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Jeff Bailey : 10/15/2005 2:47:57 AM

WEEKLY / MONTHLY Pivot Matrix at this Link

NOTE: INDU/DIA WEEKLY S1/MONTHLY S2.

NOTE: BIX.X WEEKLY R2/MONTHLY Pivot resistance, and WEEKLY S1/MONTHLY S1 support. Remember how the BIX.X tended to hug MONTHLY S1 this week?

NOTE: QQQQ MONTHLY S1/DAILY R1. Hey... that's about $0.50 higher than Friday's close. If the QQQQ gives a "repeat performance" of Friday's action at DAILY Pivot, where's your upside risk at?

Find your levels, then trade them!

Jeff Bailey : 10/15/2005 2:45:59 AM

Market / Sector / Stock alert ... QQQQ / SOX.X / PLAY ... Here's a 3 chart montage of the QQQQ / SOX.X and PLAY on 10-minute intervals at this Link ... I'm so tired, but this really got my attention tonight. I'll try and discuss more this weekend.

I've place the WEEKLY Pivot Levels on all three charts. It all begins with the observation made on Thursday at 01:59:20 PM EDT with the QQQQ (Market). I had a question regarding my "destiny trade" comment from Wednesday (10/12/05 @ 12:10:56), which comes from pivot analysis and what was found in the INDU/SPX/OEX/QQQQ/SOX.X.

Now, when you look at the above montage, try and think like a computer. Ask yourself ... If the SOX.X does this, what should QQQQ/PLAY do?

Ask yourself ... If the QQQQ does this, what should the SOX.X do?

Now ... here's a quick little DAILY/WEEKLY Pivot Matrix of the QQQQ / SOX.X / PLAY. Dorsey/Wright lists PLAY as belonging to the semiconductor group. Here's the table at this Link ... In my opinion, the SOX.X will be key as it starts out BELOW its DAILY / WEEKLY Pivot. Thinking ... "for strength, a bull needs SOX.X ABOVE the pivots."

See the QQQQ starting out ABOVE a correlative $37.93-$37.95 level? See PLAY starting out ABOVE both its DAILY and WEEKLY Pivots? See that suspicous DAILY R1 and DAILY R2 correlation? Do you see what our average price of the two 1/2 bullish positions "Now Full" is?

Just like a computer? We'll see on Monday, but for my bullish PortalPlay (PLAY) trade, I think you'll agree that I want SOX.X and QQQQ strength. A broker upgrade on PLAY would be nice too. That's a pretty big move if we were to get a "pop" to the correlative $29.48-$29.50 area. To get to that correlation, what levels need to be broken to the upside next? How about DAILY R1?

Don't forget! Friday is OPTION EXPIRATION! Check out those option chains, look where OPEN INTEREST is at!

OI Technical Staff : 10/14/2005 9:59:59 PM

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

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

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

Jeff Bailey : 10/14/2005 9:16:03 PM

Closeing U.S. Market Watch found at this Link

Jeff Bailey : 10/14/2005 9:09:08 PM

Closing Internals found at this Link

Jeff Bailey : 10/14/2005 8:08:27 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing trade round to full position (so another 1/2 position) in shares of PortalPlayer (PLAY) at the offer of $26.69. Note: I'm not a big fan of "averaging down" on a bullish play, but yesterday's action did have me bullish 1/2 position, just in case the stock gapped higher and ran again today. Going forward, I will remove the two 1/2 positions, but follow the "Now Full" portion.

Swing trade sold two (2) WellPoint Health WLP Nov. $80 Calls (WLP-KP) at the bid of $0.60. These are covered by the two (2) WLP Dec. $75 Calls (WLP-LO)

Weekly /Month-to-date Blotter of CLOSED trades at this Link

Linda Piazza : 10/14/2005 3:58:37 PM

Decision-making time if you're in OEX positions. Will you hold over the weekend or not? The OEX has confirmed (barring a deep drop in the last few minutes of trading) a morning-star reversal signal. I think there's a chance of a move up to tag the 10-sma, currently at 552.59, perhaps on Monday, but I'm not certain about upside after that. I think a move up to 555-556 is possible but perhaps not yet probable. In other words, I am so far treating this as a countertrend bounce, expected, and perhaps likely to retrace up to 38.2% of the decline that preceded it, but perhaps also subject to a collapse at any time. If in bearish plays, however, I would not hold onto the hope that the collapse will come any moment if your stop has been hit. I didn't want any part of bearish plays beginning about Wednesday, missing out a bit on the last slide down and I'll wait for signs of a rollover before initiating them again, probably.

Linda Piazza : 10/14/2005 3:50:46 PM

Another reason that the 551-552 zone might prove difficult for the OEX, unless there's a short squeeze in the last few minutes of trading, is the presence of the 30-minute 100/130-ema's at 551.28 and 552.72, with these being the next 100/130-ema hurdle that the OEX has to get through. OEX at 550.42 as I type. The possibility for that short squeeze exists, but so far today, the climb has been of the flaggish variety and not the short-squeeze type.

Jeff Bailey : 10/14/2005 3:48:20 PM

Valero Energy (VLO) $101.36 +1.06% ... dumping a long from this morning's reversal in my personal account into the close.

I think we may have seen the "capitulation" move in the refiners this morning, but not certain. I think we'll see some backfilling action, not a "v-bottom."

There was some damage done to psychology in my opinion. I do think the refiners is the place to be more bullish. Producers that are heavy in the Gulf of Mexico, that don't hedge production, didn't get a chance to capture the commodity gains.

Linda Piazza : 10/14/2005 3:47:36 PM

Advdec line still climbing.

Jonathan Levinson : 10/14/2005 3:45:37 PM

The bounce here aborted QQQQ's 30 min cycle downphase very prematurely, while topping out the short cycle. Our stop was hit on the high tick of the day, with price back into its sideways range just below the highs. This potentially bearish intraday picture still lines up with the still-ongoing daily cycle downphase. However, the higher high and higher low for the day is going to be a problem for bears. Any show of strength on Monday, in addition to causing the 60 min cycle to trend in overbought, would likely be enough to start turning the daily cycle up.

Linda Piazza : 10/14/2005 3:41:55 PM

The current level of the top of the OEX's rising regression channel off yesterday's low is just under 552, but of course, that's rising. The OEX has important Keltner resistance, currently at 551.27 on 15-minute closes, however. This is resistance that often stops the OEX, as least long enough for a pullback. I'm not sure about on a Friday after a prolonged downdraft, with the possibility of bears scrambling to cover and lock in some profits, however. We'll see, but note that potential resistance.

Jeff Bailey : 10/14/2005 3:41:11 PM

Goldman Sachs (GS) $114.78 +1.41% ... should'a sold 1,000 of those GS-VTs yesterday at $0.15, not just the three.

Linda Piazza : 10/14/2005 3:37:20 PM

Big test about to occur. The RUT is approaching its 200-sma and -ema's, at 634.00 and 634.93, respectively, with the RUT at 632.69 currently.

Jonathan Levinson : 10/14/2005 3:37:16 PM

QQQQ - Exit Point Alert -

Stopped on QQQQ short at 38.07, -.06.

Linda Piazza : 10/14/2005 3:36:08 PM

Here's a Keltner view of the OEX: The OEX is now maintaining 15-minute closes above 549.11-549.26 support, setting up a test of the 551.16 next resistance as long as that support is held on 15-minute closes.

Jeff Bailey : 10/14/2005 3:35:42 PM

Sun Micro (SUNW) $3.96 (unch) ... still sticking around where bears covered their MM short. Not overly bullish action is a thought.

Jeff Bailey : 10/14/2005 3:31:44 PM

Starbucks (SBUX) $52.97 +0.13% Link ... Makes me think JVA action is largely short covering.

Linda Piazza : 10/14/2005 3:28:26 PM

OEX punched above 550, but hasn't been able to quite hold it. Advdec line still strong, though.

Linda Piazza : 10/14/2005 3:25:07 PM

Advdec line still trying to edge higher. As long as it's doing that, there's still danger (to bears) of a breakout to the upside.

Linda Piazza : 10/14/2005 3:21:58 PM

Tough resistance the OEX faces, and it shows. The advdec line hasn't fallen back yet. The OEX is about to trade sideways in to the rising regression channel's support if it just holds where it is (although time will run out first, I think), but that's a more bullish occurrence than dropping down to test the channel's support. OEX trying to rise again as I type.

Jeff Bailey : 10/14/2005 3:18:36 PM

03:00 Internals found at this Link

Jonathan Levinson : 10/14/2005 3:17:49 PM

QQQQ 100-tick chart with 3 days' data scrunched in attached below. With confluence resistance and the intraday upphases topping out, the current highs have a decent chance of holding. If they don't, then the bounce off yesterday's low will have a rising-triangle look to them, verging on a sloppy reverse h&s. There's plenty to entice bulls with the current setup, but the longer intraday cycles aren't right for it yet (barring an upside trending move). That and, with everyone expecting a bounce yesterday and today, I'm dubious of the sustainability of that strength. In any event, the stop is just over the current highs. Link

Linda Piazza : 10/14/2005 3:08:06 PM

Advdec line still climbing, although testing resistance as I type.

Jeff Bailey : 10/14/2005 3:08:05 PM

03:00 Market Watch found at this Link

Linda Piazza : 10/14/2005 3:04:16 PM

New HOD for the OEX. It's still pausing below 550, though, now at 549.88. Bulls need to seeit press higher.

Jonathan Levinson : 10/14/2005 3:03:03 PM

Volume breadth +2.92:1 on the NYSE, +2.48:1 on the Nasdaq.

Jeff Bailey : 10/14/2005 3:02:08 PM

Coffee Holding (AMEX:JVA) $6.40 +29.03% Link ... "Perks up" after a wild couple of months.

Linda Piazza : 10/14/2005 3:03:03 PM

The SOX fell all the way back a couple of hours ago to test the rising trendline off its Wednesday low. It's rising from that trendline, but bulls want to see a new high produced, to avoid the potential consolidation-form regular H&S that it may be producing with a neckline along that rising trendline. These continuation-form formations are not as reliable as topping ones, but it should be watched, especially as the SOX was one of the first indices to lead the way higher, beginning Wednesday as it steadied on its 200-sma. The head topped out at today's HOD at 447.80, and the SOX is currently at 442.06. Another interpretation of that formation is a rising regression channel, a rather broad one, so it's possible to see this more than one way.

Linda Piazza : 10/14/2005 2:58:27 PM

OEX still struggling with all that resistance between 549.50 and 550, including the 15-minute 130-ema at 549.51, the 19.1% retracement of the rally at 549.76, the previous HOD, the R1 (according to QCharts) and myriad other sources of resistance. It's dropping back a little as I ype, but bulls don't want it to drop too far, especially not out of the rising channel or below the 15-minute 100-ema on 15-minute closes, with that at 548.74. They instead want a new HOD and strong gains.

Jonathan Levinson : 10/14/2005 2:57:07 PM

30 min channel resistance was violated on the break of 38.02, and the 60 min cycle is toppy, suggesting that the current channel touches should be it for the short cycle and possibly 60 min cycle as well.

Jeff Bailey : 10/14/2005 2:57:54 PM

QQQQ "should" close at highs of the session today based on daily pivot analysis (yesterday and today).

Jonathan Levinson : 10/14/2005 2:55:53 PM

QQQQ - Entry Point Alert -

Short QQQQ at 38.01, stop 38.07

Jeff Bailey : 10/14/2005 2:55:50 PM

Current OPEN MM Profiles found at this Link ... I've shown a "full" position in PLAY, with the two 1/2 positions added together.

With the major market bullish % indications still weak, I will not be inclined to hold full bullish position in honor or RISK management. When I issue the "sell 1/2 bullish in PLAY, it will be based on 365 shares for the RISK MANAGED traders.

Linda Piazza : 10/14/2005 2:55:23 PM

The SPX has now erased all of the losses from the previous two days, if it can maintain this level. It's at 1185.11 as I type. Like the OEX, however, it presents the potential for a double-top formation here unless it can press through to higher levels and maintain them. Another do-or-die moment here for the markets.

Linda Piazza : 10/14/2005 2:52:58 PM

RLX back at its 10-sma, edging just above it, with the average at 429.67 and the RLX at 429.93.

Jonathan Levinson : 10/14/2005 2:52:13 PM

QQQQ closeup at this Link , testing upper descending linear resistance. 30 min channel resistance rises to 38.01.

Jeff Bailey : 10/14/2005 2:51:14 PM

Buy Program Premium ... DIA $102.65, SPX 1,184.67, QQQQ $37.92

Linda Piazza : 10/14/2005 2:50:38 PM

OEX moving up a bit, but no new HOD yet. Previous HOD at 549.82, right at the 19.1% retracement of the OEX's steep decline, also near the daily R1 (QCharts calculation) for those who watch the pivots and also near the 15-minute 130-ema at 549.49. OEX now at 548.88, balancing on the 15-minute 100-ema at 548.73, with this morning's HOD a rise to the 130-ema and pullback from there. So, we have another step the OEX must take in order to look a bit more bullish, and that's to clear the 15-minute 130-ema on a 15-minute close. OEX began climbing again as I typed.

Jonathan Levinson : 10/14/2005 2:49:15 PM

I wonder how many Refco accounts were long oil and natural gas? The CRB closed -2.84 at 326.08. If those were retail longs being liquidated, that could explain the deep correction and subsequent recovery in natgas and crude oil noted earlier.

Jonathan Levinson : 10/14/2005 2:42:38 PM

Refco said today that it would unwind its securities business, and the Securities and Exchange Commission barred customers of two divisions of the commodities brokerage firm from withdrawing funds from for 20 days.

The shutdown of the securities business and S.E.C. prohibition were only the latest in a fast-moving series of events at one of the world's largest futures broker since it said Monday that it had failed to disclose transactions with its chief executive, who was suspended.

In a statement, the company said Refco Securities would "only be engaging in security transactions to the extent necessary to offset and effectively liquidate outstanding long and short customer and proprietary positions."

Link

Jonathan Levinson : 10/14/2005 2:40:30 PM

Treasury budget 35.8B vs. 37B exp.

Jonathan Levinson : 10/14/2005 2:39:51 PM

Headlines:

TREASURY: U.S. FISCAL 2005 DEFICIT TOTALED $319 BILLION

U.S. DEFICIT FELL FROM $413 BILLION IN FISCAL 2004

U.S. 2005 DEFICIT IS 2.6% OF GROSS DOMESTIC PRODUCT

Linda Piazza : 10/14/2005 2:38:47 PM

There goes that Rawhide song playing in my head again, altered to say, "coiling, coiling, coiling." It feels as if markets are trying an upside breakout here, but let's see if they can do it.

Jonathan Levinson : 10/14/2005 2:36:27 PM

Crude oil closed -.475 for the day at 62.60, 1.325 off its session low. Natgas finished +.12 at 13.225, 52.5 cents off its low.

Linda Piazza : 10/14/2005 2:33:20 PM

The OEX managed yet another 60-minute close above the flattening 60-minute 21-ema. It sure can't move far above that average, though, with that average at 548.31 currently. The OEX is at 548.56 as I type.

Linda Piazza : 10/14/2005 2:32:00 PM

Obviously, the OEX needs to produce a new HOD soon to give bulls more hope and scare bears a bit into locking in some of their profits.

Linda Piazza : 10/14/2005 2:23:25 PM

So far, the OEX maintains its rising regression channel and the advdec line maintains its support, if barely.

Jonathan Levinson : 10/14/2005 2:19:06 PM

Still no word from the Treasury.

Jonathan Levinson : 10/14/2005 2:18:27 PM

QQQQ isn't perfectly trendless here, but price is holding equidistant from support and resistance on all but the short cycle channels. With volume breadth just above neutral at +1.21:1 and even the wavelet opposed to the short cycle oscillators, there's a decent chance of sideways chop from here. Below the session low at 37.63 or above the 38.02 high, the picture will change, but for now, there's an uneasy equilibrium. Link

Jeff Bailey : 10/14/2005 2:18:20 PM

02:00 Internals found at this Link

Linda Piazza : 10/14/2005 2:16:21 PM

OEX testing the bottom of its rising regression channel. Again.

Jonathan Levinson : 10/14/2005 2:05:39 PM

Still nothing on the Treasury Budget. I'll post it as soon as I see it.

Jeff Bailey : 10/14/2005 2:03:48 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 10/14/2005 2:01:45 PM

Waiting for the Treasury Budget here, due 1 minute ago, est. 37B, prior 24.6B.

Linda Piazza : 10/14/2005 1:59:47 PM

This is labored, isn't it? However, as long as the advdec line is maintaining support and the OEX is maintaining its rising regression channel off yesterday's low, the possibility for further climbs continues. I have the feeling that at some point, we'll reach some critical level or critical length of time of this labored pattern and either bulls or bears will start giving in. I know a push over 550 that's sustained should probably be a scary move for OEX bears, although 551-552 are also sites of historical, Keltner and/or MA potential resistance. A drop out of the rising regression channel, if not immediately reversed might scare new bulls. I feel as if there's someone walking around an ammo dump, whistling, a lighter in hand, but when that fuse will be lit, I don't know.

Jonathan Levinson : 10/14/2005 1:57:43 PM

Headlines:

FED'S POOLE: ENERGY IMPACT ON CORE INFLATION MAY BE LIMITED

POOLE: IN DUE TIME, FOMC LANGUAGE WILL CHANGE

POOLE: FED DOESN'T HAVE FULL HURRICANE DAMAGE REPORT YET

POOLE: 5-YEAR INFLATION EXPECTATIONS HAVE NOT RISEN

Jonathan Levinson : 10/14/2005 1:54:39 PM

QQQQ continues to hold right on the broken rising wedge support line and just below 72 SMA resistance at 37.88, a short cycle upphase already in progress: Link

Linda Piazza : 10/14/2005 1:48:44 PM

RLX challenging its 10-sma. It's pierced it, but hasn't been able to maintain values above it just yet. That average is at 429.54 with the RLX at 428.57 as I type.

Linda Piazza : 10/14/2005 1:46:59 PM

The OEX maintains its rising regression channel. The advdec line maintains, barely, its first support at about 1550, with the advdec line now at 1680 and trying to bounce again. As long as those are happening, the possibility for more gains exists. We're entering a stop-running time of day, so be careful.

Jonathan Levinson : 10/14/2005 1:45:11 PM

Nasdaq volume breadth is back to positive, +1.35:1 here, and volume is heavy again today, 95.15M QQQQs traded so far, already 10M above the daily average while lagging behind yesterday's total of 138.6M for the day.

Jeff Bailey : 10/14/2005 1:39:56 PM

BioCryst Pharma (BCRX) $15.80 +9.95% ... bird flu play ... might be a bear in the chicken coop looking for cover.

I've proved to myself, in my own account, that I can't trade this stock (from long and short side). You don't want my help on this one.

Jonathan Levinson : 10/14/2005 1:33:27 PM

QQQQ update at this Link with price back into the wedge and testing 72 SMA resistance from below as the short cycle oscillators gather in oversold territory.

Linda Piazza : 10/14/2005 1:32:13 PM

The OEX did manage another 60-minute close above its 21-ema on that chart. It's coming right back down to test it again, though, with that average at 548.26 currently and the OEX at 548.28 as I type.

Linda Piazza : 10/14/2005 1:24:33 PM

Here's a snapshot of the OEX's rising regression channel. After a steep fall, these channels are presumed bear flags, but it's about time now for a flag to retrace a bit more than the couple of points they've been retracing over the last few days. I've placed a Fib bracket on the decline off the early September high, and you can see that the OEX has been battling the 19.1% retracement today. Link So far, about all we can say is that the OEX maintains the channel. Watch for a breakdown (although that wouldn't be my first guess for today), but be careful of a stop-running move to the downside over the next 40 minutes, too.

Jeff Bailey : 10/14/2005 1:22:48 PM

SOX.X 439.23 -1.58% ... TXN -3.91%, AMD -3.46%, NSM -2.91%, KLAC -1.98% pacing weakness.

Jeff Bailey : 10/14/2005 1:20:52 PM

01:00 Internals found at this Link

Linda Piazza : 10/14/2005 1:13:54 PM

OEX still testing that support of the rising regression channel. The 60-minute 21-ema is above, at 548.17, with the OEX at 547.80, and those hoping for further gains would like to see the OEX back above that MA before the end of this 60-minute period.

Jonathan Levinson : 10/14/2005 1:13:31 PM

Volume breadth +1.76:1 on the NYSE, down to -1.03:1 on the Nasdaq.

Jonathan Levinson : 10/14/2005 1:11:19 PM

QQQQ tests rising support off yesterday's low, along with lower 30 min channel support. As earlier, the 30 min cycle is due for a downphase and support will move lower if price doesn't bounce strongly from here. Link

Jonathan Levinson : 10/14/2005 1:10:06 PM

Big upside move in ten year note yields here, ZN futures down to a low of 108 23/32 and TNX up 5.3b bps at 4.528%. IRX is up 4.3 bps at 3.705%.

Jeff Bailey : 10/14/2005 1:08:13 PM

01:00 Market Watch found at this Link

Linda Piazza : 10/14/2005 1:06:20 PM

OEX still testing the bottom of that rising regression channel off yesterday's low.

Jeff Bailey : 10/14/2005 1:04:37 PM

WellPoint (WLP) ... Updated bar chart we've been trading at this Link ... Call option strategy notes.

Linda Piazza : 10/14/2005 1:02:53 PM

OEX now nearing the bottom of the ascending regression channel it's been climbing within since yesterday's low. Bottom support is at about 547.35, but I'd use a 15-minute close to determine whether the OEX has broken that support or not because it's been spiking either direction outside of the channel and then pulling back inside it. The OEX is at 547.89, just having hit 547.59, not quite touching that channel's support.

Jonathan Levinson : 10/14/2005 1:02:42 PM

Crude oil -1.5 at 61.575, 30 cents off the earlier low. Natgas is 21 cents off its 12.71 low. Rising energies and bond yields here shouldn't be healthy for equities, but QQQQ holds in positive territory.

Jonathan Levinson : 10/14/2005 12:58:15 PM

TNX +3 bps to 4.505% here. Next resistance is in the 4.57% area.

Linda Piazza : 10/14/2005 12:55:22 PM

As is to be expected, the OEX is dropping back to test the 60-minute 21-ema, currently at 548.27, to see if it holds as support. Bulls want to see it do so on 60-minute closes. The OEX is edging just beneath it as I type, currently at 548.12.

Linda Piazza : 10/14/2005 12:54:11 PM

Bulls would like to see the advdec line maintain support above about 1450 on this pullback. It's at 1935 as I type.

Jeff Bailey : 10/14/2005 12:45:27 PM

Swing trade sell covered calls alert ... sell two (2) of the WellPoint WLP Nov. $80 Calls (WLP-KP) at the bid of $0.60.

WLP $74.00 +4.02% here.

Jonathan Levinson : 10/14/2005 12:45:02 PM

QQQQ update at this Link with price testing 72 SMA support at 37.89.

Jonathan Levinson : 10/14/2005 12:40:57 PM

Session low for 10-year notes at 108 7/8, TNX up 2.4 bps to 4.499%, right at 4.5% resistance.

Linda Piazza : 10/14/2005 12:37:45 PM

SOX still negative. Dropping down to its 200-ema and edging just a little beneath it. It's at 442.40 with that 200-ema at 442.90.

Jonathan Levinson : 10/14/2005 12:35:57 PM

Ten year note yields are running higher, +1.4 bps at 4.489%, while 13-week bill rates edge back to a 4 bp gain at 3.702%. Don't forget the Treasury Budget due at 2PM, which could roil the bond market.

Linda Piazza : 10/14/2005 12:36:12 PM

A first OEX 60-minute close above the 60-minute 21-ema since 10/4. This has been strong and proven resistance on the way down, so might now be considered support. We may see soon, as the OEX edges just a little lower as I type, perhaps into a retest. Here's a chart showing how it functioned as resistance on 60-minute closes until the last hour: Link Bulls do not want to see a quick drop back below it again now.

Linda Piazza : 10/14/2005 12:30:28 PM

Advdec line still climbing. Potential bearish divergence still there, so be cautious, bulls. Still potential for a breakout all day, too.

Linda Piazza : 10/14/2005 12:25:40 PM

The BIX has soared above its 10-sma today and now climbs straight toward the bottom of its broadening formation, still a few points away at 339.04. With the BIX at 335.21 and having opened at 330.59, I'm not so sure it could even reach that today unless it were a blow-out day to the upside. The BIX has an ATR (average true range) of 4.01 points, and it's already topped that today, so it's already had a strong upside day, even if it closes right where it is and never tacks on another cent. The question is whether it will pull back instead.

Linda Piazza : 10/14/2005 12:22:38 PM

RUT just a little more than 2-1/2 points below its 200-sma now.

Jonathan Levinson : 10/14/2005 12:22:06 PM

Volume breadth +2.81:1 on the NYSE, +2.12:1 on the Nasdaq.

Linda Piazza : 10/14/2005 12:22:00 PM

OEX Keltner outlook. The OEX closed the last 15-minute period above tough resistance at 549.38, if only modestly above it. It's still the first close above it since 10/4. The OEX is hovering there, testing before it either pulls back or launches itself toward 551-ish resistance. OEX at 549.37 as I type.

Linda Piazza : 10/14/2005 12:20:00 PM

Advdec line has climbed into resistance. It's showing tentative bearish value/RSI divergence as it does so on the shorter-interval charts, but not yet on charts like the 30-minute one. This would normally be another indication to start looking for a bearish play, but the advdec line has not turned down again and I just do not trust bearish plays today, even though I tried to talk myself into one this morning and I should have scalped it. I just can't bring myself to either enter one or suggest one, because what I'm seeing on a day trading basis does not match what I'm seeing on a longer-term basis--the possibility (not yet probability) of a several day gain, although a countertrend one. I do not want to be caught in a bearish position if there's going to be a short squeeze this afternoon and would rather pass up the opportunity.

Jonathan Levinson : 10/14/2005 12:19:46 PM

QQQQ ran our tight stop, or, more specifically, limped over our tight stop, made a new high at 38.02 and is now back to the broken resistance line, testing it from above: Link

Jeff Bailey : 10/14/2005 12:14:56 PM

12:00 Internals found at this Link

Linda Piazza : 10/14/2005 12:11:42 PM

If the climbs continue, keep a close watch on the 10-sma's on the Dow, SPX and OEX, with those at 10,306.13, 1193.59 and 552.50, respectively. The OEX at least has not closed above that average since 10/4, and doing so today would suggest the possibility of a move up toward 554-556, but let's not put the cart before the horse just yet. Watch those levels for potential resistance, should the climbs continue. OEX at 549.51 as I type.

Jonathan Levinson : 10/14/2005 12:09:10 PM

QQQQ - Exit Point Alert -

Stopped Out QQQQ short -.03

Linda Piazza : 10/14/2005 12:08:46 PM

RUT at its HOD, edging a little above the 50% retracement of its last rally, having at least temporarily erased all the declines from the past two days. It's headed up to a test of the converging 200-ema and -sma's, though, with those at 634.91 and 633.99, respectively, and with the RUT at 630.28. If it gets past those 200-ema and -sma's . . . but let's wait to see if it does.

Jonathan Levinson : 10/14/2005 12:07:33 PM

QQQQ - Entry Point Alert -

Short QQQQ at 37.95 stop 37.98

Jeff Bailey : 10/14/2005 12:04:29 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 10/14/2005 12:04:27 PM

QQQQ bulls and bears battling it out right here at 37.92. Link

Linda Piazza : 10/14/2005 12:04:25 PM

I mention the OEX's already-confirmed inverse H&S on the line drawing. Link The bar chart's version is different and hasn't yet been confirmed: Link

Jonathan Levinson : 10/14/2005 12:03:07 PM

Headline:

[RFX] N.Y. CLEARING CORP RESTRICTS REFCO CAPITAL WITHDRAWLS

Jonathan Levinson : 10/14/2005 12:02:50 PM

Headlines:

FED'S POOLE: PREDICTABLE POLICY HIGHLIGHT OF GREENSPAN ERA

POOLE: GREENSPAN MONETARY POLICY NOT WITHOUT CERTAIN RULES

POOLE: NO FORMAL RULE MATCHES POLICY OF GREENSPAN ERA

POOLE: GREENSPAN LEGACY FRAGILE AS RULES CAN'T BE CODIFIED

Jonathan Levinson : 10/14/2005 11:56:24 AM

QQQQ tests declining resistance at the session highs: Link

Linda Piazza : 10/14/2005 11:55:06 AM

The advdec line still climbs, but still does so in a choppy fashion as it heads into the next resistance zone, beginning at about +2000, with the advdec line at +1524 on QCharts. It really needs to carry the OEX up higher before it hits that resistance.

Jeff Bailey : 10/14/2005 11:54:35 AM

BioCryst Pharma (BCRX) $15.06 +4.8% Link ... bird flu play "roosting" back near its 52-week high set earlier this week.

Linda Piazza : 10/14/2005 11:52:43 AM

I haven't suggested any plays today, nor have I initiated any in my own account, and here's why. Currently, the OEX is testing the MA that might be a make-or-break point for shorts who have been profiting from their bearish position all week. They know the OEX is approaching some potentially strong support levels and they're probably edgy, sitting on all those gains. If the OEX can close above that 60-minute 21-ema and maintain levels above it, then there's the potential for those shorts to begin covering into the weekend, and there could be an explosion upward, even if it's still not a particularly bullish development. However, if the day progresses and the bulls who have been holding on all week see that there's still no ability to take even this initial step toward a rally, they'll be the ones bailing. Some chart setups say one thing; some another. I missed a good bearish play earlier today because I was too afraid that the pullback would be minor and the upward explosion could come, but since then, I haven't seen a good setup.

Jonathan Levinson : 10/14/2005 11:49:35 AM

Bonds continue to hold in negative territory, with TNX +.6 bps at 4.481% and IRX up 4.5 bps at 3.707%, the yield curve flatter today.

Linda Piazza : 10/14/2005 11:44:10 AM

Advdec line is still climbing rather than pulling back. It's still a choppy climb, however. The OEX remains at the 60-minute 21-ema, not really above it and not really below it. Mixed evidence everywhere.

Linda Piazza : 10/14/2005 11:38:21 AM

If the advdec line is going to continue its zig-zagging progress higher again, then it's probably going to find resistance somewhere near 1300, with the advdec line now at 1177, QCharts value. It's already touched that resistance line, so a pullback toward 450-830 wouldn't be unexpected. Bulls would rather it not go deep into that potential support zone, though.

Jonathan Levinson : 10/14/2005 11:37:12 AM

Bears need to take out that rising support line connecting the lows from yesterday, currently at 39.73: Link

Tab Gilles : 10/14/2005 11:35:31 AM

Nasdaq100 ($NDX) Daily chart showing a bounce here, is this the reversal? Not sure yet? But taking some money off any short position would be prudent. Link Daily $NAHL hitting -200 another reason to take some profit. Link

Weekly chart still bearish. Link Weekly $NASI/$NAHL Link

$VXN daily & weekly Link Link

Linda Piazza : 10/14/2005 11:32:51 AM

The OEX's 60-minute close was right at the 60-minute 21-ema. While that's certainly a stronger performance than any seen since 10/4 (no others have closed at it), bulls need more, I think. They need a strong climb above it. A close at it probably has bears watching closely, their hands at the ready to trigger their STC orders on their puts, but not yet doing it, I wouldn't think, or at least not the aggressive ones. OEX at 548.03 as I type, with the advdec line now at 548.08.

Jeff Bailey : 10/14/2005 11:29:50 AM

10 Most Active ... QQQQ $37.88 +0.26%, SPY $118.14 +0.60% (large block level $118.17), EWJ $11.92 -0.25%, IWM $62.43 +0.90%, SIRI $5.94 -2.78%, JDSU $1.98 (unch), AAPL $53.81 +0.13%, MSFT $24.53 -0.24%, INTC $23.15 -0.21%, LU $3.06 +0.32%

Jonathan Levinson : 10/14/2005 11:28:41 AM

Volume breadth +1.6:1 on the NYSE, +1.5:1 on the Nasdaq.

Linda Piazza : 10/14/2005 11:28:11 AM

Bulls need that OEX 60-minute close above the 60-minute 21-ema, with that average now at 548.10 and the OEX at 548.08, testing it. I'm not sure it's going to come this 60-minute period or be convincing it if does, and bulls really need a convincing close above this MA. Bears have been watching the OEX being pressured lower by this MA since 10/4, and as long as it continues to be, they won't have a reason to close their positions.

Jeff Bailey : 10/14/2005 11:23:51 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 10/14/2005 11:23:05 AM

OEX Keltner outlook: The OEX faces potentially strong resistance at 549.42 on 15-minute closes. The last time that resistance was even tested was . . . you guessed it, the afternoon of 10/4. Above that is 551 resistance, known historical resistance and the target of the OEX's little inverse H&S. If there are any bulls in this market, you'll want to be particularly watchful as this 549.42-551 zone is tested.

Linda Piazza : 10/14/2005 11:20:33 AM

Advdec line held needed support on the last little retest and is climbing again. It might again hit resistance soon, so unless there's a breakout, any move higher might be a zig-zagging move higher. Bulls will take any climb, but need to keep on their toes if it's a zig-zagging, corrective-looking one.

Linda Piazza : 10/14/2005 11:19:00 AM

OEX tentatively confirming that inverse H&S (at least the line-drawing version) but it needs a 60-minute close above the 60-minute 21-ema at 548.08 to confirm it. If you go by the bar chart, the inverse H&S neckline might be even higher, but at any rate, a 60-minute close above that 21-ema would be the first since the afternoon of 10/4 and another sign of at least a temporary trend change. OEX at 548.56 as I type.

Linda Piazza : 10/14/2005 11:16:27 AM

RUT not negative. Neither is the RLX, the BIX, or the TRAN. The SOX is, pulling back from the midline of its rising regression channel but so far staying above its 200-ema down at 438.77. It has not yet achieved its 450.60-ish upside target from the inverse H&S it confirmed yesterday on its 60-minute chart, but it is tentatively holding to the curving-upward support of its 60-minute 21-ema at 442.49.

The OEX has a sort of inverse H&S on its 60-minute chart, too, although you have to look at a line drawing to see it clearly. It looks as if a 60-minute close above its 60-minute 21-ema at 548 would be needed to confirm it, although the neckline might actually be closer to 547.60-547.70 or so, depending on how its drawn. If it were confirmed, the OEX would have an upside target near 551, already known resistance. The OEX is at 547.32 as I type. Note that the OEX tried to produce a larger inverse H&S on the 60-minute chart on 10/6 and it fell apart before another tumble.

Jonathan Levinson : 10/14/2005 11:14:06 AM

QQQQ's 30 min cycle rolled over earlier below overbought territory, while the 60 min cycle indicators continue to point higher, roughly 3/4 of the way through their upside run. The failure so far to take out the earlier 37.96 high suggests topping action for the 60 min cycle, and further sideways chop would add weight to that view. Bears need to see a break of the 37.60 level to kick off a synchnronous downphase for these two longer intraday cycles.

Linda Piazza : 10/14/2005 11:07:48 AM

Since about April 2004, the OEX has not traveled far outside a 6% move above its 200-ema and a 3% move below it. That move would now target a low for the OEX near 540, with the OEX having touched that envelope line yesterday, piercing it and then bouncing back above it. The line is at 545.63. That's one reason to believe that downside might be limited from here. Of course, the OEX has broken out of this envelope before, and could do so again, but that's been the pattern for a while and a reason to be careful about bearish positions: Link

Jeff Bailey : 10/14/2005 11:03:15 AM

11:00 Market Watch found at this Link

Tab Gilles : 10/14/2005 10:59:42 AM

Eaton Van Limited Duration Income Fund(EVV) Link

Jonathan Levinson : 10/14/2005 10:56:34 AM

No further action, either temporary or permanent from the Fed's open market desk, so the net 250M drain for the day is going to stick. So far, the Q's bounce above the 72 SMA is getting poor traction. Bulls need to see a violation of the current 37.96 high.

Linda Piazza : 10/14/2005 10:56:08 AM

Currently, the TRAN tests the 50% retracement of its climb off the June low into the summer high. That Fib level is at about 3603.32 with the TRAN currently at 5604.60. The TRAN punched up toward its 200-sma at 3628.73 at one point, but then fell back.

Jonathan Levinson : 10/14/2005 10:54:59 AM

Volume breadth is up to +1.32:1 on the NYSE, +1.66:1 on the Nasdaq.

Linda Piazza : 10/14/2005 10:53:30 AM

Mixed signs everywhere. Advdec line did hold one level of support and it's now zooming back above another that didn't hold on the first test and so might have been presumed to have been resistance. Not so. Although the early morning outlook just after the open was for a pullback (see my 9:35:49 post), an outlook I did not heed, the outlook so far has now brightened at least temporarily to either a sideways sort of day or something more bullish. The pullback was pretty easy to diagnose, although I didn't act on it. The rest isn't.

Linda Piazza : 10/14/2005 10:45:56 AM

Advdec line now attempting to bounce and break out again. Needs to get back above 950 or so.

Linda Piazza : 10/14/2005 10:44:24 AM

Just a little hope now that the advdec line support is holding, but there's still building resistance just overhead now. Here's a chart: Link The possibility for a breakout day remains, but that first downdraft would have been a good one to try, at least.

Jonathan Levinson : 10/14/2005 10:43:45 AM

QQQQ breaks above the 72 SMA resistance line at 37.82, the short cycle indicators turning up: Link

Jeff Bailey : 10/14/2005 10:43:32 AM

Valero Energy (VLO) $96.38 -3.89% ...

Jonathan Levinson : 10/14/2005 10:40:15 AM

Ten year note yields are back to positive territory, +.2 bps at 4.477%. IRX is up 5 bps to 3.712%.

Jeff Bailey : 10/14/2005 10:36:37 AM

Buy Program Premium ... DIA $102.24, SPX 1,177.70, QQQQ $37.80

Linda Piazza : 10/14/2005 10:34:11 AM

Advdec line support doesn't look as if it's holding. I let my bias get in the way today and didn't take or suggest a bearish trade that I would have suggested at any other time, but I just couldn't bring myself to suggest that trade today, especially ahead of the sentiment number.

Jonathan Levinson : 10/14/2005 10:31:21 AM

Volume breadth -1.2:1 on the NYSE, -1.96:1 on the Nasdaq.

Jeff Bailey : 10/14/2005 10:29:43 AM

Bullish swing trade round to full alert ... for PortalPlayer (PLAY) $26.69 -4.30% here.

Linda Piazza : 10/14/2005 10:27:42 AM

Advdec line support tentatively holding again. We saw that earlier, though, didn't we, with the previous support level? This is a more important one. If the advdec line at stabilizes at this zone, it allows the equities to do so, too, but it needs to bounce in order to bring them higher, too, and now it's got resistance just overhead. Strong support and strong resistance close by and I'm not sure which will win.

Jonathan Levinson : 10/14/2005 10:25:11 AM

Session low for crude oil here, down 1.475 or 2.34% at 61.60.

Linda Piazza : 10/14/2005 10:21:21 AM

GE gapped higher this morning, and has now sunk down to test its 72-ema. This is an important test for GE, and for the OEX: Link

Jeff Bailey : 10/14/2005 10:20:45 AM

10:00 Internals found at this Link ... Yesterday's Internals found at this Link

Jonathan Levinson : 10/14/2005 10:18:07 AM

Session lows for QQQQ, with combined channel support down to 37.60. But these channels are just starting to rollover, and support could continue to decline.

Linda Piazza : 10/14/2005 10:16:47 AM

The OEX now looks vulnerable on a 15-minute Keltner basis, to a test of 545.60 and perhaps of 543.60.

Linda Piazza : 10/14/2005 10:15:39 AM

OEX Keltner picture: The OEX is holding to support at 547.07 on 30-minute closes, testing that level as I type. It's at 547.23. As long as it holds that support on 30-minute closes, it's likely to go on testing the important 548.58 overhead resistance, with the OEX unable to close 30-minute periods above that since 10/4.

So, I'm getting a picture of tentative holding of support on both the OEX and the advdec line, but tentative only. There isn't a clear picture here. I've come oh-so-close several times, including a few minutes after the open of suggesting a bearish play and entering one for myself, but something has not allowed me to do it.

Note, the OEX sank a little further as I typed and so did the advdec line, toward that next support band.

Jonathan Levinson : 10/14/2005 10:14:42 AM

QQQQ updated at this Link , bouncing below 72 SMA resistance within the descending channel off the high.

Linda Piazza : 10/14/2005 10:11:00 AM

Advdec line headed down to test stronger support, near +150 down to -500. Advdec line at 592 as I type. If it holds this, it will have maintained a breakout on the five-minute chart, at least, and will maintain a new upside target of at least +1000-1250 on the 10-minute. It's at 503 as I type.

Jeff Bailey : 10/14/2005 10:07:50 AM

10:00 Market Watch found at this Link

Linda Piazza : 10/14/2005 10:06:18 AM

Advdec line still tentatively holding to the first support band encountered, which would be the most bullish case, given the extreme levels it tested earlier. Still iffy here. If I weren't anticipating a bounce, I'd sure be watching the current advdec line bounce for signs of bearish divergence or other such things, for a signal to enter a bearish trade. My bias is perhaps getting in the way today, but the advdec line is holding that first support and no bearish divergences have shown up yet, so I'm frankly not sure what to think. Advdec line at 978 as I type, still looking vulnerable to a pullback to 160 to -50, at least.

Linda Piazza : 10/14/2005 10:02:21 AM

Advdec line still holding to that potential support, although barely. Stronger support near -500 to -150. It's at 652 as I type.

Jonathan Levinson : 10/14/2005 10:01:32 AM

Headlines:

U.S. AUG. INVENTORIES UP 0.4% VS. 0.2% EXPECTED

U.S. AUG. INVENTORY-SALES RATIO STEADY AT RECORD LOW 1.26

U.S. AUG. RETAIL INVENTORIES UP 0.9%

U.S. AUG. RETAIL AUTO INVENTORIES RISE 1.7%

Linda Piazza : 10/14/2005 10:00:36 AM

SOX eding back below its 200-ema (not -sma).

Linda Piazza : 10/14/2005 10:00:14 AM

While the possibility of a breakout day has not been erased, if I didn't have some other signs showing me that a bounce remains possible, the advdec line's action this morning would be giving me anything but bullish signals. I don't like it, but it is still testing that potential support I identified. It's at 713 as I type.

Jonathan Levinson : 10/14/2005 9:57:53 AM

Nasdaq volume breadth slips to -1.44:1, NYSE still positive.

Linda Piazza : 10/14/2005 9:56:56 AM

Advdec line now dropping into the support that bulls most want to see hold, the most bullish case. This would be support from about 600-800, although these numbers can change quickly. The advdec line is now at 840, obviously testing that level to see if it holds as support.

Jeff Bailey : 10/14/2005 9:56:46 AM

Sell Program Premium ... DIA $102.32, SPX 1,178.65, QQQQ $37.78

Jonathan Levinson : 10/14/2005 9:55:52 AM

A 4-day 7.5B repo drains net 250M while leading the door open for another repo in the coming minutes. The stop out rate declined 4 bps to 3.66, 9 bps below the 3.75 overnight target rate.

Linda Piazza : 10/14/2005 9:55:16 AM

Another type of support/resistance I'm watching is the OEX's 10-minute 100/130-ema's (still being challenged) and the 21-ema. That 21-ema has been holding as support since about 2:00 yesterday afternoon, and it just held again when the OEX dipped post-sentiment number. It's at 547.23, and is obviously important on 10-minute closes. The OEX is between that support and the resistance of the 100-ema on that chart as I type, with the OEX at 547.63.

Jonathan Levinson : 10/14/2005 9:52:27 AM

Now awaiting the Fed decision re: the expiring 7.75B overnight repo, and Business Inventories at 10AM, est. +.2%.

Linda Piazza : 10/14/2005 9:50:43 AM

The OEX is dropping down to test Keltner support from 547.43-547.35. Bulls want this to hold on 15-minute closes. It's at 547.71 as I type, at least temporarily bouncing from the post-sentiment low.

Jonathan Levinson : 10/14/2005 9:50:10 AM

QQQQdrops back below the 72 SMA, stalling the 30 min cycle upphase and turning the short cycle down. QQQQ bears need to see a break of the lower channel support at 37.65: Link

Jeff Bailey : 10/14/2005 9:49:15 AM

Sell Program Premium ... DIA $102.37, SPX 1,178.97, QQQQ $37.80

Jonathan Levinson : 10/14/2005 9:48:36 AM

Michigan sentiment 75.4 vs. 80 exp.

Jeff Bailey : 10/14/2005 9:48:01 AM

S&P Banks Index (BIX.X) $333.84 +0.98% ... ramps to DAILY R2.

Linda Piazza : 10/14/2005 9:47:56 AM

Advdec line is pulling back now, as I expected it to do, and it's pulling back from the same resistance level (Keltner-wise) from which it pulled back Monday and Tuesday mornings. Bulls want it to find support, hopefully by +700, but stronger support might not be until closer to -150 to -500. It's at 1530 as I type, QCharts value.

Jonathan Levinson : 10/14/2005 9:47:49 AM

Still nothing from UMich, late as usual.

Jonathan Levinson : 10/14/2005 9:47:34 AM

Headline:

[RFX] DTC-REFCO SECURITIES LIQUIDATING ITS, CUSTOMERS' POSITIONS

Jeff Bailey : 10/14/2005 9:46:46 AM

iShares Japan (EWJ) $11.93 -0.16% Link ... #2 most active in early trade.

Linda Piazza : 10/14/2005 9:45:06 AM

RUT climbing and setting up the potential that it could confirm its potential reversal signal on the daily chart, but the linked 200-sma's and -ema's aren't far overhead now. They're at 633.98 and 634.89, respectively, with the RUT currently at 628.35, heading into the 50% retracement of its rally off the April low. Yesterday, it completed a 61.8% retracement of that rally. I checked last night and the retracement of the July 2004-December 2004 rally was also 61.8% before the RUT turned around. That retracement had also dropped the RUT below its linked 200-ema and -sma's, and it consolidated for several weeks between its 61.8% retracement and those averages, in the meantime producing a slightly lower low, before taking off again. That 50% retracement is at about 629.29. Will the RUT follow the same pattern again?

Jonathan Levinson : 10/14/2005 9:43:03 AM

Channel resistance lines up at 38.10 QQQQ here: Link

Jonathan Levinson : 10/14/2005 9:41:23 AM

Volume breadth +3.43:1 on the NYSE, +3.40:1 on the Nasdaq.

Jeff Bailey : 10/14/2005 9:40:51 AM

WellPoint Health (WLP) $72.66 +2.13% Link ...

Linda Piazza : 10/14/2005 9:40:49 AM

OEX Keltner outlook: The OEX is slipping above the 30-minute line currently at 548.67. If there's a 30-minute close above that this morning, that will be the first time since 10/4 that's happened, so it would be another small change in trend. OEX at 549.10 as Itype.

The OEX has also opened in accordance with a possible confirmation of its potential reversal signal yesterday. It opened near yesterday's close and has climbed from there, much as the SOX did yesterday.

So far, so good for current bulls. The advdec line is at such extreme levels according to the parameters I watch that it's either building toward a breakout day or else there's going to be a reversal. My gut feeling tells me that it should be the breakout variety, but also that there should be a pullback to establish where support lies, too, and that I'm not going to make decisions until I see that pullback.

Jeff Bailey : 10/14/2005 9:39:33 AM

United Health (UNH) $55.70 +2.76% Link ... Reports net income of $842 million, or $0.64 per share, up from $698 million, or $0.52 per share, a year earlier.

Analysts expected a profit of $0.63 per share.

Jonathan Levinson : 10/14/2005 9:38:48 AM

Awaiting the Consumer Sentiment data at 9:45. The timing is notoriously uncertain with that report- leaks, delays, the works. Estimates are for a reading of 80.

Linda Piazza : 10/14/2005 9:35:48 AM

There is danger of a pullback this morning and even of something more. There are days when the advdec line breaks out, and I'm waiting to see if that happens since my expectation was for a continuation of the bounce today, but for now, it's plowing straight into resistance, and the level of resistance that's been turning it back lately. Bulls don't want to see it pull back below about 900 to maintain the breakout and certainly not below about -800.

Jonathan Levinson : 10/14/2005 9:33:35 AM

Volume breadth +2.45:1 on the NYSE, +3.99:1 on the Nasdaq at the open.

Linda Piazza : 10/14/2005 9:32:15 AM

The OEX is doing battle with the 10-minute 100/130-ema's this morning (and yesterday afternoon). They're at 547.98 and 548.62, and bulls want to see a ten-minute close above them.

Linda Piazza : 10/14/2005 9:31:21 AM

Advdec line opens and climbs straight toward resistance. Don't want to see a quick reversal here if you're bullish.

Jonathan Levinson : 10/14/2005 9:26:24 AM

QQQQ has 72 SMA support at 37.82, below which the intraday bias will begin to shift to the downside. So far, 37.87 has been defended by the bulls since the 8:30 pop.

Jonathan Levinson : 10/14/2005 9:18:50 AM

Industrial production and capacity utilization both disappointed to the downside, respectively -1.4% vs. -.4% exp., and 78.6% vs. 79.4% exp.

Jonathan Levinson : 10/14/2005 9:17:24 AM

Ten year notes hold their gains, TNX -4 bps at 4.435%, QQQQ +.10 at 37.88, pulling back from its earlier highs.

Jonathan Levinson : 10/14/2005 9:16:32 AM

Headlines:

U.S. SEPT. INDUSTRIAL PRODUCTION FALLS 1.3%

INDUSTRIAL PRODUCTION DROP LARGEST SINCE JANUARY 1982

SEPT. CAPACITY UTILIZATION FALLS TO 78.6 FROM 79.8 IN AUGUST

STORMS, AIRCRAFT PRODUCER STRIKE HURT INDUSTRIAL PRODUCTION

Jonathan Levinson : 10/14/2005 9:14:59 AM

Here's a "compressed" 3-day 100-tick view of QQQQ, showing price near the top of its nested keltner channels. The 30 min cycle is rising but about to enter overbought territory, while the 60 min is roughly halfway through its upphase, and the daily has yet to turn up. The market can go either way from here, but the bulls need to hold these gains this morning in order to start affecting the key daily cycle. Otherwise, there's a good chance that these intraday cycle channels will stall out, potentially signalling a retest of the lows. My guess is for sideways-upward chop as the market struggles with that cycle dilemma. The daily cycle is saying that the bounce should be nearly done here, but if it turns up early, the bulls will charge. Link

Linda Piazza : 10/14/2005 9:06:52 AM

Here are several reasons why I think we have to consider the bounces, if they see follow-through today, countertrend for now. First, I pointed out some likely price targets and support levels in my Wednesday Wrap and noted that bounces from there into violated former support should be watched for potential rollover bearish entries. So, this is just following the expected script. Keene's Wrap last night pointed out some of those same or similar important support violations last night. Further, there's this on the TRAN's weekly chart, with the annotations from the October 5 Wrap: Link Also, in my 8:53:19 post, I included a chart of the OEX's broadening formation and mentioned that the touch of the bottom of that formation had long been anticipated. It has been by me, at least, and that probability mentioned many times on the MM, as the OEX has been following the BIX's example, always a step or two behind, as the BIX traveled through a similar formation. Here's the BIX's chart now: Link Of course, the conundrum is, if the OEX is showing such correlation with the BIX's pattern and if the BIX has met or almost met downside objectives (a possibility because of the way a fitted Fib bracket looks (not shown), will the OEX finish out the rest of the BIX's pattern?

For now, because of several factors, including those shown here, I think we have to be cautious about assuming that the bottom has been put in. I'd like to assume that. My November bear call spreads are safe and placed far above the action, but my single November bull put spread (I was really cautious about any November bullish positions because of what I was seeing) sure could benefit if the bottom has been put in. I just can't assume that yet.

Linda Piazza : 10/14/2005 8:53:19 AM

Yesterday, the OEX touched the bottom of its broadening formation, a long-awaited event, and then sprang up, creating a convincing potential reversal signal on the daily chart. Link The SPX dipped to the weekly 72-ema, a potential target and support level I'd identified weeks ago, and it sprang higher. The SOX confirmed in inverse H&S on its 60-minute chart and produced a morning-star reversal signal on its daily chart. The TRAN dipped to the 61.8% retracement of its rally off its June low and sprang up again, closing just under a 50% retracement of the day's big range, with this potential reversal signal not particularly convincing as of yet. The TRAN also worries me, with that big diamond on its weekly chart. The Dow tested the July 7 low, dipping below it, but sprang up to close above 12,200 again.

In other words, we saw lots of potential reversal signals yesterday, some confirmed and some still needing confirmation today. The OEX's was of the variety that still needs confirmation today, and the first confirmation it needs is a 60-minute close above the 60-minute 21-ema, currently at 548.27. The OEX has not produced a 60-minute close above that MA since late on the afternoon of 10/4. It's been producing bullish price/RSI divergences on the 60-minute chart since the next day, 10/5, but now those bullish divergences and the potential bounce need confirmation first by that 60-minute close.

I've been expecting a bounce since the middle of the week, and entered a day early because all my signals said a long was a good position. Then yesterday, they gave no signals at all, so they were a day early.

For now, we must consider any bounce a countertrend bounce. Bulls need to pay particular attention to the daily 10-sma at 552.30 and daily Keltner resistance at 552.81, if the OEX should reach that high, but it's first going to run into resistance at 548.25-548.70, and then again at 549.71-550.98. Unless the OEX barrels straight through the 10-sma and that daily Keltner resistance, short-term traders at least should consider taking partial profits. I have a feeling that it could be a day when the OEX barrels through a lot of resistance levels, but I'm not sure yet how many. I'll be watching today to see what kind of signals we get as the market opens before making any decisions as to how sustainable this looks, at least for today. If you're already long, just keep raising stops. If you're not already long, I don't see a good stop for you except below yesterday's low, and with a possible gap-higher open, that's problematic. I'll let you know what I see at the open, to see if it looks like a pullback might offer an entry, but I suspect it could be a plow-straight-up kind of day if it gets going with enough steam this morning.

Jonathan Levinson : 10/14/2005 8:49:03 AM

Headlines:

[GE] GE: $2.2B SHARES REPURCHASED BY THE END OF 3Q

[GE] GE: CASH FLOW UP TO $14.7B THROUGH THIRD QUARTER

[GE] GE: PRODUCT PRICE INCREASES MORE THAN OFFSET INFLATION

[GE] GE CFO SHERIN: CONSUMER FINANCE DELINQUENCIES ROSE TO 5.23%

Currently, GE is up .43 at 34.45, a 1.26% increase in premarket trading.

Jonathan Levinson : 10/14/2005 8:38:39 AM

Thanks, Linda. And, thanks to those who emailed to wish me an easy fast. Not eating or drinking for a day really makes you appreciate those elementary things.

The Fed has a 7.75B overnight repo to address in its morning announcement. Yesterday's small net add helped equities, but there was no doubt a large bullish (and nervous bearish) contingent scoping for a low to buy.

Jane Fox : 10/14/2005 8:37:30 AM

All equity markets have now broken previous day highs. Tbonds have not.

Jonathan Levinson : 10/14/2005 8:36:23 AM

QQQQ's daily cycle downphase still points down, but will stall if the current gains hold, a higher high and higher low today. 30/60 min resistance line up from 38.05-38.10, but the 60 min cycle is early in its upphase and could have room to run.

Linda Piazza : 10/14/2005 8:35:56 AM

Good to have you back, Jonathan. Readers missed your repo data yesterday.

Jane Fox : 10/14/2005 8:34:21 AM

Dateline WSJ The crisis surrounding Refco Inc. deepened as the company shut down one of its key units and the New York Stock Exchange indefinitely halted trading in its stock.

Refco, the largest independent futures-brokerage firm in the U.S., said in a statement that its core business -- regulated futures trading -- remains on solid financial footing. But just one day after most Wall Street firms indicated they would take a wait-and-see approach, some trading partners, including major brokerage firms, severed ties with the company.

In addition, some of the lenders that provide cash to help Refco finance its daily operations, including American International Group, began pulling away from the company, according to people familiar with those relationship.

Jonathan Levinson : 10/14/2005 8:33:07 AM

Equities bounced on the news, QQQQ up .11 to 37.89, while bond yields have dropped, TNX -2.4 bps to 4.451%.

Jonathan Levinson : 10/14/2005 8:31:45 AM

And the kicker:

HURRICANES HAD POSITIVE, NEGATIVE IMPACT ON RETAIL SALES

Jonathan Levinson : 10/14/2005 8:32:26 AM

Headlines:

SEC bars withdrawals of equity capital from Refco Securities - Bloomberg

U.S. SEPT. CPI UP 1.2% VS. 0.9% EXPECTED

U.S. SEPT. CORE CPI UP 0.1% VS. 0.2% EXPECTED

U.S. SEPT. RETAIL SALES UP 0.2% VS 0.5% EXPECTED

U.S. SEPT. CPI UP FASTEST PACE IN 25 YEARS

U.S. SEPT. RETAIL SALES EX-AUTOS UP 1.1% VS 0.9 EXPECTED

U.S. SEPT. ENERGY PRICES UP RECORD 12%

U.S. AUG. RETAIL SALES REVISED TO DOWN 1.9% VS 2.1% PREV

U.S. SEPT. CORE CPI HELD BACK BY FALLING SHELTER COSTS

U.S. SEPT. RETAIL SALES EX-GASOLINE DOWN 0.2%

U.S. CPI UP 4.7% IN PAST YEAR, MOST IN 14 YEARS

U.S. SEPT. RETAIL SALES EX-AUTO AND EX-GAS UP 0.6%

U.S. CORE CPI UP 2% IN PAST YEAR VS. 2.1% AUG.

U.S. REAL AVERAGE WEEKLY EARNINGS DOWN 2.7% Y-O-Y

U.S. RETAIL SALES UP 6.5% YR-ON-YR IN SEPT.

Jonathan Levinson : 10/14/2005 8:27:58 AM

Session lows for gold and silver ahead of the data at 471.40 and 7.696 respectively.

Jonathan Levinson : 10/14/2005 8:22:25 AM

Bonds hold a light loss at the cash open with TNX +.8 bps at 4.483%, ZN futures -1/16 at 108 15/16. IRX is unchanged at 3.662%.

Jonathan Levinson : 10/14/2005 7:35:18 AM

Equities are up, ES trading 1180.75, NQ 1540.5, YM 10235 and QQQQ +.01 at 37.79. Gold is down .80 at 473.00, silver -.022 at 7.72, ten year notes are -1/16 at at 108 15/16, crude oil is -.75 at a session high of 62.325 and natgas is -.23 at 12.875.

We await the 8:30 releases of retail sales and retail sales ex-auto for Sept., est. .5% and .8% respectively, the CPI and core CPI, est. .9% and .2% respectively, then at 9:15, Industrial Production and Capacity Utilization, est. -.4% and 79.4%, then at 9:45 (or thereabouts), Michigan Sentiment, est. 80. At 10AM, we get Business Inventories, est. .2%, and at 2PM, the Treasury Budget, est. 37B.

Linda Piazza : 10/14/2005 7:06:21 AM

Good morning. The Nikkei closed lower, with most other Asian markets closing lower, too. European markets trade about as close to the flat-line as is possible today ahead of GE earnings and the CPI number in the U.S. As of 6:54 EST, gold was lower by $0.80 to $473.00, and crude, down by $0.48 to $62.60. More details about Asian and European markets follows in succeeding paragraphs.

In earliest trading, the Nikkei coiled above the flat-line level, just above the gap down from Thursday morning. In the afternoon session, it dropped and then coiled again, but below the flat-line level. It closed down 28.70 points or 0.21%, at 13,420.54. That coiling could have been produced by competing reactions of stocks to news or earnings. Raw materials suppliers and trading companies fell. UBS AG lowered its ratings on the shipping industry and the three biggest Japanese companies fell. Advantest and Tokyo Electron rebounded, helped by Samsung Electronics' forecast. Another factor in the initial coiling reaction might have been a pre-market statement by the Minister of Finance saying that Japan still is in a mild deflation. September's domestic consumer goods price index was also released early in the day. That shows a 0.2% increase month over month and a 1.7% year over year, both meeting expectations of prices driven higher by rising energy and raw materials costs. Probably near the close of the morning session or beginning of the afternoon session, Japan's revised August industrial production number was released. That was revised slightly lower to a 1.1% gain month over month from the preliminary 1.2%. Capacity utilization climbed 0.4% over the previous month's number, to 103.1.

Some companies released negative news. Retailer Daiei Inc. announced that slow sales resulted in a drop in half-year recurring profit of 48.5%, but the company reiterated its full-year outlook and said that recurring profit should triple for the full year. Victor Co. revised its full-year outlook to a loss rather than a small profit. Panasonic firm Matsushita Electric owns a majority position in Victor Co. Victor Co. blamed slow sales of DVD recorders and displays and said that it would reduce its work force by 10% by asking for voluntary retirement. Toyota is recalling 160,000 of its Prius hybrids, with the recall a global one. Construction-machinery maker Komatsu Ltd. had better news, announcing that rising global demand for large machinery had resulted in the company's plans for investment into its first new plants in Japan in 11 years. Suzuki Motor Corp. also had better news, raising its first-half profit estimates since global car and motorcycle sales had been better than expected.

Most other Asian markets declined. The Taiwan Weighted gained 0.15%, but South Korea's Kospi dropped 0.27%. Samsung Electronics Co. reported a fall in profit for the third quarter, but income results were in line with estimates. The company expects robust sales of iPod nano music players and Sony PlayStation Portable video-game machines to turn around its record of four straight quarters of declining profit. It expects LCD demand to rise in this quarter. Samsung gained in early trading after its report. Singapore's Straits Times fell 0.75%, and Hong Kong's Hang Seng dropped 0.93%. China's Shanghai Composite lost 1.13%.

Many European markets trade near the flat-line level this morning, with articles mentioning our CPI and GE earnings releases as reasons for the cautious stance. In Italy, the August trade balance moved to a deficit from July's surplus. This number disappointed. ECB member Issing spoke last night, saying that the ECB sees hints that wage moderation was ending and that average Eurozone inflation figures could rise above the ECB's 2% ceiling next year, a more hawkish stance than many ECB members have taken lately, but he did agree with those others that no second-round inflationary effects are yet in evidence.

Stock-related news included Hilton Group's announcement that it was talking with Hilton Hotels Corp. about the possibility of selling its hotel division. Hilton group surged after the announcement. Set-top box maker Thomson rose after reporting earnings that included a 16.6% drop in total sales, but partly in comparison to a particularly strong year-ago quarter. It did note that fiscal year sales would not meet guidance when using 2004 comparisons, but 2005 EBIT targets of 9% would be met. ABN Amro edged higher after announcing a restructuring. One European decliner was Fresenius, dropping after it raised full-year net income guidance and announced that it was taking a 94% stake in a German private hospital chain. The company also plans to buy Clinico, a company that manufactures medical devices.

As of 6:50 EST, the FTSE 100 was higher by 2.50 points or 0.05%, at 5,267.70. The CAC 40 was lower by 0.87 points or 0.02%, at 4,469.26. The DAX was lower by 0.67 points or 0.01%, at 4,949.40.

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