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Jeff Bailey : 11/3/2005 1:13:53 AM

Dorsey/Wright internals technical recap for 11/02/05 at this Link

Note !!!!: Dorsey/Wright's S&P 500 Bullish % (BPSPX) reversed back UP today at 54%.

StockCharts.com's S&P 500 Bullish % ($BPSPX) at this Link

Jeff Bailey : 11/3/2005 12:55:41 AM

10/26 to 11/02 Sector Bell Curve found at this Link

Jeff Bailey : 11/3/2005 12:43:00 AM

Program Trading Levels for Thursday ... HL Camp & Company has their computers set for program buying at $+3.76 and set for program selling at $+1.43.

OI Technical Staff : 11/2/2005 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The Market Monitor has been archived.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 : 11/2/2005 9:15:28 PM

Whole Foods Market (WFMI) $149.87 +2.04% Link ... bulls look to be doing some "healthy shopping."

Oh My! another 52-week high after a triple top buy Link ... Short interest on HANS at this Link

Jeff Bailey : 11/2/2005 8:59:55 PM

Could be a "jail break" pending in Corrections Corp. of America (CXW) $40.73 +1.82% Link on a trade at $41.00. Volume building last three sessions Link and nice 8-month base.

Short interest as of 10/14/05 at this Link

Jeff Bailey : 11/2/2005 6:06:44 PM

Good Gravy! Dave & Busters (DAB) $15.00 +10.37% Link ... short-covering today?

Jeff Bailey : 11/2/2005 5:45:31 PM

Qwest Communications (Q) $4.54 +4.36% Link ... HUGE volume of 78.1 million shares today (#4 most active).

Fitch Ratings said today that it may raise its ratings on the Denver-based telecom service provider's debt, citing interest rate savings from a tender offer for high-cost debt.

Fitch Ratings sees recent $3 billion tender offer by Qwest's subsidiary Qwest Services Corp. potentially generating annual savings of about $300 million.

Jeff Bailey : 11/2/2005 5:21:36 PM

Closing U.S. Market Watch found at this Link

Jeff Bailey : 11/2/2005 5:10:45 PM

Closing Internals found at this Link ... Biiiig volume at the NASDAQ today. Almost reaching the 2.27 billion shares from September's quarterly expiration on 09/16/05.

NYSE volume a healthy 2.65 billion.

Jeff Bailey : 11/2/2005 4:29:49 PM

Current OPEN MM Profiles found at this Link ... Today's Activity ... Swing traded long 1/2 position in Yellow Roadway (YELL) at the offer of $47.00. Stop $44.00 to begin, targeting $51.00.

Additional trades that are now CLOSED that hit stops and/or targets found at this Link

Jeff Bailey : 11/2/2005 4:11:50 PM

Buy Program Premium ... DIA $104.72, SPY $121.70

Linda Piazza : 11/2/2005 3:57:15 PM

The TRAN is closing right on the top trendline of that rising regression channel off the last October low.

Linda Piazza : 11/2/2005 3:49:40 PM

End of day decisions: The OEX still tests the same resistance it's been testing all day. The 60-minute chart shows pronounced 60-minute price/RSI divergence on today's swing to test that resistance, as compared to that on Monday. I think some shorts are going to give up and cover into the close since there was no last-minute drop, but I personally won't trust what happens from here on out. So, in my opinion, resistance has held today, but that's no guarantee that it will continue to do so. It's a reasonable risk to hold a bearish position overnight if you are prepared for some follow-through and if your stop hasn't been hit, but there could be follow-through tomorrow morning. It's also reasonable to hold a long overnight if you've got enough of a cushion, but I'd be aware of the possibility that markets are vulnerable to a pullback, too. Some are going to be wondering about the Dow's inability to reach above its 200-sma and the SPX's perhaps-dead stop on its 100-sma. And the SOX's stop on its 200-ema, and . . . well, you get the picture.

Jonathan Levinson : 11/2/2005 3:45:58 PM

QQQQ's short cycle downphase is stalling here after doing minimal damage to the day's gains, but so is the very-toppy 30 min cycle upphase. The 60 min cycle is just approaching overbought territory, a potential bearish divergence if the bulls suddenly lose it. Somehow, the daily cycle is still holding its bearish kiss from this morning- and is nearly out of racetrack. A break above 39.50 would sweep that aside, however, as key resistance breaks. Updated 3 min chart at this Link

Linda Piazza : 11/2/2005 3:39:09 PM

Bearish price/RSI divergence now on the OEX's 60-minute chart, in today's retest of the top of the rising regression channel off the October low and in the retest of the 50% retracement of the September 9 high.

Linda Piazza : 11/2/2005 3:37:11 PM

Slightly higher high on the TRAN, but Keltner-wise, it looked weaker. It could not close three-minute periods back above the line that had been supporting it until about 2:30, with that line at 3924.63. TRAN just below that now, at 3923.54.

Jonathan Levinson : 11/2/2005 3:34:58 PM

I have a friend who's surprised me with a visit. Back shortly.

Linda Piazza : 11/2/2005 3:20:21 PM

As we enter the last 45 minutes of the day, we are left with another day when the OEX is testing those 240-minute 100/130-ema's, the 50% retracement of its drop off the 9/09 high and the top of its rising regression channel off the October low. It's punched above all of them, but each 240-minute candle so far has left only an upper candle shadow above those important resistance levels. The advdec line is not acting as it usually does on rally days.

So, we get to see if resistance holds into the close. This feels like a ramp job, but I've got my eyes on the TRAN, the grand rampee today, as it tests the top of a rising regression channel off an October low and that Fib bracket target I fit to its climb. If it keeps climbing into the close, other indices are likely to do so, too.

Jonathan Levinson : 11/2/2005 3:11:42 PM

The dip to 39.21 QQQQ didn't even retrace 38.2% of the day's range, and so far the Qs are looking strong with a 44 cent gain at 39.28 for the day. Volume has already exceeded yesterday's 73.6M total by nearly 14M shares, and a close above the 39.08-.10 level would be a victory for the bulls. Link

Jeff Bailey : 11/2/2005 3:10:36 PM

03:00 Internals found at this Link

Jeff Bailey : 11/2/2005 3:01:48 PM

03:00 Market Watch found at this Link

Linda Piazza : 11/2/2005 3:02:39 PM

Earlier today, as the TRAN moved toward its high, I had mentioned that I had fit a Fib bracket to the TRAN's climb off its October low and that it looked as if 3916-3921 was an upside target. I mentioned that we were about to see if that had any relevance because the TRAN was charging up there. I also noted that the TRAN was reaching the top of a rising regression channel off the October low. Here's what I was seeing: Link The TRAN has paused, but it hasn't pulled back significantly, and it would need to do so to bring other markets down. Look at the shape of its climb since last Thursday morning, though. That just doesn't look sustainable to me, without a pullback. Not at all sure that it would happen today, as there appear to be plenty of shorts who still need to cover into the close.

Jonathan Levinson : 11/2/2005 2:57:09 PM

Volume breadth declines to a still-strong +3.3:1 on the NYSE and +2.2:1 on the Nasdaq.

Jonathan Levinson : 11/2/2005 2:56:16 PM

QQQQ loses the 72 SMA here, back to 39.25. I will loosening the stops from this day forward on my entries. I need to start trusting my indicators more.

Jeff Bailey : 11/2/2005 2:56:00 PM

Good Gravy! ... KLA-Tencor (KLAC) $48.08 +4.97% ... I think that work we did with the option chain paid off!

Linda Piazza : 11/2/2005 2:54:51 PM

The advdec line is not acting as it usually does on gain-all-day days, and the OEX action is sort of reflecting that. On most advdec line gain-all-day type predictions, there's an open above the 30-minute support level instead of at it, there's an immediate rise into the 30-minute resistance, a minimal pullback and then a climb above it, with most candles then climbing along it or perhaps occasionally dipping just below it. Today, the advdec line has continued to find resistance at that 30-minute resistance all day long and that resistance line is beginning to have a slight, slight rounding over or at least flattening appearance.

Jeff Bailey : 11/2/2005 2:40:57 PM

Chicago Board of Trade (BOT) $113.35 +19.47% ... my bar chart with conventional (blue) and bear fit 38.2% (red) at this Link

Jonathan Levinson : 11/2/2005 2:40:14 PM

The previous low at 39.29 lines up with 72 SMA support, below which the stalling 30 min channel takes on a bearish bias. Below 39.20, a new 30 min channel downphase would be confirmed: Link

Linda Piazza : 11/2/2005 2:39:11 PM

TRAN turning down, just a little. We've seen this before, so I'm not getting excited about it (on behalf of any in bearish plays), but it's turning down from the approximate level of my fitted Fib bracket and the top of the QCharts-drawn rising regression channel off the October low.

That TRAN rise just does not look sustainable. It's not in a healthy shape beginning late last week.

Linda Piazza : 11/2/2005 2:32:17 PM

The OEX just climbs the Keltner line at 558.77 currently, trding just either side of that now-rising line. Similar action on the 10-minute chart, but the OEX has not been able to break out above the 30-minute resistance, even though its above the level at which it did so late last week.

Jonathan Levinson : 11/2/2005 2:31:09 PM

Ten year note yields are back to the highs, currently +2.5 bps at 4.602%, while IRX holds a 2.5 bp loss at 3.837%. ZN is 1/8 above the 108 1/32 session low.

Jeff Bailey : 11/2/2005 2:29:24 PM

Bullish swing trade target alert ... for the Chicago Board of Trade (BOT) $113. Should go out at highs of the day. I've got BLUE #6 at $116.18.

Jonathan Levinson : 11/2/2005 2:25:49 PM

Crude oil bounces into the close, now down just 12.5 cents and 1.025 above its earlier low, at 59.725 with 5 minutes left in the day session.

Jeff Bailey : 11/2/2005 2:24:06 PM

Chicago Merc (CME) 372.26 +3.4% ... all-time high alert!

Jonathan Levinson : 11/2/2005 2:20:34 PM

Volume breadth is off its highs, but still strong at +3.7:1 on the NYSE, +2.4:1 on the Nasdaq.

Linda Piazza : 11/2/2005 2:19:52 PM

The TRAN pushes a little above my fitted Fib bracket and the top of that rising regression channel? Breakout or was I just slightly off in my bracket and QCharts slightly off in its rising regression channel?

Jonathan Levinson : 11/2/2005 2:14:10 PM

QQQQ is testing the previous low after failing below the previous high on a sharper decline. The daily chart apex is so far holding back the bulls, but it won't be in the back until that 39.15-.22 confluence has been broken. Link

Jeff Bailey : 11/2/2005 2:14:03 PM

02:00 Internals found at this Link

Linda Piazza : 11/2/2005 2:12:30 PM

The TRAN now approaches the top of the rising regression channel off the October low and that fitted Fib bracket I tried earlier today, both converging at about 3921. The TRAN is at 3917. We'll see if any have any relevance or if the TRAN is just going to keep charging higher. It's at 3917.28.

Jeff Bailey : 11/2/2005 2:03:40 PM

02:00 Market Watch found at this Link

Jonathan Levinson : 11/2/2005 1:57:47 PM

The SOX has pressed to the highs, continuing its upside trending move and printing 442.35 here as QQQQ returns to the previous upper channel at 38.40. 30 min channel resistance is up to 38.48 here, up in the wedge apex on the daily chart noted earlier. A strong move above 38.50 would be a very significant development for the bulls.

Linda Piazza : 11/2/2005 1:55:21 PM

The TRAN presses higher. I'd attempted to fit a Fib bracket on the TRAN's rise off its October low and determine an upside target, and came up with one between 3916-3921. Looks as if we'll soon see if that's right. I'm far from expert at this--Jeff is probably better at it--and I had fitted a Fib bracket earlier in the month that seemed to suggest a lower target, but that's what I see now. TRAN at 3914.88 as I type.

Jeff Bailey : 11/2/2005 1:49:19 PM

Bullish swing trade raise stop alert ... on the 1/2 bullish position in Chicago Board of Trade (BOT) $109.00 +14.73% ... to $105.00.

Jeff Bailey : 11/2/2005 1:45:33 PM

10 Most Active ... SYMC $19.44 -19%, QQQQ $39.34 +1.28%, SUNW $3.72 -3.37%, SIRI $6.84 +4.90%, LU $2.71 -1.09%, MSFT $26.40 +1.69%, SPY $121.43 +0.78%, JDSU $2.21 +6.25%, INTC $23.28 +2.78%, CSCO $17.63 +0.85%

Linda Piazza : 11/2/2005 1:41:15 PM

Here's what I see on the OEX's 240-minute chart: Link Mixed evidence on that chart.

Jonathan Levinson : 11/2/2005 1:34:04 PM

Volume breadth remains strong at +3.6:1 on the NYSE and +2.35:1 on the Nasdaq. The decline on the indices looks bull-flaggish, mostly sideways and slow and on lighter volume. On QQQQ, the short cycle upphase is only stalling- it hasn't even rolled over yet. Link

Jeff Bailey : 11/2/2005 1:29:41 PM

Lucent Tech (LU) $2.71 -1.09% ... after session low of $2.68. Some bull-stop hunting under last week's 10/27/05 lows?

Jeff Bailey : 11/2/2005 1:31:00 PM

Nortel (NT) alert $3.33 +3.73% ... we were swing trade stopped out on the 1/2 bearish position at $3.31.

Linda Piazza : 11/2/2005 1:27:28 PM

Big bearish price/RSI divergence on the OEX's 30-minute chart as the day's and Monday's highs are tested.

Jeff Bailey : 11/2/2005 1:26:22 PM

Semiconductor Index (SOX.X) 441.81 +3.09% ... session high. Sets up for challenge of WEEKLY R1 (443.40).

Jeff Bailey : 11/2/2005 1:22:26 PM

Beazer Homes (BZH) $61.99 +2.90% Link ... Key driver for the homebuilders today. The homebuilder said profit more than doubled from a year ago. For the quarter endend Sept. 30, BZH earned $164.4 million, or $3.61 a share, compared with $80.1 million, or $1.82 a share last year.

Revenues rose 50% to $1.81 billion. The company said it closed on the final sale of 6,339 homes, up 24%. Closings rose in all of Beazer's markets except the Midwest, where a decline in Indiana offset increases in Ohio and Kentucky.

Consensus estimates were $3.11 per share on revenue of $1.59 billion.

Linda Piazza : 11/2/2005 1:20:49 PM

If any of you happen to still be in a bearish OEX play or have entered a new one as the OEX tests the 240-minute 100/130-ema's, and its 50-sma, too, here's what I see. Again, it's facing tough resistance at its highs today. So are the Nasdaq and the Dow and some other indices. The SOX has risen almost into its important 200-ema, for example, with that average at 442.69 and the SOX currently at 441.35. The SOX has also tested the underside of the best-fit trendline that had formed the supporting line of the neutral triangle in which it had traded much of October before falling to October's low.

So, for those who hung on, it might not have been a good idea, but it had some logic behind such a decision, if your account could handle the test of this resistance. I thought it too wide a swing for a MM play.

The OEX is obviously in an upswing and it would take a 15-minute close below the Keltner line currently at 557.95 to begin to change the tenor. I think the TRAN is going to have to cave, too, personally. The advdec line has continued to show bearish value/divergence on some charts, through the 15-minute, but it's currently testing a level that pretty much has to hold if bears are to have any hope in the short-term. Those bearish value/RSI divergences can continue all day, and the longer they do continue, the more likely it is that scared shorts will keep the advdec line headed higher while those divergences are produced. The OEX is not past those important resistance levels and so there's hope, but that hope needs to be realized by some downward action. Don't let the TRAN continue to roll over you if it keeps going higher.

Jonathan Levinson : 11/2/2005 1:20:00 PM

Session low for natgas here, -.33 at 11.53. Crude oil is down .65 at 59.20 after breaking below 59 to 58.95.

Jeff Bailey : 11/2/2005 1:12:21 PM

01:00 Internals found at this Link

Linda Piazza : 11/2/2005 1:10:42 PM

The TRAN drove over our bearish OEX play today and it's not retreating yet.

Jonathan Levinson : 11/2/2005 1:04:47 PM

The stop was too tight. Here's the pullback from the upper channel breaches. The question now is how far it will get.

Jeff Bailey : 11/2/2005 1:03:04 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 11/2/2005 12:57:44 PM

That was a huge surge in volume that drilled up to the highs- nearly 6M QQQQs within 3 3-min candles.

Jonathan Levinson : 11/2/2005 12:55:37 PM

QQQQ - Exit Point Alert -

Stopped out of QQQQ at 39.44, -.04

Jonathan Levinson : 11/2/2005 12:55:10 PM

These prints are above all of the keltner channels I track. Even if a trending move, it's overdone here.

Jonathan Levinson : 11/2/2005 12:53:52 PM

QQQQ - Entry Point Alert -

Short QQQQ at 39.40 stop 39.44

Linda Piazza : 11/2/2005 12:52:18 PM

The OEX is now testing Monday's high and the 50% retracement of the decline off the 9/09 high and the rising regression channel's resistance and the 240-minute 100/130-ema's, now at 557.96 and 559.59, respectively. OEX at 559.23.

Linda Piazza : 11/2/2005 12:50:40 PM

OEX Exit Point Alert
Stopped out of bearish play at 558.45, with an entry at 556.87, for a 1.58 OEX move against the position.

Jonathan Levinson : 11/2/2005 12:50:28 PM

New highs here, with 30 min channel resistance up to QQQQ 39.36. Volume breadth is up to +2.6:1 on the Nasdaq.

Linda Piazza : 11/2/2005 12:49:00 PM

The TRAN's above 3900, at 3905.13.

Linda Piazza : 11/2/2005 12:48:27 PM

The SOX is above both its daily and weekly 200-sma's, with today's bounce so far taking it above the daily 200-sma at 435.40, with the SOX at 439.22 as I type, and at the day's high. another important average to the SOX is the 200-ema's, on both the daily and the weekly charts. They're at 442.27 on the daily chart and 450.07 on the weekly.

Jonathan Levinson : 11/2/2005 12:47:08 PM

QQQQ tags the previous high here at 39.26, invalidating any right shoulder off the prior high. The short cycle indicators haven't yet turned up yet, however: Link

Linda Piazza : 11/2/2005 12:41:32 PM

TRAN just a point below the day's sky-high high.

Jeff Bailey : 11/2/2005 12:39:40 PM

Linda ... Have you traded any of the new "Weekly's" on the SPX and OEX yet? Last night, Ameritrade (AMTD) $21.30 +1.13% informed me that clients now have ability to trade these new derivatives.

Jonathan Levinson : 11/2/2005 12:33:31 PM

QQQQ drifts back up off a low at 39.14 on this pullback. Possibly a right shoulder if it doesn't at least tag the high, or the early end of a very corrective short cycle downphase if it does. Link

Linda Piazza : 11/2/2005 12:30:06 PM

The OEX tests the 10-minute Keltner line currently at 557.44 to see if it will hold as support. Resistance now firming a bit, from 557.92-558.11 on 10-minute closes, but the OEX is currently on its way up to retest that resistance, and could soften it again. Similar picture on the 15-minute chart, with resistance there at 558.04 on 15-minute closes. OEX at 557.80 as I type.

Jeff Bailey : 11/2/2005 12:47:19 PM

Dow Industrials (INDU) 10,460 +0.51% Link ... bulls want to see a trade at 10,500 to negate the possibility of the "bull trap" pattern.

When major market bullish % are in a "bear phase," point and figure officionados are on the al_rt for a triple top buy signal, by one box, which would be quickly reversed back lower.

A two box rise to 10,500 would help negate the "bull trap" pattern.

S&P 500 Bullish % ($BPSPX) Link still "bear alert" and would take a reading of 58% to reverse back up to "bull confirmed."

Jonathan Levinson : 11/2/2005 12:28:28 PM

Session low for crude oil, -.725 at 59.125.

Jeff Bailey : 11/2/2005 12:20:34 PM

12:00 Internals found at this Link

Jonathan Levinson : 11/2/2005 12:18:55 PM

Crude oil is -.45 here at 59.40, natgas -.165 at 11.695.

Jonathan Levinson : 11/2/2005 12:15:16 PM

Session high for gold here, +4.8 at 465.40, returning back above neckline support: Link

Linda Piazza : 11/2/2005 12:12:53 PM

The TRAN's RSI (10-minute, 9-period) has just completed a H&S. RSI formations such as these sometimes lead price action, but the TRAN isn't dropping yet. Bears of any type need to see the TRAN below 3859, a Keltner support line that has bounced the TRAN since Friday morning, before there's any change in tenor. TRAN at 3892.61 as I type, and I just know that some are eyeing that round-number 4000, so the TRAN continues to be dangerous to us.

Jeff Bailey : 11/2/2005 12:10:16 PM

Nortel (NT) $3.25 +1.24% ...

Linda Piazza : 11/2/2005 12:10:01 PM

The OEX is dipping back below the 10-minute and 15-minute Keltner resistance levels I'd been watching, after minimally violating both to the upside on a few closes. However, the pullback looks bull flag-ish so far, and those resistance levels have now been turned higher, so that they're not as strong as they had looked earlier. At the least, the OEX needs to turn in a 10-minute close beneath a Keltner line currently at 557.37 to even begin to hint that the resistance will hold or that there's even the slightest change in tenor. OEX at 557.67 as I type.

Jeff Bailey : 11/2/2005 12:09:54 PM

Lucent (LU) $2.68 -2.18% ...

Jeff Bailey : 11/2/2005 12:08:14 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 11/2/2005 12:06:38 PM

QQQQ just about tagged the broken rising support line on the daily chart. Longer term shorts looking to front run a daily cycle decline would be placing their stops just above the 39.50 area, above trendline intersection/apex: Link

Linda Piazza : 11/2/2005 12:05:55 PM

Everything is hanging in space. The OEX's 240-minute 100-ema has saved the play so far. Although the OEX punched through that average, now at 557.93, the OEX has inched back below it now. The play isn't safe yet, though, especially with the TRAN hanging near its high and the advdec line doing the same.

Jeff Bailey : 11/2/2005 12:04:54 PM

Nortel (NT) $3.25 +1.24% Link ... looks "expensive" relative to LU.

Jeff Bailey : 11/2/2005 12:03:55 PM

Lucent Tech (LU) 2.70 -1.45% Link ... probes 10/27 relative low of $2.69.

Tab Gilles : 11/2/2005 12:01:29 PM

Thanks Jeff, didn't catch that one.

Jeff Bailey : 11/2/2005 12:02:26 PM

Sun Microsystems (SUNW) 3.70 -3.89% Link ... sharply lower and follow through on yesterday's noted weakness.

Jeff Bailey : 11/2/2005 11:59:01 AM

Speaking of the VXN.X Tab ... yesterday's QQQQ option chain at this Link ... notable selling in the $39 Puts (VXN.X down on day so put selling/call buying).

Linda Piazza : 11/2/2005 11:57:16 AM

Intraday double-top level being tested on the OEX . . . no, previous HOD just breached.

Tab Gilles : 11/2/2005 11:51:24 AM

$VXN/$NDX/$NASI/$NAHL *Add to position/ Profund UOPIX on closing NAV. (as per 10/26 8:34 PM post). Link I was waiting for a the $NDX to breakover 1600, instead I'm putting more weighting on the $VXN and adding to UOPIX. Link

Jonathan Levinson : 11/2/2005 11:48:25 AM

Volume breadth declines to +2.64:1 on the NYSE, +1.93:1 on the Nasdaq.

Linda Piazza : 11/2/2005 11:46:11 AM

The advdec line has stopped rising over the last twenty minutes, if my charting service is now up to date on quotes. Needs to do more. It needs to drop. The TRAN does, too.

The OEX has now broken above the 10-minute resistance we were watching, coming down now to retest it. Those of us in bearish plays would like to see the OEX below 557.69 on this next 10-minute close, but that may instead serve as support. The OEX is at 557.96 as I type.

Linda Piazza : 11/2/2005 11:43:06 AM

My charting service is not providing up-to-date quotes on the OEX. My broker's quotes tell me that our stop has not yet been violated, however. Still changing servers, trying to find an up-to-date one.

Jonathan Levinson : 11/2/2005 11:42:39 AM

Same story again- no pullback from the session highs, making it very tempting to "short the high"... usually a sign that it isn't actually the high. One of them will be, and if this is it, it will leave bearish divergences on the 30/60 min cycle indicators.

Linda Piazza : 11/2/2005 11:40:42 AM

Changing servers. I'm not getting up-to-date OEX quotes, I don't believe. Back in a moment.

Jeff Bailey : 11/2/2005 11:36:37 AM

Bullish swing trade raise stop alert ... for the 1/2 bullish position in Chicago Board of Trade (CBOT) $104.95 +10.42% ... to $97.

Jonathan Levinson : 11/2/2005 11:35:40 AM

The SOX has been mostly flat-up during the time that the Qs pushed to new highs. On both charts, the short cycle indicators are maxxed out, but price shows no weakness, a confirmation of the bullish reversals in the longer intraday cycles. If this is a last hurrah for the daily cycle upphase, it's a very convincing and bullish-looking one. Volume breadth continues to strengthen, up to +2.2:1 now on the Nasdaq.

Linda Piazza : 11/2/2005 11:32:22 AM

The OEX just bumped above that 10-minute resistance, but this ten-minute period has much time left. The OEX tests the 240-ema at 557.93, and it's not getting knocked back yet.

Jeff Bailey : 11/2/2005 11:32:52 AM

SanDisk (SNDK) $60.43 +1.88% Link ... new 52-weeker. All-time high!

Linda Piazza : 11/2/2005 11:33:18 AM

The OEX has nudged the 10-minute resistance higher, but hasn't been able to break above it. It's currently at 557.57 on a 10-minute close, with the OEX currently at 557.52. While it's good that the OEX can't break above that resistance, it's not good that it's nudging it higher, because it could nudge it right past our stop.

The TRAN is currently dropping to retest that March intraday high. Bears of any stripe need it to dive through that intraday high and keep diving. Specifically, we want to see the TRAN below 3850, as it's been climbing a Keltner line currently at that level since Friday morning. TRAN at 3888.85 as I type.

Jeff Bailey : 11/2/2005 11:26:47 AM

Bullish swing trade long alert ... for 1/2 bullish position in Yellow Roadway (YELL) $47.00 +2.48% here, stop $44.00, target $51.00

Jonathan Levinson : 11/2/2005 11:26:23 AM

Session highs across the board. QQQQ now testing upper channel resistance at 39.24. It either reverses here or is in a very strong trending move: Link

Jeff Bailey : 11/2/2005 11:24:04 AM

North American Palladium (PAL) $6.77 +5.78% ...

Jeff Bailey : 11/2/2005 11:22:40 AM

Bearish swing trade stopped alert ... on Stillwater Mining (SWC) $10.32 +3.81% ... palladium out of control!

Linda Piazza : 11/2/2005 11:22:39 AM

Those of MM commentators who entered bearish positions were either inspired or crazy, and the markets are about to show us which one. OEX testing its 240-minute 100-ema at 557.92 as I type. OEX at 557.45, high of 557.65.

Jonathan Levinson : 11/2/2005 11:21:40 AM

Volume breadth +2.8:1 on the NYSE, +1.95:1 on the Nasdaq.

Linda Piazza : 11/2/2005 11:20:23 AM

Advdec line still climbing, still showing bearish price/RSI divergence, but it needs to stop climbing.

Linda Piazza : 11/2/2005 11:19:59 AM

OEX going up to challenge that 10-minute resistance at 557.49 on 10-minute closes, with the OEX at 557.35 but having punched up to 557.43 during this 10-minute period. Resistance only tentatively holding . . . and OEX moved up to 557.56 as I typed.

Jonathan Levinson : 11/2/2005 11:18:57 AM

This move in QQQQ coincides with the first bearish kiss in the daily cycle upphase since it kicked off in mid-October, but also with an early abort to the 30 and 60 min cycle downphases. That puts us at an extreme area of indecision- risky to be short, risky to be long. With the short cycle oscillators close to peaking here, the buyers should have their work cut out for them, but it's very close to a coin toss at this point. When betting on a reversal at the top, one doesn't want to see the price holding up there for long- makes it too easy for shorts to jump on, and too easy for them to be squeezed back out again. Link

Jeff Bailey : 11/2/2005 11:18:21 AM

Bearish swing trade stopped alert ... on the 1/2 bearish position in Matria Healthcare (MATR) $33.95 +2.75% ... when it traded my stop of $34.07.

Session high has been $34.18.

Linda Piazza : 11/2/2005 11:17:16 AM

OEX Keltner resistance at 557.47 on 10-minute closes. OEX at 557.02 as I type. Advdec line pauses as I type, but hasn't pulled back. TRAN pulls back, but not even to that March high yet. It's just a minor pullback and the danger the TRAN presents isn't over. The TRAN often drives past targets, though, running them down before reversing. If it doesn't reverse, our play is probably toast.

Jeff Bailey : 11/2/2005 11:15:37 AM

11:00 Market Watch found at this Link

Linda Piazza : 11/2/2005 11:10:36 AM

The OEX's ten-minute Keltner resistance at 557.44 has held on the first test today, into the close of the ten-minute period, with the OEX currently at 557.01. That's good news for us, but we need more help from the TRAN and the advdec line.

Linda Piazza : 11/2/2005 11:06:21 AM

TRAN hanging up there just above the March intraday high.

Jonathan Levinson : 11/2/2005 11:05:54 AM

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute said crude inventories fell 2.4 million barrels for the week ended Oct. 28, contrary to the Energy Department's reported 2.7 million-barrel climb. Motor gasoline inventories jumped 4 million barrels, the API said -- four times higher than the Energy Department's figure. Distillate stocks were up 2.1 million barrels, the API said, compared with the 200,000-barrel fall posted by the government data.

Linda Piazza : 11/2/2005 11:05:43 AM

The OEX is hitting 10-minute Keltner resistance at 557.44 on 10-minute closes, with the OEX currently at 557.38. I based our stop on the need for this resistance to hold on 15-minute closes and on the 240-minute 100-ema at 557.92. OEX at 557.23 as I type, but the advdec line still climbs (producing bearish value/RSI divergence as it does). The advdec line needs to turn around, of course.

Jeff Bailey : 11/2/2005 11:05:11 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 11/2/2005 11:05:08 AM

QQQQ now breaks the upper 30 min channel and has pulled back: Link

Linda Piazza : 11/2/2005 11:02:02 AM

TRAN cents away from its March high of 3889.97 . . . just moved above it as I typed. The TRAN needs to get hit now if our play is going to work, I think. Note: In my 10:47:07 post, I erroneously typed 3389.97, instead of 3889.97 for the March high. I think it was clear from the context.

Jeff Bailey : 11/2/2005 11:01:56 AM

Dow Transports (TRAN) 3,891 +1.34% ... all-time high alert!

Jonathan Levinson : 11/2/2005 11:01:03 AM

QQQQ - Exit Point Alert -

Out QQQQ at 38.15, -.05

Jeff Bailey : 11/2/2005 11:01:02 AM

Dow Jones Home Construction Index (DJUSHB) 910.31 +4.12% ... percentage gainer in U.S. Market Watch. Sets up for test of 200-day SMA (916) and trending lower 50-day SMA (926). Bold move today above its trending lower 21-day SMA (872).

Linda Piazza : 11/2/2005 10:59:46 AM

OEX Trade Signals
Bearish entry at 556.87.

Jeff Bailey : 11/2/2005 10:58:17 AM

S&P Insurance Index ($IUX.X) 353.75 +1.27% ... rocketing to a new 52-week high!

Linda Piazza : 11/2/2005 10:57:26 AM

OEX Entry Point Alert
Enter a bearish OEX trade here. Stop 558.45, but those who want a wider stop to avoid being stopped out on a last advdec line bounce put the stop at 559.05. The official stop will be the lower one, but it has a higher chance of being stopped due to my methodology.

Jonathan Levinson : 11/2/2005 10:55:37 AM

Ten year note yields are down to a 1.2 bp gain at 4.589%, IRX down to a 1.7 bp loss at 3.845%.

Linda Piazza : 11/2/2005 10:54:16 AM

OEX Entry Point Alert
Considering a bearish entry here, for aggressive traders only. Stand by.

Linda Piazza : 11/2/2005 10:51:02 AM

The OEX's 240-minute 100/130-ema's are at 557.92 and 559.40, respectively, with the 50% retracement of the decline off the 9/09 high at 558.88 and with the top of the OEX's rising regression channel at about that 50% level. Declining trendline off the 9/09 high at 561.66. Major resistance being attacked soon.

Jonathan Levinson : 11/2/2005 10:50:13 AM

The SOX has rocketed above its 30/60 min channel tops, the type of move most likely to reverse. QQQQ is holding up here, however, and I've got the sinking feeling that I might have rushed my entry based on that surge. Our stop is tight at 39.15 just in case.

Jonathan Levinson : 11/2/2005 10:48:14 AM

QQQQ - Entry Point Alert -

Short QQQQ at 39.10 stop 39.15

Jeff Bailey : 11/2/2005 10:50:56 AM

Jet Fuel inventories fell by a fractional 143,000 barrels.

Linda Piazza : 11/2/2005 10:47:06 AM

The TRAN is within a few points of its March 8 intraday high of 3389.97. The TRAN is at 3886.62 as I type.

Linda Piazza : 11/2/2005 10:46:05 AM

The OEX is reaching toward a retest of yesterday's post-FOMC bump higher. The advdec line climbs, perhaps toward 2400-2700 next resistance, although that remains to be seen. No sign of a turnaround yet.

Jonathan Levinson : 11/2/2005 10:45:47 AM

QQQQ breaks to new highs. 30/60 min channel resistance and R2 are at 39.10 : Link

Jonathan Levinson : 11/2/2005 10:44:45 AM

What is "Agency Collateral"?

This is one type of bond used as collateral for the cash delivered pursuant to the Fed's repurchase (repo) agreement, as noted this morning. "Agency" collateral are bonds from GSEs, such as Fannie Mae. For more on this, see the following Link :

New York, NY - The Bond Market Association, revising its Repo Trading Practice Guidelines, has published new recommendations expanding the types of federal agency debt that is appropriate collateral for general agency repo transactions.

As the market in agency repo transactions has grown, the types of acceptable general agency collateral have also grown. The new recommendations are intended to reflect the current market practice in general agency collateral repo transactions. The Association said that by reflecting market practice, the update of its Repo Trading Guidelines will eliminate confusion and promote greater efficiency in the repo market for agency securities. "Unless the parties to a trade otherwise agree, collateral trading under the general agency collateral line shall be limited to the following agencies," the Association said.

Those agencies are: Federal National Mortgage Association (Fannie Mae); the Federal Home Loan Mortgage Corporation (Freddie Mac); Federal Farm Credit Banks (FFCB); and Federal Home Loan Banks (FHLB).

Jeff Bailey : 11/2/2005 10:43:00 AM

EIA Weekly Crude Oil, Gasoline, Distillate, Nat. Gas Table found at this Link

Linda Piazza : 11/2/2005 10:41:29 AM

The OEX's 15-minute candles today have all had upper shadows. That's not presenting a lot of confidence in the OEX's attempts to move higher, but the OEX so far maintains 15-minute closes above a Keltner line currently at 555.22, maintaining its rising tenor for the day. Mixed signals there and mixed signals on the other charts I watch.

Jonathan Levinson : 11/2/2005 10:41:05 AM

Volume breadth holds positive, +1.8:1 on the NYSE, +1.3:1 on the Nasdaq.

Jonathan Levinson : 11/2/2005 10:38:48 AM

Crude oil ticks positive here, +.025 at 59.875. Natgas is flat at 11.86.

Linda Piazza : 11/2/2005 10:36:30 AM

The OEX hasn't been able to make it above yesterday's post-FOMC high of 556.58.

Jeff Bailey : 11/2/2005 10:36:31 AM

EIA Weekly Input, Operable Capacity, Utilization Table found at this Link ... 82.49% of the nations refinery capacity online.

Linda Piazza : 11/2/2005 10:33:57 AM

TRAN moving higher again, continuing that test of the March high of 3889.97. We're either seeing an important double-top being put it or something more bullish, but this test is important to watch and it would be my guess that the TRAN is going to be driven up into that test, at least. TRAN at 3879.80 as I type.

Jonathan Levinson : 11/2/2005 10:33:50 AM

QQQQ breaking back to 39.00, looking like a bull flag/wedge breakout on the 3 min chart: Link

Jonathan Levinson : 11/2/2005 10:32:41 AM

Headlines:

U.S. GASOLINE STKS UP 1 MLN BRLS: ENERGY DEPT

U.S. DISTILLATE STKS DOWN 200,000 BRLS: ENERGY DEPT

U.S. CRUDE STKS UP 2.7 MLN BRLS LAST WK: ENERGY DEPT

Linda Piazza : 11/2/2005 10:30:26 AM

No confirmation yet by my signals that a bearish entry is right just yet although the possibility exists that this is one of those times that no confirmation will be given. We had two missed play opportunities this week due to my learning curve here in posting trades, so you can see that these come along often enough that we don't have to jump on an iffy play if it doesn't set up correctly. Without that confirmation, bounce potential still exists.

Jonathan Levinson : 11/2/2005 10:30:15 AM

From the EIA website:

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.7 million barrels from the previous week. At 319.1 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories rose by 1.0 million barrels last week, putting them in the lower half of the average range. Distillate fuel inventories inched lower by 0.2 million barrels last week, and remain just above the lower end of the average range for this time of year. A decline in high-sulfur (heating oil) distillate fuel more than compensated for an increase in low-sulfur (diesel fuel) distillate fuel. Total commercial petroleum inventories increased by 1.6 million barrels last week, and remain in the upper half of the average range for this time of year.

Linda Piazza : 11/2/2005 10:21:58 AM

The OEX tests Keltner support at 555.15-555.19 on 10-minute closes. OEX at 555.30 as I type.

Jonathan Levinson : 11/2/2005 10:21:26 AM

Awaiting the EIA petrol report in 9 minutes.

Tab Gilles : 11/2/2005 10:19:43 AM

Murphy Oil (MUR) 10-ema crossed over 20-ema...add to position ($47.75)/ entered on 9/16 ($48.85). Also, currently testing 200-ema (40-wema). Link Link Link *As per 11/1 11:59 AM post.

Jeff Bailey : 11/2/2005 10:18:19 AM

10:00 Internals found at this Link

Yesterday's Internals found at this Link

Linda Piazza : 11/2/2005 10:17:41 AM

Part of my methodology is in place for a bearish entry, but no confirmation yet.

Jonathan Levinson : 11/2/2005 10:13:17 AM

Crude oil is down .125 at 59.725 here, natgas -.08 at 11.78.

Linda Piazza : 11/2/2005 10:05:41 AM

Watching for the possibility that the advdec line pullback will stop at about 1400, or at 950-1150 if that first support doesn't hold. Then, if it bounces again, I'll be watching for bearish value/RSI divergence.

Jeff Bailey : 11/2/2005 10:03:21 AM

10:00 Market Watch found at this Link

Jonathan Levinson : 11/2/2005 10:02:20 AM

Headlines:

U.S. OCT. LAYOFFS UP 13% TO 81,301: CHALLENGER

FEWEST LAYOFFS FOR ANY OCTOBER SINCE 2000: CHALLENGER

U.S. CORPORATE LAYOFFS UP 4.7% YEAR-TO-DATE AT 864,953

Jonathan Levinson : 11/2/2005 10:02:00 AM

QQQQ's short cycle upphase has gotten hit with a wave of selling, but it has yet to reverse, currently bouncing from above the 72 SMA. The higher yields, lower mortgage activity, new cash being raised by the Treasury, 25 bp hike yesterday and repo drain today all look beaarish to me. But QQQQ is showing very little sign of weakness.

Linda Piazza : 11/2/2005 10:01:45 AM

The advdec line has pulled back, but in a bull flag-like way. No signals yet.

Jeff Bailey : 11/2/2005 10:01:04 AM

Bullish swing trade long 1/2 position alert ... for Chicago Board of Trade (BOT) $100.85 +6.25% here, stop $93, target $113.00

Linda Piazza : 11/2/2005 10:00:54 AM

The inventories numbers in about 30 minutes should be particularly interesting with the TRAN having approached its 3889.97 high from March.

Jeff Bailey : 11/2/2005 9:57:08 AM

You're right Jonathan ... Transports potentially trading all-time high.

Jonathan Levinson : 11/2/2005 9:56:08 AM

The Fed announces a 3.5B overnight repo, for a net drain of 7.25B. Only Agency Collateral was used, and the stop out rate was 3.98, 2 bps below the new overnight target rate.

Jonathan Levinson : 11/2/2005 9:54:51 AM

I think that could be a record high on the TRAN.

Jeff Bailey : 11/2/2005 9:54:49 AM

Dow Transports (TRAN) 3,876 +0.96% Link ... sets up for test of 52-week high!

Linda Piazza : 11/2/2005 9:52:14 AM

OEX Keltner picture: The OEX is springing up from support at 554.35 on 10-minute closes, now having approached 555.89 first Keltner resistance, on 10-minute closes. It approached that and is now pulling back slightly. This is the same Keltner level tested post-FOMC yesterday, but that formation on the 10 and 15-minute charts no longer looks so convincingly H&S-ish, and there's nearby support at 554.91-555.16. OEX at 555.54.

Jeff Bailey : 11/2/2005 9:49:20 AM

Dynamic Materials (BOOM) $23.55 +6.60% Link ... hot early.

Jonathan Levinson : 11/2/2005 9:48:45 AM

QQQQ springs back to 39- 30 min channel resistance is at 39.07, and I'll be looking at that area for another short play with a tight stop. Link

Linda Piazza : 11/2/2005 9:48:39 AM

Advdec line still climbing, and it's got plenty of room still to climb on the longer-term charts, say the 30- and 60-minute. Even on the 10-minute chart, it's setting up the potential to rise toward +2400 as long as it maintains values above about 390. It's currently at 1143, QCharts value. RSI signals that the move is looking overdone, but there's no pullback and no bearish divergence to follow up on that RSI indication. This didn't set up as the usual gain-all-day sort of move, but neither is it giving a bearish signal. No signals by my methodology. MM duties or not, I wouldn't be entering a new personal play right now, either direction.

Remember late yesterday when I talked about the 240-minute chart and the approximation to a mat hold bullish signal? The OEX is trying to confirm that signal, although it would have to keep climbing to confirm it. However, we may be in for that retest of the important 240-minute 100/130-ema's. Those are at 557.89 and 559.38, respectively, with the OEX currently at 555.82.

Jonathan Levinson : 11/2/2005 9:47:05 AM

Awaiting the Fed's decision regarding its expiring 10.75B in various repos, due in approx. 10 minutes.

Jeff Bailey : 11/2/2005 9:46:22 AM

Apache Corp. (APA) $65.51 +1.78% ....

Chesapeake Energy (CHK) $30.00 -3.50% ... I don't think the weakness in CHK is "nat gas related" as much as it is last night's news of $1.5 billion debt/convertible offering.

Jonathan Levinson : 11/2/2005 9:44:28 AM

QQQQ - Exit Point Alert -

Out QQQQ at 38.90, +.11

Jeff Bailey : 11/2/2005 9:44:07 AM

December Nat. Gas futures (ng05z) chart with conventional (blue) and bearish fit 38.2% at this Link

Linda Piazza : 11/2/2005 9:41:09 AM

The OEX is indeed bouncing from those 15-minute 100/130-ema's, having dropped down to test the 100-ema first thing this morning. The 38.2% retracement of the drop off the September 9 high is at about 555.06, and bears would like to see the bounce stop there.

The advdec line bounce is already looking overdone on some short-term charts, up to the 15-minute, but I'd like to see that confirmed by a pullback and second push up with bearish divergence before I made too much of that. Just no signal right here, either direction.

Jonathan Levinson : 11/2/2005 9:37:06 AM

The SOX has gapped up and is currently vioating its upper 30 min channel resistance, which suggests that move should have a tough climb from here. A gap down for QQQQ and a gap up for the SOX.

Linda Piazza : 11/2/2005 9:35:45 AM

Advdec line is climbing now. Look as if the bounce or bounce attempt may be in the works. No signal yet, either direction, by my methodology.

Jonathan Levinson : 11/2/2005 9:35:05 AM

I'm getting antsy about that short and am thinking about taking profits. While the 30/60 min setup is tentatively bearish, the short cycle indicators are looking bottomy at the open. Readers with a bearish bias can leave the stop protecting a small profit, while neutral traders will look to close out. I'm feeling more bearish, but still debating the exit. Bouncing as I type: Link

Jonathan Levinson : 11/2/2005 9:32:33 AM

Volume breadth is -1.16:1 on the NYSE, -1.55:1 on the Nasdaq.

Linda Piazza : 11/2/2005 9:32:27 AM

Good play, Jonathan. Congratulations!

Linda Piazza : 11/2/2005 9:32:07 AM

The OEX is headed down to test its 15-minute 100/130-ema's, with the advdec line not giving much of a clue yet as to whether that anticipated bounce--perhaps just a bounce attempt--will occur from those averages.

Jeff Bailey : 11/2/2005 9:31:16 AM

Bullish swing trade stopped alert ... for Chesapeake Energy (CHK) $29.70 -4.5%.

Linda Piazza : 11/2/2005 9:30:33 AM

Advdec line opens in neutral territory, but begins falling, just slightly. OEX opens just above those important 15-minute 100/130-ema's. No signal yet.

Jonathan Levinson : 11/2/2005 9:30:32 AM

QQQQ - Stop Loss Adjustment Alert -

QQQQ short from 39.01, move stop to 38.90

Jeff Bailey : 11/2/2005 9:30:14 AM

Chesapeake Energy (CHK) $31.10 ... ticking right at my bullish swing trade stop of $29.80.

Will honor the stop if hit at, or after the open. Will also hold the previously sold CHK Nov. $35.00 Calls (CHK-KG) as naked if/when stopped on the underlying shares.

Jeff Bailey : 11/2/2005 9:26:58 AM

Symantec (SYMC) $24.00 ... #2 most active in pre-market trade and lower at $20.30 after the maker of security software reported a net loss of $251.3 million, or $0.21 a share, compared to a profit of $135.6 million, or $0.19 a share in the year ago period.

Sales rose 71% to $1.1 billion, helped by the Veritas Software acquisition.

However, operating expenses more than tripled to $1 billion as SYMC accounted for a list of charges related to the Veritas acquisition.

For the December quarter, Symantec estimated non-GAAP sales at $1.263 billion, which was less than the $1.345 billion consensus estimate.

Jonathan Levinson : 11/2/2005 9:28:42 AM

Apparently op-ex manipulation is news to some (but not to our readers). An article from the Chicago Sun-Times:

How honest is the stock-options market? Newly published research from academics at the University of Illinois said there are times big trading firms manipulate the market to their advantage.

The manipulation, which is illegal, takes place in the final days before options expire within a given month, said the study published in the October issue of the Journal of Financial Economics.

The study is the work of finance professor Neil Pearson, associate professor Allen Poteshman and Ph.D. student Sophie Xiaoyan Ni. They based their findings on a mathematical analysis of data from the Chicago Board Options Exchange that covered trading from 1996 through 2002.

Link

The report itself is available at this Link

Jeff Bailey : 11/2/2005 9:20:40 AM

Mercury Interactive (MERQE) $35.00 Link ... sharply lower at $23.75 and atop this morning's pre-market most actives after the enterprise software maker said it isn't in a position to report financial results for the third quarter because of evidence of misdated stock-option grants turned up by a special committee of the board of directors.

While it doesn't believe changes to its historical revenues, cash position or non-stock option-related operating expenses will be required, the company says its ability to make amended 10-K and 10-Q filings with the Securities and Exchange Commission by Nov. 30 is "in serious jeopardy."

As a result, Mercury Interactive's shares face delisting by Nasdaq.

Jonathan Levinson : 11/2/2005 9:10:46 AM

From the Treasury site:

The Treasury will auction $18,000 million of 3-year notes, $13,000 million of 5-year notes, and $13,000 million of 10-year notes to refund $38,723 million of publicly held securities maturing or called on November 15, 2005, and to raise approximately $5,277 million of new cash.

Marketwatch reports that these figures, which result in a net drain of 5.277B (the new cash raised by the auctions), are inline with Wall Street's expectations.

Jonathan Levinson : 11/2/2005 9:05:33 AM

Ten year note yields are edging back from their earlier highs, now up 2.5 bps at 4.602% as ZN bonds rebound to an 11/64 loss at 108 3/16. 13-week bill rates are down 1.2 bps here at 3.85%.

Linda Piazza : 11/2/2005 9:03:19 AM

Yesterday was a frustrating day for me as I try to post trades in a timely manner. I'm especially frustrated because the thing that's stopping me is the need to decide on an OEX-based stop when I'm basing the trades on a different methodology. Post FOMC, that methodology set up a bearish trade on that spike higher, but I was trying to decide on whether I should post the stop above the previous day's high or at some certain artificial number of points above the then-current OEX level, and the OEX turned around and the trade was gone. My methodology sometimes produces trades of only a couple of points, and so I can't afford to enter after a sudden drop of a point. Bear with me. I'm actually missing personal trades as I try to sort this out, too, but we'll get it sorted out.

I've been watching a potential H&S on the OEX's 15-minute chart, but the neckline slants sharply down toward the 15-minute 100/130-ema's, and those are important averages. The right shoulder is also extending a bit longer than I'd like to see it extend, so that there's some possibility that the whole thing will unravel. I'd hoped to see a H&S with a horizontal neckline that would be up near 556, so that there would be time to take at least partial profits near 554 S/R, and prepare for a potential bounce.

Unless the OEX gaps through those 15-minute 100/130-ema's this morning, at 553.88 and 553.35, respectively, I think we should prepare for a bounce attempt from them and that's going to be problematic for the whole H&S scenario. Also, while bears will be cheered to see the OEX back below the 38.2% retracement of the decline off the 9/09 high after it touched the 50% retracement on Monday, they would have been more cheered to see the OEX pushed below the 553.80-ish support from the recent consolidation zone. Until that happens and the OEX sustains levels below that, I think the possibility of another bounce up to test this week's high can't be ruled out.

Don't get me wrong. This formation setting up throughout October on the daily chart still looks like a possible bear flag, although it's a bit wide for the bears' comfort, rising into resistance, and that resistance is likely the 50% retracement of the decline, at 558.88. The 240-minute 100/130-ema's are at 557.93 and 559.44, and have been important in the OEX's trading behavior. The OEX usually spends at least several 240-minute periods testing those averages before it either retreats from them or pushes up through them, so this testing isn't unusual. However, the OEX has now had four 240-minute periods either testing those averages or pulling back after a test, so there's danger that this is enough testing and the OEX has pent up enough energy to get through them or else finally roll down below them. I think the OEX needs a deeper pullback before it could burst through them, even if that's what's eventually going to happen, but I haven't been asked. I also think that even if the OEX is going to keep climbing off that October low, it's now set up a rising regression channel that's fairly well defined, it's hit the top resistance already this week, and it may need to pull back at least to the mid-channel level, currently at about 552.77, or even the 240-minute 21-ema at 552.00 or the bottom of the channel, now at 547.

The OEX's daily Keltner channel suggests that a retest of 552.18 may be needed, too, but that's predicated on continued daily closes beneath 557.30. So, overall, my gut instincts tell me that the OEX needs to pull back further before it finally takes off, even if it's going to take off higher, but charts just do not yet guarantee that the pullback would occur or would occur before another attempt higher.

For now, the OEX may be in too right of a range to give a new bearish entry on tests of the right-shoulder level, now descended to about 555.15, since there's support just under 554. I'm going to have to take a look at the advdec line setup this morning and hope that I'm faster making decisions than I was yesterday. This has happened to me several times lately, and is part of my learning process posting these trades. I don't have any problems with this in my own trading. When I'm not taking up time trying to post a trade for the MM, I can base my stop, say on an advdec line move above the Keltner line currently at 250. I can't tell you that's where your stops should be, though, because many don't have the ability to watch either the advdec line or Keltner lines, and those Keltner lines are dynamic. So, this is just a little adjustment that I need to figure out to translate my trades into those appropriate for the Market Monitor.

Jonathan Levinson : 11/2/2005 8:56:32 AM

Higher interest rates are taking a bite out of mortgage activity. From the Mortgage Bankers Assoc. website:

WASHINGTON, D.C. (November 2, 2005) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 28. The Market Composite Index - a measure of mortgage loan application volume - was 646.7, a decrease of 4.8 percent on a seasonally adjusted basis from 679.1, one week earlier. On an unadjusted basis, the Index decreased 5.2 percent compared with the previous week but was down 15.2 percent compared with the same week one year earlier.

The seasonally-adjusted Purchase Index decreased by 6.2 percent to 437.6 from 466.4 the previous week whereas the Refinance Index decreased by 2.8 percent to 1862.8 from 1916.8 one week earlier. Other seasonally adjusted index activity includes the Conventional Index, which decreased 4.9 percent to 965.1 from 1014.3 the previous week, and the Government Index, which decreased 4.1 percent to 115.2 from 120.1 the previous week.

"The seasonally adjusted purchase index is down 7.6 percent since last month. This decline is consistent with our expectations of a softening from the record level of new home sales during the first three quarters of 2005," said Doug Duncan, Chief Economist for the Mortgage Bankers Association.

The four week moving average for the seasonally-adjusted Market Index is down 2.4 percent to 689.5 from 706.2. The four week moving average is down 1.9 percent to 469.4 from 478.4 for the Purchase Index while this average is down 3.0 percent to 1970.1 from 2031.2 for the Refinance Index.

The refinance share of mortgage activity increased to 43.6 percent of total applications from 42.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 29.4 percent of total applications from 29.5 percent the previous week.

Jonathan Levinson : 11/2/2005 8:44:36 AM

Crude oil holds a 30 cent loss at 59.55, 7.5 cents off the low, and natgas is down 11 cents at 11.75, 7.5 cents off its low. QQQQ is down .07 at 38.77, but its 30 and 60 min cycle indicators are only hesitantly bearish- the 60 min cycle pointing weakly down, and the 30 min cycle stalled in an attempted upturn, not yet rolling over. Bears need a break of yesterday's low in the 38.65 area to confirm what is now only a cautiously bearish picture for QQQQ.

Jonathan Levinson : 11/2/2005 8:25:24 AM

Ten year notes are weaker than 13-week bills, steepening the yield curve, but the big pop in ten year note yields this morning is weighing on equities. TNX is currently up 3.3 bps at 4.61%, while IRX is unchanged at 3.862%. This is a new high fo the move in TNX: Link

Jonathan Levinson : 11/2/2005 7:39:17 AM

Equities are mixed to lower, ES trading 1205.75, NQ 1583, YM 10419 and QQQQ +.01 at 38.85. Gold is up 1.8 at 462.40, silver -.02 at 7.457, ten year notes -9/64 at 108 7/32, crude oil -.30 at 59.55 and natural gas is down .115 at 11.745.

We await the 10:30 AM release of the EIA petroleum report.

Linda Piazza : 11/2/2005 6:44:12 AM

Good morning. The Nikkei managed a positive close after a volatile night with prices swinging rather widely on either side of the flat-line level. Other Asian markets were positive, too, but European markets stumble this morning. As of 6:31 EST, gold was higher by $1.70 to $462.30, and crude, lower by $0.16 to $59.69. More details about Asian and European markets follows in succeeding paragraphs.

Seemingly aiming for 14,000, the Nikkei punched to a 13,927.51 high in early trading on Wednesday, but it couldn't hold that second four-year high in a row. It spent much of the afternoon session in negative territory, but a strong last-minute burst sent it back into positive territory. It closed higher by 26.92 points or 0.19%, at 13,894.78. Strong quarterly earnings reports by some companies, including video-game maker Square Enix Co. Ltd. and carmaker Mazda Motor Corp., helped support the markets. Toyota and Honda grabbed market share from U.S. carmakers, although industry-wide sales fell 14 percent in October. Sanyo Electric Company announced a new vice president, and gained 13.3%. Fujitsu spent another day in the doghouse after its software was blamed for yesterday's halting of trading on the Tokyo Stock Exchange. Other developments included an announcement that Japan's Mizuho Financial Group and Wal-Mart stores will together infuse capital into Wal-Mart's Japanese affiliate Seiyu Ltd. Trading firm Mitsui & Co. has agreed to sell its U.K.-based oil-trading unit Arcadia Petroleum to a Cyprus company.

Most other Asian markets climbed, too. The Taiwan Weighted gained 1.24%, and South Korea's Kospi rose 1.63%. Singapore's Straits Times climbed 1.75%, and Hong Kong's Hang Seng increased 0.17%. China's Shanghai Composite gained 1.36%.

European markets were mixed, trading either side of the flat-line level, as research for this report began, but have mostly all dipped into negative territory as the research concluded. Well-received earnings from Credit Suisse Group and German household products maker Henkel had helped buoy markets earlier. In Germany, September's employment figure rose by 41,000, with that improvement confirming the outlook painted by the employment component of the PMI. A later release showed October's unemployment at 11.6%, down from September's 11.7%. The number of unemployed dropped by 36,000. This was a better-than-expected result, but the head of the labor department perhaps later doused enthusiasm when he noted that unemployment could increase over the coming months.

In the U.K., the October CIPS' Construction PMI dropped to 53.9 from the prior 57.2. The component measuring housing dropped below 50, to 48.9, signaling contraction in that industry. Some other figures released this week provided hope that the housing market might be stabilizing or at least declining at a slower rate. The government also released figures on the stamp duty paid by homeowners, with that figure jumping almost 50% over the previous year's, providing what's been termed a windfall for the treasury. Also in the U.K., there was speculation that Work and Pensions Secretary David Blunkett may have resigned, with a recent focus on a job he reportedly took while not in office with a company that has applied for government contracts. That speculation was later confirmed by an announcement from the prime minister's office.

Stock-specific news included a downturn in the U.K.'s O2 after Deutsche Telekom confirmed that it would not launch a bid countering Telefonica's for the U.K. mobile operator. Reinsurer Swiss Re eased lower after announcing that it won't meet its full-year EPS goal due to claims related to Katrina and Rita. German retailer Metro AG dropped after it failed to meet expectations for food retail sales in Germany, with the company also trimming guidance for the fiscal year.

As of 6:20 EST, the FTSE 100 was lower by 9.60 points or 0.18%, at 5,334.70. The CAC 40 was lower by 17.82 points or 0.40%, at 4,416.93. The DAX was lower by 13.51 points or 0.27%, at 4,909.04.

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