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Jeff Bailey : 9/17/2005 2:26:43 AM

Here's three WEEKLY Pivot Matrix from 06/27/05-07/15/05 at this Link ... Look at that INDU/DIA close on 07/15/05. I thought I was seeing double!

I still post energy prices and their average weekly price for each week. I make note that for 07/05-07/08, that was the first time we saw oil hit $60/barrel. We've seen $70 just recently.

Can the Fed, make that.. should the Fed base its decision for interest rates on energy prices? I (Jeff Bailey) think not. For the most part, stock prices are right where they were in mid-July, two weeks after the late June 25 bp rate hike. If anything, the past two rate hikes do look to have slowed the economy, if you believe the stock market is a reflection of the economy.

The Fed hikes have "hurt" the banks though haven't they? This observation could be a key read from the all-knowing market next week. Yes, it is something I continue to focus on.

I'm going to try and take some time this weekend to sit down and look a little closer at "how" the major indices tracked in the matrix traded. You might want to do the same.

Also look at the TNX.X, the dollar and VIX.X. Did anyone notice that the VIX.X traded around 14 again, then plunged back lower? Why is that I wonder? Too bearish at 14? Maybe if 10-11 is too bullish.

Look at the dollar readings. Benchmark them over time from these tables. Do the same with the 10-year YIELD. There are various thoughts/analysis you will hear/read of what a strong/weak dollar or up/down bond yield is saying about the economy. It is usually bearish commentary, no matter what direction either is headed. When the dollar is weak, it is construed at "no confidence!" When the dollar is strong, it's "inflation," or plunge protection team trying to tape things together.

Jeff Bailey : 9/17/2005 1:52:47 AM

Here's three WEEKLY Pivot Matrix from 08/08/05-08/12/05, which marks the last FOMC meeting. Then a following week (08/15-08/19), which was an expiration week, then a followng week's trade. With Fed policy and energy prices all the talk, I also place the average price of crude oil, unleaded gas and heating oil for each week. At the very top (left corner) I did show energy prices for the prior week (08/01-08/05). Here's the WEEKLY Pivot tables where the highlighted BLUE would represent what WEEKLY Levels saw trade at this Link

Almost done! Let's look at the June FOMC trade too!

Jeff Bailey : 9/17/2005 12:35:48 AM

Last two week's Pivot Matrix and next week's pivot Matrix. This shows trade action the week up to expiration (for 09/06-09/09) and how computers handled things the week of expiration at this Link ... As I was putting this together I noted the S&P Banks Index (BIX.X) which was very strong today (Friday 09/16/05) and where its MONTHLY Pivot (353.05) has been suspiciously correlative with the past two week's WEEKLY R1.

I've got to believe that computers are turned on for selling this interest rate sensitive group at that level.

Analysis becomes: If the MARKETS are happy with what the Fed does and says about future interest rate policy, only then can the BIX.X get a trade at WEEKLY R2.

That's a big move for the BIX.X any week!

Hold on... I'm just getting started! Go get your highlighter!

OI Technical Staff : 9/16/2005 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 : 9/16/2005 8:09:44 PM

Educational I want to quickly make a comment/note regarding today's spectacular option trade action in Bank of America and yesterday's profiled BAC Sep. $42.50 Calls.

This trade was ONLY BASED ON the theory of option expiration manipulation.

One comment/note (which I will refer to next expiration) I would make about why I liked this particular call option was that the stock was trading very close to an at the money strike, so limited capital was at risk, and risk was easily defined for a bull trade. 1 contract = $25.00, 5 contracts = $125.00, 10 contracts = $250.00.

A second reason, and perhaps just as important as the first note, was that open interest on this OEX heavyweight was highest at the $45 call and with the stock sitting closer to $42.50, the options market maker didn't have to worry about strike as pain had already been deliverd to buyers of those calls. However, second-most heavy open interest was at the $42.50 puts. The market maker of those options (assuming market makers sell options to market participants that buy them) he/she was "obligated" to buy the stock if it fell below $42.50, less whatever premiums he/she had sold over the past several months. With the stock at some support lows, there may well have been a higher probability of some near-term defense by the market maker.

Another beneficial catalyst was recent yield curve steepening I have been noting. What was the option market makers' risk for two days?

And one of the better reasons into this particular expiration is the uncertainty of what the Fed is going to do at Tuesday's meeting!

Final and most important note In future expirations, I will be refering back to the "market manipulation" trade commentary that I've provided the past couple of days. Traders will undoubtedly look at this BAC trade and think "I'm going to play the next one, and I'm going to dump $XX,XXX.XX into Jeff's next quarterly options profile! I'll make (let me see) $1.05 - $0.25 = $0.80 option, and 5,000 call options will make me rich!"

Remember Forrest Gump's words ... "Momma always said life was like a box of chocolates. You just never know what you're gonna get."

It will be the "Stupid is as stupid does" trader that "loads the Bubba Gump shrimpboat" on one of these option expiration trades.

Did you call HL Camp & Company yesterday (1-877-811-5304) to get your FREE "Market Manipulation Game" web link? Think about what took place today, that WAS NOT SUPPOSED TO HAPPEN in "step 5" and "step 6" (it did work pretty good with the SMH, but I thought that my bullish day trade was the session low, selling would abate, and bullish gains would be found).

What "didn't work" today was what a traders calls divergence to plan as the OEX surged 0.89% ! Now think about the high short interest figures I've been alerting traders to.

Jeff Bailey : 9/16/2005 7:06:32 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Closed out the Bank of America BAC Sep $42.50 Calls (BAC-IV) at the bid of $0.40 ($+0.15, +60%).

Day traded long a full position in the Semiconductor HOLDRs (SMH) at the offer of $36.87, but was stopped out at $36.74 ($-0.13, or -0.35%).

Swing trade shorted shares of Valero Energy (VLO) at the bid of $108.10, stop is $110.00, targeting $102.25.

Updated blotter of CLOSED trades for September at this Link

I needed to include the two trades that were closed out while I was on vacation earlier this month.

For those traders that may have just joined the Market Monitor, I show two columns of "results." I believe in the practice of risk management and I'm running my profiles as if a trader were trading a $10,000 to $25,000 account. Since I review my trade blotter regularly (at least every weekend) to try and make sure I'm on the right side of a market trade, using a $10,000 in the underlying stock is equal to a full position rule helps me monitor capital risk. A $10,000 figure can also be used if a trader/investor is managing a $30,000 , $40,000 or $2,000,000 trading account as they can perhaps equate % gain/loss "results."

For underlying stock positions, a $10,000 = full position rule also helps when using position size for risk management.

By using a $10,000 = full position rule, option trader's can also understand risk management. It is my belief that proper risk management should only have a trader willing to risk in an option, what he/she is willing to risk to a stop in an underlying stock position itself.

For instance, a $10,000.00 = full position trader might short 92 shares of a stock trading $108. 1 option contract = 100 shares, and just 1 option contract might be purchased.

Jeff Bailey : 9/16/2005 6:26:45 PM

Closing U.S. Market Watch found at this Link .... October Crude Oil (cl05v) settled down $1.75, or -2.70% at $63.00. Unleaded Gas (hu05v) settled down $0.11, or -5.98% at $1.785. Heating Oil settled down $0.075, or -3.92% at $1.837.

Jeff Bailey : 9/16/2005 5:56:53 PM

Here's some average daily volumes since December 2003. Trader's investors can tie this data in with their PnF charts quickly. Just remember that January-September is 1-9 and October-Dec is A-C. Link

Pink numbers are NYSE and black are NASDAQ. % figures are month-to-month changes.

Tab Gilles : 9/16/2005 5:39:32 PM

One of my most used indicators is the 'Ratio Adjusted Summation Index' charts daily and weekly. This indicator provides some important info on market breadth. It also makes a n excellent 'smoothed' overbought/oversold indicator for the major averages, $NASI for Nasdaq/NDX. This indicator fluctuates around a neutral 'zero line' and has a tendency to expand and contract to the extreme territories of the chart(around a neutral zero line). Mostly, major market turning points will occur at these extreme areas found well above or below the zero line. I like this indicator because it offers a very smooth line that doesn't include too much random noise and meaningless moves.Meaning that you can take the turns more seriously when they do occur,especially at the extreme ends. Another reason this indicator is used is that it often diverges from the averages at critical junctures...offering the technician/trader a warning that will often come in advance of a signifigant market turn. I do not use this indicator exclusively...but as just one of many tools. My plan is to gather and weigh the available evidence...and then make decisions based on that evidence. No decisions are made without technical confirmation. Wait for the action of the market to 'confirm' your ideas as right or wrong...then and only then should you act(technically speaking). Remember...the Summation indicator will slowly fluctuate from one extreme to the other(contraction and expansion). These contractions and expansions offer big profit potential if you trade them intelligently.

$NASI/$NDX daily Link

$NASI/$NDX weekly Link

Enjoy the weekend everyone!

Jeff Bailey : 9/16/2005 5:25:23 PM

Closing Internals found at this Link ... HEAVY volume this quarterly expiration. NYSE very notable!

Remember this day you VOLUME watchers. Next Friday's price close at the big board will most likely get some talk. After HUGE VOLUME, is price above or below?

Remember Mark Davis' comments a couple of weeks ago regarding his bullishness and "all we need now is volume!"

So far, I've got NYSE running an average 2.08 billion per day, up 14% from August's average daily volume of 1.82 billion, wich fell 3% from July's 1.87 billion. Last year, NYSE average daily volume for Sept. was 1.28 billion per day.

I've got NASDAQ running 1.70 billion per day so far this month, up 12% from August's 1.52 billion, which was down 8% from July's 1.65 billion. Last year, NASDAQ average daily volume for Sept. was 1.49 billion.

Here's a PnF chart of the SPY at $1 box scale with volume indications turned on Link . BIG volume 5 columns ago (X demand), and BIG volume 3 columns ago (X demand). You can really see the light volume decline in August (red 8) and Os below to $120.

Here's the Dow Diamonds (DIA) also on a $1 box with volume turned on Link

Here's the QQQQ on a $0.25 box scale with volume turned on Link

Linda Piazza : 9/16/2005 3:59:57 PM

I don't always capitalize on what I see, but I usually have a better feel for the markets than I had today. I was just wrong about what would happen, but I hope some of you did take that breakout over the 15-minute 100/130-ema's today. With the OEX retesting important resistance at the close, though, I'd be careful about making assumptions about Monday. Hope lots of you had a better trading day than I did today, and that you have a great weekend.

Jeff Bailey : 9/16/2005 4:31:38 PM

It will be interesting and informative to see how one of Tab Gilles' favorite breadth indications reads. $NASI on 5-point box Link

Linda Piazza : 9/16/2005 3:49:19 PM

Was I ever wrong about today! I thought there would likely be chop between the OEX's 200-sma's support and the 15-minute 100/130-ema's near 570.

Linda Piazza : 9/16/2005 3:48:10 PM

TRAN approaching the 200-sma from below, still about five points below it.

Linda Piazza : 9/16/2005 3:47:02 PM

Lots of shorts running for cover in the BIX stocks, pulling the OEX up, too. Unlike the BIX, though, the OEX hasn't reached a new HOD. Unless BIX bulls get worried, though, it may tug the OEX up to a new high before the close, though. It's still testing that former rising regression channel that carried the OEX off the spring low.

Tab Gilles : 9/16/2005 3:45:52 PM

Last week CNBC reported on Dow Theory Letter author Richard Russell. Pointing out that he was looking for the $SPX to breakout over 1250. Suggesting that the $UTIL had setting a multi year high. (see 9/8 11:56 AM post).

Here's an updated chart. Link

Jeff Bailey : 9/16/2005 3:45:50 PM

Semiconductor HOLDRs (SMH) $36.97 +0.21% ... have reversed course. Earlier this morning I thought if bulls could get the bid from my day trade bullish entry and get the move back above the round $37.00, a nice move could be had. $37.00 is probably the round number close though after a session low of $36.64.

Linda Piazza : 9/16/2005 3:44:55 PM

The BIX's zoom brought the OEX higher, too, invalidating the little two-minute H&S that had been forming.

Linda Piazza : 9/16/2005 3:44:20 PM

The BIX hasn't even touched the five-minute 21-ema after its noon-ish test of that MA and spring off of it. It's now springing up from the two-minute version, now at 350.84, and steepening even that climb as I type.

Jonathan Levinson : 9/16/2005 3:44:19 PM

QQQQ - Exit Point Alert -

Stopped Out QQQQ short from 39.39 at 39.43

Jeff Bailey : 9/16/2005 3:43:40 PM

OEX 572.79 +0.79% here.

Jeff Bailey : 9/16/2005 3:43:00 PM

I don't know what Linda's projected "Max Pain" theory was from OEX open interest, but it looked about 572.50 to me.

I just sold long 3 of the Sep 570 Calls for 3.20, and the willing buyer has me wondering if we might not see strength right into the close.

Linda Piazza : 9/16/2005 3:42:44 PM

The OEX is pausing at the bottom of the former regression channel in which it rose off the spring low. Not much of a pullback yet, but both the OEX and the advdec line are at potential strong resistance, with the BIX still in testing range for its important daily 21-sma (a few cents above it now), so this is absolutely a danger point for both bears and bulls. I'd be taking partial profits if in an OEX bullish play, and, if it were a September option, I'd be considering whether I wanted to take full profit right now and risk a rise into the end, but at least capture my profit in case of a pullback closer to max pain.

Jonathan Levinson : 9/16/2005 3:39:18 PM

QQQQ is in a bearish divergent wavelet downphase here, challenging the toppy short cycle upphase. Our stop at 39.43 will be in harm's way if the bears can't capitalize on this wavelet rollover now: Link

Linda Piazza : 9/16/2005 3:32:17 PM

BIX at new HOD. Still climbing. May be the shorts who get surprised, but still a few minutes until market-on-close orders.

Linda Piazza : 9/16/2005 3:30:46 PM

OEX at 30-minute Keltner resistance. Advdec line at 30-minute resistance. BIX at the 21-ema. Either some shorts are going to get really surprised, really soon, or else gains should stop and a pullback perhaps begin. There's not enough evidence here to say which it's going to be. Just depends on who is the most afraid right now. However, if in OEX bullish positions and if no partial profit has been taken yet, I'd sure be doing that now.

Jonathan Levinson : 9/16/2005 3:27:22 PM

QQQQ - Entry Point Alert -

Short QQQQ at 39.39, stop 39.43

Jeff Bailey : 9/16/2005 3:25:40 PM

03:00 Internals found at this Link

Linda Piazza : 9/16/2005 3:24:26 PM

SOX bouncing from the confluence of various averages, the 21-, 30- and 50-sma's. Testing important Keltner resitance, at 472.64 on 15-minute closes.

Jonathan Levinson : 9/16/2005 3:23:37 PM

Volume breadth +2.09:1 on the NYSE, +1.78:1 on the Nasdaq.

Linda Piazza : 9/16/2005 3:22:25 PM

BIX hesitating at the 21-ema.

Linda Piazza : 9/16/2005 3:22:03 PM

The OEX is now all the way back up to retest the former rising regression channel off the spring low.

Jonathan Levinson : 9/16/2005 3:20:33 PM

R1 is 3 cents above the 30 min keltner top, just violated on the print to 39.38, and should cap the short ccyle upphase. The question is how many shorts from the past 2-3 days will be looking for cover on the break above yesterday's high.

Jonathan Levinson : 9/16/2005 3:17:30 PM

There go yesterday's highs, QQQ at 39.36.

Linda Piazza : 9/16/2005 3:16:13 PM

Expecting chop today, I wasn't inclined to take that push above the 15-minute 100/130-ema's (see my first OEX related post today), but mentioned it as a possibility for those feeling bullish in that first OEX-related post. Now, with the BIX reaching the target it appeared to be aiming for all day and the advdec line approaching potentially strong resistance, profit-protecting plans sound like a good idea. The OEX is setting a new topside target of 575.22, but I don't trust it yet. The OEX may get there and it may erase that bearish price/RSI divergence that had been setting up, but that doesn't mean that profit-protecting plans aren't in order. I'd be considering taking partial profits at this point, and resetting stops on the rest of the position.

Linda Piazza : 9/16/2005 3:11:01 PM

BIX at the 21-ema, actually a few cents above it. It's do or die time for both bulls and bears. This average isn't always important for the BIX and might not be this time, but it has been since early July. The BIX first found support at this average, then fell beneath it, and has since risen three times to retest it before today, falling back each time.

Back a little below it as I type.

Jonathan Levinson : 9/16/2005 3:09:28 PM

Ten year notes are trying to bounce, TNX down to a 4.8 bp gain at 4.262%. 4.26% is support, followed by 4.2%. IRX is up 5.4 bps at 3.409% here.

Linda Piazza : 9/16/2005 3:05:10 PM

Obviously, there's been some divergence today from the way the advdec line acted and the way it did the previous few days. That's why I'd mentioned the possible support being tested earlier and the levels that bears wanted to see broken. Instead of falling through that support after a period of testing it, as it had done on previous days, the advdec line instead found support and rose, predicting that something was different. It's approaching resistance again now, strong resistance, at about +1415, with the line now at +1100. Not sure if that will matter the last hour on opex Friday, though.

Jonathan Levinson : 9/16/2005 3:04:52 PM

QQQQ's short cycle indicators have ground their way into overbougth territory, with the light volume restricting the number of ticks to drive my intraday indicators. The 30 min channel has turned back up on this latest surge, though the 60 still lags. I have my doubts about the sustainability of this show of strength- so far, it fits with my guess for a corrective upphase within the new daily cycle downphase. Above 39.34, we could see added strength as shorts begin to scurry, but there's still a long way to go to this week's 39.91 high.

Jeff Bailey : 9/16/2005 3:04:24 PM

03:00 Market Watch found at this Link

Linda Piazza : 9/16/2005 3:02:31 PM

With so many September OEX calls at 570, this climb isn't going to make MM's any happier than the dip below 570 made them this morning, with so many puts at 570. However, I've never found that max pain worked particularly well for me in establishing where an index like the OEX was going to end the day on an opex Friday. (The OEX settles at the close on Friday, not at the open.)

With that said, the OEX is again challenging 15-minute Keltner resistance at 572.20 on 15-minute closes, trying to break out on this 15-minute period, but with such breakouts highly suspect, particularly if they're only minimal breakouts. The OEX has confirmed an inverse H&S on its 15-minute chart, working against yesterday's confirmation of a regular H&S. It comes up just now, at about 572.50, to test the actual descending trendline off the 9/09 high, and it snapped back a little just as it touched it. The BIX is now less than 10 cents below that MA that has stopped it since late July. Lots of mixed evidence.

Jonathan Levinson : 9/16/2005 2:58:31 PM

Session highs across the board, QQQQ at 39.30. Yesterday's high is 4 cents away.

Jonathan Levinson : 9/16/2005 2:53:05 PM

QQQQ takes another run at 39.25 resistance: Link

Linda Piazza : 9/16/2005 2:44:26 PM

RLX still headed lower, inching below the 200-sma. If the RLX ever get in synch, either with the RLX bouncing along with the BIX or the BIX rolling over and sinking lower as the RLX continues dropping, the OEX might move and move fast, but this bifurcation is causing all the chop.

Jeff Bailey : 9/16/2005 2:42:54 PM

Bank of America (BAC) $43.60 +2.03% ... closing in on $43.75, which would be the eyeball "Max Pain" theory of the $42.50-$45.00 strike open interest.

I'm pretty sure we're also seeing a preliminary run into FOMC for the banks too.

I'd be telling a lie if I told you I thought BAC would go this far today.

Linda Piazza : 9/16/2005 2:40:27 PM

The BIX is about to hit that 21-ema that has been holding it back since late July. Less than 40 cents away now.

Linda Piazza : 9/16/2005 2:35:37 PM

FWIW, there's bearish price/RSI divergence as the OEX retests the day's high.

Jonathan Levinson : 9/16/2005 2:32:19 PM

Crude oil finished 15 cents off its lows, -1.7 at 63.05, and natgas finished .195 at the session low, 11.14.

Jeff Bailey : 9/16/2005 2:30:53 PM

Top 25 weighted S&P 100 Index (OEX.X) components and current aftermath of "The Option Exercise Manipulation Game" at this Link

Linda Piazza : 9/16/2005 2:30:22 PM

OEX below Keltner resistance at 572.05.

Jonathan Levinson : 9/16/2005 2:27:09 PM

Volume breadth +1.64:1 for the NYSE, +1.27:1 for the Nasdaq here.

Linda Piazza : 9/16/2005 2:22:22 PM

OEX next Keltner resistance now at 572.06.

Jonathan Levinson : 9/16/2005 2:15:25 PM

QQQQ failed at 39.25 and has pulled back to 39.20 even as the short cycle continues to drift higher. Bulls need a show of strength to restore the 30 min cycle upphase, but the last attempted fizzled. More interesting will be whether the next set of synchronous downphases (daily, to be joined by short/30/60 min) gets any better traction than the current intraday cycle upphases are generating.

Jeff Bailey : 9/16/2005 2:15:00 PM

Bank of America (BAC) $43.49 +1.75% ... I've seen enough to know I've seen too much!

Jeff Bailey : 9/16/2005 2:12:27 PM

02:00 Internals found at this Link

Linda Piazza : 9/16/2005 2:10:30 PM

Caught on the telephone.

Tab Gilles : 9/16/2005 2:09:22 PM

$GOX Link Link

$XAU Link

Follow-up to 1:03 AM post.

Linda Piazza : 9/16/2005 2:07:40 PM

Minimal OEX breakout on the five-minute chart, but that only brought it up to face more important resistance on the 15-minute, at 572.04 on 15-minute closes, currently.

Jonathan Levinson : 9/16/2005 2:07:28 PM

Session lows for crude oil at 63.05, -2.63%, and natgas, -.165 at 11.17, -1.46%.

Linda Piazza : 9/16/2005 2:06:00 PM

Well, I was wrong. (See my 1:59 post.) How's that for timing? The OEX is above that Keltner line now at 571.57, although not on a five-minute close, and that five-minute close determines whether there's been a breakout or not. The OEX hit a new HOD while it was proving me wrong, too. The advdec line has now risen to test resistance and a sustained breakout above about +1000 issues could change the tenor from a choppy day to one seeing more gains. Until then, the possibility remains that the advdec line will find resistance here, with the OEX having just tested the HOD, so bulls need to have their profit-protecting plans in place here. The BIX has risen to with 55 cents of that important 21-sma that has stopped its advances since late July, so it's getting closer and closer to either a breakout or a rollover point, and BIX gains have been propping up the OEX while the RLX and other key indices drop today.

Jeff Bailey : 9/16/2005 2:02:01 PM

02:00 Market Watch found at this Link

Jeff Bailey : 9/16/2005 2:01:08 PM

Buy Program Premium ... DIA 106.13, SPX 1,234.27, QQQQ $39.25

Jonathan Levinson : 9/16/2005 2:01:05 PM

QQQQ clears 39.20 resistance on a big surge but only moderate volume. 30 and 60 min channel resistance are at 39.28-39.33.

Linda Piazza : 9/16/2005 1:59:08 PM

The OEX is just chopping around, and I hesitate to say too much because until the BIX and RLX get in gear and head the same direction, it's like to continue to do so. However, the OEX has just come up to test a five-minute Keltner line currently at 571.42 for the first time since falling beneath that line at about 10:55 this morning. Earlier in the morning, it had been holding as support, so this is the first retest of that broken support. On the first retest, it held as resistance, but the OEX needs to confirm by a drop, at least below 571.01 on a five-minute close, and preferably below 570.52 on a five-minute close, before that Keltner evidence suggests that the current test of resistance is concluded. Until then, resistance might go on being tested, perhaps even breached, although that doesn't appear too likely to me just now. I guess if the BIX were to shoot right over that 21-sma and the RLX were to bounce from the 200-sma, perhaps it might.

Tab Gilles : 9/16/2005 1:50:58 PM

additional info I forgot to post with 1:34PM post. Link

Tab Gilles : 9/16/2005 1:42:06 PM

+20-Year Treasury Bond Fund LEH (TLT) Link Link

Jonathan Levinson : 9/16/2005 1:40:17 PM

QQQQ's 300 min stochastic is just rolling over now, at the early end of what has actually been an upphase all day today. If this was the upphase, then the downphase could mean serious business, despite my continued faith in opex-39 support. The 60 min cycle upphase has yet to stall, but it's not exactly setting the market on fire either. Current 30 and 60 min channel support are at 39.05, and bulls need to see the north side of 39.20 to restore any semblance of bullishness.

Tab Gilles : 9/16/2005 1:39:33 PM

$NDX Note the 50% Fib retracements and lower trendline. Link

NASI/UOPIX/USPIX Link

Linda Piazza : 9/16/2005 1:37:55 PM

BIX trying to break higher again. Now less than a point away from a retest of the 21-sma, at 350.72, with the BIX at 349.80.

Tab Gilles : 9/16/2005 1:34:33 PM

Murphy Oil (MUR) ENTRY LEVEL HIT- BUY I've been targeting the $50 level as an entry point for MUR. Entering below $49 near 200-ema has in the past been lucrative. Link

Past posts, 9/14 3:46PM & 12:21 AM; 7/14 12:28PM; 7/1 9:45 AM.

Linda Piazza : 9/16/2005 1:30:05 PM

The BIX is at 349.72, not making much progress over the last 30 minutes, with the supporting five-minute 21-ema at 349.27. The strong resistance offered by the daily 21-sma is at 350.72. I don't think the OEX is going to retreat too far unless and until the BIX does. The RLX is sitting on the 200-sma at 442.68 with the RLX at 442.75 and easing back toward the LOD as I type. I don't think the OEX is going to bounce too far until the RLX does. And so there you have it. It's like that old "Bear Hunt" chant I used to do with the children. Can't go over it, can't go around it. One of them is going to have to move.

Jonathan Levinson : 9/16/2005 1:27:45 PM

Silver's holding its big 3.01% gain here at 7.293, off a high of 7.32. Gold is firm as well, up 4.20 at 463.50, 30 cents off the high. Ten year notes remain weak, TNX up 6.34 bps at 4.278%, IRX +4.2 bps at 3.397%.

Jonathan Levinson : 9/16/2005 1:23:57 PM

My classmates and I used to play hooky on Fridays like this, drink beer and shoot pool all afternoon.

Linda Piazza : 9/16/2005 1:20:21 PM

Now there's a continuation-form inverse H&S on the OEX's five-minute chart, but it probably has less relevance than even the H&S did earlier.

Jeff Bailey : 9/16/2005 1:20:02 PM

01:00 Internals found at this Link

Jonathan Levinson : 9/16/2005 1:16:47 PM

QQQQ is still 3M shares away from the half-way mark to yesterday's 80.5M share volume. Average daily volume is 74.78M shares. Currently, advancing volume leads 1.32:1 over declining volume.

Linda Piazza : 9/16/2005 1:15:08 PM

The OEX just chops around.

Linda Piazza : 9/16/2005 1:12:00 PM

Although the OEX popped above the descending trendline off the day's low, it has so far produced a series of lower highs on the 15-minute chart. It's coming up retest the last high, though, so that could change.

Jonathan Levinson : 9/16/2005 1:05:01 PM

Crude oil holds a 1.1 loss here at 63.65, natgas -.04 at 11.295, a nickel off the low.

Jeff Bailey : 9/16/2005 1:03:16 PM

01:00 Market Watch found at this Link

Linda Piazza : 9/16/2005 1:00:41 PM

The BIX has found resistance on every test of the 21-ema at 350.71 since falling through it on July 27. The BIX is currently at 349.53, and it's strong bounce today has been at least partly responsible for the OEX's failure to follow through below 570. The BIX has been skipping higher this morning along the five-minute 21-ema, currently at 348.95, so it would have to fall beneath that level before it's even begun to change its tenor.

Linda Piazza : 9/16/2005 12:55:45 PM

This last push has broken the OEX above the descending trendline off today's high, suggesting the possibility that the pullback was a bull flag and that a retest of the day's high could be in the making, but there's a caveat. Bulls don't want to see a quick reversal back below that trendline, though, and the OEX is dropping back toward it as I type. The advdec line hasn't convincingly turned up yet, and looks vulnerable to more downside.

The truth is that as long as the BIX pulls the OEX one direction and the RLX pulls it another, we may see nothing but chop. If you decided to enter a bearish position as the OEX tested that channel line that usually contains it this morning, you're soon going to have to make a decision as to whether you want to stick around through this chop or just get out and go have some fun today. There's still the possibility that the advdec line will sink further and the OEX will continue a choppy pullback from the day's high, but the evidence is a bit ambiguous as I type.

Jonathan Levinson : 9/16/2005 12:50:06 PM

QQQQ takes out 72 SMA resistance, now working on the 39.20 confluence as the short cycle indicators begin to lift from oversold territory. However, the wavelet cycle is peaking again, and with no leadership from the 30/60 min cycles yet, it's doubtful as to whether there's enough gas in the tank to cause even the wavelet to start trending in overbought. Link

Linda Piazza : 9/16/2005 12:48:30 PM

OEX Keltner resistance softening. Resistance at 571.32 and 571.91, respectively.

Linda Piazza : 9/16/2005 12:42:50 PM

A strong BIX bounce (currently up to the 10-sma with the 21-sma at 350.70 looking more important to me) is helping to support the OEX and prompt these quick bounces (BIX just bounced), while the RLX sits right on the 200-sma, with its weakness dampening the gains.

Jeff Bailey : 9/16/2005 12:42:30 PM

Bank of America (BAC) $43.32 +1.38% ... session highs.

Jeff Bailey : 9/16/2005 12:41:58 PM

S&P Banks (BIX.X) 349.29 +1.03% ... session highs.

Linda Piazza : 9/16/2005 12:40:53 PM

The OEX's 50-sma is at 570.05. I don't think the OEX's movements are as closely allayed with the 50-sma as, say the SOX's might be, but that average does have more apparent relevance lately. The SOX is also testing its 50-sma, but falling to it, not rising to test it. The SOX's is at 469.36 with the SOX currently at 470.04. (I'm surprised that the RUT isn't nearer 670, rather than at 666.82, as we have all these something-70 numbers.)

Jonathan Levinson : 9/16/2005 12:33:44 PM

I need to make way for the cleaning crew- back shortly.

Jonathan Levinson : 9/16/2005 12:33:27 PM

Volume breadth down to +1.11:1 for the Nasdaq and +1.36:1 for the NYSE, TRIN .82 and TRINQ .76, all mostly neutral readings but well off their earlier levels.

Linda Piazza : 9/16/2005 12:32:19 PM

As could have been expected, the OEX is attempting a bounce from the 15-minute 100/130-ema's. It's now retesting the 61.8% retracement of the day's range, from the bottom. These Fib levels have had some relevance today. Those hoping for more downside want to see this 570.11-ish level hold as resistance and certainly want the 50% retracement, at 570.46 to hold. OEX at 570.10 as I type, still testing.

Jeff Bailey : 9/16/2005 12:28:42 PM

Current OPEN MM Profiles found at this Link

Jeff Bailey : 9/16/2005 12:23:36 PM

October Unleaded Gas futures (hu05v) breaking below their pre-Katrina settlement.

Jeff Bailey : 9/16/2005 12:20:11 PM

12:00 Internals found at this Link

Linda Piazza : 9/16/2005 12:19:26 PM

As you can imagine, there are lots of calls and lots of puts for the September cycle at OEX 570. It's going to be tough to get too far above it or too far below it, but I'm still watching. Advdec line still suggests a possibility of more downside, if it follows the pattern from the last few days. Watching for more divergences.

Linda Piazza : 9/16/2005 12:16:34 PM

The OEX has now confirmed that H&S (bearish right triangle) by dropping through the support. It's dropping right to the 15-minute 100/130-ema's, actually a little below them, testing their support. A five-minute close beneath the five-minute 100/130-ema's at 569.58 and 569.55 would be nice for bears to see, although all should keep a watchful eye today for opex shenanigans, such as converting that bearish formation into a bull flag pullback! Smile.

Jonathan Levinson : 9/16/2005 12:12:33 PM

QQQQ is back to the lows in an expanding wedge/bullhorn above 39.10 after being rejected at 72 SMA resistance: Link

Linda Piazza : 9/16/2005 12:12:10 PM

SOX at the 50-sma.

Linda Piazza : 9/16/2005 12:11:10 PM

And now the OEX rounds right over into the neckline (?) or support of the bearish right triangle (?). It doesn't matter what we call that formation, as it would have the same downside target if the 570-ish support were breached, but remember those 15-minute 100/130-ema's currently being tested, at 569.93 and 569.96, respectively. You'd have to see a 15-minute close beneath them before you believed that the OEX was really confirming that formation. A five-minute close beneath the five-minute 100/130-ema's at 569.58 and 569.55 might be needed quickly afterwards, too. Meanwhile, the advdec line sinks into potential support, support that yesterday and the day before produced some sideways moves in the advdec line.

Linda Piazza : 9/16/2005 12:04:27 PM

The advdec line again drops toward another level of potential support from +100 to -470, and still the OEX just coils. If the advdec line bounces appreciably, you can imagine what the OEX might do. It might bounce with it . . . or it could just coil some more. So far, the advdec line still follows the pattern of the last couple of days, however, and I wouldn't have wanted to have been long after it began declining off the first 15-minute push.

Jeff Bailey : 9/16/2005 12:02:06 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 9/16/2005 11:55:52 AM

Volume breadth +1.61:1 for the NYSE here, +1.27:1 for the Nasdaq as QQQQ tests 7200 tick SMA resistance from below.

Linda Piazza : 9/16/2005 11:55:35 AM

I think that H&S on the OEX's five-minute chart has resolved into a triangle at the top of the climb. It's not a neutral triangle, though, but a bearish right triangle with a flat bottom just above 570 and a descending top trendline off the day's high. Doesn't matter: bears still need that support violated to the downside, and bulls still want it resolved to the upside, although next Keltner resistance at 571.44-571.84 may still be strong enough to hold back advances even if it might have weakened enough to allow the OEX to bounce a bit longer (but not higher) than it should have for that H&S.

Linda Piazza : 9/16/2005 11:43:21 AM

Under pressure of a falling advdec line, the OEX nonetheless essentially coils, although in a possible H&S, if viewed on the five-minute chart. Needs to go ahead and confirm that thing to satisfy bears and get some downside started. Instead, it's bouncing a bit as I type, still within the possible right-shoulder level. I mentioned earlier that the OEX's 15-minute Keltner chart and the advdec line's chart gave conflicting evidence, as the OEX's chart indicating that resistance might be weakening, allowing the OEX to rise back toward 571.50-571.86 again, while the advdec line suggested that there was still every chance that the H&S would confirm. Still mixed evidence.

Jonathan Levinson : 9/16/2005 11:42:30 AM

Big bullish engulfing for QQQQ here on the 100-tick chart, as crude oil dives to a session low at 63.70. QQQQ at this Link , crude oil at this Link

Jeff Bailey : 9/16/2005 11:42:13 AM

Swing trade sell short alert shares of Valero Energy (VLO) $108.10 here, stop $110, target $102.25.

Linda Piazza : 9/16/2005 11:36:15 AM

Danger point here. The OEX is beginning to curve over into the right shoulder(best seen on the five-minute chart), but this is a point at which many H&S's are invalidated as prices suddenly surge higher. Another is near the neckline, made even more possible by the 15-minute 100/130-ema's at 569.90 and 569.95.

Linda Piazza : 9/16/2005 11:29:03 AM

OEX Keltner resistance may be softening somewhat. It's at 571.47 and 571.82, with the topmost of those being the Keltner channel that usually holds the OEX prices on 15-minute closes. This chart suggests that the H&S could get invalidated, while the advdec chart so far suggests that everything is working toward the resolution that bears want. Mixed evidence, still.

Jonathan Levinson : 9/16/2005 11:28:34 AM

Closeup of QQQQ's price action since yesterday afternoon at this Link with price testing the upper resistance of a possible bear flag.

Jeff Bailey : 9/16/2005 11:25:03 AM

11:00 Internals found at this Link ...

Jonathan Levinson : 9/16/2005 11:22:25 AM

Session high for silver, +.20 at 7.28, a 2.82% gain. Gold is up 4 at 463.30, a .87% gain.

Linda Piazza : 9/16/2005 11:18:49 AM

OEX bouncing as I expected it to do, from where I expected it to bounce. See my 10:38:11 post. This bounce still fits with a possibly bearish scenario for the day, but that does not mean that you can count on that scenario unfolding. We can't ever or shouldn't ever count on a H&S confirming until it's done so, and then still need to cautious about assuming the downside target will be met. Still, all is working as expected so far.

Jonathan Levinson : 9/16/2005 11:18:21 AM

Sorry to hear it, Jane.

Jonathan Levinson : 9/16/2005 11:17:16 AM

Thanks, Marc. Realtime shows .77, according to Interquote.

Jonathan Levinson : 9/16/2005 11:17:46 AM

The put to call ratio has been falling all morning, last reading at .60. Link

Jonathan Levinson : 9/16/2005 11:13:45 AM

QQQQ has the 30 min cycle stalling on the break of the 72 SMA, the first of the day, with the 30 min channel bottom at 39.07, 60 min channel support at 39.04. If price holds south of 39.20, we'll have a very early failure of the 30/60 min channel upturns, but I'd be surprised to see a failure of 39 support for opex Friday. Link

Jonathan Levinson : 9/16/2005 11:08:44 AM

Ten year note yields hold their gains, +5.2 bps at 4.266%, IRX +3.1 bps at 3.386%.

Linda Piazza : 9/16/2005 11:05:06 AM

Remember that potential scenario I laid out earlier: a drop toward 570, a bounce back up toward 571-571.50 into the right shoulder for a possible H&S. That's still possible.

Jeff Bailey : 9/16/2005 11:03:38 AM

11:00 Market Watch found at this Link

Linda Piazza : 9/16/2005 11:03:31 AM

Advdec line sinking further into support, last-ditch support. On any bounce, OEX bears want to see it stay below about +950-1000. It's at +668 as I type.

Linda Piazza : 9/16/2005 11:01:17 AM

They're talking about the TRAN on the Futures side. Here's my TRAN chart that I was posting a lot late last year and early this year, when the TRAN was testing a channel line that usually stops it: Link That was suggesting that a major top could have been put in early this year.

Jonathan Levinson : 9/16/2005 11:00:28 AM

QQQQ breaks 72 SMA support on a shrap drop here, doji-ing back as I type: Link

Linda Piazza : 9/16/2005 10:57:10 AM

Just as it did the previous two days, the advdec line has been testing potential support once dipping to that support. It needs to drop now instead of bouncing from it.

The OEX still coils. You can imagine which way it will break if there's a strong bounce in the advdec line.

Linda Piazza : 9/16/2005 10:55:32 AM

Jeff, in June, I believe, the settlement value for the SPX was way out of whack because of something going on in the open on a lot of stocks. Hmm. I don't know how that was finally resolved as I didn't have an SPX play that was exposed at the time, but I know a bunch of traders were trying to check it out.

Jeff Bailey : 9/16/2005 10:50:53 AM

Jonathan ... Thanks. Sniffing around, I see quite a few "bad ticks" to the upside in stocks and wonder if the NASDAQ New High's aren't inflated based on some bad ticks. Current NASDAQ NH readings are VERY BULLISH if correct as we'd be showing most new highs since August 2 and were only a couple hours into trade.

Linda Piazza : 9/16/2005 10:49:49 AM

An OEX coil at the top of the climb: that doesn't look good for bearish plays. Yet, while the advdec line's action still has some downside to go before confirming that it's following the pattern of the last few days (testing support now which ultimately failed the previous two days, but which could hold today), it's at least looking possible that a repeat of the last two days' actions could be seen. The OEX is also mostly closing 15-minute periods beneath the Keltner line currently at 571.73, although it hasn't given up testing that Keltner channel boundary. Mixed evidence.

Jonathan Levinson : 9/16/2005 10:47:12 AM

Jeff, I use Interquote and divide the volume figures in the spreadsheet myself. The volume breadth figures were also way out of whack to the upside this AM. The New highs still look pretty high to me: Link

Jeff Bailey : 9/16/2005 10:44:38 AM

Jonathan ... What service to you use for the NASDAQ internals? Do the NH/NL readings from 10:00 look right? NH seem too many this early.

Linda Piazza : 9/16/2005 10:41:19 AM

The SOX is still negative, still below its open, but currently at a confluence of the 21-, 30- and 50-sma's.

Linda Piazza : 9/16/2005 10:38:10 AM

As a reminder, the OEX's 15-minute 100/130-ema's are at 569.83 and 569.90, respectively. The five-minute chart shows the potential for a H&S to form with a neckline at about 570, so watch for the possibility that the OEX could drop to 570 and then push up again toward 571-571.50 to form the right shoulder. Of course, the OEX hasn't shown a particular propensity to drop to 570 just yet. Smile. However, Keltner evidence suggests a vulnerability to that level, too.

Jonathan Levinson : 9/16/2005 10:37:03 AM

Volume breadth is still positive but way off its highs, +1.82:1 for the NYSE and +1.51:1 for the Nasdaq, TRIN .74 and TRINQ .93.

Linda Piazza : 9/16/2005 10:35:36 AM

Important moment coming up now. Advdec now sinking into that potential support. The last two days, that support held only through a couple of 15-minute periods at the most. Advdec at +888 as I type, with that support down to about +550, but it changes fast.

Jeff Bailey : 9/16/2005 10:35:36 AM

Bullish day trade stop alert ... for the SMH $36.74

Jonathan Levinson : 9/16/2005 10:33:02 AM

Crude oil -.475 at 64.275, natgas -.04 at 11.295.

Jeff Bailey : 9/16/2005 10:32:10 AM

Yesterday's Internals found at this Link

Jonathan Levinson : 9/16/2005 10:31:25 AM

Back to find QQQQ net unchanged after that retest of the 39.29 high. The short cycle and wavelet cycles are chopped up and directionless here, but the 30 and 60 min channels continue to drift higher: Link

Linda Piazza : 9/16/2005 10:27:53 AM

Advdec line dropping harder now, and the OEX with it. Advdec line dropping to possible support from about +450-880 (these lines change fast), though. It's at 1075 as I type. The OEX is back below the keltner channel line that usually contains it, but hasn't yet shown bearish divergence on the 15-minute chart, so it could still go on challenging that resistance. It's got strong support in the 569-570 zone.

Jeff Bailey : 9/16/2005 10:24:47 AM

10:00 Internals found at this Link

Linda Piazza : 9/16/2005 10:22:55 AM

The advdec line is still moving lower, but doing so in a choppy form, when it dropped more quickly and precipitously off its early high the previous two days. Still some slight discrepancies within a generally similar pattern. Bears who entered an OEX play this morning and haven't yet been stopped want to see the advdec line below +850 and staying there, although some steadying (in the advdec line and in some indices) and maybe even a bounce attempt should be expected from +500-850.

Jeff Bailey : 9/16/2005 10:38:05 AM

Bank of America (BAC) $43.03 +0.07% ... BAC-IV are $0.50 x $0.60. "Run Forrest Run!" ... As in "don't risk" a 100% bagger to sudden downside op-ex.

Linda Piazza : 9/16/2005 10:19:58 AM

The BIX is springing up from the bottom of its broadening formation, but it's springing up into a retest (closed below it much of this week) of the neckline of the big H&S on its weekly chart, one I showed yesterday. It's the weekly close that's going to matter since that H&S shows up on the weekly chart. Although it's a big one and a slight error in the angle of the neckline can make a big difference, that neckline appears to be at about 348.45 or so, with the BIX currently at 348.21. I think the neckline is reasonably accurate because earlier in August, the BIX was sending daily candle shadows below the line as I've drawn it, but printing candle bodies that sat right on the line I've drawn. So, there's an important BIX test going on, with that test important to the OEX, too. Too bad it's going on, on an opex Friday, so that we might not even be able to trust what we see.

Linda Piazza : 9/16/2005 10:15:16 AM

New HOD for the OEX. Some bearish divergences show up, for what that's worth, on the three and five-minute chart, but they're tentative. The advdec line is not making a new HOD, so there's that divergence, too. There may be a tentative breakout above the Keltner line now pushed up to 571.57 on this 15-minute close. These breakouts (or breakdowns) haven't had good records of reaching their targets lately, especially if the breakout should be a tentative one, but the upside target set would be at 575.30. I'm not going to be betting on it, but this is opex Friday, and I've been known to be wrong anyway. I'd be cautioning the same way (and was, yesterday) about downside targets being met if the OEX were breaking out of the channel to the downside, though.

Linda Piazza : 9/16/2005 10:10:06 AM

I thought that the advdec line hadn't fallen far enough to prevent another OEX test of the Keltner channel that usually contains it, currently at 571.53 on 15-minute closes, and here the OEX is back at 571.51, testing that channel line again. Bears want a close below it and bulls want one above it.

Jeff Bailey : 9/16/2005 10:09:38 AM

Bullish day trade long alert ... for the Semiconductor HOLDRs (SMH) $36.87 -0.08% here, stop $36.74, target $37.25.

Jonathan Levinson : 9/16/2005 10:07:10 AM

Need to step away for 10 minutes here.

Jeff Bailey : 9/16/2005 10:06:30 AM

Buy Program Premium ... DIA $105.88, SPX 1,232, QQQQ $39.17

Linda Piazza : 9/16/2005 10:04:32 AM

The SOX is dropping after an initial climb. Semi-related issues didn't perform well in early Asian trading, at least, as an industry report showed surprising inventory buildups.

Jeff Bailey : 9/16/2005 10:03:37 AM

10:00 Market Watch found at this Link

Linda Piazza : 9/16/2005 10:02:50 AM

Advdec did pull back, but not far enough to please me yet or suggest that it was following the previous two days' pattern to the letter. It should be testing the +750-ish value now, if it were. Keltner support trying to build beneath the OEX, but keep a watch on the 15-minute 100/130-ema's at 569.76-576.84 for a clear benchmark. Bears want the OEX back below those averages. As fast as possible.

Linda Piazza : 9/16/2005 9:57:47 AM

Pullback in the OEX, pullback in the advdec line, but the pullback in the advdec line isn't yet as steep as I'd like to see on behalf of the brave souls who might have hit the OEX's Keltner line with a bearish play. The OEX dipped almost to the 15-minute 100/130-ema's, and might find support there. I wouldn't be surprised to see a bounce and retest of that Keltner line, now at 571.40 on 15-minute closes.

Jonathan Levinson : 9/16/2005 9:56:25 AM

Gold and silver have pulled back, gold to +1.7 at 461, silver +.025 at a session low of 7.105.

Jonathan Levinson : 9/16/2005 9:55:48 AM

A 9.5B weekend repo refunds the 14.05B expiring, for a net 4.55B drain. The stop out rate was 3.59 for treasury collateral, 3.67 for agency and 3.69 for mortgage backed, still spitting distance from a 3.75% target rate- what appears to me the likely outcome of the Fed's rate decision next week.

Jonathan Levinson : 9/16/2005 9:54:07 AM

Ten year note yields are up to a 5.5 bp gain at 5.269%, clearing 4.26% resistance. IRX is up 2.5 bps at 3.38%. Looking for the Fed repo decision here.

Jeff Bailey : 9/16/2005 9:53:21 AM

S&P Banks Index (BIX.X) 347.80 +0.60% ... pressed against DAILY R2. BAC $42.96 ...

Jonathan Levinson : 9/16/2005 9:52:59 AM

QQQQ's short cycle is rolling over here while the wavelet reaches oversold territory. This is treacherous rangebound action made worse by the opposition between the daily and 60 min cycles.

Jonathan Levinson : 9/16/2005 9:51:09 AM

GOOG dives to negative territory at 301.66, another Maalox moment for Sept 300 call writers.

Jeff Bailey : 9/16/2005 9:50:06 AM

Sell Program Premium .... DIA $105.88, SPX 1,232.50, QQQQ $39.20

Jonathan Levinson : 9/16/2005 9:48:56 AM

QQQQ bears need a break below the 72 SMA at 39.17 to stall the 30 min cycle upturn: Link

Linda Piazza : 9/16/2005 9:48:56 AM

If the advdec line follows yesterday's pattern, it will fall steeply during this 15-minute period. If you entered an OEX bearish play (without confirmation, I note, that's it's a great idea yet) on the touch of the OEX's usual Keltner boundary, you absolutely want to see that steep pullback in the advdec line during this 15-minute period.

Jonathan Levinson : 9/16/2005 9:48:22 AM

QQQQ to a session low here at 39.20, volume breadth down to +2.77:1 for both exchanges.

Jonathan Levinson : 9/16/2005 9:47:50 AM

Briefing confirms.

Jonathan Levinson : 9/16/2005 9:47:24 AM

Headline out now:

U.S. SEPT. UMICH CONSUMER SENTIMENT 76.9 VS 89.1 IN AUG.

U.S. SEPT UMICH SENTIMENT BELOW CONSENSUS 85.1

Jonathan Levinson : 9/16/2005 9:47:07 AM

Michigan sentiment 76.9 vs. 85 exp.

Linda Piazza : 9/16/2005 9:47:18 AM

Keltner picture for the OEX: The OEX pierced but will not likely close above the Keltner channel currently at 571.33, with that the same old channel boundary that usually holds the OEX prices. First support at 569.82-570.31 if there's a pullback. The advdec line also hit Keltner resistance, but hasn't confirmed ANY weakness. If you like to hit the OEX's channel line with bearish entries, well, it's hit it, but opex is messing with things today and it's impossible to tell yet whether there's going to be a daytrading switch to buy-the-dips or if it's all about to keel over.

Jonathan Levinson : 9/16/2005 9:46:32 AM

I don't see it yet.

Jeff Bailey : 9/16/2005 9:46:41 AM

Swing trade closed out alert ... filled on five (5) of the Bank of America BAC Sep. $42.50 Calls (BAC-IV) at the bid of $0.40.

Bid/ask is $0.40 x $0.50 with BAC $42.92

Jonathan Levinson : 9/16/2005 9:44:50 AM

Amazing that they still play games with the data- as I recall, the head in charge of the sentiment survey was prosecuted for front-running his own data. I'll try to find a link to make sure I'm not mistaken. But still, the data never seems to be on time for the broad market, while suspicious moves abound in advance.

Jonathan Levinson : 9/16/2005 9:43:06 AM

Once again, a big lurch in the markets 3 minutes ahead of the scheduled release time for Michigan's data.

Jeff Bailey : 9/16/2005 9:42:23 AM

Let's close out alert ... the BAC-IV for $0.40 ... SPY is 123.12 -0.02% ...

Jeff Bailey : 9/16/2005 9:41:09 AM

Bank of America (BAC) $42.88 +0.35% ... BAC-IV are 0.35 x 0.45 . Session high came in the opening 5-minutes to $42.98. Has been sitting on top of DAILY R1 to this point. Session low $42.87

Jeff Bailey : 9/16/2005 9:38:38 AM

Sell Program Premium ... DIA $106.06, SPX 1,234.05, QQQQ $39.25

Linda Piazza : 9/16/2005 9:38:51 AM

At a touch over 572, the OEX will encounter the actual descending trendline off the 9/09 high, but it looks as if it's already punched above the best-fit descending regression channel off that high--the potential bull flag. OEX 569 might now be support on any pullback. Have to look at how things set up.

Jonathan Levinson : 9/16/2005 9:35:50 AM

Volume breadth eases to +6.45:1 for the NYSE, +2.94:1 for the Nasdaq. QQQQ holds its premarket range at 39.29. 100-tick chart at this Link

Linda Piazza : 9/16/2005 9:36:06 AM

No sign of a pullback yet. We'll want to look for any divergences over the pattern of the last few days.

Linda Piazza : 9/16/2005 9:34:02 AM

The OEX gaps up and heads straight for that neckline and the 15-minute 100/130-ema's, already a little above them as I type. The 15-minute close will be important to watch. The advdec line is repeating, exactly so far, the pattern of the last two days, but let's see if it repeats the rest of the pattern, which will then include a sharp pullback that begins during this first 30-minute period.

Jonathan Levinson : 9/16/2005 9:32:27 AM

Volume breadth is +9.9:1 on the NYSE, +5.14:1 on the Nasdaq (no typos). TRIN .46, TRINQ .52.

Jonathan Levinson : 9/16/2005 9:23:28 AM

QQQQ has 6 cents to go until yesterday's 39.34 high.

Jeff Bailey : 9/16/2005 9:20:22 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+7.45 and set for program selling at $+5.37.

Jonathan Levinson : 9/16/2005 9:12:54 AM

QQQQ's intraday cycles, buried in trending moves yesterday, have finally come up for air, with the 30 and 60 min cycles in the early stages of buy signals. The daily cycle printed a sell signal yesterday, with the 10 day stochastic on a sell and the Macd on the verge of confirming it. My expectation is for more rangebound action between 39-40 QQQQ for this op-ex Friday. On a cycle basis, a corrective bounce to fail below the last 30/60 min cycle high (39.91 QQQQ) would relieve the intraday oversold condition and pave the way for a pattern of lower low/lower highs within the daily cycle downphase.

Jonathan Levinson : 9/16/2005 9:00:41 AM

Headlines:

U.S. CAPITAL INFLOWS RISE TO $87.4 BILLION IN JULY

FOREIGNERS BUY RECORD $91 BLN OF U.S. SECURITIES IN JULY

JULY FOREIGN PURCHASES OF AGENCY BONDS HIGHEST IN 9 MONTHS

Linda Piazza : 9/16/2005 9:00:53 AM

Yesterday, some managed some profitable bearish OEX plays (perhaps some bullish ones, too), with the bearish ones entered on tests of the five-minute 100/130-ema's to the topside. That profitability happened only if they got out on the approach to the 567 historical support and 200-sma on the bottom side. Each time that support has been approached, I've been cautioning traders to take partial profits at least, lowering stops on the rest of the position. Otherwise, traders were subjected to chop. That might be what continues to happen, too, as that coiling formation narrows now, with lower highs and with a supporting line that's beginning to flatten into a possible horizontal support just above the 200-sma. Link More chop might be the prescription, although if the OEX punches high enough this morning, that new consolidation zone might resist the effort to narrow. The OEX is in a downtrend on its 15-minute chart, so we'll continue to look for bearish plays on punches up toward that neckline. If the OEX gets only to the five-minute 100/130-ema's before rolling over again, as it's been doing since Tuesday, that may not give enough cushion to enter a bearish play on a rollover, with the 200-sma just below. Perhaps traders should hope for that broadening this morning, unless they're currently in bearish plays. The e-minis have punched above the five-minute 100/130-ema's in pre-market trading, so unless they're back below the five-minute 100-ema, currently at about 1235.60, at the time of the cash open, they may be setting the stage for other entities to climb above those averages, too. I'll look at the setups as they occur, but today is going to be an iffy day with that chop between support and resistance.

A gap lower doesn't look to be in order this morning, but if something should happen between now and the open and the OEX should open at or slightly below the 200-sma (not if it gaps way below), some brave souls might want to attempt a bearish play near the open, but they need to have quick stops, if so. Another possibility is playing such a breakdown with September options, still trading on the OEX, but remember that trading with such options is risky business on the last trading day of the opex cycle. Use only money you can afford to lose, because as often as not, that's what's going to happen to it: you're going to lose it. That gap-lower possibility just doesn't look like something that traders need to worry about as I edit this report, though.

Same thing goes for an open above the 15-minute 100/130-ema's at 569.70 and 569.80, for those brave souls who want to try an upside breakout play. I don't think I'm going to be participating in any long plays right from the open, however, not with the OEX having broken below its ascending regression channel off the spring low, come back to retest the broken support and fallen away, confirming a H&S and then trading beneath the neckline all day yesterday. Both the OEX and the RLX ended the day above their 200-sma's, but the RLX has a big potential H&S on its daily chart, to be confirmed by a close beneath its converging 200-sma and -ema's. The BIX has dropped to the support of its broadening formation on the daily chart, a typically bearish formation, and has perhaps (depending on tomorrow's close) confirmed a H&S on its weekly chart. There are some in board rooms somewhere giggling over the number of times that bears have been trapped by just-barely confirmations of H&S's, only to see prices shoot higher and invalidate the things, so I'm certainly not counting on any downside targets being met just yet, but it does make me hesitant about suggesting bullish plays. So, for me, the best possibility for a new entry anyway would be for the OEX to climb up toward 569.50-570 and roll over from there, but I have to see how things set up before I make any suggestions about entries because this is opex Friday with a choppy zone now having been delineated.

Jane Fox : 9/16/2005 8:53:29 AM

Dateline WSJ The U.S. current-account deficit narrowed last spring, but the gap was wider than expected because the first-quarter shortfall was revised upward.

The current-account gap, the broadest measure of the U.S. trade imbalance, narrowed to $195.7 billion during April through June, from a revised $198.7 billion in the first quarter, the Commerce Department reported Friday. The first-quarter gap was originally reported as $195.1 billion.

Economists had expected a smaller current-account gap of $193 billion in the second quarter, according to a survey by Dow Jones Newswires and CNBC.

The deficit amounted to 6.3% of second-quarter gross domestic product, which was last reported at $12.373 trillion in current dollars. The nation's imbalance in trade of goods and services with the rest of the world makes up about 90% of the shortfall in the current account.

Jane Fox : 9/16/2005 8:43:40 AM

Jonathan I would just like to know from where will all the money come. I betcha our paychecks!

Jonathan Levinson : 9/16/2005 8:36:23 AM

Jane, I'm glad you broached the subject, because I wouldn't have. Most foreigners with whom I correspond (and I'm one, too, "up" here in Canada) can't figure out why there's been no public discussion about the merit of a serious rebuilding effort on that site, both for those directly affected and for the rest of the country. The location is still below sea level and, from most reports, now toxic as well.

Jane Fox : 9/16/2005 8:35:37 AM

My daughter works for a national lab and she has seen research projects cut like never before because of money going to the Iraq War. I wonder how many more projects will now be cut.

Jonathan Levinson : 9/16/2005 8:34:35 AM

QQQQ holds a 9 cent gain at 39.25, ten year note yields up 2.4 bps at 4.238%.

Jane Fox : 9/16/2005 8:33:29 AM

Marc and Jonanthan here is the other side of all that spending.

Dateline WSJ The open-ended commitment by President Bush and congressional leaders to rebuild New Orleans and the Gulf Coast is stoking anger among conservatives over the Republican government's record of higher spending and debt.

Following the nation's worst-ever natural disaster, no Republican in Congress is opposing federal aid that already totals $62 billion and is expected to exceed $200 billion. But the party's conservative wing, led yesterday by Oklahoma's Tom Coburn in the Senate and Rep. Mike Pence of Indiana in the House, is calling for offsetting "sacrifices" in federal spending. And they're backed by a growing chorus of conservative activists, columnists and bloggers.

"It's not about taking care of the folks that need us," Mr. Coburn said in an interview. "But I wouldn't vote for another penny until we get real about the hard choices of cutting some spending." In what would be a real break for conservatives, Mr. Coburn said he is also not inclined to vote to extend the Bush tax cuts absent some fiscal restraint

Jonathan Levinson : 9/16/2005 8:30:59 AM

Headlines:

U.S. Q2 CURRENT ACCOUNT DEFICIT NARROWS TO $195.7 BLN

U.S. Q1 CURRENT ACCOUNT DEFICIT REV $198.7B VS $195.1B EST

Tab Gilles : 9/16/2005 8:28:40 AM

Material Select Sector SPDR (XLB) In pre-market trading NEM & WY are up. Link

In reference to 9/8 11:05AM post- entered XLB @ $27. (updated chart) Link

Jonathan Levinson : 9/16/2005 8:23:22 AM

Ten year note yields are quoted +1.7 bps at 4.231%, 13-week bill rates +1.3 bps at 3.368%.

Jonathan Levinson : 9/16/2005 8:11:24 AM

Marc, the reaction to the President's speech was interesting. A massive rebuilding effort would imply massive Treasury issuances, which should be bearish for bonds/bullish for rates- the markets initially dipped. Then, just before 1AM, the futures ramped up. The rationale for a bid would be that the Fed and other central banks will monetize all this fresh debt, which is hugely inflationary, and so equities should join the party being enjoyed currently by the metals. One may question the bullishness of this latest wave of monetization, particularly as the current account continues to grow toward that theoretical estimate of total yearly world savings around $1T... but the charts will tell the story either way.

Jonathan Levinson : 9/16/2005 8:02:40 AM

As has been the open market desk, Marc. Unless the Fed cranks in a massive repo to cover the 14B expiring today and to drill down that spiking stop out rate (as of the past 2 days), then that 25bp hike that many were doubting will become effectively a done deal.

Jonathan Levinson : 9/16/2005 7:47:51 AM

Equities are green, ES trading 1239.25, NQ 1606.5, YM 10643 and QQQQ +.1 at 39.26. Gold is up 3.2 to 426.5, silver +.057 to 7.137, ten year notes are down 1/16 to 110 59/64, crude oil is down 60 cents to 64.15 and natgas is down 3 cents to 11.305.

We await the 8:30 release of the Q2 current account, est. -193B, then at 9AM Net Foreign Purchases, and at 9:45 (or whenever thereafter that they publicly release it), UMichigan Sentiment, est. 85.

Linda Piazza : 9/16/2005 7:21:01 AM

Good morning. The Nikkei tried twice last night to top 13,000, but fell short and closed lower. Most other Asian markets were lower, too, pressured by tech stocks after an industry report showed building inventories in semiconductors. European markets turn higher, however. Last night, the IMF trimmed its 2006 global growth forecast by 0.1% to 4.3%, but kept its 2005 forecast stable at 4.3%. Rising crude costs in the aftermath of Katrina would reduce economic activity, the IMF felt. U.K., German and eurozone forecasts were all trimmed, too. As of 7:00 EST, gold was higher by $3.00, to $462.30, and crude, down by $0.54, to $64.21. More detail about Asian and European markets follows in succeeding paragraphs.

Last night, the Nikkei made two early attempts at 13,000, coming within eight points of that goal, but then it tumbled throughout the morning and into the early afternoon. Then it jumped higher again, but this time stopped a little further below 13,000, and nearly confirmed a small intraday H&S at the top of the climb. It closed down 28.10 points or 0.22%, at 12,958.68. Technology stocks proved weak in early trading due to a semiconductor inventory buildup, reported by IC Insights Inc., with that buildup surprising industry watchers. J.P. Morgan cut computer equipment maker TDK to a neutral rating and lowered estimates for the company. TDK closed lower, as did Advantest. A cursory check of the Nikkei News before the market open noted information about Sony's mulling over of a plan to gradually sell off wholly owned subsidiary Sony Financial Holdings. The ongoing decision-making process is part of a possible reorganization plan intended to revive its electronics unit. Sony Financial Holdings oversees financial operations for the company. Japan Broadcasting Corp. was making some reorganization plans, too, with those plans perhaps including a trimming of its work force by 1,200 over the next three years. ING Life will join with Chuo Mitsui Trust to offer estate-planning services. In addition, Tokyo Star Bank announced its intention to list on the Tokyo Stock Exchange in late October.

Also, figures showed that corporate debt had fallen to an 18-year-low according to the Bank of Japan. The Bank of Japan's Iwata, quite vocal this week, said that an inflation target should be set.

Most Asian markets declined as semi-related companies dropped throughout Asia. The Taiwan Weighted fell 0.84%, but South Korea's Kospi gained 0.39%. Singapore's Straits Times fell 0.49%, and Hong Kong's Hang Seng dropped 0.38%. China's Shanghai Composite lost 0.36%. Over recent days, the OECD, President Bush, the ECB's President Trichet and Japan's Minister of Finance Tanigaki have all called for China to take further action on revaluing the yuan. Tanigaki says that the yuan revaluation may be discussed at the next G7 meeting on September 23. In addition to reporting on the yuan, the OECD said that volatility in inflation showed that China's monetary policy had not functioned as it should. The OECD elucidated a number of steps China needs to take, including passing pro-business laws, but still expects it to maintain a high 9.5% growth rate. Within a few years, China should be the world's largest exporter. In China on Friday, China Development Bank announced that it would issue the first asset-backed securities sold by a bank in the country.

European markets climb with the DAX trying to recoup losses from the last several days and reclaim 5,000 ahead of this weekend's election. Resource-related issues were gaining. In Italy, July's Industrial production rose 0.5% month over month, with May and June both having produced declines. Both May and June were revised higher, too, although both still declined. All components in the July figure saw increases. The EU's July Industrial Production rose 0.2% month over month above a revised-higher June figure. The number did not quite meet expectations, with France's number dropping 0.9%, but was the second month in a row of increases. Consumer goods and energy production decreased. The intermediate goods component rose the most.

Also watched was the EU12's final August CPI, showing a 0.3% month-over-month and 2.2% year-over-year growth, an upward revision to the previous 2.1% year-over-year estimate. Energy rose 11.6%, putting upward pressure on prices, with transport and housing costs also staying steady. The core rate--excluding energy, food, alcohol and tobacco--was a lower 1.3% year-over-year rate. As Jonathan said yesterday, consumers don't get to spend "core" dollars, however.

Company-specific news included Dutch company Oce's announcement that it would buy U.S. company Imagistics International Inc. (IGI) for $42 per share, a hefty premium to the company's $32.98 close on Thursday. Oce dropped in European trading. A WSJ report speculated that Deutsche Telekom would announce to investors at a conference that it will keep T-Mobile USA, following speculation earlier in the year that it would sell the division. Deutsche Telekom was higher in early trading. French environmental services group Veolia Environnement dropped after its earnings announcement. J.P. Morgan downgraded luxury goods group Richemont to a neutral rating over valuation concerns, and the company's shares eased in early trading.

As of 6:59 EST, the FTSE 100 was higher by 24.60 points or 0.46%, at 5,408.10. The CAC 40 was higher by 29.04 points or 0.65%, at 4,508.43. The DAX was higher by 65.37 points or 1.33%, to 4,971.35.

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