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OI Technical Staff : 9/2/2005 9:59:59 PM

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Jonathan Levinson : 9/2/2005 4:08:17 PM

Thanks, Mark- for the NYSE, it's -1.42:1, for the Nasdaq -1.82:1. Combined DJIA and Nasdaq volume are 2.397B here, very light.

Linda Piazza : 9/2/2005 3:59:38 PM

Have a great weekend, everyone. See you Tuesday.

Jonathan Levinson : 9/2/2005 3:57:04 PM

Session low for QQQQ at 38.74 here.

Linda Piazza : 9/2/2005 3:56:20 PM

Looks as if the OEX may close the day just above that support, leaving every one in a quandary as to what's next. The daily candle is not bullish. The weekly is a bit more so, although it's leaving behind a long upper shadow, depending on what happens in the last few minutes of trading. Barring a real burst higher, the OEX is going to end the day below the 200- and 100-sma's, both.

Jonathan Levinson : 9/2/2005 3:50:37 PM

QQQQ swing trade bears short from yesterday's 39.09 entry can leave stops in the 39.00-.02 area. While the channel bands have slid further lower, resistance now at 38.93 for the 30 min channel top and 38.98 for the 60 min, the light volume today results in resistance being weaker than it would normally be. Alternately, there's a nice profit in place at current levels. My bias is bearish below this week's 39.15 high.

Linda Piazza : 9/2/2005 3:46:50 PM

The OEX approaches the 20-minute 100/130-ema's , both near 563, and the converging daily 10-sma and 200-ema', at 562.93 and 562.85, as the advdec line approaches potential support. A break of the advdec line's support could break the OEX through that support, too, but bears need to have those profit-protecting plans in place now. They need to decide right now, if they haven't already, if they're going to hold over the weekend. If not, this current test of support is your signal to at least begin stepping out of positions.

Jonathan Levinson : 9/2/2005 3:43:10 PM

QQQQ has drifted down to within a nickel of the session lows. Bearing in mind that the Fed executed a large net drain ahead of the long weekend, with ongoing challenges to the rule of law down south, I see a better than average chance of the Qs finishing at session lows today.

Linda Piazza : 9/2/2005 3:42:37 PM

An advdec line drop much below about -1270 to -1330 might get a downside move begun. That means that zone is also potential support, though. Advdec line now at -1079.

Linda Piazza : 9/2/2005 3:41:04 PM

I wonder what will happen with the homebuilders in the wake of Katrina's damage. Looking at the DJUSHB, it looks as if some were thinking that they might benefit, as the index hit a low Monday that was near/at March's peak, and then bounced up into another test of 1000, a test it didn't pass on first try. It's at 977.87 as I type. It's possible to discern a possible inverse H&S building at the bottom of the DJUSHB's drop, but there's also a larger potential H&S, with the right shoulder possibly being formed now. There's a lot to factor in, both technically and fundamentally, including potential interest-rate developments. I've heard and read arguments all week about when the Fed will stop raising rates. With opposing potential regular and inverse H&S's on that chart, I'd sure be waiting until one or the other played out and was confirmed before I acted on any bias in the homebuilders.

Linda Piazza : 9/2/2005 3:32:10 PM

The BIX so far remains below the 10-sma. It's not far below, though, with the BIX at 350.23 and the 10-sma at 350.97.

Linda Piazza : 9/2/2005 3:31:06 PM

The RLX has so far managed to stay above the converging 200-sma and 100-sma, with the 200-ema not far below. Today's action has undone a tentative bullish MACD kiss that I swear was there this morning, though.

Jonathan Levinson : 9/2/2005 3:30:22 PM

QQQQ's roughly 3/4 of the way through a sideways short cycle downphase, with the 30 and 60 min cycle channels now flatlined, drifting sideways: Link

Linda Piazza : 9/2/2005 3:19:55 PM

Advdec line drops closer to potential support. If it drops through that support, then I expect more downside, but if not, just more coiling.

Linda Piazza : 9/2/2005 3:17:47 PM

Coiling and more coiling.

Jonathan Levinson : 9/2/2005 3:13:44 PM

Stepping away for 5 minutes.

Jonathan Levinson : 9/2/2005 3:06:01 PM

Mark, what's eerie about that chart is to remember where interest rates were in 1980-81. I remember buying a GIC that yielded 20%.

Jonathan Levinson : 9/2/2005 3:00:27 PM

We've seen op-ex Fridays with more action than this. QQQQ has spent most of the session within a 15 cent range. Link

Linda Piazza : 9/2/2005 2:56:42 PM

Advdec line approaching potential support, now from -1070 to -1350 or so. Now at -768.

Linda Piazza : 9/2/2005 2:55:38 PM

I agree with Jonathan's 2:51:36 post.

Jonathan Levinson : 9/2/2005 2:51:35 PM

Volume breadth has worsened to -1.21:1 on the NYSE, -1.41:1 on the Nasdaq, but volume is running so thin that one normal buy or sell program could change the ratios in a blink.

Linda Piazza : 9/2/2005 2:46:58 PM

Doji at the 100-sma. In any given hour today, I could have probably found a time when I could type that phrase and it be true about the OEX. I'm glad that was my bias for the day--either day or a red-candle day--or this would have been even more maddening than it was.

Jonathan Levinson : 9/2/2005 2:46:55 PM

Just hearing that regular unleaded is up to $1.47 per litre here in Montreal, certainly a new record high.

Linda Piazza : 9/2/2005 2:40:05 PM

Potential advdec line support at -1050 to -1350. At -667 as I type.

Jonathan Levinson : 9/2/2005 2:39:47 PM

The short cycle indicators are showing a bearish divergence and appear on the verge of a sell signal. A break below 38.82 should be enough to kick it off: Link . Above 38.92, it would be invalidated.

Linda Piazza : 9/2/2005 2:39:19 PM

Those OEX bears who didn't get an opportunity to put their profit-protecting plan in place on the earlier test of the converging 10-sma and 200-ema on the daily chart, with those at 563.02 and 562.86, now need to be on the ready if they want to take partial profits as those averages are approached. I can't guarantee that they will, but can only say that the advdec line is so far holding below resistance and that the OEX is so far having trouble holding above the former descending trendline off yesterday's high. Of course, a new trendline must be drawn now. Those plans will differ from trader to trader, but might include taking partial profit as that potential support is approached, if it is. Some might elect to take full support; some, just to lower stops. Depends on the trader.

Linda Piazza : 9/2/2005 2:36:01 PM

Advdec line still flattening, perhaps rounding just a little under possible strong resistance. QCharts version at -516 as I type.

Linda Piazza : 9/2/2005 2:31:48 PM

Here's why I'm not all that bullish on the intermediate-term on the OEX, at least not yet: Link

Jonathan Levinson : 9/2/2005 2:26:37 PM

Gold finished up 1.5 at 447.90, silver +.012 at 7.05, ten year notes +3/64 at 113 5/64. Crude and natgas finished red. The CRB got whacked for 4.87 to finish at 331.33, despite strength in cocoa, copper and precious metals.

Jonathan Levinson : 9/2/2005 2:24:31 PM

Volume breadth back to fractional negative at -1.08:1 for the NYSE and -1.11 for the Nasdaq.

Linda Piazza : 9/2/2005 2:13:48 PM

OEX struggling to stay above the former descending trendline off yesterday's high. Advdec line retreating just a touch after approaching potential resistance. This is all just coiling, coiling, coiling. Bulls, just be aware of the possibility, but not yet the probability, that the advdec line could turn lower soon, perhaps after some more testing of resistance, and pull the OEX lower, too. QCharts value for advdec line is now -419.

Jonathan Levinson : 9/2/2005 2:07:09 PM

Zooming out to the 30 and 60 min cycle oscillators, nothing has changed from this morning. The 30 min cycle downphase has stalled and is sputtering with the channel actually pointed up, while a weak 60 min cycle downphase continues. All of this has coincided with an upturn in the daily cycle indicators. This action looks bullish to me on a daily cycle basis, but my guess it that may well be bullish the way the upturn in mid-June was- briefly and correctively. Other than the feeling in my gut this week, derived from the chaos on the Gulf Coast and the energy rally, the weekly cycle downturn suggests that the daily cycle bounces should be countertrend and corrective. Intraday, QQQQ's 38.70-39.10 range should be decisive for these longer cycles.

Jonathan Levinson : 9/2/2005 1:56:27 PM



Linda Piazza : 9/2/2005 1:53:58 PM

OEX now moving higher. The 200-sma is at 566.45 and the 72-ema is at 567.03. Advdec line quickly approaching possible strong resistance, from about -160 to +125, although these numbers change quickly. Advdec line now at -260 on QCharts.

Linda Piazza : 9/2/2005 1:49:56 PM

The OEX is now trading sideways, moving "above" the descending trendline off yesterday's high by that method, rather than by really rising. Bulls should keep some measure of distrust of this move, supposedly above that trendline. I always distrust such moves above or below a trendline. The advdec line draws closer to potential resistance, or rather, that resistance cycles closer to the advdec line.

Linda Piazza : 9/2/2005 1:47:32 PM

My daughter has a trip into Oklahoma this weekend to meet her ex-husband and pick up her oldest daughter who has been visiting her father. I'm worrying about whether she'll find a gas station to fill up again for the return trip home. She can almost make the 8-hour roundtrip without a refill, but not quite. As I said earlier in the week, those of us who lived through and were driving in the 70's know how bad it can get, and it can get bad enough that travelers are stranded.

Jonathan Levinson : 9/2/2005 1:41:06 PM

QQQQ update at this Link with the 30 min channel rising as price persists pennies above the 72 SMA. There's no directional bias at this point, with the short cycle rolling over after a weak upphase, the 30 min rolling up after a weak down, and the 60 min continuing its downphase. Swing shorts from yesterday's 39.09 entry have the channel tops now down to 39.00, and can lower their stops to 39.02 to lock in a small profit while keeping away from the action. Volume breadth remains only fractionally negative on the the Nasdaq and NYSE, and QQQQ volume remains at a trickle.

Linda Piazza : 9/2/2005 1:37:07 PM

We're approaching a stop-running time of day. Also approaching the close of the bond market, which sometimes has strange effects on the equities.

Linda Piazza : 9/2/2005 1:28:22 PM

The OEX hasn't given up testing that descending trendline off yesterday's high, currently rising toward another test.

Jonathan Levinson : 9/2/2005 1:20:50 PM

So far, the Fed's hefty 7.25B net repo drain has only impacted treasuries and energy prices, with equities trading flat on light volume. The past two days have seen a pickup in equity action at 2:15. On a liquidity basis, my guess is that the 2:15 turn would be net bearish, but we'll see. Volume remains very light, and volume breadth is lightly negative, -1.18:1 on both the NYSE and Nasdaq.

Linda Piazza : 9/2/2005 1:16:39 PM

The OEX has not be able to maintain its attempted breakout above the descendign trendline off yesterday's high. It hasn't retreated far yet, but the last 15-minute candle left a long upper shadow. Watching the 20-minute 100/130-ema's at 562.75 and 562.84, if the OEX should now retreat to test support.

Jonathan Levinson : 9/2/2005 1:16:04 PM

Marc and Mark, I like it. How's about the loser pays an ounce of gold to Jonathan? (:biggrin:)

Jonathan Levinson : 9/2/2005 1:11:41 PM

That reference to "gas" in the headline indicates "gasoline", as I understand it.

Jonathan Levinson : 9/2/2005 1:11:14 PM



Jonathan Levinson : 9/2/2005 1:09:50 PM



Linda Piazza : 9/2/2005 1:06:39 PM

OEX trying to push above the descending trendline off yesterday's high. If it can maintain this push higher, then a retest of yesterday's high might be possible, but so far, the OEX is just testing that trendline. The advdec line has slowed its climb, but should run into resistance by the time it hits +50 to +135 (these numbers change quickly). It's at -452 as I type.

Jonathan Levinson : 9/2/2005 1:05:25 PM

Crude oil closed -1.9 at 67.575, natural gas -.015 at 11.74.

Linda Piazza : 9/2/2005 1:04:48 PM

The bond market closes early today, I believe. Sometimes that impacts equity markets, too, so be aware of the early closing, at 2:00 EST.

Linda Piazza : 9/2/2005 12:58:30 PM

OEX currently testing that descending trendline off yesterday's high. If there's an upside break, bulls don't want there to then be a quick reversal. So far, the resistance at about 565.15 holds, however. OEX at 564.91.

Linda Piazza : 9/2/2005 12:52:45 PM

Advdec -160 to +55 should be resistance, if resistance isn't encountered earlier. Advdec now at -557.

Linda Piazza : 9/2/2005 12:45:15 PM

The OEX remains below the descending trendline off yesterday's high, above the ascending trendline off yesterday's low. Still coiling. Just widening the coil a bit.

Jonathan Levinson : 9/2/2005 12:36:39 PM




Jonathan Levinson : 9/2/2005 12:35:43 PM

QQQQ clears the 72 SMA at last, stalling the 30 min cycle downphase as the 60 continues to point lower: Link

Linda Piazza : 9/2/2005 12:35:17 PM

OEX easing above the 100-sma on the daily chart again, with that average at 564.57 and the OEX currently at 564.80.

Linda Piazza : 9/2/2005 12:31:15 PM

OEX descending trendline off the Thursday high is now at about 565.25. Bears obviously want the OEX to stay below that; bulls, to climb above.

Jonathan Levinson : 9/2/2005 12:25:40 PM



Jonathan Levinson : 9/2/2005 12:18:42 PM

QQQQ has traded less than 10 million shares in the past hour and a half, 32.3M shares total for the day. QQQQ continues to struggle below the 72 SMA, currently at 38.85, but the short cycle indicators are trying to turn up. Volume breadth remains negative, however, and the 30 and 60 min channels continue to point lower. My bias remains bearish so long as the lower intraday cycles don't turn up, and it would take a move above 38.92-.95 to do so.

Linda Piazza : 9/2/2005 12:17:10 PM

There's that near-doji still on the OEX's chart. It's a little different in character than earlier--a small red body instead of a small white body--but basically the same candle indicating the same indecision. The OEX did close the last 15-minute period below the line that bears wanted to see it close beneath, but now it needs to turn lower and test Keltner support beneath it. Without a whoosh down, it could either take some time to break through that support, or else the support could prompt a stronger bounce. The advdec evidence is mixed. There was a bounce in the advdec line, but it, too, faces resistance.

Linda Piazza : 9/2/2005 12:10:02 PM

Here comes the bounce attempt, from a little higher than expected on both the OEX and the advec line. Some bears wanted to get their profit collected early, as all could see the potential support being approached. OEX bears would prefer that the 15-minute close is below a Keltner line currently at 564.14.

Jonathan Levinson : 9/2/2005 12:04:31 PM

Have to step away to make way for the cleaning crew. Back in 10 minutes.

Linda Piazza : 9/2/2005 12:01:39 PM

TRAN inching below the important 72-ema at 3661.29, trying to maintain support there. If that's lost, a retest of the 200-sma at 3639.17 may be in the works. TRAN at 3660.28 as I type.

Linda Piazza : 9/2/2005 11:59:51 AM

Advdec line drawing closer to potential support in the -1800 level, with the QCharts version now at -1411. If that support is touched, I'd expect another retest. The 60-minute chart suggests that things could get even uglier than a touch of -1800, with -2790 a possibility there. I'd think that there'd be at least a bounce attempt before the advdec line would head down that low, though, so watch that -1800 level.

Linda Piazza : 9/2/2005 11:57:37 AM

RLX moving down toward the 200-sma and 200-ema, at 442.82 and 440.38. This wee's low was 443.91, and the RLX is at 444.74 as I type. It's nearing strong support, but that support needs to hold if the OEX is going to hold on, too. The BIX is below 350 again, but just a5 349.94. It couldn't hold above the 10-sma this morning, though. OEX bulls need to see the BIX hold on here after yesterday's extremely long-legged doji.

Linda Piazza : 9/2/2005 11:55:19 AM

That OEX push lower looks so reluctant. Bears need those profit-protecting plans, but they'd really like to see a sudden flush lower.

Jonathan Levinson : 9/2/2005 11:44:04 AM

Ten year note yields are up 1.7 bps at 4.036%, 13-week bill rates +1.5 bps at 3.38%.

Linda Piazza : 9/2/2005 11:39:47 AM

Bears have had time to put together a profit-protecting plan. If that included taking partial profits as important support was tested, the OEX is quickly approaching a level of potential support. You can use those 20-minute 100/130-ema's as benchmarks, with those at 562.55 and 562.70, respectively, or can use the converging 10-sma and 200-ema's, at 562.92 and 562.85, respectively. OEX at 563.54 as I type.

Jonathan Levinson : 9/2/2005 11:39:38 AM

Volume breadth -1.56:1 for the NYSE, -1.76:1 for the Nasdaq.

Jonathan Levinson : 9/2/2005 11:37:28 AM

New session lows for QQQQ. 30 min channel support declines to 38.65, 60 min support down to 38.70.

Linda Piazza : 9/2/2005 11:34:23 AM

Watch for a potential bounce as the advdec line approaches -1800. At -1371 as I type.

Linda Piazza : 9/2/2005 11:33:39 AM

OEX daily chart still shows some vulnerability to the converging 10-sma and 72-ema, at 562.97 and 562.85, respectively. Bears need to have profit-protecting plans in place for that test, although there's the possibility, if not quite yet the probability of a lower dip. The OEX heads down into possible support as it dips.

Jonathan Levinson : 9/2/2005 11:25:41 AM

QQQQ update at this Link with price holding at 38.80 support, the short cycle indicators mixed as price trades sideways at the lows.

Linda Piazza : 9/2/2005 11:17:13 AM

OEX still coiling and the longer it coils, the less effective any oscillators or even Keltner evidence is going to be.

Jonathan Levinson : 9/2/2005 11:03:02 AM

The short cycle indicators are ticking up for QQQQ on the lack of downside followthrough. There's still no upphase, however, and it will take a move above 38.91 to confirm any upside turn: Link . Day traders can try a long off 38.80 support with a 5 cent downside stop to try and catch a short cycle upphase, but I'm not tempted, particularly with the low volume and the rollover in the broader 30 and 60 min channels.

Linda Piazza : 9/2/2005 11:01:08 AM

Advdec still near the low, but the OEX isn't reacting.

Jonathan Levinson : 9/2/2005 10:53:50 AM



Linda Piazza : 9/2/2005 10:50:18 AM

Although the advdec line is no longer coiling, but has instead broken downward, the OEX holds up fairly well and is still essentially just coiling. Right now, as evidence of the uncertainty of direction, there's a doji on the daily chart. The first task of bears is to break the OEX below the 20-minute 100/130-ema's, at 562.46 and 562.63, respectively, and the main task of bulls is to hold the OEX above that level. Those 20-minute 100/130-ema's have been benchmarks for bullish/bearish action since 8/22. Twenty-minute RSI is at 49.79, right at the neutral 50 level, so no clues there, either.

Jonathan Levinson : 9/2/2005 10:49:34 AM

Crude oil extends its loss, now -2.025 to 67.45. Natural gas is down .15 to 11.615.

Jonathan Levinson : 9/2/2005 10:45:20 AM

Volume breadth -1.23:1 on the NYSE, -1.28:1 on the Nasdaq.

Linda Piazza : 9/2/2005 10:42:28 AM

Advdec line still dropping. Without a quick bounce back above -700 or so, it will have confirmed the H&S neckline violation. On QCharts, it's now -1043.

Jonathan Levinson : 9/2/2005 10:37:36 AM

QQQQ is bouncing from the neckline above 30/60 min channel support at 38.77, with the 30/60 min and short cycles all in gear to the downside. Bulls need to clear 38.93 to stall the short and 30 min cycle downphases, failing which we should see a neckline break below the low of the day. Link

Linda Piazza : 9/2/2005 10:37:45 AM

OEX testing Keltner support from 563.36-563.69 on a 15-minute closing basis. On the daily chart, however, it looks vulnerable to the 200-ema at 562.85. Keltner support near there, too, at 562.44, plus 100/130-ema's on some intraday charts I watch. Remember, bears, to have profit-protecting plans in place for tests of the support, now from 562-563.70, with the top of that band just touched. The OEX's pattern is to produce either another doji after such a strong potential reversal signal or else a red-candle day, but another doji could mean choppy trading conditions. A drop down to 560.57 remains possible on a Keltner basis, but it's not yet probable according to that evidence. Just possible.

Jonathan Levinson : 9/2/2005 10:31:42 AM

Still no 4-day repo from the Fed, and so we have a big 7.25B net drain for the day. Looks like Greenspan meant what he said last weekend.

Linda Piazza : 9/2/2005 10:29:51 AM

So far, neckline resistance holds on the advdec line. So far, support (now dropping, though, to -670) still holds, too, on 15-minute closes. Advdec line (QCharts version) now at -484.

Jonathan Levinson : 9/2/2005 10:28:51 AM

QQQQ update at this Link with little change during the past half hour. 3 million shares have changed hands during that time, and we can expect it to grow quieter from here on this holiday Friday. The lower highs above 38.90 suggest a small bearish triangle within the broader complex top.

Jonathan Levinson : 9/2/2005 10:24:40 AM



Linda Piazza : 9/2/2005 10:20:12 AM

The OEX tests that 100-sma at 564.57, with the OEX just a little above it, at 564.71. On the 15-minute Keltner chart, it's a little below a Keltner line currently at 564.90, but candles have been forming along this Keltner line since yesterday afternoon, so its small distance below that line is not really a violation but just a continuation of the recent pattern. It's as vulnerable to push up toward the 200-sma as it is to a drop to the 200-ema, now at 562.86. Either is possible. Either looks as likely as the other.

Jonathan Levinson : 9/2/2005 10:19:55 AM

The move in the CRB is still sinking in. Here's a monthly chart of the CRB from 1986, log scale, Link , and showing a strong rally since 2002. Because the commodity index measures the price of "vital" commodities, I wouldn't hesitate to characterize this rally as "inflation." It hasn't doubled in 3 years, but it's close. The price of oil is up more than six-fold since 1998. The Fed has added what stimulus it can. How much higher can the prices of commodities go before people and businesses who need to buy them can no longer do so? That's the limit against which the Fed is fighting, and yesterday we saw negative personal savings reported.

Linda Piazza : 9/2/2005 10:13:20 AM

Still just coiling action.

Jonathan Levinson : 9/2/2005 10:10:27 AM

Session low for natural gas, -.20 at 11.555.

Jonathan Levinson : 9/2/2005 10:09:12 AM

QQQQ's traded 10.5M shares so far- this is nearly premarket volume. Looks like the heavy hitters are focused on the long weekend.

Linda Piazza : 9/2/2005 10:09:03 AM

Benchmarking again: OEX 200-sma at 566.45, 72-ema at 567.03, and the 72-ema is important on the OEX's daily chart. Support below at the 100-sma at 564.58, and the 100-sma is important on the OEX's daily chart. OEX obviously between the support and resistance. The danger of another doji day still exists, both because of the OEX's usual pattern after a potential reversal signal (often another doji day if not a red candle day) and because this is a Friday before a three-day weekend.

Linda Piazza : 9/2/2005 10:06:01 AM

As I thought might happen, advdec line bouncing right up to retest that neckline. The OEX bounces up with it, but still within that coiling formation. Watching the test of the advdec's neckline at about the current -77 level, but rising slightly.

Jonathan Levinson : 9/2/2005 10:05:13 AM

Session low for crude oil here, -1.65 at 67.825 as Nymex reopens.

Jonathan Levinson : 9/2/2005 10:03:10 AM

The CRB is up another .85 to 337.05, new 20-25 year highs. In light of this type of evident asset inflation, I don't see how the Fed can cut rates or ease up even on its daily repos. Greenspan specifically mentioned the danger of inflation and stagflation last weekend.

Linda Piazza : 9/2/2005 10:01:31 AM

Advdec line trying to hold support. Bounce potential still exists, although it's violated the actual neckline for its H&S. As it does, RSI is registering "oversold" values on the 15-minute chart, so unless it starts trending down, this testing of support at the same time RSI registers that the move is extreme provides some doubt as to whether that H&S neckline violation will hold. Conflicting info.

Linda Piazza : 9/2/2005 9:59:01 AM

The OEX also has a rough sort of H&S, with a neckline at about 563.35-563.60, depending on how it's drawn. This has an ascending neckline, but bears should be aware that if the OEX should drop toward 561-562.30, it might again bounce from there and form a new and larger H&S, this one with a horizontal neckline. Bears should have profit-protecting plans as the OEX approaches that level, although the possibility of a drop to 560.40 or so also exists. These are just possibilities and are far from confirmed as the OEX still coils. They're just possibilities to watch if the OEX shouuld drop below about 563.35 or so. It's at 564.87 as I type.

Jonathan Levinson : 9/2/2005 9:58:07 AM

Volume breadth is -1.07:1 for the NYSE, -1.32:1 for the Nasdaq. Still no additional repo announced by the Open Market Desk.

Jonathan Levinson : 9/2/2005 9:57:16 AM

The lower high on the short cycle bounce works for a right shoulder, and I'd put the neckline at roughly QQQQ 38.80-.82. Link

Linda Piazza : 9/2/2005 9:54:43 AM

Advdec line falling below that H&S neckline. A 15-minute close below -530 (QCharts) or so should confirm the decline, but bears should be aware that this is still a possible bounce area for the advdec line.

Jonathan Levinson : 9/2/2005 9:53:59 AM

So far, a 5-day 6.5B repo, net drain 7.25B. There's still room for a 4-day/weekend repo.

Jonathan Levinson : 9/2/2005 9:51:09 AM

The Fed has 13.75B in expiring repos to deal with in the coming minutes.

Linda Piazza : 9/2/2005 9:49:05 AM

TRAN also currently challenging the 10-sma. It did not close above it yesterday.

Linda Piazza : 9/2/2005 9:48:40 AM

The BIX is higher this morning, but again challenging the 10-sma, at 351.08, with the BIX currently a little above that, at 351.44. Yesterday, the BIX pierced this average, but could not close above it. So far, it's influence on the OEX is positive, but it needs to hold above that 10-sma.

Linda Piazza : 9/2/2005 9:47:31 AM

The RLX is paused right in the middle of the 200-sma support and the 72-ema resistance. It's just below 450, at 449.69. No clarity for its possible influence on the OEX today.

Jonathan Levinson : 9/2/2005 9:46:16 AM

Zooming out to a 5 day view of the 100 tick chart Link we see a possible complex top forming as the 60 min cycle makes its surprisingly slow turn. This is the stuff of which head and shoulders are made, as the shorter cycles bump around within the turning longer cycle channel. If this interpretation is valid, the 39.10 resistance level has to hold.

Linda Piazza : 9/2/2005 9:44:46 AM

Careful, bulls. I mentioned a possible H&S on the advdec line, and that those sometimes do have relevance, and the advdec line is sitting right on that neckline this morning. It's also sitting right on potential support, so careful, bears, too.

Jonathan Levinson : 9/2/2005 9:40:10 AM

My IB feed is still up, but I'm hearing from other traders that it's running choppy for them. Don't forget to enter your stops in case of outages.

Jonathan Levinson : 9/2/2005 9:36:04 AM

Volume breadth is strong at the open, +2.38:1 for the Nasdaq and +1.39:1 for the NYSE.

Linda Piazza : 9/2/2005 9:33:22 AM

OEX opens above ysterday's close and charges higher. Keltner resistance at 566.24-566.61, but of course, the 200-sma and 72-ema are probably more important, at 566.45 and 567.05, respectively.

Linda Piazza : 9/2/2005 9:31:56 AM

Yesterday, the OEX produced a long-legged doji at the top of a climb. It punched up to test the 200-sma, punched down to test the 200-ema and 38.2% retracement of the entire bear-market decline, and closed right on the 100-sma. What a day. Thankfully, my bias was for just such a day, as I said about mid-morning, and I wasn't tempted to suggest new entries, either bullish or bearish.

Bulls don't want to see an open below yesterday's close. Keltner evidence is mixed, but a drop below yesterday's low looks to confirm a H&S on the OEX's five- and fifteen-minute charts. A fifteen-minute close beneath a Keltner line currently at 563.41 would further confirm that, but potential support exists at 562.26-562.49, the location of the 20-minute 100/130-ema's. Any bears who entered yesterday as 567-568 resistance was being tested would need profit-protecting plans for a test of that level, as it's possible that the OEX would then form a larger H&S with a neckline along those important averages, rising up into the still-needed right shoulder.

Bears don't want to see an open much above yesterday's 564.30 close, and especially don't want to see a move above yesterday's high. A 15-minute close above the Keltner line currently at 566.48 sets up a 569.22 upside targets, but those upside targets aren't being met lately, at least on the first push.

Linda Piazza : 9/2/2005 9:30:48 AM

Sorry, had computer problems. My OEX "before the market" update will be uploaded in a couple of seconds.

Jonathan Levinson : 9/2/2005 9:30:36 AM

Dancing bears.. those were the days.

Jonathan Levinson : 9/2/2005 9:26:53 AM

QQQQ's 30 min cycle downphase is stalling early, above oversold territory, within the 60 min channel downphase. If it doesn't break back below the 72 SMA at 38.90, the 30 min channel will reverse to the upside, confirmed by a break above 39.10. Swing trade bears from 39.09 can take profits here, or just leave the stop at 39.09 for breakeven. Link

Jonathan Levinson : 9/2/2005 9:08:53 AM

Here, Mark:

New Orleans, LA (CBS/AP) - New fears struck Friday morning in New Orleans, as explosions rocked the riverfront a few miles south of the French Quarter. The cause of the blasts at about 4:35 a.m. and the extent of any possible damage is not yet known.

An initial explosion sent flames of red and orange shooting into the pre-dawn sky. A series of smaller blasts followed and then acrid, black smoke that could be seen even in the dark. The vibrations were felt all the way downtown.

The explosions appeared to originate close to the east bank of the Mississippi River, near a residential area and rail tracks. At least two police boats are at the scene.


Jonathan Levinson : 9/2/2005 9:07:25 AM

Big upside move in the TNX, up 3.1 bps to 4.05% here. QQQQ is holding 39, up off its lows, with 30 and 60 min channel resistance holding at 39.10.

Linda Piazza : 9/2/2005 8:44:38 AM

I was reading this morning that the economic news this morning, that had assumed such major importance, was now less important than the impact of Katrina, especially on crude and gasoline costs.

Jonathan Levinson : 9/2/2005 8:34:46 AM

The birth-death adjustment in the employment report accounts for 132K of the 169K jobs announced. For a discussion of that adjustment and a breakdown of prior months, see this Link

Jonathan Levinson : 9/2/2005 8:32:36 AM

QQQQ -.09 at 38.83 here, TNX up .2 bps at 4.021%. Crude oil is down .625 to a session low of 68.85, ditto natgas -.055 to 11.70.

Jonathan Levinson : 9/2/2005 8:33:02 AM











Jonathan Levinson : 9/2/2005 8:26:44 AM

Ten year note yields open -.3 bps at 4.016%, 13-week bill yields -2.3 bps at 3.342%.

Jonathan Levinson : 9/2/2005 7:38:08 AM

Equities are up, ES trading 1223.25, NQ 1581.5, YM 10474 and QQQQ +.01 at 38.93. Gold is up 3.10 to 449.50, silver +.061 to 7.099, ten year notes +3/16 to 113 5/16, crude oil is down 12.5 cents to 69.35 and natgas is up .045 to 11.80.

We await the 8:30 employment report, nonfarm payrolls est. 190K, unemployment rate 5%, hour earnings +.2% and the average workweek 33.7.

Linda Piazza : 9/2/2005 7:02:27 AM

Good morning. The Nikkei posted a strong gain last night, doing its best to top the August 23 intraday high, but succeeding only in testing it, closing just below it. Other Asian markets were positive, too. European markets started out that way, but have since turned negative. As of 6:46 EST, crude was down $0.42 to $69.05, and gasoline, down $0.0641, to $2.3449. More detail about Asian and European markets follows in succeeding paragraphs.

I read a rosy headline last night that predicted that earnings were going to power the Nikkei up to 14,000. I always get a bit nervous when I read these predictions, especially with an index that's been charging straight up since the middle of May with barely even a bull-flag pullback along the way. This thing needs a breather, but it wasn't taking one early Friday when it charged right up to a high for the week, headed for a retest of the August 23 intraday high of 12,612.16. A surge of buying at the end of the day brought it right up under that figure, closing the Nikkei higher by 93.03 points or 0.74%, at 12,600.00. The close did reach a new recent closing high if not a new intraday one.

Prime Minister Koizumi vowed last night before the open that the consumption tax would not be raised while he was in office. In an interview, he said he's aiming for more than a majority in the September 11 elections, but would quit if a majority is not reached by his party. The Bank of Japan's Muto continued recent optimism about Japan's recovery, saying it has become self-sustaining and that the CPI may reach and sustain gains by the end of this financial year. A newspaper article last night speculated that Middle East funds have been flowing into Japanese equities via U.K. banks.

Exporters continued yesterday's gains after economic data presented the possibility that the U.S. Fed might slow the rate of increases in the interest rate. Auto makers were also reacting to U.S. auto sales figures for August, with Honda, Toyota, and Nissan all reporting increase in sales. Nissan did close the day slightly lower, however. Commodity-related issues rose in early trading due to the rise in commodities. In stock-specific news, Seven & I Holdings Co. made an offer to take 7-Eleven private. Merrill Lynch upgraded chip-maker Elpida Memory to a buy rating, all the way up from its previous sell rating, with the firm noting increasing demand for its products.

Most other Asian markets gained. The Taiwan Weighted gained 1.37%, and South Korea's Kospi rose 0.86%. Singapore's Straits Times rose 0.23%, and Hong Kong's Hang Seng climbed 0.52%. China's Shanghai Composite gained 0.33%.

European markets started out in the green, but have since turned negative. Corporate news had started the day off with a positive tone. In addition, the Bank of England's governor had termed his view of the U.K.'s economy as "reasonably optimistic," although acknowledging that consumer spending has slowed. News wasn't so good in Italy, though. In Italy, June's trade deficit widened. There's also a banking scandal in Italy currently being investigated.

Early in the day, European automakers were showing mixed performances, reacting both to U.S. sales figures and the impact of crude prices. Air France-KLM was an early gainer after it said fuel hedging contracts would protect it from much of the impact of rising crude prices. It raised current-year operating guidance. German reinsurer Hanover Re had more sobering news, however, saying that its 250 million euro impact due to Hurricane Katrina meant that it could no longer meet its profit target. Shares still inched higher in earliest trading. Hard Rock's owner Rank Group reported that H1 pre-tax profit fell 1.9% while operating profits climbed 40%, and it dropped in earliest trading. Cosmetics group L'Oreal also dropped after H1 profit fell 5.8%, but profit climbed 1.6% after factoring out the cost of deconsolidating Sanofi-Aventis last year. The company kept its double-digit earnings growth projection.

As of 6:46 EST, the FTSE 100 was lower by 6.90 points or 0.13%, at 5,321.60. The CAC 40 was lower by 26.74 points or 0.60%, at 4,397.41. The DAX is lower by 15.56 points or 0.32%, at 4,827.38.

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