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Jeff Bailey : 10/13/2005 1:43:27 AM

Sector Bell Curve comparison from 09/21/05 to current at this Link ... How many "bullish" trades have I/you initiated since the 09/21/05 reversal? How many "bearish" trades have I/you initiated since 09/21/05.

More on this later.

Jeff Bailey : 10/13/2005 12:49:29 AM

Apple Computer (AAPL) ... bar chart with conventional and "bear fitted 38.2%" that looks to be in play at this Link ... Here's the PnF chart of AAPL Link . It did exceed its bullish vertical count of $53.00. Today's trade at $50 generates the double-bottom sell signal and has the bearish vertical count hinting at $40.00. This $40.00 "target" may be achieved, may be exceeded, or may never be met, but is used to give traders/investors an observation of downside risk (just as a bullish vertical count can be used as a measure of upside risk).

If "$40.00" is to be the evenutal bearish vertical count, what must and must not happen? If the stock trades $47.00 (not $47.01) then the bearish vertical count would grow to $38. However, even if the stock does trade $47.01, then reverses 3-boxes higher (from $48) to $51.00, then the bearish vertical count would be in place (column of O that generates the sell signal from $54.00 to $48.00).

See the 19.1% retracement from the conventional? A bear wants that to hold resistance.

Jeff Bailey : 10/13/2005 12:12:21 AM

Apple Computer (AAPL) closing options chain sorted by open interest (October & January carry largest OI) at this Link ...

Quick thoughts/observations ....

Tuesday night we saw AAPL's shares trade as low as $45.50 with bulk of trade around $46.25 in extended session. Give me a second here, but remember the covered puts and Oct. $47.50 (QAA-VW) we sold (09/28), for $0.90, but then bought back a couple of days ago (10/07) for $0.75?

Now ... this morning's pre-market electronic session had APPL immediately trading $47.00. Yes... $47.00 even. Just as the prior evening's electronic session low was $45.50. Smell a little "computerish" to you? It does to me. From $47.00, AAPL ticked higher to a $48.65 opening tick for the cash session.

Now... I had an alert set on those Oct. $47.50 Puts at $1.10 and sure as heck, that alert went off just after the open and somebody came in and sold these pretty hard from $1.15 down the scale. The stock rose into the 12:00 hour to $50.30 right where the bulk of the October Open Interest is at ($50.00).

OK ... What SHOULD I have done last night? As it relates to a target of $47.50? I SHOULD have told trader to BUY LONG an equal number of shares, or partial number of shares of AAPL when the stock was trading below $47.50. Right? While I couldn't trade the OPTION, even if I had bought the stock at $46.25, and it tanked to the next strike lower ($45.00) there would have been NO RISK in the trade strategy. Right?

Would'a, could'a, should'a .....

I say this, as I believe this is EXACTLY what smart money has done. Near-term at least.

Since I "should'a" implemented a strategy to lock in gains at $47.50 (even in post and pre-market) this has me a little more eager to do so, even for a November expire.

Now, based on OI as of Tuesday night, a focus is still on the $50 Call/Put strike.

Today's HIGH in the $50 Calls was $1.55, so somebody thinks AAPL trades $51.55 or better, between now and expiration ($50 + $1.55 = $51.55). Now play the game of the $50 PUTS, but since I'm bearish, maybe you are too, let's imagine a super bull, maybe the options market maker was selling those too. $50 + $2.70 = $52.70. Now, see today's Avg.OHLC of $1.88? That's $50 + $1.88 = $51.88. That's right at our newly lowered stop on the stock.

OK ... now slip yourself back lower to the next strike of $47.50. Add and subtract some of today's Avg.OHLC and even the highs to the strike. Focus a bit more on those $47.50 puts than the $47.50 calls. Go ahead, pretend you'r the market maker of this beast.

The options market maker is more concerned with the $47.50 put open interest than he/she is with the $47.50 call open interest. Twice as concerned I might add.

Nope... we get AAPL back near $47.50, then I think we close out those Nov. $47.50 puts for a nice profit. I should'a done it late Tuesday evening, now I'm gonn'a do it if I get a second chance.

Somebody else did.

Last note ... see that Jan $50 Call (QAA-AJ) and today's Avg.OHLC? With volume turned on, I see 4,200 contracts traded (420,000 share equivalent) between 01:00 PM EDT and 01:05 PM EDT at a price of $4.40. Hmmm... $50 +/- $4.40 gives me a floor of $45.60.

Who dat buying Tuesday night's low of $45.50? My guess is the very seller of the Jan $50 Calls.

OI Technical Staff : 10/12/2005 9:59:59 PM

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

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in most cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

Marc Eckelberry : 10/12/2005 8:47:27 PM

Tab, great work. I also noted on the future's side that COMP found support at Oct 2002 trendline (chart posted there as well). The bearish wedge and weekly ma cross tells me the reversal rally, when it comes, will just be counter-trend. But bear market rallies can pack some punch and it could last a week or so.

Tab Gilles : 10/12/2005 6:36:15 PM

LOOKING FOR REVERSAL!

$NDX/$NASI/$NAHL/$VXN Both weekly and daily charts are close to a reversal. Link Link Link Link

Jeff Bailey : 10/12/2005 6:21:34 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/12/2005 6:14:27 PM

Closing Internals found at this Link

Jeff Bailey : 10/12/2005 5:44:28 PM

Best Buy is "sold out" on Apple iPod nano 4GB* MP3 Player - White at $249.99 Link

Jeff Bailey : 10/12/2005 5:23:08 PM

Current sample of "old" iPod supply/demand found at this Link ... A couple of e-mail questions today regarding impact of cannibalism of new iPod (this is niche fundamental analysis). AAPL not willing to answer questions regarding when production will eventually meet demand.

In Apple management's defense, I (Jeff Bailey) would never disclose information to anyone when a product I produced, where demand currently outstrips supply, would eventually exceed demand.

Industry analysts may watch new auctions of "old iPods" to get feel for market. Current auction bids can't come down (those that have bids), but new auctions will be better feel.

Jeff Bailey : 10/12/2005 4:40:26 PM

Current OPEN MM Profiles found at this Link ... Today's Activity .... Closed out the Sun Microsystems (SUNW) short at the bearish target of $3.95 ($+0.21, or +5.05%).

Swing trade shorted 1/2 position in shares of Dynamic Materials (BOOM) at $40.65. Stop on this thinly traded name is currently $47.00, targeting $31.10. (see today's 11:49:01 AM Post). If we were to get a quick decline to the $33.64-$34.85 level, it would be tough to not take a profit.

Tab Gilles : 10/12/2005 4:27:06 PM

$VXN/$NDX/CSCO/INTC/MSFT Link Link

Jeff Bailey : 10/12/2005 4:11:10 PM

Sell Program Premium ... DIA $102.13, SPY $117.72

Jeff Bailey : 10/12/2005 4:02:35 PM

Blackboard (BBBB) $22.92 -4.06% Link ... to acquire WebCT for $180 million.

Jonathan Levinson : 10/12/2005 3:58:31 PM

Headlines:

OLSON: INDUSTRIAL SECTOR BEGINNING TO RECOVER

OLSON: CONGRESS NEEDS NEW RULES TO ELIMINATE BUDGET DEFICIT

FED'S OLSON: LACK OF DATA AND UNCERTAINTY LED TO PAUSE VOTE

Linda Piazza : 10/12/2005 3:58:27 PM

The OEX looks as if it will end the day having produced its second sort-of-potential reversal signal in a row. Although I think the OEX may be vulnerable to lower price, this is also the sixth day in a row in which the OEX has slid down along daily Keltner support, and it's time for either an all-out tumble through that support or else a bounce attempt. Due to the condition of the advdec line at the close, I'll say what I said yesterday, that an early bounce might be expected, but from what level and how high are as yet undetermined. The trade balance figure and the reaction to it (remember the possibility for a sell-the-rumor, buy-the-fact effect) will likely go far toward determining where the OEX opens tomorrow.

Jane Fox : 10/12/2005 3:53:52 PM

Dateline WSJ Economists believe Donald Kohn and Ben Bernanke are best equipped to succeed Greenspan, according to a WSJ.com survey. Separately, economists raised inflation forecasts and nudged third-quarter growth estimates lower.

Jeff Bailey : 10/12/2005 3:50:02 PM

S&P Banks (BIX.X) 328.82 +0.08% ... edge back green.

Jeff Bailey : 10/12/2005 3:48:48 PM

Fed's Olson ... DJ - Energy prices pose upside risk to core inflation.

Industrial output held back in September, recovering in October.

Temporary borrowing for recovery may be appropriate.

Short-run spending on hurricanes not a big worry.

However, if unchecked, budget deficits corrode U.S. economy.

Jonathan Levinson : 10/12/2005 3:47:49 PM

QQQQ daily chart update at this Link with a potentially bullish divergent downphase in progress, if the bulls can turn it around from here. The violation of declining bollinger support is another warning sign for bears, but so far, the selling has been accelerating on this downphase.

Linda Piazza : 10/12/2005 3:47:47 PM

First tentative peek of the advdec line above the resistance that's been holding it back all day.

Linda Piazza : 10/12/2005 3:46:21 PM

OEX holding tentatively to new Keltner support at former resistance, at a line currently at -547.28 on 15-minute closes. OEX at 547.63 as I type, with next resistance at 548.87 on 15-minute closes.

Jeff Bailey : 10/12/2005 3:46:02 PM

James Cramer discussed intra-day action that traders might look for to signal a near-term bottom, and good setup tomorrow.

"Look for a flush lower in the morning, followed by a rally to the close."

I think something like a gap lower open to WEEKLY S2s, banks hold firm, then swoosh back above WEEKLY S1s.

EIA data out tomorrow morning.

Linda Piazza : 10/12/2005 3:43:27 PM

Remember the trade balance tomorrow morning when making your end-of-day decisions.

Jeff Bailey : 10/12/2005 3:42:58 PM

Incredible the number of stocks hanging out at WEEKLY S1s here. Dell Computer (DELL) $32.73 +0.64% holding WEEKLY Pivot.

Linda Piazza : 10/12/2005 3:38:02 PM

OEX looking a bit stronger now, having completed one 15-minute close (barely) above the Keltner line currently at 547.25 and trying to climb from that level into next resistance at 548.90 on 15-minute closes. OEX at 547.57 as I type. The advdec line has not similarly closed a 15-minute period above important 15-minute resistance, though, with that at -4017 currently, and that shows that once again, the OEX is trying to front-run the move, with the attempt a bit suspect until the advdec line cooperates, too. Advdec line at -4245 as I type.

Jeff Bailey : 10/12/2005 3:33:39 PM

Monsanto (MON) $57.13 +0.42% Link ... Updates fiscal 2005 EPS outlook. Sees EPS between $2.35-$2.50 vs. prior outlook of $2.34. Q1 initial outlook is $0.05-$0.10 per share.

Linda Piazza : 10/12/2005 3:29:32 PM

Advdec line has not closed a 15-minute period above the resistance now at -3985, with that resistance having turned the advdec line lower most of the day, too. It's testing it as I type, with the advdec line at -4108.

Jeff Bailey : 10/12/2005 3:28:47 PM

Apple Computer (AAPL) $49.01 -5.0% ... DJ - CEO Jobs introduces new iMac computer

Introduces video iPod.

Music videos will be available for sale on iTunes site.

Disney and Apple to offer 5 TV shows on iTunes.

Linda Piazza : 10/12/2005 3:28:30 PM

There's the potential for the OEX to close its first 15-minute period above the Keltner line currently at 547.23 since the first 30 minutes of trading. There's on the potential and not the certainty, though, because the OEX heads down to retest that line as I type. This will be only the smallest of clues that the trend could have changed over the very short term. Don't hang a big financial decision on that evidence alone.

Jeff Bailey : 10/12/2005 3:20:44 PM

03:00 Internals found at this Link ... Note: 02:00 NH/NL readings have been corrected. I had transposed these figures earlier.

Jonathan Levinson : 10/12/2005 3:15:56 PM

Declining volume continues to lead 4:1 on both exchanges, and QQQQ is holding a dime off the low as another short cycle upphase tries to get going. The downtrend has been unchallenged so far today, and while the slope is moderating slightly, all of the longer intraday and daily cycles continue to point south: Link . A high volume break above the 72 SMA at 37.58 could shake things up a bit, but for now QQQQ continues to look bearish to me.

Jonathan Levinson : 10/12/2005 3:11:17 PM

Ten year note yields finished +5.7 bps at 4.441%, IRX +5.5 bps at 3.615%.

Linda Piazza : 10/12/2005 3:07:46 PM

So far, the RUT and SOX did not reach a new LOD along with some of the other indices. Neither did the RLX. The TRAN sank to test 3600 historical support, with 3603 the 50% retracement of its rally off the June low into the July high and with its 200-ema at 3588.46. The TRAN is at 3612.01 as I type. I don't know why I keep noting these potential support levels. Smile.

Tab Gilles : 10/12/2005 3:06:09 PM

$NDX weekly & daily Link Link

Linda Piazza : 10/12/2005 3:04:55 PM

OEX testing that Keltner support currently at 545.56 on 15-minute closes, with the OEX currently at 545.99 but having just reached a low of 454.74. The OEX needs to close a 15-minute period above the Keltner resistance at 547.13 before it even begins to change the trend.

Jeff Bailey : 10/12/2005 3:04:25 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 10/12/2005 3:03:28 PM

Volume breadth -4.71:1 on the NYSE, -5.14:1 on the Nasdaq.

Linda Piazza : 10/12/2005 2:58:37 PM

OEX 15-minute Keltner support currently at 545.65 on closes. OEX at 546.21.

Jeff Bailey : 10/12/2005 2:57:07 PM

Evergreen Solar (ESLR) $8.42 +6.98% Link ... off morning high of $8.89, but bucks the trend after Jefferies initiated coverage with a "buy."

Jeff Bailey : 10/12/2005 2:53:34 PM

Tomorrow Arthur... tomorrow.

Jeff Bailey : 10/12/2005 2:51:55 PM

Bearish Triangle ... According to study conducted by Professor Robert Earl Davis of Purdue University, under bear market conditions, as depicted by the major market bullish % indications, the bearish triangle is profitable 87.5% of the time, with an average gain of 33.3% in a 2.5 month time span.

Linda Piazza : 10/12/2005 2:49:00 PM

Bears, keep your profit-protecting plans in place. Both the RUT and the SPX approached their weekly 72-ema's today and both have been important on their charts, the SPX's since mid-2003. I was wrong this morning about the bounce potential and so you may not want to take the warning seriously, but it's just a warning to keep lowering stops and not let a bounce get away from you, if one should start.

Jeff Bailey : 10/12/2005 2:46:52 PM

Krispy Kreme Doughnut (KKD) $4.82 -13.92% Link ... Stock sharply lower today and all-time low. Company officials saying they don't know what has triggered today's declines.

Note: Stock achieved its bearish vertical count, but recent trade at $5.50 unleashes bearish triangle.

Linda Piazza : 10/12/2005 2:46:46 PM

No cigar the last 15-minute close, either, with resistance currently at 547.46 again holding into the 15-minute close. OEX at 547.15 as I type.

Linda Piazza : 10/12/2005 2:44:41 PM

The OEX's 15-minute Keltner support has held once again, although that's of little comfort to bulls because it still turns lower. The OEX is rising once again to test Keltner resistance at 547.53 currently, on 15-minute closes. A 15-minute close above that would be the first after the first 30 minutes of trading today. Hasn't happened yet. The OEX is currently at 547.20.

Jonathan Levinson : 10/12/2005 2:43:15 PM

QQQQ update at this Link , with price so far holding S2. 30 min channel support is down to 37.35 should it fail. 1st sign of trouble for bears will be a break above 37.60, the current level of the 72 SMA.

Jonathan Levinson : 10/12/2005 2:39:49 PM

Like Sartre's No Exit...

Linda Piazza : 10/12/2005 2:39:46 PM

The RUT is again drifting down to toward that 612-615 potential support zone, althoug it hasn't quite dropped that low yet and is trying to maintain levels above its current 616.78 LOD. It's at 619.27 as I type.

Linda Piazza : 10/12/2005 2:37:33 PM

For those planning late-afternoon entries of any type, remember the trade balance figures tomorrow, due at 8:30, if I've got my figures correct. The trade balance is expected to widen again.

Jonathan Levinson : 10/12/2005 2:35:51 PM

Haven't seen the Yahoo message boards in many moons, but it can't be pretty in the GOOG forum as the stock tests 300.

Linda Piazza : 10/12/2005 2:33:24 PM

As Jane has noted on the Futures side, the advdec line just continues lower. Jane and I have different figures since we use different sources and calculations are probably different, but QCharts' calculations show that the advdec line still isn't yet at the 10/5 level, although it's certainly coming close. The next level of support--although does it matter?--appears to be in the -4825 zone. Advdec line at -4414 as I type.

Jeff Bailey : 10/12/2005 2:32:56 PM

Buy Program Premium ... DIA $102.10, SPX 1,175.79, QQQQ $37.52

Jeff Bailey : 10/12/2005 2:32:17 PM

MMS Update alert ... Agency saying some incremental improvement in Gulf of Mexico output in recent week. 69.8% of oil and 59.2 of gas still shut in. That would be roughly equivalent to 1,046,462 b/d of oil and 5.92 bcf/d of gas still off line.

Jonathan Levinson : 10/12/2005 2:31:18 PM

No reprieve for bonds yet, with TNX now up 6.1 bps to 4.445% and IRX up 6.2 bps to 3.622%. Crude oil has just closed +.625 at 64.15, natgas -.025 at 13.495.

Jonathan Levinson : 10/12/2005 2:29:02 PM

Volume breadth -4.75:1 on the NYSE, -3.82:1 on the Nasdaq.

Linda Piazza : 10/12/2005 2:28:00 PM

OEX once again testing that Keltner support at 545.83 on 15-minute closes, with that particular Keltner line having prompted bounces--if tepid ones--since 10/7. OEX at 545.89 as I type. No change in trend yet since 10/7.

Linda Piazza : 10/12/2005 2:25:50 PM

Bears, I would be really careful as the SPX approaches 1171.50, the site of the weekly 72-ema. The SPX has bounced from this average since June, 2003. Of course, that's on weekly closes, and we still have two days of this week, but it's a level I've been watching for a while as a possible target and bounce point.

Jonathan Levinson : 10/12/2005 2:23:01 PM

Session low for QQQQ at 37.49, the previous low. Link

Jeff Bailey : 10/12/2005 2:19:47 PM

Goldman Sachs (GS) alert $113.72 -3.25% Link ... most likely on the unfolding Refco (RFX) $10.79 -22.31% Link news and events.

Seeing some heavy action in the GS Oct. $100 Puts (GS-VT) at the offer of $0.10.

Jonathan Levinson : 10/12/2005 2:17:33 PM

Volume breadth -4.19:1 on the NYSE, -4.25:1 on the Nasdaq.

Linda Piazza : 10/12/2005 2:16:56 PM

OEX testing 15-minute support from 545.95-546.48. OEX at 547.01 as I type. Next Keltner resistance currently at 547.77, with that resistance having held on 15-minute closes since the first sharp decline this morning. Nothing has yet changed in the OEX's downtrend off the 10/7 early morning high.

Jonathan Levinson : 10/12/2005 2:15:57 PM

I've heard the reverse- sell Rosh, buy Yom, for what it's worth. I've never backtested it.

Jeff Bailey : 10/12/2005 2:15:10 PM

02:00 Internals found at this Link

Jonathan Levinson : 10/12/2005 2:13:53 PM

Speaking of which, I'll be out tomorrow for the Yom Kippur fast.

Jonathan Levinson : 10/12/2005 2:13:02 PM

Thanks, Mark. I was more upset about my short from 39.74, which was stopped out for breakeven the next day during Rosh Hashanah, before the current decline kicked in.

Linda Piazza : 10/12/2005 2:12:53 PM

Advdec line approaching the day's low again. How low can it go? One chart suggests that it's approaching a likely limit unless there's going to be a waterfull loss the rest of the day, but that's the question, isn't it? We daw on 10/5 that the advdec line can go lower than this.

Jonathan Levinson : 10/12/2005 2:11:36 PM

Session lows for ten year notes, with TNX up to 4.449%, a new high for the move. Yesterday, the Fed's net add made itself felt in the equity markets with a sharp bounce starting at 2:15. If there's any validity to my interpretation, then we should see a dip at 2:15, as today was a big net drain.

Linda Piazza : 10/12/2005 2:11:07 PM

OEX next Keltner support at 546.05-546.62 and next resistance at 548.05, all on 15-minute closes. The OEX is making a modest attempt to flatten those channel lines and firm up support, but it's a modest attempt only so far. OEX at 547.48 as I type.

Linda Piazza : 10/12/2005 2:09:47 PM

I'm looking at last week's charts in preparation for tonight's Wrap and noticed that last Wednesday, I said that the Dow was likely vulnerable to the 10,195 area, although 10,230 might be Keltner support. Between last Wednesday and today, that Keltner support sank to 10,180.33, but the Dow has so far rebounded off its 10,193.45 low, a test of the 61.8% retracement of its rally off the October 2004 low into March's high. The Dow is at 10,227.31 as I type.

Jeff Bailey : 10/12/2005 2:03:35 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 10/12/2005 2:00:31 PM

I'm tempted to try a long here, using the session lows as a stop, but the price has been holding at these levels for a long time- how many have already tried the same play? It's been looking inviting for a long little while here. 30 min channel support just above S2 at 37.46, while the daily channel continues lower, the bottom now at 37.27: Link

Jeff Bailey : 10/12/2005 1:59:27 PM

Tyson Foods (TSN) $17.81 +0.62% Link ...

Jeff Bailey : 10/12/2005 2:00:22 PM

BioCryst Pharma (BCRX) $13.30 -11.56% Link ... yesterday's "bird flu" play getting plucked in today's session.

In other news ... Chester's International celebrates its 40th anniversary of serving "delicious chicken across America." The company is offering $0.40 chicken tenders to their customers exclusively on October 14.

Linda Piazza : 10/12/2005 1:58:13 PM

The OEX's next support is at 546.11-546.66 on 15-minute closes, next resistance at 548.13 on 15-minute closes. There's the possibility of a continuation-form H&S forming now on the OEX's five-minute chart, head at about 549.40, shoulder level at about 548.50-548.90 or so, with a right shoulder still to be formed.

Jonathan Levinson : 10/12/2005 1:54:39 PM

Volume breadth -3.49:1 on the NYSE, -3.91:1 on the Nasdaq.

Jonathan Levinson : 10/12/2005 1:53:58 PM

Crude oil +.825 here at 64.35, natgas -.025 at 13.495.

Jeff Bailey : 10/12/2005 1:52:03 PM

S&P Banks Index (BIX.X) 327.44 -0.33% ... slips to lows of the week. Yesterday, the BIX.X pegged its MONTHLY S1 at 328.00.

Linda Piazza : 10/12/2005 1:49:12 PM

OEX next Keltner support at 546.11-546.67 on 15-minute closes.

Jonathan Levinson : 10/12/2005 1:48:48 PM

Ten year note yields have broken upward to 4.441% here, +5.7 bps. IRX is up 6.7 bps at 3.627%.

Jeff Bailey : 10/12/2005 1:45:32 PM

Dover Motorsports (DVD) $6.28 -1.87% ... Redeems $11,908,000 of its bonds. On Sept. 15, the company announced that shareholders had fully redeemed 5.2 million shares of the common stock and 2.3 million shares of the Class A common stock. All of the Class A common stock had been accepted for purchase by the company at $7.00 per share. As for the common stock, the company said it was oversubscribed with 1.7 million shares having been accepted for purchase by the company at $7.00 per share.

Jonathan Levinson : 10/12/2005 1:37:39 PM

Ten year notes have fallen back to the lows, TNX up 4.1 bps at 4.425% and Dec. ZN futures -9/64 at 109 23/64.

Jeff Bailey : 10/12/2005 1:35:45 PM

Apple Computer (AAPL) $49.50 -4.05% ... unveils new iPod. Unveils new iMac with video capability.

Jonathan Levinson : 10/12/2005 1:34:51 PM

Bulls need support to hold here at a higher low to confirm that uptick in the 30 min channel. Any failure to hold above QQQQ 37.57ish would see the short cycle upphase abort and begin to roll over, setting up for a whipsaw and retest of the session low at 37.49. Link

Linda Piazza : 10/12/2005 1:34:31 PM

OEX has not been able to maintain 15-minute closes above a Keltner line currently at 548.29. It's at 547.84 as I type.

Linda Piazza : 10/12/2005 1:33:37 PM

Advdec line has not been able to maintain values above -3300. It's at -3693 as I type.

Jonathan Levinson : 10/12/2005 1:23:11 PM

QQQQ approaches 30 min channel resistance at 37.81 here, but the channel is turning up from its extended oversold trending move: Link

Linda Piazza : 10/12/2005 1:23:06 PM

Strong surge higher in the RUT.

Linda Piazza : 10/12/2005 1:22:51 PM

Strong move up in the advdec line, too, but it needs to get above and stay above -3000.

Linda Piazza : 10/12/2005 1:21:40 PM

OEX pushing above first Keltner resistance, to next resistance at 549.91 on 15-minute closes.

I'm singing the shoulda, woulda, coulda lament. The advdec line gave me a flat-out wrong signal early this morning, but then gave a solid signal later that was just early. It does that sometimes, and that's okay in my own personal trading, because I don't risk too much on each trade, so that I'm not uncomfortable letting the test go on, but it isn't okay with trades I suggest in the MM.

Linda Piazza : 10/12/2005 1:15:51 PM

Close but no cigar. The OEX rose right under the first Keltner resistance, now at 548.29 on 15-minute closes, but did not close the just-completed 15-minute period above that Keltner line. It's now pushing above it again, however, with the OEX at 548.44 as I type. Pushing above it is not the same as closing above it.

Jeff Bailey : 10/12/2005 1:15:09 PM

01:00 Internals found at this Link

Jonathan Levinson : 10/12/2005 1:12:25 PM

Nasdaq volume breadth has improved considerably to -3.14:1 here, with price just breaking above 72 SMA resistance at 37.65 for the first time in almost 2 hours. The last such break was short lived. Link

Linda Piazza : 10/12/2005 1:09:15 PM

OEX testing Keltner resistance currently at 548.28 on 15-minute closes. This Keltner line has been turning the OEX lower on 15-minute closes ever since the first 30-minute rise was completed. OEX currently at 548.22.

Jonathan Levinson : 10/12/2005 1:07:11 PM

Foreign central banks took a solid 5.92B of the 13B 5-year note auction. The notes sold for a high-yield of 4.27% and generated 2.75 bids for each accepted. The markets liked the results, with a small jump just now in ten year notes (TNX down to a 2.3 bp gain at 4.407%) and equities edging higher.

Jane Fox : 10/12/2005 1:06:16 PM

Dateline WSJ Ousted Refco CEO Phillip R. Bennett was charged with securities fraud in connection with hiding hundreds of millions of dollars from investors who bought stock in the future-trading firm's IPO.

Linda Piazza : 10/12/2005 1:06:11 PM

TRAN still dropping. It's now just above the 10/06 low of 3618.25, with the TRAN at 3620.65 but having touched a low of 3619.26. This is the bottom of a 3618-3700 consolidation band for the TRAN, holding since 10/05. Important level for the TRAN.

Jeff Bailey : 10/12/2005 1:02:31 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 10/12/2005 12:59:53 PM

Session low for Dec. gold at 475.30, -4.30. The session high was 483.20. Crude oil is up .725 at 64.25, silver -.015 at 13.505.

Jonathan Levinson : 10/12/2005 12:59:00 PM

Volume breadth is back down to -3.14:1 on the NYSE, -6.04:1 on the Nasdaq. QQQQ has just failed at a lower high and is trying to hold a higher intraday low, but there remain no bullish indications on any of the daily or intraday cycles yet: Link

Linda Piazza : 10/12/2005 12:54:11 PM

On a Keltner basis, the OEX is between still-drifting-lower support currently at 546.28 and resistance currently at 548.35. Next resistance above that is at 550.08. There's the slightest hint of resistance softening just a little, but not yet the needed firmness in support, although there's a hint there of an attempt to firm. It would just take one swift wash downward to erase that tentative firming, though.

Linda Piazza : 10/12/2005 12:48:48 PM

Advdec line still testing -4000-ish support, with the advdec line at -3943 as I type. It hasn't been able to rise far enough to erase more downside potential just yet, although it tentatively holds to support.

Linda Piazza : 10/12/2005 12:45:15 PM

The OEX has so far not been able to produce a 15-minute close above the Keltner line currently at 548.57, with the OEX currently at 548.25. Next Keltner support at 546.44-547.01 on 15-minute closes.

Jonathan Levinson : 10/12/2005 12:39:48 PM

Stepping away for a few minutes.

Linda Piazza : 10/12/2005 12:34:12 PM

Advdec line rises, but needs to rise above -3300 and stay above that before it even begins to change its downward trend. It's currently at -3731.

Jeff Bailey : 10/12/2005 12:32:17 PM

Current OPEN MM Profiles found at this Link ... Note: Shares of Sun Microsystems (SUNW) achieved my bearish target of $3.95. ($+0.21, or +5.05%)

Linda Piazza : 10/12/2005 12:32:05 PM

OEX Keltner outlook: The OEX found support on 15-minute closes at a Keltner line currently at 546.42, but now faces its first tough test after rising from that support, at Keltner resistance at 548.53 on 15-minute closes. Above that lies resistance at 550.08-550.32 on 15-minute closes and then stronger at 552.44-553.78.

Jeff Bailey : 10/12/2005 12:24:58 PM

12:00 Internals found at this Link ... Yesterday's Internals found at this Link

Jonathan Levinson : 10/12/2005 12:24:29 PM

Volume breadth is -3.16:1 on the NYSE, -6.4:1 on the Nasdaq.

Jonathan Levinson : 10/12/2005 12:18:54 PM

QQQQ volume is heavy today, so far 5M shares below the 84.7M average daily volume.

Linda Piazza : 10/12/2005 12:18:31 PM

I'm not going to make any further trading suggestions today, even for aggressive traders. The signals that have served me so well over the last months have not been working today, as they've been setting up at various times (and still are) the potential for a bounce. That probably means that I was just early and that the bounce will occur right now, when I'm bowing out.

I will, of course, give my impressions, and those impressions are of course that bears need to have profit-protecting plans in place. The OEX pierced but did not close below a Keltner line currently at 546.40. It needs to produce sustained 10-minute closes above the 10-minute 100/130-ema's at 550.86 and 551.49, however, before it produces anything that resembles a change in trend.

Jonathan Levinson : 10/12/2005 12:13:41 PM

The little wavelet cycle is again at odds with the short cycle- the wavelet is rolling over, the short cycle trying to turn up. If it fails, 37.50 is the line in the sand below which we could finally see those longer channel bottoms tested. A break above the 72 SMA at 37.68 would be the first sign of trouble for short cycle and 30 min cycle bears: Link

Tab Gilles : 10/12/2005 12:13:22 PM

$NYSE Taking a look at the $NYSE a broader/global market index. Link Link Link

Linda Piazza : 10/12/2005 12:10:21 PM

RUT bouncing from above the 61.8% retracement of its spring rally and from above the 72-week-ema, with those in the 612-615 zone, roughly. RUT at 619.33 as I type.

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

12:00 Market Watch found at this Link

Linda Piazza : 10/12/2005 12:08:57 PM

TRAN also at its 200-sma, at about 3630.91 (still using those 390-minute charts because of missing bars on the daily chart) with the TRAN at 3637.64 currently.

Linda Piazza : 10/12/2005 12:07:40 PM

SOX just above the 200-sma again, at 434.50 with the 200-ema at 433.27 currently.

Jeff Bailey : 10/12/2005 12:10:56 PM

QQQQ notes ... today's triple correlation is "just the opposite" to that found on 10/04/05 when QQQQ traded DAILY R2, then reversed sharply lower.

This $37.55 trade is what I believe a "destiny trade," so bears should be looking to take some profits. Any new additions should be fractional in size. Use what you know about trade size to limit your risk.

Note the NH/NL ratios as well as the $NASI (Tab Gilles updates), but most importantly, the various NASDAQ bullish % indications. Yes.... even you traders.

Linda Piazza : 10/12/2005 12:02:18 PM

A fitted Fib bracket on the OEX's decline sure makes the current 546-ish level look as if it could be once potential downside target for the OEX, but then I've been wrong all day.

Jeff Bailey : 10/12/2005 12:02:16 PM

Sell Program Premium ... DIA $101.98, SPX 1,175.56, QQQQ $37.52 (trades below today's triple correlation in pivot matrix of $37.55)

Jonathan Levinson : 10/12/2005 12:01:44 PM

QQQQ update (downdate?) at this Link with price approaching S2. The 30 min channel continues lower- as do all channels from daily to short cycle.

Linda Piazza : 10/12/2005 12:00:42 PM

OEX below last week's low.

Jeff Bailey : 10/12/2005 12:00:04 PM

Dynamic Materials (BOOM) $39.44 -6% ... I was filled at $40.65 and will take that as the MM Profiles entry point alert.

Linda Piazza : 10/12/2005 11:59:09 AM

RUT headed all the way down to next support in the 612-615 region. This is Fib and MA support. The weekly 72-ema is at 612.77, and that average sometimes does have relevance on this index. RUT at 617.45 as I type. Rising regression channel support at about 603.

Linda Piazza : 10/12/2005 11:57:06 AM

The OEX has been piercing the bottom of its descending regression channel during 15-minute periods, but not closing beneath it. It's also bounced back above that channel line since the channel began forming last Friday. That channel line is now at about 548.30 as I type, with the OEX at 547.67. Without a strong bounce over the next five minutes, this will be the first time it hasn't closed a 15-minute period back inside that channel. Last week's low was 547.13, and we're getting a retest of that low.

My beloved advdec line failed me at the open this morning, but it's been a good tool until now. What it suggests now is that bears need to protect profits now, something you would already know as the OEX tests last week's low.

Jonathan Levinson : 10/12/2005 11:55:58 AM

Volume breadth -3.71:1 on the NYSE, -4.42:1 on the Nasdaq.

Jonathan Levinson : 10/12/2005 11:54:50 AM

Session lows across the board.

Linda Piazza : 10/12/2005 11:53:26 AM

Looks as if we'll get a retest of last week's low, or a close approach to it anyway on the OEX. Next strong support on the advdec line is at -3850 or so. The advdec line does sometimes rebound sharply from tests of this support level. It also crashes through it if there's to be a waterfall day. I would not stay in even small OEX long plays if the OEX crashes through last week's low.

Jeff Bailey : 10/12/2005 11:52:35 AM

Bearish swing trade short alert ... for 1/2 position in shares of Dynamic Materials (BOOM) $40.72 -2.95% here, stop $47.00, target $31.10.

Linda Piazza : 10/12/2005 11:50:31 AM

RUT at a new low.

Jonathan Levinson : 10/12/2005 11:50:10 AM

Session lows being tested for QQQQ here, below which the 30 min channel bottom approaches S2, with the daily channel bottom down to 37.40: Link

Linda Piazza : 10/12/2005 11:50:02 AM

OEX Keltner outlook: the OEX continues to show vulnerability to Keltner levels that have drifted down to 546.93-547.92, but continues to show Keltner-style bullish divergences with respect to those lines. It keeps being pressured lower by a Keltner line currently at 549.51 on 15-minute closes, and it has to close 15-minute periods above that before it erases that vulnerability to more downside. It's instead driving lower as I type, at 548.33, back for another retest of the day's low . . . just exceeded as I type.

Jeff Bailey : 10/12/2005 11:49:01 AM

Dynamic Materials (BOOM) $40.77 -2.83% Link ... some retracement work and tie with PnF Chart. Here's my bar chart at this Link

Linda Piazza : 10/12/2005 11:45:24 AM

Advdec line still dropping. What was that old saw about catching a fall knife and why didn't I heed that advice? You out there know that I tend to be too cautious and yet here I am, having suggested countertrend longs for aggressive OEX traders. The truth is, however, that evidence keeps setting up that such a play would be at least a decent risk, and then the evidence falls apart, only to set up again. There's still bullish value/RSI divergence on some charts on the advdec line, and that usually tends to mean something on that line, but it just keeps falling. If it drops much below the currently being tested -3250-ish zone, it's vulnerable down to -3800, however.

Jonathan Levinson : 10/12/2005 11:44:19 AM

Headline:

GERMANY'S DAX INDEX ENDS DOWN 1% AT 4,981

Jonathan Levinson : 10/12/2005 11:43:33 AM

Another touch of the session low for ten year notes here at 109 21/64. TNX is up 4.2 bps at 4.426%.

Jonathan Levinson : 10/12/2005 11:39:01 AM

The 10B 4-week t-bill auction saw foreign central banks buying 2.46B of the total. The bills sold for a high-rate of 3.46% yielding 3.518%, with a bid-to-cover ratio of 3.18.

Linda Piazza : 10/12/2005 11:38:03 AM

Lots of attempts to bounce being seen, nothing that convinces me of sustainability just yet. Advdec line has to stop declining and get above that resistance band up to about -2475. It's now declining to retest support, and is at -3003 as I type.

Linda Piazza : 10/12/2005 11:36:43 AM

SOX still bouncing off its 200-sma, now slightly above its opening level, testing yesterday's 438.71 closing level, with the SOX at 438.57 as I type.

Linda Piazza : 10/12/2005 11:35:24 AM

Advdec line still challenging that resistance from -2696 to -2465, with the advdec line currently at -2700, at the bottom of that resistance band. The OEX is at the midline of its descending regression channel, pausing there. It's also pausing at Keltner resistance at 549.82, and bulls want to see it begin closing 15-minute periods above that,and strongly above that. It's at 549.86 as I type.

Jonathan Levinson : 10/12/2005 11:34:46 AM

The SOX is much stronger than QQQQ here, currently back to its pivot and testing the morning high in the 439 area. QQQQ remains almost 30 cents away from the equivalent level.

Jonathan Levinson : 10/12/2005 11:31:38 AM

Volume breadth has improved, but still remains deep in the red, -1.82:1 on the NYSE and -2.78:1 on the Nasdaq.

Jonathan Levinson : 10/12/2005 11:30:05 AM

QQQQ breaks 72 SMA resistance here on the move above 37.77: Link

Linda Piazza : 10/12/2005 11:25:53 AM

The BIX is actually positive for the day. How did that happen? Smile. It has not yet erased all of yesterday's losses.

Linda Piazza : 10/12/2005 11:24:46 AM

RLX bouncing after having dipped just below its September low. That September low was 420.72 and the RLX LOD was 419.88. This suggests to me that a bounce attempt is underway, but that the emphasis remains on "attempt," with no evidence yet that it's sustainable.

Linda Piazza : 10/12/2005 11:23:03 AM

Advdec line still struggling with -2675 to -2390 resistance, at -2755 as I type. It may need another trip down to support to retest it. Bears want to see it continue to bounce, perhaps after a retest of support.

Jonathan Levinson : 10/12/2005 11:21:35 AM

Session low for ten year notes at 109 21/64, TNX +3.9 bps at 4.423%.

Linda Piazza : 10/12/2005 11:21:33 AM

SOX bouncing off its 200-sma, the 200-ema above to offer resistance at 443.40 if the SOX should get that high. The 200-sma is at 433.28 with the SOX LOD at 433.28. Tell me someone wasn't watching that 200-sma. This isn't convincing evidence of anything sustainable, of course, but good to see if you're in a countertrend long.

Jeff Bailey : 10/12/2005 11:19:10 AM

11:00 Internals found at this Link

Linda Piazza : 10/12/2005 11:16:28 AM

Advdec line testing resistance at -2650 to -2360, and that resistance is holding so far. Those hoping for a bounce today want to see it climb above that resistance, perhaps after a pullback to just-tested support. Advdec line at -2720 as I type.

Linda Piazza : 10/12/2005 11:15:22 AM

The TRAN fell all the way to that 3657 level I mentioned earlier, actually punching a little below it, to 3656.11. By that time, it had nudged the Keltner line I was watching a little lower, too. The advdec did not violate that line, but did touch it, which I'd rather not have seen if it was going to maintain that Keltner-style bullish divergence. It's at 3661.84 now, bouncing from that support, but now toward 3680-ish Keltner resistance that might be strong.

Jonathan Levinson : 10/12/2005 11:12:26 AM

QQQQ spikes up to the 72 SMa here at 37.80, but has yet to clear it, the wavelet approaching overbought and the short cycle indicators not yet on buy signals: Link

Linda Piazza : 10/12/2005 11:11:57 AM

OEX bouncing. Advdec line, too, but needs to bounce above -2400 at least before there's any faith at all in its bounce attempt.

Jeff Bailey : 10/12/2005 11:10:00 AM

Dynamic Materials (BOOM) $40.74 -2.90% ... testing important near-term support. Looks vulnerable to low $30s.

Linda Piazza : 10/12/2005 11:09:14 AM

OEX coming down to retest this morning's 548.31 low, with the OEX at 548.48 as I type. Below that is last week's 547.13 low and Keltner support from 547.90-547.03 on 15-minute closes. Note: OEX bounce a little as I typed.

Jonathan Levinson : 10/12/2005 11:08:39 AM

Ten year note yields (TNX) hold +3.4 bps at 4.418%, 13-week bill rates (IRX) up 6.7 bps at 3.627%.

Linda Piazza : 10/12/2005 11:06:29 AM

No jump higher in the advdec line yet. Next support at -3250 to -3700 if this doesn't hold.

Jeff Bailey : 10/12/2005 11:03:21 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 10/12/2005 11:02:28 AM

Headlines:

FED'S BIES: FED EYEING RISKY MORTGAGE PRODUCTS

FED MAY ISSUE GUIDELINES ON MORTGAGE PRODUCTS, BIES SAYS

BIES: FED MULLING COMMERCIAL REAL ESTATE LENDING GUIDELINES

Linda Piazza : 10/12/2005 11:01:52 AM

If I hadn't been so off this morning, I would now be suggesting that aggressive OEX traders consider dipping their toes into the water here with a bullish entry. In fact, I still think it's worth a try with a tight account-appropriate stop. OEX at 549.27 as I type, vulnerable to a dip to 547.12 on a Keltner basis, but still showing bullish divergence on a Keltner basis.

Linda Piazza : 10/12/2005 10:57:49 AM

With the advec line approaching extreme levels and into potentially strong support, I'm standing back from suggesting bearish entries right now. I'm still watching for signs of a bounce in the advdec line as the OEX approaches the bottom of its descending regression channel, but am not seeing convincing evidence yet.

Jonathan Levinson : 10/12/2005 10:54:30 AM

Volume breadth falls to -2.13:1 on the NYSE, -4.12:1 on the Nasdaq.

Linda Piazza : 10/12/2005 10:54:16 AM

RUT still dropping, and rapidly. I see next support in the 612-615 range, with the RUT at 622.82 as I type. Advdec line still dropping deeper into the next support band. So far, it's not stopping, either, but is testing stronger and stronger support, with potential price/value divergence being preserved.

I think most OEX long scalpers should have taken their lumps by now.

Jeff Bailey : 10/12/2005 10:54:07 AM

10 Most Active ... QQQQ $37.70 -0.65%, AAPL $49.68 -3.70%, JDSU $1.96 -2.97%, SPY $118.29 -0.11%, PFE $24.85 +2.22%, INTC $22.84 -2.87%, CSCO $16.99 -1.16%, IWM $61.79 -1.13%, MSFT $24.50 +0.36%, RFX $10.41 -24.83%

Jonathan Levinson : 10/12/2005 10:49:48 AM

30 min channel support declines to 37.56 QQQQ here: Link

Linda Piazza : 10/12/2005 10:48:35 AM

Advdec line still dropping. The OEX isn't, but it won't be able to hold up if the advdec line keeps dropping. Advdec line support being tested.

Tab Gilles : 10/12/2005 10:47:27 AM

Nasdaq 100 ($NDX) Daily chart, testing lower end of downtrend channel and 38.2% Fibonacci Retracement level. Link Also, testing 200-ma. Link

$VXN Link

$NASIdaily- Link weekly- Link

USPIX Link

Linda Piazza : 10/12/2005 10:47:08 AM

TRAN still coiling, but now challenging the bottom of its consolidation pattern, and perhaps falling through it as I type. If it's to continue the Keltner-style bullish divergence it's been guilding since the 6th, then it wouldn't drop lower than 3657 and perhaps not that low. It's at 3671.41 as I type, having just dropped below an ascending trendline off the 10/6 low.

Jonathan Levinson : 10/12/2005 10:45:18 AM

Volume breadth -1.54:1 on the NYSE, -3.19:1 on the Nasdaq.

Linda Piazza : 10/12/2005 10:43:58 AM

Seeing some tentative bullish value/RSI divergence as the advdec line sinks into its support band. I'm seeing some tentative divergence in the fact that the advdec line sank below yesterday's low, but the OEX did not, either. I'm still in my long position because I didn't put much money at risk and I'm willing to wait it out and still see those tentative signs of a bounce still trying to build (fooling myself perhaps?) but this support band absolutely has to hold and bullish divergence absolutely needs to continue.

Jonathan Levinson : 10/12/2005 10:41:58 AM

The oil inventory report I posted earlier was last week's- this week's report is delayed until tomorrow due to Columbus Day. I apologize for the error.

Linda Piazza : 10/12/2005 10:40:58 AM

I'm eyeing the RUT. While I know the small-cap RUT and the big-cap OEX have little to do with each other on the surface, that RUT dive below the 50% retracement of its rally disturbs me since the RUT is a good indicator of market sentiment and as there was barely any hesitation. I had expected the RUT to bounce from that level, at least temporarily and at least into a retest of the 200-ema and -sma's that it broke through yesterday.

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

QQQQ's short cycle indicators are on the cusp of a new upphase, and a break above the 72 SMA at 37.86 should be enough to confirm it. 30 min channel resistance is down to 37.99. Link

Jonathan Levinson : 10/12/2005 10:34:39 AM

From the EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) inched lower by 0.3 million barrels from the previous week. At 305.4 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year. Total motor gasoline inventories dropped by 4.3 million barrels last week, putting them just above the lower end of the average range. Distillate fuel inventories fell by 5.6 million barrels last week, and are just above the middle of the average range for this time of year. A sharp drop in low-sulfur (diesel fuel) distillate fuel more than compensated for a slight rise in high-sulfur (heating oil) distillate fuel. Total commercial petroleum inventories plummeted by 9.9 million barrels last week, but are in the upper half of the average range for this time of year.

Jonathan Levinson : 10/12/2005 10:33:27 AM

Session high for crude oil here at 64.35, +.825. Natgas is up .015 at 13.535.

Linda Piazza : 10/12/2005 10:31:53 AM

TRAN coiling near mid-channel Keltner support, not giving a clue as to next direction. Strongest support way down at 3658 and strongest resistance way up at 3716 on a 15-minute Keltner basis.

Linda Piazza : 10/12/2005 10:30:57 AM

It's been a volatile day on the advdec line, too, and it's now hitting potential first support, in a band from -2550 to -3050, with support below that at -3600. It hasn't begun bouncing yet. Watching to see what happens here.

Jeff Bailey : 10/12/2005 10:28:44 AM

Swing trade lower stop alert ... on the Apple Computer AAPL Nov. $55 Puts (QAA-WK) ... to $51.88 from $52.88 on the underlying shares.

Apple Computer (AAPL) $49.69 -3.64% here. Still targeting $47.50 on the underlying.

Linda Piazza : 10/12/2005 10:25:38 AM

The advdec line now has dived all the way to next strong support, at -2550 to -3250, with the advdec line at -2350 as I type. This occurs just ahead of the inventories release.

Jonathan Levinson : 10/12/2005 10:24:53 AM

QQQQ 30/60 min channel support is at 37.66-37.69: Link

Jonathan Levinson : 10/12/2005 10:21:00 AM

Volume breadth -1.37:1 on the NYSE, -2.82:1 on the Nasdaq.

Linda Piazza : 10/12/2005 10:19:29 AM

RUT just collapsed beneath the 50% retracement of the rally off the spring low. Not good.

Linda Piazza : 10/12/2005 10:17:29 AM

I don't like the way the advdec line is acting now. If you haven't already exited your scalp long, you might consider doing so now. If you want to stick with OEX values, then you need to know that the OEX has tentatively produced vulnerability to 547.33-548.35 again, and assess your willingness to wait out the possibility of a dip that far before you know whether it's going to bounce again. Keltner-style bullish divergence still continues. I'm personally going to stay in for the test, but I limited my exposure.

Jeff Bailey : 10/12/2005 10:16:41 AM

Bearish swing trade target alert ... for shares of Sun Microsystems (SUNW) $3.95 -1.25%

Jeff Bailey : 10/12/2005 10:15:55 AM

Sell Program Premium ... DIA $102.72, SPX 1,185.30, QQQQ $37.79

Jonathan Levinson : 10/12/2005 10:15:32 AM

Thanks, Mark. That low Fed stop-out rate spooked me into an early exit.

Jeff Bailey : 10/12/2005 10:15:20 AM

10:00 Internals found at this Link

Linda Piazza : 10/12/2005 10:11:35 AM

So far, the advdec line still does what the TRAN is doing, zigging and zagging across likely support, although the advdec line is doing a slightly better job than the TRAN of holding to that support and not crossing it. The OEX is testing the ten-minute 100/130-ema's that have been stopping its advances all week. It's doing a more convincing job of testing those averages, but is slipping below the 100-ema as I type. If you entered a scalping long this morning, you don't like to see the advdec line dipping as low as its current -1260 level and want to see a quick rebound. If you're nervous and planned to exit ahead of the inventories number anyway, you might elect to take a small loss and exit now. For others, you want to see the OEX hold to 550.41 support on 15-minute closes and would prefer it be above 550.87 on 15-minute closes. It's at 550.76 as I type.

Jonathan Levinson : 10/12/2005 10:08:23 AM

Buyer's remorse as QQQQ breaks back below the pivot: Link

Linda Piazza : 10/12/2005 10:06:11 AM

The TRAN is fairly volatile this morning, zigging and zagging back and forth across mid-channel S/R on its 15-minute Keltner chart. No direction settled yet, and the inventories release in a few minute might change that direction even if one had been established.

Jonathan Levinson : 10/12/2005 10:05:49 AM

QQQQ is so far getting no traction on its new wavelet upphase, as the short cycle indicators begin to top. Volume breadth remains solidly negsative for the Nasdaq at -1.95:1. Link

Linda Piazza : 10/12/2005 10:04:51 AM

RUT still trying to hold above that 50% retracement off the spring low.

Jeff Bailey : 10/12/2005 10:03:33 AM

10:00 Market Watch found at this Link

Linda Piazza : 10/12/2005 10:03:22 AM

OEX pausing at the ten-minute 130-ema at 552.05. Bulls want to see a ten-minute close above that, or want to see continued ten-minute closes above the 100-ema at 551.44 if not. OEX at 551.86 as I type.

Linda Piazza : 10/12/2005 10:01:35 AM

Advdec line bounced again, but now +280 looks like stronger resistance than it did earlier. Bulls want to see the advdec line above that. It's at -268 as I type.

Linda Piazza : 10/12/2005 10:00:16 AM

OEX Keltner outlook: The OEX broke above Keltner resistance at 550.84 this morning, and bulls would like to see that level hold into the close of the current 15-minute period. That sets up an upside target currently at 553.14 and maybe 554.30. That should be strong resistance, and any scalping a few points to the long side should consider taking at least partial profit in that zone.

Linda Piazza : 10/12/2005 9:58:06 AM

Caution, bulls. Advdec line again dipping lower than I'd like to see it dip for a countertrend play. It's dipping back to that first support band it was testing earlier this morning. Want to see that hold.

Jonathan Levinson : 10/12/2005 9:57:35 AM

QQQQ - Exit Point Alert -

Out QQQQ short from 38.05 at 37.95

Linda Piazza : 10/12/2005 9:56:54 AM

I see from scanning the posts of the other writers that we've got a mixture of views today, which should make you cautious out there. My view is that a countertrend bounce could continue to build, but that's predicated upon the advdec line finding support above about -300 as it dips now to retest support, and I believe that any countertrend bounce is risky to play, as I've been noting. It's just for scalpers and aggressive traders. Advdec line at -163 as I type.

Jonathan Levinson : 10/12/2005 9:56:33 AM

The Fed announces a 6.25B overnight repo for a net 7.5B drain. But the stop out rate fell to 3.59 on treasury collateral, indicating a much smaller demand for the money on the part of the dealers- could be bullish for the markets.

Linda Piazza : 10/12/2005 9:53:54 AM

The advec line has hit first potential resistance. Bulls want it to hold above -350. It's at -100 as I type.

Jonathan Levinson : 10/12/2005 9:51:39 AM

QQQQ - Stop Loss Adjustment Alert -

QQQQ short from 38.05, move stop to breakeven

Linda Piazza : 10/12/2005 9:51:10 AM

The OEX zooms ahead again, steaming right into the 10-minute 100/130-ema's, at 551.40 and 552.04. Advdec line is holding support and is now climbing again. I sure wanted that to happen in conjunction with a test of the bottom of the OEX's descending regression channel and not the top! However, the OEX is moving above that channel, with that breaking perhaps needing to be confirmed by a ten-minute close above the 10-minute 130-ema at 552.05. Dips back to the 100-ema at 551.42 or to Keltner support at 550.85 on 15-minute closes could be used to initiate new bullish positions as long as the advdec line has not reversed. However, this would be for scalpers only as there's a great chance of the OEX hitting strong resistance in the 553.14-554.30 range, especially as the advdec line should be heading into 700-1450 next resistance by then.

Jonathan Levinson : 10/12/2005 9:49:41 AM

QQQQ surged there and broke upper 30 min channel resistance. I will cover quickly, as the move had a high volume, impulsive feel to it. Price needs to fall back almost immediately. Link

Jeff Bailey : 10/12/2005 9:48:23 AM

Buy Program Premium ... DIA $103.07, SPX 1,189.89, QQQQ $38.03

Jonathan Levinson : 10/12/2005 9:48:07 AM

Stop 38.11

Jonathan Levinson : 10/12/2005 9:47:54 AM

QQQQ - Entry Point Alert -

Short QQQQ at 38.05 stop

Jonathan Levinson : 10/12/2005 9:46:11 AM

Volume breadth +1.24:1 on the NYSE, -1.94:1 on the Nasdaq.

Linda Piazza : 10/12/2005 9:45:22 AM

RUT tentatively dipping below the 50% retracement of the rally off the spring low. That is not good, although, as Jane just said, there's a lot of day ahead, and the RUT could still spring higher.

Jonathan Levinson : 10/12/2005 9:45:13 AM

QQQQ failed at 72 SMA resistance at 37.90 (also the pivot), but is trying to find support at a higher intraday low: Link

Linda Piazza : 10/12/2005 9:44:25 AM

My gut has been telling me since yesterday that a bounce should be building, but there just hasn't been strong enough evidence as yet to suggest that traders act on that possibility. With the potential for more downside continuing, I just have to see evidence even for suggestions directed at aggressive traders only. Right now, the advdec line is dipping lower than I would have liked to have seen it dip, although it's still just testing its support.

Linda Piazza : 10/12/2005 9:41:07 AM

As I mentioned late yesterday, just before the close, the level of the advdec line led me to believe that there might be an early bounce this morning, but didn't give evidence of how long it would last. If this mid-channel (down to about -1000) support should hold on the advdec line, particularly if the higher edge near -650 should hold, then there's the potential for a further climb today. The advdec line now dips down to retest that support, at -642 as I type. Just iffy evidence as yet.

Jonathan Levinson : 10/12/2005 9:39:56 AM

The Fed has 13.75B in expiring repos to address in today's 10AM announcement.

Linda Piazza : 10/12/2005 9:38:30 AM

Advdec line above the midline support levels now. Potential to climb into 150-600. Still iffy evidence upon which to base a suggestion for a new bullish entry, but if you're already in a bullish play, you like the way the advdec line is behaving so far, but need to see more strength.

Jonathan Levinson : 10/12/2005 9:36:27 AM

My chart from the 9:33:49 has been corrected/zoomed at this Link

Linda Piazza : 10/12/2005 9:35:31 AM

A tentative holding of the advdec line's midline support here--tentative still. A tentative holding of the RUT's 50% retracement of the rally off the spring low, but really tentative there. Looks as if a rally could be beginning, but the OEX has, as it's been doing a lot lately, already tried to lead the charge. It's now halfway to next potentially strong resistance.

Jonathan Levinson : 10/12/2005 9:34:36 AM

Volume breadth -1.01:1 on the NYSE, -2.43:1 on the Nasdaq in the opening minutes.

Linda Piazza : 10/12/2005 9:33:56 AM

OEX trying to lead the way higher again through its descending regression channel, but it doesn't have the cooperation of the advdec line yet, although there has been a small bounce there, too.

Jonathan Levinson : 10/12/2005 9:33:48 AM

QQQQ closes the opening gap and breaks back into yesteday's range: Link

Linda Piazza : 10/12/2005 9:32:33 AM

The OEX opens and moves just below the bottom of its descending regression channel and then jumps up into the channel again. Mixed evidence. The advec line opens in the middle of its range of support and resistance. No clear evidence here, either. Watching to see if the midline support holds and it climbs or if that support fails and it dives further.

Linda Piazza : 10/12/2005 9:31:08 AM

RUT opens at the 50% retracement of its rally off its spring low. This could be powerful support.

Jonathan Levinson : 10/12/2005 9:29:40 AM

Session lows for crude oil and natgas here at 63.45 and 13.48, just entering negative territory.

Jonathan Levinson : 10/12/2005 9:25:53 AM

Marc, I'm trying to figure out if that INTC downgrade isn't a fade. The daily chart is oversold, but the weekly has room left to run.

Jonathan Levinson : 10/12/2005 9:18:01 AM

Despite QQQQ's uptick since 9AM, all cycles from daily down to the shortest intraday all point down. The intraday cycles continue to trend, grinding lower, but still at higher oscillator lows against the lower price lows. This is a potential bullish divergence if the bulls can turn the cycles up from here- requiring a break above 38.00 QQQQ at minimum. First channel support is at 37.70, with broader daily channel support in the 37.60 area: Link

Linda Piazza : 10/12/2005 8:49:34 AM

Yesterday, the advdec line warned early that it could be a pop-and-drop type day for the OEX and other indices, a warning I first issued in my 9:33 post yesterday morning. I was soon suggesting that aggressive risk takers try a bearish play, but as it turned out, I suggested taking profit too soon. In retrospect, it was a perfect play setup for a bearish play for all traders and not just aggressive ones, but the choppy OEX action, with the OEX not behaving as it usually does in accordance with the advdec line, led me to suggest that too-early profit-taking. Yesterday's close in the advdec line suggested an early bounce this morning, but from what level and to what height were yet unclear. Futures suggest that a lower open is possible.

The OEX had reached the bottom of its descending regression channel yesterday at the close and had bounced a little, but only tepidly. The bottom of that channel is now at about 548.75 and the top is roughly congruent with the ten-minute 100-ema at 551.44 as of yesterday's close. If the OEX opens near that 548.75 level, it's opening again at the bottom of that channel, testing its support, and I'll be paying special attention to the advdec line's opening values and early behavior.

I would not assume that the OEX is confirming an upside breakout, out of that channel, until and unless it produces 10-minute closes above the 130-ema at 552.08 and has moved above yesterday's 552.57 high, and so until that happens, we must assume that it will hit strong resistance again at the top of that channel. Any in bullish positions now or contemplating them this morning, should a setup emerge, should plan to take at least partial profit as the top of that channel is approached. Even after the OEX breaks out of that channel, it's going to slam right into Keltner resistance at 553.23-554.12 on 15-minute closes. Obviously, it would be better to go long closer to the bottom of that channel than the top, and we'll see what this morning's open offers those who are interested in aggressive, countertrend longs. As I said yesterday morning, this is a wounded market, and countertrend longs in such a market tend to be like yesterday's zoom-and-stall-and-then-croak variety or else choppy, difficult-to-trade rises that collapse out of nowhere. A lot of selling has occurred, and bear market rallies can be sudden and intense, and they just might not show us their hand before the rally is too far gone to chase.

If the OEX should zoom higher, we'll look for a sign of a potential rollover in the 554-555 region.

Jonathan Levinson : 10/12/2005 8:48:31 AM

Headlines:

U.S. GASOLINE DEMAND TO FALL 0.9% IN 2005: EIA

U.S. GASOLINE PRICES TO AVERAGE $2.45/GALLON IN 2006: EIA

CRUDE OIL PRICES TO AVERAGE ABOVE $63/BARREL THRU 2006: EIA

Jonathan Levinson : 10/12/2005 8:34:42 AM

Full text of Greenspan's speech at this Link

Jonathan Levinson : 10/12/2005 8:33:51 AM

WASHINGTON (MarketWatch) -- Fed chairman Alan Greenspan repeated a favorite theme in a speech Wednesday morning: deregulation over the past 20 years has created a flexible economy that can absorb and recover from shocks that would have caused deep recessions in decades past. Greenspan's speech to the National Italian American Foundation was almost identical to a speech he gave to the National Association of Business Economics on Sept. 27. He did not address the affects of two hurricanes that struck the Gulf Coast in late August and September. But he said that the flexibility of the economy has allowed the economy, so far, "to weather reasonably well the steep rise in spot and futures prices for oil and natural gas that we have experienced over the past two years."

Jonathan Levinson : 10/12/2005 8:36:33 AM

Headlines:

U.S. HOUSEHOLDS TO SEE 48% RISE NATURAL GAS BILLS: DOE

U.S. ELECTRICITY HEATING BILLS TO RISE 5% THIS WINTER: DOE

U.S. PROPANE HEATING BILLS TO RISE 30% THIS WINTER: DOE

Jonathan Levinson : 10/12/2005 8:33:21 AM

Headlines:

GREENSPAN REPEATS ECONOMY HAS WEATHERED HIGH ENERGY PRICES

GREENSPAN SPEECH NEARLY IDENTICAL TO SEPT. 27 ADDRESS

GREENSPAN DOES NOT ADDRESS HURRICANES IN SPEECH

Jonathan Levinson : 10/12/2005 8:27:08 AM

Ten year note yields are quoted +3.5 bps at here at 4.419%, above first resistance at 4.4%. Key resistance is at 4.44%-4.45% confluence.

Jonathan Levinson : 10/12/2005 8:09:54 AM

From the Mortgage Bankers Association website:

WASHINGTON, D.C. (October 5, 2005) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 30. The Market Composite Index - a measure of mortgage loan application volume - was 713.5, a decrease of 1.1 percent on a seasonally adjusted basis from 721.2 one week earlier. On an unadjusted basis, the Index decreased 1.2 percent compared with the previous week and was down 1.8 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index decreased by 1.9 percent to 473.8 from 483.1 the previous week whereas the Refinance Index increased by 0.1 percent to 2107.4 from 2106.6 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 1.8 percent to 1068.9 from 1088.8 the previous week, and the Government Index, which increased 11.4 percent to 120.3 from 108.0 the previous week.

The four week moving average for the seasonally-adjusted Market Index is down 1.9 percent to 741.9 from 756.4. The four week moving average is down 1.3 percent to 492.7 from 499.0 for the Purchase Index while this average is down 2.8 percent to 2191.6 from 2254.0 for the Refinance Index.

The refinance share of mortgage activity increased to 44.5 percent of total applications from 43.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 29.8 percent of total applications from 28.8 percent the previous week.

Jonathan Levinson : 10/12/2005 8:03:10 AM

Oct. 11 (Bloomberg) -- President George W. Bush's tax advisory panel, rejecting a fundamental overhaul, agreed to recommend limiting tax breaks for homeowners and employer- provided health-care benefits to help pay for repealing the alternative minimum tax.

The panel, meeting in Washington today, agreed the current $1 million cap on deductible mortgage interest should be reduced, possibly to about $350,000, and that the deduction should yield no more than a 25 percent tax savings, down from a top savings now of about 35 percent.

Link

Jonathan Levinson : 10/12/2005 7:52:03 AM

Equities are down, ES trading 1186.25, NQ 1541.5, YM 10257 and QQQQ -.17 to 37.77. Gold is up 2.7 to 482.30, silver +.024 to 7.90, ten year notes are down 1/4 to 109 15/32, crude oil is up 35 cents to 63.875 and natural gas is up 13 cents to 13.65.

We await the 10:30 release of the EIA Petroleum report.

Linda Piazza : 10/12/2005 7:12:39 AM

Good morning. The Nikkei zoomed up and down in an almost 240-point range last night, ending the day at its low of the day. Most other Asian markets declined, as do European markets this morning. As of 6:55 EST, gold was higher by $1.70 to $481.50, and crude, higher by $0.31 to $63.84. Our futures were modestly lower at that time. Lots of rumors have been floating around the forex markets all night, including rumors that Bin Laden may have been injured or killed or forced out of hiding due to the earthquake that hit Pakistan, rumors of an airport in Spain being evacuated and the UN Office in Geneva having received a warning yesterday and tightening security as a result, but none of those seem to be responsible for the state of the markets. More details about Asian and European markets follows in succeeding paragraphs.

The Nikkei had a volatile day in overnight trading, trading in an almost 240-point range. After falling in earliest trading and completing an inverse H&S, the Nikkei climbed into the early afternoon, and then dove straight down to close at its LOD. It closed down 92.97 points or 0.69%, at 13,463.74. By mid-morning, things had been looking good. Financials helped lead the market higher again. Property developers climbed. What happened?

After the open, a series of releases occurred. The Bank of Japan announced that it would leave monetary policy unchanged and keep the current account target the same, although it would allow the balance to decline below the target if there's weak demand for funds. Later, September's consumption tendency survey and general households' consumers' attitude survey fell 2.9 points month over month. Components measuring employment environment, income increase, anticipation of durable goods purchases and living circumstances all declined. Single family consumers' attitude index declined 2.0 points month over month, all households' consumers' attitude index fell 2.8 point, and Tokyo consumers' attitude index declined 2.1 points. The cabinet office released these figures and also downgraded the assessment to a weakish one from the previous flat one. That might have been enough to get things going to the downside, and the timestamp seems to match, too.

A later release by the Bank of Japan on the economic recovery bears a timestamp that's a little more difficult to pinpoint, but may have occurred after the close of the markets. It might still have contributed to the afternoon slide as investors took profit ahead of the release. The Bank of Japan retained its view that the economy would gradually recover. Improvements are expected in consumer sentiment and exports, and there may be some further signs of improvement in housing investment. The Bank of Japan's Governor Fukui spoke later, but only reiterated recent statements about not being able to give a definitive target for a stable CPI, at which point rates would begin to rise again.

Most other Asian markets declined. Merrill Lynch upgraded Taiwan Semiconductor to a buy rating and raised its 12-month price target. Still, the Taiwan Weighted dropped 1.31%, and South Korea's Kospi fell 2.19%. South Korea's antitrust agency has reported that it intends an investigation into Microsoft's alleged unfair business practices. Singapore's Straits Times declined 1.46%, and Hong Kong's Hang Seng fell 2.17%. The bourse might have been reacting to disappointment after new leader Donald Tsang failed to mention concrete measures to buoy the economy in his first speech. China's Shanghai Composite gained 0.40%, however, with banking stocks helping to lead the bourse higher. Spain's BNP Paribas has agreed to take a position in Nanjing City Commercial Bank. Last night in his Wrap, Jim Brown mentioned that the IEA had cut its demand growth outlook for this year, but that China's need for oil will drive it again in 2006. Last night, figures showed that China's imports in September were 4.8% higher than the year-ago level.

European markets turn lower this morning. Germany's final September CPI climbed higher than August's, to an 0.4% increase, 2.5% year over year, from August's 0.1% increase and 1.9% year over year. Excluding energy-related costs, the CPI measured 1.6% year over year, up from August's 1.3% but still considered benign. A rise in alcohol and tobacco, due to an increase in taxes on those items, also contributed to the CPI rise. That rise is enough to put the ECB on the watch for second-round effects, but the ex-energy figure wasn't considered as showing those effects yet. In the U.K., September unemployment claimants rose by 8.2K, far above the expected 4.0K, with August's figure revised higher, too. The average earnings index for August was steady, with a three-month average at 4.2% year over year.

Stock-related news included ASML's update, with that update verifying the impression that the Dutch semiconductor equipment manufacturer's mix was shifting toward leading-edge technology. Net profit rose 17% in the third quarter, although the company booked far fewer systems. ASML edged higher in early European trading. Stocks showed mixed results after updating on earnings or outlooks, with France's Safran gaining, U.K. retailing conglomerate GUS gaining but its partly-owned retailer Burberry dropping, SABMiller dropping, and drugmaker Schering declining.

As of 6:57 EST, the FTSE 100 was lower by 16.80 points or 0.31%, at 5,363.90. The CAC 40 was lower by 19.94 points or 0.44%, at 4,529.74. The DAX was lower by 32.49 points or 0.65%, at 4,999.97, trying hard to regain that 5,000 level and maintain levels above it.

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