Option Investor
Printer friendly version
Jeff Bailey : 9/29/2005 1:33:00 AM

I said there were two things bothering/confusing me ... SPX daily interval chart at this Link

In yesterday's Market Monitor, I did a quick review of the various "internals" that I deem important. For the most part, my analysis there would be internals are weakening and would suggest a more defensive posture.

What's bothering me is that the "market" as best described by the S&P 500 (SPX.X) isn't giving us mush of a signal from its price action. In fact, this bugger is coiling like a Jack-in-the-box that wants to explode in one direction or the other.

A bull (BLUE retracement) may be focused on "one indicator" (oil is behaving itself the past 5-days, and the SPX is steady at support) and with the two most recent pullbacks to the 38.2% retracement of 1,203.95 (say 1,204) the bulls have every reason to be bullish. (banks look terrible, and should be a negative, but the further they fall, a sudden rebound provides the massive lift).

Then there's the bear (RED retracement). Yes, the RED retracement using the July lows to recent highs. Here too, the 38.2% retracement provides the conviction.

Now, tonight's Market Wrap and comments on the NWX.X and its components. This is what "bothers me." I may be missing something, but the CIEN move and all those "little guys" jumping like they have. It might "make sense" that there's a bull move coming from telecom/network rebuild from the hurricanes, but it sure looks like some end of quarter rebalancing, adjustments. And should it end, the apparent party in the NWX.X could end quickly.

The NWX observation didn't come until after today's close, and I just saw some notable 5-day % gain for this group and decided to see just "who" was providing the move. As noted in Wednesday's Market Wrap, I'm a bit skeptical of what is going on there.

I want to pick up with this tomorrow, but I'm "fried." If you've got your OEX stocks sorted by market capitalization, take a look at these 100 stocks. Yes, DAL is up 6.49% the past 5-days, but scratch that one at $0.82 per share. Still, there are some decent gains the the "smaller guys" and while there's a few decent gains (+2.5%) among the "bigger guys" it sure appears that the little guys find some 3.9%, 8.2%, 6.98%, 5.52% type of gains the past 5-days.

Jeff Bailey : 9/29/2005 1:32:43 AM

EIA Weekly Crude Oil, Gasoline and Distillate Stocks Table found at this Link

EIA Weekly Gross Inputs, Operable Capacity and Change in % Utilization of Operable Capacity Table at this Link

In my U.S. Market Watch, November energy futures show some disparity with Crude Oil lagging behind the Unleaded and Heating Oil (refined products).

When I look at the inventory/stocks data by itself, one would probably think "crude oil should be skyrocketing!" Look at those draws!

Now look at the Gross Inputs Table. This I believe is why futures traders were more focused on Unleaded Gas and Natural Gas futures (see MM 09/23/05 01:08:53 PM)

We keep "hearing" about the supply constraints, and I think it is the Gross Inputs Table that may help some of us get a grasp of what's going on.

As it stands, Percent Utilization of Refinery Operable Capacity is just as it was for the week ended September 2nd.

If there was a "quote of the week" this week, it was Exxon Mobil's CEO Lee Raymond during an interview with CNBC's Maria Bartiromo, when Mr Raymond told Ms. Bartiromo he had been shocked by how many "refining experts" had suddenly come out of the woodwork.

Yes, there's definitely a "problem" with a refinery bottleneck at this point, which hurricane activity has only exacerbated. But it may not be just on the INPUT side of things.

Now go back and look at the Unleaded Stocks and recent three weekly builds.

How can that be happening? Some believe they're flawed figures. They can't be correct with Unleaded gas futures trading so high!

One comment I read this week may address the recent builds in Unleaded Gasoline, and it comes from Output bottlenecks that have taken place since Katrina struck. These Unleaded Gasoline stocks figures may well be "correct." The thoughts of some are that "refiners aren't just having problems getting the Crude Oil in (stockpiles are down), but getting the refined products out is also experiencing some difficulties (if you can't ship it, you end up storing it).

Now, I don't track he Natural Gas inventory figures. Ask me now if they've been building or seeing draws, and I'll guess that they've been seeing sharp draws. However, if they haven't, I wouldn't be surprised either. No, here too I'd make a guess that similar to Unleaded Gasoline there are some supply and input/output disruptions. Some serious ones too.

So... there are a couple of things that bother/confuse me right now. One is that we may be too focused in on just "one commodity." When I say "we," I don't mean OptionInvestor.com analysts, or you the trader. Nope, I think there are "two camps" out there that are so focused on their "key indicator" like just watching oil and it will tell you what to do, or unleaded gas, or interest rates, or this or that.

It's like Mr. Raymond said .... suddenly everyone's an expert on refining!

OI Technical Staff : 9/28/2005 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 : 9/28/2005 5:20:57 PM

US Airways (LCC) $20.50 +6.21% ... posts net loss of $14.1 million for August.

Jeff Bailey : 9/28/2005 5:18:00 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/28/2005 4:56:37 PM

Closing Internals found at this Link

Tab Gilles : 9/28/2005 4:34:09 PM

20+ Year Treasury Bond Fund iShares (TLT) Support found again at 120-ema. Link

Jeff Bailey : 9/28/2005 4:14:13 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Bullish swing trade stopped on the 1/2 bullish position in shares of Sturm Ruger (RGR) at the bid of $9.15 ($-0.28, or -2.97%).

Swing trade sold one (1) of the Apple Computer AAPL Oct. $47.50 Puts (QAA-VW) at the bid of $0.90. (see today's MM at 03:02:01 PM EDT).

Jeff Bailey : 9/28/2005 3:53:12 PM

Apple Computer (AAPL) $51.03 -4.49% ... Merrill cuts to "neutral"

Linda Piazza : 9/28/2005 3:51:48 PM

Tomorrow morning includes the GDP, to be released at 8:30 along with jobless claims. Consider well whether you want to hold a position overnight with potential for much movement either direction. This is another reason I needed to see strong corroboration before suggesting a new bearish entry this afternoon, ahead of that GDP number tomorrow morning. I just didn't get it, although the OEX is jammed underneath possibly strong resistance.

Jeff Bailey : 9/28/2005 3:51:14 PM

Fannie Mae (FNM) $42.31 -9.40% ... CNBC saying stock lower on word of new accounting charges.

Jonathan Levinson : 9/28/2005 3:47:27 PM

QQQQ bounces again from a test of the 72 SMA, price trading both sides of the 38.75 pivot. My bias is bearish, but until the 30 min channel turns back down, there's the possibility of another test of that 38.80-.90 confluence: Link

Jonathan Levinson : 9/28/2005 3:45:31 PM

Natgas tested and held 14.00 as support, currently up to a .045 loss at 14.055 after its big gains in the day session.

Jeff Bailey : 9/28/2005 3:42:04 PM

US Energy (USEG) $4.48 +10.66% ... late bid (uranium play)

Linda Piazza : 9/28/2005 3:39:29 PM

Advdec line's first resistance has held so far. Support just below, though.

Linda Piazza : 9/28/2005 3:32:10 PM

The OeX closed that last 15-minute period just barely above the Keltner support currently from 562.79-562.95, with the higher of the two lines being pierced intra-period. The OEX is bouncing again from that support. As long as the support holds, it maintains its 564.73 current upside target, but the OEX doesn't have a good record of hitting these targets lately.

Jonathan Levinson : 9/28/2005 3:32:10 PM

QQQQ chart to accompany my 3:31: Link

Jeff Bailey : 9/28/2005 3:31:54 PM

Buy Program Premium ... DIA 104.80, SPX 1,219.13, QQQQ $38.77

Jonathan Levinson : 9/28/2005 3:31:05 PM

QQQQ - Exit Point Alert -

Out QQQQ short from 38.83 at 38.75.

Traction is weakening above the 72 SMA, and a wavelet bounce is again due.

Linda Piazza : 9/28/2005 3:29:14 PM

Advdec line now testing that potentially strong support. It looks as strong as support as it did as resistance, but the advdec line powered right through it on the way up, so I'm not sure it's as strong a level as it looks. It does currently look strong enough to possibly prompt a bounce, however, with bears wanting to see -160 or so hold as resistance if there is a bounce.

Jeff Bailey : 9/28/2005 3:25:23 PM

03:00 Internals found at this Link

Linda Piazza : 9/28/2005 3:25:08 PM

The OEX is still holding to 15-minute Keltner support, and I know that support is important because the candle shadows are ending at that support over the last hour. It's being tested now, at 562.95 on 15-minute closes, with further support at 562.68 and 562.36. The OEX is at 562.98 as I type. Bears obviously want that support to fail on a 15-minute close.

Jonathan Levinson : 9/28/2005 3:22:13 PM

Good luck for our short- the wavelet bounce failed early. Next goal is the 72 SMA at 38.70, below which the 30 min channel will whipsaw back to the downside. Link

Linda Piazza : 9/28/2005 3:21:15 PM

Advdec dropping into the next potential support level. The OEX still stalls beneath the 30-minute 100-ema and the daily 200-ema. Although I couldn't suggest a bearish play because there just wasn't enough corroboration, those who did venture into one are at least seeing tentative signs going their way. Only tentative, so far, though.

Jeff Bailey : 9/28/2005 3:15:24 PM

Delphi (DPH) $2.66 -3.27% ... has traded a session low of $2.63. Did see some volume come in on that decline, but stock has eased back higher.

Disclosure ... I did cover 1/2 of my bearish position at these levels. Late last night I thought to myself (after the GM/CAW agreement) that I should have taken some profits with many seeing bankruptcy as 50/50 chance. As such, I do take the opportunity, but still hold 450 shares short in my personal account. Taking a profit gives some breathing room.

Linda Piazza : 9/28/2005 3:13:38 PM

Advdec line coming up again. Bears want the -150 resistance to hold if it continues rising.

Jonathan Levinson : 9/28/2005 3:11:16 PM

QQQQ's short cycle is on the cusp of a sell signal, but the wavelet is trying to turn up. If the wavelet gets any traction, there we'll most likely get stopped on our short from 38.83: Link

Jeff Bailey : 9/28/2005 3:06:54 PM

03:00 Market Watch found at this Link

Linda Piazza : 9/28/2005 3:05:11 PM

Advdec dropping more now, dropping toward that -500 to -600 S/R zone. It's at -346 as I type. This is a tentative good sign for bears, but not much confirmation yet. It may not come and I haven't been able to suggest a new bearish entry as that OEX resistance was tested because of that, but that doesn't mean I won't tell you what I see.

Jeff Bailey : 9/28/2005 3:02:01 PM

Swing trade sell covered put ... sell one (1) of the Apple Computer AAPL Oct. $47.50 Puts (QAA-VW) at the bid of $0.90.

AAPL $51.08 -4.43% here.

Something to think about for those that may be long the Nov. $55 Puts, that allow the selling of out the money near-term to be covered.

Linda Piazza : 9/28/2005 3:01:44 PM

So far, the OEX minimally maintains its Keltner upside target, yet is now stuck at the 30-minute 100/130-ema's, averages that ultimately stopped it on Monday and again this morning. They're at 564.03 and 564.64, and it's been the 30-minute 100-ema specifically that has been stopping upward movements. The advdec line clings to possible S/R, not able to move far above or below it.

Linda Piazza : 9/28/2005 2:54:19 PM

Advdec line dropping a bit, and it's dropping to and maybe slightly below S/R, but that's not particularly strong S/R, so I'm honestly not sure how much credence to give it. Would rather have seen it stall at the -500 to -600 zone, because now that zone is waiting below as possible support. It looked stronger that the zone currently being tested. So, this is one time that I don't know what to advise. The OEX is at a potentially strong resistance level, but I'd certainly like to have more corroboration than I'm getting before suggesting a new entry, so I'm reluctantly not going to suggest it unless we see a better setup. Could work out well, but there's just no corroboration yet.

Jeff Bailey : 9/28/2005 2:50:39 PM

General Motors (GM) $30.85 +0.25% ... my thoughts here are that I would think a GM bid would be needed to give any hint that bankruptcy more "certain" for DPH.

Jeff Bailey : 9/28/2005 2:49:35 PM

Delphi Trust I 8.25% (DPH-A) $8.50 -5.34% ...

Jonathan Levinson : 9/28/2005 2:49:08 PM

QQQQ - Stop Loss Adjustment Alert -

QQQQ short at 38.83, lower the stop to even

Jeff Bailey : 9/28/2005 2:48:27 PM

Delphi (DPH) $2.68 -2.20% ... probes 09/20 and all-time lows.

Linda Piazza : 9/28/2005 2:45:15 PM

Advdec line is climbing again, as I had feared. No corroboration yet that markets might be ready to roll over, although the OEX is certainly at a point when a rollover might be a possibility.

Jonathan Levinson : 9/28/2005 2:45:06 PM

Lower the entry to 38.83- the price moved as I was waiting for the screen to load.

Jonathan Levinson : 9/28/2005 2:44:21 PM

QQQQ - Entry Point Alert -

Short QQQQ at 38.84, stop 38.89

Linda Piazza : 9/28/2005 2:42:52 PM

The advdec hasn't really given any corroboration yet that resistance is holding. It's still testing it, but there's the possibility that it will convert former resistance to support and climb higher, into positive values.

Linda Piazza : 9/28/2005 2:41:37 PM

On a drop beneath and 15-minute close beneath the OEX's Keltner line currently at 562.93, I will consider the upside target as having been erased, although technically, the OEX should close a period beneath the one currently at 562.11 before it's considered erased.

Jeff Bailey : 9/28/2005 2:39:36 PM

Sell Program Premium ... DIA $104.68, SPX 1,218.89, QQQQ $38.81

Linda Piazza : 9/28/2005 2:39:33 PM

Bears hoping for a new OEX entry just below the daily 200-ema want to see the advdec line drop through -250, at least, and stay there.

Jeff Bailey : 9/28/2005 2:38:53 PM

Coca Cola (KO) $42.95 +1.46% ... breaks back above its rising 200-day SMA ($42.88). Volume light at 3.7 million.

Jonathan Levinson : 9/28/2005 2:33:21 PM

I wimped out of the short entry on the upper 30 min channel breach above 38.80, because of the uptick in the 30 min cycle. The short cycle still points north, but it's toppy, and a move to the 38.82-.85 area should be a good entry to catch its top, if the market delivers it. Link

Linda Piazza : 9/28/2005 2:33:05 PM

OEX back at the daily 200-ema. It's also reset that upside target for 564.65, but only minimally, and these breakout targets haven't been met often, as I've warned. Although I saw the OEX approaching known support and warned readers to have their plans in place because the OEX could bounce fast once approaching that support, and further warned that it might not even quite touch it or should only barely touch it if it did, even I wasn't prepared for the vigor of the bounce. The advdec line looked as if it would hold lower support. Now, though, we're right back to where we began. The OEX is hitting a level that should be strong resistance again, too, but I'm not yet seeing corroboration in the advdec line.

Jeff Bailey : 9/28/2005 2:30:25 PM

S&P Banks (BIX.X) 337.01 -0.28% ... "rocket" off their lows of 334.36.

Jeff Bailey : 9/28/2005 2:29:32 PM

Buy Program Premium ... DIA $104.74, SPX 1,219.81, QQQQ $38.80

Jonathan Levinson : 9/28/2005 2:28:52 PM

Volume breadth +1.5:1 for the NYSE, +1.21:1 for the Nasdaq.

Linda Piazza : 9/28/2005 2:27:04 PM

The advdec line has now moved all the way up to test resistance that should be relatively strong. At the same time, the OEX has moved up right to that 15-minute 100-ema. No sign yet of a pullback in either at this potential new bearish entry level, though. Not yet. The OEX is also hitting strong Keltner resistance, but if it can continue pushing higher and maintain those values, it will set an upside target near 564.61.

Jonathan Levinson : 9/28/2005 2:25:46 PM

QQQQ's 30 min channel ticks higher, channel resistance up to 38.80. 60 min resistance is at 38.86: Link

Linda Piazza : 9/28/2005 2:21:50 PM

Advdec line testing resistance, but the possibility of a further climb continues, perhaps up to -600 or perhaps even up to -350. The -500 to -600 level, a bit narrower, looks strong enough to hold any advances, if the currently being tested -880 level doesn't. Potential for the OEX to move back toward those 15-minute 100/130-ema's at 562.63 and 563.05 if the advdec line keeps climbing. I would think that resistance would be found there, too. This is not meant to encourage those whose stops have been hit to stay in a play, however.

Jeff Bailey : 9/28/2005 2:18:38 PM

02:00 Internals found at this Link

Jeff Bailey : 9/28/2005 2:17:32 PM

October Unleaded (hu05v) $2.31 +6.45% ... (30-minute delayed) ... traders cite some "short squeeze" headed into expiration.

Jonathan Levinson : 9/28/2005 2:14:16 PM

Volume breadth ticks positive for the Nasdaq, +1.01:1, and +1.23:1 for the NYSE. It's strange to see QQQQ bouncing with natural gas hitting these highs, but so it goes. The short cycle upphase for the Qs is roughly half done, with flattened 30 min channel resistance holding at 38.79.

Linda Piazza : 9/28/2005 2:13:30 PM

OEX bears, the original 560-ish target was approached, presumably all have taken at least partial if not total profit, and you have ratcheted down your stops to a level appropriate for you. The warning of a potential bounce up toward the 15-minute 100-ema has been offered several times, so you've presumably assessed your willingness to weather such a bounce. Adhere to your plan, whatever it was. If your stop on the rest of the position was hit, exit. There's the possibility of an advdec bounce higher, as I expressed earlier.

Jonathan Levinson : 9/28/2005 2:11:49 PM

Natgas breaks 14, now +7.16% or .94 at 14.06.

Linda Piazza : 9/28/2005 2:10:59 PM

Nearest OEX resistance currently at 561.46 on 15-minute closes, with stronger resistance from 561.13-562.92 on 15-minute closes. Nearest support at 560.51 with 559.83 below that.

Keene Little : 9/28/2005 2:09:28 PM

And Jonathan, that man behind the curtain really IS the Wizard.

Jeff Bailey : 9/28/2005 2:04:36 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 9/28/2005 2:04:25 PM

We're told, however, that "inflation fears remain well-contained."

Jonathan Levinson : 9/28/2005 2:03:52 PM

QQQQ breaks back into the bear flag as the short cycle upphase gets its first traction, clearing 72 SMA resistance at 38.68: Link

Keene Little : 9/28/2005 2:02:58 PM

Got it this time. Thanks. Pretty amazing spike!

Jonathan Levinson : 9/28/2005 2:01:42 PM

Here, Keene: Link

Keene Little : 9/28/2005 2:00:52 PM

Jonathan, could you upload that CRB chart again and replace the one in your 1:52 post? I'd love to see that chart. Thanks.

Linda Piazza : 9/28/2005 2:00:54 PM

Advdec line coming up to test the resistance that's been turning it back for the last two hours, at about -1020 or so. Advdec line now at -1137.

Linda Piazza : 9/28/2005 1:56:00 PM

Advdec nearest support is holding. Bears want the -640 to -500 resistance to hold. Advdec line at -1148 as I type.

Jeff Bailey : 9/28/2005 1:55:59 PM

November Crude Oil futures (cl05x) $66.90 +2.75% ... (30-minute delayed) ... get an al_rt here as it trades 19.1% of my bearish fitted 19.1% retracement

Jonathan Levinson : 9/28/2005 1:54:54 PM

QQQQ tests lower rising flag resistance here: Link

Linda Piazza : 9/28/2005 1:54:37 PM

The OEX's new downside target is 559.89, but there's potential Keltner-style bullish divergence and there's the possibility that the new target won't quite be hit. If that bullish divergence is to be continued, it will be barely hit, if it all. The OEX's low has been 560.27, close to the Keltner original target.

Jeff Bailey : 9/28/2005 1:53:35 PM

EIA ... saying at least 15% of refinery capacity may be out for weeks.

Jonathan Levinson : 9/28/2005 1:52:13 PM

The CRB is up in the vicinity of new 20+ year highs, +5.53 at 332.56. Coffee, Natgas, Heating Oil and Crude are leading the charge. 19 year quarterly candle log-scale chart at this Link

Jeff Bailey : 9/28/2005 1:48:57 PM

S&P Banks Index (BIX.X) 334.52 -1.02% ... probes MONTHLY S2 (334.98)

Jonathan Levinson : 9/28/2005 1:47:33 PM

Crude oil hit a high of 67.275, currently +2.025 at 67.10. Natgas is up a whopping 78 cents at 13.90, 3.5 cents off its high.

Jonathan Levinson : 9/28/2005 1:39:20 PM

Despite the new lows that lit up the screen, QQQQ didn't break more than 2 cents from its prior low, and the short cycle upphase has now stalled, not yet turned down. This sets up a potential bullish divergence if the price powers up from here. Bulls need to clear back above 38.65 to have a shot at it: Link

Linda Piazza : 9/28/2005 1:38:16 PM

The advdec line has finally lost support again and has vulnerability to -1650 or so. If it does drop that far, it may carry the OEX too and possibly even below its 560-ish downside target, but at -1650 or so, it will also be approaching potential support again. Guard bearish profits.

Jeff Bailey : 9/28/2005 1:34:13 PM

Sell Program Premium ... DIA $104.25, SPX 1,213.55, QQQQ $38.56

Linda Piazza : 9/28/2005 1:33:07 PM

Those who might have entered a bearish OEX play yesterday after my 3:21:37 or this morning after my 9:38:49 and 9:42:32 posts have all been advised of several points of which they might have taken partial profit, so presumably all have. You've all been advised to ratchet down stops, so presumably all have. The risks are that the OEX will rise up toward the 15-minute 100-ema again to retest it, with that at 562.70 and the downside target is 560.01. Be ready with your plan for a test of the 560 level, if it is tested, because the OEX can bounce quickly once that's hit. If you haven't yet taken partial profits (I know there are a few), I'd strongly advise doing so as that target is approached. Some might choose to take all profits, some to ratchet stops down further.

Jonathan Levinson : 9/28/2005 1:31:34 PM

Crude and natgas to new highs at 67.10 and 13.805 here.

Jonathan Levinson : 9/28/2005 1:30:41 PM

QQQQ breaks flag support but has yet to test the session lows, the short cycle upphase not yet stalling but so far clearly corrective: Link

Jeff Bailey : 9/28/2005 1:24:57 PM

Delphi (DPH) $2.76 +0.36% .... probes yesterday's lows.

Jonathan Levinson : 9/28/2005 1:19:54 PM

Session high for ten year notes here at 110 15/32, TNX -3.5 bps at 4.266%.

Linda Piazza : 9/28/2005 1:20:13 PM

Advdec line again looking weaker, but don't be too fooled as it's still testing possible support. Could keel over but it's about equally possible it will still try to rise into next resistance, up to about -630 to -540 currently. Advdec line at -954 as I type.

Linda Piazza : 9/28/2005 1:18:26 PM

The TRAN's 30-sma again was resistance today, but the TRAN so far stays above its 200-sma and the descending trendline off its summer highs, with the best-fit version of that trendline at about 3624.41 and with the TRAN at 3639.93.

Linda Piazza : 9/28/2005 1:12:03 PM

The OEX's vulnerability to its 560.03 Keltner target looks to be increasing, and is in place as long as the OEX maintains 15-minute closes beneath a Keltner line currently at 562.11 or perhaps--although that's more iffy--the one at 563.06. Right now, resistance looks stronger than support, but the advdec line is currently testing support that may allow it to attempt a bounce again.

Jonathan Levinson : 9/28/2005 1:10:54 PM

QQQQ continues to chop sideways in its rising channel/flag: Link

Jeff Bailey : 9/28/2005 1:10:19 PM

01:00 Internals found at this Link

Jonathan Levinson : 9/28/2005 1:08:56 PM

The 2-year notes sold for 4.09%, generating a 2.58 bid to cover ratio. Foreign central banks took 8.71B of the 20B total, a strong showing.

Linda Piazza : 9/28/2005 1:06:49 PM

Not much of a bounce so far, but the advdec line is still trying to rise into the (now) -525 zone, where bears would like to see it find resistance. Now at -737 on QCharts.

Jonathan Levinson : 9/28/2005 1:04:11 PM

New session high for Dec. gold at 472.50, +6.50. Crude oil is up 1.45 at 66.525, natural gas +.43 at 13.55.

Jeff Bailey : 9/28/2005 1:02:07 PM

01:00 Market Watch found at this Link

Jeff Bailey : 9/28/2005 12:59:34 PM

Washington ... House leader Tom DeLay temporarily steps down.

Linda Piazza : 9/28/2005 12:59:02 PM

The advdec line still looks as if it could retrace a bit more of today's drop, which means that the OEX could continue to bounce, too. Nothing definitive yet, but bears would like to see the advdec line's resistance remain strong.

Jonathan Levinson : 9/28/2005 12:55:31 PM

Awaiting the results of the 20B T-note auction, due in the next few minutes.

Jonathan Levinson : 9/28/2005 12:53:00 PM

The wavelet bounce has just topped for QQQQ, and so far the price action looks like a bear flag, but we won't know until the prior low is taken out. The short cycle is trying to turn up against the steep 30 min channel decline, and 72 SMA resistance is down to 38.76: Link

Linda Piazza : 9/28/2005 12:50:47 PM

Next OEX resistance at 562.29-562.40 with resistance above that at 563.08-563.23 on a Keltner basis. Bears would like to see that resistance hold, in keeping with a new H&S within the right-shoulder formation of a larger H&S on the 15-minute chart. I said earlier that I wouldn't be surprised to see the OEX rise toward the 15-minute 100-ema but wasn't sure if it would reach it. I'm still not sure, but it looks more likely now that it will at least come close if not quite hit it. I warned bears to take partial profits and then warned of the bounce potential, so all who are still following my posts and are in a bearish play are aware of the risks.

I'm not trying to irritate anyone by frequently mentioning risks, but since I trade on a Keltner basis and since those charts are dynamic, the risks sometimes change. I don't know about you, but I want to know what I'm up again and when market conditions might be changing, so I'm trying to provide that information as I see it for readers.

Jonathan Levinson : 9/28/2005 12:44:39 PM

A Travis County grand jury today indicted U.S. House Majority Leader Tom DeLay on one count of criminal conspiracy, jeopardizing the Sugar Land Republican's leadership role as the second most powerful Texan in Washington, D.C.

The charge, a state jail felony punishable by up to two years incarceration, stems from his role with his political committee, Texans for a Republican Majority, a now-defunct organization that already had been indicted on charges of illegally using corporate money during the 2002 legislative elections.


Jeff Bailey : 9/28/2005 12:37:27 PM

Kerr McGee (KMG) $95.85 +0.27% Link ... Lowers its Q3 and Q4 production estimates due to recent hurricane activity.

The company anticipates a reduction in production of 1.2 million barrels of oil equivalent in the third quarter, said senior vice-president Richard Buterbaugh during a conference call. Fourth quarter production was also revised down by 1.7 million barrels of oil equivalent a day.

Kerr-McGee expected a reduction of 3% in its annual Gulf of Mexico production volumes, but "with two category five hurricanes in one month we expect to exceed this allowance," said Buterbaugh.

The company expects to restore 60,000 barrels of oil equivalent a day, or close to 50% of its net pre-Katrina production, by the end of the week, said Buterbaugh.

Linda Piazza : 9/28/2005 12:36:11 PM

Advdec testing resistance now, with that resistance not yet quite as firm as I'd like to see it be. Possiblity of a rise toward -530 to -380, but bears would prefer a lower value to hold as resistance. Now at -833 on QCharts.

Jonathan Levinson : 9/28/2005 12:35:40 PM

Session high for Dec. gold here at 470.50, +4.40 and off a low of 464.60. Ten year notes are up, with TNX down 3 bps at 4.271% and 13-week bill yields are down 1.9 bps at 3.386%.

Linda Piazza : 9/28/2005 12:28:02 PM

Wouldn't be surprised to see an OEX bounce attempt back toward the 15-minute 100-ema again, with that at 562.84, although I'm not sure how successful it would be. Right now, I'm expecting the attempt, but not necessarily expecting it to be successful. Bears would prefer for that bounce attempt to retest the 15-minute 100-ema not get all the way up to that level, of course. Watching the advdec line, they'd actually prefer for the advdec value to stay below about -775 to -600, with the advdec value now at -914.

Jonathan Levinson : 9/28/2005 12:23:32 PM

Yesterday's low at 38.52 has yet to be tested, and there's a nominally higher high so far this morning for QQQQ. A break of yesterday's low sets up a possible bearish engulfing, but the bottomy short cycle downphase here will have to begin trending in order to do it in the coming minutes. With volume breadth deteriorating, however, longs have their work cut out for them for the time being. 3-day 100-tick view at this Link

Linda Piazza : 9/28/2005 12:16:21 PM

The advdec line has now dropped to -931 (QCharts value), safely below the -700 that bears wanted to see. Target now -1674 as long as it's staying beneath about -500 to -260, but hopefully lower than that. OEX bears want the advdec line to maintain that downside target.

Jeff Bailey : 9/28/2005 12:14:39 PM

12:00 Internals found at this Link

Linda Piazza : 9/28/2005 12:14:37 PM

OEX downside target now 560.04 as lo as it maintains 15-minute closes beneath a Keltner line currently at 562.52 or perhaps even the one at 562.93.

Jonathan Levinson : 9/28/2005 12:10:48 PM

Session lows across the board, Nasdaq volume breadth finally ticking negative, -1.14:1 here. The TRINQ is up to .84, still neutral.

Linda Piazza : 9/28/2005 12:10:30 PM

Advdec line trying to move down through that potentially strong support, but it exists down to about -700 so watch for a potential bounce again at any point, with the advdec line at -530 as I type. A strong whoosh lower in the advdec line, particularly if it goes below -700 and then stays below that level would have bears feeling pretty good, but looking at the OEX's chart and thinking about that H&S within the right shoulder of another potential H&S, has me thinking that it's possible that the OEX will steady near 561.60 and perhaps attempt a bounce. Any bears who haven't yet taken partial profit should do so now.

Jeff Bailey : 9/28/2005 12:02:37 PM

Bullish swing trade stop alert for Sturm Ruger (RGR) $9.15

Jeff Bailey : 9/28/2005 12:02:10 PM

12:00 Market Watch at this Link

Jonathan Levinson : 9/28/2005 12:01:47 PM

Volume breadth holds positive at 1.53:1 for the NYSE and +1.12:1 for the Nasdaq. The short cycle is getting bottomy but not yet maxxed out, and the 30 min channel has rolled over. So long as QQQQ holds below 72 SMA resistance at 38.82, that broader cycle should continue lower. Link

Linda Piazza : 9/28/2005 12:00:36 PM

Unless there's going to be another whoosh lower to push the advdec line below that strong support, advdec declines could slow now for a while. This occurs, too, as the OEX tests that ascending trendline off yesterday's low, but is below the daily 200-ema. Keltner resistance looks strong enough to hold the OEX back, but not strong enough yet to prevent a bounce and that's balanced by that strong support the advdec line has hit.

Linda Piazza : 9/28/2005 11:53:55 AM

OEX attempting a minimal bounce from the rising trendline off yesterday's low. Keltner resistance at 563.18-563.28 now.

Jonathan Levinson : 9/28/2005 11:49:26 AM

Session high for crude oil, +1.45 at 66.575. Natgas is up .56 at 13.68.

Linda Piazza : 9/28/2005 11:49:22 AM

Advdec line will soon hit potentially strong, strong support, at about -450 to -650. Might be a good time to consider taking partial profits as that's approached, unless the advdec line just plummets through it. As I type, the OEX is testing the ascending trendline off yesterday's low again, so that's a potential bounce point, too. Make your decision soon.

Jonathan Levinson : 9/28/2005 11:47:50 AM

Back to find QQQQ at a session low of 38.72, after failing from a weak wavelet bounce. The short cycle downphase is entering oversold territory here, but if the 30 min cycle continues its downward turn, it could grow a great deal more oversold during the coming hours. Link

Linda Piazza : 9/28/2005 11:46:18 AM

Somebody heard me and provided the whoosh. The OEX's whoosh has taken it down to the 15-minute 100-ema, at 562.91. Bears want to see the OEX below that. Note that there's the potential for another H&S within the right-shoulder formation of the OEX's continuation-form H&S on the 15-minute chart, so a drop to the 561.60 area could see a bounce, up toward those 15-minute 100/130-ema's again. Just a possibility to consider as you're planning where to take partial profits on bearish positions.

Jeff Bailey : 9/28/2005 11:45:44 AM

Delphi Trust I 8.25% (DPH-A) $8.55 -4.78% ... intra-day range also tight from $8.54-$9.10.

Jeff Bailey : 9/28/2005 11:44:26 AM

Bearish swing trade lower stop alert ... for Delphi (DPH) $2.86 +4.00% ... to $2.96.

60-minute interval chart would show a "doji" from $2.81-$2.92 with open/close at $2.90.

Take a conventional retracement from the 09/23/05 high (day we shorted) to yesterday's low of $2.75 and you'll get the 19.1% retracement at today's current high of $2.92.

Linda Piazza : 9/28/2005 11:39:15 AM

The OEX is now ringed with close Keltner support and close Keltner resistance. Needs either a big whoosh or else some choppy rattling around within support and resistance to scatter the lines. That chopping around could take a while. A whoosh would settle matters sooner, either way.

Linda Piazza : 9/28/2005 11:38:09 AM

Advdec resistance holds so far, but next support being tested and a bigger bounce could come. Bears would prefer that 550 or so hold as resistance, or 850-875 if that doesn't. Advdec at 275 as I type, QCharts value.

Jonathan Levinson : 9/28/2005 11:34:26 AM

Stepping away for a few minutes.

Jeff Bailey : 9/28/2005 11:32:42 AM

Curative Health (CURE) $1.07 -30.06% Link .... 52-weeker here. Company saying it intends to dispute the results of audits conducted by the Department of Health Services ("DHS") of the State of California of three independent retail California pharmacies which previously did business with two subsidiaries of the Company, Apex Therapeutic Care, Inc. ("Apex") and eBioCare.com, Inc. ("eBioCare"). These subsidiaries provided contract pharmacy and billing services to the three independent retail pharmacies audited by DHS.

Company's press release at this Link

Jane Fox : 9/28/2005 11:31:52 AM

Dateline WSJ Europe's largest economies - Germany, the U.K., France, Italy, and Spain - are all losing ground in an annual survey on global competitiveness, dragged down by concerns of sluggish economic growth and high budget deficits. The rankings, published Wednesday by the Geneva-based World Economic Forum, pit Italy and Poland as the least competitive members of the European Union. Italy has slipped steadily to 47th of the 117 nations measured this year from 26th in 2001, and it now lags countries such as Tunisia and is just ahead of Botswana. Italy is burdened by perceptions that its government is interfering in the private sector, as recently alleged in the Bank of Italy's intervention in banking mergers.

Finland for the third consecutive year and the U.S. for a second straight year, respectively, once again top the international organization's list of most competitive economies in the annual survey, though the U.S.'s image is tarnished by the health of an economy posting large budget deficits and near-record trade deficits.

Jonathan Levinson : 9/28/2005 11:29:58 AM

Volume breadth currently +2.15:1 on the NYSE and +1.86:1 on the Nasdaq.

Linda Piazza : 9/28/2005 11:29:53 AM

Advdec line climbing again. Bears would like to see it stay below about 475 but below 850 if the 475 level doesn't hold. It's at 388 as I type, with all these being QCharts values.

Linda Piazza : 9/28/2005 11:28:27 AM

OEX 30-minute chart: Link

Jeff Bailey : 9/28/2005 11:27:36 AM

Repsol YPF (REP) $32.45 -0.18% Link ... saying it will boost its Spain refinery investment by 150% through 2009.

Linda Piazza : 9/28/2005 11:22:31 AM

Nearest OEX resistance at 564.44-564.83, on 15-minute closes. Nearest support at 563.19-563.51 on 15-minute closes, with support layered beneath that. May take a strong push one direction or another or else a long period of chopping around to scatter those lines a bit before the OEX moves much.

Jeff Bailey : 9/28/2005 11:21:07 AM

10 Most Actives ... LU $3.20 +3.22%, JDSU $2.20 +0.91%, QQQQ $38.83 +0.41%, MSFT $25.67 +1.3%, SIRI $6.32 -2.91%, CIEN $2.61 +6.96%, ORCL $12.25 -0.64%, CSCO $17.89 +0.95%, INTC $24.09 +1.04%, GLW $17.67 -4.58%

Jonathan Levinson : 9/28/2005 11:16:25 AM

Time for a wavelet bounce for QQQQ, and bears will want to see the 38.90 level hold if tested: Link

Jeff Bailey : 9/28/2005 11:16:16 AM

11:00 Internals found at this Link

Yesterday's Internals found at this Link

Linda Piazza : 9/28/2005 11:09:25 AM

Advdec line testing support.

Jonathan Levinson : 9/28/2005 11:09:02 AM

QQQQ's 30 and 60 min cycle oscillators continue to advance weakly below their previous highs, with price having made a nominal new high. This is potentially divergent if price fails at or below the current session high, but the short cycle downphase will need to get a tighter grip on the price than it's currently showing: Link

Linda Piazza : 9/28/2005 11:09:01 AM

OEX bears want to see the OEX back beneath the daily 200-sma instead of finding support on that average. They want 15-minute closes beneath a Keltner line at 563.18, but then I might expect some rattling around between that and next support near 562.40-562.50. The former ascending trendline off yesterday's low is at just about 562.

Linda Piazza : 9/28/2005 11:05:52 AM

Bears want to see the advdec line drop below about 300. It's at 554 as I type, again finding resistance where hoped. Bears don't want it to again find support at 363-420.

Jeff Bailey : 9/28/2005 11:02:40 AM

11:00 Market Watch found at this Link

Linda Piazza : 9/28/2005 11:02:37 AM

SOX Keltner target currently at 463.96 with the SOX at 463.38.

Jonathan Levinson : 9/28/2005 10:59:56 AM

Volume breadth is +1.97:1 on the NYSE and +2.02:1 on the Nasdaq, TRIN and TRINQ neutral-bullish at .76 and .59 respectively.

Linda Piazza : 9/28/2005 10:58:48 AM

Advdec line testing resistance again. Bears want that 810-ish resistance to hold and then a rollover beneath about 300. Advdec at 754 on QCharts as I type. Again, I base my plays differently than others do, requiring that I sometimes experience some uncomfortable periods before I even know if a trade is working or will fail, so others out there need to be adhering to whatever stops they set. I certainly wouldn't stay in a bearish play if the OEX closes 15-minute periods above that Keltner target, currently at 564.79 but dynamic.

Jonathan Levinson : 9/28/2005 10:56:51 AM

The short cycle indicators have broken to the downside, price only now starting to follow. A weak/corrective downphase here would be a very bullish development, and the next hour should be key in the bull-bear showdown currently underway. Link

Linda Piazza : 9/28/2005 10:53:29 AM

The OEX's Keltner target has now moved up to 564.78 and the OEX looks determined to hit it.

Linda Piazza : 9/28/2005 10:52:42 AM

The TRAN bounced from that Keltner support that it needed to break in order to erase its upside target. Next resistance before that target is being tested, at 3647.09 on 30-minute closes. The 30-sma is at 3652.77.

Linda Piazza : 9/28/2005 10:46:35 AM

The advdec line hasn't dropped as low as bears would like, and so it might keep trying to rise. If so, bears would like it to say beneath about 800. It began rising as I typed, and is at 619 as I type.

Linda Piazza : 9/28/2005 10:45:18 AM

TRAN starting to drop heavily, but needs to fall below a Keltner line currently at 3633.20 to erase that upside target. It never reached it pre-inventory release.

Jeff Bailey : 9/28/2005 10:46:18 AM

Apple Computer (AAPL) $51.55 -3.51% ... sharply lower in early morning trade. The company saying it has acknowledged cutomer complaints about flaws in it iPod nano digital music player, saying one problem is a "real but minor issue."

Customers have complained about broken and scratch-prone LCD screens.

Macworld magazine late Tuesday quoted Phil Schiller, Apple's senior vice president of worldwide product marketing, as saying the broken screens were due to a "vendor quality issue" that affected "less than one-tenth of 1 percent of the total iPod nano units that we've shipped."

Linda Piazza : 9/28/2005 10:41:52 AM

Next advdec resistance was nudged higher, to 710 or so, but it's tentatively holding. The OEX obviously broke above yesterday's high and the daily 200-ema, but the Keltner resistance at 564.71 hasn't even been touched yet, much less exceeded and a new upside target hit. Bears would rather not have seen this first reaction after inventories be a punch higher and things are much iffier than they even were earlier, but the potential for an eventual rollover hasn't totally been erased, either. I didn't recommend entering a bearish play except for those who considered themselves aggressive. I'm staying in to watch for a while longer, because I base my plays on the advdec line and not pure price on the OEX and I limit my positions to what I know I can handle, but others might consider whether they're willing to remain in the play, especially if the OEX stays above the daily 200-ema. Bears would like for the advdec line to quickly drop below about 175, with that line now at 540 on QCharts, as partial confirmation that bearish plays aren't too scary to continue, at least.

Jonathan Levinson : 9/28/2005 10:40:53 AM

With QQQQ's short cycle oscillators trending sideways, we're robbed of a key indicator. But the wavelet is still tracking the gyrations within the rising 30/60 min channels. QQQQ is bakc within yesterday's range, with the Nasdaq ADV:DECV down to +1.72:1 here.

Linda Piazza : 9/28/2005 10:36:19 AM

Unless the TRAN gets slapped back fairly soon, it could help pull the other indices higher. Yesterday, it attempted a breakout above the descending regression channel, the 200-sma and the 72-ema, but was turned back at the 30-sma after punching a few points above it, and the TRAN ended the day back inside that channel. That 30-sma is currently at 3652.81, with the TRAN's HOD at 3654.80 and its current value at 3648.80.

Jonathan Levinson : 9/28/2005 10:34:31 AM

30 min, 60 min and pivot resistance all line up at 38.97-.98 QQQQ here: Link

Linda Piazza : 9/28/2005 10:33:05 AM

TRAN pushing up toward that 3662.38 upside target, which is often hit, but also often serves as resistance. OEX pushing toward its current 564.71 upside target. Advdec line trying to break out, but hasn't quite done that yet. Adhere to your stops if hit, but final direction may not yet be known.

Jonathan Levinson : 9/28/2005 10:32:45 AM

The Fed followed up with an overnight repo of 4.5B, for a small net drain of 250M for the day.

Jeff Bailey : 9/28/2005 10:32:05 AM

Buy Program Premium ... DIA $104.92, SPX 1,220.78, QQQQ $38.90

Jeff Bailey : 9/28/2005 10:31:39 AM

American Intl. Group (AIG) $61.11 +0.57% ... insurance giant and Dow component saying it is still too early to provide an estimate of losses related to Hurricane Rita, but losses from the disaster aren't expected to be significant.

Jonathan Levinson : 9/28/2005 10:31:37 AM





Jonathan Levinson : 9/28/2005 10:31:18 AM

QQQQ breaks yesterday's highs here, printing a high to 38.95.

Jonathan Levinson : 9/28/2005 10:30:44 AM

Crude oil 65.35 here, session highs for equities.

Jonathan Levinson : 9/28/2005 10:30:10 AM

From the EIA website: U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) dropped by 2.4 million barrels from the previous week. At 305.7 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year. Total motor gasoline inventories jumped by 4.4 million barrels last week, putting them in the middle of the average range. Distillate fuel inventories decreased by 0.5 million barrels last week, and are just above the upper end of the average range for this time of year. A drop in high-sulfur (heating oil) distillate fuel more than compensated for a rise in low-sulfur (diesel fuel) distillate fuel. Total commercial petroleum inventories rose by 2.5 million barrels last week, and are at the upper end of the average range for this time of year.

Linda Piazza : 9/28/2005 10:29:39 AM

The OEX's current next target and strong resistance on the 15-minute Keltner chart is 564.65 on 15-minute closes. Needs a strong push down to erase that.

Jonathan Levinson : 9/28/2005 10:29:17 AM

Crude oil +.575 at 65.65, natgas +.29 at 13.41 ahead of the petrol report due in 1 minute.

Linda Piazza : 9/28/2005 10:27:28 AM

I don't know why I'm getting doubles of some of my posts today. I'll try to delete them as soon as possible when I find them.

Linda Piazza : 9/28/2005 10:26:46 AM

Before the inventories number, know your stops, whether in bullish or bearish positions. If you're in a small position and have some cushion and a large trading account and much faith that your position is the right one, consider widening your stops a bit. If you're in a too-large position for your account size, don't, and consider existing now, ahead of the number.

Linda Piazza : 9/28/2005 10:25:18 AM

TRAN testing the day's high.

Linda Piazza : 9/28/2005 10:24:42 AM

Advdec line did bounce from that support I mentioned in my 10:20:12 post. Now bears want to see it stay below about 650 or maybe a little higher. It's at 356 as I type, QCharts value. OEX testing the daily 200-ema and the day's high again, actually just a little above the 563.55 200-ema.

Jeff Bailey : 9/28/2005 10:25:25 AM

ConocoPhillips (COP) $68.90 -0.12% ... DJ - expects its Sweeny refinery in Old Ocean, Texas, to complete its restart and return to normal operations later this week, and to begin restart operations at its Westlake, La., refinery by mid-October, the company said Wednesday morning.

Ongoing assessments at the 239,000 barrel a day refinery in Louisiana show floodwaters didn't reach the plant, the statement said. Wind damage isn't expected to significantly affect the resumption of operations, seen beginning by the middle of October.

The 229,000 barrel a day Sweeny refinery didn't sustain damage due to Hurricane Rita and expects to return to normal operations later this week. The plant began the restart process over the weekend, according to a statement released by the company.

Jeff Bailey : 9/28/2005 10:22:15 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 9/28/2005 10:20:12 AM

Advdec line testing support, and could spring from that support. If so, bears would really like it to stay below about 650. It's at 169, QCharts value, as I type.

Jonathan Levinson : 9/28/2005 10:19:57 AM

A wavelet bounce is due here for QQQQ, and could test the highs within the stalling but not yet reversed short cycle upphase. The petroleum report is due in 11 minutes.

Linda Piazza : 9/28/2005 10:17:17 AM

Advdec line and OEX still acting okay for those hoping for a rollover, but vulnerability to 565.63 on the OEX still exists and the inventories number could blow the whole possibility out of the water. Those who entered a bearish position and want to exit ahead of the inventories number could probably exit now for only commission or maybe even pay for part of the commission with a small position gain. I feel comfortable holding on, but I limited my position size so much that I don't even have to call myself aggressive to have entered or be holding on!

Jonathan Levinson : 9/28/2005 10:16:07 AM

QQQQ continues to hold its choppy uptrend this morning, still above 72 SMA and maintaining a positive bias for the 30 and 60 min channels. But the short cycle is topping, and yesterday's lower high has yet to be tagged: Link

Jeff Bailey : 9/28/2005 10:12:46 AM

10:00 Internals found at this Link

Linda Piazza : 9/28/2005 10:12:17 AM

The TRAN is pausing now at next resistance before its upside target. Perhaps it won't meet that target this time? I expected it to keep zooming a little longer, a little closer to the inventories number release, giving bears trouble right up into that release, although the OEX at least is still finding resistance, if tentatively, at the daily 200-ema. Hmm.

Linda Piazza : 9/28/2005 10:06:54 AM

I'm not disturbed by anything I'm seeing yet on either the OEX or the advdec line as it relates to the potential for resistance (perhaps up to 564.63 currently) holding on the OEX. So far, the daily 200-ema is tentatively holding, but there's that vulnerability up to the Keltner target. This impression doesn't mean that the inventories number can't do something wacky to the indices, but that's what I'm seeing so far.

Jonathan Levinson : 9/28/2005 10:06:43 AM

Still no word from the Fed as to further repos- the daily balance remains -4.75B.

Jonathan Levinson : 9/28/2005 10:05:27 AM

Session high for natgas at 13.175, +.055, crued oil +.325 at 65.40.

Jeff Bailey : 9/28/2005 10:03:41 AM

10:00 Market Watch found at this Link

Linda Piazza : 9/28/2005 10:03:29 AM

TRAN at 3645.90, still moving up toward its 3660.86 Keltner target. As I mentioned earlier, the TRAN often does meet its breakout targets. In fact, it's one of those indices that sometimes overruns targets.

Jonathan Levinson : 9/28/2005 10:02:17 AM

Session high for QQQ at 38.87, the short cycle upphase entering overbought territory. 38.90 is 30 min channel resistance: Link

Linda Piazza : 9/28/2005 9:59:05 AM

The SOX is gaining today, supported by the 72-ema at 458.79. For six sessions now, including today's, the SOX has been forming candles along this important -ema and just above the 456 level that Marc has mentioned (an important Fib level). It's consolidation after a drop and suggests that the eventual break will be to the downside, but that break hasn't come yet.

Linda Piazza : 9/28/2005 9:57:13 AM

Advdec resistance tentatively holding.

Jonathan Levinson : 9/28/2005 9:55:23 AM

A 5b 6-day repo from the Fed drains net 4.75B, driving the stop out rate up to 3.79 for agency and 3.83 for mortgage backed collateral- no treasury collateral was used. However, the door is still open for a second repo, an overnight, but it would need to be released within the next 15 minutes or so.

Linda Piazza : 9/28/2005 9:56:36 AM

OEX now easing above the daily 200-ema, rising to test yesterday's high, and bears should remember the 564.61 (now a little higher) upside target I mentioned earlier. I mentioned that vulnerability earlier. I'm still not so sure that the OEX will meet that target, but it's a possibility that bears should have incorporated into their plans.

Linda Piazza : 9/28/2005 9:53:33 AM

Advdec line trying to break out again, dealing with resistance. OEX just under the daily 200-ema.

Linda Piazza : 9/28/2005 9:52:04 AM

The TRAN is doing its zooming thing pre-inventories numbers, and it's zooming to the upside, supporting gains in the indices. The direction it zooms pre-inventories isn't always its final direction. Sometimes it isn't and sometimes it is. On a Keltner basis, the TRAN has set an upside target of 3660.66, and the TRAN sometimes does at least approach these breakout targets, so bears may have some hard going this morning as the TRAN tries to lead other indices upward.

Jonathan Levinson : 9/28/2005 9:50:31 AM

QQQQ holds within its opening range above gap support: Link

Linda Piazza : 9/28/2005 9:49:58 AM

So far, the OEX and the advdec line are acting just as bears would want, but it's likely to be a wacky day ahead of inventories numbers, so only those who are willing to accept the greater-than-normal risks of volatility should be entering the market.

Jonathan Levinson : 9/28/2005 9:48:59 AM

Volume breadth is down to 2.52:1 on the NYSE, 1.99:1 on the Nasdaq, TRIN and TRINQ bullish at .56 and .48.

Linda Piazza : 9/28/2005 9:46:56 AM

Here's the OEX's Keltner picture: The OEX rose up to test mid-channel resistance on the first 15-minute candle, closing just above/at that resistance, at 563.12. This gives a perhaps not to be trusted upside target of 564.54. Bears should, however, realize there's vulnerability up to that level until and unless the OEX closes 15-minute periods back below 563.12 or preferably below the line currently at 562.54. OEX at 563.40 as I type.

Jonathan Levinson : 9/28/2005 9:44:52 AM

Ten year note yields are down to flat at 4.301%, IRX down 2.3 bps at 3.382%. The Fed's open market desk has 9.75B in overnight repos expiring today- the announcement is due just before 10AM.

Jeff Bailey : 9/28/2005 9:45:57 AM

Paychex (PAYX) $37.46 +9.85% (update) ... payroll processor higher after reporting Q1 profit of $115 million, or $0.30 per share vs. $87.7 million, or $0.23 per share in year ago period. Sales rose to $403.7 million from $345 million. Consensus was for $0.28 per share on revenue of $389.4 million.

Looking ahead, the company said it still expects 2006 net income growth in the range of 22% to 24%, and for revenue to grow 13% to 15%. Wall Street expects earnings of $1.16 per share on revenue of $1.63 billion.

Linda Piazza : 9/28/2005 9:44:29 AM

Bears want to see the advdec line remain below 435 or so. It's at 299 now, QCharts value.

Linda Piazza : 9/28/2005 9:44:04 AM

Advdec line falls back beneath possible support and the OEX still tests the 15-minute 100/130-ema's, at 562.78 and 563.29, after having risen right underneath the daily 200-ema.

Linda Piazza : 9/28/2005 9:42:31 AM

Advdec line dropping back sharply, toward 440 support, at 564 as I type. Those who elected to try a bearish trade as the OEX's daily 200-ema was tested want to see a further drop. Some who might not have elected to try such a play earlier, but who would still call themselves aggressive might try it now with a small position.

Jeff Bailey : 9/28/2005 9:41:12 AM

Paychex (PAYX) $37.30 +9.50% Link ... gaps higher to rounding lower 50-day SMA.

Linda Piazza : 9/28/2005 9:38:49 AM

The advdec line reaches a level of potential resistance while the OEX reaches a level of potential resistance, too. I'm watchful now for possible rollover signs, but also am afraid that we won't see them, but instead will see yesterday's kind of quick slapping back of prices. There's the potential for a breakout on both charts, too, so that's why I'd like confirmation. I have to warn that it may not come, so those who like to send out a trial bearish position when known resistance is hit could try this level, but unlike yesterday afternoon, I can't yet say that's a good idea, so I'm not advising the play.

Jeff Bailey : 9/28/2005 9:37:42 AM

Delphi (DPH) $2.83 +2.90% ...

Jeff Bailey : 9/28/2005 9:37:02 AM

Delphi Trust I 8.25% (DPH-A) $8.80 -2.00% ...

Jeff Bailey : 9/28/2005 9:35:59 AM

General Motors (GM) $30.88 +0.35% ...

Linda Piazza : 9/28/2005 9:33:24 AM

Any who didn't take full profit with me near the close yesterday on bearish positions and instead took partial profit and lowered stops now need to honor any stops you set on the rest of the position. I'll be watching for rollover potential this morning, but I'm kind of thinking that we might see a move higher, then a stall into the inventories release. We'll see. No sign of a rollover yet.

Jonathan Levinson : 9/28/2005 9:32:33 AM

Volume breadth +4.22:1 for the NYSE and +2.66:1 for the Nasdaq at the open.

Linda Piazza : 9/28/2005 9:31:59 AM

As I expected it might do because of the futures, the OEX gapped above that Keltner resistance, converting it to support and now heads straight up to test further resistance near the 200-ema at 563.55. The advdec line shows the possibility that it could climb into the 1225-1250 region. It's at 740 now.

Jeff Bailey : 9/28/2005 9:31:35 AM

Delphi (DPH) $2.90 +5.45% ... opening ticks here.

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

Yesterday afternoon's QQQQ bounce cut the 30 min cycle downphase short, and that cycle is currently chopping sideways within a weak 60 min cycle upphase. The fact that these intraday cycles reversed up from well above oversold territory is the tell for a possible stall in the daily cycle downphase, though the daily cycle oscillators don't indicate that yet. QQQQ bulls need to take out yesterday's 38.90 high to add more evidence to the case, while a break below 72 SMA support at 38.74 will stall those intraday upphases. Link

Jeff Bailey : 9/28/2005 9:26:02 AM

Incyte Corp. (INCY) (update) ... Drug maker saying FDA withheld approval of late-stage trials for its drug to treat HIV patients. The FDA has requested the company to conduct another Phase II trial to provide additional data to support the efficacy and safety demonstrated in the original Phase II study with the drug -- known as Reverset, the company said.

In July, the company released mid-stage clinical data showing 54 percent of patients taking 200-milligram doses of Reverset along with standard HIV drugs saw more than a 90% drop in the amount of the virus in their bloodstream after four months of treatment.

That compared with 40% of those who experienced a similar drop in the virus after receiving a placebo along with their standard HIV treatment.

2.86 million shares crossed the wire from 09:00-09:05 AM EDT from $5.28-$5.42.

Jeff Bailey : 9/28/2005 9:16:55 AM

Incyte Corp. (INCY) $7.24 Link ... sharp drop to $5.12 and now atop this morning's most active.

Jeff Bailey : 9/28/2005 9:07:35 AM

Dell Computer (DELL) $33.97 Link ... ticking higher at $34.14.

Apple Computer (AAPL) $53.44 Link ... ticking lower at $52.99.

See last night's MM post at 07:47:55 Link

Jeff Bailey : 9/28/2005 9:02:37 AM

GeoGlobal (AMEX:GGR) $6.25 Link ... Announced the signing of Production Sharing Contracts on two previously announced exploration blocks in India. The signing, which was held at a ceremony in New Delhi, India on September 23, was part of the signing of 20 new exploration blocks which were awarded by the Government of India under the fifth round of the New Exploration Licensing Policy .

The Production Sharing Contracts each provide for work commitments to be performed over three phases over an exploration period of a total of 7 years with specified seismic and exploration drilling activities to be conducted during those work commitment periods. The Company will be required to fund its proportionate share of costs incurred in these activities. The Company's share of these costs is estimated to total approximately US$12.1 million for both blocks over the 7 years.

Jeff Bailey : 9/28/2005 8:59:32 AM

China.com (CHINA) $3.26 Link ... little "pop" here to $3.40 after company said its online game subsidiary achieved 9 million registered accounts and 215,000 highest peak concurrent users after two months of commercialization.

Jeff Bailey : 9/28/2005 8:54:23 AM

IEA saying it has sold 15-20 million barrels of oil product stocks.

Jeff Bailey : 9/28/2005 8:48:52 AM

Canada Employee Earnings Down 3.6% in July from Year Ago ... DJ - Canadian weekly earnings averaged a seasonally adjusted C$728.25 in July, little changed from C$728.46 in June, but 3.6% lower than C$702.96 a year earlier, Statistics Canada said.

The mean forecast of analysts surveyed by Thomson IFR Bonddata was for a year-on-year decline of 0.4%.

Industries showing the strongest year-over-year increases were forestsry and logging, management of companies and enterprises, finance and insurance and real estate, rental and leasing. The smallest year-over-year gain was in accommodation and food services.

Payroll employment in July was a seasonally adjusted 13,744,200, an increase of 9,100 or 0.1% from June.

Jeff Bailey : 9/28/2005 8:46:00 AM

Delphi (DPH) rather quiet still. Pre-market low/high has been $2.75-2.88. Last tick was $2.82

Linda Piazza : 9/28/2005 8:49:22 AM

Yesterday, the OEX hit an early low and then began climbing in a bear flag. All day, I'd expected a push higher that eventually came later rather than sooner, and I thought there might be some choppy behavior throughout the day as a right shoulder formed for a continuation-form H&S on the 15-minute chart. That tortuous climb off the low was accompanied by one punch lower that was soon reversed back above the line, an early warning signal that perhaps bears didn't yet have the strength to hold the OEX lower and that the move up to the daily 200-ema might actually occur. The OEX did hit that -ema, hesitated there, and then was slapped back. New bears who entered on that touch of the daily 200-ema (see my 3:21:37 post yesterday) were rewarded with a move lower into the close, but OEX ended on that potential support. I noted near the end of the day that the move had happened as expected, but that nothing yet precluded another punch up toward the daily 200-ema. I advised that some bears might elect to take partial profit and then add back to the position if there was another punch up to that level this morning, and if internals corroborated the idea of a rollover as it was retested. I noted that conservative bears might take full profit and go flat, as I was doing because of other situations requiring my attention, leading me to take quick profits when offered.

Futures are higher this morning, suggesting the possibility of a higher open and the possibility of a retest of that daily 200-ema. The Keltner picture at the close had suggested an early decline toward 551.06 or possibly toward 559.69 was more likely as long as 15-minute closes remained below a Keltner line currently at 562.15, but a higher open could presumably open the OEX above that line and convert it to support instead. If there is an early dip, bears who haven't yet taken partial profit need to do so as 559.70-550 are approached, if they are. A break of last Thursday's 558.99 low suggests that the most recent consolidation zone is being violated to the downside and would offer a breakdown entry, but I'd rather get a higher entry for new bearish positions since breakdown and breakout entries haven't tended to perform well. I'll look this morning for possible bounce-and-rollover entries. Bears, be warned, however, that sustained levels above the daily 200-ema, and particularly if accompanied by 15-minute closes above a Keltner line currently at 564.36 might suggest something more bullish is going on, and they should step back and watch for a possible spike up toward 566-567.

Jonathan Levinson : 9/28/2005 8:44:45 AM

November natural gas is down .065 here at 13.055. Crude oil is up .375 at a session high of 65.45.

Jonathan Levinson : 9/28/2005 8:44:10 AM

NEW YORK, N.Y., September 27, 2005 - The New York Mercantile Exchange, Inc., announced today that its prior declaration of force majeure relating to all remaining delivery obligations in the September 2005 NYMEX Division natural gas futures contract will continue in effect. In addition, the Exchange has determined to declare force majeure for the October 2005 natural gas contract.


This follows my comments in Monday's Market Wrap. Greenspan's comments to the Russian Finance Minister about how the hurricanes' risks "had peaked" continue to appear to have been a "farce" majeure.

Jonathan Levinson : 9/28/2005 8:40:40 AM

From the Mortgage Bankers Association website:

WASHINGTON, D.C. (September 28, 2005) -The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 23. The Market Composite Index - a measure of mortgage loan application volume - was 721.2, a decrease of 6.6 percent on a seasonally adjusted basis from 772.2 one week earlier. On an unadjusted basis, the Index decreased 7.1 percent compared with the previous week and was down 0.5 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index decreased by 3.4 percent to 483.1 from 500.3 the previous week whereas the Refinance Index decreased by 10.5 percent to 2106.6 from 2353.7 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 6.2 percent to 1088.8 from 1160.5 the previous week, and the Government Index, which decreased 13.0 percent to 108.0 from 124.1 the previous week.

The four week moving average for the seasonally-adjusted Market Index is down 0.1 percent to 756.4 from 756.7. The four week moving average is up 0.6 percent to 499.0 from 495.9 for the Purchase Index while this average is down 0.9 percent to 2254.0 from 2274.3 for the Refinance Index.

The refinance share of mortgage activity decreased to 43.9 percent of total applications from 45.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 28.8 percent of total applications from 29.8 percent the previous week.

Tab Gilles : 9/28/2005 8:36:41 AM

Eaton Vance Limited Duration Fund (EVV) Heading back down to below $17 in next few weeks? Link Link

Jonathan Levinson : 9/28/2005 8:33:16 AM

LONDON (MarketWatch) -- U.K. economic growth hit a 12-year low when figures released Wednesday showed that the pace of expansion has slowed to only a 1.5% annual pace.

Jonathan Levinson : 9/28/2005 8:31:26 AM

QQQQ bounced back above 38.80 on the news, +.14 at 38.81. Ten year notes are lower, TNX +1.5 bps at 4.314%.

Jonathan Levinson : 9/28/2005 8:30:42 AM






Jonathan Levinson : 9/28/2005 8:30:11 AM

BHP Billiton and partner Chevron may have to write off their Typhoon oil and gas fields in the Gulf of Mexico after Hurricane Rita severed the moorings to the production platform sending it careering across the gulf.

BHP yesterday said the platform had suffered "severe damage" and been found floating some 100km offshore of Louisiana. While that will raise hopes that the platform is salvageable, BHP yesterday said it was too early to tell.


CVX closed lower by 6 cents at 64.18. BHP -.27 at 33.22 as of yesterday's close.

Jeff Bailey : 9/28/2005 8:26:14 AM

Insmed (INSM) $1.09 .... among this morning's most active at $1.63. (see last night's MM post @ 07:06:42 PM EDT)

Jonathan Levinson : 9/28/2005 8:21:43 AM

Ten year notes are recovering slightly off their lows, TNX set to open +.3 bps at 4.304% as we await Durable Orders. Thinking over Greenspan's recent comments, particularly with respect to home prices and possible "froth" in the market, he could be trying to talk up long rates to steepen the yield curve. IRX is currently down 1.8 bps at 3.387%.

Jeff Bailey : 9/28/2005 8:19:07 AM

Delphi (DPH) ... I'm a bit surprised that Delphi's CEO Robert Miller made comment this morning regarding Chapter 11. One thought I have is that he is "rattling his saber" and trying to send a message (influence) to GM and the UAW about cutting labor and benefit costs.

I'm going to once again urge traders to manage trade risk with position size.

Jeff Bailey : 9/28/2005 8:03:55 AM

Bearish Swing trade short update alert ... for Delphi (DPHI) .... let's hang in here with the short at this point.

Jeff Bailey : 9/28/2005 8:02:26 AM

Delphi (DPH) $2.75 ... CEO will reportedly recommend to his board that the auto-parts supplier file under Chapter 11 of U.S. bankruptcy law unless it can reach agreement with the union and General Motors to substantially cut labor and benefit costs before Oct. 17, the Detroit News reported. That's the last day U.S. companies can file Chapter 11 before tougher bankruptcy laws go into effect. Meantime, Delphi retained Jack Butler, a corporate-restructuring expert with the law firm Skadden, Arps, Slate, Meagher & Flom, to advise the company on its legal alternatives, the Detroit News said. Butler was lead attorney for retailer Kmart Corp. when it filed under the bankruptcy laws in 2002.

Stock ticking by at $2.76 in extended session.

Jonathan Levinson : 9/28/2005 7:48:01 AM

Equities are up, ES trading 1225.75, NQ 1588, YM 10525 and QQQQ +.18 at 38.85. Gold is up .40 at 466.50, silver +.03 at 7.36, ten year notes down 5/64 at 110 13/32, crude oil -.025 at 65.05 and natgas is down .08 at 13.04.

We await the 8:30 release of Durable Orders, est. .7%, then at 10:30, the petroleum report.

Linda Piazza : 9/28/2005 7:18:46 AM

Good morning. Despite poor performance among chip-related stocks, the Nikkei climbed to a new recent high again, but other Asian markets were mixed. European markets gain this morning. Across both Asia and Europe, the dollar's recent gains have strengthened the performance of exporters. As of 7:05 EST, gold was unchanged, and crude, down $0.08 to $64.99. Our futures were up, with the S&P futures higher by $3.70 and the Nasdaq, by $5.00. More detail about Asian and European markets follows in succeeding paragraphs.

After Tuesday's profit-taking, the Nikkei opened near the flat-line level and climbed back toward Monday's high. It was to exceed that high, closing higher by 125.87 points or 0.95%, at 13,435.91, and the gains were made on high volume. It closed just after having confirmed a H&S on the intraday chart, with that H&S having a downside target about 22 points lower than the close.

The dollar's rise against the yen, reportedly boosted by some dollar-bullish words by the Fed's Hoenig, helped exporters, particularly automakers. Canon was another exporter gaining in early trading. Banking, oil-related, transport equipment and electric machinery sectors were also reported as gaining, while one source noted that chipmakers declined after J.P. Morgan downgraded the U.S. chip sector. The Bank of Japan's Suda continued recent rhetoric about the central bank's ending of quantitative easing, with expectations for the economy in line with April's predictions of a core CPI rise in 2006 rather than in 2005. She said that no inflation target should be adopted until the country had been returned to a normal monetary policy and reportedly would set no specific number or pattern as being appropriate for a CPI that was considered stable.

In stock-specific news, Sanyo Electric Co. widened its estimated of losses for this fiscal year and announced increased job cuts. Sanyo dropped 2%. Mitsubishi Tokyo financial Group increased its group profit forecast for the first half, ending September 30.

Other Asian markets were mixed. The Taiwan Weighted dropped 0.23%, but South Korea's Kospi charged higher, again setting a new record high with financials leading the way. Hyundai Marine, a non-life insurer, leaped higher in early trading after Samsung Securities raised its share estimate as well as raising the estimate for two other insurance companies. Samsung Electronics lost ground, however. The Kospi gained 1.57%. Singapore's Straits Times fell 0.20%, but Hong Kong's Hang Seng rose 0.21%. China's Shanghai Composite dropped 0.13%.

European markets gain this morning, with the DAX back above 5,000 despite the ECB's Liikanen repeating the ECB's recent warning that the increase in energy costs could curb growth and increase inflation. DaimlerChrysler's new CEO may cut 8,000 jobs at Mercedes, sending DaimlerChrysler up 2.7%, reportedly boosting other European carmakers, too. At least one analyst attributes the rise to the dollar's strength against the euro and other currencies. A number of economic numbers were released. In France, September's INSEE business confidence declined to 100 from July's 101, with no figure released for August according to one source. Most components saw small declines, indicating an economy that may be stagnating. However, the consumer sector and household spending had shown a rise of 1.2% and 1.9%, with household spending probably boosting the production outlook to -24 from its previous -14. Italy's September business confidence rose to 89.5 from August's 87.8, with the improvement credited to a gain in the current assessment component. However, Italy's non-EU trade numbers for August showed a much-worse-than-expected result, with a deficit found after the expected surplus. In the U.K., September's CBI retail sales balance dropped to -24 from August's -18. This is the lowest number recorded for this figure.

In stock-specific news, Goldman Sachs upgraded French bank BNP Paribas to outperform, and the bank gained in early trading. British catering group Compass plunged after announcing a shakeup in the executive lineup and saying that it will report adjusted and lowered operating profit for fiscal 2005. The company announced other planned restructuring changes. Several stocks were moving big, including the U.K.'s radio broadcaster GCap Media, soaring after announcing that revenue decline had decelerated and that its savings from a merger were greater than anticipated, and U.K. books and music retailer, plunging after saying that the July bombings had hit sales in U.K. town centers, especially in London and other big-city centers. Swedish clothing chain H&M did not emulate those big movers after its earnings release, climbing a more modest 0.7% in early trading.

As of 7:02 EST, the FTSE 100 had gained 24.40 points or 0.45%, to trade at 5,471.70. The CAC 40 had gained 39.09 points or 0.86%, at 4,585.89. The DAX charged up toward a test of the recent high on September 12, at 5,035.59, with the DAX high of the day having been 5,034.91, but with the DAX currently at 5,025.78, up 59.90 points or 1.21%.

Market Monitor Archives