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OI Technical Staff : 9/30/2005 9:59:59 PM

The Market Monitor has been archived.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

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Jeff Bailey : 9/30/2005 7:52:12 PM

Sector Bell Curve Bullish % from 06/30/2005 to 09/30/2005 at this Link

Jeff Bailey : 9/30/2005 7:26:02 PM

Don't Forget to Rebalance alert! ... The markets remain dynamic with capital flowing in and out of asset classes in rapid fashion! Those with assets in retirement plans (mutual funds, ETFs, etc) that you don't actively manage, I encourage you to reallocate your assets every quarter, if not at lease twice a year!

Last quarter's rebalancing for the Beetle's Benchmark Balanced paid off huuuuge and capital should be redistributed! Link

After withstanding several quarters of underperformance, the miners/precious metals as depicted by the $HUI.X found a hefty 21.65% gain. Large cap tech as depicted by the QQQQ was also an outperformer, and their isn't a bank in the bunch!

A hefty Q2 gain of 8.25% for longer-dated Treasuries as depicted by the TLT had rebalancers taking profits there, and good thing as the TLT fell 4.65% in Q3. "Junk Bonds" as depicted by the PHF was the outperformer among fixed income assets with a 0.74% gain (does not include dividend income of $0.225/share for Q3).

Dynamic indeed! Here's how the various asset classes have performed on a Q1, Q2, Q3 basis at this Link

I will now take the Total Value of $12,576.74, less the skewing of $66.24 from the Crude Oil (cl05x) benchmark, so $12,510.50 ($1,042.54/class), and redistribute that amount equally among the various asset classes.

Note: I'm using an EQUAL WEIGHT method of rebalancing for the Beetle's Benchmark Fund. However, a "younger investor" would most likely be weighted more heavily in their equity assets, while "older investors" would most likely be weighted more heavily in their fixed income assets.

Regardless of how you divide your own personal weightings, they should still be rebalanced to your initial weightings.

Jeff Bailey : 9/30/2005 6:06:53 PM

Lexar Media (LEXR) $6.38 +3.23% ... Cramerian's going wild. Marked at $7.10 here.

Jeff Bailey : 9/30/2005 5:57:18 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 9/30/2005 5:33:01 PM

Closing Internals found at this Link

Jeff Bailey : 9/30/2005 5:00:21 PM

Good heavens ... YELL $41.42 -0.33% at the close. Penny above WEEKLY R1.

Jeff Bailey : 9/30/2005 4:44:45 PM

Current OPEN MM Profiles found at this Link

Monthly Trade Blotter of CLOSED trades found at this Link ... with Q3 total.

Major equity market benchmarks (excluding any dividends paid) have the Dow Diamonds (DIA) $105.75 having gained 2.92% on the quarter.

The S&P Depository Receipts (SPY) $123.04 gained 3.24% on the quarter.

The NASDAQ-100 Tracker (QQQQ) $39.46 gained 7.29% on the quarter.

Jeff Bailey : 9/30/2005 4:14:58 PM

Buy Program Premium ... DIA $105.77, SPY $123.02

Linda Piazza : 9/30/2005 3:57:03 PM

H&S on the advdec line was rejected, but we start over with the advdec line on Monday morning. It's a daytrading tool only. Have a great weekend, everyone. I started the day thinking there wasn't much information about the direction and the OEX kind of chopped around all day without ever giving a clear signal one direction or the other.

Jeff Bailey : 9/30/2005 3:56:17 PM

Get out your paint brush ... Matrix Services (MTRX) $8.06 +1.51% ...

Jeff Bailey : 9/30/2005 3:54:35 PM

Valero (VLO) $112.82 -1.88% .... session lows.

Jeff Bailey : 9/30/2005 3:50:05 PM

AMR Corp. (AMR) $11.11 +3.34% ... This morning, AMR announced that it was canceling 15 round trips temporarily in markets it serves from two of its hubs in Chicago (O'Hare) and Dallas (DFW). The cutbacks will go into effect on Wednesday and continue to at least Oct. 29, when the nation's largest passenger air carrier will evaluate jet fuel prices and decide whether to restore the flights.

Jeff Bailey : 9/30/2005 3:46:13 PM

AMR $11.13 +3.53% ...

Jeff Bailey : 9/30/2005 3:45:45 PM

TRAN 3,730 +0.3% ...

Jeff Bailey : 9/30/2005 3:45:25 PM

FDX $86.81 -0.22% ....

Jeff Bailey : 9/30/2005 3:44:57 PM

YELL $41.30 -0.62% ... perfect timing.

Linda Piazza : 9/30/2005 3:44:55 PM

SOX threatening to drop beneath the next level it needs to violate to signal a change in short-term trend, at 474.15 on 15-minute closes, with the SOX currently at 473.88. If it maintains such a level into this 15-minute close, it sets a possible downside target of 470.55.

Linda Piazza : 9/30/2005 3:40:25 PM

Potential H&S on the advdec line (three-minute chart), a nicely formed one at the right shoulder currently. These sometimes do have relevance. The neckline is near 1000, I think. Advdec line at 1101 as I type.

Jonathan Levinson : 9/30/2005 3:38:30 PM

Volume breadth is +1.79:1 on the NYSE, +1.66:1 on the Nasdaq.

Linda Piazza : 9/30/2005 3:37:09 PM

RLX bouncing back above that neckline, back to test that Keltner line currently at 437.65 on 30-minute closes, with the RLX at 437.92 as I type and still climbing. This is not what bears want to see. They want downside follow through on that H&S confirmation.

Linda Piazza : 9/30/2005 3:35:03 PM

The advdec line's action still isn't convincing to me. It's not dropping through layers of support the way some indices are. I've seen some times lately when index action leads the advec line rather than the other way around, but I just haven't gotten any firm signals today in a usually reliable methodology. The potential for an advdec line bounce still remains, although now I'd expect it to get stopped probably near the HOD for the advdec line.

Meanwhile, the OEX has currently dropped right back to the former descending trendline off yesterday's high and is attempting to bounce from that.

Jeff Bailey : 9/30/2005 3:32:42 PM

Bullish swing trade exit alert for the 1/2 position in Yellow Roadway (YELL) $41.00 -1.32% ... I don't like the late session "bid" for heating oil, and after yesterday's "day trade thought," let's capture a profit.

Linda Piazza : 9/30/2005 3:30:24 PM

The RLX has violated the neckline of its H&S and it's about to close the 30-minute period below the Keltner line that signifies the first change in tenor since yesterday afternoon. Now, current OEX bears do not want to see a quick and sharp bounce in the RLX. It's at 437.42 as I type.

Jonathan Levinson : 9/30/2005 3:29:02 PM

Headline:

OCT UNLEADED GAS DOWN 5% ON DAY AND MONTH

OCT UNLEADED GAS CLOSES AT $2.1381/GAL, UP 44% ON QUARTER

Jonathan Levinson : 9/30/2005 3:26:20 PM

QQQQ's anticipated 30 min cycle downphase actually occurred today, except that the oscillators got zero price traction. This is either a bearish divergence, and a huge one at that, or an extremely weak downphase to be followed by an explosive upphase on Monday. The third option is that the out-of-sync 60 min cycle took its time rolling over, and will do so on Monday, around the same that the 30 min cycle turns up- resulting in sideways chop at current levels. My guess is that this is a victory for the bulls overall, with the daily cycle upturn confirmed today by persistent strength.

That's the cycle picture. Volume was very light for QQQQ, half of yesterday, and it's end of month and end of quarter to boot. The external factors appear more bearish than the cycles would suggest. Pricewise, QQQQ bears have little to discuss above 39.08-39.10, a break below which would be the first sign of trouble for bulls.

Linda Piazza : 9/30/2005 3:25:44 PM

Advdec line resistance holding (about 1210) and the OEX's 200-sm, 72- and 100-ema's are also holding as resistance. The OEX turns down sharply. Perhaps more importantly, the RLX is dropping to test a rising trendline that describes the neckline for a sharply rising H&S, with that neckline at about 437.50. This is also near the Keltner level that the RLX needs to drop below to signify even a short-term change in trend, with that line at 437.69 on a 30-minute close. Careful, as this is also a potential bounce point for the RLX. It's bounced from this line since mid-morning yesterday.

Linda Piazza : 9/30/2005 3:20:33 PM

TRAN dropping to test important Keltner support at 3731.60 on 15-minute closes, with a close below that signifying a potential weakening on a short-term basis, but with that needing to be confirmed by a 15-minute close beneath the Keltner line currently at 3713.63, the actual line from which it's been bouncing.

Jeff Bailey : 9/30/2005 3:21:01 PM

Today might as well be a Triple Witch from what I see happening. A lot of rebalancing and fine tuning from the looks of it.

Jeff Bailey : 9/30/2005 3:19:43 PM

TRAN 3,735

Jeff Bailey : 9/30/2005 3:18:30 PM

YELL $41.15 -0.98% ... FDX $86.85 -0.18%

Linda Piazza : 9/30/2005 3:17:48 PM

RLX falling back toward that 437.80 Keltner level that needs to be violated to the downside on a 30-minute close to see the RLX changing its short-term tenor. RLX at 438.28 as I type.

Jeff Bailey : 9/30/2005 3:17:15 PM

Union Pacific (UNP) $71.34 +0.29% ... did trade a new 52-weeker today, right above our bullish exit point back in late July and early August (07/28/05 and 08/08/05). Will look for another shot on a pullback under $69.50 if possible.

Linda Piazza : 9/30/2005 3:15:22 PM

Advdec line getting closer to even stronger resistance, the resistance band I had hoped to see tested earlier today, with that from about 1375-1900. Even if it hit that into the close, I don't think I'd risk a bearish play this late on a Friday that's the last day of the quarter. There's too much risk of end-of-quarter window dressing carrying through the rest of the day.

Jonathan Levinson : 9/30/2005 3:14:45 PM

QQQQ's wavelet cycle is in an upphase that is stalling out in the early going. Once again, the rollover off the likely short cycle upphase came early, without a test of the upper 30 min channel. Entries on such moves require much wider stops and, accordingly, carry more risk. Link

Jeff Bailey : 9/30/2005 3:13:25 PM

03:00 Internals found at this Link

Jonathan Levinson : 9/30/2005 3:13:04 PM

Headlines:

OCT HEATING OIL CLOSES AT $2.0673/GAL, DOWN 2.7% ON DAY

OCT HEATING OIL UP 23.4% FOR THE QUARTER

OCT HEATING OIL UP 6% ON WEEK, DOWN 0.4% ON MONTH

Linda Piazza : 9/30/2005 3:09:02 PM

The RLX hasn't convincingly broken out above the Keltner resistance at 439.02-439.20 on 15-minute closes, but it hasn't rolled low enough to change its tenor yet, either. As long as there's danger of the RLX bouncing or it holds its level near the HOD, the OEX isn't going to retreat too far, in my opinion. RLX at 438.95 as I type.

Jeff Bailey : 9/30/2005 3:04:48 PM

Need to go back through my notes regarding a particular session where HUGE volume on the NYSE and NASDAQ were found. What day it was, and what the high of that day was.

I think it was either the Triple Witch day, or FOMC.

Jeff Bailey : 9/30/2005 3:02:29 PM

03:00 Market Watch found at this Link

Linda Piazza : 9/30/2005 2:56:52 PM

Although the SOX made a minimal new HOD, it's essentially still testing a triple top area (15-minute chart).

Linda Piazza : 9/30/2005 2:55:36 PM

So far, this advdec line resistance is holding. The OEX obviously turns lower, finding resistance at the 567.08 Keltner resistance, and also, of course, the converging 200-sma, 72- and 100-ema's. This should be strong resistance on the OEX, but the RLX made a new HOD and has yet not done anything to confirm a change in trend, with support actually looking as if it's strengthening just beneath the 437.62 support that the RLX needs to break through to even begin to change its trend. Until the RLX weakens, I don't think we can count on the OEX weakening much.

Jonathan Levinson : 9/30/2005 2:52:56 PM

QQQQ's wavelet cycle is trying to roll over here, while the short cycle oscillators have entered overbought but haven't yet stalled: Link . This is a setup where it could break down from here into a new downphase, or whip back up for one last "Keene's wave."

Jeff Bailey : 9/30/2005 2:49:22 PM

Delphi (DPH) $2.82 +11.90% ... goofy trade today. Spiked as high as $3.53, but didn't last long above WEEKLY Pivot ($3.26) and has now traded sideways at WEEKLY S1 ($2.87)

Linda Piazza : 9/30/2005 2:43:32 PM

OEX testing resistance. Advdec line testing resistance. Resistance and support levels are narrowing, however, on the advdec line, and so there aren't clear setups still, and the advdec line isn't turning back anyway.

Jonathan Levinson : 9/30/2005 2:42:53 PM

Mark, the "Giggler" alone packs enough action to teach any option trader everything they ever wanted to know about premium. It's reminiscent of NT and JDS back in the daze.

Jonathan Levinson : 9/30/2005 2:40:28 PM

Crude oil finished -.65 at 66.15, natural gas -.27 at 13.925.

Jonathan Levinson : 9/30/2005 2:39:31 PM

QQQQ has almost made it to half of yesterday's 117.8M share volume, 55.9M traded so far today.

Linda Piazza : 9/30/2005 2:38:33 PM

OEX back at the strongly linked 200-sma, 100-ema and 72-ema, with each having obvious relevance in the OEX's trading pattern. Advdec line at potential resistance, but not strong enough to necessarily turn the advdec line around and it's not yet showing any signs of doing so. Next advdec resistance above this at about 1400.

Jonathan Levinson : 9/30/2005 2:37:47 PM

Back in time to catch QQQQ testing the prior highs on a small surge in volume. 30/60 min channel resistance line up at 39.48 currently: Link

Jeff Bailey : 9/30/2005 2:37:05 PM

TRAN 3,745 ... session/weekly highs

Linda Piazza : 9/30/2005 2:36:29 PM

Advdec climbing deep into the next resistance level, with that zone extending up to about 1150. Advdec now at 1081.

Jeff Bailey : 9/30/2005 2:36:11 PM

Bearish day trade stop alert .... for FedEx (FDX) $87.07

Linda Piazza : 9/30/2005 2:35:35 PM

RLX testing that 15-minute Keltner resistance at 438.78 on 15-minute closes, with the RLX at 438.82, but with much time left in the current 15-minute period. It's currently also testing a double-top area. Since the neckline for its H&S on the 15-minute chart slants strongly upward, a 15-minute close below that Keltner line actually preserves the possibility of the H&S forming.

Linda Piazza : 9/30/2005 2:31:17 PM

Advdec now testing a resistance band from 800-1150 or so. It's at 805 as I type.

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

TRAN still testing that 240-minute Keltner resistance, nudging it higher and not yet showing a sign of pulling back during this new 240-minute period. Resistance at 3471.01 on 240-minute closes and TRAN at 3741.90 currently.

Linda Piazza : 9/30/2005 2:29:08 PM

SOX retesting the day's high again, and it's formation looks the slightest bit like a possible bullish right triangle (flat top and rising trendline underneath), but the possibility of a triple top must be allowed.

Jeff Bailey : 9/30/2005 2:28:17 PM

Yellow Roadway (YELL) $41.01 -1.32% ... off session lows of $40.78.

Hmmmm.... FDX $87.00, YELL $41.00, TRAN 3,741 at this point.

Jeff Bailey : 9/30/2005 2:26:44 PM

FedEx (FDX) $87.02 +0.01% ... inches back green.

Linda Piazza : 9/30/2005 2:26:12 PM

The advdec line is climbing. Next resistance is at about 800, with the advdec line now at 720. Honestly, though, it's between strong support and strong resistance, not really close enough to either to give any kind of prediction about what's going to happen next, and that's been the situation most of the day. Right now, I think support looks stronger than nearest resistance, but maybe not enough stronger to prevent more chop, and that's a judgment call anyway as to which is stronger.

Linda Piazza : 9/30/2005 2:23:31 PM

It's possible that the RLX could be forming a H&S on its 15-minute chart. If the 15-minute Keltner resistance at 438.69 holds on 15-minute closes, that possibility remains. The RLX is at 438.43 as I type.

Jeff Bailey : 9/30/2005 2:23:52 PM

I should note that the U.S. Market Watch and today's low for 5, 10 and 30-year yields may be incorrect. Bad data feeds the past two days.

Jeff Bailey : 9/30/2005 2:15:59 PM

02:00 Internals found at this Link

Linda Piazza : 9/30/2005 2:15:39 PM

The RLX is trying to bound higher again from that 437.13 Keltner support on the 30-minute chart. This support is flattening, but it's been this support that has prompted bounces since yesterday about mid-morning. The flattening isn't a bullish thing, but as long as the support holds, bounce potential remains.

Linda Piazza : 9/30/2005 2:13:14 PM

The OEX just broke above the descending trendline off yesterday's high. Next resistance at 566.26 on 15-minute closes and at 566.92. Of course, there are the 200-sma and 72-ema to consider, too, with those at 566.69 and 567.23. Advdec line climbing, too, and not yet at strong resistance, although it is testing light resistance as I type. Advec line at 638 with that resistance at about 700.

Tab Gilles : 9/30/2005 2:08:56 PM

Followup to this mornings 121:51aM post on Nasdaq100 ($NDX). I tend to agree with both Linda's and Jane's comments today on the markets current indecisive trend. I had eluded to the $SPX on 9/29 11:46AM chart highlighting the 4 doji star candles. Pointing out that something had to give, which somewhat did with yesterdays rally. But, wheres the follow thru today??? This is the end of quarter?

I've been studying the daily and weekly charts of the $NDX and $NASI today and I'm getting a more bullish short term signal on the daily and a more intermediate term bearish read on the weekly.

$NASI daily; Link

$NASI weekly; Link

$NDX daily; Link

$NDX weekly; Link

I'm currently short 1/2 position via Profunds UltraShort OTC (USPIX) fund. Following the daily charts and if the $NDX stays above the 50-ma and MACD's signaling buy along with daily $NASI giving a buy after yesterday's close. I'm going to switch into a 1/2 long position via UltraOTC fund (UOPIX). Reason for 1/2 position is that the weekly charts have not given a BUY as of yet.

Will followup over the weekend or early Monday. Enjoy the weekend everyone.

Jonathan Levinson : 9/30/2005 2:06:55 PM

Stepping away for 20 minutes here.

Jeff Bailey : 9/30/2005 2:05:59 PM

02:00 Market Watch found at this Link

Linda Piazza : 9/30/2005 2:01:06 PM

I still haven't seen any setup today, so it's kept me out of any trouble with new OEX entries, either for myself or suggesting them for readers. Would have been nice to have captured that first downdraft this morning, but the setup wasn't there, and I wasn't going to try it ahead of the Michigan number without any corroboration.

Linda Piazza : 9/30/2005 1:59:12 PM

The OEX tests the descending trendline off yesterday's high.

Jonathan Levinson : 9/30/2005 1:52:17 PM

QQQQ update at this Link with price sliding sideways between 39.24-39.35. The 30 min cycle channel slides sideways, the 60 still rising. We often see a "weightless" sideways drift as the 60 min cycle crests, and that should be the case here. The channel bands are wider than the price range in this rectangle, but a flattening of the 60 min cycle should tip us off to a developing bearish risk in that timeframe.

Linda Piazza : 9/30/2005 1:49:09 PM

For the last hour, the RLX has been testing the Keltner level that prompted bounces since yesterday, and it's not bouncing much yet. However, support looks to be gathering below the RLX, from 434.95-436.27. If that's to be broken, the RLX either has to chop around long enough to scatter the lines or else needs to drop swiftly below them. Otherwise, the RLX could stabilize here and even bounce again. RLX at 437.40. The OEX isn't going to drop far unless the RLX does, too, in my opinion.

Linda Piazza : 9/30/2005 1:45:45 PM

Keltner chart of the TRAN, with some annotations: Link

Linda Piazza : 9/30/2005 1:38:23 PM

Advdec line trying to climb again. The OEX is, too, just now confirming a double-bottom formation on its five-minute chart. The top of the descending regression channel off yesterday's low is at about 566 now, with next Keltner resistance at 566.13 on 15-minute closes, and then at 566.88 above that. OEX at 565.66 as I type.

Jeff Bailey : 9/30/2005 1:37:38 PM

Dow Transports (TRAN) 3,734 +0.41% ... thinking 3,725, or 3,750 possible end of quarter settlement.

Watch energy futures into the close. If a bid develops, then TRAN 3,725 likely. Opposite if energy futures just slip to settle at lows of session. My intra-day thinking at least.

Linda Piazza : 9/30/2005 1:35:05 PM

Just realize today that the SOX has risen to retest the actual trendline off the April low. Early in September, it dropped out of its rising regresion channel off that April low, then below the actual rising trendline off that low, and fell all the way to the daily 100-ema. It bounced from that, just as it had in late June and early July and now has risen into a retest of that former support. So far, then, this climb, as abrupt as it has been over the last couple of days, just constitutes a retest of that broken support, with the outcome of tht retest as yet unknown.

Jonathan Levinson : 9/30/2005 1:33:36 PM

Volume breadth +1.68:1 on the NYSE, +1.67 on the Nasdaq.

Jonathan Levinson : 9/30/2005 1:24:06 PM

It's sloppy, but we could be watching a head and shoulders unfold here: Link . If so, then they stopped us out to the tick on the right shoulder top. 39.24 would be the neckline.

Jeff Bailey : 9/30/2005 1:23:31 PM

Bearish day trade short alert ... for FedEx (FDX) $86.82 -0.21% here, stop 87.07, target $86.05.

Disclosure: I currently hold a bearish position in FDX.

Jeff Bailey : 9/30/2005 1:15:44 PM

01:00 Internals found at this Link

Linda Piazza : 9/30/2005 1:12:14 PM

SOX: The SOX is turning back from a double-top-like formation but hasn't confirmed the double top by falling below 473.35, the trough between the two peaks. It's at 475.02 as I type. It would actually take a decline and 30-minute close below a Keltner line currently at 472.85 and preferably the one at 471.72 to even being to change the tenor.

Jeff Bailey : 9/30/2005 1:10:33 PM

Excellent discussion .... excellent (CNBC).

Linda Piazza : 9/30/2005 1:09:52 PM

The OEX's important 30-minute 100/130-ema's are at 564.23 and 564.60, respectively. OEX at 565.14 as I type. Watch for double-bottom potential, but I'm still not seeing any setup for a play going either direction.

Jonathan Levinson : 9/30/2005 1:06:07 PM

This could actually be very bullish. Given that the intraday cycles were due for a correction this AM, the sideways-up could be confirmation of a very strong daily cycle upphase keeping the price pinned through that correction. A break of the day highs from here would be the tell.

Jeff Bailey : 9/30/2005 1:03:38 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 9/30/2005 1:01:59 PM

Looks like op-ex week came 3 weeks early.

Linda Piazza : 9/30/2005 12:58:17 PM

TRAN still testing the 240-minute Keltner resistance, with that currently at 3739.84 and with the TRAN currently at 3738.40. Since hitting that resistance earlier, the TRAN has slowed its gains, as I had suggested it might, but now it comes up again to retest the HOD. The TRAN needs to fall beneath a Keltner line currently at 3714.06 or preferably beneath one at 3699.82, on 15-minute closes, to confirm a change in short-term tenor.

Linda Piazza : 9/30/2005 12:55:53 PM

SOX climbing again into a retest of the day's high. Still maintains its 479.57 upside target on the 30-minute chart. As I said earlier, don't count on this target being met, but do take at least partial profits if it is.

Linda Piazza : 9/30/2005 12:54:26 PM

The RLX is testing the Keltner line that has prompted bounces since yesterday morning. There's support below that line, too, if it should be violated, but such a violation on a 30-minute close would at least signal a slight change in tenor. That line is at 436.97 on 15-minute closes, with the RLX currently at 437.53. Until there's such a 30-minute violation, bounce potential must be assumed from this Keltner line, and if the RLX is still bouncing, the OEX isn't going to fall far. Next RLX resistance at 438.69 and then 440.

Jane Fox : 9/30/2005 12:53:20 PM

AD volume to new daily highs but AD line is not.

Jane Fox : 9/30/2005 12:51:39 PM

Here is how McMillan has SPX bracketed. Link

Linda Piazza : 9/30/2005 12:49:54 PM

The OEX currently tests Keltner resistance at 565.58, important on 15-minute closes. Next resistance at 566.21 and then again 566.87, next support at 564.95 and then at 564.61. As should be apparent from these numbers, the OEX is pretty well ringed with support and resistance, as is the advdec line that I watch. No signals. The current pattern could be a bull flag pullback from yesterday's high, with the top of that flag at about 566.23 currently. A fall through the 30-minute 100/130-ema's would question that theory as would any steep fall out of the current channel. On a breakout above the possible flag, watch for a retest of those Keltner resistance levels listed above. Nothing I see on the charts yet gives me a strong clue as to likely action, with the advdec line also ringed closely with support and resistance.

Jonathan Levinson : 9/30/2005 12:48:51 PM

Ten year treasuries are weak again today, TNX +4.9 bps at 4.338%. IRX is up .2 bps at 3.46%. A bad tick to the 3% area has rendered my daily TNX chart useless until Prophet cleans it up, but in the meantime, here's a chart of the Lehman 7-10 yr treasury fund (IEF): Link

Jane Fox : 9/30/2005 12:45:56 PM

Here is what Larry McMillian as to say about the market. So where does all of this leave us? We have two bullish indicators breadth and put-call ratios. We have two indicators in a relatively neutral status (within trading ranges): $VIX and the charts of the major indices. To us, it adds up to further trading range activity in the US markets -- especially considering that this most recent, strong rally day was likely the result of the calendar (quarter end) rather than a true shift in investor bullishness. I expect to see sellers emerge at the 1240-1245 area on $SPX because sales there were profitable the last two times that the average got that high. Eventually, if $SPX can break on through 1245, that would change things because those sellers would turn to buyers and other investors would be drawn in on the buy side as well. Unless that happens, we remain skeptical of the rally.

Jeff Bailey : 9/30/2005 12:48:05 PM

El Paso Corp. (EP) $14.09 +1.43% Link ... notable new 52-weeker at the big board. While we sold naked puts this summer (06/08/05) from the $11.00 level, would have been a nice little long play into the winter.

Big test of resistance at the 14.50 level and bearish resistance trend.

Jeff Bailey : 9/30/2005 12:36:12 PM

Current OPEN MM Profiles found at this Link ... We were stopped out of the Delphi (DPH) $2.90 +15.07% short at $2.96 ($+0.58, or +16.38%).

Jonathan Levinson : 9/30/2005 12:34:54 PM

Stepping away for ten minutes. For those who didn't take that 39.35 QQQQ stop on the short from 39.31, the wavelet looks to be topping here, and a break of 39.26 would confirm a new decline. A break of 39.35 could turn up the short cycle indicators, however. Link

Jonathan Levinson : 9/30/2005 12:26:57 PM

Volume breadth +1.48:1 on the NYSE, +1.57:1 on the Nasdaq.

Linda Piazza : 9/30/2005 12:23:30 PM

As I expected, the OEX is attempting a bounce from the 30-minute 100/130-ema's, actually from a little above those averages. The advec line attempts a bounce from its support, too, but faces resistance a bit stronger than that faced earlier, so it's a standoff right now. The OEX's 15-minute Keltner chart shows the OEX also caught between Keltner resistance and support, with that resistance at 565.62 on 15-minute closes and with next support at 564.53-564.78 on 15-minute closes.

Jonathan Levinson : 9/30/2005 12:22:03 PM

On a quicktick doji spike, no less.

Jonathan Levinson : 9/30/2005 12:18:55 PM

QQQQ - Exit Point Alert -

Stopped out at 39.35.

Jonathan Levinson : 9/30/2005 12:18:08 PM

The wavelet cycle bounce is roughly 2/3 done, and I'm hoping it eases back a bit, as our stop is 4 cents away. Link

Jeff Bailey : 9/30/2005 12:17:06 PM

12:00 Internals found at this Link

Linda Piazza : 9/30/2005 12:15:55 PM

Advdec line sinking into next support, the support that bounced it this morning, this occurring as the OEX is testing the previously strong resistance of the 30-minute 100/130-ema's. Looks as if there needs to be a whoosh down (a technical term--smile) to send the advdec line low enough to violate that support or the OEX may just steady or attempt a bounce at the potential support being tested.

Linda Piazza : 9/30/2005 12:06:42 PM

Here's what I see on the OEX's 30-minute chart, with the OEX having broken out of a rising regression channel that might have been a bear flag, jumping up to test the 50% retracement of the drop off the 9/09 high, but now falling back into the possible flag and dropping down to test the 30-minute 100/130-ema's that confirmed yesterday's ramp up, when that former resistance was finally broken. Link This is an important test then for the OEX. I would expect some sort of steadying or bounce attempt here, and how that test proceeds will tell us much about whether that really is a bear flag or something more bullish.

Jonathan Levinson : 9/30/2005 12:05:36 PM

QQQQ's wavelet cycle is due for a bounce here, and this is where we'll need to be lucky with our 39.31 short entry. A weak/sideways bounce will be followed by a deeper plunge, while a strong bounce will have a great chance of hitting our stop. Link

Jeff Bailey : 9/30/2005 12:03:11 PM

12:00 Market Watch found at this Link

Linda Piazza : 9/30/2005 12:02:30 PM

RLX dropping but toward the 436.88 Keltner support (30-minute) that has prompted bounces since yesterday morning. The TRAN is dropping, too, but not far enough yet to erase its breakout signal. The SOX has come back to retest the 473.26 (15-minute chart) Keltner line that has been prompting bounces since yesterday morning. The SOX is at 473.82 as I type.

Linda Piazza : 9/30/2005 11:56:32 AM

The OEX now sits at the 38.2% retracement of the decline off the 9/09 high, after having tested the 50% retracement yesterday. After bumping above a rising regression channel that looked a whole lot like a bear flag rising off the 9/22 low, the OEX is now back inside that channel, making yesterday's end-of-day breakout look like the overrunning of targets I thought it might be. However, the advdec line is sinking into the same support that supported it this morning, without ever first giving a sell signal according to the parameters I watch, so I wouldn't be entirely surprised if those important 30-minute 100/130-ema's didn't provide a bounce attempt or steadying, if they're touched. A strong surge down in the advdec line or through the OEX's averages would change my mind, but there just hasn't been a setup today or yesterday according to the parameters I watch.

Linda Piazza : 9/30/2005 11:50:59 AM

Advdec line dropping, but into potential support. The OEX is dropping, too, with the 15-minute Keltner chart suggesting a first target of 565.02 currently, with 564.47 and then 563.66 next Keltner support beneath that.

Jonathan Levinson : 9/30/2005 11:48:04 AM

I'm not too happy with the entry, but the short cycle feels like it's ready to fall apart and I don't want to miss it. Link

Jonathan Levinson : 9/30/2005 11:46:26 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.31, stop 39.35

Linda Piazza : 9/30/2005 11:46:15 AM

Nothing much is changing, which means that there still hasn't been a clear setup for a trade. I'd like to be suggesting a bearish trade under the OEX's 200-sma and 72-ema, and I would if the advdec line were at strong resistance and showing that it was rolling over, but no such setup is there. The RLX has pulled back, but not enough, and it's got the support that's been bouncing it a few points below. The TRAN just isn't pulling back although it's going sideways after meeting its 240-minute Keltner target. The SOX is trading sideways, too, after meeting its Keltner target.

Jonathan Levinson : 9/30/2005 11:44:18 AM

Volume has now slowed to a crawl, and the wavelet bounce is just sideways so far. Link

Jonathan Levinson : 9/30/2005 11:39:34 AM

Crude oil -.875 here at 65.925, natgas +.005 at 14.20.

Linda Piazza : 9/30/2005 11:28:32 AM

RLX and SOX turning down a little (not yet enough to change the rally mode, though) but the TRAN isn't.

Jonathan Levinson : 9/30/2005 11:27:34 AM

Amazingly, there hasn't been a single upside keltner violation today- none of my "proprietary" red paintbars have printed on the upside surges. One might've occurred during my reboot, but I don't think so. Still waiting for that wavelet bounce (Keene's wave).

Linda Piazza : 9/30/2005 11:26:50 AM

Advdec line turning lower now, but into potential support. It's just rattling around in space, between strong support and resistance and not giving any confirmation, either direction. It's just really unusual for the advdec line not to set up or corroborate a play by the measures I watch for several days running, and that's what's been happening since about Wednesday afternoon.

Linda Piazza : 9/30/2005 11:24:12 AM

Nothing happening on the RLX yet that confirms that it's through rallying. In fact, it's finding tentative support on a Keltner line currently at 438.27 on 15-minute closes, with that same Keltner line (then lower) providing resistance all day yesterday, so, if anything, it's showing tentative strength. That's tentative only, however, and a drop back below that line on 15-minute closes would question the RLX's ability to continue much further with a breakout. RLX at 438.40 as I type.

Jeff Bailey : 9/30/2005 11:22:42 AM

11:10 Internals found at this Link

Jonathan Levinson : 9/30/2005 11:20:43 AM

I agree with Mark with respect to QQQQ, but there's still that oversold wavelet bottoming here, suggesting one last bounce. It could just abort, as the wavelet is prone to do, but with tight stops it's important to respect the possibility. If the market gives us a bounce within the next few minutes, I'll be looking to sell into it, again with a tight stop. Link

Jonathan Levinson : 9/30/2005 11:13:13 AM

Volume breadth is +1.6:1 on both the NYSE and Nasdaq.

Jeff Bailey : 9/30/2005 11:12:56 AM

11:10 Market Watch found at this Link

Linda Piazza : 9/30/2005 11:11:22 AM

Still a possibility that the advdec line could climb further, toward 1550-1650 next resistance. It's at 764 as I type, testing just-established support.

Linda Piazza : 9/30/2005 11:10:30 AM

The TRAN has now hit its 240-minute Keltner target and it's possible that gains could begin to slow now. However, it needs a 15-minute close beneath a Keltner line currently at 3707.22 and preferably below the one currently at 3686.89 to even begin to change the rally mode. TRAN at 3736.37 as I type, just below its HOD and its 240-minute Keltner target.

Jeff Bailey : 9/30/2005 11:10:28 AM

Note DPH and GM were moving "opposite" this morning. Now GM $30.95 +0.84% and DPH well off morning high.

This is still a 50/50 response from market in my opinion (based on prior thoughts). If GM bids, then my thoughts were DPH goes in the tank as GM "gets off the hook" and won't have to provide some bail out capital to DPH.

Jeff Bailey : 9/30/2005 11:07:40 AM

Delphi (DPH) $2.92 +15.87% ... should be stopped on the short now. Stock did trade as high has ..... $3.53. Right where we first shorted. Taking some notes here.

Jonathan Levinson : 9/30/2005 11:06:46 AM

Session low for GE here, -.06 at 33.59.

Jonathan Levinson : 9/30/2005 11:06:24 AM

All intraday channels still point north, but the price is feeling heavier. The next bounce, if one comes, would target a channel high of 39.48: Link

Linda Piazza : 9/30/2005 11:04:55 AM

OEX still chopping around. It's not going to fall far as long as the RLX is still charging higher. The RLX pulls back a bit from the HOD, but it needs a 30-minute close beneath the Keltner line currently at 436.17 before it even begins to change its rally mode, though, with the RLX currently at 438.41.

Jonathan Levinson : 9/30/2005 11:01:26 AM

Session low for ten year notes here at 109 7/8, TNX now up 4.7 bps at 4.336%. IRX is up 1.5 bps at 3.473%, slight steepening there.

Jonathan Levinson : 9/30/2005 10:58:07 AM

I lost about 10 minutes' worth of ticks, but the 30 min channel appears to be up to 39.45. This is a trending move for the 30 min cycle, extremely rare, no doubt caused by the combined 60 min and daily cycle upphases. Link

Jonathan Levinson : 9/30/2005 10:53:48 AM

Trying to recover from a system crash and attempting to restore lost stock data.

Linda Piazza : 9/30/2005 10:52:42 AM

By the way, I no longer think that potential H&S on the OEX's five-minute chart is valid. The OEX still coils, although it's attempting to move above a descending trendline off yesterday's high as I type.

Linda Piazza : 9/30/2005 10:51:37 AM

I see next strong advdec resistance in the +1550 to +1650 zone, although there is other resistance before that's touched. If the OEX continues to consolidate the whole time the advdec line climbs into that next resistance and then shows some signs that the resistance is holding, I would not consider that bullish. That hasn't happened yet, and advdec line moves can precede OEX moves. Advdec line at +844 (QCharts value) as I type.

Jeff Bailey : 9/30/2005 10:49:40 AM

I'm have some significant computer memory problems this morning and can't keep a session going with my charting/data feeds. I need to run a virus scan and spyware scan. I shall return within 30 minutes.

Linda Piazza : 9/30/2005 10:47:16 AM

SOX still charging higher--nearly parabolic now--toward its new 479.12 Keltner target on the 30-minute chart. Don't count on this target being met, but do use it to take partial profits in short-term long positions if it's hit. Keep ratcheting up the stops as the SOX climbs as it's beginning to be in nosebleed territory. Keltner breakouts can perform well, but they require profit-protecting measures as reversals can be quick, too, as they're such mo-mo plays. The SOX needs a 15-minute close below the line currently at 471.43 or preferably below the one at 469.44 to even begin to change the rally mode. It's at 475.97 as I type.

Linda Piazza : 9/30/2005 10:43:21 AM

Advdec line still climbing, not yet at strong resistance that I can see. Potential for a higher climb, either bringing the OEX up with it or at least propping it up at or near its current level. Sometimes, often, a move higher in the advdec line precedes a move in the indices, but if the OEX continues to consolidate sideways all the time the advdec line climbs into strong resistance, I wouldn't consider that bullish. So, the jury is still out, although I see the OEX trying to climb again as I type this. OEX next resistance at 566.84-567.27 on 15-minute closes.

Linda Piazza : 9/30/2005 10:37:05 AM

The TRAN has drawn close to the current 3738.70 upside target and resistance on its 240-minute chart. This resistance can be important for the TRAN. The TRAN would need to drop beneath 3704.57 on 15-minute closes or preferably below 3682.19 on 15-minute closes to even begin to change its rally mode, though. TRAN dropping now, and is at 3726.38 as I type.

Linda Piazza : 9/30/2005 10:34:36 AM

RLX is still trying to climb, currently rising toward 437.87 resistance on the 15-minute chart, at 437.29 as I type. As long as the RLX is still climbing, the OEX isn't likely going to drop far. So far, the RLX's resisance has been holding, but the resistance still turns higher and so the RLX can climb higher along its underside.

Linda Piazza : 9/30/2005 10:32:34 AM

Advdec line still climbing. No confirmation of weakness there yet. It hasn't climbed far enough to be in a level of strong resistance, either, but is just kind suspended in space.

Jeff Bailey : 9/30/2005 10:31:23 AM

Delphi (DPH) $3.08 +22.22% ... check your account alert! ... I had a "hard stop" on my remaining 450 shares at $2.96 and did get filled, but it was a fast market higher. Check your accounts and make sure you did.

Linda Piazza : 9/30/2005 10:31:12 AM

Potential H&S now on the OEX's five-minute chart, head at yesterday's high, shoulders at about 566.70 and neckline perhaps at this morning's low, although the 38.2% retracement of the decline off the 9/09 high is just below, at about 565.23. In fact, the OEX will encounter much possible support after confirming that H&S, if it is confirmed, so the reaching of its downside target could be difficult. Still, it's useful for us to watch this formation, as it shows first that bears are in enough control to set up this formation. Now we need to see if they have control long enough to confirm it and then meet the downside target. That tells us something about bullish and bearish strength.

Linda Piazza : 9/30/2005 10:27:50 AM

SOX closed the last 15-minute period at the Keltner resistance then at 472.41 on 15-minute closes, closing that period at 472.43 after punching up through that resistance. It's punching up through it this period, too, with that resistance now at 472.60 and with the SOX currently at 473.33 and perhaps likely to create a minimal breakout signal on this 15-minute close. If so, the next target would be 478.90, according to the 30-minute chart, although breakout plays are sometimes iffy. The SOX would need to close a 15-minute period below Keltner support currently at 478.52 to even begin to change its tenor.

Jeff Bailey : 9/30/2005 10:27:36 AM

Bearish swing trade stop alert .... for Delphi (DPH) $2.96

Jeff Bailey : 9/30/2005 10:26:34 AM

General Motors (GM) $30.53 -0.52% ....

Jeff Bailey : 9/30/2005 10:26:09 AM

Delphi Trust I 8.28% (DPH-A) $9.50 +6.74% ...

Jonathan Levinson : 9/30/2005 10:25:35 AM

QQQQ chart at this Link . I'll be looking for a terminal spike to the 39.40ish area to reload that short. The intraday cycles should be maxxed out by that level.

Jeff Bailey : 9/30/2005 10:24:29 AM

Delphi (DPH) $2.80 +11.11% ... stock strong this morning with company continuing to warn about cost structure.

I do think we may be seeing some end of quarter action. Perhaps some bear funds locking in some gains? Not certain.

Linda Piazza : 9/30/2005 10:23:54 AM

I still see no clear direction today. Since I came into the day thinking that there was about equal opportunity for an OEX move up with a candle sitting on the 72-ema, a move down with a candle hanging from that average, or a doji crossing that average, I'm not surprised yet. If I see anything set up, I'll let you know, but for now, be careful with trades.

Jonathan Levinson : 9/30/2005 10:23:22 AM

QQQQ - Exit Point Alert -

Out QQQQ at 39.30. They gunning for our stop.

Linda Piazza : 9/30/2005 10:22:19 AM

Jeff's 10:19:38 post reminded me of something that I'm sure many of you heard for yourselves on CNBC this morning. Because many customers in Louisiana, Texas and Mississippi have been without utilities, demand has been lesser, but when those states are fully online again, demand will increase again and energy-related costs could spike again. As someone said yesterday--I think that was Jeff, too--a lot of people are coming out of the woodwork lately, claiming to be energy experts. I'm not one of those. I'm just repeating an idea expressed on television, that some might not have considered.

Jeff Bailey : 9/30/2005 10:19:37 AM

US Oil Demand Hit Record in August ... DJ - Preliminary data from the Energy Information Administration (EIA) show U.S. daily oil demand in August averages a record 21.375 million barrels, up 1.6% from a year earlier.

Linda Piazza : 9/30/2005 10:18:24 AM

The advdec line didn't fall much below strongest support and now doesn't appear to be able to climb much above it, either. No strong directional clues yet. After rising to test next resistance, the OEX again sets up a potential retest of the next support, at 564.78, or possibly the 563.42-564.02 support. There are other forms of support in this area, including the 38.2% retracement of the drop off the 9/09 high, at about 565.24, and the 30-minute 100/130-ema's, at 564.06 and 564.52, so any of those could provide support. Right now, the OEX appears to be rattling around between that 38.2% retracement and the 50% retracement at about 567.14, and it's been doing that since late yesterday when it began testing the 50% level.

Jeff Bailey : 9/30/2005 10:13:54 AM

10:00 Internals found at this Link

Jonathan Levinson : 9/30/2005 10:13:31 AM

QQQQ's 30 min and short cycles should be maxxed out here, and the intraday correction discussed at the close yesterday is due to commence any time on that basis. Volume breadth is strong at +1.81:1 on the Nasdaq, weaker on the NYSE, and the 60 min cycle upphase could still have more gas in the tank, but my guess is for downside from these levels first. Link

Linda Piazza : 9/30/2005 10:11:41 AM

I'm not getting a strong read on the markets, either direction. I just don't yet see evidence that gives more credence for one direction or another. I'll let you know as soon as I think I do, but for now, be careful with drawing strong opinions. If you're drawn to enter the markets despite some confusion, consider limiting position size. Don't let a position get away from you.

Linda Piazza : 9/30/2005 10:08:52 AM

Advdec line again bouncing from support. Next resistance in the +350 to +900 zone. It's at +268 (QCharts) as I type.

Jonathan Levinson : 9/30/2005 10:08:28 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.31, stop 39.35

Linda Piazza : 9/30/2005 10:07:26 AM

TRAN still climbing, still in breakout mode on my 15- and 30-minute charts, with a 3737.31 upside target now on the many-times-relevant 240-minute chart. TRAN at 3725.14 as I type.

Jonathan Levinson : 9/30/2005 10:05:39 AM

QQQQ should be at the 30 min cycle high here, but the 60 min cycle still has room to run before becoming overbought. Link

Linda Piazza : 9/30/2005 10:05:18 AM

Advdec line still testing potential support, still no guidelines as to whether that support fails or produces a bounce.

Linda Piazza : 9/30/2005 10:04:20 AM

SOX hitting Keltner resistance now at 472.28 on 15-minute closes, with this registering an extreme upward move on this chart. The SOX would have to begin producing 15-minute closes beneath a support level now at 468 on 15-minute closes, however, to even begin to change the tenor in its trading. SOX at 472.46 as I type, but with many minutes left in this 15-minute period.

Jeff Bailey : 9/30/2005 10:03:20 AM

Sell Program Premium .... DIA $105.27, SPX 1,226.23, QQQQ $39.23

Jonathan Levinson : 9/30/2005 10:02:49 AM

Correction: the Fed added net 250M for the day. 6.5B in overnight repos were expiring.

Jeff Bailey : 9/30/2005 10:01:50 AM

10:00 Market Watch found at this Link

Linda Piazza : 9/30/2005 10:01:36 AM

The advdec line hadn't dropped deep enough to be secure in violating 30- and 60-minute support, as I mentioned earlier, and now it, too, springs up, but only back into the possible support zone, still testing it. I don't yet see anything as being decided, up or down.

Linda Piazza : 9/30/2005 10:00:11 AM

The OEX is not likely going to end that 15-minute period below that Keltner line that was at 565.90, so erases the downside target, and instead charges up toward 566.58-567.34 next resistance.

Jonathan Levinson : 9/30/2005 10:00:01 AM

Chicago PMI 60.5 vs. 52 exp.

Jeff Bailey : 9/30/2005 9:59:48 AM

Buy Program Premium .... DIA $105.42, SPX 1,227.36, QQQQ $39.25

Jonathan Levinson : 9/30/2005 9:59:01 AM

Session high for QQQQ at 39.22 here.

Jonathan Levinson : 9/30/2005 9:58:03 AM

The Fed announces a weekend repo of 6.75B, resulting in a 500M net add for the day and driving the stopout rate on Treasury collateral to an amazing 3.4, 35 bps below the 3.75 target rate. The Fed may be talking tough, but it appears to be acting very easy.

Linda Piazza : 9/30/2005 9:57:08 AM

Still five minutes to go in the OEX's current fifteen-minute period, but if it closes this period below resistance currently at 565.90, it still looks vulnerable to 564.65 or maybe even 563.33-563.83. So, in other words, a test of the important 30-minute 100/130-ema's could be in the works if the OEX maintains those 15-minute closes beneath 565.90.

Linda Piazza : 9/30/2005 9:54:27 AM

Advdec sinking below first support, although perhaps not quite deep enough to say it's violated it on 30- and 60-minute charts as well as on the 15-minute one. Next potential support at about -950 to -1050, with the advdec line currently at -434, QCharts value.

Jonathan Levinson : 9/30/2005 9:53:14 AM

Chicago PMI due next, est. 52.

Jonathan Levinson : 9/30/2005 9:52:15 AM

Interquote reports the total put to call ratio at .54 currently (not equity-only), a very low current reading verging on extreme.

Linda Piazza : 9/30/2005 9:52:13 AM

Advdec line sinking to test support again, near about -350. At -344 as I type, QCharts value (advdec).

Linda Piazza : 9/30/2005 9:51:38 AM

SOX punching above the 50-sma and the 50% retracement of the decline off the September high into the Septmber low. If this holds, could help support markets or at least sentiment.

Linda Piazza : 9/30/2005 9:49:18 AM

Still watching for the reaction to Michigan Sentiment. The advdec line still clings to potential support, so continued downside is not yet clear. On a Keltner basis, the OEX looks vulnerable to 564.75 or maybe even 563.33-563.83 as long as it continues 15-minute closes beneath a Keltner line currently at 565.90.

Jonathan Levinson : 9/30/2005 9:48:27 AM

Headlines:

UMICH SEPT. SENTIMENT UNCHANGED AT 76.9: REPORT

UMICH SEPT. SENTIMENT BELOW 89.1 IN AUGUST

Jonathan Levinson : 9/30/2005 9:47:47 AM

Michigan sentiment 76.9 vs. 78 exp.

Jonathan Levinson : 9/30/2005 9:47:24 AM

Unsurprisingly, the 9:45 University of Michigan sentiment data is not yet on the wire, but price is jerking in both directions.

Linda Piazza : 9/30/2005 9:45:01 AM

Advdec line still holding to support, giving bounce potential and rollover potential about equal weight into the 9:45 number.

Linda Piazza : 9/30/2005 9:43:38 AM

The OEX's 30-minute 100/130-ema's, currently at 564.01 and 564.49 were important over the last couple of weeks in establishing resistance, and then, yesterday, in establishing that a breakout had occurred. On any normal day, you might expect them to provide support on any retest today, and that's still the most likely event if they're retested, but if we should get a severe market reaction that punches right through them, then that questions yesterday's whole breakout scenario. For now, watch for potentially strong support at that level. If you happen to be in a bearish trade from yesterday's test of the 200-sma, perhaps consider taking partial profit at those averages unless the OEX punches straight down through them.

Jonathan Levinson : 9/30/2005 9:40:37 AM

QQQQ 100-tick update at this Link with price weak below its premarket highs.

Linda Piazza : 9/30/2005 9:40:02 AM

Advdec line still holding to support, into the 9:45 release.

Jonathan Levinson : 9/30/2005 9:38:22 AM

Don't forget Michigan Sentiment, est. 78, around 9:45 AM.

Linda Piazza : 9/30/2005 9:35:02 AM

The OEX tests Keltner support at 566.02 on 15-minute closes. It would have to drop below that line on a 15-minute close before the trend even began to change.

For new readers, a reminder: Keltner lines are dynamic, and change as the markets change. Therefore a line that might be at 566.02 currently might be a little higher or lower 30 minutes from now.

Linda Piazza : 9/30/2005 9:33:29 AM

The OEX opens and heads below the 200-sma. I thought we were as likely to see this kind of open as an open that climbs, but remember the 9:45 release. Don't get married to a specific idea for the markets. The advdec line is testing support near about -350, with that being potentially strong support, so I'm watching that closely for either a bounce or a failure through that support.

Jonathan Levinson : 9/30/2005 9:32:09 AM

Volume breadth is -1.3:1 on the NYSE, -1.38:1 on the Nasdaq.

Jeff Bailey : 9/30/2005 9:20:34 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+6.58 and set for selling at $+3.98.

Jane Fox : 9/30/2005 8:50:31 AM

Dateline WSJ There was an unexpected development on a tangential issue in Washington: New York Times reporter Judith Miller was released from jail late yesterday and is scheduled to testify this morning before a federal grand jury investigating whether officials illegally leaked the identity of a CIA operative while defending Bush administration policy on Iraq. Ms. Miller, 57 years old, has been jailed for contempt of court since July 6 for refusing to testify about conversations with news sources, the Washington Post notes. Until now, she had refused to testify about information she received from confidential sources. But she said she changed her mind after I. Lewis "Scooter" Libby, chief of staff for Vice President Cheney, assured her in a telephone call last week that a waiver he gave prosecutors authorizing them to question reporters about their conversations with him was not coerced. The Times says Ms. Miller rejected previous offers from Mr. Libby, fearing they had been coerced, but that he had now made clear that he genuinely wanted her to testify.

Jonathan Levinson : 9/30/2005 8:48:54 AM

Personal income and personal spending missed the consensus targets, and the market's strength here is presumably based on the assumption that the Fed will have more room to liquify. However, with explosive rallies still on the tape in all commodities, housing, etc., I'm skeptical of that assumption- even the Fed's narrow "core" inflation measures will eventually have to reflect the exponential price increases in most primary goods, and the Fed is no doubt aware of it. In the meantime, however, equities are holding up and bonds are only slightly weaker.

Jane Fox : 9/30/2005 8:47:19 AM

Dateline WSJ The supply-and-demand quandary over natural gas may not make as many headlines as crude oil and gasoline, but it's one that could hit Americans a lot closer to home.

Prices for natural gas set a record yesterday, pointing to sharply higher heating bills for a majority of Americans this winter and soaring costs for makers of plastics and chemicals, which use natural gas as their main fuel and a raw material, the New York Times reports. Since the beginning of the summer, the price of natural gas has doubled. But unlike crude oil or gasoline, whose recent price increases have been widely felt by most Americans, the price surge in natural gas -- the most popular source for home heating across the colder regions of the country -- has so far gone largely unnoticed, the Times says. That is about to change as colder weather sets in. After the hot summer pushed up natural-gas consumption by electricity companies, the prospect of a harsher winter than last year's on top of two devastating punches to the nation's energy hub on the Gulf Coast has led to a significant tightening of natural-gas supplies.

Jonathan Levinson : 9/30/2005 8:43:36 AM

Session low for crude oil here at 66.325, -.475, natgas -.19 at 14.005.

Jonathan Levinson : 9/30/2005 8:40:47 AM

QQQQ is up to 39.18, -.02, while ten year notes are lightly negative, TNX +.5 bps at 4.294%. IRX is down .3 bps at 3.455%.

Linda Piazza : 9/30/2005 8:38:39 AM

The OEX ended the day yesterday just above its 200-sma. It first broke to the upside out of the symmetrical triangle at the bottom of its decline, confirming that upside break by a 30-minute close above the 30-minute 100/130-ema's, and then it never looked back. Worried about a fake-out move to the upside to match the one to the downside, and aware that the OEX was just rising through a possible bear-flag formation on the 60-minute chart, I watched the advdec line all afternoon, and there was never a significant change in tenor. I had wanted to suggest a bearish play on a test of the 30-minute 100-ema, but there was never any corroboration that it was a good idea, and that's because it wasn't! At the time the test was going on, I felt apologetic toward readers that I couldn't suggest that play, but, in the end, I was grateful that the advdec line's actions had made that suggestion impossible.

What about now, though? The OEX ended the day at 30-minute Keltner resistance. The advdec line showed the move was extended to the upside, but that starts over each day, as it's a daytrader's tool more than a swing-trader's or position trader's. Some indices' action show that yesterday's gains weren't such a big deal, but rather a climb through a possible bear flag or up to retest broken support, but the TRAN's action belies that supposition, so there's mixed evidence out there. Even the TRAN's action is a bit suspect. Is it suggesting an economic rebound in the future as rebuilding occurs after Katrina and Rita? Or was the TRAN, frequently subject to big swings and sometimes overrunning boundaries, just seeing an extended short squeeze?

Let's look at some recent historical actions for the OEX. When the OEX broke to the upside out of the 6/24-7/07 and 8/24-8/31 consolidation periods, it barely looked back. After the late-August breakout, it printed a long-legged doji and then a red candle on 9/01 and 9/02 and then charged into the September high. It didn't even pause that long after the July breakout. So, the possibility exists that the OEX will keep climbing. However, the OEX has a peculiar pattern with respect to its 72-ema. Link It's not apparent from this chart, but the 200-sma and 72-ema are currently closely aligned. That makes me wonder about the possibility that the OEX will again go through a period of opens, closes, highs or lows along this -ema, which could just as easily mean that it will establish that pattern by consolidating in 4-6 point ranges below the 72-ema as above it. Therefore, I wouldn't be surprised to see the OEX end the day today below or at that 72-ema, perhaps after having opened near it. Either possibility seems about as likely as ending the day with a candle sitting above that -ema.

So, I'm looking at the possibility that today that we'll see a candle body either sitting on the 72-ema or hanging below it or even pinned to it in the case of a doji, and that pretty well encompasses any kind of day, doesn't it? That's not a helpful conclusion, but all possibilities look about equally likely to me at this point. More uncertainty is attached to the day since we have economic numbers being released prior to and shortly after the open, with those numbers being potentially market moving. As yesterday closed, I didn't see any corroboration of which is most likely. This is not a failure to be able to make a decision. Rather, it's a decision that there's a lot of uncertainty attached to the day's possible trading pattern and that all traders need to exercise extreme caution. I, for one, would need to see all the ducks in a row before I participated in or suggested a new play.

However, if the OEX climbs above yesterday's high, it might be likely that it will head toward 569, the location of the 61.8% retracement of the rally and also near a Keltner target, or even toward 570.58, the site of the descending trendline off the 9/09 high. Exercise extreme caution, however, if this action happens early, before the 9:45 numbers, and be prepared for a possible quick reversal. If the OEX instead opens at or below the 200-ema and then drops below a Keltner line currently at 565.98 on 15-minute closes, it might be possible that it will instead decline toward the 30-minute 100/130-ema's again and retest them, but exercise that same caution if this sets up ahead of the 9:45 numbers. I'm just going to have to see what sets up this morning.

Jonathan Levinson : 9/30/2005 8:31:26 AM

Headlines:

U.S. AUG. CONSUMER SPENDING DOWN 0.5% VS. DOWN 0.2% EXPECTED

U.S. AUG. PERSONAL INCOME DOWN 0.1% VS UP 0.3% EXPECTED

U.S. AUG. PERSONAL INCOME, EX-KATRINA, UP 0.2%

U.S. AUG. CORE INFLATION RATE UP 0.2%

U.S. AUG. CORE INFLATION UP 2.0% YR-ON-YR VS REV 1.9% JULY

U.S. AUG. SAVINGS RATE RISES TO -0.7% FROM -1.1% IN JULY

U.S. AUG. DISPOSABLE INCOME DOWN 0.1%

Jonathan Levinson : 9/30/2005 8:11:22 AM

Yesterday's action was very bullish. A new low for the week was followed by a break and close above the previous high for the week. It led to a buy signal on the daily chart.

On the other hand, a look at the past 3 months' daily candles on the NQ future shows that each rally has been weaker than the last, rising at diminishing slopes, and the last such rally failed at a lower high to boot. Link

That's a confirmation of the broader weekly cycle downphase. If the bulls mean business, they're going to need to break the September high on this new upphase. If they don't, then we'll have further confirmation of the weekly cycle downphase, and the expectation of a break of the most recent 1562 NQ/ 38.25 QQQQ low.

Jonathan Levinson : 9/30/2005 7:40:25 AM

Equities are mixed, ES trading 1232, NQ 1601.5, YM 10537 and QQQQ -.04 at 39.16. Gold is up 1.2 to 477.20, silver +.027 at 7.587, ten year notes +1/32 at 110 9/32, crude oil -.075 at 66.725 and natural gas is down .065 at 14.13.

We await the 8:30 release of Personal Income and Personal Spending, est. +.3% and -.2%, followed by Michigan Sentiment (hopefully at or around 9:45), and at 10AM, the Chicago PMI, est. 52.

Linda Piazza : 9/30/2005 7:05:34 AM

Good morning. After hitting a new four-year high early in the session, the Nikkei closed lower with some big-cap names seeing profit taking. Other Asian markets were mixed. European markets are mostly positive, although off their early highs. As of 6:50 EST, crude was higher by $0.09 to $66.88. Our futures were modestly lower at that time. More details about Asian and European markets follows in succeeding paragraphs.

The Nikkei displayed increased volatility Friday morning, dropping 140 points off its open, hitting a steeply rising trendline off the Tuesday low and springing back. Then it trended down most of the day, closing lower by 42.94 points or 0.32%, at 13,574.30. During that morning session, however, it had touched another four-year high. This was occurring after a strong week and ahead of Monday's important tankan quarterly survey results. Some big-cap stocks, including some carmakers, saw profit-taking.

Semi-related issues tended to be higher, with those stocks boosted by Micron Technology's better-than-expected profit and revenue expectations. Nationwide core CPI for August fell 0.1% year over year, in line with median expectations, while CPI fell 0.3% against expectations of a 0.4% decline. August's industrial production climbed a seasonally adjusted 1.2%, but one report termed this a smaller-than-expected gain, and raw-material producers and other commodity-related issues declined in early trading. Sectors gaining included electronics devices, general machinery and electronics devices. Inventories and shipments were generally flat. Spending by households headed by a salaried worker climbed 3.2% month over month, with unemployment dropping to 4.3% from the previous 4.4%. The service sector gained, but the manufacturing sector stayed steady.

Other Asian markets were mixed. The Taiwan Weighted gained 1.81%, but South Korea's Kospi dropped 0.83%. Singapore's Straits Times rose 0.25%, but Hong Kong's Hang Seng eased 0.02%. China's Shanghai Composite inched up 0.01%.

Many European markets gain but are off their highs of the day. The IMF's Keppler appeared satisfied with the Eurozone's refinance rate, suggesting that reforms were more important than a rate cut in pulling Europe out of its economic doldrums. Keppler appeared to believe that a recovery was in sight, however. The IMF recently had revised lower its 2005 and 2006 GDP forecasts for the Eurozone. In Germany, August retail sales dropped 0.8% below a revised 0.5% decline in July. This was a disappointing result, as economists expected a gain after July's downside surprise. Year over year, sales improved from July's number, but the third quarter sales are still running 0.7% behind the second quarter's. In France, the second quarter GDP was confirmed at 0.1% quarter over quarter, roughly in line with the preliminary estimates. Inventories contributed most to growth but household consumption was revised slightly higher, to -0.2% from the previous -0.3% quarter-over-quarter increase. In Italy, August PPI climbed 0.5% month over month, with the yearly increase now at 3.7%. Energy costs were the culprit increasing the PPI. As some other countries are reporting, outside of energy costs, inflation pressures are benign, but as Jonathan Levinson once said, it's too bad that we can't spend "core dollars." The increase in Italy's yearly gain, although below its peak in March, nevertheless does hint that pipeline pressures could build if energy costs increase. In the U.K., the GFK September consumer confidence index fell to a worse than expected -5 from the previous month's -4. Components declining included the economic situation for the next 12 months and personal finances for that period. The component relating to major purchases unexpectedly rose. Employment concerns and energy costs likely contributed to the disappointing result.

Semi-related stocks tended to be higher in earliest trading, as they had been in Asia. Infineon, STMicrolectronics and ASML all benefited from Micron's report. Deal-making news was also a focus. A Marketwatch.com article named Cablecom, supermarkets Tesco and Carrefour, Britain's Aegis, France's Thales, Germany's Volkswagen, Swiss bank UBS and Bermuda's Nelson Resources as companies either confirming deals or the subject of speculation about deals.

As of 6:49 EST, the FTSE 100 was clinging to the flat-line level, higher by $0.40 or 0.01%, at 5,478.60. The CAC 40 was higher by 19 points or 0.41%, at 4,597.86. The DAX was higher by 18.28 points or 0.36%, at 5,039.45.

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