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Jeff Bailey : 9/15/2005 2:06:05 AM

Pivot Matrix for Thursday at this Link ... Note tomorrow's INDU/DIA DAILY S1/MONTHLY Pivot Correlations as I'll be open to selling the DIA Sep. $105 puts NAKED as discussed if we get a good setup (VIX.X/TRIN similar to today).

Hmmmm.... my $39.05 bearish target on the QQQQ may have some work at the WEEKLY S1/MONTHLY Pivot correlations.

Jeff Bailey : 9/15/2005 1:25:55 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $+7.87 and set for program selling at $+5.47.

Fair Value for the S&P 500 is $6.52. That price will not change during the day.

Jeff Bailey : 9/15/2005 12:50:51 AM

3-chart Montage of Wednesday's $PREM.X, the es05z, the SPX.X (per 11:51:41) question at this Link

To understand how a BUY PROGRAM PREMIUM is generated. I set my cursor on the 10:40-10:45 AM ET bar of $PREM.X, es05z and SPX.X.

Look at the high/low values of the es05z (1,240.00 - 1,238.00 = 2.00) and then the high/low values of the SPX.X (1,233.04 -1,231.42 = 1.62).

A question I have, which hopefully a trader would answer with a "yes!" is ... Can a trader pretend he/she is an options market maker, look at an option chain, understand what the VIX tells you about what might be getting ready to happen into an option expiration? Use that information to then set up a trade and utilize pivot analysis levels to define levels of risk/reward?

Hard work? You bet it is. Is it always right? Not always, but when you set up the scenario with some valid observations, then add in some levels where computers might well be selling/buying, a trader can have some confidence, even in an uncertain "expiration" trade.

Don't think the stock market is "fixed." As in, it is always manipulated. It isn't! But into an option expiration, BIG MONEY can move things where they want to, for a BRIEF period of time, to get things to close, or do things that the BIG money wants it to do.

The OPTION chains and an understanding of how to read indicators like TRIN and volatility measures (VIX, VXN, VXO) is helpful.

Tab Gilles : 9/14/2005 11:51:01 PM

Two key catalysts for the market... Thursday's CPI data at 8:30am and Friday's Option expiration.

QQQQ Wednesday 9/14 3:41PM post, the $NDX gave a Partial sell. Now that said it may give a full sell signal, but I'm slightly hesitantin getting to bearish at this point. I was going over the open interest for QQQQ Sept. and it is heavily in favor toward the put side. Now should one take the contrarian view and say that that index should have higher to go? Then again looking at the daily chart of the QQQQ using a BB and 50 ma with a Fib Retacement from the April low. the $39(1560 $NDX) level will be a key point to be tested. A break below would be bearish, but then again it may rally as it has in the past few months. Guess we'll just have to keep an eye on that important technical support level. Link

$SPX On the SPX, it looks like it want to go down some more and test the 1222 level. Link

$NASI Link

$SOX Link

Jeff Bailey : 9/14/2005 11:51:41 PM

Trader's Question ... I see the entries "Sell Program Premium ." and "Buy Program Premium .." in today's Market Monitor. What does this refer to? Id there a FAQ where I can look up terms used?

Response I had written several articles on how intra-day traders can utilize this information, but when we converted to the new OptionInvestor.com format, those articles were lost/deleted/not readable.

I'll try and write a couple of new articles again.

In the meantime ....

These buy and sell program PREMIUM alerts that I will post are generated as follows.

First .... Understand that the "cash market" is the S&P 500 Index (SPX.X), which closed at 1,227.16 today (Wednesday, 09/14/05).

Second ... Understand that the "futures market" is currently the December S&P Futures (sp05z), which settled at 1,234.60. You could also use the December e-mini (es05z) settlement of 1,234.50.

Now ... note the "difference" between the Cash close and futures settlement?

1,227.16 - 1,234.50 = 7.34

See the difference?

OK, this is similar to "time premium" of an option. The futures is HIGHER than cash as their is three-months worth of time premium.

Now ... each day, almost like compounding of interest on a bank account, all 500 of the SPX stocks have their quarterly dividends added up, and as we approach DECEMBER expiration, each day that passes, the "time premium" some of those accrued dividends will fall off.

Now ... each day, when all the dividends are added up, then discounted/subtracted for time remaining until FUTURES expiration takes place, that difference will diminish. What this actually is called is "fair value." As in "fair value" of what the FUTURE is, minus the dividends that one might have received if they bought all 500 of the stocks that comprise the "cash" or SPX.

It is important for a trader to have this concept in mind, as it builds toward how a buy/sell program PREMIUM is generated.

Think about it for a second. You've probably heard about how efficient the markets are. That is .... the markets are very quick to discover, and then take advantage of any price discrepancy quickly. Right?

OK ... While you and I may think the "cash" and futures markets are mirror images of each other, that isn't entirely accurate. How come? Imagine YOU are only trading futures. If you want to SELL them, do you care what the SPX does? If you want to BUY them, do you care what the SPX does?

OK ... Now you have to get in the mindset of what is going on from an INSTITUTIONAL (big money) trade. You and I might trade 1, 2, 3 futures contracts, but what about the BIG money players that are trading 100, or 1000 contracts? That can become some VERY big money.

Here's what happens, and what generates these buy and sell program PREMIUMS.

Tomorrow, or Thursday, 09/15/05, FAIR VALUE for the S&P 500 is $+6.52. Just think of this as ... the FUTURE is worth $+6.52 premium over CASH. In an EFFICIENT MARKET, for tomorrow ONLY, an efficient market would ALWAYS have futures trading $6.52 above the cash market. If all that happened each day was every trader trading just 1 contract, you can imagine how easy it would be for the market to remain effecient. Right? Prices can be easily matched to keep FAIR VALUE at $6.52 between cash and futures.

Aha! But we want to know of a way to track BIG MONEY at any given point in time.

So ... what we can do is assign some levels EITHER SIDE of FAIR VALUE to pick up on any type of discrepancy. In trader terms, we call this discrepancy ARBITRAGE. You may have heard this term (arbitrage) used in trading lingo. All it is (arbitrage) is a point in time where the market is NOT EFFICIENT.

OK ... each morning, I'll post two levels from HL Camp & Company. "HL Camp & Company has their computers set for program buying at $+7.87 and set for selling at $+5.47.

Remember ... FAIR VALUE for the S&P 500 (for 09/15/05) is $6.52. Do you see how the program buying level $7.87 (for 09/15/05) is above FAIR VALUE, and how $5.47 (for 09/15/05) is below FAIR VALUE? It's like a "collar" or range either side of an EFFICIENT MARKET.

So how does a PROGRAM BUYING LEVEL of $7.87 get generated? Do this real quick ... $7.87 - $6.52 = $1.35. How can we create ARBITRAGE, or a NON-EFFICIENT market of $1.35? I could create such an event if I BOUGHT $20 million of futures right? Cash market might be sitting at 1,227.16, but a sudden burst of BUYING in futures would have the futures trading higher to (1,236.00) .... here ... 1,236.00 - 1,227.16 = $8.84

See how $8.84 is GREATER than the buy program premium of $7.87?

This "greater than" is sudden and creates the ARBITRAGE. What has to happen in an EFFICIENT market? Correct! The cash market will get BOUGHT in order to remove that ARBITRAGE. Boom! Suddenly, the market is efficient again.

Remember too ... for each 1-point move in the S&P futures, that 1-point move is $50/per contract!

A sell program premium? Just think the opposite. Suddenly sell a large $ amount of futures contracts, while cash market is sitting there, the lower collar, or sell program premium is generated ($+5.47 for 09/15/05) and we as traders are now alert to a large amount of selling. ARBITRAGE is created. What must happen in an EFFICIENT market? Yes, selling of the cash market.

OK ... Now you and I could see all of this, if all we did was sit and watch two charts all day. The futures and cash side-by-side. But we would go crazy! Heck, if I posted EVERY buy/sell program PREMIUM on busy days, I can go crazy trying to keep up with them.

Aha! But computers are wonderful. What we can do in the electronic age is use our computer to track this difference.

It is easy right? All I have to do is have my computer track where the futures are trading and where the cash market is trading. Each second of every minute, of every hour, of every day, I could then measure the difference between futures and cash. Remember however, the cash market is from 09:30 AM ET to 04:00 PM ET, while futures trade almost 24 hours each day.

So, how do I do this?

I subscribe to QCharts (www.quote.com) Link for my charting and they track a "symbol" $PREM.X , which is the Premium of S&P 500 Futures.

All this $PREM.X is doing, is measuring the difference between cash and futures.

Cool! With QCharts (and some other charting services that track the S&P 500 Premium) I can now set two alerts each day, based on the buy/sell program premium levels HL Camp & Company give us. I can set an UPSIDE alert at tomorrow's $+7.87 and I can set a DOWNSIDE alert at $+5.47. If these are triggered, I can be ALERT to some type of ARBITRAGE taking place, and BIG MONEY moving in, or out of the market.

Now, I don't always post EVERY SINGLE buy/sell program premium that takes place each day. For instance, on Wednesday (09/14/05), if I put a horizontal line on my QCharts' $PREM.X chart at the $+5.61 sell program premium level (see my Market Monitor post at the very bottom) ie Program Trading Levels for Wednesday ... HL Camp & Company has their computers set for program buying at $+7.75 and set for program selling at $+5.61) and if I look at this chart $PREM.X on a 5-minute interval I would see that the $PREM.X pierced below the $5.61 level 11 times. If I placed a horizontal line at $7.75 .... I see this line being pierced twice (10:30-10:35 AM) and then again at 10:40-10:45 AM.intervals.

OK ... now you see what my posting are in regards to, and you should have a general feel of what is going on. This may, or may not benefit you in how you trade. For some, it DOES! That's great.

Now ... I also try and post (as fast as I can type) what some of the major benchmarks DIA, SPX, QQQQ are trading at when a PROGRAM PREMIUM is found.

Why do I do this?

That's another article/lesson in how PIVOT MATRIX levels can be utilized.

Yes! If you believe that computers can be programmed to buy or sell at or to some type of mathematically formulated level, then suddenly pivot levels make sense. Again... for some this is helpful, for some it may not be.

Again... this is another subject, but one that begins to build on how a trader can be alert as to what BIG money is doing on a day-to-day basis.

Jeff Bailey

OI Technical Staff : 9/14/2005 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.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Jeff Bailey : 9/14/2005 6:37:28 PM

Northwest Airlines (NWAC) $1.87 +19.10% ... plunged to $0.65 when released for trade. I tried to short some stock in my personal account today at $1.87, thought I got filled, but Ameritrade has notified me that they didn't have any stock to loan for a short. Today's bid may well have been bull speculators, but also some "old shorts" that simply said "I've done enough damange and have enough of a gain to lock in profits."

If YOU are short NWAC, I'd think about closing out here in extended at $0.85. Some times, a short that wants to move on and not wait until delisting, or "no bid" just wants to cover, take his/her profit and move on.

If I had gotten short today before the close, I'd be covering here, maybe look for a short-cover rally/bounce to try another short for an eventual "no bid."

Jeff Bailey : 9/14/2005 5:34:06 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/14/2005 5:26:40 PM

Northwest Airlines (NWAC) $1.87 +19.10% Link ... Files for Chapter 11 Bankruptcy

Jeff Bailey : 9/14/2005 5:07:29 PM

I've got September Fed Funds futures (ff05u) at 96.41, so ~38% chance of 25 basis point hike next week.

Jeff Bailey : 9/14/2005 5:00:34 PM

Closing Internals found at this Link

Jeff Bailey : 9/14/2005 4:58:09 PM

I've got December Fed Funds (ff05z) at 96.07, so market participants factoring a 70% chance of two more 25 bp rate hikes. Back on 09/02/05, this Fed Funds contract did spike to 95.25 and rule out the second cut intra-day, but has been falling (the contract's value) the past several sessions.

Jeff Bailey : 9/14/2005 4:49:37 PM

Delata Airlines (DAL) $0.71 -8.97% Link ... files for Chapter 11 Bankruptcy protection.

Tab Gilles : 9/14/2005 4:34:58 PM

$GOX up on a lower dollar. Link There is uncertainty over the Federal Reserve's tightening cycle before the Federal Open Market Committee meeting on interest rates on Sept. 20th. Gold's move is signaling that the Fed is going to raise a 1/4 point next week. Rising rates tend to support the dollar and, as a result, pressure gold. Conversely, a lower dollar makes dollar-priced precious metals cheaper for investors overseas. It had been the expectation that traders expect- no rate increase, if there is one that may cause a sell-off in gold. Buy the rumour, sell the news.

EUR/USD/$GOX 3 year chart Link

Jeff Bailey : 9/14/2005 4:20:56 PM

Current OPEN MM Profiles found at this Link ... Today's activity ... Swing traded short the QQQQ at $39.48, current stop is $39.35, targeting $39.05.

Jeff Bailey : 9/14/2005 4:03:49 PM

QQQQ $39.18 -1.13% ... DAILY Pivot Levels for tomorrow are ... $38.81, $38.99, Piv= $39.34, $39.52, $39.87.

Jeff Bailey : 9/14/2005 3:54:43 PM

QQQQ $39.21 -1.05% ...

Jeff Bailey : 9/14/2005 3:54:16 PM

Celgene (CELG) $54.65 +3.32% ...

Linda Piazza : 9/14/2005 3:49:25 PM

The OEX is attempting a bounce after approaching the 200-sma. I would expect a bounce to take the OEX up to or at least approach the neckline for that H&S, so at about 569.40, but I don't know that it will happen today. There's Keltner resistance at 568.40 on 15-minute closes, and that could hold. Bears, there's no guarantee that the OEX will reach those downside Keltner and H&S targets, not with the 200-sma between the OEX and those targets. That's why I suggested at least partial profits as the 200-sma was approached. Don't let a winning trade turn negative on the rest of your position, either.

Jeff Bailey : 9/14/2005 3:49:21 PM

DIA $105.58 -0.49% ... most active Sep options are $106 call (5,312:17:448), $104 put (2,919:40,979), $106 put (2,177:22,997), $105 call (1,970:21,419). The $105 puts just 276:34,046

Tab Gilles : 9/14/2005 3:46:13 PM

Murphy Oil (MUR) Entry point $50. Entry point (partial position) may occur in next few days. Link

Tab Gilles : 9/14/2005 3:41:27 PM

Nasdaq 100 ($NDX) MACD signal...Partial SELL Reduce any short position. (refer 9/7 7:29AM post) Link

Jeff Bailey : 9/14/2005 3:41:25 PM

VIX.X 13.00 +4.92% ... session high has been 13.26.

Jeff Bailey : 9/14/2005 3:40:08 PM

Dow Diamonds (DIA) $105.50 -0.57% ... the Sep. $105 puts (DIA-UA) currently bid/ask $0.25 x $0.30 (see yesterday's MM 12:49:40)

Jonathan Levinson : 9/14/2005 3:37:12 PM

QQQQ put in a low at 39.15. The break which occurred today took out rising support on the 30 and 60 min charts off the Katrina lows, the first violation of the daily cycle upphase since the low was printed those 2 and half weeks ago. On this basis, any 30 and 60 min cycle bounce, both now several hours overdue, should be corrective and encounter strong resistance at the 39.45-.55 area. Link Intraday 100-tick chart at this Link

I need to step away for the day and will be back tomorrow AM.

Linda Piazza : 9/14/2005 3:31:08 PM

The advdec line has drifted down to another level of potential support. None of those potential levels have stopped it for too long, although one did cause a few hours' consolidation earlier today. Ultimately they've all fallen, but nevertheless, it's important to know that it might be at a level from which it can bounce.

Linda Piazza : 9/14/2005 3:29:36 PM

Big bounce attempt starting on the SOX.

Jeff Bailey : 9/14/2005 3:29:27 PM

03:00 Internals found at this Link

Jeff Bailey : 9/14/2005 3:27:12 PM

Bearish swing trade lower stop alert .... on the QQQQ $39.19 -1.11% .... to $39.35.

Jeff Bailey : 9/14/2005 3:24:05 PM

VXN.X 15.40 +2.87% ... did just kiss that WEEKLY R1.

QQQQ $39.19. I say we snug the bearish stop lower. Especially an NQ futures trader.

Linda Piazza : 9/14/2005 3:19:44 PM

OEX now between the important 72-ema and the 200-sma. Bears, keep that profit-protecting plan in mind. Decide soon whether you intend to hold overnight. I wouldn't be surprised to see the OEX sitting on or near the 200-sma at the close, leaving some question as to whether there was going to be a bounce or not. Since I've been counseling bears to consider taking partial profit as the OEX approached the 200-sma, that's still my advice. Now the question is whether to take full profit and wait for a bounce up to retest the broken neckline to re-enter, but then you risk the possibility that the OEX gaps below the 200-sma tomorrow and heads down toward the 563.60-ish downside target for the H&S. There's no right or wrong answer here. If I had a crystal ball, there would be, but I don't. Depends on your account size, the number of contracts you have, whether you're going to be able to sleep tonight if you keep a partial position open, and whether those contracts are front-month (September) or not.

Jeff Bailey : 9/14/2005 3:14:05 PM

TRIN 0.86% ... rising to DAILY S1 here. (see 12:15:10 thoughts)

Linda Piazza : 9/14/2005 3:13:01 PM

The SOX has dropped all the way to the 10-sma at 475.88, with the SOX currently at 476.94. (Guess I didn't have to close out that September 495/505 bear-call spread I had for a few cents, did I? I could have let it run, but didn't want to take the chance this morning when I saw the opportunity to get out and keep most of my profit.) The SOX has set up a 15-minute Keltner downside target of 472.92.

Jonathan Levinson : 9/14/2005 3:12:52 PM

QQQQ's 30 min cycle is trending, and has been doing so since 39.55-.60 this morning. The 60 min cycle is as oversold as it's been in two weeks, but not yet trending, while the daily cycle is still on a bearish kiss, the first since July at the last daily cycle top. I continue to expect a corrective bounce from these trending intraday cycles, and it could launch anytime. Because of the flattened price-based oscillators, bulls will either want to bottom pick with very tight stops, or follow an upside break of resistance- 39.28-.31 being the first key resistance zone from current levels, 27 SMA resistance down to 39.35 above it. Link

Jeff Bailey : 9/14/2005 3:04:39 PM

03:00 Market Watch found at this Link

Linda Piazza : 9/14/2005 3:04:25 PM

Benchmarking: OEX at important 72-ema at 567.70 as I type, with the 200-sma at 566.76. Bears, keep your profit-protecting plans in place. Although the H&S itself produced a downside target of 563.60 or so, I think I'd suggest taking partial profit as the 200-sma is approached, unless the OEX thrusts down through it the way it did above it on 9/06.

Jonathan Levinson : 9/14/2005 3:02:44 PM

Volume breadth is down to -2.02:1 for the Nasdaq, QQQQ testing 39.20 confluence with the 30 min channel bottom down to 39.15. First sign of trouble for QQQQ bears is a break back above 39.31.

Linda Piazza : 9/14/2005 3:01:19 PM

No more downside traction once the OEX approached the 30-sma and 72-ema (daily chart), with the 200-sma not far below. A bounce back up to retest the broken neckline wouldn't be out of the question, although The OEX so far maintains 15-minute resistance at the channel at 568.73. This is that same old channel that mostly contains the OEX's prices, with breakouts and breakdowns out of that channel sometimes not performing well unless the OEX is beginning a trending move. The question is whether it is now. The sound break of that H&S neckline says it likely is, but perhaps not before a retest of broken support or else a sideways move to work off some oversold levels. Downside target is just below that 200-sma.

Jeff Bailey : 9/14/2005 2:59:31 PM

TRIN 0.74 -36.75% ... hasn't tried to challenge DAILY S1.

QQQQ $39.28 ... seeing session low has been $39.25. Need the "inflection" spike for a bearish cover on weakness.

Jeff Bailey : 9/14/2005 2:56:36 PM

BIX.X 346.75 -0.14% ... SPX/SPY traders keeping an eye on things here at WEEKLY S2.

10-year YIELD ($TNX.X) up 3.6 bp at 41.70. Curve flat intra-day, but some breathing room from current Fed Funds.

I think others had mentioned a 1,225 type of "Max Pain" level for the SPX.

Jonathan Levinson : 9/14/2005 2:55:40 PM

QQQQ's 30 min channel support drops to 39.18 here: Link

Jonathan Levinson : 9/14/2005 2:53:36 PM

Session low for ten year notes, down 1/4 to 111 9/64 here, TNX up 3.5 bps to 4.169%. IRX has recovered slightly off the lows, currently -5.9 bps at 3.345%.

Jonathan Levinson : 9/14/2005 2:47:17 PM

Crude oil finished 12.5 cents off the session high, +1.975 at 65.075. Natgas closed +.395 at 11.16, .005 off the high. There were respective 3.13% and 3.67% gains.

Jeff Bailey : 9/14/2005 2:47:14 PM

Celgene (CELG) $54.56 +3.13% ...

Linda Piazza : 9/14/2005 2:45:29 PM

The OEX has now set up a tentative downside target of 566.20, just below the 200-sma, but I don't have to tell you that the below-the-200-sma target is iffy or that bears need to see some strong follow-through now to discourage bulls from buying the dips. Keep those profit-protecting plans in place.

Jonathan Levinson : 9/14/2005 2:40:12 PM

QQQQ's trending short cycles are showing an uptick on this wavelet upphase, but volume has declined on the bounce, preserving bearish volume breadth at -1.8:1 for the Nasdaq despite the fractionally higher prices. QQQQ bulls need to clear 72 SMA resistance, which is down to 39.44, just below S1. Price has yet to decisively lose S2 at 39.31, but there's no force so far on the bounce attempts. Link

Jeff Bailey : 9/14/2005 2:45:59 PM

NDX/QQQQ Option Chains ... sorted by volume (but note "Max Pain" looking $39.25 with Sep. $39 Puts and Sep. $40 Puts open interest) at this Link ...

If you were the options market maker, and have sold all those $39 puts to market participants, does it do YOU any good to let those (OI=246,550) go in the money? Then think about the Sep. $40 Puts (OI 159,392).

Split the difference and I could eyeball a $39.25 "max pain."

Also think about some "pain" or the Sep $39 Calls (OI = 157,539).

Then look at the NDX. Similar to the SPY/SPX observation from earlier today, more scattered and "roll out" looking with mixed monthly expire action.

Yes! ... QQQQ option observations important into a quarterly triple witch if trying to sniff out a manipulated trade.

Linda Piazza : 9/14/2005 2:37:07 PM

Some tentative signs of bullish divergence are showing up as the OEX declines, with those warning bears to protect profits but not proving that bulls should be entering. We saw bearish divergences setting up as the OEX climbed and climbed, and the same thing can happen as it descends. They do offer a warning, so pay attention to your profit-protecting plans.

Linda Piazza : 9/14/2005 2:31:00 PM

The OEX's 72-ema is at 567.72 and the 200-sma is at 566.76. The OEX zoomed right past these with nary a pause on the 9/06 bounce, but I'd prepare for a possible pause here here and maybe even a bounce attempt, perhaps up to retest the neckline of the just-confirmed H&S.

Jeff Bailey : 9/14/2005 2:28:04 PM

TRIN 0.78 -33.33% ... see that "pop" from 0.65 15-minutes ago? Continue to monitor to the close. Understand what I thought might take place in Pivot Matrix, but BEARS are desparate for it to continue.

Linda Piazza : 9/14/2005 2:26:15 PM

OEX bears want a 30-minute close beneath the Keltner line currently at 569.60. They want a 15-minute close beneath the one currently at 568.89, so that's where they actually want the 30-minute period to end, too. The OEX is currently testing 15- and 30-minute Keltner support, not far enough below it yet to give bears a completely safe feeling.

Jeff Bailey : 9/14/2005 2:25:05 PM

QQQQ $39.28

Jeff Bailey : 9/14/2005 2:24:33 PM

VIX.X 13.08 +5.56% ... VXN.X 15.13 +1.06% ... once again, I feel the VIX a superior measure of option action vs. VXO and VXN. VXN following the move.

Jonathan Levinson : 9/14/2005 2:23:17 PM

Session high for crude oil here, +1.875 at 64.975.

Linda Piazza : 9/14/2005 2:23:13 PM

The advdec line currently suggests the possibility of more downside, although it doesn't preclude a bounce attempt. The advdec line hasn't yet reached an extreme measure for this particular move.

Linda Piazza : 9/14/2005 2:20:14 PM

The OEX is now below that neckline. It's testing Keltner support at 569.01 on 15-minute closes, and it really needs to drop soundly below that to and not bounce immediately or there's the possibility of a fake-out move to the downside. I've been expecting this move (although I certainly wish I'd gotten that confirmation I wanted so I could encourage readers to enter put positions) so it seems in keeping with expected action to me, but there's still the possibility of a reversal, although that's decreasing every moment.

Have profit-protecting plans in mind, bears, for a test of 566.28-567.

Jonathan Levinson : 9/14/2005 2:20:07 PM

QQQQ - Exit Point Alert -

Stopped out on the long. The bears have the ball.

Jonathan Levinson : 9/14/2005 2:18:37 PM

QQQQ - Entry Point Alert -

Long QQQQ at 39.31, stop 39.28

Jeff Bailey : 9/14/2005 2:16:20 PM

02:00 Internals found at this Link

Jonathan Levinson : 9/14/2005 2:15:58 PM

Volume breadth down to -1.73:1 for the Nasdaq here.

Jonathan Levinson : 9/14/2005 2:13:05 PM

Ten year note yields continue higher here, TNX +2.8 bps at 4.162%, breaking back above that 4.14-4.16% confluence.

Jonathan Levinson : 9/14/2005 2:11:47 PM

QQQQ's 30 min channel is down to 39.35, and there are no bullish divergences on the short cycle oscillators as of yet. This is behaving like a crash in the longer intraday cycles, but without the speed or volume. My indicators are not perfect and are probably just out of synch with the dominant cycles for the time being. This still should be an intraday bottom for these shorter cycles, but until the bulls can prove it with a break above 39.51 (72 SMA), the benefit of the doubt should go to the bears. I might try another bottom pick with a tighter stop for that expected long, if the price breaks quickly lower from here (thus generating a bullish-D). Link

Linda Piazza : 9/14/2005 2:11:53 PM

The RLX's actions today are in keeping with a big potential H&S on its daily chart. The neckline is roughly congruent with the 200-sma at 442.76, although perhaps the neckline slightly higher than that average. The RLX dips today, following through on yesterday's losses and continuing the rounding-over process for that right shoulder. The RLX is at 449.56, and if there's more downside today, I wouldn't be surprised to see the index end the day at either its 100-sma at 447.48 or at the 200-sma.

Linda Piazza : 9/14/2005 2:07:38 PM

The OEX again approaches that neckline, again within 20 cents of hitting it (if I've drawn it correctly, still looking vulnerable to a test of 569.09 as long as 15-minute closes remain below 570.29. A 15-minute close beneath 569.09 sets up a 566.39 downside Keltner target, but these downside targets haven't always been achieved.

Jeff Bailey : 9/14/2005 2:07:25 PM

VXN.X 14.92 -0.33% ... watch that WEEKLY R1. Kissed it yesterday morning at 15.46 then reversed to WEEKLY Pivot like a rock.

Jeff Bailey : 9/14/2005 2:05:59 PM

QQQQ $39.38 -0.60% ... OK for now.

Jeff Bailey : 9/14/2005 2:05:36 PM

Celgene (CELG) alert $54.00 +2.00% ... released for trade.

Jeff Bailey : 9/14/2005 2:04:24 PM

02:00 Market Watch found at this Link

Linda Piazza : 9/14/2005 2:02:48 PM

Right now, Keltner resistance and support again look about equally weighted for the OEX. No prediction there as to whether that neckline will get breached or whether there will be a bounce. The OEX continues to look vulnerable to 569.13, but "look" and "be" are two different animals.

Jonathan Levinson : 9/14/2005 2:01:54 PM

QQQQ - Exit Point Alert -

Out QQQQ long from 39.39 at 39.41

Volume breadth deteriorating and price feels heavy.

Jeff Bailey : 9/14/2005 2:00:51 PM

Bearish swing trade lower stop alert ... for my QQQQ $39.41 -0.52% ... to $39.63. I don't want to get washed out should CELG open at some incredible upside price action.

Linda Piazza : 9/14/2005 1:59:55 PM

The OEX is pausing at the neckline of that H&S. As long as it maintains 15-minute closes below the Keltner line currently at 570.42, it may go on testing that neckline level. Bears would like to see the OEX close 15-minute periods below the Keltner line now at 569.11 to set up a possible downside target of 566.37, but I warned bears to know ahead of time how you'd handle a neckline test, and so whatever decision you made then needs to be put into play now.

Jeff Bailey : 9/14/2005 1:56:25 PM

QQQQ $39.40

Jeff Bailey : 9/14/2005 1:56:10 PM

VIX.X 12.93 +4.35% ... comes to morning high of 13.00

VXN.X 14.95 -0.13% ... "jumping" above WEEKLY pivot last 5 minutes. Triple Witch may be heating up a bit.

Jonathan Levinson : 9/14/2005 1:53:28 PM

The stop goes at 39.30, just below S2. Playing for a short cycle bounce off the bottom of the 30 and 60 min channels.

Jonathan Levinson : 9/14/2005 1:52:43 PM

QQQQ - Entry Point Alert -

Long QQQQ at 39.39

Linda Piazza : 9/14/2005 1:50:45 PM

The OEX stopped less than 20 cents aboe the neckline, so far.

Linda Piazza : 9/14/2005 1:47:22 PM

Advdec line looking weak now, of course.

Linda Piazza : 9/14/2005 1:44:56 PM

I wasn't kidding in that 1:41 post when I said that the OEX could keel over any minute, was I? Wish my timing could always be that good but that was just coincidence. Smile. The thing had been looking as if it was ready to keel over for the last hour without doing so.

Linda Piazza : 9/14/2005 1:43:23 PM

It looks as if the RUT has already confirmed a H&S on its 30-minute chart.

Jonathan Levinson : 9/14/2005 1:42:35 PM

Way to go Mark!

Linda Piazza : 9/14/2005 1:41:40 PM

The neckline of that H&S on the OEX's 15-minute chart appears to be at about 569.47 currently, but the OEX has important Keltner support at 569.18 on a 15-minute closing basis. Bears need to be aware of the possibility of a break below the neckline, and then a steadying just below, at that Keltner support.

Jeff Bailey : 9/14/2005 1:41:20 PM

Dow Industrials good bookmark here too. Put in your "favorites" if you're a DIA/YM trader and don't have ability to put all 30 components on your trading platform. Link

Remember, the Dow is a PRICE weighted index. IBM currently the most heavily weighted at $80.88 +0.16%

Jonathan Levinson : 9/14/2005 1:41:03 PM

The lack of bounce for QQQQ here within the 30 and 60 min cycle troughs is setting up for a potential "crash" within those longer intraday cycles if the bulls can't get their act together. This would kick off the daily cycle downphase and confirm yesterday's afternoon peak at 39.91 as a blowoff top in the daily cycle upphase. Ideally, we'll get that weaker intraday bounce to a lower high, but as the hours pass without a bounce, the more likely that intraday "crash" scenario becomes.

Linda Piazza : 9/14/2005 1:38:38 PM

I can only repeat what I've been repeating all day. The OEX needed some more time rounding out its right shoulder on the H&S on its 15-minute chart, and other chart characteristics pointed to likely choppy behavior, too, so that's what I thought we might get for a period of time. And we certainly have. There's nothing yet that dissuades me from the possibility that the OEX could just be forming a right shoulder, with at least a possible retest of the neckline and--who knows--even a confirmation of the H&S. Keltner resistance continues to hold, and to look firmer than support. However, the OEX keeps hammering at that resistance, and it will eventually soften, too, if it keeps on doing so. The Keltner lines will scatter. Also, there are other internal indicators I use to tell me that the topping out process might be about concluded and I just didn't get that signal this morning from the advdec line. Instead, it's weakened all day from that first push without giving any such signal. The OEX hasn't retreated far while it weakened, however. So, sometimes you get good signals and sometimes you don't, and today I haven't. That hasn't been so terrible, because that's kept me from encouraging readers to enter a trade and then have to sit and watch their options premium leak away, but there's the possibility that the OEX could keel over and confirm that thing any time, too. Unfortunately, without that confirmation, there's also at least some possibility that the OEX could shoot up and invalidate it. This just-beginning-to-round-over spot on a right shoulder is one place at which bears are in the most danger, because prices sometimes shoot higher as the rounding-over process begins and the formation is invalidated. However, I wish I'd gotten that good signal.

Jeff Bailey : 9/14/2005 1:37:44 PM

This is neat/useful/informative though ... Link ... gives a trader an observation of how many NDX/QQQQ points each stock's price action is contribution/deducting from trade.

Jonathan Levinson : 9/14/2005 1:34:44 PM

Session low for ten year notes here at 111 13/32, TNX up 1.2 bps to 4.146%. IRX holds its huge 8.1 bp loss at 3.323%, a 2.38% change for the day.

Jeff Bailey : 9/14/2005 1:32:52 PM

Shoot! NASDAQ has made some changes to their display format. I don't know what "weighting" CELG has in the NDX/QQQQ

Jeff Bailey : 9/14/2005 1:26:56 PM

Celgene (CELG) alert still halted, but do see news item just after 01:00 PM EDT that FDA advisory panel has voted to recommend that the agency approve the compay's oncology drug Revlimid.

Note: CELG is a NDX/QQQQ component

Jeff Bailey : 9/14/2005 1:23:20 PM

Celgene (CELG) ... still halted

Jeff Bailey : 9/14/2005 1:17:42 PM

VXN.X 14.71 ... DAILY Pivot Levels are ... 13.64, 14.30, Piv = 14.91, 15.56, 16.18.

Weekly Pivot Levels are 13.02, 13.64, Piv= 14.84 15.46, 16.66

Linda Piazza : 9/14/2005 1:12:55 PM

As I thought it would, the OEX has gone on challenging that resistance, now from 571.09-571.41 on the 15-minute Keltner chart. It's pierced it, although it's currently back below it, at 571.03. It's trying to soften up that resistance, too, but it currently still looks firmer than nearby support. The caveat to this is that the advdec line hit that potential support I mentioned and is now trying to bounce, too. Those hoping for an OEX rollover would really rather that the advdec line not get much higher than about +200 on QCharts.

Jeff Bailey : 9/14/2005 1:12:10 PM

01:00 Internals found at this Link

Jonathan Levinson : 9/14/2005 1:12:02 PM

QQQQ hugs the 72 SMA here after bouncing from 39.46 on a spike, with volume picking up as the short cycle downphase stalls. The 30 and 60 min cycle indicators are gathering in overbought, and should turn up provided that the current session lows hold for any retest. Volume breadth has picked up to +1.18:1 for the Nasdaq, but remains effectively neutral. Link

Jeff Bailey : 9/14/2005 1:03:01 PM

01:00 Market Watch found at this Link

Jeff Bailey : 9/14/2005 1:00:26 PM

TRIN 0.60 session low ... DAILY S2 is 0.53 for QCharts, 0.54 for my Pivot Matrix calculations.

Linda Piazza : 9/14/2005 1:00:09 PM

The OEX continues to challenge resistance. Support continues to look as if it's softening, but it's not even being tested (569.17 on a 15-minute closing basis). The OEX coils with RSI zig-zagging near the neutral 50 level. The advdec line approaches next potential support. There's nothing definite yet to say yes or no to a directional play, one direction or the other.

Jeff Bailey : 9/14/2005 12:58:33 PM

My QQQQ short is PURELY and option expiration type of trade. Indicators "don't feel/look" right for a bull move, and possible quick move down, spike in volatility, then a quick bounce back higher. Way too many calls are "in the money." Need some "max pain" volatility to shake out the bulls.

We shall see, but risk/reward near-term looks to be in bears favor. They'll be waiting to gobble up weakness though.

Add to that some of the DIA thoughts/observation I had yesterday.

Jeff Bailey : 9/14/2005 12:54:46 PM

TRIN 0.64 -45.29%

VIX.X 12.82 +3.47%

VXN.X 14.73 -1.60%

Jonathan Levinson : 9/14/2005 12:52:54 PM

Nasdaq volume breadth is down to +1.01:1, on the NYSE +1.31:1. QQQQ is back below the 72 SMA and losing bear flag support. Below 39.45, we should see some acceleration. However, the bottomy 30 and 60 min cycles should be providing support. Link

Jeff Bailey : 9/14/2005 12:52:38 PM

Bearish swing tradeshort alert ... for the QQQQ $39.48 here, stop above DAILY Pivot, target $39.05

Jeff Bailey : 9/14/2005 12:40:13 PM

VIX.X 12.81 +3.38%

Jeff Bailey : 9/14/2005 12:39:40 PM

SPX 1,232.72 ... now seeing the SPX 1,250 Calls (SZP-IJ) most active at 7,914:58,696 and SPX 1,200 Puts (SZP-UT) #2 at 6,601:115,338.

Jeff Bailey : 9/14/2005 12:36:22 PM

Daily Pivot Matrix ... update with "yellow" showing levels of trade at this Link ... Note: NDX/QQQQ disparity, tie in with morning's BTK.X action.

Watch that 10-year YIELD as it missed DAILY S1 by 0.01 at 41.07. A move below there could be a "defensive trigger."

Jonathan Levinson : 9/14/2005 12:32:06 PM

Good eye, Jeff. Also, NQ has been unable to clear the 7200 tick SMA, while QQQQ marches along above it. Link

Linda Piazza : 9/14/2005 12:30:37 PM

The advdec line again approaches a potential steadying and/or bounce point, from the current (Q-Charts) -510 down to -960. If it doesn't steady there, it could tumble much lower.

The OEX's 15-minute Keltner resistance still holds, but the OEX still clings to first Keltner support, too, suggesting the possibility that it will go on challenging that resistance. It's sinking a little now, but not far from the resistance. I unfortunately have still not gotten confirmation that I need although Keltner resistance continues to hold and so do the 15-minute 100/130-ema's.

Jeff Bailey : 9/14/2005 12:28:15 PM

Jonathan! See the disparity between the NDX and QQQQ Price action this morning? And sharp rebound in the NDX from below DAILY S2? I think that was the CELG and BTK.X action this morning. Computers "had" to compensate for that error

Jonathan Levinson : 9/14/2005 12:27:49 PM

Bonds have not moved today, TNX currently down .2 bps at 4.132% and IRX down an impressive 3.362%, with flattening perhaps resulting from the Fed's generous 6B overnight repo this morning.

Jeff Bailey : 9/14/2005 12:22:16 PM

12:00 Internals found at this Link

Jeff Bailey : 9/14/2005 12:15:10 PM

Look at that TRIN reading. At session low. My thoughts here are that EQUITY BULLS really need session lows for the majors to hold. If they don't with TRIN so low, then we might see a "buyers exhaustion."

VIX.X readings are more bearish intra-day, so keep eye on it. If VIX.X reverses lower, then TRIN indications could be telling as to market bid.

Jonathan Levinson : 9/14/2005 12:13:18 PM

Update on QQQQ's potential bear flag, with price rising within the automatic regression trendlines: Link

Jonathan Levinson : 9/14/2005 12:11:43 PM

Jeff, I no longer follow the put to call ratio closely, but watch the total p/c ratio below my volume breadth figures during the day. With total p/c readings at the lowest levels I've seen in many weeks, if not months, it's possible that the drop in volatility you've noted is because of call selling/put buying, with call volume heavier than it's been in many moons. I just don't know, but the heaviest volume in the Q chain is on the 40 puts, and they're up in price. Either way, there's a lot of guesswork.

Jeff Bailey : 9/14/2005 12:11:07 PM

12:00 market Watch found at this Link

Jeff Bailey : 9/14/2005 12:07:21 PM

Jonathan! That is a bit suspicous. VXN.X 14.66 -2.07% would suggest put selling/call buying. Keep digging. Good work!

Linda Piazza : 9/14/2005 12:07:12 PM

Not sure I'm going to get that confirmation that I need that this coiling action is over and that it's more likely to resolve to the downside. I expected the signs I needed to take from a few minutes to several hours to develop and the "several hours" version certainly has become more likely than the "few minutes" one. The OEX's Keltner resistance continues to looks as if it's firming while the support continues to look as if it might be softening a little, but one strong buy program can zoom the OEX above that firming resistance and convert it to firming support. With a H&S on the 15-minute chart, that doesn't appear to be what should happen, but we've seen what happens when these things are invalidated.

For now, all I can say is that I don't see anything still that dissuades me from believing that this could be further right-shoulder-building choppiness on the OEX with some slight signs of softening support but with no confirmation from other signs I watch that the coiling action is over or that the resolution is probably going to be to the downside. Bulls will point to a possible double-bottom formation at the neckline of that H&S, however. If any are in bearish positions and that neckline is approached again or if 569.15 Keltner support is approached again, know how you'll handle a test of that level.

Jeff Bailey : 9/14/2005 12:05:45 PM

VIX.X 12.82 +0.43% ... note "field position" within MONTHLY and WEEKLY Pivot Matrix Levels. A bit "neutral" is a thought.

Jeff Bailey : 9/14/2005 12:03:20 PM

SPX/SPY Option Chain sorted by most actives at this Link ... With VIX.X higher, assuming put buying/call selling.

Have to look and think about this for a couple of minutes.

I don't see much "roll out" action in the SPX with most actives all September. SPY month(s) out a little more mixed.

Jeff Bailey : 9/14/2005 11:53:29 AM

Sell Program Premium ... DIA $106.16, SPX 1,233.15, QQQQ $39.54

Jonathan Levinson : 9/14/2005 11:53:17 AM

Biggest volume is reported on the Sept. 40 puts, +.15 at .55, with 29.5K, but it's unsurprising given the opening lurch lower in the underlying.

Jonathan Levinson : 9/14/2005 11:48:23 AM

Nothing particularly noteworthy that I've seen today in the QQQQ option chain, except that put support seems to be lower at 38, with open interest highest for the month at the 38 level, while call OI is highest at the 40 strike. That leaves a wide range between 38-40, but with 246K open 39 puts, my guess is for support to hold price above that level- maxpain should be between 39-40 for Sept.

Linda Piazza : 9/14/2005 11:45:24 AM

So far, the OEX's Keltner resistance at 570.56-571.58 is holding on 15-minute closes. The OeX is at 570.84 as I type, but holding to 570.56 support on 15-minute closes, so perhaps not yet through challenging that resistance.

Jeff Bailey : 9/14/2005 11:44:28 AM

VIX.X 12.79 +3.22% and VXN.X 14.61 -2.40% ... Jonathan ... you see anything in the QQQQ/NDX option chains that looks suspicious?

Jeff Bailey : 9/14/2005 11:40:34 AM

10-Most Active ... QQQQ $39.59 -0.10%, JDSU $1.77 +6.62%, NWAC $1.83 +16.56 (some speculation company may announce intentions on filing for bankruptcy today), SPY $123.83 +0.13%, VRSO $0.51 +24.3%, LU $3.14 +1.6%, MSFT $26.53 +0.18%, SIRI $7.11 -1.38%, INTC $24.99 +0.36%, ORCL $13.62 -0.14%

Linda Piazza : 9/14/2005 11:36:45 AM

The RLX fell below the important daily 72-ema yesterday. It rose up to retest it today, but hit only the 10-ema before falling back again. The 10-dma at 454.18 and the 72-ema at 455.09 will likely serve as resistance now, with the 100-sma at 447.49 and the 200-sma at 442.77 likely to serve as support, so this index is another in a possible chop zone. The RLX is at 450.47 as I type.

Jonathan Levinson : 9/14/2005 11:35:27 AM

QQQQ continues to chop sideways as the short cycle oscillators rise. If this is an upphase, then it suggests that the current range off the lows is a bear flag off yesterday's final-hour decline. 39.45 is the support level to watch, 39.58 current flag resistance. Link

Linda Piazza : 9/14/2005 11:32:11 AM

Still watching for the next push higher in the advdec line that I've been expecting. This advdec bounce sure isn't getting far yet. Meanwhile, the OEX rises to test 15-minute Keltner resistance from 571.13 to 571.45 on 15-minute closes, with the OEX at 570.77 as I type.

Linda Piazza : 9/14/2005 11:24:26 AM

The OEX's Keltner resistance and Keltner support still look about equally weighted, although there's some hint now that the 571.14-571.57 resistance is strengthening. The lines converge more closely. That's just a hint, however, and nothing that a strong buy program can't undo. OEX at 570.46 as I type.

Jeff Bailey : 9/14/2005 11:26:09 AM

Celgene (CELG) $52.91 ... still halted and will remain so until an oncology drug advisory panel of the FDA votes on whether the company's Revlimid should be recommended for approval.

The panels vote is not a final decision, but the FDA usually abides by the recommendation of its expert panel memebers. Celgene said a vote is expected by 12:30 PM EDT. The company added that the FDA is scheduled to formally rule on whether to approve Revlimid by 10/07/05.

Jeff Bailey : 9/14/2005 11:18:54 AM

Sell Program Premium ... DIA $106.12, SPX 1,232.60, QQQQ $39.54

Jeff Bailey : 9/14/2005 11:16:09 AM

11:00 Internals found at this Link

Yesterday's Internals found at this Link

Jonathan Levinson : 9/14/2005 11:14:06 AM

QQQQ clears 72 SMA resistance at 39.54 for the first time today. 30 min channel resistance continues to intersect the pivot at 39.68. However, volume is declining on this most recent advance, and volume breadth is up to just 1.22:1 on the Nasdaq, still barely above neutral. Link

Linda Piazza : 9/14/2005 11:13:22 AM

Coiling, coiling, coiling. I'm still watching for signs that this coiling is about over and that the OEX is more likely to resolve this move to the downside (which the H&S hints that it should do, but which hint can't be trusted lately). I haven't quite seen that confirmation, and those signs could anywhere from a few minutes to a few hours to develop.

Linda Piazza : 9/14/2005 11:09:01 AM

The OEX's nearby Keltner support and resistance still looks about equally weighted. The only weighting one direction or another is that the OEX is below that mid-channel level.

Jeff Bailey : 9/14/2005 11:05:03 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 9/14/2005 10:59:13 AM

Session highs for crude oil and natgas here, +2.02% and +2.88% respectively.

Linda Piazza : 9/14/2005 10:58:12 AM

The OEX is still just chopping around.

Jeff Bailey : 9/14/2005 10:57:12 AM

Weekly Crude Oil/Gasoline/Distillate table at this Link

Jonathan Levinson : 9/14/2005 10:54:16 AM

The short cycle is directionless with potential bullish divergences, while the 30 min cycle is approaching oversold to join the 60 min cycle, which appears to be maxxed out to the downside. Nothing has changed since earlier this AM, with the daily cycle still looking topped out and due to roll over for 2-3 weeks. This current zone for QQQQ remains dangerous and choppy, due for an intraday bounce, probably to fail at a lower high, which would be our optimal entry for a short with which to ride a daily cycle downphase.

Linda Piazza : 9/14/2005 10:51:40 AM

The GSO is lower today, pulling back off yesterday's high and this morning's open, but its pullback looks measured so far, on the 15-minute chart, with the pullback so far retracing not quite 19.1% of the bounce off the August low. It would have to fall below that August low before it confirmed the double-top formation on its daily chart. (Although the GSO reached a little higher than July's high, it did so on an intraday basis and not a closing basis, leaving only a candle shadow above the July high. I'd still consider that an almost equal high.)

Linda Piazza : 9/14/2005 10:45:49 AM

So far, there's nothing that dissuades me from believing that the OEX could just be forming a right shoulder for its H&S. I suspected that the right shoulder wasn't quite finished forming. I suspected that the advdec line would bounce again, bringing the OEX back up closer to the top of the right shoulder again. I'm waiting still for some confirmation that this process is finished, and that it will be more likely to resolve to the downside, confirming the formation, than to the upside, invalidating it. I haven't yet gotten the confirmation that I'd like to see. I may not. Signals haven't been as good the last week as they were the previous two weeks.

Jonathan Levinson : 9/14/2005 10:45:10 AM

Crude is bouncing to back above 64 on the API report.

Jonathan Levinson : 9/14/2005 10:44:44 AM

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute said crude inventories fell by 3.1 million barrels for the week ended Sept. 9 -- that's less than half the government's reported 6.6 million-barrel decline. Motor gasoline inventories rose 5.6 million barrels. Distillate stocks were down 1.4 million barrels, the API said.

Jonathan Levinson : 9/14/2005 10:44:13 AM

Crude oil +.75 at 63.85 here, off a high of 64.30.

Linda Piazza : 9/14/2005 10:42:01 AM

Watching the advdec line's bounce now, with the OEX bouncing, too, but essentially just continuing the chop between support and resistance so far. Coming up to test the 15-minute 100/130-ema's and other resistance from 571-572.60 or so. It's at 570.85 as I type.

Jeff Bailey : 9/14/2005 10:38:08 AM

Weekly Oil Inputs/Utilization table at this Link ... after a 10.2% decline in refinery capacity after from Hurricane Katrina, some stabilization. Inputs up 77,000 barrels per day after a whopping 1.75 million barrel decline.

Jonathan Levinson : 9/14/2005 10:37:56 AM

Volume breadth +1.11:1 for the NYSE and +1.16:1 for the Nasdaq.

Jonathan Levinson : 9/14/2005 10:36:45 AM

QQQQ continues to hold above the 39.45 low at S1, with the short cycle oscillators printing a potential bullish divergence if prices runs higher from here. 30 min channel support has declined to 39.35, resistance to 39.68 at the pivot: Link

Jeff Bailey : 9/14/2005 10:32:19 AM

Buy Program Premium ... DIA $106.09, SPX 1,231.48, QQQQ $39.51

Jonathan Levinson : 9/14/2005 10:31:41 AM

The "pre-release" of data appears to be no longer restricted to just the University of Michigan Sentiment report- seems to be becoming commonplace.

Linda Piazza : 9/14/2005 10:32:19 AM

Advdec line dropped all the way to another position of possible support. It looks more bearish now, though, that it didn't hold that first support. I still am watching for a possible bounce or steadying attempt in the advdec line now, however, with a possible OEX bounce to accompany it. I will then look for signs that the move could be topping out, but they just haven't confirmed yet.

Jeff Bailey : 9/14/2005 10:31:01 AM

Sell Program Premium ... DIA $105.96, SPX 1,230.70, QQQQ $39.46

Jonathan Levinson : 9/14/2005 10:30:15 AM

From the EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 6.6 million barrels from the previous week. At 308.4 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year. Total motor gasoline inventories rose by 1.9 million barrels last week, putting them at the bottom end of the average range. Distillate fuel inventories decreased by 1.1 million barrels last week, and are above the upper end of the average range for this time of year. Total commercial petroleum inventories dropped by 4.1 million barrels last week, and are in the upper half of the average range for this time of year.

Linda Piazza : 9/14/2005 10:30:10 AM

The SOX tests Keltner support at 481.81 on 15-minute closes, but it doesn't look like particularly strong support. Stronger suppor is near 478.77-479.52 with next strong resistance at 484.25-484.86. SOX at 481.96 as I type.

Linda Piazza : 9/14/2005 10:28:19 AM

Looks as if the OEX is going to head down toward that H&S neckline and Keltner support to await the inventories number. Of course. That's the most dangerous spot for bulls and bears both.

Jonathan Levinson : 9/14/2005 10:27:38 AM

Equities have just plunged in unison, 3 minutes ahead of the scheduled release of the petroleum data.

Linda Piazza : 9/14/2005 10:26:08 AM

OEX Keltner resistance from 570.51-571.78. Support from 569.29-569.42. They look about equally weighted, which predicted this chop so far. The OEX needs either a strong thrust one direction or the other, which the inventories number could perhaps provide, or else some rattling around for a long enough while that some of those lines are scattered and either support or resistance softens.

Jeff Bailey : 9/14/2005 10:24:52 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 9/14/2005 10:23:21 AM

Advdec line still trying to steady, but slipping a little, still, as I type. No bounce yet, and the effort to steady still looks a little iffy.

Jonathan Levinson : 9/14/2005 10:23:01 AM

Awaiting the petroleum inventory report in 7 minutes.

Linda Piazza : 9/14/2005 10:20:17 AM

The TRAN isn't doing its often-seen zoom here or there before the inventories number. Instead, it's consolidating near yesterday's LOD, below 3600 at 3590.51.

Jonathan Levinson : 9/14/2005 10:20:08 AM

Interquote reports the realtime total put to call ratio at an extreme .49 currently, a very low reading even for the equity component alone. Note, however, that the usual benchmarks are less relevant than usual during op-ex week.

Jeff Bailey : 9/14/2005 10:19:31 AM

10:00 Internals found at this Link

Jonathan Levinson : 9/14/2005 10:17:26 AM

Volume breadth holds slightly positive, +1.13:1 on the NYSE and +1.18:1 on the Nasdaq.

Linda Piazza : 9/14/2005 10:15:42 AM

Advdec line still trying to steady, still not making much progress on a bounce attempt, though.

Linda Piazza : 9/14/2005 10:12:05 AM

The OEX is between Keltner resistance that looks fairly strong and Keltner support that is trying to firm up, too. More chop? The inventories number in a few minutes could change all that, of course.

Jonathan Levinson : 9/14/2005 10:09:24 AM

It's looking increasingly like QQQQ hit a short cycle bottom at 39.45, with the indicators turning up for the first time since their extended downphase commenced at 2:30 yesterday. Bulls need to hold price above the lower short cycle channel at 39.48 for any pullback from here. 39.61 is upside confluence resistance, the 72 SMA 2 cents above it. Link

Linda Piazza : 9/14/2005 10:07:53 AM

Advdec line is trying to steady, as I thought it might right here. It's not doing much about a bounce yet, but I'm watching for that possibility, continuing the OEX's choppy attempt to test resistance.

Jeff Bailey : 9/14/2005 10:04:20 AM

10:00 Market Watch found at this Link

Linda Piazza : 9/14/2005 10:01:24 AM

Watching now for a possible steadying and even bounce of the advdec line, down steeply from the first push higher.

Jonathan Levinson : 9/14/2005 10:00:27 AM

That action from the Fed should be supportive to the markets, unless there's something deeper going on for which they're trying to compensate and of which I'm unaware.

Jeff Bailey : 9/14/2005 10:01:52 AM

Celgene (CELG) ... halted for trade. News pending. I've got a quote of $0.20 -99.62% and it may have thrown off the Biotechnology Index (BTK.X) 644.81 -0.05% early readings of 605.00.

Linda Piazza : 9/14/2005 9:59:05 AM

Watch for a possibility that the advdec line may soon steady and attempt another move higher, perhaps bringing the OEX up again in another choppy move.

Jonathan Levinson : 9/14/2005 9:58:05 AM

A big 6B overnight repo here replaces the 2.25B expiring for a 3.75B net add, and drives down the stop out rate to 3.43 for treasury collateral, 3.48 for agency and 3.5 for mortgage-backed collateral. The treasury collateral stop out is getting farther and farther away from an expected 3.75% overnight target rate as the next Fed meeting approaches.

Jeff Bailey : 9/14/2005 9:54:39 AM

Premier Global Services (PGI) $7.62 -11.73% ... business communications service provider gapping lower after the company said it now expects 2005 earnings from continuing operations between $0.66-$0.67 cents a share on revenue between $494 million and $498 million. The earnings forecast excludes a pre-tax restructuring charge of about $2 million expected to be taken in the third quarter, the company said in a news release. On July 27, Premiere had forecast 2005 earnings per share from continuing operations of $0.70-$0.73 cents a share on revenue of $505 million to $510 million.

Jonathan Levinson : 9/14/2005 9:54:08 AM

Volume breadth is mixed, with the NYSE leading for a change, +1.29:1 on the NYSE and -1.08:1 on the Nasdaq.

Jonathan Levinson : 9/14/2005 9:50:30 AM

Quick 5 cent bounce from a session low of 39.45 for QQQQ. Link

Jeff Bailey : 9/14/2005 9:49:53 AM

Sell Program Premium DIA $106.22, SPX 1,233, QQQQ $39.50

Linda Piazza : 9/14/2005 9:49:13 AM

The OEX's Keltner resistance band from 570.71-572.07 held on the first 15-minute close. Next support below that at 569.34, although the OEX is currently trying to hold onto the support at 570.71.

Jeff Bailey : 9/14/2005 9:49:09 AM

Image Entertainment (DISK) $4.26 +42% ... independent licensee, producer and distributor of home entertainment programming in North America announced it has completed principal photography on "Surveillance," a modern-day psychological thriller being co-produced with Graymark Productions (OTCBB:GRMK), an independent motion picture and television production company. The film stars accomplished stage, screen and Emmy award-winning actor Armand Assante ("Paradise Alley," "Unfaithfully Yours," "Private Benjamin," "The Mambo Kings," "Fatal Instinct") and is directed by horror classic "Children of the Corn" director Fritz Kiersch.

"Surveillance" is a psychological thriller about an obsessive department store security guard (Assante) whose spotless record at crime prevention masks the horrifying reality of blackmail, deception and murder.

Linda Piazza : 9/14/2005 9:47:28 AM

The TRAN has eased just below yesterday's low.

Jonathan Levinson : 9/14/2005 9:47:09 AM

30 min channel support lines up with S1 at 39.45 QQQQ here: Link

Linda Piazza : 9/14/2005 9:46:54 AM

The OEX closed the first 15-minute period below the 15-minute 100/130-ema's after punching through them, so they are showing some relevance today. They're at 571.50 and 571.07, with the first 15-minute period closing just below those averages. Unfortunately, I'm still not quite seeing confirmation that the attempt to push the indices higher is over.

Jonathan Levinson : 9/14/2005 9:43:36 AM

QQQQ breaks lower, violating the overnight lows as the short cycle indicators trend deeper into oversold territory. This is extreme weakness on an intraday basis, where there should have been a bounce: Link

Linda Piazza : 9/14/2005 9:43:20 AM

Remember inventories due this morning. The TRAN has not been able to maintain its early push higher, and is back below 3600 again, at 3593.70, threatening to fall back below yesterday's low.

Jeff Bailey : 9/14/2005 9:43:03 AM

Sell Program Premium ... DIA $106.26, SPX 1,233.76, QQQQ $39.55

Linda Piazza : 9/14/2005 9:40:44 AM

The OEX now tests the 15-minute 100/130-ema's at 571.52 and 571.08. These averages didn't prove as strong a benchmark yesterday afternoon as they had previously, however, but the OEX zoomed close to the right-shoulder level at 572-572.60 that I've been watching. Nearest Keltner resistance layers from 570.74-572.26, with the OEX now at 571.22, testing the mid-channel level. No confirmation yet that there will likely be a turnaround right here, though.

Jonathan Levinson : 9/14/2005 9:34:16 AM

Volume breadth is +2.2:1 on the NYSE and +2.03:1 on the Nasdaq at the open.

Linda Piazza : 9/14/2005 9:33:49 AM

TRAN bouncing, currently testing the 50% retracement of its climb off the June low, with that retracement at about 3603.30 and the TRAN currently at 3604.63. The 100-sma is just above 3613.

Linda Piazza : 9/14/2005 9:32:30 AM

SOX slightly higher this morning, but still below yesterday's high.

Linda Piazza : 9/14/2005 9:31:03 AM

The OEX opens above the neckline for the H&S on its 15-minute chart, displayed in my 8:55:27 post, so the possibility of some more right-shoulder-building rise (or chop?) continues.

Jeff Bailey : 9/14/2005 9:31:17 AM

Baidu.com (BIDU) $113.59 Link ... sharply lower at $87.02 and #4 on the most active list after Goldman Sachs and Piper Jaffray start coverage with underperform ratings.

Goldman Sachs analyst Anthony Noto values the stock at $27, with an optimistic $45 implied value.

Piper's Safa Rashtchy saying "Baidu's current stock price has far exceeded even the most aggressive valuations and is distinctly 'off the chart' in our view."

Jonathan Levinson : 9/14/2005 9:25:24 AM

Session highs for crude oil, +.75 at 63.85, and natural gas, +.185 at 10.95. Gold and silver hold their gains as well, Dec. gold +3.5 at 453.50, 1.1 off this morning's high.

Jeff Bailey : 9/14/2005 9:24:08 AM

Verso Technologies (VRSO) $0.41 ... atop this morning's most active list and higher at $0.60 after the provider of packet-based solutions announced the introduction of its new carrier grade application filter, which offers a bandwidth optimization and content management tool specifically for the carrier market. This new application provides the most comprehensive array of optimization and content management options currently available for cable operators and internet protocol service providers seeking to selectively disable undesirable network traffic and improve service levels on their networks. Applications such as Skype, Peer-2-Peer (P2P) messaging, streaming media and instant messaging increasingly cause congestion on service provider networks and interrupt or degrade service for other critical applications.

Jonathan Levinson : 9/14/2005 9:23:09 AM

Ten year note yields are up to unchanged at 4.133%, -.1 bps here.

Jonathan Levinson : 9/14/2005 9:17:19 AM

From the MBA's website:

WASHINGTON, D.C. (September 14, 2005) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 9. The Market Composite Index - a measure of mortgage loan application volume - was 760.6, a decrease of 1.4 percent on a seasonally adjusted basis from 771.6 one week earlier. On an unadjusted basis, the Index decreased 12.3 percent compared with the previous week but was up 26.4 percent compared with the same week one year earlier. The seasonally-adjusted Purchase Index increased by 2.9 percent to 513.4 from 499.1 the previous week whereas the Refinance Index decreased by 6.7 percent to 2198.7 from 2357.1 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 1.6 percent to 1142.8 from 1161.1 the previous week, and the Government Index, which increased 0.8 percent to 122.7 from 121.7 the previous week. The four week moving average for the seasonally-adjusted Market Index is down 0.1 percent to 752.7 from 752.9.

Jonathan Levinson : 9/14/2005 9:15:43 AM

Headlines:

U.S. AUG. INDUSTRIAL PRODUCTION UP 0.1% VS 0.2% FORECAST

U.S. AUG. CAPACITY UTILIZATION 79.8% VS REV 79.8% IN JULY

Jane Fox : 9/14/2005 9:07:51 AM

The Federal Reserve is scheduled to release the August production report at 9:15 a.m. Economists forecast a 0.3% increase in industrial production in August after a sluggish 0.1% gain in the prior month, and for the capacity utilization rate to inch up to 79.8% from 79.7%.

Jane Fox : 9/14/2005 9:06:34 AM

Dateline WSJ U.S. retail sales suffered the sharpest drop in more than three years during August as plunging demand for cars overwhelmed higher gasoline station receipts.

Retail sales decreased a seasonally adjusted 2.1%, after climbing an unrevised 1.8% in July, the Commerce Department said Wednesday.

The sales decline was the sharpest since demand tumbled 2.9% in November 2001. It was also a more severe drop than the 1.3% economists had expected, according to a survey by Dow Jones Newswires and CNBC.

Linda Piazza : 9/14/2005 8:55:27 AM

Today's OEX open could be particularly important. Yesterday, we saw an early breakdown out of the bear flag in which the OEX rose to test broken support from the channel that climbed off the spring low. Later, we also saw a retest of the bear flag's former support and a pullback from that. Yesterday's action finished the head and started forming a right shoulder for a H&S on the 15-minute chart, with the OEX ending the day right on the neckline of that formation. Link Today's open might be particularly important, then. It still seems possible that the OEX could rise again, filling out that right shoulder a bit more. That possibility can't be precluded, but an open below that neckline and yesterday's low would look as if the formation had been confirmed, and unless the OEX soon zipped back above that neckline, its 563.60-ish downside target would be established. There's of course no guarantee that target would be met, and bears would want to be watchful for that quick reversal back above the neckline. If the OEX instead opens at or near that neckline and then begins climbing, then the 571-572.50-ish zone should be watched again for rollover potential. A move above 574 would likely invalidate the potential H&S.

Keltner evidence supports the idea that the open is important. An open and first 15-minute close below the Keltner line currently at 569.60 resets a downside target of 566.50. An open and first 15-minute close above that line at 569.60 suggests that support is holding and that resistance from 570.72-571.92 could be retested. Any current bears should have enacted their first profit-protecting plans near the close yesterday, as the neckline was tested. If there's follow-through to the downside today, profit-protecting plans need to be in place for an approach to 566.50-567, and then again near 563.50-564. Since any rise might be part of a right-shoulder building exercise, I won't be recommending long plays on a bounce from the neckline.

Linda Piazza : 9/14/2005 8:41:22 AM

CNBC just announced that 11M barrels will be sold (have been sold?) from the SPR. Wonder why that was released just before this morning's inventories numbers? Hmm.

Jonathan Levinson : 9/14/2005 8:33:36 AM

QQQQ surged upward but has settled back to 39.63, TNX down to a 1.2 bp decline at 4.1%.

Jonathan Levinson : 9/14/2005 8:32:28 AM

Headlines:

U.S. AUG. RETAIL SALES FALL 2.1% VS. -1.2% EXPECTED

U.S. AUG. RETAIL SALES EX-AUTOS UP 1% VS. 0.6% EXPECTED

U.S. AUG. RETAIL SALES EX-AUTOS, EX-GAS UP 0.5%

U.S. AUG. AUTO SALES FALL RECORD 12%

U.S. AUG. GASOLINE SALES RISE 4.4%

U.S. RETAIL SALES UP 7.9% YEAR-ON-YEAR

BIGGEST DECLINE IN RETAIL SALES SINCE NOV. 2001

Jonathan Levinson : 9/14/2005 8:31:58 AM

Retail sales ex-auto +1% vs. .6% exp.

Jonathan Levinson : 9/14/2005 8:30:58 AM

Retail sales -2.1% vs. -1.4% exp.

Jonathan Levinson : 9/14/2005 8:21:10 AM

Ten year notes hold their gains at the cash open, with TNX quoted -2 bps at 4.114%, IRX -1.4 bps at 3.39%.

Jonathan Levinson : 9/14/2005 7:48:16 AM

QQQQ never bounced after its 39.91 peak, the wavelet cycle trending in oversold for the next hour. What has resulted is an oversold and trending short cycle within a 30 min cycle upphase that will abort and reverse several hours early if QQQQQ doesn't bounce back within the first half hour after the opening bell. The broader 60 min cycle is in an ending downphase, while the daily cycle is in an ending upphase and on a bearish kiss.

This is a most chaotic setup, with the longer cycles fighting it out while the shorter cycles get skewed. I will be very hesitant to enter any trade until it resolves, but my bias will be with the longer cycles- currently, the weekly cycle is down and the daily cycle upphase is finishing. A sharp upside spike would be a short entry- I'm wishing I had taken the short yesterday afternoon, but didn't want to step in front of a 30 min cycle that should have run for another few hours.

Jonathan Levinson : 9/14/2005 7:43:30 AM

Equities are lower, ES trading 1238.75, NQ 1621.5, YM 10656 and QQQQ -.01 at 39.62. Gold is up 2 to 452, silver is +.017 to 7.025, ten year notes are +9/64 to 111 21/32, crude oil is up .5 to 63.60 and natgas is down .065 to 10.70.

We await the 8:30 release of Retail Sales, est. -1.4%, ex-auto est. +.5%, then at 9:15, Industrial Production and Capacity Utilization, est. +.3% and 79.9%. At 10:30, it's the Petroleum Report.

Linda Piazza : 9/14/2005 7:24:28 AM

Good morning. The Nikkei dropped last night, with other Asian markets mixed. More gained than lost, however. European markets are currently mixed, with the DAX and others dropping off earlier highs. As of 7:09 EST, gold was higher by $1.60, and crude, up $0.48 to $63.59. Our futures were modestly higher as of that time, but had fallen over the last hour. More detail about Asian and European markets follows in succeeding paragraphs.

Last night, the Nikkei gapped lower, with exporters heading lower after the performance of U.S. indices. The Nikkei stayed lower and closed down 67.70 points or 0.52%, at 12,834.25. It remains, however, above the big gap Monday and above support just above 12,800.

The August Manufacturers' Input/Output Price Indices show a rise in input prices of 0.3% month over month or 6.3% year over year, and a rise in output prices of 0.2% month over month or 2.6% year over year. Crude prices impacted both indices, but the figures showed that costs were likely cutting into profits. The Trade Condition Index fell 0.1% month over month or 3.4% year over year. Bank of Japan members seemed to have some disagreement last night over quantitative easing policy. Deputy Governor Iwata said that the central bank approaches a time when it will exit its quantitative easing policy, as he believes that there have been signs that Japan is moving out of its deflationary period and the ending of that easing policy is necessary to give confidence and avoid the impression that Japan will slip back into deflation. However, Fukuma also was interviewed last night and said that the CPI was still weak and that the easing policy was still needed. He did not know if the central bank would end the current easing policy in next year's first half.

Tokyo Steel Manufacturing Co. gained in early trading after a newspaper reported that the company would build an electric furnace steelworks that will be the country's largest. Weak issues included TDK Corp., Sony Corp., Fanuc Ltd. and Kyocera. Kyocera reported that its North American cell-phone manufacturing unit would likely report a loss.

Other Asian markets were mixed, but with more positive than negative. The Taiwan Weighted declined 0.33%, but South Korea's Kospi rose 1.09%. Singapore's Straits Times rose 0.13%, and Hong Kong's Hang Seng climbed 0.11%. Wednesday, a group including the US Chamber of Commerce will gather to make a report on China's compliance with rules of the World Trade Organization. Some feel that China isn't fully complying, not meeting some deadlines for allowing direct sales and distribution of products by foreign companies, among other actions. However, Chinese President Hu told President Bush that China will make efforts to increase imports from the US, along with other efforts such as protecting intellectual property rights. Other efforts outside the realm of the trade imbalance would include helping with nuclear talks with North Korea. President Bush reportedly told President HU that the revaluation of the yuan was a good first step, but that China should take further steps. President Bush reportedly plans a visit to China in late November. In other news, the Economist Intelligence Unit believes that China's GDP growth will slow to 8% in 2006. China's Shanghai Composite gained 0.84%.

European markets are mixed, although most were positive early in the trading with automakers helping promote early gains. Yesterday, the IMF's Deppler noted that there's no need for the ECB to cut rates for the eurozone unless the recovery loses ground again and inflationary pressures remain stable. Deppler expects that eurozone's growth to recover, however. Last night, the Bank of France released results of a survey it conducted, with that survey concluding that GDP growth the third quarter may be 0.3% quarter over quarter. July's business climate index dropped to 96 from June's 101. The bank concludes that the industrial sector's growth prospects remain bleak, but the Finance Ministry has a different view, believing that the second half will be better than the first half. The government's GDP estimates for the year are for 1.5-2.0% growth. When talking about crude, the Financial Minister has claimed that he's ready to be hard-hitting with firms over prices. Last night CNBC Europe reported extensively on ECB President Trichet's concerns about the impact of crude prices. He believes that, although there is currently no inflation, there could be second-round effects due to crude costs, and the central bank must be extremely vigilant. House prices and excessive liquidity also provide inflationary risks, he conceded. He added that the yuan needs to appreciate, but in an orderly manner.

Other economic numbers included Italy's final August CPI, showing a rise of 0.2% month over month and 2.0% year over year on a national basis, with those numbers in line with previous estimates. The EU-harmonized figure was revised higher to a 0.2% decline month over month and a 2.2% rise year over year. Some concluded that inflationary pressures remained tame. In the U.K., unemployment claims rose in August from a revised-lower July figures. August's number of claimants proved far less than anticipated. July's average earnings showed that the 3-month year-over-year rate remained steady against expectations for a slight drop. The reports' results were termed "mixed" by one commentator.

Those early gains in European automakers came after the ACEA trade association released figures showing that Western Europe automobile registrations jumped 8.3% in August. Other companies in the news included France's Bouygues, rising in early trading after its earnings results; JC Decaux, rising in early trading after its results; and the U.K.'s plasterboard manufacturer BPB. BPB tossed out a bid from France's Saint Gobain, saying the bid undervalued its shares. Brokers were active, too, with Morgan Stanley downgrading Merck and JP Morgan upgrading Nokia. In early trading, Merck declined and Nokia gained.

As of 7:04 EST, the FTSE 100 was lower by 7.60 points or 0.14%, at 5,330.40. The CAC 40 was higher by 13.63 points or 0.31%, to 4,467.04. The DAX was lower by 5.92 points or 0.12%, at 4,895.96. The DAX's high of the day was 4,934.61.

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