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OI Technical Staff : 10/7/2005 9:59:59 PM

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Jeff Bailey : 10/7/2005 4:57:59 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/7/2005 4:48:08 PM

Closing Internals found at this Link

Jeff Bailey : 10/7/2005 4:20:49 PM

Current OPEN Positions found at this Link ... Today's Activity ... Day traded short a full position in shares of Valero Energy (VLO) at $106.82, stopped out at $107.75 ($-0.93, or -0.97%).

Weekly Trade blotter of Closed Trades found at this Link

Linda Piazza : 10/7/2005 3:59:39 PM

This is not a real convincing ramp up into the close, in my opinion. I wonder if a retest of that 550.70 (30-minute) Keltner line needs to occur on the OEX, to see if it now holds as support. It hasn't been significantly retested since the OEX spent several days finding it to be resistance. We'll have to see Monday.

Linda Piazza : 10/7/2005 3:56:21 PM

Time to decide if you're going to hold over the weekend. I think it's possible that the OEX may do its typical 4-6 point consolidation thing for another day or two, with the Keltner charts pegging the likely range from about 550.29-556.08. I don't have strong evidence yet that could happen other than the OEX's tendency to move big and then spend a few days in a 4-6 point range before deciding on next direction. The OEX is trying to bottom, but I consider the BIX's example, with the BIX leading the OEX by a few steps as it dropped through the broadening formation similar to the OEX's. I'll look at charts more this weekend, but just give some consideration to this possibility.

Linda Piazza : 10/7/2005 3:52:11 PM

First five-minute close above the descending trendline off the day's high. Still testing the five-minute 13-ema, though, as well as Keltner resistance currently up to 553.47 on 15-minute closes.

Linda Piazza : 10/7/2005 3:49:50 PM

And a bigger push up toward the five-minute 130-ema, past the 100-ema. Hasn't been a five-minute close above either, yet, though, much less a 15-minute close above 553.18-553.40 next Keltner resistance. OEX trying, though, at 552.96 as I type.

Linda Piazza : 10/7/2005 3:47:58 PM

OEX just above--like a couple of cents above. There was a gap up to this trendline, at the five-minute 100-ema now. Let's see if it holds and the OEX can get past those averages and then the next Keltner resistance. I'm not trading this. Just watching.

Linda Piazza : 10/7/2005 3:44:32 PM

I've turned to a 1-minute chart on the OEX, not for trading information as that's too tight for me for options trading, but just so I feel as if the thing is moving.

Linda Piazza : 10/7/2005 3:42:48 PM

The advdec line isn't moving to corroborate this tentative downturn from the OEX's five-minute 100/130-ema's . . . and the OEX bounced a little as I typed. Until the advdec line does move strongly, this is just more chop. The advdec lie is at strong resistance and hesitating there, but not turning down.

Linda Piazza : 10/7/2005 3:35:08 PM

Advdec line and OEX both jammed up under resistance. A breakout could be important--but watch for a potential quick reversal, a fake-out move. Such a breakout will see the OEX hit next resistance, at 553.35 on a 15-minute close, right after the breakout. A downturn finds first support soon, too, with strongest support between 549.53-550.33. Depends on who is the most scared to carry over the weekend now. MOC orders coming soon.

Jeff Bailey : 10/7/2005 3:33:02 PM

Bearish day trade stop alert ... for Valero Energy (VLO) $107.75

Jeff Bailey : 10/7/2005 3:27:30 PM

Sell Program Premium ... DIA $102.95, SPX 1,194.96, QQQQ $38.33

Linda Piazza : 10/7/2005 3:27:04 PM

The OEX tests the five-minute 100/130-ema's at 552.77 and 553.15, respectively, as well as testing the descending trendline off the day's high. Sigh. The advdec line also tests first resistance that looks strong, up to about 1400, with the advdec line at 1254 as I type.

Jonathan Levinson : 10/7/2005 3:21:35 PM

I need to step away and won't be back before the close. Have a good and safe weekend.

Linda Piazza : 10/7/2005 3:20:25 PM

I think this is probably approaching the do-or-die point for the bulls for today. All day, they've been trying to push the OEX and the other markets higher. On the OEX, the battle with the five-minute 100/130-ema's has literally been going on all day, with bulls unable to keep the OEX above those averages except for a brief push above them early this morning. Bulls who entered yesterday near the close, expecting a V-shaped recovery to continue today, just aren't getting it. Not yet, anyway, and if they don't soon, they may decide to bail. I'm not betting either way, as I still see a mixture of evidence with the OEX's 15-minute Keltner chart even less clear than earlier. Keltner resistance at 553.38 on 15-minute closes.

Jonathan Levinson : 10/7/2005 3:20:17 PM

QQQQ's now locked in a daily cycle downphase, within which is a 60 min upphase, within which is a 30 min cycle downphase, within which is a short cycle upphase of sorts. Overall, a perfect recipe for chop. This noisy range should persist within 38.20-38.40, as it has since 10AM. Volume breadth for the Nasdaq is also neutral at +1.15:1. Updated 3 min QQQQ chart at this Link

Linda Piazza : 10/7/2005 3:16:28 PM

GE is hitting the daily 72-ema as I type, actually a few cents above it. See the chart linked to my 1:50:32 post. I do not closely watch GE, so I have no idea as to whether it typically overruns targets or not, but I know from that chart that it's testing resistance that has been important all summer.

Jeff Bailey : 10/7/2005 3:13:49 PM

03:00 Internals found at this Link

Jeff Bailey : 10/7/2005 3:03:07 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 10/7/2005 3:02:10 PM

WMT printing session lows -.18 at 43.75 as the data is released.

Jonathan Levinson : 10/7/2005 3:01:55 PM

Headlines:

U.S. AUG. REVOLVING CREDIT UP 3.5%

U.S. AUG. NONREVOLVING CREDIT UP 2.3%

Linda Piazza : 10/7/2005 3:01:44 PM

Resistance holding on the advdec line and on the OEX, at the five-minute 100/130-ema's. Support at 551.49 and then stronger at 549.56-550.26.

Jonathan Levinson : 10/7/2005 3:01:22 PM

Headline:

U.S. AUG. CONSUMER CREDIT UP $4.9 BLN OR 2.7%

U.S. JULY CONSUMER CREDIT REVISED TO UP $6.5BLN VS. $4.4BLN

Jonathan Levinson : 10/7/2005 2:53:53 PM

Awaiting the Consumer Credit data in 7 minutes.

Linda Piazza : 10/7/2005 2:51:08 PM

The OEX is currently testing the descending trendline off the day's high, the top of the triangle it's been forming today. It's also, of course, testing the five-minute 100/130-ema's. Absent a look at the advdec line, I'd be suggesting that those who want to scalp a long should try one if the OEX should produce a five-minute close above those averages, but I don't trade absent a look at the advdec line, and it says the advdec line is closer to resistance than to support. If I were only looking at the advdec line, I'd say that tests of this descending trendline off the day's highs could be used to scalp a point or two to the downside, but the OEX's Keltner chart tells me that could be dangerous, although perhaps not quite as dangerous as it looked about midday. Still, there's just a mixture of evidence here that should make traders cautious about any suppositions going into the last hour of trade.

Jonathan Levinson : 10/7/2005 2:47:24 PM

WASHINGTON (MarketWatch) -- House lawmakers voted 212-210 Friday to pass a bill that would make it easier to build a new oil refinery or expand existing ones. The Gasoline for America's Security Act of 2005, crafted in the wake of two devastating hurricanes that crippled the U.S. refinery sector, would speed up the permitting process for refineries. The bill would require the federal government to coordinate the permitting process; allow the president to select a handful of federal sites, including closed military bases, to host new refineries; reduce the number of specialty blended fuels that refineries produce from several dozen to six; and require an investigation into price gouging by the Federal Trade Commission.

Jonathan Levinson : 10/7/2005 2:47:05 PM

Headline:

HOUSE PASSES BILL TO ENCOURAGE BUILDING OF OIL REFINERIES

Jonathan Levinson : 10/7/2005 2:45:19 PM

Volume breadth +1.63:1 on the NYSE, +1.18:1 on the Nasdaq. QQQQ volume is not yet half of yesterday's huge 162.2M shares, currently 71.8M shares traded.

Jeff Bailey : 10/7/2005 2:44:46 PM

I don't know why DPH rocketed higher that day and stopped us out of our short. Then reversed like a rock.

So ... if anyone is still short, I would cover at these levels of $1.00.

Note that even though Delta (DAL) $0.84 -1.17% is in bankruptcy, stock still hangs around the $1.00 level.

There's more to risk in a DPH short than there is to gain at this point. (from a bear's perspective)

Jonathan Levinson : 10/7/2005 2:42:56 PM

QQQQ 30 min channel resistance is down to 38.47, 60 min channel resistance to 38.55. But the short cycle is still declining, with its channel top at 38.34. Above 38.34, that short cycle could whipsaw back up, but currently, the opposition of all these timeframes suggests more chop to come. Link

Linda Piazza : 10/7/2005 2:42:24 PM

The advdec line's resistance up to 1300-1800 looks strong, as strong as the OEX's support does, and will require a strong surge to move higher. That's going to keep me from scalping long, too.

Jeff Bailey : 10/7/2005 2:40:38 PM

Delphi (DPH) $1.12 -49.09% ... looks like the proverbial "hub cap" is coming off.

Linda Piazza : 10/7/2005 2:39:15 PM

The advdec line's appearance of more weakness is following through with more weakness. Next support band from about 250 to 750 now being tested. The OEX is looking more vulnerable to a retest of 549.66-550.28. Although that support doesn't quite look as rock-solid as it did earlier, it still looks strong enough to support the OEX on anything other than a strong surge through it. I tell you, it's taking everything I've got not to try to scalp a point or so to the downside here, but there is absolutely too much mixed chart evidence here and I'm going to stop myself, as it's possible that the chop will continue or even that after a brief dip down, the OEX will spring up again as it did yesterday. I think the potential for support is just too strong.

Linda Piazza : 10/7/2005 2:31:06 PM

The advdec line looks vulnerable to a deeper decline, perhaps deeper into that next support zone that extends down to about 250, but there could first be a retest of 1000-1250 resistance, too. Advdec line at 900 as I type. The advdec line continues to look vulnerable to a decline at the end of the day, but the OEX continues to look pretty well armored against too deep of a decline. Mixed evidence which won't be resolved unless there's a big push one way or the other that catches fire. Today appears to be about tamping out any movement any direction, so far.

Jane Fox : 10/7/2005 2:28:20 PM

Jeff thank for the reminder. You mean to say the bond market is not closed in observance of Canadian Thanksgiving?

Jeff Bailey : 10/7/2005 2:25:23 PM

Reminder alert ... The bond markets will be closed on Monday in observance of Columbus Day.

Then, according to the Stock Trader's Almanac, Tuesday (October 11) is "historically the worst trading day of the year."

Jonathan Levinson : 10/7/2005 2:18:28 PM

Volume breadth drops to +1.38:1 for the NYSE, -1.17:1 for the Nasdaq. The intraday cycles are still opposed, but should get in gear to the downside if bears can break the 38.20 confluence, whcih conveniently lines up with the session low at 38.18. Link

Linda Piazza : 10/7/2005 2:17:55 PM

I'm still thinking chop. Those with good scalping skills and the ability to buy deep ITM options with big deltas can probably make a little money scalping moves, but other than that, this is for the futures traders and not for the options side.

Jeff Bailey : 10/7/2005 2:17:13 PM

02:00 Internals found at this Link

Linda Piazza : 10/7/2005 2:10:31 PM

Next advdec line support at about 200-700, with the advdec line at 886 as I type. OEX support at 551.50, just touched, and then at 549.67-550.23. I'm still thinking chop might be continuing, so bears consider now how you'll handle this dip--use it to exit the position or hold on?

Jonathan Levinson : 10/7/2005 2:07:38 PM

Session low for MSFT, session high for GE as QQQQ's short cycle ticks down: Link

Jeff Bailey : 10/7/2005 2:07:11 PM

02:00 Market Watch found at this Link

Linda Piazza : 10/7/2005 2:06:32 PM

Thought I'd posted this already, but it's still sitting here, with more evidence of that softening now: There's the slightest hint of support softening on the advdec line. Just a hint. It is, however, still just essentially testing the support that's been propping it up all day, at just above 1100 currently, with the advdec line at 1146 currently.

Jonathan Levinson : 10/7/2005 1:59:23 PM

QQQQ is testing lower short cycle channel support here at 38.29: Link

Jonathan Levinson : 10/7/2005 1:58:07 PM

Volume breadth +1.67:1 on the NYSE, +1.22:1 on the Nasdaq.

Linda Piazza : 10/7/2005 1:58:07 PM

Advdec line dropping to test support all day, at about 1075-1100 now, with the advdec line now at 1142. Needs to plunge through this to get past that support, but for now, it's still just testing. The OEX is meanwhile still testing resistance, at those five-minute 100/130-ema's, at 552.96-553.42. If you're in a bearish play, consider what you'll do if that 551-ish zone is hit again. Support is now at 551.72 and then stronger at 549.76-550.28.

Jeff Bailey : 10/7/2005 1:54:30 PM

Valero (VLO) $106.77 +3.61% ... updated day trader's chart at this Link ... need further weakness back below the $106.05 level. Might be building a little intra-day h/s top and "right shoulder" on this strength.

Linda Piazza : 10/7/2005 1:51:28 PM

That's still more than an hour away, Jonathan. (Jonathan's 1:49:56 post.) We may all be asleep by then.

Linda Piazza : 10/7/2005 1:50:31 PM

Sorry, I originally posted this on the Futures side.

GE has now moved above its opening high, I see. It's at 33.99 as I type, headed toward next Keltner resistance at 34 on 60-minute closes. I see strongest daily resistance at 33.19 (72-ema), so it should be approaching strong resistance from two levels. I'm watching GE because of its influence on the OEX. Here's a chart showing the recent action with regard to the 72-ema. Link

Jonathan Levinson : 10/7/2005 1:49:55 PM

Don't forget Consumer Credit at 3PM, with estimates running from + $5B to +$10B. With recent headlines of record highs in new bankruptcy filings ahead of the legislative amendments due this month, there could be room for a downside surprise in that 3PM report, but we'll find out soon enough.

Jonathan Levinson : 10/7/2005 1:48:25 PM

QQQQ's 30 min cycle upphase has stalled below overbought territory, while the 60 min cycle upphase continues. The range here is so flat that the keltner bands are narrowing the way bollingers normally do- the 30 min cycle range is now just 30 cents wide from 38.19-38.50: Link

Jonathan Levinson : 10/7/2005 1:37:22 PM

Session high for ten year notes here at 109 13/16, TNX at 4.361%, and session low for crude oil, -.175 at 61.175.

Linda Piazza : 10/7/2005 1:35:38 PM

That old Rawhide song is playing in my head again, that "rolling, rolling, rolling" one, but it's reformulated into "coiling, coiling, coiling." I'm glad I had a preconceived idea that we'd get some chop and suggested that bears exit on the test of 551-552, because bears were spared these interminable tests of resistance. There's really no predicted outcome from the tools I use. The advdec line would have to drop beneath 1050 and maybe even below 900-950 before there was any change in its choppy rise higher. The OEX would have to climb above and stay above those five-minute 100/130-ema's before there was any change in its choppy trading beneath those averages.

Linda Piazza : 10/7/2005 1:25:45 PM

Next advdec resistance at 1500-1800, with the advdec line at 1300 and rising. The OEX still tests its five-minute 100/130-ema's and is likely to go on doing so or perhaps even move above them as long as the advdec line rises. The OEX basically still produces fifteen-minute candles that form along a Keltner line currently at 552.74, but has 15-minute resistance from 553.58-553.80 and nearest support now at 551.67.

We're getting closer to a typical stop-running time of day, and it may take a stop-running move to get anything at all started. I have no predictions at this point as to the direction of any stop run--although my best guess would be up--or the outcome of that attempt.

Jonathan Levinson : 10/7/2005 1:22:30 PM

QQQQ updated at this Link with price holding within its 10 cent short cycle band.

Jeff Bailey : 10/7/2005 1:20:07 PM

01:00 Internals found at this Link

Jeff Bailey : 10/7/2005 1:10:51 PM

01:00 Market Watch found at this Link

Jeff Bailey : 10/7/2005 1:07:04 PM

Bearish day trade adjustment alert ... for Valero (VLO) $107.32 ... Stop is $107.75, and have to raise bearish target to $105.05 from $104.25.

Jeff Bailey : 10/7/2005 1:04:44 PM

GG $19.97 +2.83% ... strong move with DAILY R2 above at $20.17

Jeff Bailey : 10/7/2005 1:03:53 PM

VLO $107.49 +4.31% ... stop will now be FIRM at $107.75.

Session high has been $107.70

Jeff Bailey : 10/7/2005 1:01:51 PM

Level II shows some sellers at DAILY R2, give them a chance.

Jeff Bailey : 10/7/2005 1:01:13 PM

Bearish day trade stop adjustment alert ... edge a stop up to $107.75 on VLO.

Jonathan Levinson : 10/7/2005 1:00:47 PM

The "700-story derivatives tower"... the scary part is the huge concentration of counterparty risk in the hands of few players. I've only heard anecdotal estimates (ie guesses) to the effect that a small number of banks are on the hook for huge percentages of that risk. With contractual obligations linking the various players, a problem with one can transmit up or down the contractual chain. Puplava mentioned the Lactancia blowout as an example- you never know who's holding who's debt.

Linda Piazza : 10/7/2005 1:00:40 PM

Here's the current OEX Keltner picture: the OEX is printing 15-minute candles strung along a line currently at 552.77 on 15-minute closes,with the OEX currently at 552.52. Nearest resistance at 553.67-553.98 continues to look stronger than nearest support at 551.52, suggesting that this support could be retested or at least approached, but the support at 549.87-550.17 looks so strong that it may be propping up the OEX from way down there. So, a continued testing of resistance isn't ruled out, a retest of 551.50 looks at least possible if not probable, but it may take a strong move one direction or the other to actually break the OEX out of this impasse.

Jeff Bailey : 10/7/2005 1:00:01 PM

Volume light on VLO, and I need a long liquidator at that DAILY R2

Jeff Bailey : 10/7/2005 12:58:35 PM

Valero (VLO) $107.40 +4.22% ... session high here.

Jonathan Levinson : 10/7/2005 12:55:42 PM

Session high for Dec. gold here at 479, +4 for the day.

Jonathan Levinson : 10/7/2005 12:53:18 PM

Crude oil -.375 at 61.725 here, natural gas -.015 at 13.36. Ten year notes are up 1/16 here, with TNX down .3 bps at 4.363%, while IRX holds a 2.1 bp gain at 3.533%.

Linda Piazza : 10/7/2005 12:49:44 PM

The advdec line still coils. It wasn't until about the 1:50 candle yesterday that the advdec line broke out of its coil. We could have some more wait ahead of us if the pattern repeats. I'm not expecting all of the pattern to repeat--I wouldn't expect as deep a decline as yesterday, for example. In fact, I don't have a strong feeling about whether it will repeat at all or whether the breakout this time will be to the upside. By this time yesterday, the advdec line was showing more weakness by some measures, finding resistance at a line that now provides tentative support, for example. That confusion in signals is why I'm not recommending any new entries right now.

Jonathan Levinson : 10/7/2005 12:44:57 PM

Volume breadth is back to positive, running +1.93:1 on the NYSE, +1.17 on the Nasdaq.

Jeff Bailey : 10/7/2005 12:40:25 PM

Valero Energy (VLO) $106.72 +3.57% ... updated day trader's chart at this Link ... see notes.

Jonathan Levinson : 10/7/2005 12:40:07 PM

Zooming out to a 5-day view, this morning's chop isn't much different from yesterday's, though certainly stronger. Nonetheless, unless the 30/60 min cycles pick up some traction from here, my guess is that the action to follow will be similar as the daily/weekly cycle downphases push back. Link

Linda Piazza : 10/7/2005 12:38:53 PM

No change. Resistance holds on the advdec line and the OEX. Support holds on the advdec line and tentatively does on the OEX. Chop, chop.

Linda Piazza : 10/7/2005 12:32:10 PM

Neither the OEX nor the advdec line has really lost support, although the OEX has violated the rising trendline off the last little bear flag. Neither can break above the resistance they're testing, either. If the OEX declines, it's got first support at 551.53 but stronger support at 549.93-550.18, and that support still looks strong. The advdec line has to drop below 900 at least, and maybe lower, before it's really lost support, however, and it's at 1064 as I type.

Linda Piazza : 10/7/2005 12:24:55 PM

So far, the OEX's five-minute 100/130-ema's hold as resistance and the advdec line's strongest resistance still holds, but so does its strongest support, down to about 900, with the advdec now at 1041. There's no resolution to this chop yet.

Jeff Bailey : 10/7/2005 12:24:31 PM

12:00 Internals found at this Link

Jeff Bailey : 10/7/2005 12:21:41 PM

Sell Program Premium ... DIA $103.02, SPX 1194.60, QQQQ $38.34

Jonathan Levinson : 10/7/2005 12:19:57 PM

RIMM appears to still be halted at 64.50, -2.47 or 3.69%. I've just received an emailed press release to the effect that the company's lost its application for leave to appeal its patent infringement case.

SAN FRANCISCO (MarketWatch) -- Shares of Research in Motion (RIMM: news, chart, profile) were halted in late morning trading Friday. A U.S. appeals court refused a request by the maker of the Blackberry handheld device to reconsider an earlier ruling that upheld a decision that it infringed on a number of claims held by U.S. patent holding company, NTP Inc., according to a notice on the court's Web site. Shares were halted at 63.17, down 5.7%.

Jonathan Levinson : 10/7/2005 12:13:27 PM

Volume breadth +2.04:1 on the NYSE, +1.27:1 on the Nasdaq.

Jonathan Levinson : 10/7/2005 12:08:08 PM

QQQQ's 30 min cycle upphase appears about 2/3 complete, judging from the oscillators, while the 60 min is only now approaching its midpoint. Traction is respectable off yesterday's low but abysmal since the cash open, and it looks corrective so far. The next downphases should do considerably more downside damage if the bulls can't do better on this intraday bounce: Link

Linda Piazza : 10/7/2005 12:07:55 PM

Advdec line approaching next resistance, from 1500-1750, with the value now at 1255.

Jeff Bailey : 10/7/2005 12:07:34 PM

12:00 Market Watch found at this Link

Linda Piazza : 10/7/2005 12:05:42 PM

The OEX is still possibly setting up that inverse H&S, though, descending neckline at about 554.50 currently, if I've got it drawn correctly. I wouldn't count that formation as being confirmed until there's a new HOD, though, and then there's the 555.38 level that's the 38.2% retracement of this week's steep decline. I would expect that or the 50% level to be next resistance above the neckline, with the 50% level at 557.96.

Jeff Bailey : 10/7/2005 12:04:30 PM

Valero (VLO) $107.07 +3.91% ... day trader's chart at this Link ... Took my "dynamic" blue retracement, up to today's DAILY R1.

Linda Piazza : 10/7/2005 12:02:59 PM

Advdec line pushing a little harder through resistance and the OEX pushes a little harder against the five-minute 100/130-ema's, at 553.10 and 553.71, respectively. OEX at 553.16 as I type. This is the part of the day I expected to be choppy, the reason I suggested that bears take profit this morning between 551-552. An hour ago, the advdec line and the OEX gave completely different impressions of what was going to happen, so chop seemed expected and that's what's happened. Now, the advdec line's resistance has softened somewhat, but the OEX's may have firmed somewhat, so that there's still a mixed picture. I said earlier that I was unlikely to give further new entries unless I saw a stellar setup, and I just haven't seen one, either direction.

Jeff Bailey : 10/7/2005 12:02:22 PM

Matrix Service (MTRX) alert $9.26 +12.10% ... notable new 52-weeker at the NASDAQ.

Jeff Bailey : 10/7/2005 11:59:22 AM

VLO $107.14 +3.97% ... I've taken a "dynamic" from the session low of $103.39 and then up to today's DAILY R2 of $107.63.

Session highs are $107.24 so far.

Jeff Bailey : 10/7/2005 11:56:57 AM

Bearish day trade entry point alert for Valero Energy (VLO) $106.93 +3.77%

Jonathan Levinson : 10/7/2005 11:55:27 AM

QQQQ is breaking above the pivot, the short cycle resolving its drift to the upside. 30/60 min channel resistance line up at 38.60-.62: Link

Jonathan Levinson : 10/7/2005 11:51:14 AM

Session high for 10-year notes here, TNX down to a .4 bp gain at 4.37%.

Linda Piazza : 10/7/2005 11:49:02 AM

The OEX tests those five-minute 100/130-ema's again, while the advdec line tests 900-1150 next resistance, with 1350-1700 next resistance above that. OEX at 552.74 as I type and advdec line at 832, QCharts value.

Jeff Bailey : 10/7/2005 11:45:05 AM

Bearish day trade short alert ... for Valero Energy (VLO) $106.25 +3.11% on a trade at $106.82, stop $107.65 to begin, target $104.25.

Jonathan Levinson : 10/7/2005 11:39:25 AM

NEW YORK (Reuters) - Part of the section of New York's Pennsylvania Station where Amtrak trains operate was sealed off on Friday morning because of what authorities said was a police situation, a day after officials warned of a possible attack on the system.

Link

Jonathan Levinson : 10/7/2005 11:33:45 AM

QQQQ trades sideways here, the short cycle downphase stalling and drifting at this point. With the overnight gap up and subsequent decline, there has been no way to trade this beyond very small scalps in either direction. Traders either got in long yesterday late in the afternoon, or were short from higher levels. Link

Linda Piazza : 10/7/2005 11:30:23 AM

The OEX retests the five-minute 100/130-ema's again. Remember that there's that potential inverse H&S on the OEX's 15-minute chart, with this action today possibly being part of a right-shoulder-building exercise. If that's what it is, the neckline is at a little different place than I thought it would be, with a descending neckline, but the potential for that formation still exists.

Jonathan Levinson : 10/7/2005 11:24:38 AM

Crude oil +.40 at 61.75 here, 50 cents off the intraday high. 3-day 100 tick chart of QMX5 at this Link

Linda Piazza : 10/7/2005 11:20:14 AM

So far, the OEX's five-minute 100/130-ema's hold as resistance, but I'm not sure the OEX is through testing them yet. The advdec line's resistance holds, too, with stronger resistance above the currently being tested level, but the advdec line isn't falling away from that resistance and that needs to happen if the OEX is going to fall back any. We're into the choppy part of the day that I anticipated, still with contradictory evidence on the advdec line and the OEX. It's going to resolve in favor either of the advdec line that suggests more downside is possible or the OEX that suggests that not much more downside will be seen, but I'm not sure which direction as I haven't seen this particular setup before.

Jeff Bailey : 10/7/2005 11:19:27 AM

11:00 Internals found at this Link

Jonathan Levinson : 10/7/2005 11:18:11 AM

Volume breadth +1.61:1 on the NYSE, -1.09:1 on the Nasdaq.

Jonathan Levinson : 10/7/2005 11:10:28 AM

And Linda :)

Jonathan Levinson : 10/7/2005 11:10:13 AM

Thanks, Jane.

QQQQ bounced from 38.18 and holds just below the 38.40 pivot. The intraday cycles are fighting the daily/weekly cycles. I expect more gyration in the current range as the 30/60 min cycles work through their upphase, but my expectation is that following that, we'll see a renewed attack on today's, and likely yesterday's lows as the daily cycle downphase reasserts itself.

Linda Piazza : 10/7/2005 11:08:16 AM

Happy Thanksgiving to Jane and Jonathan from me, too. I'm putting this on the Options side, so hoping that you're seeing it, too, Jane.

Linda Piazza : 10/7/2005 11:07:11 AM

Advdec line jammed under nearest resistance as the OEX comes up to retest the five-minute 100/130-ema's at 553.16 and 553.87, respectively. Those in bearish plays want the resistance from +700-1200 to hold. The want the OEX's five-minute 100/130-ema's to hold as resistance, too.

Jeff Bailey : 10/7/2005 11:06:33 AM

11:00 market Watch found at this Link

Tab Gilles : 10/7/2005 11:04:26 AM

Weekly $NDX/$VXN/$NASI/$NAHL Link

Jonathan Levinson : 10/7/2005 10:53:57 AM

I'm running 2 minutes behind the action here. Stepping away for a few minutes to clear my head.

Linda Piazza : 10/7/2005 10:53:49 AM

The OEX's chart and the advdec's chart offer completely different outlooks right now, with the divergence greater than I've ever seen it. The advdec pattern suggests that we'll see a repeat of yesterday's pattern, with more weakness to come, perhaps after a retest of overhead resistance. The OEX's suggests that downside could be limited from here, as I've been noting. My impression coming into the day was that it could be a choppy day, a possible doji-type day. Hence, my intention to scalp only this morning and then go flat. Perhaps this divergence fits with my impression that the day could be a doji day, with the advdec line perhaps still continuing to drop, but with the OEX at some point steadying while the advdec line continues to drop. That's just conjecture.

Jeff Bailey : 10/7/2005 10:50:42 AM

Stopped on a GG short in personal account at $19.68

Jeff Bailey : 10/7/2005 10:50:10 AM

StreetTracks Gold Trust (GLD) $47.40 +0.4% ... lurching to a 52-week high

Jonathan Levinson : 10/7/2005 10:48:43 AM

38.20 support cracking here.

Linda Piazza : 10/7/2005 10:48:19 AM

OEX Keltner outlook. Currently, the OEX looks vulnerable to 550.19-550.39, where support looks stronger than it has in days. The advdec line gives contradictory impressions, following the same pattern as yesterday, but I'd be careful of assuming too much more of a drop will be seen in the OEX, below 550 on 15-minute closes.

Jonathan Levinson : 10/7/2005 10:44:31 AM

QQQQ's 30 and 60 min oscillators are still trailing the action and are in upphases, the 30 min roughly halfway done and the 60 just starting out. The daily cycle is still on a new sell signal. My bias remains with the daily and weekly cycles, and I will looking for a QQQQ short on a test of combined 30/60 min channel resistance if we get it. 38.50-.60 is strong resistance today, but so far, 38.20-.25 holds as support. Link

Linda Piazza : 10/7/2005 10:46:08 AM

The advdec line test of support continues. Resistance still holds, too, though. I may be sorry I exited, but a profit is a profit and my original plan was just to scalp a little on what I thought might be a choppy day. Those who didn't get an opportunity exit before as the 551-552 zone was tested are now getting a second chance, so make up your minds now and get an order in if you intend to exit. The advdec line just isn't giving strong clues as to whether that support will hold or not, but it looks less likely to hold than it did earlier.

Jeff Bailey : 10/7/2005 10:43:12 AM

Sell Program Premium .... DIA $103.05, SPX 1,193.77, QQQQ $38.31

Linda Piazza : 10/7/2005 10:41:28 AM

Advdec line bounces instead of coming back to retest support, so those who didn't exit earlier, with the test of 552, have not yet had another chance to do so. It looks to me as if 1360-1700 should be strong resistance on the advdec line, however, so I'm not seeing anything particularly troublesome yet in a bounce up to retest that resistance. From this vantage point, it looks as if it will fail. In fact, such a bounce might offer new bears another new entry, although I'd sure have to see some firm evidence before I suggested it.

Tab Gilles : 10/7/2005 10:38:28 AM

20+ Year Treasury Bond Fund iShare (TLT) Testing August 9th low $90.96 and closing in on 200-ma. Link

Linda Piazza : 10/7/2005 10:36:06 AM

The advdec line is pausing above next potentially strong support. If it acts anything like it did yesterday, it may coil around for a while before it decides on next direction and carries the OEX with it, in whatever direction it goes. Right now, the advdec line looks as if it's headed back to retest that support, so if you didn't exit the bearish trade before and wish you had, you perhaps will get another opportunity.

One note: If you're not using options with deltas of at least the 0.70 (or -0.70 in the case of a put) realm, you're not going to be able to profit on these little scalping moves. The option price just won't change enough with a small scalping move in the OEX.

Jonathan Levinson : 10/7/2005 10:34:54 AM

QQQQ's short cycle is on the cusp of a sell signal, with the short cycle channel bottom down to 38.20 here: Link

Jeff Bailey : 10/7/2005 10:32:40 AM

Current OPEN MM Profiles found at this Link

Jonathan Levinson : 10/7/2005 10:32:15 AM

Volume breadth +1.92:1 on the NYSE, +1.2:1 on the Nasdaq.

Jeff Bailey : 10/7/2005 10:28:00 AM

Swing trade put lower stop alert ... on the Apple Computer AAPL Nov. $55 Puts (QAA-QK) to $52.88 on the underlying stock.

Apple Computer (AAPL) $50.76 -1.81% ...

Jonathan Levinson : 10/7/2005 10:27:14 AM

Ten year note yields have pulled back below 4.4%, currently down to a 2.6 bp gain at 4.392%. IRX is down to a 1.5 bp gain at 3.527%.

Linda Piazza : 10/7/2005 10:25:27 AM

My expectation for today was for a potential doji day following yesterday's or maybe a rise. So, I wasn't surprised to see the pop and drop and was ready to jump on it. However, what's next becomes more difficult to gauge. A retest of yesterday's low is possible, but Keltner support is trying to firm up between 550-552, and so I wouldn't be surprised to see a bunch of chop from here on out. At this time, I'm not planning on any new plays, but I'll let you know if I see them. I'll let you bears who did not exit know what I'm seeing, too. Next Keltner resistance at 554.60.

Jonathan Levinson : 10/7/2005 10:22:32 AM

Actually, that potential right shoulder support can be seen as low as 38.20 without violating the symmetry of it- but with the short cycle rolling over here, the bulls had better mean business.

Linda Piazza : 10/7/2005 10:22:30 AM

In the interest of disclosure, I estimated wrong. I had an order waiting for what I thought my option would be when the OEX hit 551-552 and it got hit, so I'm flat. Others still in the play, make up your minds now as the OEX dips into that 551-552 region if you're going to exit. My intention was just to scalp a little, and I'd certainly advise partial profits as this potential right-shoulder level and Keltner support is retested. From here on out, it's your play, but I'll advise you what I see.

Jeff Bailey : 10/7/2005 10:22:20 AM

Sell Program Premium ... DIA $102.97, SPX 1,193.23, QQQQ $38.25

Jonathan Levinson : 10/7/2005 10:21:42 AM

Session lows here. Beware the potential for a reverse h&s right shoulder low here if 38.25-.28 holds as support on QQQQ: Link

Jeff Bailey : 10/7/2005 10:20:32 AM

Sell Program Premium ... DIA $103.09, SPX 1,194.79, QQQQ $38.36

Jonathan Levinson : 10/7/2005 10:19:41 AM

Volume breadth +2.38:1 on the NYSE, +1.53:1 on the Nasdaq.

Linda Piazza : 10/7/2005 10:18:48 AM

The advdec line is hesitating above the support that I'd like to see it break through. It's attempting a tepid bounce, but it's enough to bring the OEX back up to retest the five-minute 100/130-ema's. Keep those stops in place just in case, but I'm not exiting just yet. I will be exiting on a test of 551-552, however, unless the advdec line just plunges into negative values as that OEX test goes on.

Jeff Bailey : 10/7/2005 10:16:07 AM

10:00 Internals found at this Link

Yesterday's Internals found at this Link

Jonathan Levinson : 10/7/2005 10:15:31 AM

QQQQ is stuggling to hold the 72 SMA but seems to be failing, printing 3 min gavestone dojis here as the price fades lower. The 30 min channel upturn is stalling, and on our time-based (as opposed to tick based) QQQQ chart, the 60 min channel has yet to turn up: Link

Linda Piazza : 10/7/2005 10:12:43 AM

If you entered a bearish trial-balloon play with me this morning, consider taking a quick profit or at least a quick partial profit, somewhere in the 551-552 region. I'm not expected a huge pullback, although a retest of yesterday's low can't be ruled out. I'll be taking a quick profit myself unless the advdec line just plummets into negative territory.

Linda Piazza : 10/7/2005 10:11:26 AM

Good. Advdec line dropping more sharply. Potential support coming up soon, though, from about +350-650. Advdec line at +1075 as I type.

Linda Piazza : 10/7/2005 10:09:07 AM

OEX 15-minute Keltner picture. The OEX has been stalling at Keltner resistance currently at 554.24-554.42 on 15-minute closes, with vulnerability to 552.10 or so as long as those closes remain below that resistance line.

Jonathan Levinson : 10/7/2005 10:06:38 AM

QQQQ trades sideways here at the top of its premarket range as the short cycle indicators continue their rise. 72 SMA support is just below at 38.38: Link

Linda Piazza : 10/7/2005 10:06:22 AM

Okay, if you entered a bearish OEX play as the advdec line was testing resistance this morning, a trial-balloon play, you may have only a small loss now, depending on whether you, like me, trade options with deltas 0.70 and above (-0.70 in this case, since it's a put). Advdec line is still dropping but it's not dropping at the speed I'd like to see it drop, so some might elect to exit now for a small loss, if you're nervous. I'm not ready to exit personally, but make your own choice.

Linda Piazza : 10/7/2005 10:03:27 AM

Advdec line still dipping, but still not quite as fast as I'd like to see it dip. Bears would like to see it below about +570, but it's likely to find support either there or toward +250. It's at 1504 as I type.

Jeff Bailey : 10/7/2005 10:03:11 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 10/7/2005 10:01:47 AM

Headline:

U.S. JULY WHOLESALE INVENTORIES REVISED 0.1% VS. -0.1%

Jonathan Levinson : 10/7/2005 10:01:36 AM

Volume breadth down to +2.91:1 on the NYSE, +1.88:1 on the Nasdaq.

Jeff Bailey : 10/7/2005 10:01:28 AM

Sell Program Premium ... DIA $103.20, SPX 1,196.05, QQQQ $38.43

Jonathan Levinson : 10/7/2005 10:01:13 AM

Headline:

U.S. AUG. WHOLESALE INVENTORIES UP 0.5% VS. 0.3% EXPECTED

Jonathan Levinson : 10/7/2005 9:59:20 AM

Session high for the SPX has been 1199.71, the first attempt to regain 1200 support from below unsuccessful.

Linda Piazza : 10/7/2005 9:58:51 AM

Advdec line still pulling back. The OEX is still testing the five-minute 100/130-ema's, but pulled back a little from its HOD. There's nothing definitive here, with the possibility still existing that the advdec line could push up again. If you're in a bearish OEX play, you don't want that to happen, or you want only a small OEX new HOD along with it and a bearish divergence on the advdec line, too. A test of 556-ish resistance remains possible, with a break up to 557.60-558.69, the 15-minute 100/130-ema's also not ruled out yet. Set your stops appropriately for your trading style and account size as any trial-balloon bearish entry was just that. So far, the advdec line does pull back, but not as significantly as I'd have liked to have seen it do.

Jonathan Levinson : 10/7/2005 9:56:38 AM

A little lift in the market as the Fed announces a 7.5B 5-day repo, net add 500M, but sufficient to drive the stopout rate down to 3.69, 6 bps below the target rate and showing a slighter demand for the repo money than we saw yesterday.

Jonathan Levinson : 10/7/2005 9:53:25 AM

Marc, QM opens in another 10 minutes.

Jonathan Levinson : 10/7/2005 9:53:09 AM

Volume breadth +3.31:1 on the NYSE, +2.17:1 on the Nasdaq.

Linda Piazza : 10/7/2005 9:53:23 AM

Advdec line pulling back, but not significantly yet. OEX still testing the five-minute 100/130-ema's at 553.31 and 554.17, respectively. Bulls don't want to see the advdec line drop below about +400, with the advdec line now at +1962, dropping back from resistance. RSI is measuring almost the same as it did yesterday morning on the first push higher, so you can see why I'm concerned about the pop-and-drop possibility. We haven't seen the same kind of steep pullback in the advdec line that there was yesterday, but there's all kinds of evidence that suggests that pop-and-drop remains a possibility. Those who want to risk a bearish entry here could so, setting a tight, account-appropriate stop, and knowing that downside might be limited, perhaps to 551.75 or so, and perhaps to 550.40-550.80. Only aggressive traders and only a small contract size.

Jonathan Levinson : 10/7/2005 9:48:09 AM

10-year note yields are holding their gains, +4.2 bps at 4.408% here, IRX now up 2.5 bps at 3.537%.

Linda Piazza : 10/7/2005 9:47:46 AM

OEX climbing straight toward the potential neckline of a possible inverse H&S, with that neckline at about 555.56 and with the OEX now at 554.62. I mentioned this morning the possibility for a neckline test and a pullback from there, so now I'm watching for that possibility. There's still no sign yet of a pullback in the advdec line, but this begins the time period when such pullbacks sometimes occur on days when the early advance is going to stall.

Jonathan Levinson : 10/7/2005 9:45:39 AM

Awaiting the results of the Fed's repo announcement re: the 7B expiring today, as well as the 10AM release of Wholesale Inventories, est. .4%.

Jonathan Levinson : 10/7/2005 9:44:24 AM

Session high for QQQQ. Switching to a 3 min chart, we see 30 min channel resistance at 38.59 here, below declining 60 min channel resistance at 38.73. Because the tick chart is showing even the keltner channels trending, I'll stay with the 3 min chart for now: Link

Linda Piazza : 10/7/2005 9:44:07 AM

No real pullback in the advdec line, but that usually occurs in the second or third 15-minute period if we're going to see a pop-and-drop day. I don't really expect a great descent today, but I wouldn't be surprised to see some chopping around and a pullback. So far, no sign of such, but watch that advdec line and the ongoing test of the OEX's 15-minute 100/130-ema's, at 553.30 and 554.18.

Linda Piazza : 10/7/2005 9:38:43 AM

There is potential for a pop-and-drop day in the way the advdec line is acting. Bulls do not want to see a quick reversal in that advdec line over the next 20 minutes or so. Remember that one thing I wouldn't be surprised to see today is a doji-type day, which would require a pullback from the day's high.

Jonathan Levinson : 10/7/2005 9:35:23 AM

We have a heavy thunderstorm taking place here in Montreal, and my overhead lights just browned out for a second. While my computer is UPSed, our office network and modem are not, so if I disappear, that'll be why.

Linda Piazza : 10/7/2005 9:35:03 AM

The OEX still climbs and is looking the way I want it to look, but the advdec line isn't. It shows some potential to perhaps rise up toward 2400, but I have to see how it behaves here, as I'd much rather it have begun at strong support and climbed, than underneath possible strong resistance before I suggested a countertrend play. This presents the possibility of a pop-and-drop move, although it's not conclusive proof just yet. Sorry, if you're in a bullish play or have just initiated one, you're happy to see the OEX climbing, but be particularly careful of your play.

Jonathan Levinson : 10/7/2005 9:33:31 AM

QQQQ update showing pre-market channel violation: Link

Jonathan Levinson : 10/7/2005 9:33:00 AM

Volume breadth is +3.43:1 for the NYSE and +2.12:1 for the Nasdaq at the open.

Linda Piazza : 10/7/2005 9:31:44 AM

Advdec line opens differently than I'd like it to open before I suggested a countertrend long. It's jammed up against strong resistance already.

Jeff Bailey : 10/7/2005 9:28:46 AM

SPY / SPX Option Chains sorted by open interest at this Link

Jeff Bailey : 10/7/2005 9:11:20 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+6.28 and set for program selling at $+3.38.

Linda Piazza : 10/7/2005 9:09:39 AM

Yesterday my pre-market thoughts were that the OEX might bounce first, perhaps up to 556-568 and then drop, perhaps through the previous day's low and perhaps as low as 548, my downside target, although I wasn't sure that would all happen in one day. Although my targets were a little off (the OEX didn't quite get to 556 and dipped a little lower than 548), they were pretty close. Unfortunately, family circumstances pulled me out of my own bearish play, so my participation was minimal, and so was that of readers who took to heart my comment that all but those who preferred making their own decisions anyway should probably exit with me, as I would do my best to add applicable commentary, but my focus had been damaged. By the time the OEX was hitting the 550 level, down to 548, markets felt as if bounce potential might be building, and I warned readers still in bearish plays. Bounce potential did build during the last few minutes of trading. The OEX sprang up, producing a long-legged near-doji at the bottom of a deep decline for the daily candle. As I've said before, the OEX often does honor such potential reversal signals with either another doji or an actual reversal, so that possibility must be considered for today.

The OEX needs to begin closing 15-minute periods above the 15-minute 21-ema before it even begins to change its tenor. That's at 552.03 as of yesterday's 551.15 close. On a Keltner basis, it needs 30-minute closes above a Keltner line at 552.16. I will consider any bounce to be a countertrend bounce, and will watch for potential resistance at the appropriate Fib levels, particularly at the 38.2% and 50% retracements at 555.38 and 557.96, respectively, but I'm not sure whether we'll see a pullback on a Friday after a week of steep declines. That depends on how steep any bounce might be and how much it might scare shorts sitting on big profits. One potential I see is for a rise up to the 555.38-556-ish level and a pullback there into an attempt to form an inverse H&S. If the OEX moves much above 556, then I think 558 is possible in a similar effort to form an inverse H&S, but with a higher neckline.

I'm not a big fan of countertrend plays because they tend to come in two varieties--choppy movements higher or a zoom higher that then stalls--and neither is particularly amenable to technical analysis. However, if I see something setting up this morning, I'll let you know and you can decide if it fits your risk profile. The setup might have begun yesterday at the close and there might be an early zoom today that then stalls, so it's possible there won't be a new setup today. That's okay with me, and I like to be particularly careful on a Friday because Friday's just don't seem as amenable to technical analysis to me as do other days. It's all about squaring up positions before the weekend and so markets can appear ready to do one thing and then do something completely opposite. If you're the kind of trader who has to trade every day, then look for an opportunity to enter a long play this morning, perhaps near the open, if you're willing to weather a retest of yesterday's low before you know whether it's working or not. My OEX plays are usually pure day trades these days, and for those, I usually like an option with a delta of at least 0.70, but I think in this case, I'd advise something slightly OTM instead and I'd advise a smaller-than-usual position size. This is just a guess, but one of two things is going to occur, I think--either a choppy rise that soon fizzles out--in which case you won't have lost as much, pure dollar wise and not percentage wise--if the position fails, or else a strong surge that comes out of nowhere, in which case, you'll make money. Your choice, but that's the way I'd probably go. Remember, I'm not recommending a long automatically at the open. This is just advice for those of you who are ready to go anyway, no matter whether you get the right setup or not. Be ready to bail out of any long position at the drop of a hat, and be particularly watchful of resistance in the 554.50-556 zone and then from 557.50-559 zone.

Jonathan Levinson : 10/7/2005 9:05:19 AM

QQQQ has breached upper 30 min channel resistance on the break above 38.33, and is now printing above the 60 min channel top as well at 38.45. This is a potential gap & crap setup, except that the intraday cycles are still so oversold that an irregular bounce is not as obviously unsustainable as it would otherwise be.

Jonathan Levinson : 10/7/2005 8:59:15 AM

Closing sentence of the note I referenced earlier from the BLS report:

Hurricane Rita made landfall during the September data collection period. As a result, response rates for both surveys were lower than normal in some areas. However, because the reference periods for both surveys occurred before Hurricane Rita struck, the impact of this storm on measures of employment and unemployment was negligible.

Jonathan Levinson : 10/7/2005 8:43:31 AM

I can't copy text from this BLS current report page, but read the note about the Hurricanes at this Link

Linda Piazza : 10/7/2005 8:37:53 AM

I was hearing earlier this morning, Jonathan, before the release, that some differences were being made in the method of calculating the employment numbers today, so your suspicions are probably correct.

Jonathan Levinson : 10/7/2005 8:35:34 AM

Jane, nonfarm payrolls came in 115K jobs better than expected. I haven't looked, but I suspect that there was some kind of "birth/death adjustment" that accounts for the rosier picture, but in the meantime, this is the number to which the market's reacting.

Jonathan Levinson : 10/7/2005 8:33:58 AM

Crude oil and natgas hold their gains, while TNX is up 5.2 bps to 4.413% and IRX is up 1 bp to 3.522%.

Jonathan Levinson : 10/7/2005 8:33:20 AM

Session low for ES and YM, QQQQ down to a 5 cent gain at 38.30 after spiking to 38.42.

Jonathan Levinson : 10/7/2005 8:32:52 AM

Hourly yearnings 0,2%, as expected.

Jonathan Levinson : 10/7/2005 8:32:27 AM

Average workweek 33.7, as expected.

Jonathan Levinson : 10/7/2005 8:31:51 AM

Prior month's nonfarm payrolls were revised down from 211K to 169K.

Jonathan Levinson : 10/7/2005 8:31:10 AM

Nonfarm payrolls -35K vs. -150 exp.

Unemployment rate 5.1%, as expected.

Jonathan Levinson : 10/7/2005 8:29:10 AM

Crude oil is +.75 at 62.10, natgas +.03 at 13.405.

Jonathan Levinson : 10/7/2005 8:28:28 AM

Ten year note yields +3.4 bps at 4.4% ahead of the Employment report.

Jonathan Levinson : 10/7/2005 8:08:29 AM

The sharp spike up off yesterday's QQQQ low left the 30 min cycle indicators trending sideways while causing a slight uptick in the 60 min cycle stochastic. All these indicators are still trending in oversold, and the spike was too fast to cause more than an an upward twitch in these indicators. The daily cycle turned down from a lower high, and the uncertainty here will derive from a bearish daily (and weekly) cycle picture against potentially bullish but trending intraday cycles.

Jonathan Levinson : 10/7/2005 7:35:30 AM

Equities are up, ES trading 1199.25, NQ 1566, YM 10343 and QQQQ +.121 at 38.371. Gold is down 20 cents at 474.80, silver +.042 at 7.64, ten year notes -3/32 at 109 39/64, crude oil +.675 at 62.025, and natgas +.075 at 13.45.

We await the 8:30 release of nonfarm payrolls, est. -150K, the unemployment rate, est. 5.1%, hourly earnings, est. .2%, average workweek, est. 33.7, then at 10AM, wholesale inventories, est. .4%, and at 3PM, consumer credit, est. 5B.

Linda Piazza : 10/7/2005 6:53:20 AM

Good morning. The Nikkei declined last night, but other Asian markets were mixed. European markets head lower this morning. As of 6:47 EST, gold was higher by $0.70, to $475.70, and crude, higher by $0.74, to $62.10. Our futures were modestly higher at the time. More details about Asian and European markets follows in succeeding paragraphs.

Last night, the Nikkei gapped lower and then headed up, but it never made it to the flat-line level. For most of the rest of the day, it chopped around in a 60-point range, but it broke to the downside out of that range in the afternoon, and ended the day near the low of the day. It closed down 131.77 points or 0.99%, at 13,227.74, just above that 13,180-13,225 zone that some were watching for potential resistance not so long ago. Now it will be watched for potential support next week, an important week for Japan with a Bank of Japan meeting, core machinery orders, and consumer confidence numbers, among other economic developments. Last night saw the release of August's leading index and coincident index, with those at 100.0 and 88.9, respectively, both in line with expectations. Among the two releases, 18 of 19 components were positive.

Fanuc Ltd. was an early leader to the downside. Sumitomo Trust & Banking Co. Ltd. upgraded its outlook for profit for the first half of the fiscal year, and posted a more-than-4% gain, bucking the wave of profit-taking. Cosmetics and food group Kanebo Ltd. now has four potential bidders, Reuters reported.

Other Asian markets were mixed. The Taiwan Weighted lost 0.23%, and South Korea's Kospi eased 0.12%. Singapore's Straits Times climbed 0.69%, and Hong Kong's Hang Seng inched higher by 0.06%. China's Shanghai Composite remained closed for Chinese holidays.

European markets decline. A little more than an hour ago, the OECD composite leading indicator for August was released, showing an increase to 104.0 from July's 103.9, bumped higher by some improvement in the EU15 countries. France, Germany and Italy saw increasing activity. The U.K. also improved, as did Japan, but the U.S. figure dropped to 102.9 from 103.1, and Canada's fell to 98.7 from 100.4. In another release, Germany's August industrial production dropped 1.6% month over month. A drop had been expected since the previous months' figures had been strong. The PMI's output index dropped below the benchmark 50, to 49.5 from the previous 52.6. Although a decline had been expected, the breakdown still showed a troublesome 3.5% month-over-month decline in capital goods, with some viewing that as a sign that investment might be dropping. In the U.K., the John Lewis' retail sales for the week through October 1 rose 6.0%. Department store sales climbed strongly from the previous week's decline.

Stock-specific news included Reckitt Benckiser's decision to buy the over-the-counter medicines unit of Boots PLC, with both parties higher in early European trading, although some feel that Anglo-Dutch conglomerate Reckitt Benckiser paid top dollar for Boots Healthcare. Bayer, Novartis and GlaxoSmithKline had been bidders for the company. Today, GlaxoSmithKline's shares are benefiting from yesterday's announcement by Merck of the effectiveness of its cervical-cancer vaccine, because GlaxoSmithKline has a similar one in the pipeline, about a year behind GlaxoSmithKline's. Novartis also inched higher, but peer Roche declined. Reporting companies included British supermarket J. Sainsbury, rising after its report, and Cable & Wireless, plunging almost 17% at one point after its report. Airlines reported traffic patterns, with Air France-KLM gaining afterwards, Iberia Airlines also gaining, but easyJet declining. Spain's Iberia yesterday noted steps it would take to improve productivity, lessen costs and increase revenue.

As of 6:44 EST, the FTSE 100 was lower by 9.50 points or 0.18%, to 5,362.90. The CAC 40 was lower by 17.58 points or 0.39%, to 4,519.32. The DAX was lower by 22.03 points or 0.44%, at 4,995.24.

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