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Tab Gilles : 9/8/2005 1:13:21 AM

Murphy Oil (MUR) Several refiners to be offline- EIA Link

Jonathan Levinson : 9/7/2005 4:21:05 PM

Headlines:

WHITE HOUSE: ADDITIONAL HURRICANE SPENDING WILL BE NEEDED

WHITE HOUSE: $51.8B REQUEST SUFFICIENT FOR NEAR-TERM AID

It will be a hurricane of new Treasury issuances as well. But today, that huge foreign central bank bid suggested that the US won't have to go it alone. Nonetheless, it's impressive that the bond market hasn't been weaker than it was this week. TNX closed +5.3 bps at 4.138% after testing the top of 4.14-4.16% confluence.

Linda Piazza : 9/7/2005 3:54:15 PM

Will it be a doji or not? I'm going to have to take off a few minutes early, so I won't be able to watch the OEX close, but it's going to be a close call, isn't it? Bulls, I know I advised taking partial profit yesterday, but if you didn't do so yesterday, you might consider doing so today. If you did take partial profit yesterday, then you have a little more leeway, but I'd keep ratcheting up those stops as the OEX has been following that 30-minute Keltner line for a long, long time now without being able to move away from it much either direction.

Jonathan Levinson : 9/7/2005 3:54:01 PM

It's do or doo-doo time for a bounce, with the wavelet as deeply oversold as it's been all day. The reason I'm harping on this subatomic timeframe is that it's actually the only intraday cycle that's tracking the price at all. It's due for a bounce here, which should be good for roughly 5-10 QQQQ cents by my guestimate.

Linda Piazza : 9/7/2005 3:40:14 PM

My prediction for tomorrow depends heavily on how the OEX closes the day today. A doji day will have me suggesting that there could be either another one or a pullback that starts a possible corrective move, perhaps back to test the 200-sma or resistance a bit higher than that. A strong finish today near the current high of the day has me in a quandary, though, as that will have the OEX butted right up against the resistance of the rising regression channel in which it's climbed off the August low. And, has anyone noticed the potential big H&S within the OEX's broadening formation? I, too, remember the sometimes-tendency of those broadening formations to then narrow into a diamond, so I'll just have to do some chart checking tonight if the OEX ends the day anywhere between the current 571.80 level and 574.

Jonathan Levinson : 9/7/2005 3:33:45 PM

Shanked out of our short by an uptick in the wavelet downphase after getting no traction. With the 30 min channel still rising, now up to 39.55, I'm not willing to risk getting caught on the wrong side of a continued rise.

Jonathan Levinson : 9/7/2005 3:31:12 PM

QQQQ - Exit Point Alert -

Out QQQQ short at 39.44, flat

Linda Piazza : 9/7/2005 3:27:42 PM

OEX bulls do not want to see the OEX pull back in the last thirty minutes near the open, recreating that doji scenario. The OEX often does honor such doji after a strong white candle with at least another doji if not an actual pullback.

Linda Piazza : 9/7/2005 3:26:29 PM

RLX finally hit a new HOD. Bearish price/RSI divergence there, too. Surprise, surprise: it doesn't matter yet.

Jonathan Levinson : 9/7/2005 3:25:22 PM

A bad tick just now to 38.44, obviously a mis-type. Quotetracker users can delete it by clicking the chart and pressing CTRL-shift-L.

Jonathan Levinson : 9/7/2005 3:23:29 PM

We're looking for a wavelet downphase due now. If the price hangs around without pullback for even a few minutes, we'll bail as it begins trending.

Jonathan Levinson : 9/7/2005 3:22:02 PM

QQQQ - Entry Point Alert -

Short QQQQ at 39.44, stop 39.52

Linda Piazza : 9/7/2005 3:14:35 PM

Unless this is slapped back quickly, could be a lot of bears covering as we approach the close. The OEX's 30-minute Keltner upside target is currently 574.36.

Linda Piazza : 9/7/2005 3:13:03 PM

Top of the OEX's newest rising regression channel at 572.90 currently. There's been bearish price/RSI divergence with each subsequent test of the highs today, but that's not stopping the OEX from moving higher. Bulls, you know what to do.

Glad we've had that Keltner evidence to tell us that the trend hasn't changed yet. Sorry that I didn't personally heed that evidence, entering a trade I thought too risky to even mention to readers. :-(

Jonathan Levinson : 9/7/2005 3:11:05 PM

QQQQ tagged the 39.45 high again, and is holding just below it. The intraday cycles here are pretty much useless, while the 30 and 60 min cycles have reversed to the upside, the 60 min trending. Channel resistance is up to 39.51 for the 60 min, 39.53 for the 30 min. Link

Linda Piazza : 9/7/2005 3:10:47 PM

And, another new high on the OEX with the advdec line climbing right back up to retest that mid-channel level's resistance. A strong thrust here could break through that resistance, turning the tenor of the day (doji, choppy) into a July 11-ish type of follow-through day. Doesn't look as if that's what should happen, but it very well could happen.

Linda Piazza : 9/7/2005 3:06:29 PM

Here's the OEX Keltner trend to which I've been referring today and yesterday: Link

Jonathan Levinson : 9/7/2005 3:01:56 PM

That little surge may have been the terminal push for the wavelet upphase- a move back below 39.36 QQQQ should confirm it. Above the session high, it will begin to trend.

Linda Piazza : 9/7/2005 2:58:12 PM

Advdec line may be coming back up for a retest of the mid-channel level at which it found resistance earlier. I mentioned a while ago that it might bounce from one of the support levels I mentioned and it did. I thought today might be choppy, but I sure wish it hadn't been.

Linda Piazza : 9/7/2005 2:56:15 PM

It's a little hard to see the latest, smallest rising regression channel with clarity on the chart I'm posting, but I wanted you to see all I'm watching. The OEX broke through the longer-term rising regression channel, fell to August's low, rose off that low in a flag-like shape, up to today's 2/3 retracement and retest of the former channel's support. This is why today is so key. I would think that there needs to be a pullback, back to the 200-sma or these 240-minute 100/130-ema's (Note how often the OEX finds S/R there?) or the 200-sma, and that's what I'd think most likely, but OEX investors didn't ask me. Link

Jonathan Levinson : 9/7/2005 2:53:00 PM

The wavelet upphase is nearly done, but QQQQ still has a shot at the session high, above which the next wave of shorts could drive the price up toward the channel tops 5 cents above. The 30 and 60 min channels have resumed their upward drift on the narrow rising range today.

Linda Piazza : 9/7/2005 2:43:51 PM

If there's an OEX bounce, bears or bulls hoping for a pullback to a new entry want to see the OEX find resistance at the 15-minute line currently at 570.85 or perhaps the one at 571.37, on 15-minute closes. OEX at 570.92 as I type.

Linda Piazza : 9/7/2005 2:40:34 PM

Here's what's maddening: The OEX's 15-minute RSI is moving rapidly toward levels indicating an oversold level, while the OEX is still far from a solid drop. Bears, be careful. No real convincing evidence just yet, although we're seeing a few things I expected to see. Remember that I also thought there might be a choppy move lower today after the retest of yesterday's high was concluded and a day that ended up a doji, which means that after a choppy decline, we could see a bounce. This is all just conjecture, but it gives me something to weigh the action against.

Jonathan Levinson : 9/7/2005 2:39:12 PM

Volume breadth is holding positive, +1.38:1 for the Nasdaq, but that will obviously change if 39.33 support lets go. The wavelet downphase is growing oversold here: Link

Linda Piazza : 9/7/2005 2:37:44 PM

That OEX 30-minute close wasn't low enough below the Keltner line to be really convincing, but the OEX so far moves lower. The advdec line is approaching a potential bounce point, though, so watch for that potential bounce. Bears want a quick thrust lower in the advdec line, and, this time, they want the OEX to move lower with it, rather than consolidating as it did earlier this morning while the advdec line moved lower.

Linda Piazza : 9/7/2005 2:31:43 PM

So far, the advdec line's resistance is holding. Bears want to see the advdec line move first below -490 and then below -1400 to get things snowballing downwards, though. OEX bears or those bulls who want a new entry want to see some downside traction if the advdec line does move to those levels. Be careful of bounce potential as the advdec line tests those levels.

Jonathan Levinson : 9/7/2005 2:30:24 PM

Stepping away for 5 minutes.

Linda Piazza : 9/7/2005 2:28:48 PM

OEX bears or just bulls wanting a new entry want to see the OEX close this 30-minute period below a Keltner line currently at 570.61, but they'd like to see it close further below it than its current 570.50 level, because it's been zigging and zagging right around that line all day.

Jonathan Levinson : 9/7/2005 2:26:06 PM

Ten year notes are getting crushed, TNX now up a whopping 2.03% or 8.4 bps to 4.169%. IRX has finally recovered its losses, the shorter-dated 13-week bill rate now flat at 3.41%. Steepening of the yield curve today, suggesting that cash is more abundant.

Linda Piazza : 9/7/2005 2:25:36 PM

RLX has a tentative, not-quite-confirmed H&S on its 15-minute RSI. These formations sometimes lead price developments, so I'm watching it. This is nothing to trade on yet, particularly to trade the OEX based on what the RLX's RSI, but it's something to watch. Potentially being confirmed as I type, so it warns bulls to be careful. That's all for now, but watch for other developments. Remember that the RLX is a sneaky, snaky thing that strikes in directions you don't expect. Particularly higher! Smile.

Linda Piazza : 9/7/2005 2:19:17 PM

While I wasn't watching, the SOX shot all the way up to the top of this morning's gap into a test of yesterday's high. Definite 15-minute price/RSI divergence as the equal high was tested, but remember that can be reversed if the RSI turns higher again. The SOX is testing a Keltner channel that often holds, at 474.63 on 15-minute closes. Need to see it back below that gap, though, before you even begin to believe that a rollover could be happening.

Linda Piazza : 9/7/2005 2:16:33 PM

RLX so far maintaining its Keltner trend, too, although it's also so far maintaining that rounding-over appearance at the top of its climb.

Linda Piazza : 9/7/2005 2:15:23 PM

Advdec line still testing possible strong resistance. That resistance holds so far.

Jonathan Levinson : 9/7/2005 2:14:52 PM

This tape is like a ping-pong match between Hal and R2D2.

Linda Piazza : 9/7/2005 2:12:00 PM

Absolutely no change in Keltner trend for the OEX as of yet. Still chugging upward within a narrow channel demarked by 15-minute closes mostly above a Keltner line currently at 571.01 and mostly below one currently at 571.83. Bears need a sharp move lower, but I think bulls need one higher, too, although bulls might have an easier time just inching it up past some critical level that causes shorts to cover.

Jonathan Levinson : 9/7/2005 2:09:04 PM

Volume breadth is at its best levels of the day, +1.38:1 for the NYSE and +1.55:1 for the Nasdaq currently.

Linda Piazza : 9/7/2005 2:08:23 PM

Another new HOD for the OEX, although minimal so far. The top of the rising regression channel off the August low is now at about 572.65.

Jonathan Levinson : 9/7/2005 2:05:25 PM

Bonds are at their session lows, TNX now up an impressive 5.7 bps to 4.142%, back to challenging the 4.14%-4.16% confluence, while IRX remains -2.3 bps at 3.387%.

Linda Piazza : 9/7/2005 2:06:35 PM

The OEX should be getting near a short-term top. If it isn't, then there could be a melt-up and more of that goofy trading that Mark just mentioned on the Futures side. My best guess today was for a punch higher--but it's taking far longer first to begin and then to complete than I anticipated--and then a pullback that might produce a choppy day that results in a doji. I thought that might start a bull flag pullback into support over a day or two before we see where it ends up. My second best guess was for a reaction like that seen July 11 after the strong gain seen on July 8, both event-related reactions. I thought that was a less-likely scenario, but it sure wasn't one I'd completely discounted this morning and I haven't now, either.

Jonathan Levinson : 9/7/2005 2:02:56 PM

New session highs for the SOX here: Link

Jonathan Levinson : 9/7/2005 2:01:41 PM

Full text of the Beige Book: Link

Jonathan Levinson : 9/7/2005 2:00:55 PM

Headline:

EPA: FLOOD WATER HAS HIGH LEVELS OF LEAD, E. COLI BACTERIA

Jonathan Levinson : 9/7/2005 2:00:37 PM

Headlines:

FED REPORT BASED ON INFORMATION BEFORE HURRICANE LANDFALL

FED REPORT SAW HIGHER ENERGY PRICES ACROSS COUNTRY

FED REPORT SAYS FIRMS CAN'T PASS ENERGY COSTS TO CONSUMERS

FED REPORT SEES SOME SOFTENING IN HOME MARKET

Jonathan Levinson : 9/7/2005 1:59:37 PM

Headline:

[AAPL] APPLE IPOD NANO IS HALF THE SIZE OF STANDARD #2 PENCIL

So is the range since yesterday at 11AM.

Linda Piazza : 9/7/2005 1:59:07 PM

Didn't think the OEX was through testing resistance. The advdec line is trying to move higher for another test of its resistance, too. Should be strong resistance, up to +630 or so now, and it's resistance that usually does hold on mid-day tests, but it sure didn't on 8/29, so it can't be assumed that it will.

Jonathan Levinson : 9/7/2005 1:57:14 PM

QQQQ's 30 min cycle downphase has stalled out very early and is turning up, while the 60 min has turned down but remains in overbought territory. If price doesn't head down from here, it will turn up and begin a bullish trending move. 30 and 60 min channel resistance have risen to 39.48, while support remains at 39.20-.25. Link

Jonathan Levinson : 9/7/2005 1:50:39 PM

Crude oil -1.25 to 64.70 here, off a low of 64.575. Natgas is down .495 at 11.16.

Linda Piazza : 9/7/2005 1:49:27 PM

I'm not sure the advdec line is through testing resistance just overhead, which might mean the OEX isn't through testing resistance, either. Still watching.

Linda Piazza : 9/7/2005 1:48:23 PM

No change in trend yet for the RLX, either. It's currently rising from its test of Keltner support, but so far, still maintains a rounding-over appearance on the 15-minute chart.

Jonathan Levinson : 9/7/2005 1:45:53 PM

Remember those Fed rate announcement days when a long narrow range like this would be followed by rapid-fire 1-inch long candles in both directions on a 3-min chart? I doubt if the Fed's beige book due in 15 minutes will pack that kind of punch, but anything would be a relief at this point.

Linda Piazza : 9/7/2005 1:45:54 PM

Almost, but no cigar. (Where did that phrase originate, anyway?) The OEX maintains its trend since yesterday, about mid-morning. It's closing 15-minute periods on or near a Keltner line currently at 570.81. OEX at 570.91 as I type. It's closing most 15-minute periods below a Keltner line currently at 571.63. Tight, tight zigs and zags back and forth. Watching for a bigger move one direction or the other.

Jonathan Levinson : 9/7/2005 1:43:03 PM

Headline:

MOSKOW: 'WON'T SPECULATE' ON UPCOMING FED MEETINGS

Jonathan Levinson : 9/7/2005 1:35:43 PM

The strong foreign central bank participation at the 5-year auction was the most bullish thing I've seen today- they took more than half of the total auctioned, and a strong increase from their usual 20-30%.

Linda Piazza : 9/7/2005 1:34:37 PM

RLX pulling back just a touch, but beginning to have a rounding-over appearance on the 15-minute chart. As I said earlier, though, this index is a sneaky, snaky kind of thing and it can strike higher again in a flash just when you thought it was going to slink lower. It's approaching 15-minute support that has been holding since yesterday, though, with that support from 457.59-457.82 on 15-minute closes, with the RLX at 458.25 as I type. On the 30-minute chart, those hoping for an OEX rollover want to see sustained RLX 30-minute closes beneath a Keltner line currently at 457.51. That means that the RLX is also sinking into possible support, so watch closely.

Jonathan Levinson : 9/7/2005 1:31:38 PM

Another steep rejection from the higher high for QQQQ, back down to 39.35. My model calls for entering position on cycle channel violations to allow for tight stops- and so far, there have been none since yesterday around the 10:45AM highs. Link

Jonathan Levinson : 9/7/2005 1:24:47 PM

GE to a session high at unchanged here, 33.94.

Jonathan Levinson : 9/7/2005 1:20:10 PM

Session low for Oct. crude at 65.05, -.90. Natgas is down .475 at 11.18.

Jane Fox : 9/7/2005 1:19:44 PM

Dateline CNN Ford Motor Co. recalling 3.8 million pickups, SUVs for a cruise control switch suspected of causing engine fires.

Linda Piazza : 9/7/2005 1:19:28 PM

The top of the rising regression channel in which the OEX currently trades is now at about 572.44. The OEX may be moving back into the former regression channel off the April low, a channel with support that was broken as the OEX declined off the August high. This so far has constituted a retest of that former channel, to see if former support now holds as resistance. Important test going on today on the OEX. That channel off the April low is a long-term one, so it will be daily closes that will count there, but this is an uncomfortable test of the smaller channel's (climbing off the August low) rising resistance going on right now. Anyone hoping for a pullback wants to see the OEX slapped back soon. Could be a dangerous place for bulls and bears both for the OEX to be parked pre-Beige Book release.

Jonathan Levinson : 9/7/2005 1:17:05 PM

Volume breadth +1.38:1 on the NYSE and +1.26:1 on the Nasdaq.

Jane Fox : 9/7/2005 1:15:27 PM

VIX to new daily lows as ES makes new daily highs.

Linda Piazza : 9/7/2005 1:15:23 PM

Jane, the QCharts symbol is advdec.

Jonathan Levinson : 9/7/2005 1:15:17 PM

A retest fo the session high for QQQQ at 39.41: Link

Linda Piazza : 9/7/2005 1:14:25 PM

New HOD for the OEX. Advdec line moving up into next resistance band. Hasn't slowed yet, though.

Jane Fox : 9/7/2005 1:17:00 PM

Linda I had a reader ask about the Qcharts symbol for the AD line. Could you please post it here for I certainly cannot remember what it is.

Linda Piazza : 9/7/2005 1:12:05 PM

Still no new HOD for the RLX. SOX still trying to stay above the gap's bottom support, but just barely doing so, so far.

Linda Piazza : 9/7/2005 1:11:11 PM

Subscriber D.C. reminds us of the Beige Book out at 2:00. I know that others have mentioned it already, but I thought I would remind readers to keep that in mind. Thanks, D.C.

Linda Piazza : 9/7/2005 1:08:51 PM

Here's the test. If this catches, then the OEX could flame upward a la July 11 after the strong July 8 candle. Don't think it should, but that's what we're sitting here trying to find out. Bears should keep it in mind as a possibility. Advdec line still moving up toward/into that next resistance band, extending from the current level up to +680-700.

Jonathan Levinson : 9/7/2005 1:04:42 PM

Headlines:

MOSKOW: LENGTH OF KATRINA RECOVERY KEY FOR ECONOMY

MOSKOW: PORT, ENERGY IMPACT MAKE KATRINA UNIQUE STORM

MOSKOW: ENERGY FUTURES SHOW KATRINA RISK SEEN AS TRANSITORY

MOSKOW: KATRINA DISRUPTION MAY BE INFLATIONARY IN SHORT RUN

FED'S MOSKOW: KATRINA'S NATIONAL ECONOMIC IMPACT UNCLEAR

Jonathan Levinson : 9/7/2005 1:02:44 PM

That drop lined up with the 5 year auction result. Foreign central banks took a whopping 7.128B of the 13B total. It sold at 3.902%, bid to cover a respectable 2.61.

Linda Piazza : 9/7/2005 1:01:22 PM

Advdec line moving up closer to next resistance.

Jonathan Levinson : 9/7/2005 1:01:18 PM

The bounce was just sold hard again, down to the 72 SMA at 39.32 QQQQ.

Linda Piazza : 9/7/2005 12:59:52 PM

Same old pattern on the OEX. No change. Most 15-minute closes above a Keltner line currently at 570.58, most below a line currently at 571.17. As you can see from those numbers, that range is narrowing to an unsustainably tight range. Upper Keltner target now at 571.67. So far, price/RSI divergence persists on the 15-minute chart, but it's still just warning bulls to protect profits. Need a 15-minute close beneath 570.58 and a 30-minute one below 570.22. Didn't happen on the just-completed periods.

Linda Piazza : 9/7/2005 12:56:46 PM

I expected this kind of day today, but that doesn't mean that I find it fun.

Jonathan Levinson : 9/7/2005 12:49:28 PM

The highs so far are NQ 1600, YM 10613, ES 1236.25 and QQQQ 39.41. The last pop added 2 cents to QQQQ and, though it was quickly sold, changed the whole tenor of today's sideways range. 30 min channel support is currently 39.25, resistance 39.45. Pending a break of either level, this chop remains directionless.

Linda Piazza : 9/7/2005 12:48:07 PM

The OEX still hugs that some old Keltner line that it's been hugging since mid-morning yesterday. The 15-minute candles are growing so small that I can't even discern them through the line they're hugging. I just see a spike higher or lower here or there. No change in trend yet.

Linda Piazza : 9/7/2005 12:46:25 PM

Still no new HOD for the RLX. It didn't even test the twice-tested 459.73 HOD, and is currently at 458.54. It's perhaps breaking through the support of what had previously looked like a possible bullish right triangle (flat top, rising support line), but that's tentative as yet, and through months of watching the RLX, I know it's a sneaky, snaky thing that can look to be turning down and then shoot right back up.

Linda Piazza : 9/7/2005 12:44:30 PM

SOX still testing this morning's gap level, currently right at the bottom of that gap. It's been trying to close the gap but finding resistance at the midpoint of that gap. Bulls want the gap closed; bears don't.

Linda Piazza : 9/7/2005 12:35:32 PM

Okay, I have a bit of a revision to earlier statements. The OEX's current rising regrssion channel, one off the August low, now has top resistance just a touch above 572. The longer-term rising regression channel off April's low, the one with the former support now being tested, probably crosses a little lower than that, but it wouldn't be surprising to see the OEX punch up to 572. I said that earlier, but now I wouldn't be surprised to see it punch just a little higher. I'm getting ahead of myself, however, because it hasn't yet topped the previous HOD.

Jonathan Levinson : 9/7/2005 12:32:53 PM

V9olume breadth is just +1.3:1 on the NYSE and +1.02:1 on the Nasdaq- but it isn't negative.

Linda Piazza : 9/7/2005 12:32:26 PM

No new HOD for the RLX. At least not yet.

Linda Piazza : 9/7/2005 12:32:00 PM

I wanted to check on how the DAX ended the day. As I mentioned earlier, it headed up this morning for a test of the long-awaited 5,000 level, achieving a high of 5,004.23 by mid-morning in its session. It tumbled off that high, all the way almost to the flat-line level, but then recovered to close higher by 19.86 points or 0.40%, at 4,988.14. It never touched 5,000 again during the afternoon, however, so that it was left with a doji or near-doji at resistance, with a small real body both upper and lower shadows.

Jonathan Levinson : 9/7/2005 12:28:17 PM

The SOX ramped up strongly after an initial dip this AM and holds just below yesterday's closing high. QQQQ bulls need to see a break above 474.50 for starters. By comparison, QQQQ has been drifting sideways for the entire session, just below yesterday's highs.

Linda Piazza : 9/7/2005 12:28:13 PM

Advdec line attempting to move higher again. It will see resistance near +78 to 620. At -267 as I type.

Jane Fox : 9/7/2005 12:28:02 PM

Here is a chart of ES and the VIX. If ES should break its red trendline then watch to see the VIX breaks its respective trendline for confirmation. Link

Jane Fox : 9/7/2005 12:24:34 PM

Dateline WSJ Donald Nicolaisen, the chief accountant of the Securities and Exchange Commission, will step down at the end of October, The Wall Street Journal has learned.

Mr. Nicolaisen, a former senior partner at Pricewaterhouse Coopers, joined the SEC in August 2003 when he was appointed by former SEC Chairman William Donaldson.

Jonathan Levinson : 9/7/2005 12:22:37 PM

Here it is:

Katrina victims to get $2K debit cards - Miami Herald - 7 minutes ago

Jonathan Levinson : 9/7/2005 12:22:26 PM

Drudge is reporting that the federal government will distribute cash cards loaded with $2,000 each to Katrina victims. Looking for mainstream confirmation.

Linda Piazza : 9/7/2005 12:21:56 PM

No new HOD for the RLX yet. It's at 459.00, below the two tests of 459.73.

Jane Fox : 9/7/2005 12:21:16 PM

Linda when is your 3-year anniversary?

Linda Piazza : 9/7/2005 12:17:20 PM

Oh, sorry, Jonathan that I either missed your anniversary with OIN or else congratulated you then and have since forgotten. Believe me, that's possible lately.

Linda Piazza : 9/7/2005 12:16:25 PM

While the OEX is perhaps relieving some overbought pressure by trading sideways, as Keene mentioned earlier with regard to the futures, my trusted advdec line observations show it relieving "oversold" pressure by doing about the same, so there's still mixed evidence for me today. All I can say is that the OEX is testing a do-or-die level today, and that I had expected the slightly higher high today. I also thought a pullback might be begun, either today or tomorrow, producing a possible doji day today, and that it might be only a pullback. We just have to see. All bets are off if the RLX breaks out and carries the OEX much higher than a sustained level above 572, however. That would make the Keltner breakout on the 30-minute chart look more valid--unless such a move were quickly reversed--and would make that 573.87 upside target look more realistic. It would bring the OEX back into the rising regression channel off the April low, perhaps, and would make it look as if, on this retest, the former support was not holding as resistance.

Jonathan Levinson : 9/7/2005 12:15:51 PM

Headline:

MISS. GOVERNOR: HURRICANE DEVASTATION IS "UNIMAGINABLE"

Jonathan Levinson : 9/7/2005 12:15:44 PM

Sorry Linda- actually, it was 3 years as of June. Time really flies when you're having fun.

Linda Piazza : 9/7/2005 12:11:57 PM

And here's the RLX, nearly at the twice-tested high of the day again. It's tested 459.73 twice, and is now at 459.19, with the 15-minute formation looking a bit like a bullish right triangle (flat top, ascending bottom support). OEX bears don't want the RLX to keep pushing higher.

Jonathan Levinson : 9/7/2005 12:08:12 PM

So far the wavelet bounce is even weaker than the downphase that ended at 11:30. That's bearish, but like yesterday, the indicators are only flatlining- it would be a lot easier to fade a channel touch, but price is holding almost perfectly centered. Link

Linda Piazza : 9/7/2005 12:06:49 PM

Hey, Jonathan, aren't you coming up on your three-year anniversary with OIN soon?

Linda Piazza : 9/7/2005 12:05:03 PM

SOX testing this morning's gap again.

Linda Piazza : 9/7/2005 11:59:10 AM

RLX heading up for another test of the day's high, and the OEX is trying to head up with it. Basically, though, the OEX continues to cling to the Keltner line currently at 570.28 on 15-minute closes, with most 15-minute closes above that and below the line currently at 571.04. OEX now at 570.56. The support line still heads up, while there's a slight flattening of the resistance line. Don't read too much into that, though, as that particular line tends to be fairly responsible to little squiggles up and down. So, the trend put in place after yesterday's first big whoosh higher hasn't changed yet.

Linda Piazza : 9/7/2005 11:46:54 AM

Advdec line attempting to move higher again, but testing possible resistance. If it moves to a new HOD, watch +293 to +620 for next resistance. At -333 as I type, on the QCharts version.

Jonathan Levinson : 9/7/2005 11:45:43 AM

The wavelet cycle has now turned up for QQQQ from a low of 39.30. This higher low is bullish, but now it needs to carry through with a break of the 39.41 high. I find the lack of downside today very impressive, particularly given the 4B repo drain and the toppy 30/60 min cycles as of this morning. Link

Linda Piazza : 9/7/2005 11:39:19 AM

Well, we do have the doji day I thought might be one possibility for the OEX, but it's not quite meeting my expectations yet. I'd thought it possible that we could see a deeper pullback, but perhaps one that's choppy and difficult to trade. Gotta see a pullback in the RLX first, though, and it's chugging away, maintaining the Keltner support that keeps it aimed higher. At least so far. I'm watching the BIX, too, pulling back within its flag off the August low, an August low that tested the support of its broadening formation. It hasn't fallen out of that rising regression channel, however.

Jonathan Levinson : 9/7/2005 11:30:03 AM

QQQQ's wavelet cycle is just approaching oversold territory here. Bears need a break below 39.27 to start it trending.

Linda Piazza : 9/7/2005 11:28:23 AM

I agree with Keene's assessment (Futures side) that this is a tricky spot. As I said earlier, the OEX is approaching do-or-die levels for both bulls and bears, and I expect that they might have to fight it out a bit. The OEX should be approaching strong resistance, but the advdec line is not positioned as I would want it to be to get a good assessment of whether it will roll over or not. Kind of mixed evidence.

Jonathan Levinson : 9/7/2005 11:24:55 AM

QQQQ volume has yet to reach 1/3 of yesterday's 78.1M shares, and volume breadth is back to -1.14:1 for the Nasdaq. Ten year notes continue to march lower, while QQQQ holds at unchanged, 39.34.

Linda Piazza : 9/7/2005 11:21:05 AM

Depending on how you draw the OEX's former rising regression channel off the OEX's April low, the OEX either hit it or almost did. Do or die time for OEX bulls and bears both.

Linda Piazza : 9/7/2005 11:19:58 AM

The RLX also punched higher, hitting and even piercing its 15-minute Keltner target. Tentative bearish price/RSI divergence there as the RLX pierced that target channel line a second time. Tentative signs that the RLX gains should be limited from here, but far from any confirmation. The RLX could just continue to climb that target line, finding support on minimal pullbacks at a line currently at 457.46 or one at 456.54. RLX at 458.11 as I type. As I've pointed out in the past, OEX bears have to see the RLX weaken before they can believe too strongly in any OEX pullback. So, OEX bulls want to continue to see the RLX perform well.

Jonathan Levinson : 9/7/2005 11:19:22 AM

A wavelet downphase has kicked off for QQQQ within the young short cycle upphase. If it bottoms above 39.20, then it will only confirm the short cycle downphase. 30/60 min channel resistance are holding 39.46, and continue to point sideways. Link

Linda Piazza : 9/7/2005 11:16:42 AM

Looks as if a lot of that bounce was in SOX stocks, bringing the SOX up to test the gap from this morning. The SOX did pierce that gap, but found resistance at the mid-gap level and now is back below the gap. Still watching.

Linda Piazza : 9/7/2005 11:15:07 AM

Tentative OEX bearish price/RSI divergence on the five-minute chart. Needs to be more than tentative and needs to be seen on the 15-minute chart, too, or else it's just a warning--unneeded so far--to bulls to continue to protect their profits. There is tentative divergence on the 15-minute chart, but it's really tentative. Bulls want the OEX to continue printing 30-minute candles above the Keltner line currently at 569.81, and bears want closes below that.

Linda Piazza : 9/7/2005 11:12:24 AM

Advdec line facing first important resistance now, with more up to +230 to +670. Advdec line now at -247 according to QCharts version.

Jonathan Levinson : 9/7/2005 11:10:57 AM

The coupon pass has just been announced, 1.201B to be delivered tomorrow. This is a permanent addition to liquidity.

Linda Piazza : 9/7/2005 11:08:26 AM

This is a last-ditch point for the OEX bears, I think. If the OEX gets much above 572, then gains could accelerate and the OEX could print a bullish candle today a la that of 7/11 after the 7/08 tall white candle. So far, this is all within the potential doji-day scenario that I outlined yesterday, with the bounce just coming a little later this morning than I expected.

Jonathan Levinson : 9/7/2005 11:08:22 AM

Natgas is down 4.8% at 11.10. Crude oil -.35 at 65.60.

Jonathan Levinson : 9/7/2005 11:07:48 AM

Headlines:

U.S. ENERGY DEPT. SEES ENERGY MARKET RECOVERED BY YEAR-END

ENERGY DEPT. SEES UNCERTAIN OUTLOOK FOR ENERGY PRICES

Linda Piazza : 9/7/2005 11:03:59 AM

OEX slightly topping yesterday's high now. Moving up toward 571-572 potential resistance, although the 30-minute chart suggests that 573.83 could be hit. Don't know that I believe that target just yet. Watching to see what happens here as the OEX is now approaching the bottom of that former ascending triangle off the April low.

Jonathan Levinson : 9/7/2005 11:03:28 AM

Volume breath is up to +1.2:1 on the NYSE and +1.15:1 on the Nasdaq as the indices make new highs. This is considerably weaker volume breadth than yesterday's +4 readings, but price remains firm.

Linda Piazza : 9/7/2005 10:56:36 AM

Oh, by the way, I think we can consider that potential OEX H&S invalidated.

Linda Piazza : 9/7/2005 10:56:07 AM

Here comes the OEX test of yesterday's high, a test I expected to happen and said might, beginning late yesterday, although I certainly expected it earlier this morning. Bears want bearish price/RSI divergence on this test, and could perhaps see the OEX rise to 571-572, where it should find resistance, if not before. They also want some confirmation that the bearish price/RSI divergence, if it should occur, means something and not just that "warning to bulls to protect profits" that it's meant so far.

Linda Piazza : 9/7/2005 10:53:17 AM

And there the OEX is, right back at that same old Keltner channel line that clung to most of yesterday. That's at 569.87 on 15-minute closes. There was a 30-minute close at, but not below the important Keltner line currently at 569.50 on 30-minute closes. This is the line that I mentioned in my first OEX-related post this morning, saying that at the least, bears needed a 30-minute close beneath that line.

Jonathan Levinson : 9/7/2005 10:52:08 AM

Session low for ten year notes, -13/64 at 112 43/64. TNX is up 4 bps at 4.125%, IRX down 3.8 bps at 3.372%.

Linda Piazza : 9/7/2005 10:51:19 AM

First important resistance to watch on the advdec line has now descended to -220 to -80 (QCharts). Now at -717 and testing nearest but perhaps not as strong resistance.

Linda Piazza : 9/7/2005 10:49:25 AM

The OEX has a roughly formed potential H&S with an ascending neckline, with that formation sitting at the top of the climb off yesterday's low. Head at yesterday's high, neckline currently at about 569.30. Right shoulder near 570.40. Bulls and bears alike can watch to see if it's confirmed or invalidating to guage bearish/bullish strength.

Jonathan Levinson : 9/7/2005 10:47:36 AM

The Fed has just announced a coupon pass, no amount known yet, but that probably gave the markets the lift a few minutes ago. I will post the quantum when it's announced.

Jonathan Levinson : 9/7/2005 10:45:21 AM

OTTAWA-The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 2 3/4 per cent. The operating band for the overnight rate is correspondingly increased, and the Bank Rate is now 3 per cent.

Link

CAD futures +.37% at .8443.

Jonathan Levinson : 9/7/2005 10:42:34 AM

Session high for QQQQ at 39.35 here. 30 and 60 min channel resistance hold at 39.45-.46.

Linda Piazza : 9/7/2005 10:42:05 AM

I guess this was why I felt so out-of-tune this morning, because I expected this OEX bounce, but expected it earlier.

Linda Piazza : 9/7/2005 10:38:15 AM

Advdec line trying to steady; OEX trying to bounce. Possibility of a move up to 571-572 exists. Bears want to see bearish price/RSI divergence.

Jonathan Levinson : 9/7/2005 10:35:44 AM

Here's the 2 1/2 day 3-min chart of QQQQ, with price holding within the 39.20-.40 blender: Link

Jonathan Levinson : 9/7/2005 10:35:00 AM

Headlines:

IEA: COUNTRIES HAVE COMMITTED 2.1 MILLION BOEPD

IEA: CONTRIBUTION ALSO 3% INCREASED INDIGENOUS PRODUCTION

IEA: CONTRIBUTION 94% STOCKDRAW, 3% DEMAND RESTRAINT

Linda Piazza : 9/7/2005 10:30:57 AM

SOX still testing that long-term rising regression channel's support. No breakdown. No bounce.

Linda Piazza : 9/7/2005 10:28:00 AM

OEX coming right up to retest that 15-minute Keltner line that it had been clinging to through most of yesterday, at 569.95 on 15-minute closes. Bears want another 15-minute close beneath it and would like to have a 30-minute one beneath 569.37. OEX at 569.58 as I type, with a minute or two left.

Linda Piazza : 9/7/2005 10:24:17 AM

Advdec still trying to steady.

Jonathan Levinson : 9/7/2005 10:24:01 AM

Ten year note yields holding their 3.8 bp gain at 4.123%, IRX -1.9 bps at 3.391%. Crude oil is up .25 at 66.20, natgas down 3.05% or .355 at 11.32.

Linda Piazza : 9/7/2005 10:20:53 AM

SOX below 470, about to test the support of its rising regression channel off the April low. That support is at about 468, but I'd use the 240-minute 100/130-ema's as a possible benchmark for gauging whether the SOX has really broken down out of that channel. They're at 459.83 and 455.34, respectively. The SOX is at 469.13 as I type, so this is an important test going on right now.

Jonathan Levinson : 9/7/2005 10:17:09 AM

Bad news for bulls here as the wavelet upphase stalls just out of oversold territory, at least 20 minutes early. That's a "crash" in the very shortest timeframe. 39.20 QQQQ remains key support, just being approached now.

Linda Piazza : 9/7/2005 10:16:47 AM

Thanks, Jonathan and Marc, for the update on the inventories number. I should have remembered Monday's holiday and how that often throws the number off a day.

Linda Piazza : 9/7/2005 10:15:32 AM

If the advdec line continues dropping, watch -2100 to -2400 for next potential support. Advdec line at -1331 as I type.

Jonathan Levinson : 9/7/2005 10:14:52 AM

Yes, Linda- tomorrow. Marc pointed it out to me earlier.

Linda Piazza : 9/7/2005 10:13:39 AM

Advdec line is not bouncing, and neither is the OEX. Watch 569-569.40 for next potential support. Bears want to see a 30-minute close beneath 569.40.

Is the inventories number tomorrow instead of today?

Jonathan Levinson : 9/7/2005 10:09:27 AM

Quite right, Marc. Thanks.

Jonathan Levinson : 9/7/2005 10:07:19 AM

We'll look to re-enter at the top of the wavelet bounce. My expectation is that it will be within the morning range, but I'm not willing to risk a wide stop ahead of the petroleum report.

Jonathan Levinson : 9/7/2005 10:06:00 AM

QQQQ - Exit Point Alert -

Out QQQQ short at 39.24, flat. Wavelet bounce starting here after a minimal 2 cent decline.

Linda Piazza : 9/7/2005 10:04:48 AM

I guess we're going to be on hold for a while, perhaps until the inventories number is released?

Linda Piazza : 9/7/2005 10:03:33 AM

You know, in that scenario I outlined late yesterday and early this morning, that bounce to retest the previous day's high usually occurs fairly early. The pattern is diverging a little, then, but there's no convincing evidence yet that the bounce potential has been reversed and the OEX is attempting a slight bounce as I type. I'm still watching the advdec line to see if it's going to be able to maintain its still ongoing attempt to stabilize and then bounce, or if it's just going to keel over, and that may be our best clue.

Linda Piazza : 9/7/2005 10:01:06 AM

OEX Keltner outlook: The OEX currently tests the same 15-minute Keltner line that it clung to most of yesterday, after the first strong rise. That Keltner line is currently at 569.86, and is still rising. The OEX was closing 15-minute candles near that line, sometimes just over and sometimes just under, most of yesterday after the first whoosh higher. So, nothing has really changed yet. If the OEX starts breaking down beneath that line, we could probably expect a retest, but support thins below it, with possible support currently at 568.91, 567.77, and then stronger at about 565.70. Those hoping for a pullback would really like to see a 30-minute close beneath a Keltner line currently at 569.40, which didn't happen in the last 30-minute period.

Jonathan Levinson : 9/7/2005 9:58:12 AM

Volume breadth is -1.07:1 on the NYSE, -1.58:1 on the Nasdaq.

Linda Piazza : 9/7/2005 9:57:34 AM

Advdec line threatening to break down now, with -2100 the next target if it does so. Still a possibility of an OEX bounce to retest yesterday's high, so bears should be prepared for that possibility if the advdec line manages to steady and bounce, but there's the possibility of a rollover beginning now. There hasn't been 15-minute OEX price/RSI divergence yet, and I certainly would have liked to have seen that before I asserted that the bounce potential was gone, especially with the advdec line testing a rising trendline that has held for more than a week. Not sure I have the best grip on the market right now, so watch the posts of the other writers too for insight.

Jonathan Levinson : 9/7/2005 9:53:58 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.24 stop 39.42

Jonathan Levinson : 9/7/2005 9:53:22 AM

The Fed announces a 10.5B overnight repo for a net 4B drain.

Linda Piazza : 9/7/2005 9:52:57 AM

Advdec line attempting to steady/bounce. If it does so, this could follow the possible scenario that I outlined yesterday, with the advdec line's bounce bringing the OEX up into a retest of yesterday's high, with a possible higher high, perhaps up to 571-572. Then, I'd watch for bearish OEX price/RSI divergence. Bulls don't want to see it; bears do. Bulls, if the advdec line does move up, I'd watch carefully in the +168-681 region, with particular attention in the narrower +177-300 zone, for potential advdec resistance and another move down in the advdec line, carrying the OEX lower this time, into a pullback. This is all just a potential scenario, as the advdec line has not yet completely steadied and still might break down.

In fact, it's moving lower again as I type.

Jonathan Levinson : 9/7/2005 9:51:18 AM

The rise in labor costs combined with this year's rally in energies shows how real the inflationary threat actually is. Greenspan specifically said that the Fed would tighten to avoid a "discouraging stagflation." Today's news adds resonance to his speeches at Jackson Hole.

Jonathan Levinson : 9/7/2005 9:48:45 AM

I'm most curious to see what the Fed is going to do with its massive 14.5B in expiring repos this morning. We saw that the large net add yesterday benefitted equities to the exclusion of all else, and the bill for today is looking quite steep. Currently, TNX is up 2.9 bps at 4.114%, and IRX is down 1.3 bps at 3.397%.

Jonathan Levinson : 9/7/2005 9:47:17 AM

Volume breadth is -1.27:1 on the Nasdaq and +1.02:1 on the NYSE.

Linda Piazza : 9/7/2005 9:46:41 AM

Advdec line testing support. I would think that there would be at least a bounce attempt here, bringing indices up with it, but will have to wait and see.

Linda Piazza : 9/7/2005 9:44:25 AM

Not sure what to think. I believe that 571-572 might be strong resistance, and until the OEX has breached that, all this climb has just been a climb up to retest broken former support, from that rising regression channel off the April low. The OEX could break through that resistance, but that's what we're waiting to see. The advdec line is on the verge of either finding support or breaking down, but if it finds even temporary support, it might result in an OEX retest of yesterday's high and even a move up to 571-572. That's when bears would want to see bearish price/MACD divergence. So, there are a couple of possibilities right here, with the advdec line currently at -907 and testing a rising trendline in place since 8/26.

Jonathan Levinson : 9/7/2005 9:40:42 AM

QQQQ is holding at its premarket levels, again an impressive display in the wake of what I take to be ugly 8:30AM data. 30 and 60 min channel resistance are up to 39.45, and I will be scoping for a short entry if we see that level.

Linda Piazza : 9/7/2005 9:38:20 AM

Careful, bears. Advdec line already approaching levels that indicate that it might be approaching extreme levels to the downside (unless there's a Keltner breakdown) and the OEX hasn't budged. I'm watching -1000 on the advdec line (QCharts version) for breakdown/support status, with the advdec line currently at -718.

Linda Piazza : 9/7/2005 9:32:02 AM

As I thought, advdec line gapped lower, with the OEX opening a little lower. This is part of a possible scenario I outlined late yesterday and earlier this morning. Now, bears should remember the possibility that the advdec line could climb from here, carrying the OEX into a retest of yesterday's high. It hasn't done this so far, but instead heads down from the opening advdec level, but watch for potential support if the advdec line should drop to about -1000, with the advdec line now at -545.

Jonathan Levinson : 9/7/2005 8:57:10 AM

The 30 and 60 min cycle oscillators were so toppy at the close that this morning's 6 cent drop has kicked off a sell signal on the 30 min indicators. The 60 min has yet to confirm. 39.20 QQQQ remains the maginot line, while to the upside, bulls need a break of 39.40-.45 to suggest further continuation. More likely would be the anticipated intraday pullback for a few hours, then bottoming at a higher low to confirm the daily cycle upphase, and a renewed attempt on yesterday's highs.

Linda Piazza : 9/7/2005 8:53:24 AM

Yesterday, the OEX closed the day at its 15-minute Keltner target after having zoomed past all sorts of supposed resistance. It zoomed right up to a test of the former rising regression channel off the April low, with that resistance meeting up with that of the OEX's current rising regression channel. So, does this resistance matter after all that other resistance didn't?

It may. I see a possibility for a doji day today as bulls and bears battle it out, perhaps with another soon-reversed spike higher to test that resistance again. There's the possibility of another strong day, a la that of July 11 after the July 8 strong gain, however, so bears need to watch for signs of a rollover before they assume there will be one. At the least, I think bears would need to see a 30-minute close beneath a Keltner line currently at 569.14 before assuming that a pullback was underway. For now, as long as the OEX is closing above the 200-sma and 72-ema again, we have to suppose that those will be support on any pullback. I, for one, wouldn't be surprised to see a bull flag pullback to retest the 200-sma and other former resistance in the 566-568 zone, but it could be a choppy and difficult-to-trade pullback, and it might be preceded by that spike higher, perhaps even up to 572. There's often a pattern related to the point at which the advdec line closed. With such closes, there's often a drop in the advdec value at the open, then a climb back to a channel boundary I watch, often bringing equities up to retest or sometimes even exceed the previous day's high. That's the test that usually produces bearish price/RSI divergence and usually results in a decline, if only in the nature of a bull-flag pullback. There's no guarantee that will happen, but it's a pattern that sometimes occurs. Of course, the advdec line doesn't always behave this way and sometimes just rolls over from the resistance being tested, so a straight-down move, possibly toward a retest of the 566-568 S/R level could happen immediately. Watch the advdec line this morning. Bears don't want to see an immediate and sustained move higher in the advdec line after the open. Bears do want a profit-protecting plan in place for a test of the 566-568 level, if that immediate rollover should occur.

Other possibilities exist, of course. As long as the OEX maintains 30-minute closes above that Keltner line at 569.14, it maintains a potential upside target of 573.64. So, bears want an opening below that Keltner line and a downturn through to test the 200-sma or even 564.50-565.75 support. Bulls want to see that Keltner line maintained.

Jonathan Levinson : 9/7/2005 8:51:56 AM

Headlines:

MORGAN STANLEY CUTS '05 U.S. GDP GROWTH FORECAST TO 3.5%

MORGAN STANLEY CUTS '06 U.S. GDP GROWTH FORECAST TO 3.3%

MORGAN STANLEY CUTS '06 WORLD GDP GROWTH FORECAST TO 3.7%

Jonathan Levinson : 9/7/2005 8:31:59 AM

Lower productivity, higher labor costs. Added to higher commodity costs as well, that sounds like potential stagflation to me. QQQQ is down another 3 cents on the news to 39.27, bonds slightly lower as well.

Jonathan Levinson : 9/7/2005 8:30:28 AM

Headlines:

U.S. 2Q PRODUCTIVITY REVISED DOWN TO 1.8% VS. 2.1% EXPECTED

U.S. 2Q UNIT LABOR COSTS REVISED UP TO 2.5% VS 1.5% EXPECTED

U.S. 2Q NONFINANCIAL PRODUCTIVITY RISES 6.8%

U.S. 2Q MANUFACTURING PRODUCTIVITY RISES 3.6%

Jonathan Levinson : 9/7/2005 8:22:53 AM

10 year note yields open up 1.2 bps at 4.097%, while 13-week bill yields are down .8 bps at 3.402%. QQQQ is down .04 at 39.30 as we await the 8:30 data.

Jonathan Levinson : 9/7/2005 7:59:08 AM

Just received this video Link , which presents the obvious problem with easing by central banks.

Jonathan Levinson : 9/7/2005 7:53:23 AM

The Organisation for Economic Co-operation and Development on Tuesday urged the world's central banks to adopt a relaxed attitude to interest rates in the wake of surging oil prices and Hurricane Katrina.

Describing the $20-a-barrel rise in oil prices since May as a big economic shock, Jean-Philippe Cotis, the OECD's chief economist, said the ability of economies to shake off its effects would depend on their underlying momentum. The US and Japan were better placed than the eurozone or the UK, he said.

"The Federal Reserve should continue to move back towards neutrality, although possibly at a more measured pace thanhitherto," Mr Cotis said.

Link

Tab Gilles : 9/7/2005 7:46:39 AM

ISHARES LEHMAN 20 YR (TLT) Link

Eaton Vance Limited Duration(EVV) Link Link

Jonathan Levinson : 9/7/2005 7:40:11 AM

Equities are lower, ES trading 1233.25, NQ 1596, YM 10585 and QQQQ -.027 at 39.313. Gold is down 60 cents to 447.90, silver -.017 to 7.085, ten year notes down 3/32 to 112 25/32, crude oil -.325 to 65.625 and natgas +.01 to 11.665.

We await the 9:30 release of Q2 productivity, est. 2.1%, and at 2PM, the Fed's Beige Book.

Tab Gilles : 9/7/2005 7:29:50 AM

$Nasdaq Summation Index ($NASI) After yesterday's close this indicator reversed and gave a BUY signal. On 8/8 10:17 aM it gave a sell signal. I've been using the Profunds UOPIX & USPIX leveraging the $NDX, selling USPIX today and entering the UOPIX fund. In fairness I did state that those short the $NDX would have been prudent to have taken some profits back on 8/29 2:36 PM based on the 1550 support and other techincals. (see past post). And on 8/29 5:15 PM I restated that I would continue to remain short waiting for the $NASI signal.

$NASI Weekly Link

$NDX Note 3 setting on MACD. Link

$NASI daily Link

$NASI/USPIX/UOPIX Link

Linda Piazza : 9/7/2005 7:06:35 AM

Good morning. The Nikkei clawed its way to a modestly positive close after spending most of the day tumbling from its early high. All other Asian markets closed in the green. Most European markets are currently in the green, although some have pulled back from their highs of the day. Our futures trade near the flat-line level, a little above and a little below, depending on the moment they're observed. As of 6:57 EST, gold was lower by $0.90, and crude, lower by $0.21 to $65.79. More detail about Asian and European markets follows in succeeding paragraphs.

Last night, the Nikkei gapped higher again, but immediately began falling. It tumbled into negative territory by mid-afternoon, but then managed to claw its way back into positive territory by the close. It closed higher by 8.16 points or 0.06%, at 12,607.59. That close was about 75 points off the high of the day.

The Bank of Japan has begun a two-day meeting. Exporters were again gaining at the open, an expected result of the pullback in crude costs. Sony was to end the day 2.1% higher after it announced plans to sell shares of online brokerage Monex Beans. Issues related to domestic demand also increased, however, at least partially due to the OECD upgrade in expectations for the Japanese economy, a report I mentioned yesterday morning. Last night was Japan's first opportunity to react. Energy stocks tended to move lower in early trading.

One figure--that denoting the number of shares sold on margin--sounded an alarm, with that number being the highest since "at least 1990," and perhaps since the Nikkei's record 1989 high, according to a Bloomberg article. The Nikkei tumbled off that 1989 high all the way into 2003's low, and that comparison was credited by one article with capping early gains. Also perhaps influencing early trading was the recovery from Typhoon Nabi, which made landfall yesterday in southern Japan. According to one source, many were without electricity or evacuated from their homes, and at least 16 were missing. Late in the day, perhaps one reason for the late-day bounce although I can't always be sure of the exact time stamp, Japan's July Leading Index was released, with that number at 50 and the Coincident Index at 22.2, both reportedly within expectations.

All other Asian markets closed in the green. The Taiwan Weighted gained only 0.02%, but South Korea's Kospi rose 1.81%. Singapore's Straits Times climbed 0.33%, and Hong Kong's Hang Seng rose 0.42%. China's Shanghai Composite gained 1.79%.

European markets currently turn in positive performances, influenced at least in part by lower crude and yesterday's strong performance in U.S. markets. There's been some excitement in Germany as the DAX temporarily topped 5,000 by a few points this morning, although currently pulling back from that level. Germany's July Industrial Production rose 1.2% month over month and 3.2% year over year, more than had been forecast, although the recent Factory Orders number hinted that the Industrial Production forecast might be too low. Consumer goods production, intermediate output, and capital good production all rose. A political poll showed that Chancellor Schroeder and his party continue to chip away at the earlier lead held by his competitor's coalition. Company news in Germany includes speculation that Deutsche Post will make an offer for the U.K.'s logistics group Exel.

Other company-specific news in Europe included strong gains by defense contractor BAE Systems and French bank Credit Agricole after their earnings releases. Deutsche Bank contributed to the enthusiasm by upgrading Swiss banks UBS and Credit Suisse Group to buy ratings, both up from former hold ratings. Both gained. Dutch supermarket and catering group Ahold tumbled after announcing that it's going to be tough to reach food retail operating targets for 2006. Dutch brewer Heineken fell after its earnings report. The company mentioned currency issues and restructuring charges as contributing to its 8.2% drop in first-half net profit. Endessa fended off Gas natural's takeover bid, with Endessa gaining and Gas Natural easing afterwards.

As of 6:50 EST, the FTSE 100 was higher by 5.60 points or 0.10%, to 5,364.80. The CAC 40 was higher by 13.54 points or 0.30%, to 4,486.09. The DAX was higher by 14.48 points or 0.29%, to 4,982.76. The DAX was near its low of the day, down from its 5,004.23 high, and German bulls don't want to see the DAX tumble too far just after reaching that long-sought-after 5,000 level.

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