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Jeff Bailey : 10/17/2005 11:41:50 PM

Program Trading Levels for Tuesday ... HL Camp & Company has their computers set for program buying at $+5.01 and set for program selling at $+2.59.

OI Technical Staff : 10/17/2005 9:59:59 PM

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Jeff Bailey : 10/17/2005 9:41:28 PM

QQQQ / SOX.X / PLAY ... Daily/Weekly Pivot Matrix Levels found at this Link ... Today's closing action in the PLAY option chain at this Link ... May look to sell 1/2, or 3/4 of the bullish PLAY position tomorrow should QQQQ trade WEEKLY R1, with PLAY trading .... $25 + $3.50 = $28.50 near DAILY R2. PLAY earnings not slated for release until Monday, October 24, 2005 after the market's close.

Jeff Bailey : 10/17/2005 7:18:52 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/17/2005 7:09:16 PM

Closing Internals found at this Link

NYSE NH/NL ratio (5-day / 10-day) found at this Link

NASDAQ NH/NL ratio (5-day / 10-day) found at this Link

Table of Internals since 08/22/05 found at this Link

Analysis: ... At this point, I've got to think "short covering bounce" underway, where bulk of buying is done by profitable bears, especially in stocks that are overextended to the downside and have been hitting 52-week lows day after day.

Think about my comments last week and "destiny trade" in the QQQQ at WEEKLY S1, and thoughts that bears should be covering some positions there, and any new bear entries would be partial only, as internals were very "oversold."

Today's volume was anemic. This makes sense if BULLS are hesitant, perhaps just nibbling and not certain a bottom is in (see NYSE NH/NL observations "f"ive day 04/20/05-05/13/05), where profitable BEARS do bulk of buying.

Any very weak stocks you've been monitoring at new 52-week lows for weeks that suddenly find a bid from nowhere last couple of sessions?

Jeff Bailey : 10/17/2005 6:23:32 PM

IBM (IBM) $82.59 +0.29% ... ticking $84.00 here.

WEEKLY Pivot Levels ... $79.89, $81.15, Piv= $82.33, $83.59, $84.77.

Dow Diamonds (DIA) $103.50 +0.65% ... ticked $103.66 here.

Jeff Bailey : 10/17/2005 4:17:43 PM

IBM (IBM) $82.59 +0.29% ... Higher at $82.93 in early post-market trade. Big Blue reports Q3 ESP of $0.94 vs. $0.92 in same period last year. Q3 revenue came in at $21.53 billion vs. $23.35 billion, so down 7.8%.

Jeff Bailey : 10/17/2005 4:10:29 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing traded long 1/2 position in shares of Lucent Technology (LU) at the offer of $3.18. Stop currently $3.08, targeting WEEKLY R2 of $3.31. (see NT/LU charts at 11:56:45)

Jonathan Levinson : 10/17/2005 4:09:39 PM



[IBM] IBM Q3 TOTAL REV $21.52B VS $23.35B



Jim Brown : 10/17/2005 3:59:49 PM

BTU +5.37 Investors are really buying up shares of BTU ahead of their earnings tomorrow. I would be careful since most of the good news may already be priced in.

Jeff Bailey : 10/17/2005 3:57:29 PM

Matrix Service Co. (MTRX) $9.48 +7.72% Link ... big test longer-term here. Some chatter today of possible hurricane activity approaching Gulf of Mexico.

Linda Piazza : 10/17/2005 3:56:12 PM

Some of the reasons I stayed flat today: Link

Jeff Bailey : 10/17/2005 3:53:44 PM

Streicher Mobile Fueling (FUEL) $3.34 +37.2% Link ... buyers making a "pit stop" as stock near's overhead resistance of $3.50.

Linda Piazza : 10/17/2005 3:53:16 PM

Bears are likely getting a few beads of perspiration on their brows about now. There's danger of a short-squeeze into the close. The OEX heads up toward the day's high and toward the 30-minute 130-ema that held it back earlier, with that average at 552.39. I'm not sure it has the time to close above that, even if it eventually will do so, a fact that we can't assume. I've been thinking, and noting on the MM, that it's possible that the OEX will push up toward the 38.2% retracement of the decline off the 10/3 high into the 10/13 low, but I wouldn't be surprised to see bears waiting there. The situation is going to be complicated by the fact that the OEX will have just confirmed an inverse H&S as it touches that Fib level, if it does touch it and if I've drawn the neckline correctly, so the bull and bear battle is likely to be fierce at that zone. If you are in a bullish position, a 38.2% retracement level would be an appropriate place to take partial profits. I think you're going to have to make a decision this afternoon, though, before that level is touched, if it is. Are you going to hold overnight with more earnings to come and with the OEX testing resistance that's likely to be strong but with an inverse H&S on the 30-minute chart? There's no evidence that I see that suggests which way this will conclude, so if you're the conservative type, make plans to limit your exposure or even go flat. If you're more reckless, it still might be a good idea to lessen your exposure to a downdraft. I'm still considering any long position a countertrend one.

Linda Piazza : 10/17/2005 3:43:51 PM

Advdec line perhaps aiming toward +400 values, if it can maintain values above -280. It's at -123 as I type, QCharts value.

Linda Piazza : 10/17/2005 3:42:03 PM

The OEX is currently testing the 30-minute 100-ema at 551.18 and the daily 10-sma at 551.24, with the OEX at 551.24 as I type.

Jonathan Levinson : 10/17/2005 3:41:33 PM

QQQQ dropped just below the 38.20 30-min channel top. There was nothing to suggest significant action at the high, no surge in volume or sudden spike, but the 30 min channel has turned up. This was a premature reversal, just like on Friday, and the 60 min indicators are still suggesting that they've peaked. All that's left is for some actual selling to come in- but it's been notably absent for most of the session. Link

Jeff Bailey : 10/17/2005 3:33:49 PM

Semiconductor Index (SOX.X) 444.45 +0.39% ... comes to challenge morning highs.

QQQQ $38.15 +0.23% ....

PLAY $27.26 -1.23% ....

Linda Piazza : 10/17/2005 3:33:27 PM

RUT still just below its 200-sma and -ema's, at 633.90 and 634.91, respectively, with the RUT at 632.23 as I type. Market bulls of any stripe would like to see the RUT close well above those averages to avoid printing a doji just beneath them, looking as if it's ready to keel over at resistance.

Jeff Bailey : 10/17/2005 3:32:04 PM

PortalPlay (PLAY) $27.07 -1.92% ... seeing some action in the PLAY Nov. $25 Calls (PQP-KE) $3.30 (710 : 3,935).... Analysis: Covered call selling as you can buy all the stock you could want here ... $25 + $3.30 = $28.80.

Jim Brown : 10/17/2005 3:31:00 PM

PBR and DVN just partnered to buy several new exploration blocks in Brazil in an auction today.

Linda Piazza : 10/17/2005 3:30:43 PM

Advdec line still climbing. OEX above the descending trendline off the day's high, moving up toward a test of Keltner resistance and the neckline of its potential inverse H&S on the 30-minute chart. This is why I did not suggest a bearish entry today, even though my best guess is still that we will see a rollover at some point. Pre-market, I'd even thought a test of the bottom of the OEX's rising regression channel might make a good long entry, but the OEX broke through that channel and the advdec line wasn't setting up the play, either, so no entry was suggested. With a play that might well be a countertrend play, the setup needs to be stellar or the play passed up and no setup today, either direction, was stellar.

Advdec line now testing -300 to -250 resistance, with the QCharts value at -309 as I type.

Jonathan Levinson : 10/17/2005 3:29:04 PM

Volume breadth +1.57:1 on the NYSE, +1.23:1 on the Nasdaq.

Jonathan Levinson : 10/17/2005 3:26:34 PM

QQQQ holds just below this morning's high as the 30 min channel approaches the 38.20-.25 confluence area. The short cycle indicators suggest that we've seen the bounce, but they could be trending here given how light the price has been acting: Link

Jim Brown : 10/17/2005 3:25:24 PM

PBR was a recent play in the LEAPs section. We lost it when the energy correction hit and I am waiting for a move back over $65 to get back in. I wonder where they are going to get that extra gas they are going to consume? Last I heard they were selling assets to buyild a 250,000 bbl refinery and were talking about a nuclear plant.

Linda Piazza : 10/17/2005 3:22:46 PM

OEX Keltner picture: Support at 549.47-549.75 has continued to hold on 15-minute closes since the 12:30 candle. Next resistance at 551.19 and then at 552.24, with light support nearby at 550.32. Still watching the potential inverse H&S on the OEX's 30-minute chart, watching as the advdec line rises toward resistance in the -300 to -250 zone.

Jeff Bailey : 10/17/2005 3:22:34 PM

Petroleo Brasileiro (PBR) $63.56 +2.18% Link ... Jose Sergio Gabrielli, president of Brazil's Petrobras saying he sees the country's natural gas consumption nearly tripling by 2010 to 100 million cubic meters a day.

Linda Piazza : 10/17/2005 3:18:39 PM

Remember that neckline of that inverse H&S is at about 552, confirmed, I think by a 30-minute close above the 30-minute 130-ema at 552.40, so that zone is likely to be resistance for several reasons, if the OEX should get that far. This kind of choppy behavior could go on a while still if the right shoulder is to be symmetrical to the left.

The OEX currently tests the descending trendline off the day's high. It punched above it again and now sinks just below it. No clarity.

Jonathan Levinson : 10/17/2005 3:18:37 PM

There's still that bearish divergent setup for the Q's short cycle oscillators, but it's about to get vaporized by the grind higher: Link

Jeff Bailey : 10/17/2005 3:14:29 PM

03:00 Internals found at this Link

Linda Piazza : 10/17/2005 3:12:57 PM

Did someone shut down the SOX trading today? It's still at the 200-sma, where it's been most of the day. The short candle shadows above and below the average show me that it hasn't been there all day, but that's right where it's been each time I've looked. Because this doji does not occur at either the top of a steep rally or the bottom of a steep decline, it's just indicative of indecision. That's all we can assume. And, of course, I shouldn't be assuming that much, because there's still more than 40 minutes of trading left in the day.

Linda Piazza : 10/17/2005 3:07:01 PM

Advdec line continuing to build strength, although now facing the next resistance band, with that at about -650 up to -270. OEX's descending trendline off the day's high is at about 550.63 currently. The ascending trendline off the triangle it's been forming today is now at about 549.60. The OEX is at 550.32 as I type.

Jeff Bailey : 10/17/2005 3:04:30 PM

03:00 Market Watch found at this Link

Jonathan Levinson : 10/17/2005 3:03:21 PM

QQQQ pops above its previous 38.05 high, as the 30 min channel climbs. The 30 min channel top is up to 38.15 here, but the short cycle is in a potentially bearish divergent setup with a lower high and no turn back up to match the move in price. Link

Linda Piazza : 10/17/2005 2:55:58 PM

Advdec line looking better. OEX still holding above the 30-minute 21-ema, but just barely, and it's coming down to test it as I type. It's at 549.83 and the OEX is currently at 550.04. The OEX may now be forming a big triangle at the top of its climb off last week's low.

Jonathan Levinson : 10/17/2005 3:01:42 PM

Unfortunately, Marc, it will send energy even higher still. That's the snafu in which the Fed now finds itself. The inflation it's been steadfastly not seeing is a problem it cannot ignore. Link

Jonathan Levinson : 10/17/2005 2:48:04 PM

Volume breadth mixed, +1.26:1 on the NYSE, -1.22:1 on the Nasdaq.

Linda Piazza : 10/17/2005 2:42:43 PM

Advdec line again trying to push above the resistance that has pressured it lower all day, with that at -1051 currently and the advdec line above it, at -925. On the OEX, the 30-minute 21-ema holds as support so far this 30-minute period, too, with a test of the descending trendline off the day's high to come at about 550.80, if the OEX should rise that high. OEX at 550.39 as I type.

Jonathan Levinson : 10/17/2005 2:35:41 PM

It should be clear by now, the price action is just weird today. None of the cycles are getting their usual traction, and all the moves feel false or delayed. QQQQ is rolling back over from a lower high, which confirms the 60 min cycle downphase, but the move is sideways and flaggy, not what I'd expect from a confirming lower-high failure within a 60 min cycle downphase. Link

Linda Piazza : 10/17/2005 2:34:52 PM

The OEX just closed the last 30-minute period at its flattening 30-minute 21-ema, with that average at 549.80 currently and with the last period closing at 549.82. Not much to be gleaned from that. The OEX has been maintaining that MA's support since Friday morning, so is it preparing for another test of the 30-minute 100/130-ema's overhead or perparing to keel over again? The potential inverse H&S on the 30-minute chart suggests that even if it dips, it might soon find support again, and so there's no clarity, once again. This is typical behavior for a right-shoulder building period, though, until a final direction is chosen. OEX at 549.66 as I type.

Jeff Bailey : 10/17/2005 2:37:57 PM

Yahoo! (YHOO) Link and Bell South (BLS) Link announced today that they would partner to deliver joint high-speed Internet access, similar to those Yahoo has signed with SBC, Verizon, and other telecom and cable companies.

Jonathan Levinson : 10/17/2005 2:22:56 PM

Session low for GE here, -1.08% at 33.97.

Jonathan Levinson : 10/17/2005 2:20:51 PM

Crude oil is back to its highs, +1.575 at 64.20 with 10 minutes left in the day session. Link

Linda Piazza : 10/17/2005 2:19:45 PM

Since the 11:00 candle on Friday, the OEX has been maintaining 30-minute closes above the 30-minute 21-ema, currently at 549.82. The OEX has spent a couple of hours now testing that support, with the OEX currently at 550.09. With a potential inverse H&S on the 30-minute chart, however, and with the right-shoulder level perhaps extending down to 548.30 or so, I'm hesitant to make too much of a 30-minute close beneath that support, if that should happen, with right-shoulder support strongest perhaps near 549.30, but extending down to that 548.30 level.

Jeff Bailey : 10/17/2005 2:13:06 PM

02:00 Internals found at this Link

Linda Piazza : 10/17/2005 2:11:26 PM

Confirmation of that regular H&S that I just mentioned in my 2:09:47 post, but not much of a confirmation and the OEX is trying to bounce back to the 549.97 neckline as I type . . . just did.

Jonathan Levinson : 10/17/2005 2:10:56 PM

Volume breadth drops to +1.13:1 on the NYSE, -1.5:1 on the Nasdaq as QQQQ tests the 72 SMA from above. The short cycle upphase is stalling early here, and the 30 min channel was only beginning to tick up. Link

Linda Piazza : 10/17/2005 2:09:47 PM

In opposition to the inverse H&S seen on the OEX's 30-minute chart is a potential regular one right now on its 2-minute chart, with a neckline at about 549.97 and shoulder levels at about 550.50 and below. The OEX is between the neckline and the shoulder now, at 550.32. A rise above 551 would invalidate the two-minute chart formation, of course, and would also push the OEX above the descending trendline off the day's high. A drop below the neckline would set up a retest of the day's low.

Jeff Bailey : 10/17/2005 2:04:49 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 10/17/2005 2:04:32 PM

Ten year note yields are holding their fractional gain, +.2 bps at 4.493%, while IRX is back down to a .5 bp loss at 3.697% in the wake of the treasury auctions.

Linda Piazza : 10/17/2005 2:03:47 PM

Still nothing showing up with clarity. The advdec line closed at, not above, the line that's been pressuring it lower all day. That's currently at -930 on five-minute closes, with the advdec line currently at -965, and with that difference not being a big one as the advdec line goes. Kind of understandable if the OEX is in a right-shoulder building exercise, as per my 2:00:02 post.

Linda Piazza : 10/17/2005 2:00:01 PM

The OEX has a potential inverse H&S on its 30-minute chart, neckline at about 552. There's no assurance that it will be confirmed or the upside target met if it is, but this is a formation that might be watched for guidance. It looks to me as if there might be up to another few hours of trading needed for symmetry's sake to complete the right shoulder, before we know whether the formation will be confirmed or invalidated. Link

Jonathan Levinson : 10/17/2005 1:57:42 PM

QQQQ stopped at the 38.05 channel top, but it's holding steady just below it at 38.03 as the short cycle indicators continue to rise. Bears need to see a break back below the 72 SMA at 37.97, above which the 30 min channel will begin to turn up. Link

Jeff Bailey : 10/17/2005 1:53:07 PM

Semiconductor Index (SOX.X) with WEEKLY and MONTHLY Pivot Retracement at this Link

Linda Piazza : 10/17/2005 1:52:13 PM

Stop running move continuing. A test of the descending trendline off the day's high isn't far ahead, with the OEX currently at 550.89 and that trendline at about 551.07. Advdec line is punching above a line that has been pushing it lower all day. If that move above that line is sustained, then there's the slightest sign of a short-term change in tenor since the OEX began turning down through its Keltner channel today. Advdec line now a -793, QCharts value. Bulls do not want to see a quick reversal there or in the OEX.

Linda Piazza : 10/17/2005 1:48:26 PM

Here comes the often-seen 1:45 stop-running move, having begun exactly on target, a couple of minutes ago. This move is a test. If it's quickly slapped back, bears will likely have more confidence. If it's not, bulls will. OEX at 550.4 as I type, doing battle with the one-minute 100/130-ema's, of all things, heading again toward the declining trendline off the day's high, with that trendline currently at about 551.07.

Jonathan Levinson : 10/17/2005 1:47:29 PM

QQQQ breaks back into its morning range, clearing the 72 SMA on the break above 37.97. 30 min channel resistance is just above at 38.05, and the channel has not yet turned up. If this bounce is indeed corrective, that's where it should fail. Link

Linda Piazza : 10/17/2005 1:44:00 PM

No clarity yet, at least to me. The OEX is currently maintaining central channel support at or above 549.50-549.69 on 15-minute closes, suggesting that the OEX could continue to challenge overhead support. Yet it's finding resistance at the line currently at 550.45, with that suggesting that it's likely to go on testing that support that's been, so far, holding up.

Linda Piazza : 10/17/2005 1:42:07 PM

The advdec line has not risen high enough to change its pattern today, continuing to find resistance on five-minute closes at a line currently at about -850. The advdec line is now at -1126. There may be a slight hint of support firming on the shortest-term chart, but only a slight hint.

Jeff Bailey : 10/17/2005 1:35:00 PM

QQQQ options chain sorted by Open Interest, with focus on October.

My analysis is that QQQQ WEEKLY R1 formidable resistance this week and a "Max Pain" close for Friday somewhere near $38.25ish.

Linda Piazza : 10/17/2005 1:33:33 PM

Interesting. OEX and advdec line were both just testing their one-minute 100-ema's, both pulling back slightly from those 550.42 and -866.70 averages.

Linda Piazza : 10/17/2005 1:30:32 PM

This is the reason I said in my 12:42:21 post that I just couldn't recommend a bearish play on a breakdown out of the rising regression channel, because there was too much of an opportunity that the support was just being overrun and that the OEX would pop higher again. It's not popping higher in a particularly convincing way just yet, but the advdec line is just now rising into the resistance lines that have been stopping it all day, at -963 on the three-minute chart and -786 on the five-minute. (These numbers change fast, as the advdec line does.) The advdec line has now risen to -924, and a five-minute close above the line currently at -786 (but likely to move higher) would likely change the short-term tenor for the day.

Jonathan Levinson : 10/17/2005 1:26:54 PM

QQQQ pops back to the broken rising trendline at the 37.95 pivot, 4 cents below the now-declining 72 SMA. This is so far just a short cycle bounce and should be corrective within the declining 30 min channel: Link

Jeff Bailey : 10/17/2005 1:26:21 PM

QQQQ $37.96 -0.26% ... edges back above DAILY and WEEKLY Pivots.

Linda Piazza : 10/17/2005 1:25:51 PM

Next Keltner resistance for the OEX at 550.51, then 551.52 and 552.28, all on 15-minute closes.

Linda Piazza : 10/17/2005 1:25:03 PM

OEX still trying to move higher after testing the support of its 15-minute 100-ema, but advdec still not high enough to confirm the idea that the current bounce is sustainable. Needs to be above -750 or so, at least, to do that. It's now at -1018, QCharts value. It is, however, maintaining the support just tested, now at -1350 or so.

Linda Piazza : 10/17/2005 1:15:48 PM

OEX bouncing, but advdec line not bouncing enough yet in concert to give strong confidence that it will continue to bounce.

Jonathan Levinson : 10/17/2005 1:15:31 PM

Volume breadth +1.13:1 on the NYSE, -1.38:1 on the Nasdaq.

Jeff Bailey : 10/17/2005 1:12:07 PM

01:00 Internals found at this Link

Linda Piazza : 10/17/2005 1:09:17 PM

Still a mixture of signals, and I believe the mixture is produced by the uncertainty about market direction. The signals that are usually reliable are showing different possibilities across different time frames and continue to do so. Some still show a potential that the last move was just a stop-running move, while others show increasing potential for more downside. The advdec line is rising again, and I'll have to see what it does with the -650 zone, to see if it's turned back yet again, with the advdec line now at -1120.

Jonathan Levinson : 10/17/2005 1:06:36 PM

Foreign central banks tok 8.6B of the 34B auctioned in 13- and 26-week bills. The 13-week bills sold for 3.785% yielding 3.875%, with a bid to cover ratio of 2.05. The 26-week bills set a high-rate of 4.015% yielding 4.155%, with 2.08 bids for each accepted.

Jeff Bailey : 10/17/2005 1:03:19 PM

01:00 Market Watch found at this Link

Jeff Bailey : 10/17/2005 1:00:01 PM

QQQQ $37.88 -0.47% ... last week it was "sell, sell, sell" the the DAILY Pivots with R1s not tested until late in the week.

With QQQQ dipping below the DAILY Pivot now, will look for any "buy, buy, buy" with no trade at DAILY S1.

Linda Piazza : 10/17/2005 12:58:56 PM

The advdec line still testing that last do-or-die level. Those hoping for a bounce need to see it back above -550 or maybe even above -350 and staying there. Those who hope to see continued weakness want to see it below about -1300 and sustaining levels below it. It's at -1193 as I type, QCharts value.

Linda Piazza : 10/17/2005 12:56:33 PM

OEX springing up from the 15-minute 100-ema at 549.39. It's sprung up only high enough to test the 130-ema at 549.83, with the OEX currently at 549.81, but so far that support tentatively holds.

Jonathan Levinson : 10/17/2005 12:48:23 PM

QQQQ has violated rising support and is currently holding below the lower 30 and 60 min channel bottoms. A failure to bounce now will see the longer intraday cycles turn more sharply down, as they did to the upside last Thursday: Link

Linda Piazza : 10/17/2005 12:47:06 PM

On a Keltner basis, the OEX dropped to mid-channel support, at 549.53-549.66 on 15-minute closes. On closes lower than this, still being tested, the OEX would look vulnerable to 546.80. I just don't trust any of this with the evidence so mixed. Bears, be very watchful for a quick reversal higher here, as this kind of spike lower can sometimes end a pullback through a rising regression channel. We're all waiting for the breakdown out of that channel, but I don't see conclusive evidence that this is it.

Jonathan Levinson : 10/17/2005 12:45:30 PM

QQQQ - Exit Point Alert -

Out QQQQ at 37.84, -.03

Jonathan Levinson : 10/17/2005 12:44:36 PM

I'm willing to risk a very tight stop on the possibility that this is a throwunder below the trendline right on the channel bottoms. But it has to bounce here.

Linda Piazza : 10/17/2005 12:44:34 PM

OEX now back 549.75-ish support.

Jonathan Levinson : 10/17/2005 12:43:37 PM

QQQQ - Entry Point Alert -

Long QQQQ at 37.87 stop 37.84

Jeff Bailey : 10/17/2005 12:43:14 PM

Sell Program Premium .... DIA $103.06, SPX 1,185.96, QQQQ $37.90

Linda Piazza : 10/17/2005 12:42:20 PM

If I thought, early this morning, that the OEX was likely going to move sideways to sideways down through its rising regression channel as the advdec line retreated toward -900 (currently at -797), why didn't I suggest a bearish entry? That rising regression channel on the OEX is only 3 points wide if you catch the absolute top and the absolute bottom. A sideways to sideways-down move would cut off some of that three points. For example, if the OEX were to spike down momentarily to test the support, as sometimes happens on a last move lower before a reversal, it would now be spiking down to about 550.40 or so. It's HOD was at 552.41, so that's only a two-point decline, and a choppy one, with the opportunity for the last spike lower to be quickly reversed. Just weren't good odds. Looks as if we'll soon get that bottom-of-the channel test. Unfortunately, the advdec line's actions gives no clues as to the outcome. Those who want to play a bearish play on a breakdown, something I just can't recommend with the current setup, would probably want to see at least confirming five-minute close beneath the five-minute 100-ema at 549.95. They'd need to be ready to exit right away if there was a quick reversal. Since the advdec line is at a sort of do-or-die level, it looks just about as likely to have a bounce from the bottom as to have the OEX fall through it.

Jonathan Levinson : 10/17/2005 12:41:16 PM

Session lows here, right at the QQQQ trendline. Link

Jeff Bailey : 10/17/2005 12:35:41 PM

Dynamic Materials (BOOM) $19.79 +0.55% Link ... WEEKLY Pivot Levels ... $16.45, $18.06, Piv = $19.89, $21.50, $23.33.

No options on this one.

Tab Gilles : 10/17/2005 12:34:04 PM

NYSE Summation Index ($NYSI) & NYSE Composite Index ($NYA) Link

Jonathan Levinson : 10/17/2005 12:33:54 PM

QQQQ is testing new lows for the day and the rising support line as the short cycle indicators approach oversold territory. If the bulls are going to mount a defense, they'll want to see 37.90 hold. Link

Linda Piazza : 10/17/2005 12:28:46 PM

OEX still drifting sideways, sideways-down through its rising regression channel off last week's low, with the bottom support now at 550.20-550.30 or so and still rising. The OEX is at 551.04 as I type. The advdec line still drops, still showing bullish value/RSI divergence as it does so. It's now dropping into that earliest support zone I identified early this morning, and it needs to find support now, somewhere above about -1200, and push back above about -300, before there's hope of a bounce this afternoon. It looks as if the OEX and the advdec will test make-or-break support about the same time.

Jeff Bailey : 10/17/2005 12:26:18 PM

TRIN 0.63 -7.35% ...

Jeff Bailey : 10/17/2005 12:25:52 PM

QQQQ $37.97 -0.23% ... just tested WEEKLY Pivot.

SOX.X 442.86 +0.04% ...

PLAY $27.27 -1.19% ...

Jonathan Levinson : 10/17/2005 12:25:22 PM

Ten year note yields holding a slight .2 bp gain at 4.493% while IRX has risen to a 1.3 bp gain at 3.715%. Awaiting the results of the day's Treasury auctions at 1PM.

Jeff Bailey : 10/17/2005 12:23:56 PM

Nortel (NT) $3.54 +7.27% ... Telecom equipment maker trades higher after the company announced that it has named former Motorola No. 2 man Mike Zafirovski as president and CEO to replace Bill Owens.

Mr. Zafirovski was president and COO at Motorola from 2002 until January, and was credited with turning around the No. 3 maker of mobile handsets' mainstay business.

Jonathan Levinson : 10/17/2005 12:21:46 PM

4-day 100-tick QQQQ chart here, with key rising support off last Thursday's low just below: Link

Linda Piazza : 10/17/2005 12:19:42 PM

After breaking above the descending trendline off the day's high, the OEX has now broken back below it again . . . and then starts immediately bouncing back above it again, within the same five-minute period. There's still some remaining danger to bears here when these breakdowns are quickly reversed.

Jonathan Levinson : 10/17/2005 12:18:13 PM

QQQQ breaks the previous low here, the short cycle whipsawing back down: Link

Linda Piazza : 10/17/2005 12:16:53 PM

Advdec line still drifting down toward that next support.

Jeff Bailey : 10/17/2005 12:16:47 PM

12:00 Internals found at this Link

Linda Piazza : 10/17/2005 12:13:17 PM

This TRAN daily chart, although messy, epitomizes the quandary that investors are in today as they study charts. Are bulls or bears in charge over the short-term? (There's a big diamond on the weekly chart, so I don't think it's good long-term, but we're talking about today.) Link

Jeff Bailey : 10/17/2005 12:05:26 PM

12:00 Market Watch found at this Link

Linda Piazza : 10/17/2005 12:05:16 PM

OEX retests the descending trendline off the day's high and then climbs again, but now finds resistance at the rising midline of its rising regression channel. This is all so messy and difficult to guage, with no clear confirmation of anything. So far, my scenario of likely sideways to sideways-down movement from the OEX's high while the advdec line retreated into negative territory has held up, but evidence remains so mixed across time frames that it's difficult to go much further in a prediction. Advdec line RSI suggests on the five- through fifteen-minute charts that it might be time to begin looking for long entries, evidence that's entirely contradicted by the actual level of the advdec line, at mid-channel S/R, so that it might as easily tumble lower as rise higher. I still give it at least equal odds that the OEX will rise to retest the 30-minute 130-ema, currently at 552.61. It's just doing too good a job at clinging to the 30-minute 100-ema as the advdec line retreated off its HOD to assume just yet that the OEX is through challenging resistance. There's just not a whole lot of evidence other than that, though. OEX at 551.57 as I type, with the 30-minute 100-ema at 551.30.

Jonathan Levinson : 10/17/2005 12:01:25 PM

Volume breadth is strengthening and the short cycle indicators are turning up for QQQQ after a higher low at 38 on this most recent pullback. 30 min channel resistance has declined to 38.16, just above the session high, and it could be a recipe for future chop. Lettuce hope that this isn't a preview of the rest of this opex week- it could turn into a long 5 days. Link

Jeff Bailey : 10/17/2005 11:56:45 AM

Nortel (NT) / Lucent (LU) ... 2-chart montage on 30-minute intervals at this Link

Linda Piazza : 10/17/2005 11:56:27 AM

SOX above its 200-ema.

Linda Piazza : 10/17/2005 11:53:15 AM

Advdec line has resistance now at about -150 up to -100, now being tested. The advdec line is at -219 as I type.

Linda Piazza : 10/17/2005 11:52:16 AM

The OEX just broke above the descending trendline off the day's high. Have to see if it holds, as this 551.60-ish area was giving it some trouble earlier this morning.

Jeff Bailey : 10/17/2005 11:47:04 AM

Bullish swing trade long alert ... for 1/2 bullish position in Lucent (LU) $3.18 +3.92% here, stop $3.08, target $3.31.

Disclosure: I currently own a bullish position in LU.

Jonathan Levinson : 10/17/2005 11:41:53 AM

Greece Confirms First Bird Flu Case

Politics: 17 October 2005, Monday.

Greece has confirmed the first bird case after the emergence of positive results on eight dead birds found in the northeastern Evros river delta over the weekend.

According to state-run television as quoted by Sky News, tests for the deadly H5N1 strain of the flu are pending.

The news comes as British scientists travel to the Far East to help develop a global strategy to fight bird flu. It also follows a warning from the Chief Medical Officer that a Europe-wide pandemic is "inevitable".


Jeff Bailey : 10/17/2005 11:41:25 AM

Lucent (LU) $3.17 +3.59% ... looks "cheap" vs. Nortel (NT) $3.56 +7.87% ... usually track pretty close in price to each other.

Linda Piazza : 10/17/2005 11:40:03 AM

The OEX continues to test the 30-minute 100-ema. Here's a chart with the Fib levels anchored to the top and bottom of the decline off the 10/3 high into the 10/13 low. Link

Jeff Bailey : 10/17/2005 11:39:14 AM

10 Most Active ... NT $3.54 +7.27%, SPY $118.94 +0.22%, GM $29.94 +7%, LU $3.18 +3.92%, QQQQ $38.04 -0.05%, EWJ $11.82 -1.82%, MSFT $24.54 -0.56%, IWM $62.63 -0.44%, ORCL $12.45 +1.13%, MO $75.26 +6.5%

Jonathan Levinson : 10/17/2005 11:38:28 AM

Volume breadth is down to +1.55:1 on the NYSE, -1.03:1 on the Nasdaq.

Linda Piazza : 10/17/2005 11:36:15 AM

Advdec line still dropping into possibly stronger support, but the OEX is already (one-minute chart) trying to bounce. This advdec line support was support I'd mentioned earlier today, but the advdec line was just resistant to falling there for a while. It's now drifted from the -750 -900 zone into the -750 to -1200 zone, with the advdec line now at -581.

Jeff Bailey : 10/17/2005 11:33:07 AM

Citigroup (C) $45.01 -0.06% Link ... gives back morning gains ($45.58). The nation's largest financial institution said Q3 earnings rose 35% (includes a $2.12 billion gain from sale of life insurance business) to $7.14 billion, or $1.38 per share, which was up from $5.3 billion, or $1.02 per share for the same period last year.

Excluding the sale of its Travelers Life & Annuity, the company said it would have earned $0.97 per share, up from $0.96 in the year-ago quarter.

Citigroup said revenue increased 15% to $21.5 billion, up from $18.74 billion a year earlier.

Analysts were looking for C to earn $0.99 per share on revenue of $20.47 billion.

Jonathan Levinson : 10/17/2005 11:30:30 AM

Once again, the short cycle downphase just can't get any grip. All intraday cycles have flattened sideways here, and while the obvious implication of the short cycle failure is bullish, the alternate view would be that we're seeing sideways chop within the turning 60 min channel. And, of course, it is op-ex week. Link

Jonathan Levinson : 10/17/2005 11:27:58 AM

Session low for ten year notes here, going negative at 108 55/64, with TNX now up .2 bps at 4.493%. Crude oil is up .95 at 63.575, natural gas +.52 at 13.74.

Linda Piazza : 10/17/2005 11:23:56 AM

I prepared a whole post that I lost when I momentarily lost my broadband connection. The OEX has been testing the descending trendline off the day's high, with that currently at about 551.60, but it so far hasn't been able to stay above that. It's currently back to a test of its 30-minute 100-ema. A breakout above that descending trendline might suggest a retest of the 30-minute 130-ema, currently at 552.64. I've been leaning toward shallow pullbacks and continued tests of resistance, with the ultimate outcome unknown as yet, but there just hasn't been enough corroboration across different time frames to give any kind of trade suggestions. OEX at 551.27 currently.

Jeff Bailey : 10/17/2005 11:25:08 AM

SOX.X 443.54 +0.19% ... edges back above DAILY Pivot here.

PortalPlayer (PLAY) $27.75 +0.54% .... session low has been a penny above WEEKLY Pivot.

QQQQ $38.04 -0.05% ...

Jeff Bailey : 10/17/2005 11:13:41 AM

11:00 Internals found at this Link

Jonathan Levinson : 10/17/2005 11:11:52 AM

Ten year notes hold fractionally within positive territory, TNX down .2 bps here at 4.489% and IRX flat at 3.702%.

Linda Piazza : 10/17/2005 11:09:08 AM

Ten-minute advdec line chart says that the support might have been hit. The five-minute says, nope, more downside to come, although there's bullish value/RSI divergence, so that might not happen. This kind of discrepancy has been showing up all day, so that I haven't seen any clear signals yet.

Jeff Bailey : 10/17/2005 11:05:45 AM

11:00 Market Watch found at this Link

Jeff Bailey : 10/17/2005 11:03:02 AM

PortalPlayer (PLAY) ... Option Montage at this Link ... Bulk of OI is higher at the $30 Call (8,330) with 5,592 at the $25 Puts. $27.50 is mid-point, but quite a bit of "wiggle room" between $25 and $30.

Jonathan Levinson : 10/17/2005 11:01:18 AM

Nasdaq volume breadth has just ticked negative, but price is so far holding firm above 38.

Linda Piazza : 10/17/2005 11:04:12 AM

While the advdec line is now testing only mid-channel support on the 15- to 60-minute charts, RSI already begins to signal that the downside is being overdone, all the way up through the 15-minute chart. The five- and 10-minute charts are showing tentative bullish divergence as the lower lows are produced on the advdec line. Meanwhile, the OEX tries to cling to 551-ish support, while currently slipping a little below the 30-minute 100-ema.

Where I'm going with all of this is first to suggest that signals are not setting up in a clear way, and this is playing out in somewhat indecisive movements. While bulls should certainly be protecting profits here, we are not seeing the strong downdrafts that would be expected with each movement down in the advdec line if the fall out of this likely bear flag were imminent and if bulls were through giving overhead resistance a try. Instead, if my advdec line charts across different intervals were lining up more in accordance with each other, I'd be looking for signs that a long entry was a good idea. Unfortunately, each interval's chart gives a different picture. I'd just be careful about assuming just yet, barring a strong advdec line move below -1100 or so, that the bulls were through.

Jonathan Levinson : 10/17/2005 10:55:58 AM

QQQQ tests lower short cycle channel support now and the 38 round number. The pivot is at the sesin low, with the 30 min channel bottom 2 cents below it. The 30 and 60 min cycles are overdue for a downphase here, and a break of the lower 37.85-.90 level should be enough to kick it off. Link

Linda Piazza : 10/17/2005 10:54:29 AM

Advdec line pulling back, as it's looked as if it needed to do after the first 30-40 minutes of trading. It's now testing new and first support, down to about -350, with stronger support down to about -1000. Advdec line at -309 as I type.

Jeff Bailey : 10/17/2005 10:53:28 AM

QQQQ $38.04 -0.05% ....

SOX.X 442.51 -0.03% ....

PLAY $27.37 -0.83% ....

Not looking all that bullish to me. SOX.X did stick its head above WEEKLY Pivot, but was quickly cut off.

Linda Piazza : 10/17/2005 10:52:06 AM

RUT's 30-minute Keltner chart: Since the 2:00 candle on 10/13, the RUT has been maintaining 30-minute closes at or above the Keltner line currently at 631.40, with the RUT currently at 631.28, testing that support. Resistance overhead spans from 634.13-636.86, but we all know about the daily 200-sma and -ema's above, too. If the RUT can maintain those 30-minute closes above the support at 631.40, it might go on challenging that resistance, but a close below that level mgiht suggest a pullback to possibly stronger support near 628.55.

Jonathan Levinson : 10/17/2005 10:49:01 AM

Volume breadth +2.09:1 on the NYSE, +1.37:1 on the Nasdaq.

Linda Piazza : 10/17/2005 10:43:33 AM

And here's some weakness, finally, in the advdec line, while the OEX tests the 30-minute 100-ema at 551.30 (on 30-minute closes). Advdec line at 37 currently, vulnerable to -350 or so before it hits next support, with stronger support below that, beginning at about -900.

Jeff Bailey : 10/17/2005 10:43:04 AM

Altria (MO) $75.09 +6.26% Link ... Big tobacco higher after the U.S. Supreme Court rejected the Justic Department's attempt to collect $280 billion in its civil racketeering lawsuit against the industry.

Linda Piazza : 10/17/2005 10:39:13 AM

Advdec line dropping a bit. Support has firmed a bit above the strongest support, down at -900 or so, with some support now showing up at about -300 to -350, with the advdec line now at 266. If I were to show you a five-minute chart of the advdec line, you'd see resistance massed over it, but it's so far been refusing to keel over beneath that massed resistance. Could this be the repo amount that Jonathan noted at work here? Could be. So far, the OEX's 30-minute 100-3ma at 551.30 holds as support, although the current 30-minute period has just begun. Midline support on the OEX's rising regression channel is now at about 551, and bottom support at about 549.40. OEX at 551.83 as I type.

Jonathan Levinson : 10/17/2005 10:38:18 AM

QQQQ is still within a dime of the highs, but the short cycle indicators have rolled over from lower highs, kicking off the bearish divergence noted earlier. 72 SMA support is at 38.04, below which the 30 min channel upphase will confirm its current stall: Link

Linda Piazza : 10/17/2005 10:29:28 AM

SOX still battling that 200-ema, at 442.91, with the OEX currently at 443.12.

Jeff Bailey : 10/17/2005 10:28:13 AM

Current OPEN MM Profiles found at this Link

Linda Piazza : 10/17/2005 10:27:05 AM

There's still a possibility of further downdrafts on the advdec line, to stronger support, but there's been a disinclination to test that support support and each minor tick upward in the advdec line is seeing an immediate gain in the OEX. The current 450 level up to about 680 looks like potential resistance on the advdec line, but resistance and support is scrambled across various time frames, so it's just not giving a clear reading. Remember from my earlier post that it would be my best guess that the OEX would see a sideways to sideways down move, perhaps ended by one minor thrust to regression channel support, if the advdec line did retreat.

Jonathan Levinson : 10/17/2005 10:22:19 AM



Jonathan Levinson : 10/17/2005 10:19:24 AM

Volume breadth +2.54:1 on the NYSE, +1.63:1 on the Nasdaq.

Jonathan Levinson : 10/17/2005 10:19:45 AM

WASHINGTON (MarketWatch) -- With the U.S. Supreme Court's rejection of a key appeal Monday, the tobacco industry dodged attempts by the Justice Department to collect $280 billion in its civil racketeering lawsuit against the industry.

The high court's rejection of the government appeal returns the focus of the litigation back to the Washington-based U.S. District Court, where a federal trial judge is expected to rule on the case later this year. It also marks a striking loss for the government. "It's one more in a litany of embarrassing losses. This case has been a textbook case of compulsive gambling behavior," said Jonathan Turley, professor at George Washington University Law School.


MO is +5.84% at 74.79 here.

Jeff Bailey : 10/17/2005 10:14:16 AM

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

Linda Piazza : 10/17/2005 10:13:23 AM

Has the OEX converted the 551.20-551.40 zone from resistance to support? We're about to find out. OEX at 551.68. Watch the 15-minute closes.

Jonathan Levinson : 10/17/2005 10:12:37 AM

Crude oil +1.0 at 63.625, natgas +.55 at 13.77.

Jonathan Levinson : 10/17/2005 10:09:09 AM

QQQQ update at this Link with price holding 5 cents below a 39.13 high. 30 min channel resistance is up to 38.21 and the pathetic short cycle downphase has whipsawed back up. If the bulls lose it here, there will be a bearish divergence on those oscillators, but until then, it remains an upphase.

Linda Piazza : 10/17/2005 10:09:11 AM

The OEX is now at the top of its ascending regression channel on its 15-minute chart, with this channel off the 10/13 low. Without a breakout above that channel, it may be time for a sideways trade while midline or lower support catches up, or even a pullback to the bottom of the channel, now left far below. The OEX currently tests the 30-minute 100/130-ema's at 551.29 and 552.68, so I would expect the 100-ema to likely provide some support now on pullbacks and would anticipate a sideways kind of choppy move between the averages rather than a deep pullback. A test of the 553.38 level that's the 38.2% retracement of the decline off the 10/3 high might be in the making now. Bulls should have profit-protecting plans in mind for that test.

Linda Piazza : 10/17/2005 10:05:00 AM

Some strength being shown on the OEX as I type. The advdec line has still not even pulled back to strongest support, but instead began climbing from the middle of support and resistance, with any pullbacks being shallow.

Jeff Bailey : 10/17/2005 10:04:28 AM

PortalPlayer (PLAY) $27.83 +0.83% ...

Jeff Bailey : 10/17/2005 10:03:45 AM

10:00 Market Watch found at this Link ... Alert! SOX.X at weekly Pivot (see Sat. Morning's MM @ 02:45:59 AM EDT) Link

Linda Piazza : 10/17/2005 10:00:13 AM

Here's the OEX's Keltner picture: The OEX has been challenging resistance at 551.46 on 15-minute closes. This is the Keltner channel line that usually turns the OEX lower, but this time, the OEX has bumped above the central hannel line while challenging this resistance. That central channel level is trying to firm up as support, from 548.44-549.92 on 15-minute closes. Bulls would like to see the OEX close 15-minute periods in the higher end of that range, above 549.34. Bulls should keep in mind that the OEX is up against that usually strong resistance, so should be protective of profits. Next strong Keltner resistance is at 552.26-553.52 on 30-minute closes. So far, the OEX performs well, not able to breach the resistance, but still challenging it.

Jonathan Levinson : 10/17/2005 9:58:21 AM

Volume breadth +2.07:1 on the NYSE, +2.32:1 on the Nasdaq.

Jonathan Levinson : 10/17/2005 9:56:24 AM

Session high for ten year notes at 109 7/8, TNX -2.8 bps at 4.463%.

Linda Piazza : 10/17/2005 9:55:59 AM

RUT pulling back a little below the 200-sma.

Jonathan Levinson : 10/17/2005 9:55:39 AM

Marc, QM is closed here ;)

Linda Piazza : 10/17/2005 9:54:30 AM

Advdec line now facing resistance in the +800 zone, and it could be that resistance that rolls it back down to test stronger support. If looks as if the rollover could bring the advdec line down as low at -900 to -1100, but that's still to be tested. In this case, that wouldn't be as severe a pullback as it would otherwise seem because of the setup, so it's possible the OEX would just pull back to 549.60 or so even if the advdec line does pull back that far. That's what we're watching to see. Advdec line began turning down a bit as I typed, and it's now at 386.

Jonathan Levinson : 10/17/2005 9:54:50 AM

The stop out rate was 3.74 for treasury collateral on that repo, 1 bp below the overnight target and up 8 bps from Friday's stop out rate. This indicates a rising demand for the money.

Jonathan Levinson : 10/17/2005 9:53:41 AM

A big 6.25B overnight repo from the Fed has just been announced, for a net add in that amount. QQQQ is making a new high at 38.10, and ten year notes are just off their session high as well, TNX -2.6 bps at 4.465%.

Linda Piazza : 10/17/2005 9:50:37 AM

The TRAN is currently above its 200-sma, testing a river of converging MA's in the 3643-3652 zone. The 200-sma is at 3628.34 and the TRAN is currently at 3638.68. Taht reistance looks tough, but the TRAN definitely dipped down to the 200-sma this morning and sprang up from that MA, so there may be a battle going on below important 3650-3655 resistance.

Linda Piazza : 10/17/2005 9:47:17 AM

The OEX has been challenging the 30-minute 100-ema at 551.28, just yet another form of resistance that bears and bulls might be watching in that 551-552 zone.

Linda Piazza : 10/17/2005 9:44:25 AM

No clear signals for me today. A pullback still remains possible, but it also looks possible that such a pullback could be shallow, so it's not one upon which I would issue a bearish call, either. So, I'm on the sidelines.

Jonathan Levinson : 10/17/2005 9:43:49 AM

The bears are going to have to do better than this on the current short cycle downphase. If the sellers can only hold the price in a sideways drift, I'll expect the next short cycle upphast to challenge the 38.20 level. The market could be waiting to see the size of the Fed's repo in the next 15 minutes. I'm expecting a net add- the only question is how big it will be.

Linda Piazza : 10/17/2005 9:42:11 AM

RUT just above the 200-sma, now challenging the 200-ema at 634.93, with the RUT at 634.66. While this small-cap index has little to do directly with the OEX, it is a useful indicator of market sentiment.

Jonathan Levinson : 10/17/2005 9:38:10 AM

The Fed's Friday repo was a 4-day agreement, which means that there are no expiries today. Any amounts added at 10AM are net additions to available liquidity.

Linda Piazza : 10/17/2005 9:37:20 AM

It's still possible that the advdec line will have to pull back into the -900 level to find stronger support. If so, OEX bulls want to see the OEX maintain the support of its 15-minute 100-ema, currently at 548.86, on 15-minute closes, as that MA also marks the bottom of its rising regression channel, off last week's low.

Jonathan Levinson : 10/17/2005 9:35:38 AM

The short cycle indicators are in gear to the downside here, but the bears need to take out that 37.95 72 SMA support before it means anything. Below that level, the strong 30/60 min bullish setup that gave the bulls Friday's afternoon ramp will stall out.

Linda Piazza : 10/17/2005 9:35:03 AM

RUT at the 200-sma at 633.91 with the 200-ema just above at 634.93, with the RUT at 633.80 as I type. Important test.

Linda Piazza : 10/17/2005 9:34:26 AM

SOX at the 200-sma, clinging to that, but there isn't a clear sense here, either, of whether it will use that to springboard higher or whether it will turn down, pressured by that average. SOX at 442.73 as I type.

Jonathan Levinson : 10/17/2005 9:33:25 AM

Volume breadth is +1.71:1 on the NYSE and +1.3:1 on the Nasdaq at the open.

Linda Piazza : 10/17/2005 9:33:16 AM

Advdec line isn't giving me a clear picture for a good setup. It's between support and resistance, so no setup either direction right now.

Linda Piazza : 10/17/2005 9:32:38 AM

OEX climbing straight into next Keltner resistance at 551.36 on 15-minute closes. the 10-sma is also at 551.20. OEX at 550.90 as I type.

Linda Piazza : 10/17/2005 9:31:14 AM

Advdec line opening value is in a neutral range, but it might need to drop back toward -900 to find stronger support. At -73 as I type. No conclusion yet from the advdec line.

Jeff Bailey : 10/17/2005 9:31:08 AM

General Motors (GM) $27.98 ... Atop this morning's pre-market most active list and higher at $31.07 after the world's largest automaker said it lost $1.6 billion, or $2.89 a share in the latest quarter. The company had a profit of $315 million in the year-earlier quarter.

Excluding special items, including a charge of $805 million for asset impairments primarily in North America and Europe and restructuring charges at GM Europe of $56 million, GM's third-quarter loss totaled $1.92 per share. On that basis, analysts' average forecast was a loss of $0.81 cents.

The company said quarterly revenue rose more than 5% to $47.2 billion.

Jonathan Levinson : 10/17/2005 9:28:40 AM

QQQQ 60 min cycle indicators appear to be cresting in overbought territory, while the 30 min cycle's upside whipsaw has also reached overbought. 38.20-.25 is strong upside confluence resistance, with the 30 min cycle currently lined up with R1 at 38.17. The 72 SMA is at 37.95, a break below which will be the first sign of trouble for intraday bulls. Link

Linda Piazza : 10/17/2005 9:20:01 AM

GM's plan to lower health-care costs and the subsequent bump higher in that stock and in other equities may mean that there won't be a test of the support on the OEX's rising regression channel first thing this morning. (See my 8:09:17 post.) As I said in that post, there's resistance just overhead (the 10-sma at 551.16 is one example), and any long entries need stellar setups, including a cushion before next resistance, I think. I'd be careful about chasing any longs this morning, and, if already in a long position, I'd be careful of my profits in that 551-552 next resistance zone for the OEX. I'll let you know more about what I see as the markets open and we see how internals set up.

Jeff Bailey : 10/17/2005 9:17:31 AM

Program Trading Levels ... HL Camp & Company has their computers set for program buying at $5.14 and set for program selling at $+2.48.

Jonathan Levinson : 10/17/2005 8:55:31 AM

Gold is up 4.8 here to 476.80, natgas and crude oil holding their gains. The price-paid component in the Empire State Index is a likely contributor.

Jonathan Levinson : 10/17/2005 8:48:57 AM

Bonds are weakening here slightly after the disappointing Empire State Index data, TNX up to a .8 bp loss at 4.483%. QQQQ is rising, currently +.01 at 38.07.

Jonathan Levinson : 10/17/2005 8:32:01 AM

Ten year note yields are down 1.6 bps here at 4.475%, QQQQ -.04 at 38.02.

Jonathan Levinson : 10/17/2005 8:30:52 AM







Linda Piazza : 10/17/2005 8:09:17 AM

Friday, the OEX confirmed a morning-star reversal signal, as did many other indices and as the SOX had done one day earlier. The SOX's action on Friday suggests one possibility for other indices, though. The SOX pulled back Friday, and perhaps sets up the possibility of a flag-like climb that zig-zags up toward the resistance that will finally stop it.

Where would that resistance be for the OEX? Now that the OEX has confirmed its reversal signal, I've drawn a rising regression channel off the low and I'll be watching for the OEX to either continue climbing inside that channel (still possibly bearish), break to the downside out of that channel (definitely bearish) or break to the upside out of the channel. I'd like to see a move up to the 38.2% retracement of the decline off the 10/03 high, with that at about 553.37, or maybe even to the 38.2% retracement of the decline off the 9/09 high, with that at about 555.75, but I'm not sure yet if the OEX will get that far. We'll just keep watching to see.

For now, you might consider new bullish entries on pullbacks to the bottom of the OEX's rising regression channel, now at about 548.84, but still climbing of course, as long as the internals support such an entry. As I type, futures are lower, so it's possible that there will be a flattish to lower open. I'll be watching this morning if that channel's support, and let you know what I see about internals at that point. The OEX has resistance just overhead in the 551.25-552.75 zone, so that pullback is probably needed to give some cushion before an entry.

I have to say that I'm not usually in favor of countertrend plays, especially those in which the OEX is essentially zig-zagging through a channel about 3 points wide from top to bottom, and especially when each trip to the top of the channel could be its last. Unless the OEX and other indices show conclusive evidence to the contrary, we have to consider such a rise a probable bear-flag rise, and so any bullish setups need to be stellar. The RUT is already approaching its 200-sma and -ema's, possible resistance zones. I'd be particularly careful of any bullish plays in the OEX, too, as the SPX approaches the 1192-1200 zone, the location of its former wedge support, its 200-ema and then the 200-sma at 1199.14, as that zone is nearly guaranteed to be one that bears will try to defend, whether ultimately successful or not.

Jonathan Levinson : 10/17/2005 7:48:27 AM

Equities are down, ES trading 1187.5, NQ 1549, YM 10286 and QQQQ -.07 at 37.99. Gold is up 2.5 at 474.5, silver is up .05 at 7.91, ten year notes are up 5/64 at 109, crude oil is up 1.425 at 64.05 and natgas is up .72 at 13.94.

We await the 8:30 release of the Empire State Index, est. 20, prior 17.

Linda Piazza : 10/17/2005 7:00:04 AM

Good morning. The Nikkei stayed positive most of the day, but fell in the mid-afternoon and closed lower. Most other Asian markets declined. European markets have fallen from early morning highs and are now mixed, trading near the flat-line level. As of 6:57 EST, gold was higher by $2.60 to $474.40, and crude, up by $1.40, to $64.03. More details about Asian and European markets follows in succeeding paragraphs.

Monday, the Nikkei was positive most of the day, but then sank into negative territory about the middle of the afternoon session, closing down by 20.25 points or 0.15%. A newspaper report speculating that Toshiba might beat expectations sent that company's stock higher in early trading, but many exporters were gaining then. Automakers were among those gainers. Nitto Denko, manufacturer of chemical products for electronic components, rose after it beat forecasts. Steel-related issues dropped after a newspaper report that Nippon Steel would cut production for steel sheet. Friday's report mentioned that Victor Company, majority-owned by Panasonic, had revised its full-year forecast lower, and it was halted in early trading, with sell orders outstripping buy orders.

By the close, banks had led the index lower. Sentiment had soured after Prime Minister Koizumi had visited a shrine that included memorials to convicted war criminals. That visit was criticized by China and South Korea, although the Nikkei Net reported that he changed the way he conducted his visit to emphasize that the visit was made as a private citizen and not as a government representative. Although at least one article attributed the afternoon decline to fears of political tensions arising as a result of that visit, I'm not sure that's all that was at work. It's possible Victor Company's stock was released for trading and that its trading pattern could have impacted the afternoon session. In addition, the chief cabinet secretary spoke, claiming that the country has not yet overcome deflation. Also, the Bank of Japan's minutes from the September 7/8 meeting were due Monday, although I can't find information as to whether that was released before the close of trading.

Most other Asian markets also fell. In Taiwan, Powerchip Semiconductor Corp. said that profit dropped more than 67% in the third quarter, blaming a glut in industry production. The Taiwan Weighted lost 2.39%, and South Korea's Kospi declined 1.16%. After August's retail sales index fell instead of rose, as expected, Singapore's Straits Times fell 0.64%, but Hong Kong's Hang Seng climbed 0.38%. China's Shanghai Composite lost 0.72% after China Southern Airlines warned that energy costs could hurt earnings and airlines tumbled.

European markets are mixed, trading near the flat-line level. Most opened bullish, but dove into the noon period. Stocks in the oil and gas sectors led early gainers. Philips Electronics surprised to the upside in its third-quarter report, and it helped boost early sentiment, as did Sony Ericsson, also reporting. Sony Ericsson saw profit rise 16% in the third quarter. Swedish retailer Hennes & Mauritz disappointed, however, and had dropped in early trading. Refco-related developments impact European stocks, too, with the U.K.'s hedge fund manager and futures broker Man Group edging higher after announcing that it had no direct financial exposure to Refco and was not currently in talks with Refco about an acquisition. British media buying company Aegis fell after it lost one of its suitors, Publicis, although it may still have at least two others. Elan leaped more than 8% higher after further trials did not identify any more cases of the deadly PML disease in patients taking Elan's Tysabri drug. The drug is used to treat Crohn's disease and rheumatoid arthritis.

As of 6:49 EST, the FTSE 100 was down 0.70 points or 0.01%, to 5,274.30. The CAC 40 was higher by 7.43 points or 0.17%, at 4,489.56. The DAX was lower by 6.21 points or 0.12%, to 4,969.35.

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