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Jeff Bailey : 9/28/2005 12:51:59 AM

ym05z up 3 at 10,498 ... off to bed I go.

Jeff Bailey : 9/28/2005 12:49:11 AM

DPH Tuesday's extended session trade ticks at this Link ... (per Tuesday evenings MM notes at 06:11:00 and 09:42:20 PM EDT)

Jeff Bailey : 9/28/2005 12:42:48 AM

DPH $2.75 ... WEEKLY Pivot Levels ... $2.17, $2.81, Piv= $3.32, $3.96, $4.47.

DAILY Pivots for Wednesday based on H/L/C of $3.05/$2.75/$2.75 are ... $2.55, $2.65, Piv= $2.85, $2.95, $3.15.

Jeff Bailey : 9/28/2005 12:32:11 AM

ym05z are up 2 points at 10,497.

Jeff Bailey : 9/28/2005 12:27:03 AM

Swing trade short update alert ... for Delphi (DPH) $2.75 -8.02% ... OK, at this point in time, I must assume that those large block trades that were crossed in Tuesday's extended session (see MM notes) and the modest up-ticks to $2.90 in the extended electronic trade is the "smart money."

Tomorrow morning, risk averse bears in this profiled MM short should probably try and sneak in, if possible, and cover their positions below the currently profiled stop of $3.18 in pre-market trade, which begins at 08:00 AM EDT. There were several INET offers from $3.00 to $3.20 as the electronic session ended, and they may be their in the morning. Otherwise, traders should expect a "delayed open" on DPH. (GM too!)

I'd better get to sleep and will try and be here at 08:00 AM EDT on the button.

From an investment standpoint, DPH isn't out of the woods regarding a potential bankruptcy, but now there is some home. I'm looking to trade DPH, and this "hope" will most likely bring in some short covering.

Jeff Bailey : 9/28/2005 12:12:57 AM

Trade alert! Canadian Auto Workers Union reaches tentative agreement with General Motors (GM) ... DJ - The Canadian Auto Workers union reached a tentative agreement with General Motors (GM) just minutes before a strike deadline, averting a walkout by 17,000 members and capping weeks of heated neogitations with the Big Three automakers of North America.

The three-year contract with the world's largest automaker, which comes on the heels of agreements with Ford (F) and DaimlerChrysler (DCX), was reached after General Motors withdrew a demand for shorter worker breaks at its Oshawa assembly complex outside of Toronto.

GM faced a strike deadline of midnight Tuesday, one both sides wanted to avoid. The last walkout by the Canadian division of General Motors was in 1996 and lasted 22 days.

CAW president Buzz Hargrove called off the strike deadline while the union and General Motors continue to put the terms of the contract on paper.

Jeff Bailey : 9/28/2005 12:08:47 AM

NASDAQ NH/NL Ratio with shorter-term five day and more intermediate-term 10-day (X and O) measures at this Link shows bullish leadership is taking a rest, and bearish leadership currently under control. I've marked current measures with bold black boxes. 5-day's look destined for a 30% or lower reading. Note today's action has the 10-day NH/NL ratio giving a "sell signal" at 56%.

NYSE NH/NL Ratio Chart Link ... also showing bullish leadership taking a rest and bearish leadership in control. Seems to "confirm" what the $NASI and $NYSI are saying about adv/dec breadth. This makes sense.

Note: These charts are developed using the conventional 3-box reversal technique of Point and Figure Charting. These readings are taken at each day's close from my "Closing Internals" table and NH/NL ratio measures.

Jeff Bailey : 9/27/2005 11:50:29 PM

NASDAQ Summation ($NASI) Link ... -297.10 and fell 10.81. Think of 0.00 as a "waterline." Still defensive here and column of "O." First sign of strength would be a 3-box reversal up to -280, with meaningful sign of strength being a column of X exceeding a previous colum of X at -75.

NYSE Summation ($NYSI) +45.00 and fell 37.64 on Tuesday. Think of 0.00 as a "waterline." Still defensive here and column of "O", but the still positive (+45.00) reading tells us that the adv/dec line, while weakening, has been stronger than that found at the NASDAQ. First sign of strength would be a 3-box reveral higher at 60.00, with a more meaningful sign of strength coming should a column of X exceed the prior column of X at 420.00.

Jeff Bailey : 9/27/2005 11:41:10 PM

Stockcharts.com's Bullish % Updates ... The broad S&P 500 Bullish % ($BPSPX) Link fell 0.2% in Tuesday's trade, so a net loss of 1 stock to a reversing lower PnF sell signal. After reversing back lower to "bear alert" status on 09/13/05 at 69.8%, current 65.00% reading is the bear phase low.

The very broad NYSE Bullish % ($BPNYA) Link rose 0.3%, so a net gain of approximately 1 stock (roughly 3,000 stocks comprise this bullish %) to a reversing higher point and figure buy signal. After reversing lower to "bear confirmed" status on 09/22/05 this very broad indicator of market breadth has seen a bear phase low of 64.52% on 09/23/05.

NASDAQ Composite Bullish % ($BPCOMPQ) Link slipped lower by 0.01%, so a net loss of approximately 1 stock (roughly 3,000 stocks comprise this bullish %) to a reversing lower point and figure sell signal. Still "bear correction" status at 51.02% and would need a lower reading of 50% to reverse to "bear confirmed." A higher measure of 62% is needed to achieve "bull confirmed" status.

NASDAQ-100 Bullish % ($BPNDX) Link rose 1%, so a net gain of 1 stock to a reversing higher PnF buy signal. Since reversing lower to "bull correction" status at 56% on 08/17/05 this narrower measure of market breadth among large cap NASDAQ stocks has edged off its 09/22-09/26 lower measures of 52% bullish.

S&P 100 Bullish % ($BPOEX) saw no net change in Tuesday's trade. Since reversing lower to "bear confirmed" status at 64% on 08/30/05 this narrow measure of market breadth among large cap stocks holds at a low reading of 64% for a fifth-straight session.

Dow Industrials Bullish % ($BPINDU) from Stockcharts.com still "bull confirmed" status at 73.33% for this very narrow bullish %. Dorsey/Wright's BPDJIA still at 70%.

Note: The above "links" will be dynamic should traders and investors review them after their 09/27/05 closings. However, the readings I noted are to serve as benchmark readings for their 09/27 closing measures.

Jeff Bailey : 9/27/2005 10:30:06 PM

Seoul Composite ($KOSPI) 1,215.10 +0.45% Link

Jeff Bailey : 9/27/2005 10:24:27 PM

S&P Upgrades Ratings on Five S. Korean Banks ... DJ - Standard & Poor's said Wednesday that it has raised the credit ratings of five South Korean commercial banks by one notch to A- based on expectations of extraordinary government support.

It raised the ratings of Hana Bank (002860.SE); Kookmin Bank (060000.SE); Shinhan Bank and Chohung Bank, both units of Shinhan Financial Group Co. (055550.SE); and Woori Bank, a unit of Woori Finance Holdings Co. (053000.SE).

The short-term ratings on these commercial banks were affirmed at A-2, the ratings agency said.

Shares of these banks were higher on the news.

At 0210 GMT, Kookmin Bank shares were up 1.3% to KRW63,500; Hana Bank 6.1% to KRW38,250; Shinhan Financial Group 3.7% to KRW36,200; and Woori Finance 3.6% to KRW15,850.

Jeff Bailey : 9/27/2005 11:02:02 PM

US Airways Group (LCC) said that is successfully offered to the public, 8.5 million common shares priced at $19.30 per share. Merrill Lynch (MER) was the lead manager of the offering, and underwriters have the option to buy an additional 1.275 million shares of common stock to cover any over-allotments.

Third time may be a charm! US Air has filed Chapter 11 twice before. The recent filing gave the company leverage to rid itself of existing labor contracts and forcee union workers to accept lower pay.

One "reason" I felt a need to profile a put for shares of AMR Corp. (AMR) $10.99 -0.45% Link is that I feel their unions are going to have to give in (fat chance when you read any union literature), or suffer the same fate as US Air, UAL, DAL, or NWAC.

Continental (CAL) $9.44 -1.66% Link ... might have a bit of a head start on AMR's PnF chart.

Jeff Bailey : 9/27/2005 10:13:01 PM

Program Traiding Levels for Wednesday ... HL Camp & Company has their computers set for program buying at $+6.52 and set for program selling at $+4.24.

OI Technical Staff : 9/27/2005 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 : 9/27/2005 9:42:20 PM

Still no word out of GM and UAW talks. There was some late, but light upside action (6,100 shares) in DPH with last tick at $2.90 as INET offers were exhausted into the end of the electronic trade.

Jeff Bailey : 9/27/2005 9:35:54 PM

Puru's High Court Overturns Regional Legalization of Coca ... DJ - Peru's highest court overturned two regional laws promoting expanded cultivation of coca - the raw material for cocaine.

The Constitutional Tribunal ruled unanimously Tuesday that the regional governments of Huanuco and Cuzco did not have the authority to declare the laurel-shaped leaf "cultural patrimony" earlier this year.

"In this case, the ordinances by the governments of Cuzco and Huanuco assumed attributes that are exclusive ... to the central government," Constitutional Tribunal President Javier Alva Orlandini told Radioprogramas radio.

But the 54-page court ruling also called on President Alejandro Toledo to reevaluate Peru's national counter-drug policy, saying drug interdiction and development of alternative crops to steer farmers away from the drug trade are not working.

More than 90% of Peru's coca winds up being used for cocaine production, experts say.

Peru permits limited cultivation of about 10,000 hectares (25,000 acres) of the crop, mostly in the Cuzco region, for chewing and for sale to companies that produce pharmaceutical cocaine, package coca tea or produce extracts used in soft drinks.

Jeff Bailey : 9/27/2005 9:29:08 PM

Fed's Hoenig ... Headlines ...

Important for Fed to have neutral policy

Economy is in "reasonably good shape."

Expects to see US employment continue gains.

Rate hikes will be driven by incoming data.

Not sure what's next for monetary policy.

Optimistic about consumer confidence levels.

Jeff Bailey : 9/27/2005 8:15:20 PM

Apex Silver Mines (AMEX:SIL) $15.46 -2.46% Link ... DJ - Denver-based miner announcing that it has agreed to repurchase for cancellation up to an aggregate amount of $30 million of Convertible Senior Subordinated Notes comprised of $20 million of 2 7/8% Notes and $10 million of 4% Notes. Apex Silver has agreed to issue up to a total of approximately 1.5 million shares under this transaction if the full amount of the Notes is repurchased. The exact number of the issued shares will depend, among other things, on the weighted average price of the company's ordinary shares until completion of these transactions, which is expected to occur in September and October 2005.

Technical note: See that BIG volume on 09/16/05 of 1.798 million shares? Bar chart Link . I'd have to think that was the "smart money" that knew of this news (issue approx 1.5 million shares to buy back the convertible). "Silver Stallions" might look for the stock to firm up around $14.00-$14.50.

Recent NASDAQ short interest trends at this Link ... If "short against the convertible" this one might be worth keeping an eye on for a possible squeeze.

Jeff Bailey : 9/27/2005 7:47:55 PM

Dell (DELL) $33.97 +0.44% Link ... DJ - Company is expected to unveil a set of long-awaited products Wednesday for the high-priced consumer market, but some analysts say the top PC maker faces big hurdles as it looks to sell more entertainment gear.

A Dell spokesman declined to comment on the specifics of the announcement, but analysts expect it will pertain to what Dell's VP of Consumer US Consumer Business, Mike George in June referred to as "the Lexus of our lineup" - a group of high-end desktop and notebook computers and new digital televisions aimed at customers willing to pay a premium for their electronic equipment.

Round Rock, Texas-based Dell had focused its past efforts at business customers looking to buy powerful personal computers at affordable prices, a strategy that served it well against rivals such as Hewlett-Packard Co. (HPQ) and International Business Machines Corp. (IBM)

Now Dell is pushing into TVs and digital music players to boost sales growth. In those markets, however, it's coming up against rivals Sony Corp. (SNE) $34.04 +0.91% Link and Apple Computer Inc. (AAPL) $53.44 -0.74% Link , respectively - two companies with loyal customers and long experience satisfying consumer appetites for entertainment gear.

"Looking at their consumer strategy, they don't have the brand name that Apple and Sony have," said Shaw Wu, of American Technology Research.

Wu points to last week's release of Dell's new DJ Ditty music player as an example of the challenges the company is up against in the consumer market. The $99 device can hold 220 songs and is being marketed as an alternative to Apple's iPod Shuffle. But Apple's dominant market position and ubiquitous iPod marketing campaign will force Dell to play catch-up.

"They released it without much fanfare," said Wu, who rates Dell shares at buy. "They're trying to hit the iPod Shuffle, but Apple is already so strong there."

Jeff Bailey : 9/27/2005 8:35:14 PM

Just when you think you've seen/heard it all .... Pentagon to Review Use of Govt. Credit Cards for Katrina ... DJ - Pentagon auditors said Tuesday they will investigate whether federal employees have been abusing government-issued credit cards since their purchase limits were hastily raised to $250,000 to help pay for hurricane-related expenses.

Gary Comerford, spokesman for the Pentagon's inspector general, said the audit comes after Congress - at the request of the Bush administration - increased the purchase limit as part of a massive Katrina recovery bill approved earlier this month.

Previous government audits have shown that the credit cards, which typically have a purchase limit of $2,500, were improperly used to pay for prostitutes, gambling activity and even breast implants. About 250,000 federal employees currently have the government credit cards.

Heee, hee, heeee .... There's a late night video just waiting to be made with this one isn't there? "Relief Workers Gone Wild"

Jeff Bailey : 9/27/2005 7:18:29 PM

Fortune 500 Contributors to Katrina relief ... Fortune - Link ... Wal-Mart (WMT) #1.

Jeff Bailey : 9/27/2005 7:06:42 PM

Insmed Inc. (INSM) $1.09 (unch) Link ... DJ - Gets approvable letter for iPlex, for the treatment of children with growth failure who suffer from Severe Primary IGF-1 deficiency. Previously, Insmed referred to its primary indication as Growth Hormone Insensitivity Syndrome (GHIS). Based on FDA input GHIS is now referred to as Severe Primary IGFD. iPlex is the new worldwide trade name for Insmed's proprietary combination of rhIGF-I/rhIGFBP-3 which was previously called SomatoKine.

INET bid/offer $1.312 (100) x $1.40 (10,000)

Jeff Bailey : 9/27/2005 6:55:38 PM

Merger ... Constellation Brands (STZ) $25.56 -1.80% Link to acquire Vincor Intl. (TSE:VN) $23.47 +0.85% Link for C$31.00 (US$26.45) in cash.

Jeff Bailey : 9/27/2005 6:45:33 PM

Gaming in/around the "Big Easy," may not be so easy ... DJ - Dan M. McDaniel Jr., managing partner for the gaming practices of Phelps Dunbar's Mississippi and Louisiana offices and the newly appointed president of the International Association of Gaming Attorneys, concluded the 2005 IAGA/IAGR International Gaming Law Conference with a panel of involved and informed presenters discussing the sweeping impact of the devastation on the gaming industry in the Gulf of Mexico region of the United States.

Steve Batzer, currently a managing director of Sykes O'Connor, Salerno and Hazaveh (a New Jersey-based architectural firm with clients in the Gulf region) and a former insurance industry executive, was among the panelists. Batzer offered his perspective based on more than 30 years of insurance industry experience related to gaming, including projects in the Gulf Coast region:

"The magnitude of the losses and the fact that they were not created by a single storm, but rather a history of severe damage over the last few years, coupled with reports by several meteorologists who feel that this severe storm exposure will continue, will lead the insurance industry to rethink how it provides insurance for properties in this region and could, therefore, impact the ability for casinos to rebuild and to get financing. In addition, the amounts of required self-insured retentions could escalate, making it very difficult for some of the smaller operators to stay in business." Batzer added, "The new casino designs will certainly impact the availability and pricing of insurance going into the future."

Jeff Bailey : 9/27/2005 6:39:17 PM

No... that's not me "Jeff in Colorado" on Mr. Cramer's Lightning Round. If it were, I'd of asked .... "How about some Ruger (RGR) with a lofty SEC dividend yield of 4.24%!"

Jeff Bailey : 9/27/2005 6:32:39 PM

Rita Victims Still Without Electricity, Fuel and Water ... DJ - Nearly four days after Hurricane Rita hit, many of the storm's sweltering victims along the Texas Gulf Coast were still waiting for electricity, gasoline, water and other relief Tuesday, prompting one top emergency official to complain that people are "living like cavemen."

Jeff Bailey : 9/27/2005 6:24:39 PM

Delphi (DPH) alert $2.75 -8.02% ... DJ - Company acknowledging that it continues to be in discussions with its major unions and General Motors (GM) $30.77 -1.21%.

Robert S. "Steve" Miller, Delphi's chairman and CEO, said, "While I'm pleased that we continue to be in discussions on a consensual restructuring, as everyone is aware we have been working on this for quite some time and our board is committed to achieving a successful restructuring of Delphi, one way or another."

Delphi also stated that, until a path is chosen for implementing its restructuring, it does not intend to comment further on these matters.

Jeff Bailey : 9/27/2005 6:14:31 PM

Geopolitical ... DJ - Israeli aircraft unleashed a barrage of missiles against targets throughout Gaza City early Wednesday, knocking out power and plunging the city into darkness. No injuries were immediately reported.

Missiles landed in at least three locations, including the impoverished Tufah neighborhood and the Bureij refugee camp, just south of the city.

One airstrike hit a two-story building used by the ruling Fatah party in Gaza City. The offices provide tutoring lessons to school children, and cash and food assistance to families in Tufah.

The attack left a big hole in a wall of the building, smashed windows and destroyed an electrical transformer. Windows on several nearby houses were broken, and a car was damaged by flying debris.

Minutes later, an aircraft attacked a building belonging to the Popular Front for the Liberation of Palestine, a small militant group, in Bureij, and fired missiles into central Gaza City. The PFLP office suffered heavy damage.

The army said it was attacking offices used for terrorist activity. Israel has carried out a series of airstrikes in recent days aimed at Islamic militant targets.

Jeff Bailey : 9/27/2005 6:11:00 PM

Delphi (DPH) $2.75 -8.02% ... seeing two (2) blocks of 2.5 million each crossed the wire at 05:02:51 and 05:16:68 at $2.76. These were Agency Cross and would be orders that were put together during today's trade, then marked to the close.

Jeff Bailey : 9/27/2005 6:05:14 PM

Vintage Petroleum (VPI) $44.08 +0.38% Link ... DJ - Company still evaluating impact of Hurricane Rita, but early assessment viewed as no significant damage to operations. Officials still see 2005 output target of 27.3M achievable.

Jeff Bailey : 9/27/2005 6:00:46 PM

Global Interest Rates .... DJ - Argentina's Bank of Investment and Foreign Trade, or BICE, announced Tuesday that it has lowered interest rates and extended payment periods in a bid to boost private sector investment.

The BICE, which mostly provides loans to small exporters, announced in a press release that it "decided to lower its lines in dollars by one point and its lines in pesos by 1.50 points." The lender also extended payment periods to a maximum of seven years, two years longer than previously offered, and announced a grace period of up to 18 months.

Jeff Bailey : 9/27/2005 5:58:59 PM

Grey Wolf (AMEX:GW) $8.16 +1.87% Link ... DJ - Gives preliminary damage assessment from Hurricane Rita. Company saying it has returned 37 of 40 rigs to production that were shut in just prior to Rita. Sees minimal financial impact on rigs.

Jeff Bailey : 9/27/2005 5:53:39 PM

Eaton Vance Ltd. Duration (AMEX:EVV) $17.17 -0.40% .... just noticing this shorter-dated closed-end bond fund trades a 52-week low today. Volume heavy at just over 523k shares.

Jeff Bailey : 9/27/2005 5:48:08 PM

Nextel Partners (NXTP) $25.09 -0.51% Link ... DJ - Company saying it has restored service in areas hardest hit by Hurricane Rita.

Jeff Bailey : 9/27/2005 5:56:30 PM

Global Elections ... DJ - Ivory Coast President saying rebels have failed to disarm. Planned elections for October won't be held. President Gbagbo doesn't expect elections before end of December.

Jeff Bailey : 9/27/2005 5:44:51 PM

Closing Internals found at this Link

Jeff Bailey : 9/27/2005 5:33:33 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/27/2005 5:02:53 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing trade put shares of AMR Corp. and three (3) of the AMR Feb $11 Put AMR-NM) at the offer of $2.00. No stop and targeting $6.00 or bankruptcy.

Swing traded long 1/2 bullish in shares of Sturm Ruger (RGR) at the offer of $9.43, stop goes at $9.15, targeting $11.00. (Note: Stop should be $9.15, in my rush to post on the news, which I think should be bullish, I typed $9.25. If I go back and change that post, my time stamp would then be incorrect).

Jeff Bailey : 9/27/2005 4:39:17 PM

Imperial Oil (AMEX:IMO) $113.19 -0.52% Link ... DJ - Raised its purchase price for benchmark 40-degree gravity light crude oil at Edmonton by C$15 a cubic meter to C$500 a cubic meter, effective Tuesday.

In terms of barrels, the company is now offering C$79.50 a barrel, up from C$77.12. The new purchase price indicates an export price delivered to Chicago of about US$68.88 a barrel after considering transportation and import charges and foreign exchange rates.

Actual export prices are confidential but are believed to be closely related to the posted levels.

Jeff Bailey : 9/27/2005 4:14:19 PM

Buy Program Premium ... DIA $104.55, SPY $121.60.

Jeff Bailey : 9/27/2005 4:04:30 PM

Sturm Ruger (RGR) $9.42 +2.50% Link ... Trader's note: This "bull play" goes back to 07/28/05 and James Cramer's "Mad Money" program. Bulls got a bit ahead of themselves the following session (to $11.75). Tonight, might want to stick out an extendes session (sell day extended session at $11.00) and see if you get hit.

Jeff Bailey : 9/27/2005 3:57:37 PM

Bullish swing trade long alert .... for 1/2 bullish position in shares of Sturm Ruger (RGR) $9.43 here, stop $9.20, target $11.00.

Jeff Bailey : 9/27/2005 3:56:35 PM

Sturm Ruger (RGR) alert $9.40 +2.28% ... company saying case dismissed on court's own motion.

Linda Piazza : 9/27/2005 3:55:31 PM

I said early this morning that I wouldn't be surprised if that right shoulder for that continuation-form H&S on the OEX's 15-minute chart took up to a day to form, as the left shoulder had taken that long, and that's why I came into today expecting possibly choppy behavior. I thought a potential rise into the daily 200-ema might be one good place to look for rollover potential, and was rewarded by a quick push lower when that was hit. However, there's nothing here that suggests that the OEX might not rise back up to retest that daily 200-ema, and so those who have eked out a small profit and don't want to weather that possibility might elect to take profit this afternoon. I've elected to do so because we're dealing with a lot of ongoing situations here with family evacuated from Port Arthur that don't always guarantee that I'll be able to pay attention to personal trades as well as my work with the site, and I always put my work first to the sometimes detriment of my own trades. If your situation is different, I see no difficulty with holding overnight, as I still think pushes up toward and perhaps slightly above the daily 200-ema will be met with selling and that the eventual break will come to the downside. Perhaps some might elect to take just partial profit and then enter again on any pushes up toward the daily 200-ema again if those look likely to fail.

Linda Piazza : 9/27/2005 3:47:08 PM

The advdec line approaches potential support, too, at about -1180, with the advdec line now at -1017. Resistance looks strong on any bounce, but a bounce isn't precluded yet, with this particularly significant, perhaps, as the OEX approaches possible support. I would think, given the look of the advdec line and the action as the daily 200-ema was tested, that a bounce would fail, but perhaps not until tomorrow.

Jonathan Levinson : 9/27/2005 3:45:50 PM

Volume breadth turns back negative, -1.3:1 for the NYSE and -1.23:1 for the Nasdaq.

Linda Piazza : 9/27/2005 3:44:21 PM

So far, a bearish OEX entry just below the daily 200-ema is working as expected, but the OEX approaches next Keltner support at 562.05. Bears want that broken on a 15-minute close. The first ascending trendline off the morning's low is now at about 561.40, which will likely be tested if that 562.05 support fails on a 15-minute close. Bears need to know what they'll do at 561.18-561.40, as that could be a bounce zone, although the support that usually holds for the OEX is down at 559.70.

Jeff Bailey : 9/27/2005 3:37:12 PM

Harrah's Entertainment (HET) $64.96 -0.80% ... announces its Harrah's Rincon to host World Series of Poker circuit event.

Linda Piazza : 9/27/2005 3:36:12 PM

OEX bears hoping for a rollover beneath the daily 200-ema want to see the 15-minute 100-3ma at 562.81 fail to hold as support on a 15-minute close, as a first sign of weakness. The OEX sits at that -ema as I type.

Jonathan Levinson : 9/27/2005 3:34:33 PM

Looks like the bears carried the ball, and the 38.90 top did it for the short cycle upphase. 72 SMA support is at 38.70, below which a new downphase will confirm: Link

Linda Piazza : 9/27/2005 3:33:08 PM

Another little push up toward the OEX's daily 200-ema was met with selling again. The advdec line is finding resistance where I thought it might (near -600 but up to +72), so all is working as I hoped when I thought a punch up to the 200-ema might merit a try at a new bearish position, but bears aren't out of the woods.

Jeff Bailey : 9/27/2005 3:31:01 PM

Sell Program Premium ... DIA $104.66, SPX 1,217.70, QQQQ $38.79

Jeff Bailey : 9/27/2005 3:29:05 PM

GMX Resources (GMXRW) (Warrants) $12.29 +22.51% ... big bid from $10.00

GMX Resources (GMXR) $23.89 +13.27% ...

Jeff Bailey : 9/27/2005 3:26:21 PM

Global ... DJ - Israeli troops fire live artillery shells into Gaza.

Linda Piazza : 9/27/2005 3:21:37 PM

If you're the kind of trader who likes to hit known resistance with a bearish trade, here's a place to try it on the OEX, as it's testing the daily 200-ema and as the advdec line is testing resistance. I base my trades differently than many people, on the movement of the advdec line, so you'd have to set your own account-appropriate stops. Suggestions are just above yesterday's high or just above the 50% retracement of the last decline, at about 566.40 if you employ wide stops.

Note that there's the possibility that the advdec line could move up toward +70 into the close and the OEX could keep retesting that daily 200-ema.

Jeff Bailey : 9/27/2005 3:20:59 PM

Hurricane Rita victims ... Bush administration announces victims of Hurricane Rita entitled to $2,000.00 check from FEMA.

Jonathan Levinson : 9/27/2005 3:15:04 PM

This feels like the kind of relentless grind higher as shorts squeeze each other to a closing session high. If you disagree, price has just dojied to a session high at 38.90, violating upper keltner resistance and printing one of those red "paintbars" I have programmed. That identifies a likely short entry to catch a short cycle downphase: Link

Jeff Bailey : 9/27/2005 3:12:50 PM

03:00 Internals found at this Link

Linda Piazza : 9/27/2005 3:04:10 PM

OEX inching just above the 200-ema now, with the advdec line still climbing. On a Keltner basis, the OEX hits Keltner resistance at 564.32, with this the same channel that usually turns back advances. Bulls, time to protect profits and perhaps even consider exiting at least partial or even total positions, depending on trading style. Ratchet up stops if you intend to keep part of the position open.

Jeff Bailey : 9/27/2005 3:03:17 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 9/27/2005 3:02:42 PM

Volume breadth +1.13:1 for the NYSE, +1.22:1 for the Nasdaq. The bulls are going to have to find another 20 cents on QQQQ to take out yesterday's highs, and yesterday's low has already been broken.

Linda Piazza : 9/27/2005 3:00:07 PM

The advdec line is now hitting potentiall strong resistance as the OEX heads up toward the 200-ema on the daily chart. I don't see signs of a rollover yet, but this is the punch I kept thinking was coming all day.

Jeff Bailey : 9/27/2005 2:59:28 PM

Technology Research (TRCI) $4.21 +9.92% ... thinly traded name lurches from $3.80 on 120K shares in last 5-minutes.

Jonathan Levinson : 9/27/2005 2:58:09 PM

QQQQ retests the morning highs: Link - yesterday's high is at 39.03.

Jeff Bailey : 9/27/2005 2:56:47 PM

Buy Program Premium ... DIA $104.71, SPX 1,217.92, QQQQ $38.83

Jeff Bailey : 9/27/2005 2:51:27 PM

S&P Banks (BIX.X) 338.07 +0.01% ... inch green as "Mr. Greenspan speaks."

Linda Piazza : 9/27/2005 2:51:04 PM

The "next resistance" to which I referred in my 2:49 post was Keltner resistance on 15-minute closes. The OEX is already testing next resistance from another source, the 15-minute 100/130-ema's at 562.78 and 563.33. The daily 200-ema is at 563.54.

Jonathan Levinson : 9/27/2005 2:49:34 PM

QQQQ breaks the 38.75 high, approaching the 38.80 pivot and 30 min channel top: Link

Linda Piazza : 9/27/2005 2:49:07 PM

In my judgment and according to the Keltner channels, the potential for a push higher, although maybe only slightly higher still exists. The OEX is maintaining 15-minute closes above 561.58 and along Keltner S/R at 561.88, and that suggests a push higher . . . which is beginning as I type. Next resistance 563.15.

Jeff Bailey : 9/27/2005 2:48:58 PM

Buy Program Premium ... DIA $104.63, SPX 1,217, QQQQ $38.76

Jonathan Levinson : 9/27/2005 2:48:48 PM

Greenspan quotes Joseph Schumpeter, the Harvard economist who carried N. Kondratieff's work forward. Here's the conclusion of the speech:

Protectionism in all its guises, both domestic and international, does not contribute to the welfare of American workers. At best, it is a short-term fix at a cost of lower standards of living for the nation as a whole. We need increased education and training for those displaced by creative destruction, not a stifling of competition.

Moving forward, I trust that we have learned durable lessons about the benefits of fostering and preserving a flexible economy. That flexibility has been the product of the economic dynamism of our workers and firms that was unleashed, in part, by the efforts of policymakers to remove rigidities and promote competition.

Although the business cycle has not disappeared, flexibility has made the economy more resilient to shocks and more stable overall during the past couple of decades. To be sure, that stability has created some new challenges for policymakers. But more fundamentally, an environment of greater economic stability has been key to the impressive growth in the standards of living and economic welfare so evident in the United States.

Jonathan Levinson : 9/27/2005 2:46:07 PM

Full text at this Link

Jonathan Levinson : 9/27/2005 2:45:38 PM

Headlines:

GREENSPAN: INCREASING FLEXIBILITY IMPORTANT FOR ECONOMY

GREENSPAN DEFENDS NOT BURSTING STOCK BUBBLE

GREENSPAN DOESN'T DISCUSS HURRICANES IN TUESDAY SPEECH

Linda Piazza : 9/27/2005 2:39:16 PM

OEX Keltner support currently at 561.46 held on the last 15-minute period close. That suggested that the OEX would go on retesting resistance, which it's doing as I type, with that closest resistance at 561.88-562.28 on 15-minute closes. OEX at 561.78 as I type. Next resistance at 563.17.

Jeff Bailey : 9/27/2005 2:35:49 PM

Equity/Energy futures at this Link with open interest.

Jonathan Levinson : 9/27/2005 2:34:55 PM

Crude oil finished -.775 at 65.05, natgas +.025 at 13.16.

Jeff Bailey : 9/27/2005 2:25:40 PM

OfficeMax (OMX) $32.05 -2.64% ... a 1/2 day too early.

Linda Piazza : 9/27/2005 2:23:57 PM

OEX Keltner support being tested, at 561.35 on 15-minute closes, with the OEX at 561.39 as I type. If that holds on the close, then further tests of resistance might be presumed,w ith that resistance at 561.83-562.30 and then at 563.18-564.15.

Jeff Bailey : 9/27/2005 2:16:45 PM

02:00 Internals found at this Link

Linda Piazza : 9/27/2005 2:16:42 PM

Tentative advdec line confirmation of a countertrend bounce. It's tentative so far, but there's potential for a further climb to -890 to -640, depending on whether -1980 support holds. Advdec line now at -1696, with thises all being QCharts numbers.

Linda Piazza : 9/27/2005 2:11:59 PM

Is this the push higher I've been expecting all day? If so, I'll be watching the daily 200-ema at 563.75, and just below that, at perhaps about 563.40, for rollover potential, with that rollover perhaps not occurring until tomorrow. I'd need to see internals set up the way I want, too. I want all my ducks in a row here, but plays like that come along often enough that you don't have to try to catch the ones that don't have enough conditions right and are too risky. That's why I didn't suggest a bearish position this morning, even though the advdec line was heading lower.

Jonathan Levinson : 9/27/2005 2:05:41 PM

Session high for GE here, +.99% at 33.60.

Jeff Bailey : 9/27/2005 2:05:01 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 9/27/2005 2:02:19 PM

Volume breadth negative here, -1.55:1 on the NYSE and -1.15:1 on the Nasdaq.

Jonathan Levinson : 9/27/2005 2:01:55 PM

QQQQ clears the 72 SMA here, the bounce getting some lift and retesting the pre-1PM high at 38.75: Link

Linda Piazza : 9/27/2005 1:58:53 PM

Advdec line pushing above the 30-minute Keltner resistance that has been holding it back all day, currently at -2200, but it hasn't closed a 30-minute period above that. It's at -1994 as I type. The next step would be a 15-minute close above about -1725, but that's possibly going to be difficult advdec resistance, too.

Linda Piazza : 9/27/2005 1:56:53 PM

The OEX pushes toward nearest Keltner resistance, at 561.72-561.95, with the OEX at 571.72 and with this resistance important on 15-minute closes. Next resistance above that at 563.23-564.16.

Jonathan Levinson : 9/27/2005 1:55:04 PM

Session low for crude oil here at 64.725, -1.1.

Jeff Bailey : 9/27/2005 1:53:13 PM

Question regarding covered puts on Delphi (DPH) $2.80 -6.35% ... Jeff: So far so good on the DPH. I'm short more than 200 shares of DPH, what do you think about selling some $2.50 puts against our short?

This is something I've considered too, but the "time line" of October 17 (GM possibly restructuring with UAW) might not fit.

I'm (Jeff Bailey) currently holding 750 shares short with average cost of $3.27. My target on any potential bankruptcy announcement between now and Oct. 17 would be $1.05.

RISK Management could well have a trader selling Oct. $2.50 for $0.90 (bid), which is an obligation to buy $1.60, and effectively raise a trader's cost basis by the $0.90 premium. Nov. $2.50 puts are $1.05 (bid) and obligation to buy $1.45.

This is an idea that traders might want to consider. Good comment/question from long-time subscriber.

Linda Piazza : 9/27/2005 1:53:16 PM

I thought there would be chop today on the OEX but I thought the chop would include some pushes up into the 574-ish area at least and I feared a push up toward that 566-567 zone. So far, the chop has been in a narrower and lower range than I expected, but still chop. Keltner charts still show me risk up to 563.22-564, but without any evidence that allows me to conclude how likely that is. So, I'm still unable to suggest a play. While that feels a bit like a failure, in actuality, it's perhaps avoided a lot of hand-wringing today for readers who might have been tempted into a play had I suggested one. I just haven't seen a good setup and might not.

Jonathan Levinson : 9/27/2005 1:49:36 PM

QQQQ shied away from declining 72 SMA resistnace at 38.67, the short cycle downphase still in progress as a wavelet bounce reaches its peak. Longer channel support is converging at 38.50-.53, just below yesterday's lows. So far, today's printed a lower high and nominally lower low. Link

Linda Piazza : 9/27/2005 1:48:19 PM

Advdec resistance at -2174 currently on 30-minute closes has just been a killer on any attempt to bounce the markets today. A bunch of 30-minute candles ae lined up just underneath that Keltner line. Advdec at -2314 as I type.

Linda Piazza : 9/27/2005 1:37:26 PM

After a minimal break of its latest bear flag to the downside, the OEX bounced right up again into that flag and above the Keltner line currently at 560.98. While this certainly isn't a sign of spectacular strength, it still looks suspicious for someone like me, who has already been suspicious that there could be another run higher in the works. Still watching. The advdec line's action still isn't confirming any such impression of another run higher before an eventual rollover.

Jonathan Levinson : 9/27/2005 1:33:36 PM

Volume breadth -2.09:1 for the NYSE here, -1.38:1 for the Nasdaq.

Jonathan Levinson : 9/27/2005 1:31:45 PM

I'm not sticking around in a long to see if it can turn the still-declining 30 and 60 min cycles- the exit was at the midpoint of the declining linear regression channel for QQQQ.

Jonathan Levinson : 9/27/2005 1:30:59 PM

QQQQ - Exit Point Alert -

Out QQQQ at 38.63, +.10.

Jeff Bailey : 9/27/2005 1:27:48 PM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 9/27/2005 1:25:31 PM

Correct the entry to 38.53- by the time I hit "Post," the price had already moved.

Linda Piazza : 9/27/2005 1:29:30 PM

Advdec line now at -2527. Next support at -2975 to -3100. We'll soon be able to label the movement extreme to the downside, but without an extreme downside movement on the indices, or at least on the OEX. That just worries me about bounce potential--and the advdec line action vs. price action has all day--and keeps me on the sidelines about suggesting new plays.

Jonathan Levinson : 9/27/2005 1:24:53 PM

QQQQ - Entry Point Alert -

Long QQQQ at 38.52, stop 38.48

Jonathan Levinson : 9/27/2005 1:21:01 PM

Look for first support at 30 min channel support which overlaps S1 at QQQQ 38.55: Link

Linda Piazza : 9/27/2005 1:19:55 PM

Minimal break on the OEX below the latest bear flag formation. The OEX may be headed toward a retest of the 559.7-560.23 support, although Keltner support and resistance now ring the OEX so snugly that a breakout either direction could occur.

Jeff Bailey : 9/27/2005 1:19:08 PM

01:00 Internals found at this Link

Jonathan Levinson : 9/27/2005 1:16:17 PM

Stuck on a call. QQQQ update at this Link

Linda Piazza : 9/27/2005 1:14:58 PM

Advdec dropping again, just minimally so far. next support is down at -3000, though, if it can't halt the drop. It's at -2312 as I type, on the QCharts version.

Jeff Bailey : 9/27/2005 1:06:08 PM

01:00 Market Watch found at this Link

Linda Piazza : 9/27/2005 1:05:34 PM

The OEX is testing the support of its latest little bear flag, off this morning's low.

Jeff Bailey : 9/27/2005 1:04:11 PM

Exxon Mobil not interested ... DJ - U.S. oil major ExxonMobil Corp. (XOM) $64.18 -0.65% has no plans to join an Angolan refinery project, President Rex Tillerson said Tuesday.

Over the weekend Angola's Minister of Petroleum Desiderio Costa said the country is looking to build a 200,000 barrel-a-day refinery with the help of international partners. He said potential partners included Exxon, Total (TOT) $135.37 -0.55% and Chevron (CVX) $64.08 -0.24%. Costa said he hoped a deal for the refinery could be struck within a year.

Jeff Bailey : 9/27/2005 1:00:33 PM

U.S. Forces to leave Uzbekistan AP - U.S. forces will leave their base in Uzbekistan at the Uzbek government's request, a senior U.S. diplomat said Tuesday.

"The Uzbek government made it clear that we need to leave the base, and we intend to leave it without further discussion," Daniel Fried, an assistant U.S. secretary of state, told reporters after a meeting with Uzbek President Islam Karimov.

Linda Piazza : 9/27/2005 12:54:42 PM

First OEX close above a Keltner line currently at 561.04 since the 10:00 15-minute candle, but it's a tentative close above that resistance. It suggests a test of 561.84-562.04, but doesn't promise much above that, if that test occurs. I'm still watching the advdec line but there's been no change in tenor there, no push above and maintaining of values above about -1950. Advdec line at -2128 as I type.

Jeff Bailey : 9/27/2005 12:56:50 PM

Ciber (CBR) $7.45 +0.67% (see 12:52:33 , 12:43:56) ... and others Link

Jeff Bailey : 9/27/2005 12:52:33 PM

Keane (KEA) $11.09 -4.31% (see 12:43:56) ...

Linda Piazza : 9/27/2005 12:46:15 PM

I think the likely resolution of all of this OEX action over the last few days is to the downside, but I just don't see anything yet that precludes another test of the 566-567 level and some signs that point to that as a possibility. I don't know about you, but I don't want to be in a bearish position from just above 561 if the possibility still remains that 563.60 at least or perhaps 566-567 could be retested.

Jeff Bailey : 9/27/2005 12:43:56 PM

DiamondCluster (DTPI) $7.86 -10.17% ... management consulting company lower on heavy volume.

Market Watch - The company said it plans to reduce its global workforce by about 6% as part of a restructuring. The company expects to close its offices in Munich and Lisbon, downsize its office in Barcelona, and consolidate German operations into a single office in Munich. It won't make job cuts in North America and the United Kingdom. DiamondCluster expects to record charges totaling $11 million to $12 million in the September quarter from the plan. The company believes the restructuring will hurt earnings in the current quarter, and it forecast a loss of 29 to 34 cents a share for the period, including the charge. DiamondCluster projects revenue of between $48 million and $49 million for the period, due to a pullback in spending by core clients in the propery and casualty and health insurance sectors. Wall Street's current consensus estimate is for revenue of $50.3 million in the September period.

Jonathan Levinson : 9/27/2005 12:39:25 PM

Mark, your 12:36 is a textbook example of "moral hazard," where irresponsible decisions get made and bad news gets bought because of the market's certaintly of intervention or other such distortion. If a market doesn't react to external events, then it becomes harder to think of it as a "market" at all.

Jeff Bailey : 9/27/2005 12:40:30 PM

Cell Therapeutics (CTIC) $3.19 +50.47% ... stock is very active and atop today's % gainer list after the company said Phase II trial showed its investigational lung cancer treatment Xyotax may be more effective for women than men. Xyotax is designed to help standard chemotherapy drugs attack tumorous cells, leaving healthy cells unaffected.

Low/high for the session has been $2.13-$3.27. Weekly R2 at $2.29.

Jonathan Levinson : 9/27/2005 12:33:15 PM

QQQQ volume is a fraction of what we saw last week, with 28.3M shares traded so far. Price is coiling within pennies of its opening range, volume breadth lightly negative. 30 min channel resistance is down to 38.80, support up to 38.53: Link

Linda Piazza : 9/27/2005 12:32:06 PM

Advdec line is moving sideways, but can't climb above and maintain values above the -1950 level that would indicate the slightest change in tenor.

Linda Piazza : 9/27/2005 12:22:25 PM

The OEX can't produce 15-minute closes above that first Keltner resistance, now at 561, but it isn't falling far away and the Keltner support is strengthening a little. It's not strong enough to preclude another retest of that support, now from 569.70-570.09, but it looks as if it might hold on tests. OEX at 560.90 as I type.

Jeff Bailey : 9/27/2005 12:07:52 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 9/27/2005 12:07:45 PM

Volume breadth remains negative here, -2.16:1 for the NYSE and -1.08:1 for the Nasdaq.

Linda Piazza : 9/27/2005 12:03:54 PM

The OEX again tests first Keltner resistance at 561.03 on 15-minute closes, with next resistance above that near 562. First support at 559.73-560.10.

Jonathan Levinson : 9/27/2005 12:01:33 PM

Headlines:

FED'S YELLEN: CENTRAL BANK MUST NOT ALLOW INFLATION TO RISE

YELLEN: GRADUAL RATE HIKE SENSIBLE GIVEN FORECAST OF REBOUND

YELLEN: HIGHER ENERGY PRICES PUTS MONETARY POLICY IN DILEMMA

YELLEN: HIGHER INFLATION NOT A GIVEN IN WAKE OF HURRICANES

YELLEN: MONETARY POLICY CAN'T CUSHION HURRICANE IMPACT

YELLEN SEES RISK OF TOO SHARP REBOUND IN 2006

YELLEN: FED POLICY SHOULDN'T DEFLATE ANY HOUSING BUBBLE

Jonathan Levinson : 9/27/2005 11:59:51 AM

Crude oil -.325 at 65.50 here, natgas +.05 at 13.185.

Jonathan Levinson : 9/27/2005 11:48:01 AM

The short cycle downphase is staggering toward oversold territory, with QQQQ's price faring well. The downphase has generate very poor traction so far, a bullish sign. But with the 30 and 60 min channels still declining, and price holding between all of its price bands, there's no sign of any unbalanced move against which to trade- and the head and shoulders is still potentially in effect: Link

Linda Piazza : 9/27/2005 11:47:33 AM

I'm still struck by the fact that the OEX isn't dropping as steeply as the drop in the advdec line would lead one to expect.

Linda Piazza : 9/27/2005 11:41:02 AM

Advdec line headed lower again. OEX headed back toward the current 559.77-560.06 Keltner support. So far, the resistance currently at 561.10 holds on 15-minute closes.

Linda Piazza : 9/27/2005 11:37:47 AM

No sign of a sustainable bounce yet. I'm watching that potential H&S on the RLX, neckline at about 433, with the RLX now at 433.66. It's resisted confirming it so far.

Jeff Bailey : 9/27/2005 11:46:52 AM

Question regarding reverse stock split ... Jeff: What is the best explanation/definition for "reverse split?" JDS Uniphase (JDSU) $2.16 +7.96% has been recommended to do so. Thank you for input

Companies whose stock trades at low levels (usually below $5.00) and thus becomes "penny stock" (penny stock is term used for stocks that fall below $5.00. Some brokerage houses will not allow their brokers/advisors to solicite trades from clients in stocks below $5.00) will consider a reverse stock split.

The reasoning behind a reverse stock split is for two main reasons.

1) To artificially increase the "perceived value" or price of the stock. For instance, should JDSU perform a 1:2 reverse split, the PRICE of the stock would become $4.32. A 1:5 reverse stock split would have the stock's PRICE at $10.80.

2) Another reason behind a reverse stock split it to decrease the number of shares outstanding where any net income, or net loss, will then "give the look" that bottom line results are more (profit, or loss on a per share basis (EPS)).

Note: Option traders will NOT find any type of arbitrage from a reverse stock split. The CBOE usually either decimalizes the current options, or will create a "post split" series set of contracts.

JDSU currently has approximately 1.45 billion shares outstanding.

Linda Piazza : 9/27/2005 11:26:51 AM

I don't know why I've been so unsure that there was much downside potential the early part of this morning, but I just didn't see enough cushion between the OEX's close yesterday and a potential bounce point today. The OEX is attempting a bounce from its Keltner target, but it's possible that it won't get far, either. I just thought it likely that the OEX could chop around within a potential right-shoulder level for its continuation-form H&S, at least for a few hours more, and there was some mixture of evidence that suggested choppiness could prevail. If the OEX bounces from here up into the right-shoulder area, perhaps up to the 15-minute 100/130-ema's at 563.26-563.82, I will have been right, but if the OEX finds resistance now, at the first Keltner resistance it's currently testing and rolls down again, then I will have been very wrong about there being enough cushion from yesterday's close and this morning's open to consider a new bearish entry.

Linda Piazza : 9/27/2005 11:23:17 AM

The OEX rises to test first Keltner resistance at 561.19, on 15-minute closes. If it maintains 15-minute closes below that level, it's likely to go on retesting support. On 15-minute closes above it, it's likely to test 562.20-ish resistance.

Linda Piazza : 9/27/2005 11:21:34 AM

I see a potential for the advdec line to continue dropping further, toward -3000, unless it can climb back above and maintain values back above -1950 or so. It's at -2192 as I type, with this on QCharts. If it can get above and maintain values above that level, markets might attempt to steady and climb, too.

Linda Piazza : 9/27/2005 11:13:01 AM

The BIX had a big gap, a possible breakaway gap, on its five-minute chart today as it broke out of the bear flag rising off yesterday's low. These often aren't filled, but the BIX is rising into that gap. It hasn't completely filled it and may not, but this is a danger signal for bears.

Jonathan Levinson : 9/27/2005 11:12:04 AM

QQQQ holds just below declining 72 SMA resistance, QQQQ down 7 cents at 38.69. The short cycle downphase has done a lot less damage than appeared imminent, but it's still in progress and the right shoulder of the h&s has yet to be violated. Link

Linda Piazza : 9/27/2005 11:10:45 AM

RLX trying to climb again.

Jeff Bailey : 9/27/2005 11:03:45 AM

11:00 Market Watch found at this Link

Linda Piazza : 9/27/2005 11:01:21 AM

Advdec still headed down, but the RLX is still trying to steady, as is the BIX.

Linda Piazza : 9/27/2005 10:55:49 AM

The OEX has now reached the Keltner target on the channel that usually contains most OEX prices. Now is the time to consider taking partial profit and ratcheting down stops on the rest of the position, if in a bearish OEX position, or even taking full profit if that's your usual practice at this channel line. Yesterday and pre-market, I would have suggested the partial-credit choice so that you could keep a toe in these bearish waters, but something just doesn't feel right to me today, so I'm not sure. Make the decision that's best for you.

Jonathan Levinson : 9/27/2005 10:52:03 AM

Stuck on a phone call- back shortly.

Linda Piazza : 9/27/2005 10:50:53 AM

New low on the OEX and the advdec line and I was wrong about the continuing challenge of the resistance, but with the OEX currently hitting its downside target on the Keltner channels, I'm not sure I was wrong yet about the possibility of more choppy behavior.

Jonathan Levinson : 9/27/2005 10:47:16 AM

QQQQ holds right on the line here, testing support in what appears to be a head and shoulders pattern, with the head printed yesterday morning. Neckline support would be in the 38.55 area: Link . However, if it's valid, the current session highs at 38.85 cannot be exceeded, as such would violate the right shoulder.

Linda Piazza : 9/27/2005 10:43:31 AM

The OEX approaches its 559.95-560.39 downside target, with that also constituting a retest of yesterday's low and recent historical support.

Jonathan Levinson : 9/27/2005 10:38:12 AM

Volume breadth -2.04:1 here for the NYSE, +1.06:1 for the Nasdaq.

Jonathan Levinson : 9/27/2005 10:35:35 AM

Crude oil -.4 at 65.425, off a low of 65.025, natgas -.125 at 13.01.

Jeff Bailey : 9/27/2005 10:35:05 AM

Swing trade put alert ... Let's take three (3) of the AMR Corp. AMR Feb. $11 Puts (AMR-NM) at the offer of $2.00.

AMR $10.82 -1.99% here.

Linda Piazza : 9/27/2005 10:32:48 AM

Advdec still trying to steady and I still don't see clear evidence of a good-risk play. I'm still not convinced that the OEX is through challenging resistance.

Jeff Bailey : 9/27/2005 10:32:16 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 9/27/2005 10:31:07 AM

Another index to watch today is the TRAN, currently testing the 50% retracement of the rally off the June low into the late July high. That's at 3603.32, with the TRAN currently at 3603.54. The TRAN is between the 200-sma's resistance and the 200-ema's support. It's still in a confirmed downtrend, but not giving many clues yet as to next direction.

Jonathan Levinson : 9/27/2005 10:26:59 AM

QQQQ continues to hold 72 SMA support, the short cycles issuing the first sell signals with price still coiled in its earlier range. It should break south from here, but there were no surges to resistance sufficient to trigger keltner breaches for a clean entry with a tight stop. That looks suspicious to me, and the oversold wavelet cycle here could still yield another stop-running bounce: Link

Linda Piazza : 9/27/2005 10:27:08 AM

After failing to confirm an inverse H&S on its 15-minute chart this morning, the RLX has fallen to the neckline of a potential regular H&S, with that neckline at about 433, and with the RLX now at 433.15. Will it be confirmed or invalidated as the earlier inverse H&S was?

Jane Fox : 9/27/2005 10:18:49 AM

Here is what the WSJ has to say about CC. Hurricane Katrina and high oil prices dealt a huge blow to U.S. consumer confidence levels in September, with a key confidence index falling to its lowest level in almost two years.

The Conference Board, a private research group, said Tuesday that its index of consumer confidence for September slid to 86.6, versus a revised 105.5 in August. The September reading is well below the 93.0 consensus of economists from a survey conducted by Dow Jones Newswires.

The group attributed the bulk of the drop to Hurricane Katrina, which battered the U.S. Gulf Coast causing widespread damage to property and lives, and hindered oil production and refining in that region. It also cited soaring gasoline prices, which were partly due to Katrina, and a less-optimistic job outlook.

Linda Piazza : 9/27/2005 10:17:59 AM

The RLX is doing some jumping around on its five-minute chart. I still don't trust this action this morning, still not trusting that the OEX is through challenging resistance.

Jonathan Levinson : 9/27/2005 10:17:23 AM

The chart on the Conference Board's website paints an ugly picture for consumer confidence, no doubt exacerbated by the negative savings rate. Link

Jeff Bailey : 9/27/2005 10:11:02 AM

10:00 Market Watch found at this Link ... I "rolled" unleaded, heat oi and natural gas futures to their November contracts as open interest for October falls.

Jonathan Levinson : 9/27/2005 10:10:19 AM

A bearish divergent wavelet downphase has broken south, the short cycle upphase stalled and on the cusp of a new rollover. A retest of 72 SMA resistance here needs to break back above 38.72 QQQQ to avoid kicking of that new short cycle downphase. Link

Linda Piazza : 9/27/2005 10:09:26 AM

According to the OEX's 15-minute Keltner chart, it's vulnerable to a drop to 560.06-560.61.

Linda Piazza : 9/27/2005 10:08:10 AM

And there goes the OEX, dropping along with the advdec line. I should have paid more attention to that usually trustworthy indicator, but the snaky RLX's early setup fooled me, along with my expectation that the OEX could chop around a number of hours or a day in the possible right-shoulder area for its continuation-form H&S. the advdec line now drops into that next possible strong support, now shoved down toward the -1850 zone, with the value at -1732 as I type. I don't know why, but I still just don't trust the action today, and don't see a good setup for either a bearish or a bullish play.

Jonathan Levinson : 9/27/2005 10:07:11 AM

Ten year note yields are down 2.5 bps here at 4.269%, IRX -1 bp at 3.415%.

Jonathan Levinson : 9/27/2005 10:04:44 AM

QQQQ dives here to test 72 SMA support at 38.72: Link

Linda Piazza : 9/27/2005 10:02:13 AM

The action of the advdec line supports the idea of a bearish play, but other factors do not, and further support will be encountered near -1740, with the advdec line currently at -1130. The thing that warns me, too, not to give the advdec line as much credence as I usually would is that the OEX is consolidating sideways as the advdec line drops through layers of support into successively stronger possible support layers.

Jonathan Levinson : 9/27/2005 10:01:22 AM

Headlines:

U.S. AUGUST NEW HOME SALES FALL 9.9% TO 1.24 MLN UNITS

U.S. AUGUST NEW HOMES SALES BELOW 1.34 MILLION FORECAST

U.S. JULY NEW HOME SALES REVISED TO 1.37 MLN VS. 1.41 MLN

Jeff Bailey : 9/27/2005 10:07:24 AM

WellPoint (WLP) alert $75.22 +0.17% Link ... announces it will buy/merge with WellChoice (WC) $75.45 +6.86% Link ... The companies jointly announced today that they have signed a definitive merger agreement whereby WellChoice would operate as a wholly owned subsidiary of WellPoint. The transaction brings together WellChoice, the parent company of Empire Blue Cross Blue Shield, the largest health insurer in the State of New York, and WellPoint, the nation's leading health benefits company. The combined company will now serve more than 33 million medical members as a Blue Cross or Blue Cross Blue Shield licensee in 14 states and through its HealthLink and UniCare subsidiaries.

This transaction is expected to be neutral to 2006 earnings per share and accretive thereafter. At least $25 million in pre-tax synergies are expected to be realized in 2006 and approximately $50 million in 2007, with annual pre- tax synergies of at least $125 million expected to be fully realized on an annual basis by 2010.

The transaction is structured as a merger of WellChoice, Inc. with a wholly owned subsidiary of WellPoint and is intended to be tax free with respect to the WellPoint stock to be received in the transaction by WellChoice stockholders. The consideration of $77.23 per share to be received by the stockholders of WellChoice will be comprised of $38.25 in cash and WellPoint stock at a fixed exchange ratio of .5191 of a share of WellPoint stock for each share of WellChoice stock (valued at $38.98 per share at the market close on September 26, 2005). The transaction will be accounted for under the purchase method of accounting.

The New York Public Asset Fund, which currently owns approximately 52 million shares of WellChoice common stock, will receive approximately $1.989 billion in cash and approximately 27 million shares of WellPoint common stock from the merger based on Monday's closing stock price. The New York Public Asset Fund has agreed to vote its shares, representing approximately 62% of the outstanding shares of WellChoice, Inc., in favor of the transaction.

Jonathan Levinson : 9/27/2005 10:00:50 AM

Headlines:

U.S. SEPT. CONSUMER CONFIDENCE FALLS TO 86.6 VS 105.5 AUG

U.S. SEPT. CONSUMER CONFIDENCE BELOW CONSENSUS 94.9

U.S. SEPT. CONSUMER CONFIDENCE LOWEST LEVEL SINCE OCT. 2003

Linda Piazza : 9/27/2005 9:56:09 AM

The advdec line is so far not holding to support, but again appears to be trying to steady. I'm getting mixed messages from a study of the advdec line, the SOX, the BIX, and the RLX. The Keltner picture on the OEX isn't conclusive, either. This supports the possibility of more choppy behavior. Resistance from 562.81-563.92 appears to be trying to firm, but support at 562.11 appears to be holding well on 15-minute closes, too. The OEX is approximately in the middle of the black channel that usually contains most movements. Despite the action of the advdec line, I'm not convinced yet that the OEX is through challenging resistance.

Jonathan Levinson : 9/27/2005 9:56:03 AM

The Fed announces a 9.75B overnight repo to replace the 10B expiring, for a net drain of 250M. The stopout rate was 3.63 on treasury, 3.76 on agency and 3.79 on mortgage backed collateral. Ten year notes print a session high here, TNX down 1.8 bps at 4.276%, and IRX is down 1 bp at 3.415%. Equities printing highs as I type.

Jeff Bailey : 9/27/2005 9:57:13 AM

Delphi (DPH) $2.89 -3.34% ... It wasn't until late last night that I saw where Deutsche Bank commented yesterday that it had a change in thinking thought it best if the auto part maker filed for bankruptcy. Deutsche Bank analyst Rob Lache wrote, "The primary reason for our change of thinking for Delphi, is that there may be a legitimate argument that GM and the UAW would be better off if Delphi files."

Brian Johnson, an analyst at Bernstein & Co. gave chances of bankruptcy a 50/50 chance at this point and said, "The only sure thing is by Oct. 17, there is either an adequate restructuring plan or a filing. We think it stands with the UAW to agree to a deal with a price tag GM is willing to support in terms of assistance to Delphi. GM is on the hook for some extended benefits if Delphi were to file, so it has an interest in keeping the company out of Chapter 11, but that doesn't mean GM will pay an unlimited amount of money."

Jonathan Levinson : 9/27/2005 9:54:29 AM

Volume breadth now mixed, -1.05:1 on the NYSE and +2:1 on the Nasdaq.

Linda Piazza : 9/27/2005 9:52:06 AM

In contrast to the SOX, the RLX has a potential inverse H&S on its 15-minute chart, with the neckline there a little more difficult to pinpoint, but perhaps at about 437. RLX at 436.20 as I type.

Linda Piazza : 9/27/2005 9:51:09 AM

The SOX has a potential H&S on its 15-minute chart, and a drop below about 460.20 would confirm that H&S. The SOX is testing the right-shoulder level as I type.

Jeff Bailey : 9/27/2005 9:49:45 AM

December Fed Fund futures (ff05z) 95.92 ... currently predicting a 40% chance of two more 25 bp tightenings.

Jeff Bailey : 9/27/2005 9:48:04 AM

UBS cutting/downgrading several "gold" miners this morning. I haven't been able to find anything other than the headlines crossing the wire.

Additional news ... DJ - The dollar was around two-month highs versus the euro and the yen early in New York trading Tuesday, lifted by comments from Federal Reserve officials suggesting the rate tightening cycle has some way to run.

Federal Reserve Bank of Kansas City President Thomas Hoenig said late Monday that the economy will likely face temporary headwinds from Hurricanes Katrina and Rita but was in "reasonably good shape" overall, despite the hurricanes somewhat clouding the outlook.

"It's important for the Federal Reserve to stay focused on its primary mission for attaining a neutral monetary policy that is both able to contain any inflation pressure and still allow us to grow in a stable way for the long term. That is our primary mission."

Hoenig's comments came after Fed Chairman Alan Greenspan sounded an upbeat note on the economy earlier Monday, noting that homeowners could weather a possible drop in housing prices. Greenspan delivers another speech Tuesday.

Analysts said the remarks underline the sense that the Fed is still some way from completing its rate hike cycle, which has seen interest rates rise by increments of 25 basis points in each of the last 11 meetings.

The Fed raised rates to 3.75% last week. The yield on the 10-year U.S. Treasury note lifted to its highest level in a month and a half overnight following the comments. "The Fed continues to point the way toward risks that the funds rate might have to be raised significantly more in order to preserve a well-fought battle...for price stability," wrote Divyang Shah, global strategist at Ideaglobal in London, in a research note Tuesday.

The Fed comments pushed the euro to its lowest levels since July 26 overnight, with the single currency dipping to $1.1992. The euro's losses came despite better than expected German data.

The dollar also lifted to a two-month high versus the yen at Y113.35, not far from its 2005 high at Y113.73.

Early in U.S. trading, the euro was at $1.2002, from $1.2071, according to EBS. The dollar was at Y113.32, from Y112.28 and at CHF1.2978 from CHF1.2893. The pound fell to $1.7648 from Y1.7781, and the euro was at Y136.04 from Y135.52.

The market will be eyeing U.S. data due at 10 a.m. EDT. August new home sales are expected to dip slightly while September's Conference Board consumer confidence - hit by the impact of the recent hurricanes - is expected to drop to 93.0 from 105.6, according to a Dow Jones Newswires survey.

Linda Piazza : 9/27/2005 9:47:49 AM

The RLX is trying to steady this morning. As long as it's doing so and especially if it starts climbing again (a possibility according to the chart), the OEX isn't likely to fall far, so bears need to be careful.

Linda Piazza : 9/27/2005 9:45:16 AM

The advdec line is trying to bounce, and tentatively hold onto that support. It's still possible that the OEX isn't through challenging resistance and may attempt another climb. Evidence is a bit iffy, still.

Remember in my earliest OEX-related post this morning, when I mentioned that it could take up to a day to finish building the right shoulder for a possible H&S? Choppy trading behavior today would fit with that scenario, so be careful.

Note: As I typed, the advdec line dived lower.

Jonathan Levinson : 9/27/2005 9:44:28 AM

Don't forget Consumer Confidence and New Home Sales at 10AM. As well, we'll see the Fed's disposition of its massive 10B overnight repo from yesterday.

Jeff Bailey : 9/27/2005 9:42:11 AM

Kinross Gold (KGC) $7.24 -2.29% Link ... UBS cuts to "neutral" from "buy."

Linda Piazza : 9/27/2005 9:40:54 AM

The advdec line may be losing that support that often holds. Without a reasonably quick bounce back above about -500, within the next five minutes or so, that looks like what might be happening, but the jury remains out. It's at -713 (QCharts value) as I type.

Jonathan Levinson : 9/27/2005 9:39:28 AM

QQQQ trades back to its premarket range here, testing support to 38.75: Link

Linda Piazza : 9/27/2005 9:38:22 AM

Advdec sinking deep into potential support. Watching to see if it holds.

Linda Piazza : 9/27/2005 9:37:30 AM

Reader J.G. asks what time interval I'm using when watching the advdec line. Here's what I mainly watch on the 30-minute chart: Link Note that movements are usually capped somewhere near the outer boundaries of the black channel. This is a Keltner channel with a length of 45, based on a source of exponential AvgHLC, and with a multiplier of 3.

Jonathan Levinson : 9/27/2005 9:35:50 AM

Volume breadth is +1.3:1 for the NYSE and +1.98:1 for the Nasdaq at the open.

Linda Piazza : 9/27/2005 9:32:09 AM

The OEX opens slightly lower, but the advdec line gaps down to potentially strong support. I'm watching to see if that support holds. If it does, the advdec line and the OEX could resume its retest of resistance.

Jeff Bailey : 9/27/2005 9:30:26 AM

Bema Gold (BGO) $2.86 ... could be weak early after UBS cuts to "neutral" from "buy" Link ... In other news, Placer Dome (PDG) $17.27 Link ... said it will develop the Pueblo Viejo gold project in Dominican Republic, but has deterimed the Cerro Casale project in Chile isn't financially viable at this time. Bema Gold, which owns 24% of Cerro Casale, disagrees with Placer's conclusion and plans to pursue all legal avenues to reclaim Placer's stake in the project.

Jonathan Levinson : 9/27/2005 9:22:26 AM

Euros are down this AM, -.45% at 1.2063 and testing confluence support. Gold is weak , -2.9 at 466.70, off a low of 465.90, silver -.058 at 7.311.

Jeff Bailey : 9/27/2005 9:16:33 AM

Program Trading Levels for Tuesday ... HL Camp & Company has their computers set for program buying at $+6.53 and set for program selling at $+4.33.

Jonathan Levinson : 9/27/2005 9:11:24 AM

Second that, Jane. Pivot points are just decision points, no different from fibs. Choosing and configuring the right indicators takes skill, but more importantly is consistency of use, learning to read their subtleties.

Jane Fox : 9/27/2005 9:10:10 AM

Linda you brought up a very valid point in your 8:51 post. There is much debate on how to calculate pivot points, do you use intraday highs, lows and close or all sessions highs, lows and close. It doesn't matter as long as you just stick to one method and get used to how it works. The same goes for the AD line, what matters is not how it is calculated but how you use it.

Jonathan Levinson : 9/27/2005 8:58:04 AM

QQQQ's 30 min cycle downphase has stalled just past the midpoint of its range, while the 60 min and daily cycle downphases continue. Within all these channels, the short cycle continues to point higher, but price is very close to the top of the 30 min channel at 38.82. Resistance at yesterday's 38.90-39.00 range should be strong, and I'm expecting it to hold. Above 39.00, I expect bears to begin running for cover.

Linda Piazza : 9/27/2005 8:51:22 AM

Reader Question: What symbol do you use for advec? I'm on IB and Thinkorswim.

Response: The symbol on QCharts, the charting service I use to watch, is advdec. I'm not currently using either IB or Thinkorswim (interesting name, though). Do any of the other writers know the symbol for either of these?

In my email response to the reader, I noted that there are different ways to compare advancing and declining issues, and so different charting services and brokerages may offer different numbers. Some use a subtraction method and some a method in which advancers are divided by decliners. Sometimes readers may note that Jane and I post advdec figures in close succession to each other, and the figures don't match. The point is to familiarize yourself with the way that the advdec figures move on your provider, and to learn what indicates oversold and overbought measures on that indicator.

Linda Piazza : 9/27/2005 8:46:21 AM

The OEX follows its usual pattern: a big move followed by a 4-6 point consolidation range before next direction is decided. On a Keltner basis, that current range is from 560.28 to 565.46, with the OEX ending the day near the middle of that range. On most occasions over the past few months, it's been a good idea to take at least partial profits as the outer boundary is hit on either side, and ratchet up stops on the rest of the position, or else take total profits and watch for an opportunity to switch sides.

A different view shows a more bearish than neutral outcome to yesterday's trading, as the close in the middle of the Keltner channels suggested, however, with the OEX rising into a bear flag from Friday's low, breaking down out of that flag yesterday and then rising to retest the flag's support. That former support is roughly congruent with the 15-minute 100/130-ema's at 563.60-564.15, with those also being the site of a right shoulder for a potential H&S on the 15-minute chart. It could take up to a day of trading for that right shoulder to form if it's going to be symmetrical to the left shoulder. This is a continuation-form H&S, however, with those not entirely trustworthy. Still, I'll be watching any test of the 563.60-565 zone this morning for rollover potential. This report was prepared last night, after the close, and a lower opening looks possible as of this writing, so that bounce might not occur until a retest of support. I'll watch as the market opens to see how internals set up, to see if there's a trading opportunity.

Jonathan Levinson : 9/27/2005 8:37:46 AM

Ten year notes hold their losses, with TNX up 1.5 bps at 4.311%. IRX is up .2 bps at 3.427%.

Jonathan Levinson : 9/27/2005 7:47:55 AM

Equities are down, ES trading 1220.75, NQ 1585, YM 10478 and QQQQ -.003 at 38.757. QQQQ is down 2.6 at a session low of 467, silver -.019 at a low of 7.35, ten year notes -1/4 at 110 15/64, crude oil is down .65 at 65.175 and natgas is down .105 at 13.03.

We await the 10AM releases of Consumer Confidence, est. 95, and New Home Sales, est. 1.35M.

Linda Piazza : 9/27/2005 7:07:20 AM

Good morning. The Nikkei fell on profit-taking, and other Asian markets were mixed. European markets are mixed, too. As of 6:40 EST, gold had dropped $1.50 to $468.00, and crude had fallen $0.57 to $65.25. Our futures were near the flat-line level. More detail about Asian and European markets follows in succeeding paragraphs.

After zooming to new four-year highs Monday, the Nikkei opened slightly in the red Tuesday as some investors appeared to be in a profit-taking move. The Nikkei fell further and ended the day down 82.59 points or 0.62%, at 13,310.04. Crude had rebounded as news circulated that refineries and chemical companies in Rita's path might not be operating at full capacity for several weeks, although companies such as Huntsman (HUN) were quick to reassure investors last night that they had sustained little damage and would soon be fully operational again. Nippon Telegraph & Telephone Corp. and TDK Corp. were among early decliners.

Other Asian markets turned in mixed performances. The Taiwan Weighted gained 0.25%, and South Korea's Kospi hit another record high early in the session, closing just off that high of the day, up by 0.27%. Big-cap companies produced mixed performances on that bourse, however. Singapore's Straits Times fell 0.48%, and Hong Kong's Hang Seng declined 0.55%. China's Shanghai Composite dropped 1.89%.

European markets also are mixed. I'm reading rumors of an explosion at an electrical plant in Spain, possibly attributed to a Basque terror group, but I'm not seeing confirmation on any of the more trustworthy sources, so am not sure how reliable that rumor might be. Elsewhere, the U.K.'s BBA August mortgage lending figures showed a month-over-month and year-over-year rise. The second-quarter's business investment was also revised higher. Some feel that these numbers may suggest that tomorrow's final GDP for the second quarter may see another upward revision. When looking at the 12 EU countries, the July trade surplus was revised lower, narrowing it significantly, as had been feared. Exports rose 0.9% month over month after a 0.3% drop in June, but imports rose a much-stronger 4% month over month. Energy imports rose 39% year over year.

European and U.K. oil and gas majors rose, with J.P. Morgan upgrading BP and Royal Dutch Shell to overweight ratings. France's Total also was among the majors gaining, although J.P. Morgan downgraded that company to a neutral rating from its previous overweight rating on valuation concerns, among other reasons. Banks were among stocks gaining attention. Switzerland's UBS AG announced that it and the Bank of China would be preferred partners in China and for Chinese clients, in the areas of investment banking and other securities businesses, and that it would invest $500 million in the Bank of China as part of the deal. It eased lower in early trading. The Bank of Ireland was also lower after updating on its earnings expectations.

As of 6:49 EST, the FTSE 100 had climbed 9.70 points or 0.18%, to 5,462.80. The CAC 40 had fallen 16.31 points or 0.36%, to 4,550.61. The DAX had declined 23.14 points or 0.46%, to 4,975.02, after closing less than two points below the benchmark 5,000 yesterday. The DAX closed above 5,000, at 5,005, on September 9, but hasn't been able to achieve another close above that benchmark since that time.

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