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

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Jonathan Levinson : 9/9/2005 4:07:17 PM

WASHINGTON (MarketWatch) -- The U.S. Treasury Department is broadening a tax credit program in order to benefit victims of Hurricane Katrina. More businesses and individuals will now be considered for a total of $3.5 billion in credits if they commit to investing through a Treasury program in counties hit by the storm, Treasury Secretary John Snow said Friday. The deadlines for the nationwide program will also be extended on a case-by-case basis, Snow said in remarks prepared for a speech in Mobile, Ala.

Jonathan Levinson : 9/9/2005 4:01:15 PM

Nothing yet on the IRS' news page: Link

Jonathan Levinson : 9/9/2005 3:57:54 PM

Headline:

TREASURY EXPANDS TAX CREDIT PROGRAM AFTER KATRINA

Searching for details.

Jonathan Levinson : 9/9/2005 3:52:57 PM

First time I've smiled all day, Marc. Thanks!

Jonathan Levinson : 9/9/2005 3:51:55 PM

Neither did he :) Link

Jonathan Levinson : 9/9/2005 3:24:51 PM

Volume breadth currently +3.4:1 on the NYSE and +1.8;1 on the Nasdaq.

Jonathan Levinson : 9/9/2005 3:16:20 PM

With possibility of 9/11 jitters, there's the potential for an end-of-weekend relief rally, such as we've seen frequently in recent years. I'm surprised that the indices are as strong as they are, but the 4-year anniversary falling on the weekend adds an extra factor to consider.

Jonathan Levinson : 9/9/2005 3:10:15 PM

Headlines:

OCT CRUDE LOSES $3.49, OR 5.2%, FOR THE WEEK

OCT CRUDE CLOSES AT $64.08/BRL, DOWN 41C

OCT UNLEADED GAS DOWN 10.3% FOR THE WEEK

OCT UNLEADED GAS DROPS 3.7% TO CLOSE AT $1.9597/GAL

Jonathan Levinson : 9/9/2005 3:08:17 PM

Most of the QQQQ volume bars for the past hour have been red, and I've got little doubt that we're in a distribution zone above 39.57. But I'm not going to fight city hall, particularly in light volume and with the short cycle indicators just beginning to turn up.

Jonathan Levinson : 9/9/2005 3:04:10 PM

Crude oil finished -.45 at 64.05.

Jonathan Levinson : 9/9/2005 3:03:46 PM

Headline:

OCT NATGAS FALLS 42.8C, OR 3.7%, FOR THE WEEK

OCT NATGAS CLOSES AT $11.263/MLN BTUS, DOWN 8.4C

Jonathan Levinson : 9/9/2005 2:59:56 PM

I think that this is a respectable level from which to enter to try to catch a lower high above the neckline for QQQQ. I'm not going to do it because the short cycle downphase is stalling, and price is way below the upper 30 and 60 min channel tops at 39.74. If you can tolerate a 15-20 cent stop and are looking for a bearish entry, then this is the place. I'm hoping for a terminal push higher to short into.

Jonathan Levinson : 9/9/2005 2:50:32 PM

If 39.65 caps this QQQQ bounce, then a rough head and shoulders top will be in play. There's a small bullish divergence in the wavelet oscillator, and the bounce from the neckline has to be respected for now. Link

Tab Gilles : 9/9/2005 2:43:20 PM

Gasoline (inflation adjusted) and $SPX/$TRAN Link Link

Jonathan Levinson : 9/9/2005 2:40:39 PM

Another sell program- it wasn't a glitch. We have a head and shoulders neckline in play right here at 39.57. Link

Jonathan Levinson : 9/9/2005 2:32:04 PM

A big surge of volume on the offer just now- I don't know if it's a glitch in my feed: Link

Jonathan Levinson : 9/9/2005 2:24:06 PM

The little wavelet cycle has been bouncing the Qs all day. Link

Jonathan Levinson : 9/9/2005 2:22:32 PM

The market feels very heavy here- but the oversold wavelet cycle is keeping out.

Tab Gilles : 9/9/2005 2:09:14 PM

DELL Link Link

Jonathan Levinson : 9/9/2005 2:05:30 PM

I agree with Marc. I believe that the daily cycle is what's at work here, causing the 30 and 60 min cycles to bottom at higher lows, and early. However, there's still room to run, despite the numerous bearish divergences in the intraday indicators. I think that this is a good area for shorts that can permit a wide stop- for narrower stops, the daily cycle top, which I expect to see next week, should offer a spike high on which to enter.

Jonathan Levinson : 9/9/2005 1:49:28 PM

QQQQ's 30 min channel top has risen to 39.74, which is 2 cents above R2. The short cycle is no longer overbought either: Link

Jane Fox : 9/9/2005 1:43:27 PM

Dateline WSJ Federal Emergency Management Agency Director Michael Brown is being removed from his role managing Hurricane Katrina relief efforts, the Associated Press and CNN reported.

Mr. Brown is being sent back to Washington from Baton Rouge, where he was the primary official overseeing the federal government's response to the disaster, according to two federal officials who declined to be identified before the announcement.

Mr. Brown will be replaced by Coast Guard Vice Adm. Thad W. Allen, who was overseeing New Orleans relief and rescue efforts.

All I can say is he should have never been put in this position to begin with. He was a political appointee who once served as a commissioner for the International Arabian Horse Association and had little experience handling disaster relief.

Jane Fox : 9/9/2005 1:36:54 PM

The bulls would really like the TICKs to rally and get on board but so far they have only made a one peek over the +1000 marker.

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

An AD line at +1154 supports the bullish TRIN.

Jane Fox : 9/9/2005 1:34:35 PM

TRIN's range so far today has been from a high of 0.76 to a low of 0.56, a fairly bullish range. Link

Jonathan Levinson : 9/9/2005 1:34:53 PM

You hit the nail on the head. I have CNBC or MSNBC on all day. I always thought that was an advantage, but in reality, what I've started doing is listenting to the news and reacting without chart confirmation. We know that doesn't work. I would probably be better off turning the news off and just watching the charts.

It's certainly worth a try. At most, consider the broad sweep of the news in terms of your longer term bias/outlook- but shorter than that, I think you'd be much better off redirecting that energy to your charts.

Tab Gilles : 9/9/2005 1:34:12 PM

TLT weekly Link

Tab Gilles : 9/9/2005 1:23:43 PM

iShares Lehman 20+ Year Treas Bond (TLT) Decreasing sell volume and Inverse H&S, TLT needs to close above $95.65 on strong up volume. Link Link

Jonathan Levinson : 9/9/2005 1:18:25 PM

Here's a surge on the overdue wavelet cycle upturn, supply still subordinate to demand for QQQQ. The 30 min channel has flattened, however, and bulls need to break through th eprior 39.65 resistance line to reignite the 30 min cycle upphase: Link

Jonathan Levinson : 9/9/2005 1:16:15 PM

At some point, reality will catch up. But so long as liquidity can be created at will, the devaluation of the currency can spur rallies in all assets valued in that currency, equities included. However bearish any factor may be, trading- particularly using leverage via options and futures- is dependent on price and price alone at any given instant. Many understand that, but if you're a new reader, don't ever let yourself forget that price is the primary indicator. Don't let yourself bang the trigger based on news or arguments alone- that's what your charts are for.

Jonathan Levinson : 9/9/2005 12:58:10 PM

Stepping away for a few minutes.

Tab Gilles : 9/9/2005 12:54:06 PM

Sears Holdings (SHLD) Follow-up to 12:11AM post. Still within downtrend channel, 10-ema and tested 25% Fib retracement. Would like to see more volume and a breakout. Link

Jonathan Levinson : 9/9/2005 12:32:39 PM

This is a short cycle trending move, working against a premature reversal in the 30 and 60 min cycles. The bounce from 39.37 was counter to the prevailing cycles, and I should have hit the silk when it occurred. I don't know which cycle is dominant here, and until I am, I'm stepping out of the way. The 30 min channel continues to rise, and my expectation is that we'll be seeing a daily cycle high next week.

I will be seeking to line up with the daily cycle, and hunt for swing trades in the direction of the daily cycle. That would have resulted in long trades for the past week, and should, once the daily cycle turns, result in short trades next week.

Jonathan Levinson : 9/9/2005 12:27:35 PM

QQQQ - Exit Point Alert -

Out QQQQ at 39.65, -.06.

Jonathan Levinson : 9/9/2005 12:18:34 PM

QQQQ's wavelet and short cycle Macd negative divergences: Link

Jonathan Levinson : 9/9/2005 12:17:53 PM

Crude oil is trading -.075 here at teh session low of 64.425.

Jonathan Levinson : 9/9/2005 12:16:00 PM

QQQQ should have dropped straight away, and is instead holding sideways-up. The higher low on yesterday's decline demonstrates an abundance of demand, and the reason is irrelevant in the short term. I will begin to apply tighter profit stops to begin taking advantage of what so far have been good entries but late exits.

Jonathan Levinson : 9/9/2005 11:47:50 AM

Second that, Linda!

Jane Fox : 9/9/2005 11:47:30 AM

See you Linda have a great weekend and enjoy the wedding.

Linda Piazza : 9/9/2005 11:46:38 AM

I'm going to need to take off now. Have a great day everyone. Glad I didn't tell bears to enter at the open! (See my first OEX-related post) and said I had to see how internals set up, because they sure didn't open where I thought they would. I still don't like the TRAN's behavior on behalf of the bulls, but watch what it does with this bounce attempt.

Jonathan Levinson : 9/9/2005 11:46:37 AM

The surge here violated the upper 30 and 60 min channels, the short cycle upphase and wavelets are buried in overbought, and it's going to take a meltup to advance beyond these levels. I'm willing to risk 6 cents over it. Link

Jonathan Levinson : 9/9/2005 11:45:04 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.59, 6 cent stop

Linda Piazza : 9/9/2005 11:44:39 AM

Top of the OEX's newest rising regression channel has now risen to about 575.20. Don't necessarily count on that being touched today, but if in bullish positions, have profit-protecting measures in place from about 574 (Keltner channel resistance) up to the top of that channel.

Jonathan Levinson : 9/9/2005 11:42:56 AM

QQQQ - Exit Point Alert -

Stopped Out QQQQ at 39.55, -.01

Jonathan Levinson : 9/9/2005 11:35:57 AM

Still in our QQQQ short- they missed the stop by one cent.

Linda Piazza : 9/9/2005 11:32:58 AM

OEX still climbing.

Linda Piazza : 9/9/2005 11:32:46 AM

The SOX is attempting a bounce, and from just above the Keltner level that I'd mentioned earlier. Bears want it to find resistance on 30-minute closes at a Keltner line currently being tested, at 478.32, and at 480.30-480.90, if that first resistance fails. Bulls want 30-minute closes above those levels.

Linda Piazza : 9/9/2005 11:28:29 AM

New high of the day and the week for the OEX. It will be a close call as to whether it sets a new upside target of 573.89 on this 15-minute close (needs to be above 572.68 currently) or whether the OEX instead finds resistance at that channel line, as it's been doing today. This is in contrast to Tuesday and Wednesday, when it was using that same channel line as a springboard to move up within tight-range zigs and zags. Of course, that matters not a whit to bulls who are still following the OEX higher or to bears who are still suffering, but so far, it's a bit of a contrast to Tuesday's and Wednesday's patterns.

Jonathan Levinson : 9/9/2005 11:28:23 AM

Session low for crude oil here, +.1 at 64.60. Natgas is down .035 at 11.31.

Jonathan Levinson : 9/9/2005 11:23:50 AM

A big surge of volume and a stronger wavelet cycle upphase. I should have exited when I was busy typing about the short cycle bottoms shaping up on the SOX and Qs. Link

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

Next Keltner resistance for the OEX is at 572.62 on 15-minute closes. A 15-minute close above that resets an upside target now at 573.83.

Linda Piazza : 9/9/2005 11:20:31 AM

OEX rising to retest today's and the week's highs again, with the week's high at 572.52 the OEX currently at 472.41.

Linda Piazza : 9/9/2005 11:15:21 AM

SOX drifting closer to a zone that should prompt a bounce attempt and it may be trying to steady right here. At 476.86 as I type.

Jonathan Levinson : 9/9/2005 11:10:34 AM

The SOX is growing oversold on a short cycle basis, and QQQQ's short cycle downphase is looking weak so far.

Linda Piazza : 9/9/2005 11:10:01 AM

Bulls, OEX and otherwise, be watchful for a possible whoosh lower in the advdec line, perhaps below +600 (QCharts value) or so, that doesn't quickly get reversed. I would expect a bounce in the advdec line somewhere between 600-950, but if that doesn't happen . . . well, it's at least short-term "not good."

Linda Piazza : 9/9/2005 11:07:12 AM

SOX drifting closer to next potential Keltner support, so bears might anticipate a bounce attempt at any time. If so, they want 30-minute closes beneath 478.14, or at least below 480.66.

Jonathan Levinson : 9/9/2005 11:07:06 AM

Volume breadth is +1.33:1 for the Nasdaq, +2.35:1 for the NYSE.

Jonathan Levinson : 9/9/2005 11:05:43 AM

The short cycle indicators are on the cusp of a new sell signal, while the wavelet tries to bottom. QQQQ is doing its sideways thing, and it's anyone's guess as which way this will break. Definitely not the place for new directional positions. Price is currently hugging the 72 SMA, right at the keltner midpoint: Link

Linda Piazza : 9/9/2005 11:01:54 AM

SOX still looking vulnerable to Keltner lines now at 474.98 and 475.85, with the SOX at 476.84 as I type. There's the possibility of a bounce as this Keltner support is tested. If so, bears want to see 30-minute resistance at 478.19 and 479.98 hold on those period closes.

Linda Piazza : 9/9/2005 11:00:27 AM

On this 15-minute period, OEX Keltner resistance now at 572.50 held into the close. First support at 471.38 and then from 570.50-570.60.

Jonathan Levinson : 9/9/2005 10:58:25 AM

Stepping away for 10 minutes here.

Jonathan Levinson : 9/9/2005 10:57:45 AM

Session lows for INTC just now, down 3.22% at 25.25.

Linda Piazza : 9/9/2005 10:53:29 AM

Next Keltner resistance for the OEX at 572.51 on 15-minute closes. OEX at 572.15 as I type.

Linda Piazza : 9/9/2005 10:52:24 AM

TRAN trying again to bounce.

Jonathan Levinson : 9/9/2005 10:52:20 AM

Headlines:

[BRK.A, BRK.B] BERKSHIRE: GENERAL RE CEO BRANDON GETS WELLS NOTICE FROM SEC

[BRK.A, BRK.B] BERKSHIRE: BRANDON WELLS NOTICE RELATES TO SEC ONGOING PROBE

[BRK.A, BRK.B] BERKSHIRE:SEC MAY SEEK PERMANENT INJUCTIVE RELIEF VS BRANDON

Linda Piazza : 9/9/2005 10:46:06 AM

TRAN below 3600 again. It hasn't been able to mount an effective bounce, and that's a BIG red candle so far, for the day. It could spring up, changing the character of that candle, so I'm not drawing too many conclusions so far. However, this leading index is leading down. The RLX did so yesterday morning and has since just been consolidating in a tight range. If it breaks to the downside, and if the SOX starts a pullback that's deeper and little more drastic than the current measured-looking pullback, then I'd sure want to be checking my profit-protecting plan for long plays in key indices like the SPX, OEX and even the Dow.

Jonathan Levinson : 9/9/2005 10:43:28 AM

QQQQQ is back to the 72 SMA, with the wavelet cycle growing bottomy. Bears need to take out this level to roll the stalling short cycle upphase back to the downside. Link

Linda Piazza : 9/9/2005 10:42:45 AM

SOX still looks vulnerable to Keltner lines now at 474.92-475.99. SOX at 477.43 as I type.

Linda Piazza : 9/9/2005 10:31:29 AM

According to the 30-minute Keltner chart, the SOX now looks vulnerable to a pullback to 474.95-476.39.

Jonathan Levinson : 9/9/2005 10:30:24 AM

Keene, that would likely line up with a 30 min cycle bottom... but the longer 60 min cycle downphase could keep a lid on the bounce as it often does, resulting in a boring sideways consolidation first. Just playing "what if" here.

Linda Piazza : 9/9/2005 10:29:56 AM

The TRAN still tries to steady. It's testing important historical S/R at 3600, but also the 100-sma at 3606.19. The TRAN is currently at 3601.06. Also, the 50% retracement of the climb off the June low, into the July high, is at 3603.32, so this is important support. I would have expected a bounce attempt somewhere through here, but nothing convincing has begun yet. If a bounce does begin, watch to see if it's corrective or otherwise. Watch for potential resistance now at the 200-sma or 72-ema, at 3640.43 and 3661.15.

Jonathan Levinson : 9/9/2005 10:24:36 AM

This should be the top of the wavelet cycle here, and any further upside from here will be a trending move in this shortest of timeframes. 30 and 60 min channel resistance are lined up at 39.525, and our stop remains above it. Link

Linda Piazza : 9/9/2005 10:24:18 AM

SOX coming back up to retest the Keltner line that will reset its upside target, with that target now at 483.45. The line it needs to close above this 30-minute period to reset that target is 479.95. The pullback off yesterday's high (this morning's was quickly reversed, leaving only a spike higher with the real body within the current formation) still looks corrective, so there's mixed evidence. That quick slap back this morning wasn't exactly a positive event, but bears can't consider it a good sign in their favor, either, that the pullback just looks corrective on the 30-minute chart.

Linda Piazza : 9/9/2005 10:19:47 AM

TRAN still trying to steady. Whenever in bullish OEX, SPX or Dow plays, I have never liked to see the TRAN diving, as it sometimes leads these indices.

Linda Piazza : 9/9/2005 10:17:45 AM

New HOD for the OEX, pushing up toward a retest of this week's high, which was 572.38. The advdec line is bouncing, as anticipated, although from a slightly higher level than anticipated. The OEX's pullback on the advdec line pullback was only moderate.

Jonathan Levinson : 9/9/2005 10:14:01 AM

A wavelet upphase should be topping out within the next couple of minutes here for QQQQ. If it doesn't, I'll be looking to exit the short play and wait for a better entry.

Linda Piazza : 9/9/2005 10:13:07 AM

The OEX is getting stuck today at the current site of the former ascending regression channel off the April low. Earlier in the week, it was able to temporarily push above that former support hit was fairly quickly rebuffed, but today it's pausing there. The pullback doesn't look dramatic yet, though, and as long as 15-minute closes remain above Keltner lines currently at 570.38-570.76, it's likely to find the strength to keep testing that resistance. If it starts producing 15-minute closes below those lines, however, it may be yesterday's low or even the 568.50-ish Keltner support that gets tested.

Jonathan Levinson : 9/9/2005 10:09:41 AM

Still no word from the Fed- looks like that 800M net drain is going to stick.

Linda Piazza : 9/9/2005 10:07:23 AM

TRAN trying to steady at 3600.

Linda Piazza : 9/9/2005 10:06:43 AM

Still that reversal going on in the advdec line. Still expecting a possible bounce in the advdec line, too, though, from somewhere near +500-+650. It's at +869 as I type. Those hoping for a pullback then want the advdec line to find resistance at or below the current HOD for that value.

Linda Piazza : 9/9/2005 10:04:14 AM

The TRAN has plummeted all the way to 3600. The TRAN sometimes leads indices the way that the SOX sometimes leads tech-related indices. Keep this on your radar screen.

Linda Piazza : 9/9/2005 10:03:14 AM

The SOX once again erased its breakout signal on its 30-minute chart, but once again rises right up to retest resistance at 479.88 on 30-minute closes. It's so far pulling back in a corrective manner only off yesterday's high, and SOX bears want to see a stronger thrust down. Bulls don't, of course.

Jonathan Levinson : 9/9/2005 10:00:48 AM

Volume breadth is still positive, but has weakened to +2.45:1 on the NYSE and +1.2:1 on the Nasdaq.

Jonathan Levinson : 9/9/2005 9:55:32 AM

The Fed announces a 7-day 4B repo, resulting in a net 800M drain (including the TIPS pass delivered today). But, the door is still open for a weekend repo. We should find out about that within the next 15 minutes or so.

Linda Piazza : 9/9/2005 9:55:23 AM

Markets may be setting up for the pullback I expected today, but they're setting up about 20 minute later and from a different level than I had expected, so I'm left feeling uncertain about these new conclusions. Maybe my bias is just coloring my observations? I don't think so, however, because I'm not yet convinced and also see the possibility of a sideways move for a while to burn off the excessive levels seen on some indicators, as we're beginning to see in the advdec line right now. Here's what I want to see in that advdec line before I believe too strongly that the rollover is beginning: If there's support near +500 and another jot up in the advdec line, I'd like to see it top out at or below the previous HOD, with bearish value/RSI divergence. I'd like to see the OEX move down strongly with any advdec line moves down and move up less strongly with any upturn in the advdec line.

Linda Piazza : 9/9/2005 9:51:37 AM

SOX dropping right back. There's the potential for a H&S on the 30-minute RSI for the SOX, and these are often useful tools. I'm watching. It will erase that upper target again if it has a 30-minute close beneath a Keltner line currently at 479.00. SOX at 479.67 as I type.

Jonathan Levinson : 9/9/2005 9:48:14 AM

QQQQ prints below 72 SMA support for the first time today.

Linda Piazza : 9/9/2005 9:55:39 AM

Should be a pullback starting soon, and its nature should tell us a lot.

Linda Piazza : 9/9/2005 9:45:53 AM

Watch out, bulls. The TRAN is elow the 200-sma. It hasn't yet breached its 8/31 low of 3619.52, with the TRAN currently at 3623.73, so there's possibility of a bounce back above the 200-sma, just as it did on 8/31, but don't really want to see the Dow reaching for new recent highs while the TRAN is doing the opposite.

Linda Piazza : 9/9/2005 9:41:54 AM

The SOX is hitting Keltner resistance on the 15-minute chart, but maintains a 483.17 upside target on the 30-minute chart. Bulls should have profit-protecting plans in place if they've been participating in the latest rally, with those plans at least including racheting up stops as the SOX moves higher. It's retesting weekly rising regression channel resistance or approaching that test, depending on how the regression channel is drawn.

Jonathan Levinson : 9/9/2005 9:39:51 AM

The Fed has a lone 5.25B overnight repo expiring, and the 450M TIPS pass deliverable today. Awaiting the 10AM announcement to see whether there will be a net add or drain going into the weekend.

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

SOX at 481.19.

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

The short from 39.54 QQQQ is still in play, stop 39.55. Bears need to see a break and hold below the 72 SMA at 39.39 to get the 30 min cycle pointed back down.

Linda Piazza : 9/9/2005 9:37:37 AM

There's still a possibility for a pop-and-drop day, but it's not clearcut at all. The OEX has popped above the descending trendline off this week's high and there could be some follow-through. Keltner resistance being tested now, with next resistance at 572.19 on 15-minute closes, with next at 573.52. I just don't have a good feel for the markets this morning, but the advdec line is reaching potential resistance, and so there could at least be a slowing of gains now.

Jonathan Levinson : 9/9/2005 9:33:51 AM

QQQQ holds unchanged from yesterday's close, 2 cents below the 39.42 pivot. There's a slight wavelet and short cycle Macd bearish divergence, but volume breadth remains +2.77:1 on the Nasdaq and the opening dust needs to settle. Link

Linda Piazza : 9/9/2005 9:32:00 AM

The scenario that I anticipated as possible for the OEX--an open at or slightly higher than yesterday's close and then a move down from there--is obviously not coming to pass, and neither are the internals setting up the way I thought they might. All bets off for now.

Linda Piazza : 9/9/2005 9:30:53 AM

Intel gaps lower.

Jonathan Levinson : 9/9/2005 9:09:13 AM

QQQQ's 30 and 60 min cycles remain in bearish divergent downphases, neither past the midpoint of their runs, much less oversold. However, the overnight bounce has the 30 min cycle channel stalled in its decline, and bears need a break back below the 72 SMA at 39.39. 30 min channel resistance holds at 39.50, above which is the 60 min channel top, still declining and currently at 39.55: Link

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

Yesterday, the OEX did what I expected it to do a day earlier--it pulled back. I'd expected a doji day Wednesday and a possible small-bodied red candle Thursday, maybe with an upper shadow, as the OEX worked it way down in a possible bull flag, into a possible retest of the 200-sma. I thought it wouldn't be until we saw the shape and speed of the decline that we'd know more information about whether it was a short-term pullback or something more bearish. For a while, it looked as if we'd get an answer yesterday with a big bearish engulfing candle printing for much of the day. A late-day bounce changed that outlook a bit. That bearish engulfing candle didn't quite happen, as the real body of yesterday's candle didn't engulf the entire range of Tuesday's move, but it did engulf the entire real body. That means that all Tuesday's gains were retraced. That's not a bullish event. Remember that all this was occurring as the OEX was rising in a possible bear flag, up to test the former support of the rising regression channel off the spring low. So far, that former support is holding as resistance, then, and the OEX may still be vulnerable to a retest of its flag's support, now down near the 72-ema and 200-sma at 567.29 and 566.57, respectively. Any bears who haven't yet taken partial profits might do if that zone is tested. Then we start watching to see if this potential bear flag's support is invalidated, but a bounce from that zone, if hit, should probably be anticipated. Bears just don't want it to get too far.

On the five-minute chart, there's a potential inverse H&S forming along the five-minute 100/130-ema's. If there's an immediate pullback this morning, watch for potential support near 569.50 and then a push up from there, toward those averages. Bulls want that formation to confirm and bears want to see it invalidated. They want to see a 15-minute close beneath the Keltner lines currently at 568.29-568.35. I cautioned bears to have a profit-protecting plan in mind yesterday for a test of that level, but the OEX never quite got there before bouncing.

If there's an immediate bounce this morning, or only a minor pullback before that inverse H&S is confirmed, watch for potential resistance at a Keltner line currently at 572.10 and then at 573.44, all on 15-minute closes. Bears want to see that first level hold, and bulls don't want any of it to hold. Any in bullish positions should protect profits in the 572 region and again from 573-574, if they should be touched.

Currently, futures are higher. Some other indices across the globe are hitting important new or new recent highs, so the possibility of our indices continuing much higher must be factored into any outlook. Still, the OEX is just retesting broken support so far, and that must also be factored in. I'm looking at the possibility this morning of an open near or slightly above yesterday's close, but then a move down that starts fairly soon. I don't know that will happen, and I have to see how the internals look at the open before I have a strong feel for that, but it's one possibility that I'm thinking could play out. I think that's probably my best guess for this morning, but this is certainly in the realm of guesswork as there's not strong enough evidence there for me to suggest that you plunge into a bearish play at the open. My second best guess is that the OEX might settle into another one of those consolidation zones that it's so good at setting up, with today a doji or up day within the last two days' ranges.

I'm going to stay through the open and hopefully into mid-morning to give Jonathan as much help as possible in updating readers, but then must leave for an out-of-town family wedding. For the rest of the day, after I'm gone, OEX traders can watch the Futures Monitor for mentions of the ES. The e-mini isn't an exact approximation of the OEX, of course, but the comments there should prove helpful.

Jonathan Levinson : 9/9/2005 9:01:45 AM

SAN FRANCISCO (MarketWatch) -- Yellow Roadway Corp. (YELL: news, chart, profile) after Thursday's closing bell lowered its third-quarter earnings forecast to $1.40 to $1.45 a share from $1.60 to $1.65 a share. Analysts polled by Thomson First Call estimate earnings at $1.62 a share. The Overland Park, Kan.-based transportation service provider cited Hurricane Katrina as one reason for the lowered forecast. The company estimated the storm's impact at 5 cents a share in the third quarter.

YELL is currently -2.61 or 5.67% at 43.40.

Jane Fox : 9/9/2005 8:53:31 AM

Dateline WSJ Not two weeks ago, shares of the nation's refiners looked poised for a breather after a long and profitable run. Then came Hurricane Katrina.

The storm plowed through a key Gulf Coast refining center, cutting into supplies of gasoline and heating oil as demand for such products remained strong. Shares of San Antonio-based Valero Energy Corp., the nation's largest refiner, have jumped 25% from before the storm to $111.47 yesterday as the flood waters that wreaked havoc from Louisiana to Mississippi also pushed refining margins into the stratosphere.

U.S. refiners have averaged a 24% gain in share price since the market closed Aug. 26, the Friday before Katrina blew ashore, and a 129% gain for the year to date, according to Friedman, Billings, Ramsay Group Inc., a U.S. investment bank. By comparison, the bank's oil exploration and production index is up 6.5% since the storm and 36.9% so far this year, while the overall stock market is only modestly in the black for the same periods.

Jonathan Levinson : 9/9/2005 8:35:06 AM

QQQQ holds a 2 cent gain at 49.42, within a short cycle upphase from yesterday's close that is approaching but not yet overbought. 30 min channel resistance remains 39.50. Link

Jonathan Levinson : 9/9/2005 8:31:47 AM

Headlines:

U.S. AUG. IMPORT PRICE INDEX UP 1.3% V. 1.2% EXPECTED

U.S. AUG. IMPORT PRICES EX-OIL UNCHANGED

U.S. AUG. EXPORT PRICES FALL 0.1%

U.S. AUG. EXPORT PRICES EX-AGRICULTURE FALL 0.1%

Jonathan Levinson : 9/9/2005 8:31:02 AM

Still awaiting the numbers.

Jonathan Levinson : 9/9/2005 8:30:50 AM

Headlines:

U.S. AUG. IMPORTED PETROLEUM PRICES UP 7.1%

U.S. IMPORT PRICE INDEX UP 7.6% YEAR-OVER-YEAR

U.S. AUG. IMPORT PRICES EX-FUELS FALL FOR 4TH STRAIGHT MONTH

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

Session highs for gold and silver here.

Jonathan Levinson : 9/9/2005 8:21:19 AM

Ten year note yields are quoted -1.9 bps at 4.12%, 13-week bill yields -1.3 bps at 3.385%.

Jonathan Levinson : 9/9/2005 8:16:30 AM

Session high for crude oil here, +.75 at 65.25, natural gas up 6.5 cents at 11.41.

Jonathan Levinson : 9/9/2005 7:32:30 AM

Equities are up, but settling down from a European "Corynthian Geyser" open in the wee hours. ES is trading 1240.75, NQ 1614.5, YM 10654 and QQQQ -.01 at 39.39. Gold is up .50 at 451, silver +.011 at 7.045, ten year notes +9/64 at 111 21/32, crude oil is up .625 at 65.125 and natgas is up 6 cents to 11.405.

We await import prices ex-oil and export prices ex-ag., prior -.1% and +.2% respectively, due at 8:30AM.

Linda Piazza : 9/9/2005 7:17:41 AM

Good morning. The Nikkei posted a triple-digit gain last night, with techs performing well, but other Asian markets were mixed. Techs gain in European markets, too, and markets are positive, although the DAX is below 5,000 again after having punched through it earlier today. As of 7:10 EST, gold was unchanged, and crude, up $0.57 to $65.06. Earlier this morning, the International Energy Agency lowered its forecast for global oil demand, with the effects of Katrina and slowing Chinese and Indian consumption responsible for that lowering of demand estimates. It cut its demand forecast by 250,000 barrels a day for 2005 and 260,000 barrels a day for 2006. This morning, the OECD released leading indicators for July for a block of 30 nations, with the overall figure rising to 103.9 from June's 103.6. Only Italy's showed a decline among the major nations included. The U.S., Eurozone, U.K., and Japanese indices all rose. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei showed some volatility in early trading and then took off to the upside. It closed at its high of the day, up 158.15 points or 1.26%, at 12,692.04. In earliest trading, semi-related stocks performed well, boosted by enthusiasm over Texas Instruments' and Intel's reports. Oil-related shares also gained, with Goldman Sachs raising its rating of energy issues to an attractive rating, up from the sector's previous neutral rating. Rising crude also benefited those stocks.

Other Asian markets were mixed. The Taiwan Weighted lost 0.50%, but South Korea's Kospi climbed 0.63%. Singapore's Straits Times rose 0.15%, but Hong Kong's Hang Seng was flat, down 0.40 points. China's Shanghai Composite dropped 0.40%.

Most European markets are positive, although some countries saw disappointing data today. August Wholesale Prices for Germany were unchanged, with the yearly rate now dropping to a 1.9% gain. These figures were much weaker than unexpected. Some suggest that the PPI slated to be released some time in the middle of September might be weaker than had earlier been anticipated. In France, July's Industrial Output was also weaker than expected, falling 0.9% month over month against a revised-lower 0.2% increase the previous month, and producing a 0.7% drop year-over-year. A 2% decline in the component measuring intermediate goods was responsible for the decline, when expectations had been for a rise. This Industrial Production release can be volatile, but this was a disappointment. Manufacturing production fell 1.2% month-over-month. In the U.K., July's Trade Deficit widened, with that widening showing up in the global trade deficit and the non-EU deficit. Exports declined and imports were mostly unchanged. Italy's economic release was not disappointing, however, with final Q2 GDP showed a rise of 0.7% quarter over quarter, and 0.1% year over year, in line with preliminary estimates. This confirms that Italy is moving out of a recession.

Chip-related stocks tend to perform well in Europe, as they had in Japan, and mobile-phone-related issues gained, too. Ericcson, Nokia, and Infineon were among issues showing gains in early trading. ABN Amro raised ratings of European technology stocks. ABN Amro also suggested that investors cut back on holdings of (German? European?) utility shares, and German companies E.On AG and RWE AG were declining this morning. Energy stocks BP Plc and Repsol YPF SA benefited from a boost in Goldman Sach's recommendation of the industry to an attractive rating.

As of 7:07 EST, the FTSE 100 was higher by 10.70 points or 0.20%, at 5,351.50. The CAC 40 was higher by 11.91 points or 0.27%, at 4,477.85. The DAX was higher by 0.16 points or 0.00%, at 4,992.91. The DAX opened trade today just below 5,000 and soon had climbed just above 5,020, since falling back below 5,000 again.

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