Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
Jeff Bailey : 10/20/2005 2:58:22 AM

Correction Corp. of America (CXW) $39.60 Link ... can't seem to make up its mind relative to the 50-day SMA, but back above today.

Jeff Bailey : 10/20/2005 2:53:56 AM

Bull Alert! ... Dorsey/Wright & Associates' Ten Week for NYSE Bullish % (TWNYSE) reversed up to "bull alert" status today at 28% Link ... Throw all stocks listed on the big board into one basket. Then put all the charts of stocks that are trading ABOVE their 50-day SMA in one pile, then place all those stocks that are trading BELOW their 50-day SMA in the other pile. Each day, repeat the process.

I've marked past "bull alert" and then the more powerful "bull confirmed" readings on the chart.

Tab Gilles ran through some of his NYSE Composite charts in last night's Market Monitor.

Ooooeeee! Here's a chart of the NYSE with just the 50-day SMA at this Link

Jeff Bailey : 10/20/2005 1:52:08 AM

Congratulations to the Chicago Board of Trade and their successful IPO. NYSE:BOT $80.30 that was priced at $54.00. Not bad, not bad at all!

Jeff Bailey : 10/20/2005 1:37:17 AM

Beetle's Balanced Benchmark since our 09/30/05 end of quarter rebalancing at this Link ... "GREEN +" is asset classes that we would have added capital to that had underperformed relative to other asset classes represented. "BLUE ~" saw little rebalancing, while "RED -" was asset classes that had outperformed in Q3, some profits were taken, and capital then equally distributed among other asset classes.

Energy prices have fallen since rebalancing. The economy may be slowing, but some "Fed bashing" yesterday morning has me wondering if market participants aren't being a little defensive until a new head of the Fed is named? Remember how the markets traded into the most recent Presidential election? The evening that George Bush won, stock futures rocketed. It is often thought that the "markets hate uncertainty."

Who do you think will be the next head of the Fed? What is their "core belief, or indicators for how they believe monetary policy should be guided?"

Just as the Presidential election brought uncertainty (market participants had a 4-year feel for what Bush's policies were vs. Kerry's thoughts during his campaign), it was the "certainty," or the "known" that brought the strong rally to stocks. It was fascinating to see stock futures trade LOWER when early returns had Kerry in the lead, but stock futures whipped higher when Bush began to show victory in Florida and then Ohio. We noted the action in the futures monitor that evening.

Yes... it can't be "proven" that the recent weakness can all be attributed to Fed head uncertainty. But with some so glad to see Mr. Greenspan's exit, the MARKETS (other than the dollar) don't seem to be all that happy.

Oh... did you know that the "new" bankruptcy laws took hold on Monday? Most bankruptcy filers under new law that file Chapter 13 will now have to pay off 50% or more of their debt over 60 months. Severe spending limits will now be imposed by the Court, which can force filers to sell assets such as their car, recreational vehicles, boats, 401k, pension funds, and any real asset. New filers may be denied state or municipal licenses. Miss a payment and your car may be taken. Bankruptcy will now remain on your credit report for 10 years.

Yes... we have seen a sudden "surge" in bankrupty filings the past couple of months. Now you know why. It is somewhat similar to selling that "dog stock" for a loss before the end of the year to use as a tax loss.

Sector Bell Curve comparison from 09/30/05 to 10/19/05 close at this Link

Jeff Bailey : 10/20/2005 12:16:22 AM

PortalPlayer (PLAY) ... trade recap and refer back to "suspicous" trade in Nov. $25 Calls from Monday at $3.30 per contract. 5-minute interval chart at this Link

Jeff Bailey : 10/19/2005 11:34:51 PM

KLA-Tencor (KLAC) $47.70 -0.33% ... Same type of 5-minute chart and option chain as shown in QQQQ (market) at this Link ... Last night (Tuesday night) I saw NVSL got "crushed" lower, then negative reaction to Intel (INTC). KLAC should have gotten crushed lower Tuesday, but it didn't. Should have gotten crushed lower today (Wednesday), but it didn't. Is business that much better at KLAC (#2 chip maker) than at #3 NVLS? Bearish side of me thinks October expiration may be holding things together. Would want to see a Bearish close below WEEKLY Pivot on Friday (if not stopped out at $48.50), then see KLAC get hit early next week.

Neet to keep an eye on the Oct. $50 Put volume tomorrow. If a pre-determined "Max Pain" type of trade ($50 puts have the RISK), what to be alert to is sudden volume in the $50 Puts, offset by volume in the $47.50 Calls (put selling and call buying)

Note: At time of PROFILE, the $47.50 Puts were "in" the money. $47.50 Calls were "out" the money. By the close, just the opposite. See "the pain" delivered in the slightly more OI of the puts? Expect volatility around option expiration, know where the OI is at and who has the risk and where the RISK is at.

OI Technical Staff : 10/19/2005 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 : 10/19/2005 9:50:29 PM

QQQQ ... 5-minute chart with DAILY/WEEKLY Pivot Levels turned on. I've added tomorrow's DAILY Pivot Levels. Also shown is today's QQQQ Option Chain sorted by volume. Note the "Pain" delivered and the "Pain" that may yet be delivered. Chart at this Link ... Here's the QQQQ Option Chain from earlier this week at this Link

Note: $38 Put OI up 38,476 since 10/17 benchmarking.

$38 Call OI down 36,299 since 10/17.

Note: VXN.X down since 10/17 benchmarking. (Put selling and/or call buying)

Note: $39 Put OI down 4,070 since 10/17 benchmarking. (Maybe needs a little more influence to brink OI down, otherwise no decline or volume equals DETERMINED liquidation at strike on expiration)

Note: $39 Call OI down 8,115 since 10/17 benchmarking and with WEEKLY R2/DAILY R1 correlation, willing sellers for anything above $0.10 most likely.

So... tomorrow, a QQQQ trader HAS TO HAVE A TARGET or an idea of where things are going, but also think about "who has the risk."

In my mind, "Max Pain" has got be be within a range of $38.25-$38.75 when looking at the Oct. open interest and how the QQQQ traded today. Do you see where it becomes "obvious" what took place when the QQQQ cleared DAILY R1 (remember last week's observations of how the QQQQ traded around DAILY Pivot and how a DAILY R1 was alert to strength? That's how computers trade).

If you're getting convinced that option expiration does impact trade (were you with us last expiration?) then think "target of $38.50" and I'll take an additional $0.25 either side if I can get it.

So... if looking short, is it worth the RISK to $39.00 to be shorting a target of $38.50-$38.25? Probably not, but the risk/reward and analysis sure looks more favorable the closer to $39.00 you get.

What about a long? Highly unlikely at this point that the options market maker lets the $38 put holders off the hook. They had their chance, now it is probably gone (excluding act of terrorism) and the $39 Puts and heavy open interest at that strike is a likely "let's see if we can't shake the tree."

Jeff Bailey : 10/19/2005 8:17:30 PM

Updated QQQQ Option Chain found at this Link ... Who got some "Max Pain" today? Those QQQQ $38 Puts right? Those are going "poof" most likley.

Now where's the open interest at. If you're the options market maker, who is your biggest target? The $39 puts right? Look at the $38 Call and $39 Put open interest. Almost 2/3 more pain to inflict on the $39 Puts. Right?

More in a second when we look at how the QQQQ traded today. The "gig was up" at $38.08 and DAILY R1 as if a realization that "destiny" of WEEKLY R1 was in play.

Disclosure: At this morning's open, there was no way I thought WEEKLY R1 could have been traded today. However, it was always an OPTION EXPIRATION possibility from the hard work we put into it.

Tab Gilles : 10/19/2005 8:59:15 PM

Nasdaq Summation Index ($NASI) No reversal signal on the $NASI after the close today. Both on the weekly and daily chart. Remain short, via Profunds USPIX fund. Link Link

Looking at weekly $NASI BUY/SELL points using the Profunds USPIX & UOPIX. I have to admit that I should of just stayed with the weekly major turning points. But I tried to catch some micro moves on the daily moves and strayed away from my disciplined approach and got whipsawed. Here's a chart with those trades.[Green buys, Red sells, violet are micro trades.] Link Currently short via USPIX and will remain so until weekly charts signal long. However, question remains...Is today's move a reversal or a a bear market rally? Even Cramer - "Mad Money" suggested tonight, those who believe this should sell into this rally.

Jeff Bailey : 10/19/2005 8:26:14 PM

QQQQ $38.67 +2% ... see how QQQQ holds steady at $38.68 in extended session? Hold on a sec, I think I've got a "MAX PAIN" trade plan for traders. More in a second .... Look at your option chain, sort by today's October QQQQ volume then look at who got some "MAX PAIN" today. What's tomorrow's DAILY R1? Now look who might have a little more "PAIN/RISK" based on open interest. If you're the market maker, are you worried about your Oct. $38 call OI, or more interested in handing out some pain to the Oct. $39 Puts?

Jeff Bailey : 10/19/2005 7:04:32 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 10/19/2005 6:43:42 PM

AAPL / INTC ... 5-minute interval charts with WEEKLY/DAILY Pivot Levels turned on. How AAPL traded after "disappointing" earnings. How INTC begins to digest the data at this Link ... Also envisioning how INTC might trade if QQQQ is to settle out near $38.25-0.30 per Monday's option chain/pivot analysis review.

Jeff Bailey : 10/19/2005 6:15:28 PM

INTC $23.69 -0.03% ... good gravy! Pulled and AAPL-like trade (10/12/05 trade) today. (gapped lower on earnings $22.99 open with session low of $22.79, then bid hard toward the close).

Jeff Bailey : 10/19/2005 6:10:47 PM

James Cramer is right ... YHOO did nothing in last night's extended session. YHOO $35.91 +2.21 bid from the opening ticks.

Jeff Bailey : 10/19/2005 6:04:28 PM

Alternating large block trades ... Late this afternoon, a large block trade in HD was executed. Yesterday, a large block trade in XOM was noted. Intra-day charts at this Link ... XOM's PnF chart Link and HD's PnF chart Link ... A little "rotation" going on.

Jeff Bailey : 10/19/2005 5:49:01 PM

KLA-Tencor (KLAC) ... from 02:52:30 Post, here's the option chain Link that didn't seem to upload at that post.

Jeff Bailey : 10/19/2005 5:40:19 PM

Closing Internals found at this Link

Jeff Bailey : 10/19/2005 4:54:40 PM

Good Gravy .... BGC $15.80 +4.49% Link ... was also looking at selling some Oct. $15 puts on this one into Friday's expire.

Jeff Bailey : 10/19/2005 4:47:55 PM

Amgen (AMGN) $78.09 +2.92% ... NDX/QQQQ heavyweight marked lower at $73.65 on earnings.

WEEKLY Pivot Levels ... $70.98, $73.37, Piv= $75.89, $78.28, $80.80.

Jeff Bailey : 10/19/2005 4:45:13 PM

QQQQ $38.67 +2.0% ... DAILY Pivot Levels for tomorrow ... $37.26, $37.96, Piv = $38.32, $39.02 (tie with WEEKLY R2 for upside risk/reward), $39.38.

Jeff Bailey : 10/19/2005 4:37:51 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... Stopped out of the bullish full position in PortalPlayer (PLAY) at $26.00. 1/2 ($-2.00, or -7.14%) and 1/2 ($-0.69, or -2.59%).

Swing trade shorted 1/2 position in KLA-Tencor (KLAC) at $46.97, current stop at $48.50, targeting $45.25.

Option Expiration Play and sold two (2) naked Valero Energy VLO Oct. $95 Puts (VLO-VS) at the bid of $0.80, with stop now at $1.50.

Tab Gilles : 10/19/2005 4:36:16 PM

$NYA & NYC Followup from 10/18 11:26AM

Link Link

Jonathan Levinson : 10/19/2005 4:21:25 PM

Headline:

[EBAY] EBAY SHARES DOWN 5% AFTER POSTING QUARTERLY RESULTS

Jonathan Levinson : 10/19/2005 4:17:17 PM

This is the first time I've seen the blue 155-period Keltner band violated in either direction: Link . I've set these channels to provide reliable limits to price moves- generally, only divergent price moves should violate the bands, and if so, briefly. When they do so more seriously, it indicates a violation of cycle resistance in the corresponding timeframe- a trending move. As an example, GOOG's upside break of 205 the day after it announced earnings- it was effectively an upward "crash."

For QQQQ, the move would look a lot less believeable if it wasn't accompanied by large volume (130.9M, well above average), and by participation from the broader market. It may well be op-ex machinations, but the rest of the market bought it, and blew through some daunting resistance in the process. If this is a fakeout, then it needs to reverse very quickly- as in tomorrow morning. Otherwise, the cycle bands will adjust themselves accordingly- sharply to the upside.

Jeff Bailey : 10/19/2005 4:15:55 PM

Swing trade lower stop alert ... Let's lower stop to $1.50 on the two (2) naked Valero Energy VLO Oct. $95 Puts (VLO-VS).

Tab Gilles : 10/19/2005 4:09:00 PM

Eaton Vance Limited Duration Fund (EVV) Followup to 10/14 10:59 AM post. Link Link

Jeff Bailey : 10/19/2005 3:59:34 PM

QQQQ $38.62 +1.87% ...

KLAC $47.70 -0.33% ...

Jeff Bailey : 10/19/2005 3:57:36 PM

Valero Energy (VLO) $98.89 -1% ... tentative under that $100.00 level.

Jeff Bailey : 10/19/2005 3:56:09 PM

Broker/Dealer Index (XBD.X) $174.89 +2.87% Link ... comes to its 21-day SMA.

Did Greenspan delay retirement?

Linda Piazza : 10/19/2005 3:55:59 PM

That's a big bullish engulfing candle on the OEX's daily chart, bringing up the psosibility that the OEX could finally attempt that climb back to 555-556 that I was anticipating last week. It's certainly making me sorry that I closed out my bullish position early to do research and that I didn't wait until the close to try that bearish position. The bearish position was entered just on the setup of the advdec line, showing the possibility of a pullback tomorrow morning, but not from what height and to what depth, as I said earlier. The OEX is now again approaching the 38.2% retracement of the decline off the 10/3 high. It's also testing the 60-minute 100-ema as we move into the close. Tomorrow will see if those levels can be maintained, but my timing wasn't great on either my personal bullish exit, although that run was nice while I was in it, certainly, or on the bearish entry.

Tab Gilles : 10/19/2005 3:55:07 PM

Murphy Oil (MUR) Testing $42 level again. Link

Following pattern I outlined the other day. Link

Jonathan Levinson : 10/19/2005 3:54:44 PM

Session highs as QQQQ melts upward through upper channel resistance in an upside trending move. Current high is 38.61, with the daily cycle oscillator printing its first buy signal since September.

Jeff Bailey : 10/19/2005 3:49:38 PM

Got ya covered Tab ... Murphy Oil (MUR) $42.86 -1.38% ... PnF chart from Dorsey/Wright at this Link

Jeff Bailey : 10/19/2005 3:46:32 PM

Here comes "Brown" ... Link

Jeff Bailey : 10/19/2005 3:46:04 PM

FedEx (FDX) $89.00 +1.03% Link ... breaks above its 200-day SMA.

Linda Piazza : 10/19/2005 3:43:35 PM

Advdec line still at extreme levels and still showing the possibility of an early decline, although from what level and to what level is yet undetermined. I think we're probably just seeing a short-squeeze into the close, something I warned about, but those who entered a tentative bearish position might think about whether they want to go ahead and exit. I'm probably going to hold overnight, but feeling the squeeze myself right now.

Tab Gilles : 10/19/2005 3:41:10 PM

Just getting in...been out most of today.

$NDX Wow! Nice Bullish engulfing candle today. Link

$VXN Link

Let's see what the $NASI signals after the close today. Link Link

Last weeks -200 $NAHL signaled a nearterm buy. Link Link

Linda Piazza : 10/19/2005 3:40:55 PM

OEX making a close approach to the 10/17 high of 552.41 and may overrun it into the close.

Linda Piazza : 10/19/2005 3:40:08 PM

RUT back across its 200-sma.

Jeff Bailey : 10/19/2005 3:40:04 PM

Apache Corp. (APA) $62.72 +0.41% ... comes back to take a look at that 200-day SMA Link .

Might be important for the Murphy Oil (MUR) $42.54 -2.11% Link faithful. Note: MUR did achieve its bearish vertical count of $42.00 (dorseywright.com PnF chart).

Jonathan Levinson : 10/19/2005 3:32:24 PM

On a 200-tick basis, trimming out some of the noise, we have upper channel resistance up to the mid 38.50s for QQQQ, with slight short cycle bearish divergences showing. So far, the decline off the initial touch of the high was slow, corrective and weak, and there remains no indication of trouble for the bulls yet. The 72 SMA is only up to 38.10, and volume breadth is nowhere near extreme at +1.76:1. The Qs walked easily through resistance to 38.25, and that area will now act as support. Link

Jeff Bailey : 10/19/2005 3:34:17 PM

Apple Computer (AAPL) $54.39 +4.17% Link ... oh my! Closing in on a new 52-week high.

Getting above the recent "doji" from 10/14/05 of $54.00 even.

Linda Piazza : 10/19/2005 3:24:38 PM

Aggressive OEX traders who are willing to risk a further short-squeeze into the close could dip their toes into the water with a small OEX bearish position. I'd exit if the OEX pushed an account-appropriate amount above the 10/17 high of 552.41.

If you're still in a bullish position, it's not time to panic. The advdec line is still rising, but rising into strong resistance and showing that it's overdone. You could elect to take profit here or just follow the OEX higher, if it moves higher. It's just facing strong resistance and the advdec line is showing potential for a pullback, perhaps not until tomorrow and perhaps not until after further end-of-day gains, so the bearish play is a risky one.

Jeff Bailey : 10/19/2005 3:21:01 PM

AMR Corp. (AMR) $12.22 +1.83% ... allllll over the runway today. Low/High $11.37/$12.40

Jeff Bailey : 10/19/2005 3:17:48 PM

03:00 Internals found at this Link

Linda Piazza : 10/19/2005 3:17:38 PM

OEX facing the resistance that usually turns it back, at the 15-minute channel line currently at 551.27. Be careful through here, bulls.

Linda Piazza : 10/19/2005 3:11:59 PM

By the way, there's a reason I keep appending "short term" to my talk about bullish positions today. I think this could all be just churning around before next direction. The SPX keeps bouncing off support I'd identified, but it's just bouncing up to the former wedge support, to retest it. Nothing all that bullish is happening here, despite what it feels like today. It's possible the SPX could continue to climb the underside of that wedge or even pop back inside it, but so far, this is just an expected event.

Jonathan Levinson : 10/19/2005 3:11:13 PM

Because price has gotten so far ahead of the 60/30 and short cycle oscillators, there are potential bearish divergences if the bulls can't hold it here. So far there's no sign of weakness at the highs, but the game's far from over. The 60 min cycle in particular has barely turned up, and there are hours to go for the oscillators to make it to overbought territory.

Linda Piazza : 10/19/2005 3:08:44 PM

Really iffy here. The advdec line is looking very overdone on the 10-minute and 30-minute charts, two that I watch quite frequently. The OEX is approaching that 552.41 high from 10/17. I would think there would be a lot of scared bears that would keep this going higher, but the advdec line and other evidence suggests that the movement is getting a bit overdone, so just keep following the OEX higher with your stops if you've elected to stay in for now. I'm out.

Jonathan Levinson : 10/19/2005 3:04:49 PM

Volume breadth +1.83:1 on the NYSE, +1.77:1 on the Nasdaq as new highs print across the indices.

Jeff Bailey : 10/19/2005 3:02:45 PM

03:00 Market Watch found at this Link

Jeff Bailey : 10/19/2005 2:59:12 PM

North American Telecom (XTC.X) 694.68 +0.89% ... NT $3.49 (unch) , Lucent Tech (LU) $3.13 +0.64%

Linda Piazza : 10/19/2005 2:58:37 PM

Remember the confirmation level of the double-bottom, with that at 552.41 on the OEX, and with the OEX currently at 551.07.

Linda Piazza : 10/19/2005 2:57:37 PM

For disclosure's sake, I got chicken and bailed on the rest of my position. It looks as if the OEX may have a decent chance at closing this 30-minute period above the 30-minute resistance at 550.72 and it's coming up now to test the 30-minute 100-ema, but I'd more than exceeded my original 548-548.50 goal and need to concentrate on research for the Wrap tonight. I couldn't tend my positions, research, write the MM and do a good job on all.

Jeff Bailey : 10/19/2005 2:56:01 PM

PortalPlayer (PLAY) $26.45 -0.60% ... while stopped at $26.00, will utilize prior option chain observations and recent action in November $25 Calls strike (thought that was a seller). Session low has been $25.17. If bugger settles $27.50-ish on Friday, then get additional thought of expiration-related trade.

Jeff Bailey : 10/19/2005 2:52:30 PM

KLA-Tencor (KLAC)Link ... I did look at this chain late last night. Thoughts were that INTC weakness, along with recent NVLS earnings would cap KLAC near-term. At this point, neither OCT. $47.50 or $50 put holders have flinched. Oct. $47.50 Call holders did flinch a bit (see volumes)

Jonathan Levinson : 10/19/2005 2:52:13 PM

From a retest of Friday's low to a break to a new high for the week, QQQQ bulls are looking at a key outside reversal print if they can hold these gains. The short cycle is reaching a peak not seen since yesterday's open, and the keltners suggest that we've seen the rally, but again, I'm having trouble trusting my indicators at this point. Link

Linda Piazza : 10/19/2005 2:51:28 PM

Advdec line punching higher. OEX moving toward the 30-minute 130-ema, but hitting that 30-minute Keltner resistance that I just mentioned in my 2:48:54 post. . . and pulled back a few cents as I typed. That resistance is at 550.72, with the OEX currently at 550.59.

Linda Piazza : 10/19/2005 2:48:54 PM

OEX 15-minute resistance and target at 551.10. First light support at 549.60, but stronger at 548.81 and then even stronger near 548. OEX at 550.10 as I type. It's facing 30-minute Keltner resistance at 550.72, the resistance that turned it back on several times this week. It's closely related to the 30-minute 100/130-ema's, but if I showed you the chart with the central line now at 550.72, you would see that each touch came to this line before a pullback. It will be defended, but if bears can't drive the OEX much lower or the advdec line much lower, then there's a chance the OEX could move above it. It's certainly a time to protect bullish profits and decide whether you've gotten enough of a run if in a bullish play that was intended to be short-term (as mine was today) or if you want to hold on a while longer, just raising stops. I've got a position open still, but am closely watching the advdec line and may take profits if it dips too much. Officially, I told traders to take full profit earlier except those who were the least risk-adverse. Guess that includes me today, but I'm ready to bail at any moment, and you should be, too. It's all up to the bears from here on in and whether they can drive it lower or will have to cover as we move into the last hour in a few minutes.

Linda Piazza : 10/19/2005 2:42:22 PM

It looks to me as if the advdec line has the potential to climb to about +900-940 as long as pullbacks aren't too deep into negative territory. It's at +404 as I type, but perhaps needing a pullback to -170 or so.

Jonathan Levinson : 10/19/2005 2:41:57 PM

QQQQ 200 tick view since last Thursday, compressed, at this Link

Linda Piazza : 10/19/2005 2:39:57 PM

Advdec line still climbing. May soon be time for another pullback, though. Bulls would like to see it stay positive, or at least above about -170 if it does drop. It's at 432 as I type, QCharts value.

Linda Piazza : 10/19/2005 2:35:35 PM

The OEX is now facing the strongest resistance it's faced all day long. That 30-minute 100-ema is at 550 and the 130-ema at 551.07. The OEX hasn't closed above both of these averages since 10/4. It will also be confirming a double-bottom formation if it can climb above 552.41, the peak between the two troughs, so bears are going to defend this.

Linda Piazza : 10/19/2005 2:33:15 PM

OEX above 550, moving into the middle-of-the-day gap from yesterday. Careful here, too. It's testing the 30-minute 100-ema. If you remember, it was the 30-minute 130-ema, currently at 551.08, that kept turning back the OEX all last week when it tried to climb. Bears are about to get very scared here, but may strongly defend that average.

Bulls, just keep following the OEX higher with your stops.

Jeff Bailey : 10/19/2005 2:31:53 PM

QQQQ ... Look for selling at WEEKLY R1, then a "option expire" settle back near $38.25 (see 10/17/05 01:35:00) Link

Jonathan Levinson : 10/19/2005 2:32:11 PM

All intraday channels have been violated by this move. It's either the start of a huge rally, or it's a very divergent buy program and a great fade. I'm staying out of the way. Link

Linda Piazza : 10/19/2005 2:30:23 PM

New HOD for the OEX. Advdec line at -33, about to go positive, if this all holds.

Jonathan Levinson : 10/19/2005 2:30:16 PM

QQQQ - Exit Point Alert -

Stopped out for a 7 cent loss. My tools aren't working today.

Linda Piazza : 10/19/2005 2:30:00 PM

SOX inching back above its 200-sma after dropping way below it. It's still just within "testing" range of that average, though, with the SOX at 434.11 and the average at 433.67. Still, that's one long lower shadow on that candle, if it holds.

Jonathan Levinson : 10/19/2005 2:29:20 PM

QQQQ - Stop Loss Adjustment Alert -

Move the stop to 38.35

Jonathan Levinson : 10/19/2005 2:28:36 PM

QQQQ - Entry Point Alert -

Short QQQQ at 38.28, stop 38.31

Linda Piazza : 10/19/2005 2:27:37 PM

Advdec line found support a little higher than I thought (I had thought maybe as deep as -850, as per prior post) and it trying to rise again. Needs to keep posting higher highs. It really needs to move into positive numbers, as that would scare shorts, especially those who look only at positive or negative and not at trajectory or S/R.

Linda Piazza : 10/19/2005 2:23:33 PM

OEX Keltner picture: First support at 547.30-547.74 on 15-minute closes. First resistance at 548.70-548.78. OEX at 548.23 as I type, dipping below the 15-minute 100-ema but so far remaining above the five-minute versions down near that Keltner support.

Jonathan Levinson : 10/19/2005 2:22:30 PM

QQQQ ran the stop and is now back to the broken trendline, testing it from above at 38.13: Link

Jeff Bailey : 10/19/2005 2:17:41 PM

02:00 Internals found at this Link

Linda Piazza : 10/19/2005 2:17:06 PM

The OEX's 15-minute Keltner resistane at 548.78 on 15-minute cloes has held in the just-completed 15-minute period. The 15-minute 100-ema at 548.55 also held, giving conflicting outlooks. Both just barely held. OEX bulls would like to see the OEX continue to hold above that 15-minute 100-ema on 15-minute closes and then would like to see follow-through with 15-minute closes above that Keltner level at 548.78. OEX at 548.76 as I type.

Jonathan Levinson : 10/19/2005 2:17:04 PM

Imagine if good news suddenly broke out? Greenspan's correct: the markets are very resilient.

Linda Piazza : 10/19/2005 2:13:28 PM

No appreciable pullback in the advdec line yet. I wouldn't be surprised to see it pull back to -850 of so, or at least move sideways for a while until support catches up, but no pullback yet as I watch. It's at -266, QCharts value.

Jeff Bailey : 10/19/2005 2:13:22 PM

02:00 Market Watch found at this Link

Linda Piazza : 10/19/2005 2:11:51 PM

Jonathan and Jane: Thanks for keeping us up-to-date on news releases.

Linda Piazza : 10/19/2005 2:10:11 PM

As long as the OEX produces 30-minute closes above the Keltner line currently at 548.39, it preserves the possibiltiy of reaching toward a 550.72 target, with 552.97 the resistance above that. OEX at 549.30 as I type. It's broken above the 15-minute 100/130-ema's, so those bulls still with partial positions hope to see any pullbacks find support at the 100-ema at 548.55 on 15-minute closes.

Jonathan Levinson : 10/19/2005 2:09:21 PM

QQQQ regains the broken rising resistance line: Link

Jonathan Levinson : 10/19/2005 2:08:55 PM

QQQQ - Exit Point Alert -

Stopped out, -.05.

Linda Piazza : 10/19/2005 2:07:21 PM

Advdec line through one level of resistance, propelled straight up into another. As long as it's gaining and its pullbacks are shallow, bulls are okay for now, but be aware that the advdec line is beginning to reach overdone levels on the 5 through 15-minute charts.

Jonathan Levinson : 10/19/2005 2:06:25 PM

QQQQ - Entry Point Alert -

Short QQQQ at 38.13 stop 38.18

Linda Piazza : 10/19/2005 2:06:05 PM

OEX shows a strong gain, hitting next resistance now near 548.50. This is Keltner, historical and 15-minute 100-ema resistance. This 15-minute 100-ema has been important, so here's another place that bulls are going to have to fight to surmount. If you're still in the bullish play from earlier, you're glad to see this reaction, but now want to see a short squeeze take over and propel the OEX through this resistance.

Jeff Bailey : 10/19/2005 2:04:02 PM

A little "Max Pain" likely. Option expiration is Friday!

Jeff Bailey : 10/19/2005 2:03:35 PM

Buy Program Premium ... DIA $103.22, SPX 1,182.20, QQQQ $38.05

Jonathan Levinson : 10/19/2005 2:02:08 PM

Volume breadth is up to -1.3:1 on the NYSE, -1.22:1 on the Nasdaq.

Linda Piazza : 10/19/2005 2:01:38 PM

Advdec line moved higher, but now dropping. Watch carefully.

Jonathan Levinson : 10/19/2005 2:01:23 PM

Headlines:

U.S. ECONOMY CONTINUES MODERATE GROWTH: BEIGE BOOK

WAGE, PRICE PRESSURES GROWING: FED'S BEIGE BOOK

HOUSING MARKETS SLOWING IN SOME REGIONS: BEIGE BOOK

LABOR MARKETS TIGHTENING: BEIGE BOOK

SCATTERED REPORTS INDICATE GROWING PRICING POWER: BEIGE BOOK

RETAIL SALES WEAKER IN SOME REGIONS: BEIGE BOOK

Jeff Bailey : 10/19/2005 2:01:13 PM

#1, #2 and #3 chip equipment makers ... AMAT $16.80 -2.49% Link , KLAC $46.90 -2% Link , NVLS $21.14 -3.16% Link

Jonathan Levinson : 10/19/2005 2:00:56 PM

Here comes the test of QQQQ 38.11: Link

Linda Piazza : 10/19/2005 1:59:55 PM

Advdec line inching up again, just a little. It's at -1037 as I type.

Jonathan Levinson : 10/19/2005 1:59:53 PM

Ten year note yields hold steady at 4.449% here, -3.2 bps, while IRX has risen to a 1.5 bp loss at 3.755%.

Jonathan Levinson : 10/19/2005 1:57:39 PM

Headlines:

FISHER: FED WILL CONTAIN INFLATION EXPECTATIONS AND PRESSURE

Jeff Bailey : 10/19/2005 1:55:53 PM

Current OPEN MM Profiles found at this Link

Linda Piazza : 10/19/2005 1:49:46 PM

The OEX has come within 8 cents of hitting my 12:13:13 upside target. I think that most scalpers should probably consider taking full profits ahead of the Beige Book release, with the target approached so closely. For those who have already taken partial profit and who are willing to risk a strong downdraft, well, you know what you're risking. I'll continue to cover the position in my posts, but I'd advise all but the least risk-adverse to consider closing the position or at least taking most profits.

Jonathan Levinson : 10/19/2005 1:48:59 PM

Potential bearish divergence for QQQQ here at 38, with the short cycle oscillators lagging the quick run in price. But the 30 min cycle upphase is only approaching the idpoint of its range, and if the current highs get broken 5 cents away, there will be room to run easily to the 38.20 on that and the 60 min cycle. Link

Jeff Bailey : 10/19/2005 1:47:43 PM

WellPoint Health (WLP) $75.04 +1.36% ... best levels of the week.

Linda Piazza : 10/19/2005 1:45:11 PM

Advdec line hit that -1100 level and pulled back, but the pullback has been minor so far. Bulls would like to see it stay above -1250 or maybe -1700, although a drop that deep would cloud the picture. It's at -1147 as I type.

Linda Piazza : 10/19/2005 1:41:53 PM

I'm doing the Market Wrap for tonight. Usually I can start looking at charts and making some annotations about now, changing them as needed by the end of the day. I don't think I can start doing that today.

Bulls, you've had a good run up so far. If it continues, the short squeeze will start at some point, but do remember my possible doji-day or gain scenario for today. A bad reaction to the Beige Book could push the OEX lower again and produce that doji. Or something worse.

Linda Piazza : 10/19/2005 1:39:13 PM

Danger for bulls as the OEX tests its previous HOD. Needs to vault over 548 now to get anything going, but may now drop down to retest the five-minute 100-ema at 547.25 instead. At least, bulls hope that's all it retests. OEX at 547.59 as I type.

Linda Piazza : 10/19/2005 1:37:17 PM

That advdec resistance extends higher than I thought it did, up to about -950 instead of -1100. Advdec line still climbing, at -1150, QCharts value, as I type.

Linda Piazza : 10/19/2005 1:36:32 PM

OEX just vaulted over the five-minute 100/130-ema's. Advdec line still climbing, but still climbing into that resistance band up to about -1100. It's at -1201 as I type, through part of the resistance, but not all.

Linda Piazza : 10/19/2005 1:34:31 PM

Advdec line still pushing higher. Original OEX target of 548-548.50 being approached. If you've taken partial profits already, you might just want to ratchet up your stops as long as the advdec line isn't dropping too quickly. I'd plan how much I wanted to risk holding over the Beige Book release, though.

Jonathan Levinson : 10/19/2005 1:34:01 PM

Crude oil is up to a 1.20 loss at 62.00, 72.5 cents off the low. Natgas is still leading, now +.12 at 13.54 and 27 cents off its low. Hurricane Wilma is becoming increasingly frightening, now upped to Cat-5:

MIAMI (Reuters) - Hurricane Wilma became the fiercest Atlantic hurricane ever seen as it churned toward western Cuba and Mexico's Yucatan peninsula on Wednesday, and threatened densely populated Florida after having already killed 10 people in Haiti.

The season's record-tying 21st storm, fueled by the warm waters of the northwest Caribbean Sea, intensified with unexpected and unprecedented speed into a Category 5 hurricane, the top rank on the five-step scale of hurricane intensity.

A U.S. Air Force reconnaissance plane measured maximum sustained winds of 175 mph, with higher gusts, the U.S. National Hurricane Center said.

Link

Jeff Bailey : 10/19/2005 1:32:09 PM

VLO-VS ... would use a stop of $1.80 to begin on these naked puts.

Linda Piazza : 10/19/2005 1:31:50 PM

Advdec line pushing into strong resistance, up to about -1100. It's at -1557 as I type, QCharts value. This resistance does look strong, so there needs to be a strong surge to move the advdec line above it. Those who saw the OEX hit the five-minute 100-ema and didn't take at least partial profits, or wish they'd taken full profits, are getting another opportunity right now.

Linda Piazza : 10/19/2005 1:29:36 PM

OEX Keltner picture: For the last hour, the OEX has been maintaining 15-minute closes above the Keltner line currently at 546.09 and those in short-term bullish positions need to see that continue. Next resistance on that chart at 547.66 on 15-minute closes. The OEX has not yet produced a 30-minute close above Keltner resistance at 546.41 on 30-minute closes, so if it does it this 30-minute period, that will be the first time since about 1:00 yesterday afternoon, so another short-term change in trend.

Remember the Beige Book coming up and consider now whether you'll go flat before that release--not a bad idea.

Jonathan Levinson : 10/19/2005 1:30:40 PM

The rising trendline that broke yesterday is up to 38.11 QQQQ. So far, price has been unable to regain that broken support. A break below 37.70 would make today's price action look like a secondary bear flag testing yesterday's breakdown, while a break above 38.11 would set up the gap down as bear trap. Direction is still up for grabs on that basis. Link

Jeff Bailey : 10/19/2005 1:29:32 PM

Swing trade sell naked put alert ... Sell two (2) of the Valero Energy VLO Oct. $95 Puts (VLO-VS) at the bid of $0.80.

VLO $96.86 here.

Linda Piazza : 10/19/2005 1:27:14 PM

Pullback on the OEX from the five-minute 100-ema. That's to be expected, but it's the reason that I suggested at least partial profits be taken. Now the advdec line pulls back, also to be expected, but bulls who retained a partial position want to see it hold above -1900 or at least above -2200. It's dropping steeply, at -1765 as I type.

Jeff Bailey : 10/19/2005 1:26:24 PM

Oil Service Index (OSX.X) 153.85 +0.02% ... edges green.

Jonathan Levinson : 10/19/2005 1:24:31 PM

Ten year notes have edged off their highs, TNX up to a 3 bp loss at 4.451%. IRX is down 2.3 bps here at 3.747%.

Jeff Bailey : 10/19/2005 1:23:57 PM

01:00 Internals found at this Link

Linda Piazza : 10/19/2005 1:23:43 PM

Advdec line shot right into next Keltner resistance, from -1650 to -1300 or so. Another iffy time, but so far, it's still climbing and that's still good. I sure would take those partial profits if you were in a bullish scalping play from my earlier suggestions. I'd set the rest to breakeven or else be willing to risk another trip down to the LOD before you know whether there's going to be another bounce. This is iffy and possibly countertrend.

Linda Piazza : 10/19/2005 1:22:02 PM

The OEX's five-minute 100-ema is being approached now. Take partial profit if in aggressive bullish positions, if you haven't already done so. Some might consider taking full profit, but the advdec line has just shot higher.

Jonathan Levinson : 10/19/2005 1:18:05 PM

Back to find QQQQ bouncing from 37.82 and clearing 72 SMA resistance at 37.91. The 30 and 60 min channels are in tentative upphases hereoff the noontime 37.72 low, but breadth remains negative for the Nasdaq at -1.28:1. Link

Linda Piazza : 10/19/2005 1:17:57 PM

OEX five-minute 100-ema at 547.25, and if you aggressive bulls haven't already taken partial profit, I'd suggest doing so if that is approached.

Linda Piazza : 10/19/2005 1:17:26 PM

Advdec line climbing again and this time, and this time, it's attempting to push above the resistance that's been holding it back. That's great for OEX bulls hoping to see 548, but the advdec line needs to stay there.

Linda Piazza : 10/19/2005 1:05:07 PM

If the OEX rises again and if you short-term aggressive bulls haven't already taken partial profits, at least (hope you have, as I've suggested), I'd certainly consider doing so if the five-minute 100-ema at 547.32 is tested. The OEX is now chopping around inside a triangle at the bottom of its descent, and it may test the bottom of that triangle at 544.72 before it retests the top, with the five-minute 100-ema roughly congruent to the top.

Jeff Bailey : 10/19/2005 1:02:52 PM

01:00 Market Watch found at this Link

Linda Piazza : 10/19/2005 12:59:34 PM

Advdec line attempting to steady above -2650. This is still following a pattern from earlier, and it wasn't ultimately successful in its attempt to steady that time. We'll see this time. I'm thinking that a trip down to -2780 or so might still occur. It's at -2509 as I type, QCharts value.

Jeff Bailey : 10/19/2005 12:58:41 PM

10 Most Active ... QQQQ $37.92 +0.02%, SPY $117.75 -0.05%, INTC $23.19 -2.23%, YHOO $35.64 +5.75%, MSFT $24.86 +1.18%, SIRI $5.81 -2.68%, CSCO $16.99 +0.05%, MOT $20.94 +3.76%, ORCL $12.18 -1.53%, AMEX:XLE $46.03 -1.37%.

Linda Piazza : 10/19/2005 12:54:00 PM

Advdec line dropping after its test of the same configuration that dropped it earlier today. It's coiling, too.

Linda Piazza : 10/19/2005 12:52:43 PM

OEX Keltner picture: The OEX is tsting 15-minute Keltner suppor at 545.98 on 15-minute closes. So far, the OEX is just coiling, so it's possible that it's at least going to come down and retest the ascending trendline off the day's low, but short-term bulls would prefer to see this hold on 15-minute closes. The 30-minute chart shows still-firming support near 544, with first resistance at 546.48 on 30-minute closes helping to stop the OEX. It's at 546.08 as I type. There hasn't been a 30-minute close above this line since the 1:00 candle yesterday.

Linda Piazza : 10/19/2005 12:49:14 PM

Hopefully, you short-term aggressive bulls again took partial profit where I suggested, and can now make reasoned and calmer decisions about whether you want to stay in as the OEX apparently sets up a coiling formation, right now testing the bottom of this morning's gap. This is why I pointed out exact levels at which the advdec line might run into resistance, so you could exit or exit at least part of the position.

Linda Piazza : 10/19/2005 12:45:56 PM

Advdec line still climbing, now approaching the configuration that turned it back earlier, now from -2140 to -2050 or so. It's at -2210, QCharts value, as I type. Those aggressive bulls who haven't already taken profit as the 15-minute 21-ema was challenged (and the top of the gap) want to see the advdec line burst through that resistance this time, or at least not pull back strongly. Be careful here.

Linda Piazza : 10/19/2005 12:41:30 PM

The OEX is testing the 15-minute 21-ema that ultimately turned it back earlier today. Although the advdec line still climbs, this would be a good place to take partial profits, at least, if you've entered an aggressive bullish OEX play.

Linda Piazza : 10/19/2005 12:38:03 PM

Advdec line did punch higher and now moves quickly toward the particular arrangement of resistance that stopped it on the first bounce, with that at -2140 to -2050 or so. The advdec line is now at -2305. If it doesn't punch through this fairly quickly or at least if it starts pulling back strongly after hitting it, then those aggressive bulls who tried a new bullish OEX play need to give some consideration to closing out positions. This bounce is not carrying the OEX as high as did the other. For now, the advdec line is still climbing, though.

Jeff Bailey : 10/19/2005 12:36:16 PM

12:00 Internals found at this Link

Linda Piazza : 10/19/2005 12:33:24 PM

Next difficult test for the advdec line going on now, at -2350. Advdec line now at -2442. This could be resistance, so those in aggressive bullish scalping plays want to see it punch higher quickly and stay above that level.

Linda Piazza : 10/19/2005 12:28:37 PM

Remember the Beige Book report at 2:00 this afternoon, as Jonathan reported earlier today.

Linda Piazza : 10/19/2005 12:26:29 PM

I changed servers on my charting service, not sure if the OEX really was sitting there, not moving, or whether my charting service was just behind. The OEX isn't moving much. It has managed to produce a 15-minute close above the 15-minute Keltner support and may, depending on the action in the next five minutes or so, again close a 30-minute period above the support at 543.91-544.10. It's been closing 30-minute periods at or above this level all day, with a minor violation the first 30-minutes of the day. The OEX needs a climbing advdec line before it can show much strength. The advdec line is attempting to climb, but only tepidly so far, leaving the outcome of the OEX's second bounce attempt of the day in some confusion as yet.

Linda Piazza : 10/19/2005 12:13:32 PM

If you're not already in a bullish OEX play and you're an aggressive scalper, you might consider entering a long play with a stop an account-appropriate amount below the low of the day. I wouldn't bet the whole farm on this play. Possible upside target 548, with the emphasis on possible. I'd certainly be giving some consideration to taking at least partial if not full profit if the advdec line rose to about -2100 and stalled there. It's at -2968 as I type.

Linda Piazza : 10/19/2005 12:09:00 PM

The OEX needs the help of the advdec line, but the possibility of a bounce up to 548-548.66 exists. See the chart in my 12:07:25 post.

Linda Piazza : 10/19/2005 12:07:25 PM

The OEX closed its last 30-minute period above the firm support. Here's a picture: Link

Jeff Bailey : 10/19/2005 12:05:28 PM

12:00 Market Watch found at this Link

Linda Piazza : 10/19/2005 11:58:42 AM

RUT dropping. It's at 618.09, with the 10/13 low at 614.76.

Linda Piazza : 10/19/2005 11:57:35 AM

Advdec line approaching possible strong support in the -3300 range. It's at -3199 as I type, QCharts value. OEX testing 30-minute support at 543.98-544.20, with that not looking quite as firm as it did even a few minutes ago. OEX at 544.41 as I type.

Jeff Bailey : 10/19/2005 11:54:31 AM

Eastman Kodak (EK) $22.26 -3.80% Link ... Off session lows of $20.91 after the image products maker said it lost $1.03 billion, roughly $3.58 per share on sales of $3.55 billion. The company said it took a one-time restructuring charge of $900 million, or $3.13 a share.

For the first time in company history, EK said it produced more revenue from digital products than from film, paper and other chemical-based products. While digital sales were up 47% to $1.89 billion, traditional revenues fell 20% to $1.66 billion.

Jonathan Levinson : 10/19/2005 11:51:54 AM

I have to leave for an appointment that will keep me away for about 1 hour and a half.

Linda Piazza : 10/19/2005 11:51:24 AM

OEX holding just above the day's low, but will it continue to do so? It closed the last 15-minute period just below the desired 545.08 level, and it's just below that now, but not enough below to say the support has been lost. Both five-minute and 30-minute support appears to be firming, with 30-minute at 544.13-544.26 on 15-minute closes, and with five-minute from 544.33-544.84 on five-minute closes. The advdec line has to do better, though, before there's too much hope that the day's low will hold. It still looks vulnerable to a further decline, again starting as I completed this.

Jeff Bailey : 10/19/2005 11:48:49 AM

Bank of America (BAC) $41.71 +0.33% Link ... Nation's second largest bank (by assets) reported quarterly profit of $1.04 per share on revenue of $14.81 billion. Consensus was for $1.02 per share on revenue of $14.14 billion.

Jeff Bailey : 10/19/2005 11:45:13 AM

JP Morgan (JPM) $34.30 +1.56% Link ... Nation's third largest bank reported quarterly EPS of $0.71 on revenue of $14.47 billion. Consensus was for $0.72 on revenue of $13.8 billion.

Jonathan Levinson : 10/19/2005 11:44:34 AM

Crude oil -1.2 at 62.00 here, a nickel off the session low. Natgas is up .02 at 13.44, 17 cents off the low.

Linda Piazza : 10/19/2005 11:43:43 AM

OEX testing 544.26-545.13 Keltner support, on 15-minute closes. It's just below the most important line, the 545.13 one, with the OEX currently at 544.90. Thirty-minute support loosk fairly firm, however, with that at 544.16-544.28 on 30-minute closes.

Jeff Bailey : 10/19/2005 11:42:43 AM

Altria (MO) $73.64 +1.60% Link ... Reported Q3 earnings of $1.38 on revenue of $24.96 billion. Consensus was $1.33 per share.

Linda Piazza : 10/19/2005 11:40:16 AM

So far, it's looking as if the advdec line is still being pressured by resistance at -2670, not able to sustain levels above it. It looks vulnerable to a decline toward -3300 unless it can do so. It's at -2815 as I type, QCharts value.

Jonathan Levinson : 10/19/2005 11:39:49 AM

Here's a compressed look at the bounce from Thursday's low on a 100-tick QQQQ chart. This morning's bounce as a "return to the scene of the crime," unsuccessfully attacking resistance at yesterday's broken trendline. So far, it's looking like a bear flag break occurred yesterday. Link

Linda Piazza : 10/19/2005 11:32:21 AM

Advdec line climbing again, but needs a 10-minute close back above -2650, with the advdec line now at -2750.

Linda Piazza : 10/19/2005 11:30:30 AM

RUT dropping toward potential support from 617.88-619.04 on 15-minute closes, with the RUT currently at 619.48. Unlike some other indices, the RUT has not dropped all the way down to the 10/130 low of 614.76 yet. It's LOD so far has been 618.32.

Jeff Bailey : 10/19/2005 11:29:51 AM

Current OPEN MM Profiles found at this Link ... Note: ... Stopped out of the PortalPlayer (PLAY) long at $26.00.

Adjusted stop lower for Lucent (LU) to $3.05 from $3.08.

Linda Piazza : 10/19/2005 11:27:01 AM

OEX testing Keltner support from 544.49-545.30 on 15-minute closes, with the OEX at 544.99 as I type. Thirty-minute support has dropped to 544.37.

Jeff Bailey : 10/19/2005 11:25:06 AM

Sell Program Premium ... DIA $102.77, SPX 1,173.79, QQQQ $37.76

Linda Piazza : 10/19/2005 11:23:41 AM

Advdec line needs a strong surge above resistance or it looks vulnerable to a deeper decline. It's rising as I type, right into that next resistance near -2500, but not exactly surging. It's at -2648 as I type.

Jonathan Levinson : 10/19/2005 11:23:31 AM

QQQQ bounces back to the 72 SMA at 37.81 from a higher low. 37.75 has held as support on this decline, with the wavelet cycle trying to turn back up: Link

Linda Piazza : 10/19/2005 11:21:56 AM

OEX 15-minute Keltner support at 544.70-545.39 on 15-minute closes. It may be strong enough to hold the OEX. It's trying to flatten and firm up, but still a bit iffy.

Linda Piazza : 10/19/2005 11:20:45 AM

OEX slipping below the bottom of the gap. Aggressive bulls, I advised several points for taking partial profits, and this was the reason why. If your stops haven't already been hit, a 15-minute close beneath the midpoint of the bounce, at about 545.84, would be another time to consider exiting, but if you've taken partial profits already and are so inclined, you can stay in for a retest of the day's low, if that should happen. Advdec line trying a tepid bounce as I type, and the OEX is bouncing back into the gap again, too, at least temporarily holding to the 50% retracement of the bounce off the day's low. Really iffy stuff, and I hope you've pocketed some gains at least.

Jeff Bailey : 10/19/2005 11:17:51 AM

11:00 Internals found at this Link

Tuesday's Internals found at this Link

Jonathan Levinson : 10/19/2005 11:20:37 AM

Headlines:

[GOOG] ASSOCIATION OF AMERICAN PUBLISHERS FILES LAWSUIT VS GOOGLE

[GOOG] AMERICAN PUBLISHERS SUES GOOGLE OVER PLANS TO DIGITIZE BOOKS

[GOOG] AMERICAN PUBLISHERS: SUIT VS GOOGLE AFTER TALKS BREAK DOWN

GOOG trades +4.19 at 307.45 here.

Jonathan Levinson : 10/19/2005 11:14:33 AM

Ten year note yields are down to a 4.2 bp loss here, at 4.439%, IRX down 2.8 bps at 3.742%.

Linda Piazza : 10/19/2005 11:12:36 AM

OEX at the bottom of its gap again, testing it. A 50% retracement of the bounce off the day's low is at 545.85. OEX at 546.29. Thirty-minute Keltner support is at 544.58-544.79.

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

Advdec line volatile today. It's dropping again, below the support that bulls would have liked to have seen it held. One of the first markers today for an improvement in behavior in the advdec line was a S/R level now at -2612, with the advdec line now below it. Further support at -3200, and it looks relatively strong. Advdec line at -2810 as I type.

Jeff Bailey : 10/19/2005 11:10:26 AM

Sell Program Premium ... DIA $102.94, SPX 1,175.52, QQQQ $37.76

Jeff Bailey : 10/19/2005 11:08:10 AM

Sell Program Premium ... DIA $103.00, SPX 1,176.25, QQQQ $37.79

Jonathan Levinson : 10/19/2005 11:08:07 AM

QQQQ is holding just above now-rising 72 SMA support at 37.81, below which the current 30 min cycle bounce will begin to look like a bull trap as it whipsaws back down. The short cycle indicators have just printed a sell signal, rolling over from overbought: Link

Linda Piazza : 10/19/2005 11:05:52 AM

OEX Keltner picture: During the just completed 15-minute period, the OEX held to 15-minute support at 546.77 on its 15-minute close. The OEX is testing that now. First resistance at 548.58-549.33 on 15-minute closes, with that resistance possibly firm. That's another place for aggressive short-term bullish traders to further lighten positions, if it's reached. For now, the first target was reached and even exceeded, and I'd just be very watchful of my profits from here on.

Jeff Bailey : 10/19/2005 11:04:57 AM

11:00 Market Watch found at this Link

Linda Piazza : 10/19/2005 11:00:54 AM

Advdec line trying to steady above -2300, but not looking too steady just yet and perhaps likely to drop to -2500 . . . and there it goes as I type.

Linda Piazza : 10/19/2005 11:00:08 AM

It's going to be disturbing to bears if they can't drive the OEX (and other indices) back into this morning's gap and then below it again. So far, the OEX is holding up fairly well above the gap, but not building on gains just yet. It's retesting that 10-minute 21-ema, and it will be touch and go as to whether it closes this 10-minute period above it, too, as it did the last one. That's at 547.12 with the OEX at 547.15 as I type, but oscillating a little above it and a little below it over the last few minutes.

Jonathan Levinson : 10/19/2005 10:58:00 AM

Volume breadth never made it to positive, though it came close for the Nasdaq at the session high. Currently, declining volume leads 2.25:1 on the NYSE, 1.8:1 on the Nasdaq.

Jeff Bailey : 10/19/2005 10:55:20 AM

Jet Fuel stocks ... fell by 1.5 million barrels to 36,072,000. Lowest level since May 2004.

Linda Piazza : 10/19/2005 10:54:40 AM

Advdec line retreating. Aggressive OEX bulls have already been advised to consider lightening positions, but now they don't want to see the advdec line drop beneath about -2500 or so, with it currently at -2203. They also don't want to see the OEX drop back below the bottom of that gap. First Keltner support is at 546.69 on 15-minute closes, with next down below the gap, at 545.60 on 15-minute closes. OEX at 546.83 as I type, testing the top of the gap.

Jeff Bailey : 10/19/2005 10:50:52 AM

Weekly EIA Inventory Table (Crude Oil, Gasoline, Distillates) found at this Link

Linda Piazza : 10/19/2005 10:50:35 AM

Aggressive OEX players who tried a bullish play today, remember the possibility that the OEX could produce one of the doji days that it's so good at producing when it's in these weeks-long congestion periods that it tends to form after a strong move. That could mean a pullback from the day's high, whatever that turns out to be. The OEX is dropping down to test that 10-minute 21-ema at 547.11 after piercing it strongly, and bulls would really like a close above it and a close that didn't leave such a long upper shadow. OEX at 547.29 as I type. Right now, the advdec line is pulling back from its first test of resistance after surging higher. That's not an alarming event, but OEX bulls want to see that pullback remain a minor one.

Jonathan Levinson : 10/19/2005 10:48:00 AM

QQQQ is edging back from a brief break of its upper 30 min channel. I had typed up a short entry and then paused, during which time the drop started. The market's moving fast today. Link

Linda Piazza : 10/19/2005 10:46:44 AM

OEX surging higher again. Still a lot of minutes in this 10-minute period, but it's definitely still above the 10-minute 21-ema at 547.17. Advdec line testing possibly strong resistance, and, if it gets past this, will face more beginning about -1400. Advdec line now at -1780. It's the strongest climb in the advdec line that I've seen in a while, though.

Linda Piazza : 10/19/2005 10:44:54 AM

Keep an eye on the SOX as it approaches its 200-sma again. That's at 433.66, with the SOX currently at 431.41. The SOX has climbed back above the 61.8% retracement of its decline off the year's high.

Linda Piazza : 10/19/2005 10:43:32 AM

Advdec line still surging higher, but by -1800, will be hitting a possible strong resistance band. It's at -1968 as I type.

Jonathan Levinson : 10/19/2005 10:42:15 AM

The current rocket ride north launched from a higher low above last week's low, currently testing the lower rising channel off that Thursday low. A break back into yesterday's range could attract buyers playing the bounce off that higher low, as well as the op-ex players defending that big Oct. 38 put open interest.

Linda Piazza : 10/19/2005 10:42:11 AM

Next step for those in bullish countertrend plays on the OEX is to see a 10-minute close above the 10-minute 21-ema at 547.11. The OEX hasn't closed above this since it gapped lower yesterday at 1:00 and plummeted. It has come up to test it two other times since then, and fell back each time, so it's proven resistance on the decline, and it will be important to close the period above it. Still a lot of minutes to go, but OEX currently above it, at 547.48.

Jeff Bailey : 10/19/2005 10:42:04 AM

Weekly EIA Inputs / Operable Capacity / Capacity Utilization Table found at this Link ... 79.09% of the nations refineries online.

Linda Piazza : 10/19/2005 10:40:31 AM

OEX right at the top of its gap, testing, testing.

Linda Piazza : 10/19/2005 10:39:54 AM

If any aggressive scalpers tried an OEX bullish play after my 10:03:39 post, the OEX has now cleared the 15-minute Keltner resistance at 545.80-546.41, but hasn't closed a 15-minute period, and it's obviously still testing this morning's gap. Taking some off the table wouldn't be a stupid thing to do just now. Advdec line shows the possibility of more gains, still, but doesn't promise them.

Jonathan Levinson : 10/19/2005 10:39:24 AM

Session high for QQQQ, breaking the previous wavelet high and clearing 72 SMA resistance for the first time today. 30 min channel resistance is at 37.96 and rising: Link

Jeff Bailey : 10/19/2005 10:39:23 AM

Buy Program Premium ... DIA $103.01, SPX 1,176.94, QQQQ $37.94

Linda Piazza : 10/19/2005 10:38:07 AM

Advdec line still climbing off its low. Hasn't cleared next important resistance in the -2800 level, but it's approaching it now.

Linda Piazza : 10/19/2005 10:37:08 AM

There's a potential inverse H&S on the bottom of the TRAN's decline on its five-minute chart. A pullback from the current 3575.42-3580 level should be watched for possible support in the 3570 area, and push back through 3580.

Linda Piazza : 10/19/2005 10:35:46 AM

Next hurdle for the advdec line is resistance at -2800, with the advdec line currently at -3028 and facing resistance that's been turning it lower since midday yesterday.

Linda Piazza : 10/19/2005 10:34:26 AM

TRAN bouncing from a test of the 10/13 low of 3554.51, with today's low at 3555.58, but the TRAN needs a 15-minute close above 3580.83 before it even begins to show any sustainable strength. Until then, it's just retesting broken support, to see if it holds as resistance. The TRAN is back above that 3570 level, though, at 3574.24 as I type.

Jonathan Levinson : 10/19/2005 10:33:12 AM

Volume breadth recovers to -3.21:1 on the NYSE, -2:1 on the Nasdaq.

Linda Piazza : 10/19/2005 10:32:18 AM

Big burst higher in the advdec line, but now it needs to get above -3600 and stay above it to have even the weakest hope of a further bounce. It's at -3577.75 as I type, climbing above that line, but only a little, as I typed.

Jonathan Levinson : 10/19/2005 10:31:53 AM

Headlines:

U.S. DISTILLATE STKS DOWN 1.9 MLN BRLS: ENERGY DEPT

U.S. GAS STKS UP 2.9 MLN BRLS: ENERGY DEPT

U.S. CRUDE STKS UP 5.6 MLN BRLS LAST WK: ENERGY DEPT

Jonathan Levinson : 10/19/2005 10:31:35 AM

Crude oil drops to a .70 loss at 62.50, session low.

Jonathan Levinson : 10/19/2005 10:30:16 AM

From the EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.6 million barrels from the previous week. At 312.0 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year. Total motor gasoline inventories rose by 2.9 million barrels last week, putting them just above the lower end of the average range. Distillate fuel inventories fell by 1.9 million barrels last week, and are in the lower half of the average range for this time of year. Inventories fell for both low-sulfur (diesel fuel) distillate fuel and high-sulfur (heating oil) distillate fuel. Total commercial petroleum inventories jumped by 6.3 million barrels last week, and remain in the upper half of the average range for this time of year.

Linda Piazza : 10/19/2005 10:26:01 AM

Inventories number coming up in a few minutes. Whatever your position, decide now if you want to hold over that release.

Linda Piazza : 10/19/2005 10:23:33 AM

RUT at a new LOD, at 619.33 as I type.

Linda Piazza : 10/19/2005 10:22:46 AM

Advdec line testing deeper support again, still showing bullish value/RSI divergence. It has been since about 1:00 yesterday afternoon. Could be erased on this swing lower in the advdec line, but hasn't been so far.

Linda Piazza : 10/19/2005 10:21:31 AM

TRAN headed down again, toward 3580.41 Keltner support on the 15-minute chart. TRAN at 3564.59 as I type. Historical and Fib support in the 3550-ish area.

Jonathan Levinson : 10/19/2005 10:20:15 AM

10 minutes until the EIA petrol report. Crude oil is down .125 at 63.075, natgas +.15 at 13.57.

Linda Piazza : 10/19/2005 10:20:15 AM

No confirmation of the OEX's potential reversal signal on the 15-minute chart. There was a climb in the just-completed 15-minute period, but not a strong-enough one, with the OEX pulling back from its high of that period. The OEX is trying again, with the advdec line trying to hold just-retested support, too, but all looking so very tentative right now. Without a strong climb to punch through that gap, then this might still be presumed to be an automatic bounce at last week's low, a given, and a gap test, not a given but a possibility. Still watching the advdec line and the OEX's behavior with respect to 15-minute Keltner resistance at 546.11-546.52 to see if anything changes. OEX at 545.53 as I type.

Jonathan Levinson : 10/19/2005 10:15:31 AM

Volume breadth has deteriorated to -3.37:1 on the NYSE, -2.59:1 on the Nasdaq as the short cycle upphase stalls below overbought territory.

Linda Piazza : 10/19/2005 10:15:17 AM

Advdec line headed down again to test support again. Closest is at -3100 to -3200, with the advdec line at -3012.

Jeff Bailey : 10/19/2005 10:14:46 AM

10:00 Internals found at this Link

Linda Piazza : 10/19/2005 10:13:05 AM

OEX so far maintaining 30-minute Keltner support at 544.99 on 30-minute closes. Risky place here for any trader, bullish or bearish.

Linda Piazza : 10/19/2005 10:12:17 AM

Next Keltner resistance for the OEX and BIG test is the Keltner lines currently at 546.19-546.84. This is also within that gap today. So far, we've just had a gap test. If the OEX should end this 15-minute period anywhere near the current 545.75 or above, though, it confirms a reversal signal on the 15-minute chart, creating a puzzle for traders.

Linda Piazza : 10/19/2005 10:10:20 AM

SOX bouncing, but perhaps just back to test the 200-sma and the 61.8% retracement of the decline off the year's high, with that at 430.71. The SOX is at 430.07 as I type.

Linda Piazza : 10/19/2005 10:08:58 AM

TRAN trying to steady above 3570 as we head into inventories numbers at the close of this half hour. Keep that inventory number in mind as you make your trading decision, as it could be market-moving.

Linda Piazza : 10/19/2005 10:08:12 AM

Advdec line over the first hurdle, but sustaining values above resistance now at -2800 is something different. Advdec line at -2698 as I type, above it for now. Wouldn't count on anything, though.

Jonathan Levinson : 10/19/2005 10:07:59 AM

Great entry, Mark.

QQQQ is testing yesterday's lows now from below, the wavelet upphase that kicked off this bounce starting to peak and roll as I type. The 72 SMA was almost tested at 37.89: Link

Linda Piazza : 10/19/2005 10:06:40 AM

Pronounced bullish value/RSI divergence on the advdec line's five-minute chart. We know we can't count on these divergences to produce bounces (although the advdec line is bouncing right now), but they do serve as warnings of a bounce, and bears, you're being offered one. For now, I'd consider it a likely bounce up to test the gap only, but watching to see if it's anything stronger.

Linda Piazza : 10/19/2005 10:03:39 AM

Potential reversal signal on the OEX's 15-minute chart. Needs confirmation by a strong climb this 15-minute period. Advdec line trying to steady, but I would like to see a move above -2700, a sustained move above it, before I believed too strongly in bounce potential. Aggressive scalpers could try a bullish OEX position here, but only aggressive ones, and they need to watch that gap this morning for potential resistance, with 15-minute Keltner resistance at 546.28 on 15-minute closes. Not a good risk vs. reward scenario with the only logical stop below the day's low.

Jeff Bailey : 10/19/2005 10:03:38 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 10/19/2005 10:01:03 AM

Headlines:

SEPT GASOLINE DELIVERIES DOWN 4% VS YR AGO: API

GAS DELIVERIES LOG BIGGEST YR-TO-YR FALL IN A DECADE: API

Jonathan Levinson : 10/19/2005 9:59:07 AM

A 2.25B overnight repo results in a 2B net drain against the 4.25B expiring, but the stop out rate is 3.68, still 7 bps below the overnight target and indicating less than strong demand for the money on the part of the Fed's dealers.

Jonathan Levinson : 10/19/2005 9:56:11 AM

QQQQ's short cycles are printing a preliminary buy signal here, but the 72 SMA is far above at 37.90: Link

Linda Piazza : 10/19/2005 9:56:09 AM

Advdec line trying to steady, but not climbing yet.

Jeff Bailey : 10/19/2005 9:53:50 AM

Apache Corp. (APA) $61.74 -1.15% Link ... breaking below its rising 200-day SMA here.

Linda Piazza : 10/19/2005 9:53:08 AM

Automatic bounce on the OEX from last week's low. That's pretty much a given. Advdec line hasn't bounced, though, and it needs to do so, too, before there's any hope of the OEX slowing its decline on anything more than a short-term basis.

Linda Piazza : 10/19/2005 9:51:31 AM

The RUT approaches its weekly 72-ema at 613.37, with this average often providing support for the RUT on a weekly closing basis. RUT at 619.58.

Linda Piazza : 10/19/2005 9:50:37 AM

TRAN at possible 3570 support. Next at 3550.

Jonathan Levinson : 10/19/2005 9:50:21 AM

Awaiting the Fed's decision respecting its expiring 4.25B overnight repo in the coming minutes.

Jeff Bailey : 10/19/2005 9:50:39 AM

Applied Materials (AMAT) $16.75 -2.78% Link ... testing its 200-day SMA here Link

Linda Piazza : 10/19/2005 9:48:45 AM

OEX 15-minute target now 542.77, with other targets nearer 543-543.50. The OEX is quickly approaching last week's low of 543.81, with the OEX at 544.04 as I type.

Jonathan Levinson : 10/19/2005 9:48:23 AM

QQQQ's wavelet bounce just aborted, and my automatic linear regression channel points to the mid 37.50s for next support. Price is holding steadily below the 30 and 60 min channel bottoms, indicating a downside trending move. Link

Linda Piazza : 10/19/2005 9:47:41 AM

SOX plummeted below its 200-sma. Not sure if anyone mentioned that yet.

Linda Piazza : 10/19/2005 9:43:22 AM

Here's another OEX chart, an envelope, showing where the OEX often stops its declines. Of course, if we're to start trending lower, the OEX could trend outside the envelope, but here's where it usually stops, with the lower envelope now at 543.34. Link

Jonathan Levinson : 10/19/2005 9:42:34 AM

Volume breadth -3.52:1 on the NYSE, -2.09:1 on the Nasdaq.

Jeff Bailey : 10/19/2005 9:41:11 AM

Disclosure: I currently hold a bearish position in KLAC prior to this morning's profile.

Jeff Bailey : 10/19/2005 9:40:27 AM

Bearish swing trade short alert ... for 1/2 position in KLA-Tencor (KLAC) $46.97 here, stop $48.50, target $45.25.

Linda Piazza : 10/19/2005 9:39:52 AM

For reference, last week's OEX low was 543.81. OEX at 544.48 as I type.

Jeff Bailey : 10/19/2005 9:38:55 AM

Bullish swing trade adjust stop alert ... for Lucent Tech (LU) $3.09 -0.64% ... to $3.05 at this time.

Jonathan Levinson : 10/19/2005 9:38:07 AM

QQQQ holds at the bottom of its intraday channels, the short cycle indicators oversold but not yet showing signs of a bounce. If they don't bounce it soon, we'll be dealing with an oversold trending move in that timeframe: Link

Linda Piazza : 10/19/2005 9:38:25 AM

Plenty of room for the advdec line to dive deeper. It's not extreme at all, but it's squarely in the middle of nowhere land according to the signals that I use. OEX heading rapidly toward its 543-ish downside target, although it's hitting intermediate support at 545.29 on 15-minute closes. If in bearish options positions from overnight, remember that these inflated early prices will help you, but that they'll deflate quickly if the OEX should slow its descent, much less bounce. Use that to help you make profit-protecting positions as the possibility of a bounce arises. Advdec line is still dropping, and that remains in your favor as long as it does, but I'd be wary of bounce potential if it starts to climb.

Jeff Bailey : 10/19/2005 9:37:15 AM

Bullish swing trade stop alert ... for PortalPlayer (PLAY) $26.00 -2.40% here.

Jonathan Levinson : 10/19/2005 9:35:12 AM

Big decline in gold this AM, Dec. gold futures down 6.7 at 467.70 here, 70 cents off the session low. Silver is down 13.8 cents at 7.701.

Linda Piazza : 10/19/2005 9:33:42 AM

I think the gap down was too big, despite the advdec line action, to risk a new bearish entry, without a bounce and evidence of a rollover. Options prices are going to be inflated at the open and that gap down and quick move down didn't help.

Keene Little : 10/19/2005 9:32:47 AM

You're right Jonathan. When mainstream media reports such things you know general recognition is upon us. Once the market realizes how clueless the Fed is, and loses confidence in its ability to protect the market, that's when the negative reaction will really start to kick in. We may not be far from that time.

Jonathan Levinson : 10/19/2005 9:32:08 AM

Volume breadth is -1.76:1 on the NYSE and -1.95:1 on the Nasdaq at the open.

Linda Piazza : 10/19/2005 9:32:06 AM

The OEX gaps below its Keltner support and drops. Keltner target 543 now, if the OEX maintains 15-minute closes beneath the Keltner line currently at 546.84. If you're in a bearish play currently, know how you'll handle that 543 level.

Linda Piazza : 10/19/2005 9:30:41 AM

Advdec line actually opens quite high and drops straight into support.

Jonathan Levinson : 10/19/2005 9:26:27 AM

Keene, that article made the headline on MSN's frontpage yesterday - a pretty bold title for them to run.

Linda Piazza : 10/19/2005 9:26:21 AM

For those looking at the foreign bourses last night and thinking doom-and-gloom, I wanted to show a chart of the Nikkei, with the Nikkei seeing a steep decline last night (not shown on this chart, by the way, since Stockcharts doesn't update it until sometime today.) Link The Nikkei has been charging straight up with barely a pullback. It's about time for it to pull back to the 50-sma, at least, and even a pullback of that scope isn't disastrous. Mostly, though, I wanted to point out that there's been little correlation between the behavior of our bourses and the Nikkei for quite a while. When I first began doing the Asia/Europe report three years ago, our futures used to react quite strongly to the Nikkei's behavior, but they no longer do. We're seeing pullbacks in other bourses, too, but some of their actions have been divorced from the U.S.'s lately, too. The South Korea Kospi has been hitting record high after record high, for example. The DAX has been climbing strongly, too, despite some trouble economic reports in Germany. Today, the DAX is dropping below its 50-sma.

Jonathan Levinson : 10/19/2005 9:10:07 AM

QQQQ's 30 and 60 min oscillators continue lower, in the first full downphases we've seen since last Thursday. Price is currently below the lower 30 and 60 min channels, however, setting up a possible pop at the open from its current gap down. 37.90-.95 is confluence resistance at yesterday's lows, and these intraday cycles should remain down so long as price holds south of the 72 SMA at 38.01. Link

Linda Piazza : 10/19/2005 9:01:14 AM

Yesterday, the OEX rattled around inside its triangle at the top of its rally off the 10/13 low, then broke out of that triangle to downside and plummeted below a 61.8% retracement of the decline off this week's high. It's possible that the target was just overrun, although some charts last week were still showing the potential for 540-543. That's including the target for a larger triangle that had been produced on its daily chart. The OEX approached that target last week, but may need a retest. Futures are obviously lower this morning, but I do notice something: Futures' lows have so far been above last week's low despite massive overnight losses. Is this a sign of an attempt at a higher lower? Possibly, but that remains to be seen after the cash markets open.

The TRAN ended right on its 200-ema, an average that has been supportive for the TRAN on daily closes over the last two months, and neither the BIX nor the RLX declined as strongly as did the OEX. With crude inventories due today, it might be a good idea to watch at the open whether the TRAN does its often-seen zooming thing pre-inventories release and whether that zoom is up above the 200-ema, currently at 3589.66 or below. If below, watch for support in the 3550 zone.

I'm frankly thinking that it's still possible that the OEX is just doing its usual 4-6-point range chopping around after a big move, a chopping around process that continues for days or even weeks sometimes. Until it breaks out of that chopping around zone, we can perhaps expect alternating days of gains and declines, punctuated by a doji day now and then. For example, a doji day today could punch down toward next support and then see a bounce.

The question is whether the OEX will continue inside that congestion zone it's been building, with a doji day or climb or whether it will break down. Here's what I'll be watching for today: Link I'll let you know what I see on the internals after the open, but I have a special caution. With futures lower, there's the possibility of a gap lower this morning, with the advdec line strongly negative, too. If the advdec line should open near -3000 to -3300, for example, it's setting up a possibility of an extreme for this move and a bounce, perhaps after some further downside. Just as over the last weeks, we were watching for opens near an upside extreme and a quick reversal, sometime in the second or third 15-minute periods of the day, I'll be watching for an extreme open and a quick reversal sometime in the second or third period of the day, too, but this time watching for a possible bounce rather than a decline. What I'm saying is that if there's a deep gap lower, I don't know that I'd be chasing it, especially if the advdec line opens anywhere in the -3000 to -3300 range. If the advdec line instead opens near the -1000 level and if a gap is minor, the opportunity for more downside might be present.

This warning is partly predicated on the fact that futures held above last week's level despite dismal performances overnight in other markets. There's still time for them to drop again.

Jonathan Levinson : 10/19/2005 8:38:41 AM

From the Mortgage Bankers Assoc. website:

WASHINGTON, D.C. (October 19, 2005) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 14. The Market Composite Index - a measure of mortgage loan application volume - was 737.5, an increase of 6.1 percent on a seasonally adjusted basis from 694.8, one week earlier. This measure includes an adjustment to offset the effects of Columbus Day on application activity. On an unadjusted basis, the Index decreased 4.4 percent compared with the previous week but was up 3.7 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index increased by 7.3 percent to 503.9 from 469.5 the previous week whereas the Refinance Index increased by 4.5 percent to 2095.7 from 2004.9 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which increased 6.0 percent to 1103.8 from 1040.9 the previous week, and the Government Index, which increased 7.8 percent to 126.3 from 117.2 the previous week.

The four week moving average for the seasonally-adjusted Market Index is down 1.2 percent to 716.8 from 725.4. The four week moving average is up 0.2 percent to 482.6 from 481.7 for the Purchase Index while this average is down 3.0 percent to 2078.7 from 2143.2 for the Refinance Index.

The refinance share of mortgage activity decreased to 42.8 percent of total applications from 43.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 29.3 percent of total applications from 29.5 percent the previous week.

Jonathan Levinson : 10/19/2005 8:37:37 AM

Equities are trying to bounce in the wake of the reports, QQQQ up to a .16 loss at 37.75. Ten year notes are holding their pre-data levels, TNX -3.6 bps at 4.445%.

Jonathan Levinson : 10/19/2005 8:31:49 AM

Headlines:

U.S. SEPT. HOUSING STARTS RISE 3.4% TO 2.108 MILLION PACE

U.S. SEPT. HOUSING STARTS EXCEED 1.97 MILLION EXPECTED

U.S. SEPT. BUILDING PERMITS UP 2.4% TO 2.189 MILLION PACE

U.S. SEPT. BUILDING PERMITS HIGHEST IN 32 YEARS

U.S. SEPT. SINGLE-FAMILY STARTS UP 2.6% TO 1.747 MILLION

U.S. SEPT. SINGLE-FAMILY PERMITS RECORD 1.749 MILLION PACE

Jonathan Levinson : 10/19/2005 8:24:06 AM

Ten year notes have edged down a bit while equities have edged up, still holding the bulk of their overnight moves. TNX is currently down 3.2 bps at 4.449% for the cash open, IRX down 2 bps at 3.75%, the yield curve flattening further.

Jonathan Levinson : 10/19/2005 8:03:43 AM

Crude oil is up .075 at 63.275, off an overnight high of 63.50, natgas +.13 at 13.55.

Jonathan Levinson : 10/19/2005 8:01:52 AM

WASHINGTON (Reuters) - Hurricane Wilma, which triggered mudslides that killed up to 10 people in Haiti, has strengthened to a catastrophic Category 5 storm as it approaches western Cuba and Mexico's Yucatan Peninsula.

The season's record-tying 21st storm, fueled by the warm waters of the northwest Caribbean Sea, strengthened alarmingly as it headed into the Gulf of Mexico on a path expected to lead across storm-weary southern Florida by Saturday.

Link

Jonathan Levinson : 10/19/2005 7:24:09 AM

Equities are down, ES trading 1176.25, NQ 1536, YM 10258 and QQQQ -.24 at 37.67. Gold is down 2.3 to 472.10, silver is down .051 to 7.788, ten year notes are up 19/64 to 109 1/4, crude oil is up a dime to 63.30 and natgas is up .04 to 13.46.

We await the 8:30 release of Housing Starts and Building Permits, est. 1.975M and 2.075M respectively, then at 10:30 the Petroleum Report, and at 2PM, the Beige Book.

Linda Piazza : 10/19/2005 6:54:49 AM

Good morning. Each index around the globe that's covered in this report declined last night. Our futures are reacting, turning down, too. As of 6:49 EST, gold was down $2.60 to $472.00, and crude, up $0.20 to $63.40. More details about Asian and European markets follows in succeeding paragraphs.

Last night, the Nikkei dove and had seen triple-digit losses within the first hour of trading, and it was going to get worse. At one point, the Nikkei had dropped almost 280 points off the previous day's close. It managed to close off that low of the day, but still lost 222.75 points or 1.67%, to close at 13,129.49. Exporters fell although the dollar remained strong against the yen. Toyota was also suffering after a report that repairing defects on more than a million vehicles would cost the company $134 million. Semi-related stocks declined after Intel's report and a report by Semiconductor Equipment and Materials International showing that September's three-month average for semi orders edged a little lower than August's three-month average. In addition, the Semiconductor Equipment Association of Japan said that September's orders fell below sales, the first time that has happened in four months. However, a newspaper report that six top banks had probably produced a record first-half net income sent banks higher in earliest trading, at least.

Other Asian markets turned lower, too. The Taiwan Weighted lost 2.34%, and South Korea's Kospi dropped 2.79%. Samsung Electronics Co. Ltd. and Sharp Corp. announced that the decline in LCD TV prices will increase the market to 100 million units by 2010, up from 2005's estimated 20 million units. Singapore's Straits Times declined 2.89%, and Hong Kong's Hang Seng fell 1.54%. China's Shanghai Composite lost 0.58%.

European markets decline, too. Yesterday, the ECB's President Trichet and other members spoke in hawkish terms, with a need to be continuously watchful for second-round effects. The Eurozone's August industrial production surprised to the upside, rising 0.8% month over month. This pushed the working day adjusted year over year rise up to 2.6% from the previous 0.6%. Intermediate, durable and non-durable goods all rose. Germany's decline was offset by gains in France and Italy.

As had happened in Asia, chip-related stocks were hit. Energy-related stocks dropped after Exxon Mobil's big block trade yesterday, discussed by Jim Brown in his Wrap. Disappointing third-quarter comparable sales and guidance on operating margins from French dairy giant Danone drove that company's stock lower, and also that of competitors such as Nestle and Unilever. Luxury-goods maker LVMH Moet Hennessy dropped although it reported an 11% rise in revenue over the first nine months and a 9% increase in sales in its fashion and leather goods units, having encouraging things to say about profit for the full year. Christian Dior also dropped, with that company being the main shareholder of LVMH. Drugmaker Roche fell but Akzo Nobel rose, with both reacting to earnings reports. Akzo Nobel had been expected to report worse numbers than it did.

As of 6:45 EST, the FTSE 100 had fallen 74.00 points or 1.41%, to 5,189.90. The CAC 40 had fallen 75.71 points or 1.70%, to 4,385.43. The DAX had fallen 94.63 points or 1.91%, to 4,852.55.

Market Monitor Archives