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Tab Gilles : 9/13/2005 1:28:02 AM

Several updates...

Citrix Systems (CTXS) 7/13 11:25 AM & 7/28 4:44 PM posts; Mentioned that CTXS was on radar as a $NDX stock, observation- Cup & Handle formation. updated chart. Link

Murphy Oil (MUR) 8/31 1:43PM post. Price objective for entry $50. updated chart; Link

iShares Lehamn 20+ Year Treas Bond (TLT) Posted 9/9 1:23 PM; What looked like an inverse H&S, could still be but at a lower level. chart... Link

Material Select Sector SPDR (XLB) Intraday high tested 200-ema. Link

OI Technical Staff : 9/12/2005 9:59:59 PM

The Market Monitor has been archived.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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

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Jeff Bailey : 9/12/2005 5:26:08 PM

Bull Confirmed I see Friday's action had Stockcharts.com's Dow Industrials Bullish % ($BPINDU) Link achieving bull confirmed status at 76.66%.

This internal action among the very narrow (only 30 stocks) would suggest a high probability that the INDU Link will trigger a tripple top buy signal at 10,750 after strong rebound from bullish support trend.

Jeff Bailey : 9/12/2005 5:07:03 PM

Pivot Matrix for tomorrow at this Link

Jeff Bailey : 9/12/2005 5:00:50 PM

Power outage update KNBC reporting that power is starting to come back on line in Los Angeles.

Jeff Bailey : 9/12/2005 4:46:27 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/12/2005 4:40:57 PM

Closing Internals found at this Link

Internals Data Table from 08/01/05-09/12/05 at this Link

Recent inflection high (green square(s)) and low (red square(s)) noted. 5-day NH/NL ratio numbers are green when above the 10-day NH/NL ratio. 10-day NH/NL ratio red when in a column of O, green when in a column of X.

Jeff Bailey : 9/12/2005 4:29:07 PM

CNBC reporting that a large portion of Los Angeles has lost power.

Jeff Bailey : 9/12/2005 4:18:07 PM

Current OPEN MM Profiles found at this Link ... Today's activity ... Swing traded long just over 1/3 bullish position (100 shares based on full=$10,000) in shares of eBay (EBAY) at $39.16, stop $37.50, targeting $44.00.

Updated closures of BGC long and DAB short at 09:43:59 AM post as both achieved trade targets on 09/01/05.

Jonathan Levinson : 9/12/2005 4:02:36 PM

QQQQ is set to leave off with the 30 min cycle pointing tentatively down, as it's been doing on and off all day, and the 60 min cycle on the verge of confirming its downphase as well. These cycles have been trending more or less all day, and the next buy program could be a tick away, but for the moment, the intraday cycles point south. I'll be holding the QQQQ short, stop at breakeven.

Linda Piazza : 9/12/2005 4:00:08 PM

Sorry, I got that last post uploaded a bit too late to be of much help to anyone.

Linda Piazza : 9/12/2005 3:59:29 PM

OEX bears, you have a tough decision to make. The OEX is still zigging and zagging lower through the flag-like shape in which it's pulled back from Friday's high. It may end the day near the bottom support of that channel, near 573, if it continues lower, and just above the support of the bigger channel from which it climbed off August's low, and also just above the support of the even-bigger channel in which it had climbed off the spring low, near 572. This support will all be converging by tomorrow morning, with some of it converging this afternoon. The channel in which the OEX has risen off the August low could be a bear flag, although it rose a little higher than such a flag should have risen. So, do you cash out this afternoon and take your profit or hold on, waiting for a breakdown through that channel off the August low tomorrow? I think I might take partial profits and lower stops on the rest, if you have enough of a cushion and are not too extended. The more prudent thing might be to just take all profit tonight and see what sets up tomorrow morning, but I might feel comfortable, if I'd entered Friday and had that cushion, in taking partial profits.

Linda Piazza : 9/12/2005 3:52:39 PM

The GSO just minimally confirmed the H&S on its five-minute chart. It's not going much of anywhere, though, and could still zoom up and invalidate the formation.

RUT as 681.71 with daily Keltner resistance at 683.41.

Linda Piazza : 9/12/2005 3:46:56 PM

I knew that breakout on the OEX was suspicious. The OEX may still be vulnerable to a test of 572.20-573.00 and maybe even to the 15-minute 100/130-ema's at 572.05 and 571.22. That test is going to be important to watch, if it occurs today or tomorrow. However, we still have some strange behavior, with some front-running higher by some of the mo-mo indices, with the RLX being one of those and with the RLX's behavior sometimes important to the OEX's. So, I'm not certain that test of the support will occur, but it still possible.

Jeff Bailey : 9/12/2005 3:40:20 PM

GoAmerica (GOAM) $5.47 +40.25% ... wireless data communications service provider has lurched from $3.80 just before 02:00 PM EDT. Jumps to percentage gainer among 4-5 lettered stocks at the NASDAQ.

Jonathan Levinson : 9/12/2005 3:36:46 PM

Back to find our stop tickled but not hit. The wavelet cycle is in an upside trending move as the short cycle continues to rise from an early low. The 2:15PM low came ahead of schedule, and there was never a clear terminal push to the short cycle downphase. The 30 min cycle is trending as well, the decline stopping before it could really get started. Link

Linda Piazza : 9/12/2005 3:35:54 PM

The GSO has a roughly formed H&S at the top of its climb on its five-minute chart. It hasn't confirmed yet, but neither has it been invalidated.

Jeff Bailey : 9/12/2005 3:37:57 PM

S&P 500 Index (SPX.X) bar chart with updated MONTHLY/WEEKLY Pivot Matrix at this Link ... Last week's action within the WEEKLY Pivot Matrix has SPX looking 1,250 minimum. Trigger for further strength is a trade at MONTHLY R1 and another "quick 6" for bulls.

Linda Piazza : 9/12/2005 3:33:04 PM

The OEX attempts another breakout above the descending trendline off Friday's high, but it just can't quite maintain that breakout. We either have some key indices front-running a move higher, or there's been some money thrown at some of the mo-mo indices with the others dragging up the rear. Not sure what's at work, but either the mo-mo indices are going to pull the others up or the laggards are going to tug the mo-mo ones down.

Linda Piazza : 9/12/2005 3:29:48 PM

On the 30-minute chart, the RLX's formation looks a bit like a cup-and-handle formation, which is a valid continuation formation. It looks as if the RLX is testing the slanting-higher lip of that formatiion.

Linda Piazza : 9/12/2005 3:27:55 PM

RLX at a new HOD, but remaining within a possible right-shoulder formation for the potential H&S on it daily chart. It hasn't invalidated that formation yet.

Linda Piazza : 9/12/2005 3:24:42 PM

RUT just-reached HOD was 682.49, and the RUT reaches closer to the daily Keltner target and resistance at 683.42. This often does hold on a daily close, but there's the possibility of it being overrun by a little, too, and that will leave bulls and bears in a quandary. Is it a breakout or just an overrunning of the target will be the question.

Linda Piazza : 9/12/2005 3:20:58 PM

The OEX is currently attempting an upside breakout above the actual descending trendline off Friday's high. It's come back down to retest that trendline immediately, and bulls don't want to see the OEX fall too far or this will look like a stop-running move. Since this is the actual trendline off Friday's high, a sustained upside breakout here would suggest that the flag-ish pullback was indeed a bull flag pullback and that the OEX was going to attempt a cycle up through the rising regression channel off August's low again, and that it wasn't going to wait for a retest of the bottom of the channel to do so. However, it's not yet maintaining that breakout well, and I haven't liked some things about the internals today, at least on behalf of bullish plays, and I'm not enthusiastic about suggesting a long play right here, not so short a time before the close. I'm trying: I really am since I've seen this pullback, labeled it flag-ish, and thought there would be a bounce attempt (although from the bottom of the channel, not from right here), but I just really cannot make myself like a long position right here, right now.

Linda Piazza : 9/12/2005 3:14:36 PM

TRAN rising again.

Jane Fox : 9/12/2005 3:11:27 PM

Dateline WSJ Mike Brown says he has resigned as director of the Federal Emergency Management Agency.

Jeff Bailey : 9/12/2005 3:10:53 PM

03:00 Internals found at this Link

Linda Piazza : 9/12/2005 3:05:11 PM

This hour is going to be important on the OEX. The OEX currently has a doji for the day's candle, and the OEX often does honor such doji at the top of a climb by either another doji day or by an actual decline. We've seen some potential doji days look that way all the way into the last hour of the day, however, and then see a late-day move that transforms the candle into something more bullish, so I'm not making assumptions. I'm just saying that it's important to watch the daily candle's nature at the close today.

Jeff Bailey : 9/12/2005 3:02:21 PM

03:00 Market Watch found at this Link

Jeff Bailey : 9/12/2005 2:58:26 PM

eBay (EBAY) $39.27 +1.68% ... comes back up for a test of WEEKLY Pivot.

Jeff Bailey : 9/12/2005 2:57:00 PM

Per earlier Sector Bell Curve post ... BUSIness products shifted up/right, METAls non ferrous shifted up/right 2 slots, BUILding products shifted up/right 2 slots, STEEl shifted up/right,

RETAil shifted down/left

Jonathan Levinson : 9/12/2005 2:53:38 PM

Stepping away for a few minutes to nurse a headache.

Linda Piazza : 9/12/2005 2:51:49 PM

As a reminder, the daily Keltner chart shows next RUT resistance at 683.23 on daily closes, with the RUT at 681.16 as I type. There can and are breakouts above this resistance, but this channel line often holds on the first test.

Linda Piazza : 9/12/2005 2:49:57 PM

RUT moving higher again.

Jonathan Levinson : 9/12/2005 2:45:50 PM

QQQQ update at this Link

Linda Piazza : 9/12/2005 2:45:32 PM

Benchmarking: The OEX's rising regression channel off the August low is now at about 572.30. The 15-minute 100/130-ema's that have been following that channel higher, roughly congruent with the channel's support, are now flattening a little instead of climbing exactly with the channel. They're at 571.88 and 571.03, respectively, and I wouldn't consider that channel's support lost until the OEX began making 15-minute closes beneath those averages. I've thought that the OEX could be retreating off Friday's low to retest that support. As I mentioned this morning, the last test of the upper boundary of that channel didn't approach that boundary as closely as did prior tests, so there was some slight warning of possible weakness on the test of the upper channel. The beginning (and still small) divergence away from the channel's rising support line could be another, but warnings don't mean anything if there's not price action to go along with it, and this decline off Friday's high is corrective only. If that continues, a bounce attempt might be expected as the bottom of the channel is retested, if it is, so bears need a profit-protecting plan for that test. I don't know whether I'd be interested in a long play on a test of that support and on that possible bounce, however. Here's why: while the OEX has mostly been declining today, zigging and zagging through that channel, the advdec line has actually been mostly rising. Perhaps the money is being concentrated on those fast-moving indices that have seen gains and the OEX and others will soon play catch-up, but I don't like that particular divergence.

Linda Piazza : 9/12/2005 2:35:29 PM

No real retreat yet in the TRAN, RUT, RLX or GSO. The SOX currently bounces up to test next 15-minute Keltner resistance to see if it holds, and is currently negative, but its pullback isn't all that serious yet, either.

Linda Piazza : 9/12/2005 2:26:36 PM

SOX bears--next Keltner support is at 477.62-478.10, so profit-protecting plans might be needed at that level, if it's tested. I'd probably expect some sort of bounce attempt from near that level. Next resistance at 480.91-481.37, although it will be lower by the time the SOX tests that support, if it does, and you want that resistance to hold on 15-minute closes.

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

SOX was vulnerable to those Keltner levels I mentioned after all, currently at 480.56, with a LOD at 479.90. Next Keltner resistance at 480.92-481.41. Next support at 477.63-478.15.

Linda Piazza : 9/12/2005 2:14:33 PM

Big bounce in the OEX, zigging and zagging in that same channel and attempting to get back and stay back above those five-minute 100/130-ema's. They're at 573.69 and 573.44, respectively, with the OEX currently above them, at 573.84.

Jonathan Levinson : 9/12/2005 2:14:09 PM

Volume breadth weakens to -1.15:1 for the NYSE, +1.55:1 for the Nasdaq.

Jeff Bailey : 9/12/2005 2:13:21 PM

02:00 Internals found at this Link

Jonathan Levinson : 9/12/2005 2:08:11 PM

QQQQ - Stop Loss Adjustment Alert -

QQQQ short at 39.84, lower stop to 39.84

Linda Piazza : 9/12/2005 2:03:54 PM

For the first time today, the OEX has fallen below the five-minute 100/130-ema's. I still think it's vulnerable to fall through to a retest of the channel support and 15-minute 100/130-ema's as depicted in my 10:25:38 post.

Jeff Bailey : 9/12/2005 2:03:25 PM

02:00 Market Watch found at this Link

Jeff Bailey : 9/12/2005 2:56:15 PM

Sector Bell Curve from Dorsey/Wright & Assoc. at this Link . Trying to get "caught up" on what I missed last week.

BUSIness products shifted up/right, METAls non ferrous shifted up/right 2 slots, BUILding products shifted up/right 2 slots, STEEl shifted up/right,

RETAil shifted down/left

Jonathan Levinson : 9/12/2005 1:57:43 PM

QQQQ loses 72 SMA support for the third time today, but the wavelet cycle isn't oversold (for a change). With QQQQ down a dime here at 39.74, neutral traders can cover the 39.84 short and be flat for the day against our 10-cent stop out this AM. I'm holding the position for an anticipated 30/60 min cycle downphase.

Linda Piazza : 9/12/2005 1:52:36 PM

By the way, the DAX closed below 5,000, at 4,989.98, down 15.95 points or 0.32%. Not a big pullback, but that magic 5,000 leel is being closely watched.

Jeff Bailey : 9/12/2005 1:52:22 PM

10-most Active ... SEBL $10.30 +12.81%, ORCL $13.46 +1.35%, SUNW $4.20 +5%, INTC $24.99 -1.06%, QQQQ $39.79 +0.42%, EBAY $39.17 +1.37%, CSCO $18.48 -0.53%, SIRI $7.41 +0.27%, EWJ $11.57 +0.08%, MSFT $26.57 -0.03%

Linda Piazza : 9/12/2005 1:49:29 PM

Okay, didn't take long to refute that information in my 1:47 post, as some indices have of course broken above their previous summer swing highs, including the BTK and XBD. I still think the GSO test may be important to watch.

Linda Piazza : 9/12/2005 1:47:43 PM

GSO still just hovering near that mid-July swing high. While my search has been far from exhaustive, I haven't found another index yet that's risen into a retest of its summer high, so this GSO test may be particularly important to watch.

Jeff Bailey : 9/12/2005 1:47:14 PM

Amazon.com (AMZN) $44.62 +3.91% Link ... I see the stock did partially pull into its bar chart's gap Link while I was gone, but has quickly reversed that attempted fill.

Jeff Bailey : 9/12/2005 1:41:05 PM

Bullish swing trade long alert for 1/3 bullish position in shares of eBay (EBAY) $39.16 +1.39% here, stop $37.50, target $44.00

This will approximate 100 shares for my MM $10,000 = full position trade/risk management profiles.

Linda Piazza : 9/12/2005 1:38:13 PM

Nothing much has changed on the OEX as it hugs a Keltner line currently at 574.01, this on the 15-minute chart. The OEX remains within the descending regression channel off Friday's high, but has been finding support above the five-minute 100/130-ema's, currently at 573.68 and 573.41. OEX at 574.12 as I type, with the descending trendline off Friday's high now at about 574.43.

Jeff Bailey : 9/12/2005 1:32:16 PM

Linda (per your 01:13:30) ... Yes, the "liberal media" may not always report the true facts, and those that stayed despite evacuation orders may indeed not all be poor, or uninsured.

Jonathan Levinson : 9/12/2005 1:29:16 PM

So far, this short cycle upphase is getting poor traction for QQQQ, the weakest so far today. It's at the 60% mark, so not over yet, and I'm afraid to jinx it, but this suggests weakness for QQQQ if the bulls can't take out the day high on this so-far tractionless bounce: Link

Jonathan Levinson : 9/12/2005 1:24:49 PM

Volume breadth is actually declining for the Nasdaq as QQQQ rises off the 39.76 low, currently +2.11:1.

Jeff Bailey : 9/12/2005 1:23:38 PM

eBay (EBAY) $39.12 +1.29% ... interesting acquisition today of Skype (Internet telephony provider). Is eBay going to turn to a public outcry type of auction?

Note: Skype was founded by the creators of Kazaa, the free music-sharing program that riled the music industry.

Linda Piazza : 9/12/2005 1:15:22 PM

GSO still testing that mid-July swing high, just a few cents away now. Equal high or higher high? We'll soon find out.

Linda Piazza : 9/12/2005 1:13:30 PM

Jeff, I'm not sure how this information might impact the speculations in your 12:52:36 post, but I listened to an NPR report and interview with evacuees last week, and many pointed out that they were being portrayed unfairly. Many had chosen to live in the Ninth Ward, one of the hardest-hit sections of the city, due to church affiliations, family, and rich cultural associations even after they obtained MBA's and other higher degrees. Of course, they were probably not among those who did not evacuate. One extended family being interviewed also noted that nine homes were lost in total by family members, but that all but one home was insured and did have flood insurance. This does not minimize the difficulties seen by Katrina evacuees or the problems of those who were not able to evacuate due to poverty. When returning from Houston, my daughter encountered an elderly couple barely able to walk, who had bought a $200 car when turned away from one shelter, only to drive to a shelter in Dallas. My daughter's paramedic boyfriend--who volunteered to go into New Orleans ahead of the storm and was there in the early post-storm period--had to check out the husband because he was in such poor health, and attendants at the gas station were frantically calling nearer shelters to find a place for them, as they were still three hours away from Dallas. While it wouldn't be the first scam pulled at a gas station, they had documentation that they were from New Orleans. They certainly were suffering the kind of ill effects that would have led to increased medical costs, if they had insurance.

Jeff Bailey : 9/12/2005 1:13:22 PM

01:00 Internals found at this Link

Jonathan Levinson : 9/12/2005 1:12:14 PM

So far, the only traction in our short was from the wavelet cycle, which has already bottomed and turned back up. The 30 min, 60 min and short cycles all remain in suspended animation where they should be dropping, but those longer intraday cycles can take hours to turn, depending on the market. Lack of downside traction is bullish, but with all of these key cycles so extended, I see little opportunity to trade it long from current levels.

Jeff Bailey : 9/12/2005 1:06:02 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 9/12/2005 1:18:49 PM

Foreign central banks took a respectable 11B of the 28B in 13-week and 26-week bills auctioned today. The 13-week bills sold at 3.45%, yielding 3.529%, and fetched 2.15 bids for each awarded. The 26 week bills went for 3.67%, yieldiong 3.791%, and set a bid to cover ratio of 1.96.

Jeff Bailey : 9/12/2005 1:02:00 PM

HMO Index (HMO.X) components found at this Link (sorted by 5-day Net% Change)

Linda Piazza : 9/12/2005 1:00:27 PM

The OEX is still zigging and zagging in that flag-like pullback off of Friday's high. Nothing on the OEX has yet precluded a retest of the support shown in the chart linked to my 10:25:38 post, but I'm certainly watching the fast-moving TRAN, RUT, RLX, SOX and GSO indices. If you didn't notice my post earlier, the GSO has risen up to a retest of its mid-July swing high.

Linda Piazza : 9/12/2005 12:57:26 PM

I'm just seeing a release this morning, saying that the U.S.'s July machine tool orders rose 22.4% from the previous year's levels after June's 2.2% year-over-year drop. The forex coverage suggests that the headline number might be misleading, as the numbers tend to be volatile and that orders are lower so far for this half when compared to the second half of 2004. They're running higher for the year to date, by 15%. This article also notes that orders have a lot of catching up to do to get to the levels seen in the late 1990s and 2000.

Jonathan Levinson : 9/12/2005 12:54:33 PM

Ten year note yields have blown through 4.18% resistance, now approaching the 4.2% level, currently +7.3 bps or 1.77% at 4.196%. The IRX is up a smaller 2.8 bps at 3.425%. Awaiting results of the 13-week and 26-week bill auctions in a few minutes.

Jeff Bailey : 9/12/2005 12:52:36 PM

Health Insurance thoughts from Katrina ... My initial thought regarding recent news regarding health insurers is that there would be a higher number of claims.

But then I think about the news reports of how "poor" many of those people left behind in New Orleans and portions of Mississippi are and have to wonder how many of them can/could afford health insurance.

Linda Piazza : 9/12/2005 12:52:25 PM

GSO still challenging that high from mid-July, with that high at 169.80 and with today's GSO high at 169.71 and with the index currently at 169.53.

Linda Piazza : 9/12/2005 12:50:26 PM

The OEX is now ringed with nearby Keltner support and nearby Keltner resistance, both looking about equally weighted. Fifteen-minute RSI is neutral, at 52.62, so there are no clues as to next direction there, either. It's between the descending trendline off Friday's high and the support of the five-minute 100/130-ema's. No clue there, either.

Jeff Bailey : 9/12/2005 12:48:25 PM

Humana (HUM) $48.86 -2.33% Link ... Action/news here likely contributing to WellPoint (WLP) $75.35 -1.84% .... Today, Humana (HUM) traded higher at the open to $50.91, but then found selling after company said it still expects 2005 earnings per share of $2.23 to $2.25, and 2006 earnings per share of at least $2.80, according to a filing with the U.S. Securities and Exchange Commission on Monday.

The health insurer said the projections exclude any potential impact from Hurricane Katrina because the financial impact from the event can not yet be determined.

A consensus of analysts expects earnings of $2.12 per share for this year and $2.77 per share for 2006.

Jeff Bailey : 9/12/2005 12:41:45 PM

Energy price falling with Oct. Unleaded Gas futures (hu05v) nearing their "day before Katrina" trade. Crude Oil and Heating Oil below their 08/26/05 settlement. Partial table of historical prices at this Link

Some traders citing "fear of weaker demand" for oil/unleaded after recent price spikes for today's sharp declines.

I would think that the 08/26/05 settlement on Unleaded Gas will be a closely watched level of support.

Linda Piazza : 9/12/2005 12:39:09 PM

So, whatcha gonna believe, TRIN rising or all these fast-moving indices making a run toward higher levels? I'm not going to believe any of it, just yet, not when there's a mixture of evidence. Jane's 11:46:18 Future side post indicated some thoughts about the TRIN's trustworthiness. The OEX remains below the descending trendline off Friday's high, and could still be angling toward a retest of the 15-minute 100/130-ema's and the rising channel support off the August low.

Linda Piazza : 9/12/2005 12:35:45 PM

Note: While all this bullish action is going on in select indices, TRIN has still been rising, hitting 1.00 a second ago, although it's now at 0.98.

Jonathan Levinson : 9/12/2005 12:35:24 PM

Stepping away for a few minutes.

Linda Piazza : 9/12/2005 12:35:09 PM

Wow. GSO nears its 7/20 high of 169.80, with the GSO at 169.68 and with the HOD at 169.71. We're seeing a test of a possible double-top area here in this important index, and are also seeing a test of a potential inverse H&S on the weekly chart. This is an inverse H&S that would be a not-to-be-completely-trusted continuation form, however, and it remains to see whether it would be invalidated or confirmed.

Jonathan Levinson : 9/12/2005 12:34:55 PM

That short entry is based on the convergence of a now stalled and maxxed out 60 min cycle, a bearish divergent 30 min cycle stall, and maxxed out short cycle indicators. Short is the only way I can trade this setup- hopefully they won't pick me off again.

Jonathan Levinson : 9/12/2005 12:33:09 PM

QQQQ - Entry Point Alert -

Short QQQQ at 39.84 stop 39.95

Linda Piazza : 9/12/2005 12:32:10 PM

TRAN above the 200-sma and now headed toward resistance that looks stronger, between 3655-3664, with the TRAN currently at 3649.51.

Linda Piazza : 9/12/2005 12:31:01 PM

The OEX is currently testing the descending trendline off Friday's high, with the OEX at 574.54. Keltner resistance at 574.73-474.95 and then at 575.57, all on 15-minute closes. There's a slight flattening in that nearest Keltner resistance, indicating that it might be strengthening today, but it's not definitive enough to stay the resistance will hold.

Jeff Bailey : 9/12/2005 12:30:55 PM

WellPoint (WLP) $75.52 -1.62% Link ... no stock specific news today that I can find. I do see that on September 7, the company did adjust health and pharmacy guidelines for members affected by Hurrican Katrina. Press release at this Link

Linda Piazza : 9/12/2005 12:25:43 PM

RLX above last week's high, about to face the 30-sma at 461.84, with the 50-sma above that, at 464.31. There's been a bearish cross of the 30-sma down under the 50-sma. RLX is currently at 461.46.

Linda Piazza : 9/12/2005 12:23:41 PM

The RUT, TRAN and RLX, all fast-moving indicator indices, were hinting that this attempt would be made. On the OEX, the descending trendline off Friday's high is currently just a touch above 574.50, so that's the next level of potential resistance to be watched. OEX at 574.24 as I type.

Jeff Bailey : 9/12/2005 12:22:41 PM

12:00 Internals found at this Link

Jonathan Levinson : 9/12/2005 12:21:34 PM

QQQQ - Exit Point Alert -

Out QQQQ at 39.83, stopped for a 10 cent loss.

Linda Piazza : 9/12/2005 12:20:36 PM

The RUT usually adheres fairly well to daily Keltner R/S. Next Keltner target and resistance is at 683.00, with the RUT currently testing resistance at 680.51, all on daily closes. The RUT does sometimes break out of this Keltner resistance. It did so in the middle of June, leading into that big run-up into the early August high, for example, but it often finds resistance at that line on first touches, anyway, so it may be close to a pullback anywhere from the current level, up another three points or so. RUT at 679.83 as I type.

Jonathan Levinson : 9/12/2005 12:19:28 PM

The wavelet cycle is looking maxxed out to the upside here, our stop 2 cents away. What should have been a good catch of the 30 min rollover has morphed into a slow grind higher after an initial drop. Volume readth remains positive, overall volume light, and while disbelieve this move, there's less and less to see bearish in it. Link

Linda Piazza : 9/12/2005 12:13:57 PM

TRAN above the 200-sma, although still within testing range. More and stronger resistance near 3655-3663. TRAN at 3644.27 as I type.

Jeff Bailey : 9/12/2005 12:13:15 PM

12:00 Market Watch at this Link

Linda Piazza : 9/12/2005 12:13:01 PM

RLX climbing toward 461-ish resistance, at 459.82.

Linda Piazza : 9/12/2005 12:12:36 PM

RUT at HOD, at 679.32, still climbing.

Linda Piazza : 9/12/2005 12:05:26 PM

The OEX's last two five-minute candles have been springing up from the five-minute 100-dma at 573.49, with the OEX currently at 573.66. As long as it's doing that, it may go on challenging the descending trendline off Friday's low, with that currently at just above 574.50.

Linda Piazza : 9/12/2005 12:03:33 PM

TRAN back at the 200-sma. Some of the fast-moving, market-leading indices are trying to make a run toward the upside this morning, with the TRAN, RUT, and RLX being among those indices. So far, they're not being particularly successful, but this absolutely should be watched. In fact, the TRAN has just inched a few cents above the 200-sma.

Jonathan Levinson : 9/12/2005 12:03:04 PM

Volume breadth weakens to -1.11:1 on the NYSE and +2.14:1 on the Nasdaq. MSFT has just printed a session low at 36.53, -.05.

Linda Piazza : 9/12/2005 12:00:14 PM

Just took a look at OBV (On-Balance Volume) for the SMH, as proxy for the SOX since I've been told that QCharts OBV isn't valid for the indices. OBV has been turning lower, the whole time that the SMH has been rising off the August low. In fact, it's been headed down since the middle of July. That's not a good divergence to see, as it means that the bounce is not supported. Obviously, this is not a good market-timing tool.

Jonathan Levinson : 9/12/2005 11:58:42 AM

QQQQ is flirting with its 72 SMA again. Since Thursday, most of these moves have bounced. Once again, the short cycle is rolling over from a bearish divergent high as the short wavelet cycle bottoms. Once of these tests is going to fail, but there's no telling which one. A break below the prior low at 39.63 will confirm that this is the real deal. Everything above it is just noise, and potentially bullish noise at that. Link

Linda Piazza : 9/12/2005 11:56:32 AM

OEX heading into potential support from the five-minute 100/130-ema's, now risen to 573.17-573.49. The 15-minute versions are still tracking the bottom of the OEX's flag-like rise off the August low, with those averages at 571.37 and 570.49, respectively.

Jeff Bailey : 9/12/2005 11:48:27 AM

S&P Banks Index (BIX.X) components ... sorted by market cap at this Link ... snapshot view of BIX.X components as well as 13-week thru 30-year YIELD.

Traders/investors will focus on NET Change of bond yields (basis point) to understand flattening/steepening of yield curve. Then note PERCENTAGE Change of BIX.X components. What's "special" about MEL and CMA? What's "not so special" about FITB, ASO and HBAN last 20 sessions?

Jane Fox : 9/12/2005 11:46:17 AM

Linda I totally agree that the TRIN has been in a uptrend all day but the range is quite bullish so that pretty well negates the trend. Also in the last few months I have seen the TRIN quite bullish when the markets were very bearish so I no longer have a good feel for this internal. Link

Jonathan Levinson : 9/12/2005 11:41:44 AM

There's now a bearish wavelet divergence on the latest high for QQQQ, and volume breadth for the Nasdaq is holding below its morning highs, currently +2.47:1. But price is firm, with a bid under every dip. Our stop is just above R1 and just below the 30 min channel top at 39.85. I'm leaving it where it is, tight at 39.83. Were it to be raised, 39.87 is just above the current convergence of resistance. Link

Linda Piazza : 9/12/2005 11:40:59 AM

Another fast mover, the RLX, is attempting to move up, but it's still within the consolidation zone from the last four days, and hasn't moved above the 461-ish resistance from last week. The 30 and 50-sma's are at 461.75 and 464.25, respectively, with all this well within a potential right-shoulder level for a possible H&S on the RLX's daily chart. Still, a punch higher in the RLX might bring the OEX up, too, while a rollover in the RLX below the important 72-sma at 455.21 might bring the OEX lower, too. RLX at 458.54 as I type.

Jonathan Levinson : 9/12/2005 11:38:07 AM

Session low for ten year notes, with the TNX up 5.7 bps to 4.18%, testing resistance right here, above which 4.2% is the next confluence.

Linda Piazza : 9/12/2005 11:36:55 AM

Subscriber D.C. just pointed out that the TRIN has been climbing all day since the first five-minute drop. It's currently in a little bull-flag pullback, at 0.93 as I type. It hasn't yet approached Thursday's above-1.00 highs, though. Maybe Jane will take a look and tell us what she concludes in a little while. Thanks, D.C. Unfortunately, the RUT is climbing right along with the TRIN, suggesting opposite things for the markets.

Tab Gilles : 9/12/2005 11:35:40 AM

Last Thursday Richard Russell The Dow Theory went to neutral from bearish and pointed to the $UTIL & $SPX . here's a link on that story... Link Link

Linda Piazza : 9/12/2005 11:29:55 AM

I'm still watching that OEX chart displayed in my 10:25:38 post, still seeing nothing that argues against a possible retest of the bottom of that channel.

Jonathan Levinson : 9/12/2005 11:28:14 AM

The Fed's coupon pass is much larger than last week's 450M TIPS pass, this time in the amount of 1.1B deliverable tomorrow.

Linda Piazza : 9/12/2005 11:27:14 AM

The OEX has zigged (or zagged) back up again through the flag-like pullback off Friday's high to test resistance of that formaiton. Current descending trendline off that high is at about 574.66, with the OEX currently at 574.32.

Jeff Bailey : 9/12/2005 11:26:45 AM

Buy Program Premium ... DIA $106.91, SPX 1,241.27, QQQQ $39.78

Jeff Bailey : 9/12/2005 11:25:23 AM

Yield Curve ... today's news out of CBH isn't overly surprising as it relates to my discussions of the regional banks and impact of a flattening yield curve.

Quick 5-day and 20-day measure does show some steepening with 5-year yield up 13.7 bp last 5-sessions, while 30-year up 16.0 bp during same time. Over past 20-days, 5-year has dropped a sharp 13.2 bp, while 30-year up 1.0 bp.

Linda Piazza : 9/12/2005 11:20:10 AM

RUT at 678.67, above the 677-678 resistance, although currently inching back from the HOD. Next resistance may be at 679.60-680, but it's light resistance. If the RUT keeps climbing, it might ignite some buying interest in the markets in general. Bears want it slapped back instead.

Jonathan Levinson : 9/12/2005 11:18:57 AM

Bearish divergences abound on the 15 and 30 min QQQQ charts, but the 60 has yet to roll over from deep within overbought territory, and my carefully entered short at 39.73 is causing me to sweat as price refuses to drop. Link

Jeff Bailey : 9/12/2005 11:17:15 AM

Commerce Bancorp (CBH) $31.68 -6.16% (update to 10:42:11) ... Banker now forecasting Q3 EPS will fall $0.02 below consensus estimate of $0.47 and Q4 EPS will be $0.04 below the $0.49 consensus estimate.

"The continued flattening of the yield curve over an extended period of time has had a greater negative impact on net interest income, net income and earnings per share than originally projected by management," the company said.

Jeff Bailey : 9/12/2005 11:12:19 AM

11:00 Internals found at this Link

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

The OEX still zigs and zags within the flag-like pullback off Friday's high. It's currently zigging up . . . or is that zagging up . . . but staying broadly within the confines of that pullback.

Linda Piazza : 9/12/2005 11:05:37 AM

The TRAN still balances between the 200-sma's resistance and the 100-sma's support. There's also historical support near 3600 and the 50% retracement of the rally off the June low at about 3603.32. The TRAN is at 3635.67 as I type, with the 200-sma at 3640.62.

Jeff Bailey : 9/12/2005 11:04:10 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 9/12/2005 10:55:25 AM

Crude oil -.525 at 63.55, natural gas -.295 at 10.97.

Linda Piazza : 9/12/2005 10:55:22 AM

OEX Keltner outlook: Currently the OEX tests resistance on the 15-minute chart, at 574.01 on 15-minute closes. Next resistance, beginning to flatten slightly but only slightly, now from 574.81-575.36. Next support was just tested, at 572.99-573.21 on 15-minute closes, with 570.54-571.18 next support below that. OEX at 573.99 as I type.

Jonathan Levinson : 9/12/2005 10:54:20 AM

Volume breadth has weakened to 1:1 for the NYSE and +2.36:1 for the Nasdaq. Price remains firm, however.

Linda Piazza : 9/12/2005 10:51:58 AM

RUT at 678.26 currently, just a few cents below the HOD. No pullback there yet.

Linda Piazza : 9/12/2005 10:50:39 AM

BIX moving down, at the day's low now, just below 350, but approaching last week's support level. Last week's low was 348.86, with the BIX currently at 349.56. A move below last week's low, unless quickly reversed, suggests another retest of the bottom support of the BIX's broadening formation, with that now at about 345.90. As I type, the advdec line is trying to break higher, though, so it's tough to conclude just yet that the BIX (or the OEX) is going to continue to drop.

Jonathan Levinson : 9/12/2005 10:43:01 AM

The Fed has just announced yet another coupon pass, another permanent repo. No amount yet.

Jeff Bailey : 9/12/2005 10:42:11 AM

Commerce Bancorp (CBH) $32.00 -5.18% Link ... sharp drop from the $33.50 level in last 10-minutes after the banker warns on earnings.

Jonathan Levinson : 9/12/2005 10:39:07 AM

QQQQ breaks 72 SMA support here at 39.66, stalling the 30 min channel upphase and confirming a new short cycle downphase. In recent sessions, however, sudden bounces have occurred from these key support breaks. 100-tick chart at this Link

Linda Piazza : 9/12/2005 10:39:24 AM

OEX bears need to have profit-protecting plans for a test of 572.20-572.50, and then again at the 15-minute 100/130-ema's at 571.10 and 570.22, respectively. A sound breakdown through those averages would corroborate a breakdown out of that channel. Remember my cautions from last week that it's possible the entire climb through this rising regression channel has been nothing but a retest of the broken support of the former longer-term rising regression channel. The OEX moved back into that longer-term channel on Friday, but was that just an overrunning of resistance or will the support hold today (or tomorrow) as the OEX comes down to test that former support? My suggestion would be that bears take at least partial profits if 570.22-571.10 is tested, but that those with enough of a cushion to do so might reset stops to breakeven on the rest of the position and see what happens with that test. Some might want to take full profit and then watch the test and see how it proceeds. If the OEX should just dive through those averages, I don't think I'd take full profit yet, but instead would opt for the partial-profit and resetting-stops choice. I would expect at least a bounce attempt from a test of the support of this newest rising regression channel, however.

Jonathan Levinson : 9/12/2005 10:33:07 AM

Thanks- I'm more worried about not blowing the exit, as I did with that 30 cent profit from Wednesday's entry that got stopped out for a 1 cent loss.

Linda Piazza : 9/12/2005 10:32:58 AM

Something that might be watched on the RLX for either invalidation or confirmation of a potentially bearish formation, since the RLX sometimes prompts OEX moves, too: Link

Jeff Bailey : 9/12/2005 10:31:06 AM

CSS Industries (CSS) $35.15 -3.46% Link ... mass marketer of seasonal products trades lower after the company warned that it now sees fiscal 2006 earnins lower-than-expected as higher energy prices cut into margins. Company now expects per-share earnings in the fiscal year ending March 31 to increase by 13% to 18% instead of the previously forecast range of 20% to 25%.

Based on fiscal 2005 EPS of $2.45, guidance would put EPS between $2.77 and $2.89. Consensus was for $3.00.

Jonathan Levinson : 9/12/2005 10:29:53 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.73 stop 39.83.

Linda Piazza : 9/12/2005 10:25:38 AM

OEX 15-minute chart: Link

Jeff Bailey : 9/12/2005 10:22:33 AM

eBay (EBAY) $39.00 +0.95% Link ... has reversed its opening bell losses. #3 most active behind SEBL $10.34 +13.25% Link and ORCL $13.41 +0.97% Link

Linda Piazza : 9/12/2005 10:22:06 AM

The RUT isn't doing much of anything today, either on traditional or Keltner charts. However, it's looking extended on the 15-minute Keltner chart. Many indices do, though, and went into Friday looking that way, too, so this chart setup is nothing more than a suggestion that bulls keep those profit-protecting plans in mind.

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

TRAN pulling back slightly from its test of the 200-sma from below. It's nothing too steep yet, and it's staying above 3603-3611 support. TRAN at 3631.73 as I type.

Jonathan Levinson : 9/12/2005 10:18:23 AM

Meanwhile, GOOG hits a high of 309.14, up nearly 4% this AM. Those Sept. 310 call writers are facing a long op-ex week.

Linda Piazza : 9/12/2005 10:18:05 AM

SOX still looking vulnerable on a Keltner basis to 479.98-480.55 (slightly different values than earlier).

Jonathan Levinson : 9/12/2005 10:17:28 AM

QQQQ tests short cycle support at 39.68 as the wavelet oscillator hits oversold. My guess is for a terminal bounce within the short cycle here to test the session high, but it needs to kick in now.

Linda Piazza : 9/12/2005 10:13:48 AM

Germany's DAX is back below 5,000 again, at 4,996.37 as of a few minutes ago.

Jeff Bailey : 9/12/2005 10:15:26 AM

10:00 Internals found at this Link ... 5 and 10-day NH/NL ratios reversed up while I was on vacation with bullish leadership once again resuming. 10-day NH/NL ratios at both the NYSE and NASDAQ reversed up on 09/07/05 at respective 77.9% and 64.6%.

Linda Piazza : 9/12/2005 10:10:59 AM

TRAN bouncing, back at the 200-sma as I type. Watch this average, at 3640.65 and the 72-ema at 3660.80. The TRAN is at 3640.15 as I type.

Jonathan Levinson : 9/12/2005 10:09:56 AM

Volume breadth is +1.04:1 on the NYSE and +2.89:1 on the Nasdaq.

Linda Piazza : 9/12/2005 10:08:22 AM

OEX back below the trendline established Friday, off Friday's high. Advdec line turning lower again. OEX again looking vulnerable to 572.89 (slightly higher value than earlier). So far, the upward Keltner trend is still maintained, but so is the bull flag pullback within that trend.

Jonathan Levinson : 9/12/2005 10:05:56 AM

QQQQ has call resistance at 40 and put support at 39, and my guess for this op-ex week is that QQQQ will not deviate from that 1 point range. Given the relative toppiness in the daily and 60 min cycles, I'll be looking to enter a short as close to 40 as possible. Currently, that's looking like 39.80-.82: Link

Jeff Bailey : 9/12/2005 10:02:14 AM

10:00 Market Watch found at this Link

Linda Piazza : 9/12/2005 10:01:54 AM

The OEX is not really maintaining its breakout attempt over the descending trendline off Friday's high, but not retreating below that trendline again, either. It did, however, just close the first 30-minute period above the Keltner lines currently at 574.07-574.15, maintaining a short-term upward bias.

Jonathan Levinson : 9/12/2005 9:54:33 AM

30 min channel resistance rises to 39.78 QQQQ, the short cycle in an upphase: Link

Jeff Bailey : 9/12/2005 9:54:04 AM

Sell Program Premium ... DIA $106.87, SPX 1,241.52, QQQQ $39.74

Jonathan Levinson : 9/12/2005 9:53:03 AM

The Fed announces a 4.75B overnight repo for a net add in that amount.

Jonathan Levinson : 9/12/2005 9:50:13 AM

Bonds continue to weaken, with the TNX up 3.9 bps at 4.162%, IRX up 3.8 bps at 3.435%. For the TNX, next minor resistance is 4.18% if 4.14%-4.16% confluence holds as support.

Linda Piazza : 9/12/2005 9:49:16 AM

The OEX did just break back above the descending trendline off Friday's high, but it's again pulling back as I type, so it's uncertain how strong the breakout potential is here, and how certain a retest of that high might be. Bulls, look for first potential resistance at Friday's high if the OEX should maintain this breakout. Keltner resistance at 575.19 on 15-minute closes.

Jeff Bailey : 9/12/2005 9:52:22 AM

Goldman Sachs (GS) $117.32 +0.98% Link ... stock hits a new 52-week high for a 4th-straight session. I will be looking to close out these puts (Oct. $100) on any weakness. Perhaps $0.40 per contract if we get the chance.

Jonathan Levinson : 9/12/2005 9:47:11 AM

QQQQ clears Friday's highs here. Link

Linda Piazza : 9/12/2005 9:45:58 AM

OEX testing still-rising 15-minute Keltner resistance from 574.23-475.57 with further resistance at 575.14, as the close of this 15-minute period approaches. No change in Keltner trend yet for the OEX. It tried to push above the descending trendline off Friday's high but looks as if it will close the current five-minute period back below it. Bulls don't want to see a quick reversal now, but for the time being both the Keltner uptrend and the bull flag pullback within that uptrend are being preserved.

Jeff Bailey : 9/12/2005 9:43:59 AM

Current OPEN MM Profiles found at this Link ... Vacation Updates to CLOSED Positions ... On September 1, traders should have closed out their bearish/short position in shares of Dave & Busters (DAB) at the open of $13.95 when the stock traded below my bearish target of $14.00 ($+1.45, or +9.42)

On September 1, traders should have closed out their bullish position in shares of General Cable (BGC) at my bullish target of $16.50 ($1.51, or +10.07%).

Linda Piazza : 9/12/2005 9:42:36 AM

The SOX is lower this morning, looking vulnerable to 479.62 on a Keltner basis. Some of these downside targets were not quite being met late last week.

Jonathan Levinson : 9/12/2005 9:39:43 AM

Nasdaq volume breadth is down to 2.64:1, still quite strong. The TRINQ is in extreme territory at .30- usually reflects "unsustainable" buying pressure, but if sustained, can indicate the start of a very strong upmove (ie 2002 Oct. lows).

Linda Piazza : 9/12/2005 9:38:26 AM

OEX is trying to avoid staying below Keltner lines at 573.91-574.01 on this first 30-minute period and that may change that theory about vulnerability to 572.75, if it can maintain those values. The OEX is dropping back below them now, so the action is inconclusive, so far. The advdec line is dropping, but the OEX isn't dropping much with it, at least not yet. Fifteen-minute Keltner resistance just overhead for the OEX, and it hasn't yet driven above the descending trendline off Friday's high, though. So far, the vulnerability remains but is not ironclad.

Jeff Bailey : 9/12/2005 9:35:30 AM

Bidu.com (BIDU) $104.90 +8.62% Link ... also "hot" Jonathan.

Jonathan Levinson : 9/12/2005 9:35:10 AM

Volume breadth is -1.11:1 for the NYSE, +3.46:1 for the Nasdaq.

Linda Piazza : 9/12/2005 9:35:01 AM

Jeff, I was busy studying charts. Welcome back from me, too. Hope you had a good vacation and that Drake did some more recovering while you were away from the MM.

Linda Piazza : 9/12/2005 9:33:40 AM

TRAN opens modestly lower.

Jonathan Levinson : 9/12/2005 9:32:59 AM

GOOG continues to run above 300, +3.95 at 303.04 here. Current high is 303.25.

Linda Piazza : 9/12/2005 9:32:13 AM

I see a possibility for a continuation of the pullback off Friday's low, with current OEX vulnerability to about 572.75.

Jeff Bailey : 9/12/2005 9:33:25 AM

Oracle (ORCL) $13.46 +1.35% Link ....

Mark Davis : 9/12/2005 9:30:07 AM

Welcome back from me also Jeff... Link

Jeff Bailey : 9/12/2005 9:30:03 AM

Siebel Systems (SEBL) trades up $1.21, or 13.25% from its Friday's close of $9.13 after the software maker said it has agreed to be bought by Oracle (ORCL) for $5.85 billion in cash and stock.

The deal values Siebel's shares at $10.66 per share. Oracle said the deal is expected to boost earings, excluding items, in fiscal 2007, and contribute to Oracle's goal of 20% annual growth on a long-term basis.

Jonathan Levinson : 9/12/2005 9:27:18 AM

I would have expected more of an upside pop after an uneventful weekend, and I suspect that it's the 30 min cycle keeping a lid on the action. Because the 60 min and daily cycles still have room to run and have not stalled, however, there's still the possibility of upside followthrough. Also bullish is the fact that the Fed added funds through a 7-day repo on Friday, which means that there are no expirations today. With bonds weak, the Fed will be more inclined to be generous, and any amount added with be a net add. Bulls need to see a move above Friday's 39.67 high, but it will have to be a sustained move to get the channel tops to rise above their current 39.75 level. Link

Jeff Bailey : 9/12/2005 9:20:22 AM

Thanks Jonathan. Looks like market participants did some buying while I was gone.

Jane Fox : 9/12/2005 9:15:21 AM

Dateline WSJ After tottering on the edge of solvency for much of this year, Delta Air Lines is expected to seek bankruptcy-court protection as early as this week, and it's possible the spike in prices for refined fuel caused by Hurricane Katrina is what pushed the carrier over the edge.

Jeff Bailey : 9/12/2005 9:14:14 AM

Program Trading Levels for Monday ... HL Camp & Company has their computers set for program buying at $+7.76 and set for program selling at $+5.34.

Jonathan Levinson : 9/12/2005 9:13:55 AM

Welcome back, Jeff!

Jonathan Levinson : 9/12/2005 9:13:09 AM

QQQQ's daily cycle indicators made it to the 80% level on Friday, now entering overbought territory. The 30 min cycle indicators have topped and are starting to roll, while the 60 min cycle still rises. My interpretation of this is that we've entered or are very close to a potential distribution zone. There is certainly the potential ofr a stronger rally from here, but a decline, even if only corrective, looks more likely. Upper 30 and 60 min channel resistance are at 39.75, where they were for most of Friday afternoon. Below 39.57, the intraday cycles should roll to the downside.

Jeff Bailey : 9/12/2005 9:10:57 AM

Pivot Matrix found at this Link

Linda Piazza : 9/12/2005 9:03:27 AM

Friday, the OEX broke out again. I was driving most of Friday, and had limited computer access after I arrived. I was able to see only closing values for the indices until I arrived home last night. Nevertheless, I was already thinking about this post I'd write last night, thinking about how I was going to be telling about all the bullish things that had happened (the OEX broke back above the former support from the long-term rising regression channel off the spring low, for one). However, something happened on the way to writing this post after I'd studied charts Thursday night. It wasn't anything all that bearish, either, but just that there's still a caveat to all this bullishness.

Thursday had reversed all of Wednesday's gains, but Friday saw no follow-through to the downside after that potential reversal signal, and the action blew my best-guess scenario for the day out of the water right away. Luckily, that scenario had as one necessary element that the OEX move down right away from the open, and I was able to see that wasn't happening and warn traders that it wasn't working out as expected. Also, I'd cautioned pre-open that I didn't see enough evidence to suggest a bearish entry at the open. Good thing I didn't.

So, what do I see and why is there a caveat to all this bullishness? Link The caveat lies in the fact that by late Friday, the OEX had begun a small pullback through the latest rising regression channel. Each approach to the top of that rising regression channel has shown bearish divergence, not in a classical way but in a way that I've often noticed can have some significance. I'll explain. The first and second approaches pierced it, the third almost touched it, the fourth stopped further away, and Friday's approach so far stopped just barely above the midline of the channel. Of course, there can be variations in how Q-Charts constructs these channels, based on where you place the cursor to begin tracking the channel, and perhaps the true channel just slants differently than marked on that chart. However, when I see that kind of bearish divergence, that's sometimes a sign that the support of the channel may be weakening. . . or that I've just drawn the thing wrong. Therefore, the caveat is that a test of the conjunction of the support levels of those two regression channels, one off the spring low and one off the August low, must be watched closely if it happens today or tomorrow. There's a possibility that it could be tested today. By 2:00 today, the two support lines will converge at about 572.20, as mentioned on that chart posted above.

Some chart setups suggest that the test might not come today, but tomorrow, perhaps after one more high. Here's the Keltner setup. As the OEX closed Friday, it was looking vulnerable to 572.70 or so, at least, but maintaining that downside target requires that the OEX close the first 30-minute period below Keltner lines currently at 573.89-573.94. It probably also requires that the OEX open below those levels. Next support below that 572.70 level is 570.17-570.90, which would constitute a retest of the 15-minute 100/130-ema's. Those ema's are currently tracking the rising regression channel rather closely, and the OEX has been bouncing from them, so they can be used as benchmarks as to whether this new rising regression channel's support has been broken or is being maintained.

So, it's rather simple, really. It looks as if a pullback through that channel may have begun already, with the OEX perhaps slated to return to a new test of the 15-minute 100/130-ema's. Current bears need profit-protecting plans near 572 and then again near those averages. All bears need to watch for an upside break of the descending trendline off Friday's high as a sign that the OEX is going to head upward again through that channel, making another attempt on Friday's high. If that happens, current bulls need a profit-protecting plan for a retest of Friday's high and then for the top of the channel, at about 578 currently.

Bulls who want a new bullish entry, though, want a pullback to and bounce from the 15-minute 100/130-ema's for a potential new entry, but they want the right internals to set up and they don't want a quick plunge through those averages. Stand aside until you know there's a bounce, accompanied by an upside break through the descending trendline off Friday's high. Bears want a plunge straight through those averages or at least some consolidation there and then a rolling over through those averages.

My quick study showed that much of the OEX's recent gain has been fueled by tech stocks, with the SOX turning in a strong white candle for a weekly chart. Yet that weekly candle ended right at the top trendline of a long-term (more than a year) rising regression channel. In Jim's weekend Wrap, he also pointed out that it's right at a long-term descending trendline, too. The SOX couldn't close the week above that channel or the trendline that Jim drew. I wouldn't be surprised to see the SOX at least pierce that channel on my charts intra-week, but watch for potential resistance there by week's end. A weekly close strongly above that channel will be bullish.

I also notice that while the TRAN did rebound off the steep decline from early Friday morning, it could not close back above the 200-sma and closed below it for the first time since July 7. The BIX, an index that has been providing a sort of step-by-step blueprint for the OEX's next actions, rose on Friday, but couldn't recoup all of Thursday's losses. Neither could the important RLX. The TRAN and SOX are going to be important to watch.

Linda Piazza : 9/12/2005 8:46:32 AM

The DAX is oscillating around the flat-line level right now, having climbed off sub-5,000 levels over the last couple of hours in what may or may not be a bear flag climb. This may be important to watch, as our futures also climbed off their levels of an hour ago as the European markets rose off their lows of the day. The DAX's climb looks bear flag-ish, but it has climbed above the descending trendline off the day's high, so the nature of that climb is inconclusive as yet.

Jonathan Levinson : 9/12/2005 8:32:42 AM

Ten year notes hold their losses at the cash open, with TNX up 2.2 bps at 4.145%, another attempt on the 4.14%-4.16% confluence zone. The 13-week bill rate, IRX, is up 1.6 bps at 3.413%.

Jonathan Levinson : 9/12/2005 8:03:24 AM

EBAY is down 2.64% to 37.60 this morning on news that it has agreed to pay $1.3 billion in cash and $1.3 billion in stock for the Luxembourg VOIP provider, Skype. It intends to use the acquisition to add free web telephone calling capability to its online auctions. Skype, a private company, expects revenue of $60 million for 2005 and more than $200 million in 2006 and has a member base of 54 million callers. It expects to double that within a year. This is EBAY's largest acquisition to date, larger than its acquisition of Paypal.

Jonathan Levinson : 9/12/2005 7:45:20 AM

Equities are mixed, ES downt 1 to 1247.5, NQ up .5 to 1623, YM down 9 to 10711 and QQQQ up 2 cents to 39.64. Gold is down .5 to 452.50, silver -.028 to 7.04, ten year notes -11/64 to 111 13/32, crude oil down 40 cents to 63.675 and natural gas is down .205 to 11.06.

There are no major economic reports scheduled for today.

Linda Piazza : 9/12/2005 7:13:38 AM

Good morning. The Nikkei posted a strong gain Monday after Prime Minister Koizumi's party and coalition achieved a landslide victory in this weekend's election. Most other Asian markets gained, with China's an exception. European markets started out positive, but have been sinking since near the open, with Germany's DAX currently retesting the 5,000 level after closing a few points above it Friday. As of 6:59 EST, gold was down $1.00, to $452, and crude, down $0.24, to $63.84. More detail about Asian and European markets follows in succeeding paragraphs.

This weekend, Prime Minister Koizumi's bet paid off, and his party won a landslide victory in the election he called. He won a majority in the lower house, his party capturing 296 seats in the 480-seat Lower House, with the coalition put together with New Komeito winning another 31 seats. The Bank of Japan's Governor Fukui spoke out in favor of postal privatization, the pet project over which Koizumi called the election. The governor also reiterated his commitment to keeping monetary policy easy. Speaking in Basel, he also mentioned again his concerns about the way crude prices might weigh on global economies. Koizumi still will face an extraordinary session in which he will likely be appointed as Prime Minister again, and then he would form a cabinet and resubmit the postal bill. Some feel that this landslide victory would extend Koizumi's likely period of holding power, and it effectively removes the threat of a too-early change in the easy monetary policy.

With that election news, the Nikkei was expected to open higher, and it did, opening almost 150 points higher, climbing from that opening level, and then coiling the rest of the day. The Nikkei closed higher by 204.39 points or 1.61%, at 12,896.43. Banks rose in early trading, as it's presumed that they'll benefit from the postal privatization, as Japan Post sells off assets and banks gain more fees from fund management. Insurers and brokerages also gained. Koizumi's postal privatization plans would split Japan Post into four separate private entities. One business would manage mail delivery; another, postal services; a third, insurance; and the fourth, savings deposits.

Economic numbers also impacted trading. Japan's second-quarter GDP was revised higher to 0.8% quarter over quarter from the preliminary 0.3%. The annualized rate leaped to a 3.3% advance against the preliminary 1.1%. External demand was unchanged, but private consumption's contribution to the GDP lessened, revised lower to 0.3% increase from the preliminary 0.4%. In another release, the August Domestic Corporate Goods Price Index rose 1.7% year over year, up from July's 1.5% gain. This and the 0.2% month-over-month gain were in line with expectations. Higher commodity costs caused the rise with finished goods still declining. The decline in finished goods, 0.4% year over year or flat month to month, has been getting smaller.

Most other Asian markets also gained. In Taiwan, exporters gained on the back of a greater-than-expected expansion in Japan. The Taiwan Weighted gained 0.75%, and South Korea's Kospi rose 0.51%. Singapore's Straits Times rose 1.04%, and Hong Kong's Hang Seng climbed 0.22%. China's August Consumer Prices rose 1.3%, with Bloomberg pegging that as the slowest rate in two years. The Shanghai Composite eased 0.12%.

Many European markets currently decline toward or below the flat-line level, losing earlier gains. Those earlier gains had been prompted by a weaker euro, among other causes, with European automakers benefiting from that currency effect. In Italy, Prime Minister Berlusconi worried over the weekend about Italy's competitiveness if the hyper-valuation of the euro is not resolved. The DAX may be suffering from pre-election jitters, as it's down ahead of next week's election, and the euro may also have declined against the yen and some other currencies due to that upcoming election.

A deal-making Monday helped prompt early enthusiasm, too. Germany's insurer Allianz AG made an offer for the shares of Italy's RAS that it didn't already own, claiming that it would then incorporate into a new kind of company. RAS climbed and Allianz eased in early trading. A U.K. newspaper speculated that Scottish & Southern Energy might bid for Scottish Power, too, if E.ON also makes an offer. French outdoor advertising company JC Decaux gained in early trading after announcing a deal to continue its advertising concession for two NYC airports, John F. Kennedy International and La Guardia, among other transportation-related hubs in the U.S. In other news not related to deals, Swiss Re posted modest gains in earliest trading after raising its pre-tax claims estimated on Hurricane Katrina to $1.2 billion and the insurance market loss estimate to $40 million. The company maintained its dividend payout plan for the year, but said that it probably wouldn't increase its earnings per share by 10% for the year.

As of 6:54 EST, the FTSE 100 was higher by 3.20 points or 0.06%, at 5,362.50. The CAC 40 was down 0.31 points or 0.01%, at 4,491.37. After closing just above 5,005 on Friday, the DAX was hovering near 5,000, down 4.89 points or 0.10%, at 5,001.04.

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