick reversal. Bulls do not want the OEX to spend too much time below this 38.2% retracement, however, and they certainly don't want a breakdown out of that rising regression channel. Bears do want those things to happen. Any bears out there who entered on the test of 567-568 resistance--not a play that I suggested, but some might have ventured it--you need to have profit-protecting plans in place for a test of 561.75-562.30 or so, if it's tested. The OEX could bounce from that level into the right shoulder for a potential H&S.

Jonathan Levinson : 9/1/2005 1:46:33 PM

A sharp drop below the 72 SMA here for QQQQ, back to testing 38.90, the former neckline that formed this morning at the session lows.

I was thinking how technically focused the markets have become, sometime to the exclusion of good sense. I rely exclusively on technicals for entries and exits, but usually derive my broader bias from current events/fundamentals and other technical and non-technical factors. That bias looks to me extremely bearish right now, as it has all week. The only bullish arguments I can construct are technically based, and fundamentally derived from an all-out reflationary stimulation binge by a panicked Fed. Aside from that, though, the recent volatility lows, the terrible tragedy along the Gulf Coast, the implications for the energy complex, the inevitable mortgage and debt defaults by victims who have been wiped out... I see nothing bullish anywhere near it.

Jane Fox : 9/1/2005 1:39:56 PM

DAteline WSJ In Washington, Mr. Greenspan, chairman of the Federal Reserve, met with Mr. Bush. The topic was unspecified, but there is a good chance that at least some of their visit was spent considering whether the Fed will continue its recent campaign of interest-rate increases in the wake of the hurricane. Fed policy makers are scheduled to meet later this month, and until recently it was considered a foregone conclusion that central bankers would raise rates again.

Linda Piazza : 9/1/2005 1:37:04 PM

The OEX coils between the 38.2% and 50% retracement of the last decline off the August 10 high. This is not an unusual development and one I predicted might happen. Now have to wait for the direction of the break--above the 50% or below the 38.2%. We're coming up in a prime stop-running time of day, so beware a possible break above or below one of those, that's then quickly reversed.

Linda Piazza : 9/1/2005 1:34:54 PM

Okay, let's try this again with the RLX. OEX traders need to keep their eyes on the RLX, with the RLX's performance sometimes important to the OEX. Link

Jonathan Levinson : 9/1/2005 1:23:27 PM

QQQQ's short cycle downphase is sputtering, still above oversold territory: Link . Volume breadth remains nominally negative for the Nasdaq, -1.17:1, and positive for the NYSE at +1.31:1.

Linda Piazza : 9/1/2005 1:21:34 PM

OEX dropping closer to that 38.2% retracement of the last decline. It's trying to hold onto a Keltner line currently at 565.29, zigging and zagging a little above and below it. If it firmly loses that support, it looks vulnerable down to 565.10, the current site of the rising regression channel's support. Remember, bears, the OEX hasn't even broken the support of that rising regression channel. If any tried a bearish entry under 567-568, something that I didn't suggest because I didn't believe I had a good feel for the market's pulse today, you want that support to be broken. Soundly. Then, you need to have profit-protecting plans for 561.75-562.30 or so. I suspect that if the OEX were to drop that low, it might attempt to rise again itno a right shoulder for a potential H&S. All that is speculation, however, because that rising regression channel's support has not been broken.

Tab Gilles : 9/1/2005 1:49:39 PM

Will Greenspan and President Bush end rate hikes and perhaps cut rates? Sure looks like the bond market believes so? Just look at the 2 year note. Link

2/5/10 year Link $USTU

$IRX Link Link $UST/$SPX/$NYSI Link EUR/USD Link $GOX Link

Jonathan Levinson : 9/1/2005 1:05:08 PM

The bounce off the 72 SMA at 12:30 ran up to the automatic regression midpoint on the QQQQ chart, and price failed from there. Those automatic regression lines detail a hunchback h&s, and it's looking good for a bearish swing position on a break below 38.92. Link

Linda Piazza : 9/1/2005 1:01:54 PM

Potential H&S on the advdec line (15-minute chart). These sometimes do have relevance. Neckline at about -220 to -540, depending on how it's drawn. That means that's a potential support level for the advdec line, too. It's now at 878, at a dangerous spot for bulls and bears, just rounding over into a right shoulder. This is one of the two points at which many H&S's are invalidated, values shooting higher. The neckline is the other.

Linda Piazza : 9/1/2005 12:58:44 PM

OEX coming down now finally for a test of the 38.2% retracement level. Bulls don't want to see the OEX maintain levels below that, at 564.75. They also don't want a 15-minute close below the Keltner line now being tested, at 565.29. The rising regression channel in which the OEX has been climbing off Tuesday's low has support at 563.77, although the actual rising trendline off Tuesday's low is lower, at about 561.60. Depending on what happens with the current test, the OEX could have vulnerability down to the bottom of that rising regression channel, and then to 561.60-562.50 if that support should fail.

Linda Piazza : 9/1/2005 12:48:51 PM

So far, OEX Keltner support at 565.45-565.59 holds. OEX attempts to rise again. Watch that 50% retracement of the last decline level for potential resistance (at the day's high) with the 240-minute 100/130-ema's at 567.56 and 567.42 also important to watch on 240-minute closes. OEX at 566.16 as I type, with the HOD at 567.21, and I still wouldn't be surprised to see some rattling around between 564.75 and 568.

Linda Piazza : 9/1/2005 12:39:49 PM

OEX Keltner support currently being tested, with that support currently at 565.24-565.53. OEX at 565.75 as I type, just bouncing up a little from 565.45. Bulls need to see this support maintained on 15-minute closes to maintain that upside target of 568.58. That pullback to the 38.2% retracement at 564.75 remains possible. Bulls don't want to see the OEX maintain values below that 38.2% retracement.

Linda Piazza : 9/1/2005 12:33:30 PM

Pullback still looks bull-flag-like. The OEX hasn't dipped quite to the 565.40 level that I thought it might touch, having dipped only to 565.63 so far. Keltner support has risen to 565.29-565.47, so bulls would like to see that maintained on 15-minute closes. Bulls, I still think you need to have your profit-protecting plans in place. That's just wise with any profitable position, but those bearish divergences continue. Those are a warning only to bulls and not necessarily a sell signal for bears.

Jonathan Levinson : 9/1/2005 12:31:21 PM

So far, QQQQ is net flat from its open, as the 60 min channel continues its slow roll from upphase to downphase. I expect the next big move from here to be to the downside, though a strong punch above 39.20 would change my mind in a hurry. I need to step away for half an hour, but that 39.20 area, say 39.25 to allow room in case of an errant spike, would be the stop for QQQQ bears looking to turn my 39.09 short entry into a swing position.

Jonathan Levinson : 9/1/2005 12:21:21 PM

QQQQ - Exit Alert -

QQQQ short at 39.09, exit now at 39.01. The wavelet cycle is due for a bounce, and I'm not willing to get stopped out over it. Those who can tolerate a wider stop can stay in to try to catch the short cycle and, eventually, the 30/60 min cycle downphases.

Linda Piazza : 9/1/2005 12:18:50 PM

The OEX's pullback has so far been bull-flag-like, and the OEX hasn't so far retreated to the next Keltner support or to the 38.2% retracement of the last decline. It's instead currently pausing at the midpoint of the last tall white candle on the 15-minute chart, the one produced during the 11:30 period. The midpoints of these taller-than-normal candles sometimes do serve as support or resistance. The midpoint of this one is at about 565.93, with the OEX dropping to 565.84 before attempting this last little bounce again. Still think it's possible that the OEX will drop at least to about 565.40 and maybe all the way to that 38.2% retracement level at about 564.75. Don't know that for sure, but it certainly looks like a possibility.

Linda Piazza : 9/1/2005 12:05:24 PM

I suggested earlier that bulls evaluate whether they wanted to weather an OEX pullback toward the 38.2% retracement of the rally before they knew whether that would hold as support. Keltner support is also near that 38.2% level at 564.75, with the Keltner support from 564.92-565.34 on 15-minute closes. Bulls want these levels to hold. If not, there's a possibility of a drop to 563.20 or maybe even back toward the day's low.

Linda Piazza : 9/1/2005 11:59:17 AM

The indicators that I prefer to use are "in space," a term Keene just used on the Futures side, so all I can go on here are those Fib levels, the bearish price/RSI divergence, historical S/R being tested currently on the OEX and Keltner levels. The OEX still reaches toward its 568.48 Keltner target and resistance, but the current 15-minute candle is likely to be a doji. Even without that doji, I think it likely that there will be some rattling around between the currently being tested 50% retracement of the last decline and the 38.2% level passed up earlier, before a decision is made about where to go next.

Linda Piazza : 9/1/2005 11:53:21 AM

Bulls, be aware that the price/RSI divergence persists. The RSI high is lower than the one at the 9:45 candle, while the price high was higher. I mentioned earlier today that the OEX's 15-minute RSI was reaching levels that usually predicted a pullback, but that it usually proceeded as follows: a shallow pullback and then a retest with bearish price/RSI divergence. That's happening now. Bears, this isn't enough evidence alone to tell you to enter a play and after guessing so wrong yesterday, I'm going to be careful about making any suggestions today. Bulls, this is enough evidence for you to make those profit-protecting plans and keep to them.

Jonathan Levinson : 9/1/2005 11:52:13 AM

Marc, short rates have plummeted, with the 13 week bill rate -4.9 bps at 3.381% and the yield curve steepening. While the 13-week rate is off its intraday lows, this is still a huge move.

Jonathan Levinson : 9/1/2005 11:48:11 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.09, stop 39.17

Linda Piazza : 9/1/2005 11:48:00 AM

Should be some OEX testing of the 38.2% retracement's level now, seeing if it holds as support. That's back down at about 564.75. That might not occur, though, with a Keltner target up at 568.44. However, there usually is some rattling around between the 38.2% and 50% levels, with the HOD right at the 50% level. OEX 567-568 is also historical S/R, also for whatever that's worth. Bulls should just assess their willingness to weather a pullback toward that 38.2% retracement and set stops accordingly. If you're willing to weather it, then stops should be set an account-appropriate level below it.

Linda Piazza : 9/1/2005 11:42:30 AM

Wow. Big surge in the OEX. Bulls haven't needed that profit-protecting plan, have they. Fifty percent retracement of the last decline coming up at about 567.25. Keltner target and next resistance at 568.44.

Jonathan Levinson : 9/1/2005 11:42:04 AM

QQQQ - Exit Point Alert -

Stopped out of QQQQ short at 39.11, after being up a dime. QQQQ is printing above the 30 and 60 min channels and should reverse, but volume is rising and no weakness evident yet.

Linda Piazza : 9/1/2005 11:41:06 AM

RLX has been testing its 72-ema today, too, along with the TRAN. The RLX's is at 455.18, with the RLX currently at 451.43. The RLX also tests the 10-sma at 453.52. It's rattling around between that resistance and the support of its 200-sma at 442.91.

Linda Piazza : 9/1/2005 11:39:25 AM

The BIX is helping to propel the OEX higher today. The BIX has been climbing in a flag-like formation off the bottom of its broadening formation, trying to steady there. It's just above 350 as I type, at 350.68. The 10-sma is at 351.55, but the more important average appears to be the 21-sma at 353.75. MACD attempts a bullish kiss, but from below signal, and there has not yet been any bullish price/MACD divergence on the daily chart.

Jonathan Levinson : 9/1/2005 11:38:23 AM



I wonder if they'll give Ben Bernanke some toy cars or blocks to play with during their meeting. Didn't "The Printer" already say that Katrina was no big deal?

Linda Piazza : 9/1/2005 11:32:21 AM

Fifteen-minute OEX close above the breakout level again, with that level now at 564.73. Bearish price/RSI divergence continues, but so far all it's serving is just to warn bulls to keep their profit-protecting plans in place.

Linda Piazza : 9/1/2005 11:28:42 AM

New attempt at a breakout on the OEX's 15-minute Keltner chart. Bulls want to see the OEX close this 15-minute period above the Keltner line currently at 564.65 while those hoping for a rollover want to see it close this 15-minute period below that line. That line still turns higher, though, and the OEX could keep nudging it higher without even needing to break above it. So far, bearish price/RSI divergence continues on this retest of the previous HOD. This warns bulls to be careful and protect positions, but doesn't necessarily suggest that a bearish play would be a good idea. The technicals I usually watch are ambiguous right now.

Linda Piazza : 9/1/2005 11:24:59 AM

New HOD on the OEX. So far, bearish price/RSI divergence on the 15-minute chart, for whatever that's worth.

Jonathan Levinson : 9/1/2005 11:24:23 AM

.QQQQ - Entry Point Alert -

Short QQQQ at 39.05, stop 39.11

Linda Piazza : 9/1/2005 11:24:23 AM

The TRAN has bounced back above the 72-ema at 3661.43, with the TRAN currently at 3665.69. Still negative and still below the 10-sma at 3681.52.

Jonathan Levinson : 9/1/2005 11:22:37 AM

Looking to enter short on a spike. 30 min channel resistance is up to QQQQ 39.04.

Linda Piazza : 9/1/2005 11:15:58 AM

Looks as if we are going to get that retest of the day's high that I mentioned in as possibilities in my 10:03:27 and 10:10:22 posts. Those hoping for a rollover would really prefer to see a lower high with bearish price/RSI divergence. They might take a higher high with price/RSI divergence, but would prefer the other alternative. OEX now back just below the 38.2% retracement of the decline off the 8/10 high, also just below the 100-sma at 564.53. The OEX at 564.19 as I type.

Jonathan Levinson : 9/1/2005 11:11:53 AM

30 min channel resistance is down to 39.00 for QQQQ, which should a good short entry with a stop at 60 min resistance of 39.10. Link

Jonathan Levinson : 9/1/2005 11:06:23 AM

Session high for ten year notes, TNX down 3.7 bps at 3.984%. 13 week bill rates are up to a 5.9 bp loss at 3.371%.

Linda Piazza : 9/1/2005 11:00:50 AM

OEX testing Keltner resistance at 563.02 on 15-minute closes (200-ema at 563.05), with next Keltner resistance at 564.19-564.44. Support currently still looks relatively firm near 561-562. Could be some bouncing around between support and resistance until one or the other softens.

Jonathan Levinson : 9/1/2005 10:58:36 AM

Stepping away for 10 minutes.

Jonathan Levinson : 9/1/2005 10:56:14 AM

A short cycle upphase has been in progress for the past 20 minutes, so far generating 7 cents' upside. I expect a lower high for this short cycle upphase, which would result in a head and shoulders formation within the turning 30 and 60 min channels: Link

Linda Piazza : 9/1/2005 10:54:25 AM

Not much of a bounce in the OEX yet. Watch the advdec line for a further rollover, particularly below -320 or so on a 30-minute close. Advdec line still trying to steady currently, so I don't think we can say yet that the bounce is concluded.

Jonathan Levinson : 9/1/2005 10:48:54 AM

Volume breadth is up to neutral, +1.06:1 for the NYSE and -1.05:1 for the Nasdaq.

Linda Piazza : 9/1/2005 10:46:10 AM

I mentioned earlier that the TRAN was testing the 10-sma and that it hadn't closed significantly above that since early in the month. Since that earlier post, the TRAN has dropped heavily and now tests the 72-ema at 3661.21, easing just below it as I type, toward the 200-sma at 3639.15. The TRAN is at 3656.66. On each of the last two days, the TRAN has pierced the 200-sma, but has managed to bounce back above it by the close. Important support being tested, though, with both the 72-ema and 200-sma having proved important lately.

Linda Piazza : 9/1/2005 10:41:24 AM

OEX still attempting to bounce from the 20-minute 100/130-ema's. Advdec line hit a possible support level, too, as I mentioned in a previous post. Now we just have to see what's done with this bounce, if it continues. Those hoping for a rollover want to see 15-minute OEX closes below the Keltner line currently at 563.02, but at least below the one currently at 564.13. Bulls want the OEX above both.

Linda Piazza : 9/1/2005 10:38:49 AM

I'm proud of my adopted community. UT Arlington announced yesterday that they would accept Texas residents who were university students from the New Orleans area, and they're scrambling to find housing for them. Our schools are accepting school-aged children, "no questions asked" about records or immunizations. Churches are scrambling to find available rental properties and repaint/recarpet/furnish them for evacuees. Houston is doing its share, too.

Jonathan Levinson : 9/1/2005 10:38:28 AM

Natural gas is up from its 11.155 low to a .035 loss at 11.435. Crude oil -.35 at 68.60.

Jonathan Levinson : 9/1/2005 10:37:55 AM

SAN FRANCISCO (MarketWatch) -- The Energy Department said U.S. natural-gas stocks rose by 58 billion cubic feet for the week ended August 26, in line with expectations by analysts at Global Insight. Total stocks now stand at 2.633 trillion cubic feet, down 50 billion cubic feet from the year-ago level, but up 130 billion cubic feet from the five-year average, the government data said.

Jonathan Levinson : 9/1/2005 10:35:25 AM

QQQQ is coming in for a test of 30 and 60 min channel support here. But because these cycles are just turning down now, any short cycle bounce should be only corrective: Link

Linda Piazza : 9/1/2005 10:34:19 AM

Watch for bounce potential in the equities if the advdec line should approach -800 to -850. There's bounce potential at the current -257 level, too.

Jonathan Levinson : 9/1/2005 10:32:51 AM

Big drop in the USD Index since last night: Link

Linda Piazza : 9/1/2005 10:27:34 AM

OEX still testing those 20-minute 100/130-ema's at 561.21 and 561.79, still trying to steady ahead of them.

Jonathan Levinson : 9/1/2005 10:27:33 AM

The 13 week bill rate is down a whopping 8.5 bps to 3.345%, TNX down just 1.5 bps at 4.005%, a sudden steepening of the yield curve. As Marc noted, it looks like the market expects the Fed to stop raising overnight rates.

Jonathan Levinson : 9/1/2005 10:24:24 AM

Huge moves up in gold and silver, with Oct. gold +11.1 at 446.40 and Sept. silver +.199 at 6.979. HUI is up 5.98 at 211.97.

Linda Piazza : 9/1/2005 10:24:08 AM

OEX attempting to bounce from just above the 20-minute 100/130-ema's, at 561.22 and 561.79. This was an expected event, and now we have to see what bulls do with the bounce attempt.

Jonathan Levinson : 9/1/2005 10:23:34 AM

Volume breadth +1.02:1 on the NYSE, -1.21:1 on the Nasdaq.

Linda Piazza : 9/1/2005 10:19:59 AM

Benchmarking: the OEX's important 20-minute 100/130-ema's are at 561.22 and 561.79. These averages had been holding back the OEX on several tests and the break above them yesterday signaled the breakout. The OEX is dropping toward a retest of those averages. Bulls obviously want them to hold as support while bears don't want that support to hold. I think all could probably expect a steadying at least and maybe a bounce attempt from those averages, however. OEX at 562.71 as I type. If there's a bounce and a retest of the previous HOD, watch for bearish divergence.

Jonathan Levinson : 9/1/2005 10:19:31 AM

The Fed's drain for the day has so far only impacted equities, with treasuries green, TNX down 1.9 bps at 4.001%.

Linda Piazza : 9/1/2005 10:17:42 AM

Advdec line testing -13 to -200 support, now at 113. Next support in the -800 to -850 region, where there could be a possible bounce.

Linda Piazza : 9/1/2005 10:16:19 AM

OEX testing Keltner support at 563.95 on 15-minute closes. Bulls want that support maintained and bears want it lost. There was just a minimal close below that support, but not enough to term it lost just yet. OEX turning down toward next support at 563.31 as I type.

Jonathan Levinson : 9/1/2005 10:13:11 AM

QQQQ's 30 min channel appears to have topped in overbought territory, while the 60 min cycle is still rising. A sideways drift for 1-2 hours here would likely be the "weightless" period as the 60 min cycle makes its slow turn, unless price breaks 38.80 first. My goal will be to enter short as close to the top of the 30/60 min channels as possible, to allow for a tight stop just above the channels in the event that a bullish trending move breaks out. Link

Linda Piazza : 9/1/2005 10:10:21 AM

Remember the possibility that after a shallow pullback, the OEX could then retest the high. Those hoping for a pullback will then want to see bearish price/RSI divergence. (I'm watching the 15-minute chart.)

Jonathan Levinson : 9/1/2005 10:08:51 AM

QQQQ is losing 72 SMA support at 38.94 here, the 30 min channel flattening now. Link

Linda Piazza : 9/1/2005 10:06:18 AM

Remember the possibility that today could be a doji kind of day. That wouldn't be unusual after yesterday's big gain, with a doji at the 38.2% retracement of the last decline. It could even be a long-legged doji, which would mean difficult trading conditions for traders. I'm not predicting a doji kind of day, because I don't truly feel that I have a good feel for the market currently, but keep it in your mind as a possibility.

Linda Piazza : 9/1/2005 10:03:26 AM

Bears want the OEX below 563.94 on 15-minute closes. Bulls want it above to preserve that 567.74 upside target. Remember that there's sometimes a shallow pullback and then a retest of the previous high with bearish OEX price/RSI divergence before a rollover, so watch for that possibility. It doesn't always occur. Bulls, just keep to the profit-protecting plans you've got in place. The trend has been up since late Tuesday afternoon, and any pullback may be shallow, but don't hold onto your position too long, in case it isn't.

Jonathan Levinson : 9/1/2005 10:04:24 AM








Linda Piazza : 9/1/2005 10:01:22 AM

Advdec line turning lower, but not significantly so just yet.

Jonathan Levinson : 9/1/2005 10:04:35 AM





Linda Piazza : 9/1/2005 9:58:32 AM

OEX at the 38.2% retracement of the last decline, into the ISM number, as I proposed earlier might happen.

Jonathan Levinson : 9/1/2005 9:56:25 AM

A 7.25B overnight repo results in a net 750M drain for the day.

Linda Piazza : 9/1/2005 9:54:48 AM

Advdec line following that pattern I mentioned earlier after a Keltner breakout at the end of the day--an open near mid-channel level (check) and then either a sideways consolidation or a rise (check) carrying equities higher with that rise (check). Usually that rise is into a lower high on the advdec line, however, so we'll see if that happens and if the advdec line tops off somewhere near 2000-2400. If you're in a bullish play, watch for that possibility.

In fact, if you're in a bullish play, you might consider now whether you want to take partial profits ahead of the ISM number. Then decide if you want to rachet up your stops or if you want to widen them. That depends on your bias. If you just know that the markets are going higher and you've got some cushion, you'll want to widen your stops. I'm not so sure, but I'm not personally in a bullish play, so I don't have to make that decision.

Linda Piazza : 9/1/2005 9:51:20 AM

TRAN at its 10-dma. (I think--QCharts is leaving out one daily bar, so the figure may be a little off.) The TRAN hasn't closed a day significantly above this average since early August. A couple of times, it's closed right on it or just a little above it.

Linda Piazza : 9/1/2005 9:49:14 AM

OEX RSI showing that the short-term move is getting pretty extended to the upside. (Big news, right?) This does usually make a difference, but sometimes there's a shallow pullback and then a rise in to a slightly higher high that shows bearish price/RSI divergence. So, although the move looks extended, there may be Keene's "one more high" move after an initial pullback.

Linda Piazza : 9/1/2005 9:45:42 AM

This is an OEX level at which bears might want to watch for a potential rollover possibility. I was off the mark yesterday and so I hesitate to say too much, not sure I've got a good pulse for what's going on. Just watch for a reversal in the advdec line along with other technicals you watch. As I type, the OEX continues to test those resistance levels I mentioned.

Jonathan Levinson : 9/1/2005 9:42:49 AM

30 min channel resistance is up to 39.10 QQQQ here. Link

Linda Piazza : 9/1/2005 9:42:39 AM

So far, the advdec line is still climbing, as has been a typical pattern when it performs a Keltner breakout into the close of one day and then opens at mid-channel support the next. It's bringing the OEX up off the opening low with it, as often happens, too, but now the OEX investors must deal with the resistance of the 100-sma and the 38.2% retracement of the last decline, as well as the top of that consolidation pattern that was so familiar from earlier in the month. Looks as if investors might be trying to push it through this ahead of the ISM number or else position it there into the number.

Linda Piazza : 9/1/2005 9:39:46 AM

For benchmarking purposes, the OEX's important 100-sma is at 564.52. The 38.2% retracement of the tumble off the August 10 high it at about 564.76.

Linda Piazza : 9/1/2005 9:36:52 AM

When making trading decisions today, remember that we still have Jonathan's report on the rest of the repo situation this morning and we have the ISM number at 10:00. Both could impact the markets.

Jonathan Levinson : 9/1/2005 9:34:23 AM

Volume breadth is +1.06:1 on the NYSE, +1.28:1 on the Nasdaq. QQQQ's just kicking off a short cycle downphase.

Linda Piazza : 9/1/2005 9:34:07 AM

The advdec line dropped all the way to mid-channel support. I went back a lot of months last night and when the advdec line broke out in the late afternoon, then dropped to midline support at the open the next day, it often either consolidated the rest of the day or rose from that support, but into a lower high. That didn't keep equities from sometimes rising along with it. The OEX did not open below the Keltner line currently at 563.50, although it currently drops down to test it. If it continues 15-minute closes above that line (which will also be above the 200-ema), then it keeps intact that upside target of 567.51.

Advdec line already climbing as I type. Watch it. Bears hoping for a rollover from under the OEX's 100-sma want to see it keel over and stay below -230 or so.

Jonathan Levinson : 9/1/2005 9:20:40 AM

Colonial Pipeline today announced that it is safely restarting its pipeline. The initial restart of Colonial's Main lines 1 and 2 is scheduled to begin within the next several hours.

Initial service restoration will provide between 25% and 35% of Colonial's normal operating capacity. Both gasoline and distillate service is included in this system restart. Colonial's first priority through all of these restart activities is the protection of public safety and the environment.


Currently, crude oil is -.05 at 68.90, natural gas -.21 at 11.26.

Jonathan Levinson : 9/1/2005 9:16:43 AM

Ten year note yields are back up to their pre-8:30 highs, +2.6 bps at 4.046% here. QQQQ is down to unchanged at 38.98. The 30 and 60 min cycle upphases for QQQQ are beginning to stall below overbought territory, a potential bearish divergence if the price drops straight from here. QQQQ bears will need a break below 38.80 to confirm a downturn in the still-rising 30 min cycle channel.

Jonathan Levinson : 9/1/2005 9:11:02 AM




Linda Piazza : 9/1/2005 8:49:06 AM

Subscriber D.C. reveals that all stations she tried in the Phoenix area last night were out of gasoline. Becky on CNBC was commenting this morning that she and the staff made cold calls yesterday to stations in various areas of the country and was finding some stations out of gas. An allocation system has been established, she said, and the situation is exacerbated by people topping off their tanks, afraid of a shortage. Any who lived and were driving through the early 70's hopes this doesn't get that bad.

Jonathan Levinson : 9/1/2005 8:44:34 AM

The Fed announces a 9B 14-day repo, leaving 8B to address at the short term announcement scheduled for 10AM.

Linda Piazza : 9/1/2005 8:43:50 AM

Big climb on the OEX yesterday, but a climb that occurred within that same range that mostly contained the OEX's values in late June and early July, with that range from about 558 to 553.50-555. The OEX ended the day right at the 100-sma.

Yesterday, I misread cues and jumped too early into a bearish play, although I had warned that an upside breakout was possible. The positioning of the entry just below the important 20-minute 100/130-ema's allowed for a nearby stop that made sense. The testing of key resistance combined with some other signs I watch had suggested that it was a good play to attempt, but it did not work. So what, now? I confess that the signs were so clear yesterday--as clear as they've been for the previous nine-in-a-row profitable personal OEX trades--that I'm a bit at a loss this morning. All I can say is that bears will want to see the OEX open below a Keltner line currently at 563.39 and then find resistance there on 15-minute closes. Bulls will want to see the OEX open above that line and stay above it, perhaps suggesting a climb up to retest the 200-sma at 566.44 or the important (to the OEX) 72-ema at 567.15. OEX 564.77 is the 38.2% retracement of the decline off the August 10 high and 567.26 is the 50% retracement, so it wouldn't be surprising to see the OEX hesitate near 565, perhaps producing some kind of doji--either log-legged or otherwise--before either turning down or moving up toward that 50% retracement level.

A warning to bears wanting a new rollover entry. Based on my studies last night and corroborated by the current futures levels, there's the possibility that the OEX could decline some at the open. However, it could then either consolidate or even climb the rest of the day, so you'll want to watch those resistance levels. I'll be watching signs and let you know what I see although I'm hesitant to state my views too strongly today since I obviously was off the mark yesterday. I tested and tested while I was ostensibly on vacation last week, and was so excited about showing the results, and then look what happened.

Jonathan Levinson : 9/1/2005 8:39:31 AM

NEW ORLEANS (Reuters) - Looters rampaged through flooded streets and survivors scrambled to get out on Thursday as shell-shocked officials tried to regain control of the historic jazz city reduced to ruin by Hurricane Katrina.

An operation to bus more than 20,000 refugees to the Houston Astrodome was suspended temporarily when shots were fired in New Orleans at helicopters being used in the evacuation, a local government spokeswoman in Houston said.

The incident was part of the chaos that prompted New Orleans Mayor Ray Nagin to order police to drop rescue operations to fight the crime that gripped the besieged city.

An angry Louisiana Gov. Kathleen Blanco told reporters: "We will do what it takes to bring law and order to our area."


Jonathan Levinson : 9/1/2005 8:35:47 AM

According to Marketwatch, it's been 46 years since the rate of personal savings was negative.

Jonathan Levinson : 9/1/2005 8:34:36 AM

Ten year note yields are down to a 1.3 bp gain at 4.033%, QQQQ holding a 4 cent gain at 39.02.

Jonathan Levinson : 9/1/2005 8:33:33 AM

Negative savings and higher than expected initial claims would be terrible news, but it will provide the Fed impetus to be easier than it would normally.

Jonathan Levinson : 9/1/2005 8:31:48 AM









U.S. 4-WK AVG. JOBLESS CLAIMS UP 1,250 TO 316,750


Jonathan Levinson : 9/1/2005 8:24:49 AM

Ten year notes open lower, TNX +2.2 bps at 4.042%.

Jonathan Levinson : 9/1/2005 8:10:03 AM

Compared with the rally in bonds this week, the bounce in equities is hesitant and weak. It's also just getting started, on a daily cycle basis. But to keep those daily cycle oscillators from losing their long upturns, any intraday correction will have to hold this week's lows. While we wait for the 8:30 data, my thought on what's happened this week is that Katrina caused a spike in energy and other commodity prices. The Fed (and, foreign central banks on Monday and Tuesday) supplied liquidity, which appears to have gone to bonds, driving yields lower. Equities, which had been acting lifeless and heavy at critical support (daily and weekly timeframes) only responded to the bids in bonds yesterday, no doubt lifted by the Fed's big 7.75B net add.

Today, there will be 17B in expiring repos from the Fed.

Jonathan Levinson : 9/1/2005 7:44:41 AM

Florida utility companies began rationing power Tuesday to hundreds of thousands of customers because of disruptions in natural-gas supplies caused by Hurricane Katrina.

Utility officials, who asked all customers in Florida to conserve electricity, warned that shortages could affect the state's ability to produce power for weeks and possibly months.

The brownouts are targeting homes, businesses and government offices that participate in voluntary energy-management programs. Power is being cut temporarily to air conditioners, water heaters and pool pumps during peak-demand periods.


Jonathan Levinson : 9/1/2005 7:40:37 AM

Equities are down, ES trading 1221, NQ 1583, YM 10484 and QQQQ -.03 to 38.95. Gold is up 1.7 to 437, silver is up .001 to 6.781, ten year notes are down 7/64 to 112 13/16 and crude oil is up 25 cents to 69.20. Natural gas is down .015 to 11.455.

We await the 8:30 releases of initial claims, est. 315K, Personal Income and Personal Spending, est. .5% and .1%, then at 10AM Construction Spending, est. .5% and the ISM index, est. 57.

Linda Piazza : 9/1/2005 6:55:40 AM

Good morning. The Nikkei closed higher by almost 100 points last night, although it moved down all afternoon and closed well off its high of the day. Other Asian markets were positive as are European markets this morning. As of 6:44 EST, gold was up $2.70, and crude, up $0.31 to $69.25. As of that same time, our futures were modestly negative. More detail about Asian and European markets follows in succeeding paragraphs.

Trying to make up ground after last week's losses, the Nikkei shot to triple-digit gains early in last night's session. The afternoon session was all downhill after the high reached shortly after the open of the afternoon session, but the Nikkei still managed to post a gain of 93.37 points or 0.75%, at 12,506.97. A newspaper poll showed that Prime Minister Kozumi's LDP party gains more support, so that Koizumi may have the backing after the September election to push through some of his plans for the economy. Crude's decline off the new record high helped exporters. CSFB's initiation of the Japanese glassmaking industry with an overweight rating helped those companies. Also helping early sentiment was a strong early showing in the IPO of Seven & I Holdings Co., the owner of Seven-Eleven Japan and Denny's Japan, among others. TDK Corp. and telecom provider KDDI Corp. both helped to lead gains. One stock not participating in early gains was that of Japan's seventh-largest bank, Mitsui Trust Holdings. The stock declined after a newspaper speculated that a government agency would reveal sometime this month a plan that would allow for the easy conversion of preferred bank shares the government owns into common stock that it could sell to investors. The government has a large holding of preferred stock in Mitsui Trust Holdings.

Most other Asian markets gained, too. My source provided no Thursday data for the Taiwan Weighted, so my assumption is that it was not open. South Korea's Kospi gained 2.13%, and Singapore's Straits Times rose 0.88%. Hong Kong's Hang Seng rose 1.61%, and China's Shanghai Composite climbed 1.90%. Late yesterday afternoon, an official with the USTR announced that meetings on textile imports would continue today in Beijing, with some concluding that major differences in U.S. and Chinese proposals still existed.

All European markets trade in the green this morning. Lower crude prices send airlines and auto makers higher, and positive corporate news helped boost sentiment. Some economic data was not as cheering. The EU12 unemployment rate for July was cheering, though, as it fell to 8.6% from the previous 8.7%, with France's unemployment rate the highest among those 12 countries. A drop in German unemployment seems to have led to the surprise move lower in this figure. The EU12 August manufacturing PMI disappointed, however, falling to 50.4 from the previous 50.8. Output and orders components fell, but the employment index climbed. The employment index remained below 50, at 48.3. Input prices rose to 56.3 under the impact of energy prices. Output prices also rose. In some respects, France's pattern was almost directly opposite the EU12 pattern. August manufacturing PMI climbed to 52.5 from July's 51.9, the third month in a row that the number has been above the benchmark 50. Output and new orders both increased. Exports increased. Employment remained weak and fell to 47.7 from the previous 48. Prices rose to 58.9 from the previous 50.7, indicating some upward pressure from energy costs.

In the U.K., nationwide data showed house prices falling 0.2% month over month, rising 2.3% year over year, in what one source termed the lowest annualized growth in nine years. The August manufacturing PMI moved back above 50, to 50.1 from July's revised-higher 49.5. Output and new orders increased, but export orders were unchanged and employment fell to 45.8, the lowest level in more than two years. In a pattern familiar throughout the region, input and output prices both rose, influenced by higher energy costs.

Company news included Novartis AG's announcement of its $40 a share offer for the stake in Chiron Corp. that it doesn't already own. Insurer Swiss Re pegged the company's costs from Hurricane Katrina at about $500 million and the total cost to insurers of around $20 billion. Swiss Re's shares gained after the announcement. French retailer Carrefour posted strong gains after announcing that its H1 profit fell 6.9%. Perhaps it was a sell-the-rumor, buy-the-news effect or the decline was less than expected? Diageo, manufacturer of Johnnie Walker and Guinness, also climbed after earnings that included a fall in pretax profit. The decline had been less than expected. AMB Amro inched higher after announcing an IT deal with IBM, Infosys and three other vendors. Nokia and Alcatel received new buy ratings from Citigroup, and both climbed.

As of 6:44 EST, the FTSE 100 was higher by 35.60 points or 0.67%, at 5,332.50. This morning, a venerable Art-Cashin type from the Cantor Index was speaking about the performance of the stock market. He led into his discussion about the "interesting session" by saying that markets had apparently decided a few weeks ago to divorce stock market performance from company performance and economic outlook, saying that markets were illogical right now, and implying that the upward momentum might not be supported by recent company and economic performances. The CAC 40 had risen 26.82 points or 0.61%, to 4,426.18. The DAX had risen 29.64 points or 0.61%, to 4,859.33.

Marc Eckelberry : 9/1/2005 3:29:44 AM

Schaeffer mentioning that heavy QQQQ 38 put interest as being a major danger zone for bulls should we get close again to the strike. Usually I would suggest it is bullish, but such a vast amount of puts, and we have them at the 37 strike as well, would have to be covered quickly by shorting the underlying, so bulls do not want to see any sign of another breakdown in the coming days.

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