Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
OI Technical Staff : 11/4/2005 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The Market Monitor has been archived.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.

Tab Gilles : 11/4/2005 4:10:52 PM

Same here Jane!

Linda Piazza : 11/4/2005 4:11:19 PM

Close well off the high, volume less than the previous two day's: that's what happened on the SPY today. That's no guarantee of a turnaround, but it's a danger signal to bulls. Similar result on the QQQQ's, and the DIA. Supposedly, this should be evidence that the professionals were not interested at this level, not active because the volume was lower. I can't follow volume on the OEX and the OEF isn't liquid enough, I don't think. Interestingly, the OEF had larger-than-normal volume today, like yesterday, but that can be a danger sign, too, because the OEF has had several days over the last week in which it printed small-range days with high volume, supposedly indicative of professionals selling into the rise. In that case, the volume wasn't able to move it much because there was so much supply from professionals waiting to absorb any demand. Kind of seems counter-intuitive, doesn't it, that both higher and lower-than-normal volume could both be dangerous. Remember, that I'm a neophyte with this particular study, but it kind of goes along with what we've known all along. Anyway, if there's been momentum behind a move, as there has been, it can still carry on a bit further, even if professionals aren't that interested in carrying it higher.

Jane Fox : 11/4/2005 4:07:34 PM

Have a great weekend and C U all on Monday bright and early.

Tab Gilles : 11/4/2005 4:07:02 PM

Two oil charts of interest, note 40-ema. Dow Jones US Oil & Gas Index ($DJUSEN) Link Energy Select SPDR (XLE) Link

Jane Fox : 11/4/2005 4:06:56 PM

AD volume almost closed above 0.

Jane Fox : 11/4/2005 4:05:47 PM

TICKS range today was from 939 to a low of -844.

Linda Piazza : 11/4/2005 3:59:59 PM

OEX Trade Recap
Week
11/1
Bearish entry at 556.87. Stopped at 558.45 for a 1.58 point move against the position.
The play was not stopped by my methodology before the first profit target was reached, but probably would have been the next morning for a loss on the rest of the position.
11/3
Bearish entry at 561.70. Stopped at 563.11, for a 1.41 OEX move against the position.
At the entry, I told readers that I was posting that stop, but that I would follow the position through my methodology, which I did. It was possible to profit from the position with that methodology, with the first profit target hit and with profit again offered today.
Today
Exit second half of position was at 560.47. Entry was at 562.09. First half exited at 561.08. Captured 1.01 points on the first half, 1.62 points on the second half.

I'm still trying to fine-tune my methodology so that it's workable on the MM. Setting the stops is the difficult part of this methodology, because the OEX could spike up and stop us out, or spike down and spike us out on a bullish trade, and the advdec line would not have supported that move, with our play eventually reaching its profit target. I'm working on it, to the detriment of my own account, I have to say, but we will get this done.

Linda Piazza : 11/4/2005 3:58:38 PM

What about Monday? I had my trendline off the 9/09 high draw wrong, and realized last night that I did. The OEX reached up and touched it yesterday, but not today. It's closing the week below it, unlike some other indices that have broken above similar trendlines. Yesterday, the OEX also came up and touched--exactly--the former trendline off the April low, and fell back. It still looks like a possible kiss good-bye, but other evidence is more bullish, including a possible daily close above the daily 100-ema at 561.19. It's formed a candle body between the 100/130-ema's, however. We're still in an iffy point, and we won't see the answer until Monday.

Jonathan Levinson : 11/4/2005 3:56:33 PM

The expression "never short a dull market" was exemplified today. That flat, endless range was violated by just a 10-15 cent move in QQQQ... and when that happened, all those trapped shorts since 10:30 had to cover. It's far from a meltup, and the same vulnerability was there for bulls to the downside, but we see the danger of flat ranges on a day like today. Much safer to wait it out. Link

Jane Fox : 11/4/2005 3:55:06 PM

The TRIN and SPY have broken their bullish trendlines but the VIX has not quite and probably will not before the end of the day. Anyway you look at it this close was a coup for the bulls. Link

Jonathan Levinson : 11/4/2005 3:46:30 PM

CHICAGO (MarketWatch) -- Treasurys fell Friday and wrapped up their fifth weekly decline in the past six weeks after bond investors focused more on the rise in hourly wages than an October payrolls gain that was well short of forecasts. The report was seen doing little to sideline a Federal Reserve that continues to telegraph higher interest rates. The benchmark 10-year Treasury note was down 3/32 at 96 26/32 at Friday's close. The small drop in price lifted its yield tp 4.66% from 4.65% Thursday. The 10-year yield remains capped below the year's yield high of 4.68% hit on March 23.

Jonathan Levinson : 11/4/2005 3:45:50 PM

At 40.06 QQQQ, all sellers since 10:30AM are now underwater.

Tab Gilles : 11/4/2005 3:43:40 PM

$NDX Testing resistance. Link

Murphy Oil (MUR) Testing 200-ema Link

Citrix Systems (CTXS) SELL Hit 10-ema STOP Link

JP Morgan Chase (JPM) Set stop @ 10-ema, topping nearterm. Link

Linda Piazza : 11/4/2005 3:43:02 PM

The OEX is also at the top of the descending regression channel in which it's been pulling back since yesterday morning.

Jonathan Levinson : 11/4/2005 3:42:35 PM

Headline:

3:41pm BERNANKE NOMINATION HEARING SET FOR NOV. 15 IN SENATE

Linda Piazza : 11/4/2005 3:42:11 PM

I'm certainly glad we exited. The OEX is rising to test resistance at 561.47, with this being resistance that stopped it earlier today. This time, the advdec line is inching above the resistance that held it back all day. End-of-day stuff.

Jonathan Levinson : 11/4/2005 3:42:15 PM

Another upside break for QQQQ, testing the previous 40.05 high: Link

Jonathan Levinson : 11/4/2005 3:38:26 PM

Ten year notes finished in the red, TNX up 1.3 bps at 4.657%. Link This week has seen bonds fall as stocks rise, different from the 2003 rally when both rose together. This suggest limited liquidity, as strength in the one isn't matched by buying in the other class. Whether the equity rally was spurred by rebalancing of large portfolios in reaction to the downside break in bonds, we won't know until bonds bounce back. But for the moment, higher yields and higher equities are the bottom line for this week.

Linda Piazza : 11/4/2005 3:25:49 PM

Currently, the TRAN has erased all of yesterday's gains.

Linda Piazza : 11/4/2005 3:25:15 PM

Advdec line resistance still holding . The OEX is jumping all over the place, though, when viewed on a one-minute chart. On the Keltner charts, it's settling into an equilibrium position, with support and resistance about equally weighted. We know that already because of the daily 100/130-ema's and descending trendline off the 9/09 high just overhead, and the 240-minute 100/130-ema's and former resistance of the regression channel rising off the October low just below it.

Jonathan Levinson : 11/4/2005 3:23:42 PM

Headlines:

3:04pm DEC NATURAL GAS ENDS AT $11.415/MLN BTUS, DOWN 2.3% ON DAY

3:04pm DEC NATURAL GAS ENDS THE WEEK WITH A 12.6% LOSS

Jonathan Levinson : 11/4/2005 3:21:29 PM

The bounce here did more for YM than it did for the Qs or NQ, still no deviation from this endless range. Volume breadth pulled up to -1.45:1 for the NYSE and +1.16:1 for the Nasdaq. Looking at this week's impressive run, kicking off from Monday's gap up open and the lack of meaningful pullback either for bears seeking to cover or for bulls on which to enter, the lack of pullback today is all the more impressive. Profit taking has either been gradual or minimal. Today's failed to run to a new high leaves a taller daily doji than yesterday, but the volume is light and the action slow, neither of which fits the classic doji pattern. A break below yesterday's low would be another story, but if it happens at all, it's very unlikely to be today. Link

Linda Piazza : 11/4/2005 3:18:25 PM

It's still possible for the OEX to dive into the close. (I hope so. I was so busy preparing that post for you guys that I didn't get out of the rest of the position on my own play! This is an occupational hazard, I'm learning.)

For those who didn't take the exit, we're going to have to see what happens into the end of the day, but it's possible that the OEX will print a doji today after yesterday's candle that pulled back from its high. You've heard me say this before, but the OEX often honors such indecision with either another pullback or else an actual decline. You should balance this knowledge with the knowledge that price decay is going to accelerate in your front-month options over the weekend as November's opex draws closer.

Jane Fox : 11/4/2005 3:14:33 PM

TICKS +800 and the buyers are showing up again.

Linda Piazza : 11/4/2005 3:14:13 PM

OEX Exit Point Alert
Exit second half of position was at 560.47. Entry was at 562.09. First half exited at 561.08. Captured 1.01 points on the first half, 1.62 points on the second half.

We worked hard for that. The advdec line was telling us the truth about the day, at least so far, but there was just too much risk staying in the play right now. My methodology has not yet closed out the play, but there is now some bullish divergence on the 15-minute chart, and there was just too many price spikes, such as the one currently occurring, just after we closed the play.

Linda Piazza : 11/4/2005 3:10:19 PM

OEX Exit Point Alert
Exit the rest of the position now. I think the powers-that-be want the Dow to stay above the 200-sma too much, and there's just too much danger in staying in this OEX play.

Jonathan Levinson : 11/4/2005 3:06:32 PM

Stepping away for a few minutes.

Linda Piazza : 11/4/2005 3:06:09 PM

OEX Trade Signals
Advdec line resistance holds, so far. Tentatively.

Linda Piazza : 11/4/2005 3:02:41 PM

OEX Exit Point Alert
Remain on the standby for an exit, in case it's needed. The advdec line bounced automatically from the equal-low level. (Yes, it does that, too.) It's bounced up to test resistance again, with that resistance looking firm at the moment. However, there's going to be a real effort to keep the Dow above the 200-sma into the weekend, I think, so I'm watching carefully to see if advdec resistance is breached.

Jonathan Levinson : 11/4/2005 3:01:48 PM

Second that, Linda.

Linda Piazza : 11/4/2005 2:58:34 PM

Tab, it's nice to have you posting more often these days. I've been studying all your charts.

Your mention of Jeff reminded me that I had meant to tell Jeff that I hope the doctor's visit results in his feeling better, but I was trying to get a post done and didn't get the get well wishes posted.

Tab Gilles : 11/4/2005 2:56:00 PM

Jeff, excellent posts, great info! [11/4/2005 1:47:43 AM] Thanks for the heads up on the $BPNDX, just went from "Bull Correction" to "Bull Confirmed". [11/4/2005 10:39:04 AM]

Linda Piazza : 11/4/2005 2:55:02 PM

They didn't like that confirmation of the OEX's H&S on the 1-minute chart, or else this is the real right shoulder. Unfortunately, we're going to get these buying spikes even if the OEX is headed down. If your nerves can't take this kind of action, consider bailing.

Linda Piazza : 11/4/2005 2:53:47 PM

Dow back above the 200-sma. They're trying hard and running it up quickly.

Jonathan Levinson : 11/4/2005 2:53:25 PM

QQQQ is back to within 4 cents of the low, but the real support is at 39.80, followed by 39.60, the midpoint of yesterday's opening gap up: Link

Linda Piazza : 11/4/2005 2:50:48 PM

No new LOD for the OEX. Advdec line approaching its LOD at -1724, with the advdec line at -1708. Need it to keep falling.

Jane Fox : 11/4/2005 2:50:20 PM

Keep your eye on the AD volume and you will see that the bears are now picking up momentum.

Linda Piazza : 11/4/2005 2:49:40 PM

New LOD on the TRAN. As it drops, it keeps approaching new potential support levels in the form of 100/130-ema's on various time frames. It's also now approaching 3900, and that round number might be potential support, although a 38.1% retracement of its climb off Thursday's low alone, not even the whole last climb off the Oct low, is at 3877.49. It is, however, currently testing a 19.1% retracement of that climb off the Oct low, easing just a little below it as I type. That's at 3916.95, with the TRAN currently at 3912.08.

Linda Piazza : 11/4/2005 2:46:58 PM

That little H&S on the OEX's one-minute chart has now been confirmed, downside target 558.97. It's going to be dangerous to assume that target will be confirmed, but let's see what the markets do. I'm not going to lower the stop again just yet, but feel free to take the rest of your profit at any time if the OEX does not soon make a new LOD.

Linda Piazza : 11/4/2005 2:44:52 PM

A little potential H&S action going on, on the OEX's one-minute chart. Lots of jumping around. The advdec line's resistance still holds, but it needs to drop further. How many times have I said that so far?

Linda Piazza : 11/4/2005 2:43:50 PM

By the way, if you think we on the MM talk about the manipulation that "they" might do, you should have listened to Tom Williams, author of Master the Markets during the CBOT webinar last night. "They're devious and don't want you . . . fully aware of what turns people on and off . . . cunning and crafty." They mark the markets down hard and trap retail traders or mark it up hard and do the same thing, he said, particularly in the first 30 minutes of the day.

Jonathan Levinson : 11/4/2005 2:38:26 PM

QQQQ is right back to its previous range. The intraday oscillators have nothing coherent to say at this point- the price action remains sideays, with that 7 cent move reversed as quickly as it started. Link

Linda Piazza : 11/4/2005 2:37:46 PM

"They" are really going to want to hold the Dow above that 200-sma into the close. Dow at 10,500.66 with that ma at 10,498.00.

Linda Piazza : 11/4/2005 2:34:58 PM

Wouldn't be surprised to see the OEX bounce back toward 560.60-560.80 again.

Jonathan Levinson : 11/4/2005 2:33:51 PM

Volume breadth up to -1.7:1 on the NYSE, 1:1 on the Nasdaq.

Linda Piazza : 11/4/2005 2:33:19 PM

Advdec line resistance held.

Linda Piazza : 11/4/2005 2:31:41 PM

That last spike was to 561.23, the 38.2% retracement of the entire bear-market decline. This number keeps showing up over and over.

Linda Piazza : 11/4/2005 2:30:26 PM

OEX Trade Signals
I was preparing a post to exit the rest of the position just as that last spike occurred. That spike brought the advdec line up to test the resistance again, so I'm watching to see if it holds. Our exit is just above that spike we got a few minutes ago, so seems worth it to watch now to see if the resistance holds. I would have felt good with the exit near 560.36, where it was when I was preparing that post. Exit any time if you're nervous.

Jonathan Levinson : 11/4/2005 2:24:54 PM

QQQQ breaks north out of its range. 30/60 min channel resistance are at 40.10-.12: Link

Jonathan Levinson : 11/4/2005 2:18:13 PM

Crude oil is weakening toward the close, now down 1.15 at 60.625. Natgas is down .335 at 11.355. Still no direction from NQ/QQQQ, but there's been no weakness since the 39.84/1623 low.

Jeff Bailey : 11/4/2005 2:14:29 PM

I have to leave for a doctor's appointment. I hope to return prior to the close, but it is a "fit you in" appointment.

Jeff Bailey : 11/4/2005 2:13:27 PM

02:00 Internals found at this Link

Jane Fox : 11/4/2005 2:11:18 PM

AD volume just picked up again and gave some life to the bulls.

Linda Piazza : 11/4/2005 2:11:05 PM

OEX Trade Signals
The OEX minimally confirmed that H&S on its five-minute chart and then climbed dramatically. Again, that's a dangerous sign, pointing to a possible invalidation of the formation. The advdec line has not yet invalidated this play, however and is just crawling along below resistance without yet being able to break over it.

Jeff Bailey : 11/4/2005 2:04:55 PM

02:00 Market Watch found at this Link

Linda Piazza : 11/4/2005 2:02:28 PM

As a reminder, the OEX's 240-minute 100/130-ema's are at 558.19 and 559.50. It's going to take a strong thrust and lots of help from the advdec line to push the OEX below that. OEX at 559.73 as I type.

Jonathan Levinson : 11/4/2005 2:01:19 PM

Volume breadth back down to -2:1 on the NYSE, -1.3:1 on the Nasdaq.

Linda Piazza : 11/4/2005 1:59:32 PM

OEX Trade Signals
The OEX's five-minute chart now has a H&S formation, but the OEX is rising from the neckline level, into a second right shoulder. This is a point at which many H&S's are invalidated, and was the reason for my lowered stop a few minutes ago. If the OEX is going to invalidate that H&S (admittedly in the middle of congestion and so not particularly trustworthy), then we'll be taken out of the play right afterwards, without having to wait for the higher stop.

Jeff Bailey : 11/4/2005 1:56:53 PM

QQQQ Options Chain at this Link ... Great observation Jane.

Looks like some $39 Call selling, $39 put Selling and $40 Put selling at November strikes.

As energy prices slip lower to their Friday close, things could shift quickly in the last hour of trade.

Jonathan Levinson : 11/4/2005 1:50:35 PM

Crude oil is back down to an 80 cent loss at 60.975. High for the day was 60.075. Natgas is down .325 at 11.365, off a high of 11.71.

Jane Fox : 11/4/2005 1:46:38 PM

AD volume to new daily lows and the bears are gaining momentum.

Linda Piazza : 11/4/2005 1:45:46 PM

OEX Exit Point Alert
Lower stop on the rest of the position to 561.60.

Jonathan Levinson : 11/4/2005 1:43:21 PM

Ten year notes are pulling back down to their lows, TNX currently up 2.7 bps at 4.671%. IRX is down to a 1.8 bp gain at 3.865%.

Linda Piazza : 11/4/2005 1:40:07 PM

The OEX has got to get below 558.66-559.28 on a 10-minute closing basis, its next hurdle, if it's going to too far. Then it has to get below 557.87-558.10, support it hasn't breached since last Friday. Lots of support below the current level, and lots of resistance above, so bears need much help from that advdec line. One prime stop-running time of day approaches, so be careful.

Jeff Bailey : 11/4/2005 1:36:07 PM

Chicago Board of Trade (BOT) $114.90 +3.90% ... gets back above mid-point of day's session. WEEKLY Pivot $118.80 and DAILY R1 119.34 could be a bull's target toward the close.

DAILY Pivot $113.22

Jonathan Levinson : 11/4/2005 1:33:55 PM

The Qs have flatlined on light volume, holding an extended sideways pennant off the morning drop. There have been some test of the 72 SMA, but everything is flat at this point. This could be right shoulder, or a neutral pennant, or a consolidation near the top of the week's gains, or a consolidation at the day lows. All of these competing interpretations ahead of the weekend are feeding the flat, dead range: Link

Linda Piazza : 11/4/2005 1:29:14 PM

OEX Trade Signals
So far, today's action on the advdec line has set up most like that seen on August 4, August 16, and, perhaps, September 13. If you take a look at the daily candles for those days, you'll see why I risked holding on and not taking total profits. However, there have been other days that have seen a late-day bounce, so adhere to your stops.

Jane Fox : 11/4/2005 1:29:00 PM

I see AD volume made a new daily low at the same time the VIX made a new daily high HMMMM!!!

Linda Piazza : 11/4/2005 1:23:22 PM

Advdec line dropping again, and we'd like to see it drop further.

Jeff Bailey : 11/4/2005 1:16:32 PM

01:00 Internals found at this Link

Linda Piazza : 11/4/2005 1:15:15 PM

Dow testing the 200-sma again. That's at 10,497.98, with the Dow now at 10,497.46. This is an important test, of course, and one of the most visible ones going on.

Linda Piazza : 11/4/2005 1:13:29 PM

The OEX has broken through its latest and wider bear flag off the day's low. Bears want follow-through, but now the advdec line has some potential support in the -1250 zone, so bears want that to break, too. Advdec line at -1227 as I type.

Jane Fox : 11/4/2005 1:12:33 PM

Larry McMillan's Friday commentary. (If you are a bear don't read this) The breakout by $SPX above 1205 and also above 1210 has turned the charts of the major indices bullish. They should stay that way unless they fall back below 1195 again. While there is still considerable overhead resistance, it appears that the current bullish environment is strong enough that a test of the summer's highs could be in order.

Breadth (advances minus declines) has been very strong. That is good, because it not only generates a buy signal from this indicator, but it means the participation in the rally is strong (i.e., a lot of small stocks are trading up). In fact, one might say that breadth has been so strong as to generate an overbought condition already. That could be true, but it is welcome, for any budding bullish market needs to generate overbought conditions early on -- it is an indication of strength in this case.

Volatility ($VIX) finally got its act together, too, and has now confirmed the bullish posture of the index charts and market breadth. $VIX dropped to a new relative low this week -- even gapping down on Thursday. $VXO -- the implied volatility of $OEX options -- is even lower than $VIX. As long as these continue to trend downward (in fact, as long as they don't begin to trend upward), this is a bullish sign for stocks.

The only one of our technical indicators that hasn't joined the party is the equity-only put-call ratio. Both the standard and the weighted ratios have recently raced to very high (i.e., oversold) positions indicating that traders were buying a lot of puts. Since these are contrary indicators, that is a good setup for a buy signal. However, that buy signal has not yet occurred. There is a little 'hook' on the charts now, which likely will grow into a buy signal if this rally persists for another day or two. But, at this time, the equity-only put-call ratios have not yet signaled 'buy.'

In summary, we are on an intermediate-term buy signal -- much as we've seen in other Novembers. This one is coming off a good technical base, which makes it much better than the post-Katrina rally we saw in September. It's interesting to note that there seems to be a lot of bullish consensus in the media, but we can't trade that -- we can only observe the sentiment indicators we have on hand, and the extremely high levels of the put-call ratios would indicate that traders might have been saying they were bullish for November, but weren't actually trading that way.

Jonathan Levinson : 11/4/2005 1:12:04 PM

Stepping away for a few minutes.

Jane Fox : 11/4/2005 1:09:45 PM

I don't see any signs of bullishness yet. The red trendlines I drew on the VIX, TRIN and SPY charts are still in tact and the AD volume or AD line have not come close to retracing 50% of their daily range. The bears still have the reins.

Linda Piazza : 11/4/2005 1:09:05 PM

OEX Trade Signals
The advdec line tentatively holds to the resistance we wanted to see it hold, but it's tentative yet.

So, if I could see that the advdec line was going to bounce and could see that confirmed inverse H&S on the OEX's 1-minute chart, why didn't I exit the total position? I was tempted and it certainly still might have been the best idea. However, as I discussed earlier, this set up as a potential down-all-day kind of day. At various points, I discussed with readers levels at which they might consider taking partial or full credit, and the reasons they might do that, and so all have had plenty of time at key levels to make up their minds. We could expect a bounce in the advdec line at some time, up to test the very level that it's just moved up to test, but if that resistance did hold, then the afternoon could be a bearish one. I didn't want to pull the plug on the rest of the play if that's a possibility. That may turn out to be a bad decision, if that advdec line resistance ultimately does not hold, but there's just no way to know ahead of time. Partial profit has been taken, and so we watch. If I see something disturbing on the advdec line, I'll pull the plug on the rest of the play ahead of the stop.

Jeff Bailey : 11/4/2005 1:04:34 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 11/4/2005 1:03:23 PM

Crude oil is up to a .425 loss at 61.35, off a low of 60.775, natural gas -.28 or 2.4% at 11.41, 20.5 cents off the low.

Jeff Bailey : 11/4/2005 12:56:51 PM

Burlington Coat (BCF) $38.94 +0.36% Link ... don't see any same store sales news from yesterday. Recent earnings news from Reuters at this Link

Q3 sames store sales were up 8.9% though.

Looks like StockCharts.com has their data feed problem corrected now.

Linda Piazza : 11/4/2005 12:52:05 PM

The OEX is just pushing over a 50% retracement of the day's decline. Its formation still looks like a bear flag, but traders want the bounce to stop soon, at or before the 61.8% retracement, at about 561.25.

Jonathan Levinson : 11/4/2005 12:49:47 PM

Another failure to retake the 72 SMA for QQQQ, this time from one penny above it. The short cycle indicators continue to drift, taking a slight tilt higher but still sideways, while the wavelet cycle has been tracking the bounce more closely. It is nearly overbought, but bounced well above oversold territory on the last dip. The 30/60 min channels have gone neutral, leaving intraday direction up in the air here. Patternwise, this looks and feels like a bear flag/wedge, a sideways bounce from a sharper drop. But with only minimal losses after such a sharp bounce in recent sessions, the bigger picture for the week still favors the bulls. Link

Jeff Bailey : 11/4/2005 12:51:16 PM

Burlington Coat Factory (BCF) $38.93 +0.33% Link .... New Zealand said yesterday that lamb skin exports were sharply lower. Cold winter? Turn down the thermostat and put on a coat?

Jeff Bailey : 11/4/2005 12:48:56 PM

Linda or Jane ... do you own any "lamb skin" shoes? I know coats are made out of lamb skin, but shoes?

Jeff Bailey : 11/4/2005 12:46:30 PM

OSI Systems (OSIS) $17.75 +9.77% ... Best levels of session. Late yesterday company posted a loss of $0.26 a share vs. consensus (three analysts) $-0.31.

Hmmm "jail break," a "stunner," and sucurity/inspection equipment maker.

That equals protection/safety in the sector bell curve.

Linda Piazza : 11/4/2005 12:46:49 PM

The OEX has still not exactly shot up toward its target for its confirmed inverse H&S on its one-minute chart. Bears don't want to see these targets easily met,and especially not exceeded, but the OEX's five-minute chart does show the possibility, but not yet the probability that the OEX could test 571.71 on a five-minute closing basis. The advdec line is now testing that resistance band beginning at about -963 and extending up to -625. If it had already been exceeded, I would have closed the play, as the OEX could bounce above out stop while this tests goes on. Advdec line now at -950, QCharts value.

Jonathan Levinson : 11/4/2005 12:41:34 PM

Volume breadth is up to -1.6:1 on the NYSE, +1.2:1 on the Nasdaq as QQQQ and NQ test their 72 SMAs at 39.99 and 1629.5.

Jeff Bailey : 11/4/2005 12:39:01 PM

UTStarcom (UTSI) $6.15 +13.67% ... presses session highs.

Linda Piazza : 11/4/2005 12:36:58 PM

The advdec line is slowly, slowly climbing up to the level that we need to see hold, between -900 and -700, or perhaps even up to -625. The advdec line is now at -1190, QCharts value. That Dow value just above its 200-sma makes me nervous, because you know they're going to try it hold it above the 200-sma into the close today. If the Dow had gotten pushed so low below that MA that it was going to be resistance, I'd feel better about the rest of our bearish OEX position.

Jeff Bailey : 11/4/2005 12:35:45 PM

SNDK chart and observation from 10/21/05 at this Link

Jeff Bailey : 11/4/2005 12:31:53 PM

Sanmina (SANM) $4.50 +22.95% ... 5-minute interval chart with "dynamic" PINK retracement at this Link ... Outline possible bullish trade setup.

Linda Piazza : 11/4/2005 12:28:08 PM

Right now, the OEX is trapped between important support and resistance levels, and there is going to be some chop. The daily 100/130-ema's are above at 561.17 and 561.73, respectively, and the 240-minute versions are just below at 558.16 and 559.50. The daily ones are more important, of course, but the OEX's behavior does show congruence to the 240-minute ones, too, and after OEX-component investors spent four or five 240-minute periods testing those averages before the OEX pushed through them, they're going to try to hold those stocks up, especially into the weekend.

Jane Fox : 11/4/2005 12:27:50 PM

IF the red trendlines break then I think we can safely say bullishness is creeping back into the market. Link

Jeff Bailey : 11/4/2005 12:24:33 PM

Sanmina (SANM) $4.48 +22.40% ... what do you think about that early morning action on 5-minute intervals? I've seen that before (SNDK 10/21/05)

Linda Piazza : 11/4/2005 12:24:04 PM

That webinar last night was pretty good. The TRAN bounced just where the evidence presented last night said it should. Depending on how its steep decescending trendline is drawn off this morning's high, the TRAN may actually have bounced above that channel. However, the information I gained last night suggests it may be close to topping out for this very short-term move. It's at 3928.83 as I type, just having hit a two-minute high of 3930.10. I'm just watching the two-minute chart there to gain some experience. We don't have this info on the OEX.

The webinar was presented by the CBOT, and titled "Detecting High Probability Turning Points in the mini-sized Dow Using Volume Spread Analysis." If you see it offered again, you might consider taking it.

Jeff Bailey : 11/4/2005 12:18:09 PM

12:00 Internals found at this Link

Yesterday's Internals found at this Link

Linda Piazza : 11/4/2005 12:16:20 PM

OEX trying again to rise after coming back and retesting the neckline of that inverse H&S on the one-minute chart. Target 561.57.

Jeff Bailey : 11/4/2005 12:10:03 PM

Stunning! ... TASR $7.87 +7.80% ... breaks free of its WEEKLY R2 $7.56 to DAILY R2 $7.68 zone of resistance.

Retracement work has zone from $8.11-$8.40.

Jonathan Levinson : 11/4/2005 12:09:59 PM

The Fed's coupon pass is in the amount of $800M, deliverable Monday.

Jonathan Levinson : 11/4/2005 12:08:57 PM

QQQQ trades sideways below the 72 SMA at 40.00, the short cycle bounce now drifting sideways and directionless. So long as the price holds below the 72 SMA, the intraday cycle bias remains bearish and the short cycle upphase corrective. A break below the session low would set up a quick test of S1 at 39.80, with the 30 min channel bottom 3 cents below it from current levels. Link

Linda Piazza : 11/4/2005 12:07:58 PM

The OEX hasn't made much progress yet toward meeting the upside target of that inverse H&S it confirmed on the one-minute chart.

Linda Piazza : 11/4/2005 12:06:35 PM

TRAN still headed down. It's close to a 90-point drop off yesterday's intraday high, but that webinar I listened to last night suggests that it might be time for a short-term bounce, at least up to the top of today's steep descending regression channel. Beginning as I typed.

Jeff Bailey : 11/4/2005 12:02:56 PM

12:00 Market Watch found at this Link

Jonathan Levinson : 11/4/2005 11:54:23 AM

Bonds are participating in the bounce, TNX down to a 1.3 bp gain at 4.657%, while the 13-wk rate, IRX, holds a 2 bp gain at 3.867%.

Linda Piazza : 11/4/2005 11:55:01 AM

OEX Trade Recap
I am not yet seeing bullish divergence on the advdec line on the 15-minute chart. When I do see it, early in the day or late in the day, that's sometimes a signal to switch sides. However, for some reason when the advdec line begins hugging or trading below the Keltner line that's now at -840 at this time of day, it usually hugs it the rest of the day. Not always, but often enough that we should be careful about thinking about switching sides. The same thing happens on the topside days. This is a bit of interpretation here, but I'm still seeing the possibility for more downside. The rest of the position is set at a breakeven (according to the OEX price, but of course that means a loss on the option due to spread and commissions), but if you're nervous, bail out now, because the information really is a little iffy. I've personally taken the partial profit-route.

Jonathan Levinson : 11/4/2005 11:50:42 AM

QQQQ and NQ return to their 72 SMA resistance lines at 40 and 1630 respectively, from higher relative lows.

Linda Piazza : 11/4/2005 11:48:06 AM

The OEX has just confirmed an inverse H&S on its one-minute chart, upside target 561.57.

Jeff Bailey : 11/4/2005 11:44:34 AM

Taser Intl (TASR) $7.70 +5.47% ... picked up some shares yesterday in personal account. I did just sell 3 of the Nov. $7.50 Calls (QUR-KU) against the stock for $0.55.

Was between $0.50 and $0.60 and they were snapped up quickly.

Linda Piazza : 11/4/2005 11:43:57 AM

Advdec line turning down again.

Jane Fox : 11/4/2005 11:43:54 AM

Here is how the VIX, the TRIN and the SPY compare to one another. This is quite bearish. Link

Jonathan Levinson : 11/4/2005 11:42:24 AM

Still no specifics from the Fed with respect to the coupon pass. No amount known yet.

Jonathan Levinson : 11/4/2005 11:41:19 AM

Volume breadth falls back down to -2.31:1 on the NYSE, -1.3:1 on the Nasdaq.

Linda Piazza : 11/4/2005 11:38:05 AM

Equal low test coming up for the OEX, with the previous LOW at 559.17 and with the OEX at 559.42, and testing important support.

Linda Piazza : 11/4/2005 11:37:05 AM

No, the OEX isn't just widening the flag. I had predicated that on the fact that the advdec line hadn't broken through its bear flag, but it has now.

Linda Piazza : 11/4/2005 11:36:30 AM

The OEX just broke down out of its bear flag climbing off the low or the day, or else it's just widening the flag. I'd bet on that possibility for now, thinking there might be a retest of 560.21-560.27, at least. Maybe not, though.

Jeff Bailey : 11/4/2005 11:29:42 AM

Dell Computer (DELL) $29.70 -0.06% ... continues to depress!

You think a bull could catch a KLA-Tencor type break? No way it seems.

Jonathan Levinson : 11/4/2005 11:27:46 AM

QQQQ ticks back above 72 SMA resistance at 40.00: Link

Jeff Bailey : 11/4/2005 11:27:21 AM

Taser Intl. (TASR) $7.71 +5.47% ... continues to impress.

Jonathan Levinson : 11/4/2005 11:27:01 AM

The number of people going bankrupt has soared to its highest level since records began in the 1960s, [British] Government figures showed today.

More than 12,000 people in England and Wales were declared bankrupt during the three months to the end of September, nearly a third more than during the same period of the previous year, according to the Department of Trade and Industry.

At the same time the number of people taking out Individual Voluntary Arrangements, under which interest on credit is frozen in exchange for a set amount being repaid each month, nearly doubled to 5,500.

Link

Linda Piazza : 11/4/2005 11:27:42 AM

The OEX's climb off its LOD looks bear flag-like. If you're in a bearish position, snap a Fib bracket on the OEX's decline off the day's high and determine whether you want to weather a test of the important Fib levels, resetting your stops accordingly. A 38.2% retracement lies at 560.47. A 50% retracement is at about 560.87. A 61.8% is at about 561.27. (Note: Sorry, I had the stop wrong and when this post originally appeared thought that would get it. It won't, of course.)

Jonathan Levinson : 11/4/2005 11:24:19 AM

Volume breadth is -2.05:1 on the NYSE, back to +1.15:1 on the Nasdaq.

Jane Fox : 11/4/2005 11:22:16 AM

I certainly would not be thinking long here. Link

Jeff Bailey : 11/4/2005 11:21:55 AM

Corrections Corp. of America (CXW) $43.11 +1.43% ... new 52-weeker on the big board.

Yesterday morning I was swamped with upside alerts on my QCharts. This had to be one of them. (see 11/02/05 "jail break")

Linda Piazza : 11/4/2005 11:20:47 AM

Advdec line isn't mounting much of a bounce here.

Jonathan Levinson : 11/4/2005 11:18:44 AM

The USD's strength today is taking a bite out of gold, making a new low for the decline and losing h&s neckline support: Link

Jeff Bailey : 11/4/2005 11:17:50 AM

11:00 Internals found at this Link

Linda Piazza : 11/4/2005 11:07:13 AM

OEX Keltner outlook: First resistance at 560.24-560.49. First support being tested now, at 559.18. Next and stronger support at 557.59-557.69.

Linda Piazza : 11/4/2005 11:05:09 AM

OEX Trade Recap
Advdec line bouncing for the first time since early this morning. Bears would prefer to see it find resistance at or below about -700. Advdec line now at -1367, QCharts value.

Jeff Bailey : 11/4/2005 11:03:07 AM

11:00 Market Watch found at this Link

Jonathan Levinson : 11/4/2005 10:58:23 AM

QQQQ trades back to 39.89 as the wavelet cycle bounces tries to bite, but the bounce is heavy and vol. breadth holds negative. A failure to regain the 40 level will confirm those overdue intraday channel downphases. Link

Jonathan Levinson : 11/4/2005 10:57:03 AM

Session low for crude oil, -1 at 60.775 just now.

Jeff Bailey : 11/4/2005 10:53:58 AM

U.S. Dollar Index (dx00y) alert 90.82 +0.42% (30-min delayed) .... 52-week high when 90.77 was traded. 30-minutes ago.

Jonathan Levinson : 11/4/2005 10:53:24 AM

TNX is back up to a 2.1 bp gain at 4.665%, IRX up 2.5 bps at 3.872%.

Jonathan Levinson : 11/4/2005 10:52:54 AM

Volume breadth is down to -2.26:1 on the NYSE, -1.29:1 on the Nasdaq here.

Linda Piazza : 11/4/2005 10:52:32 AM

The advdec line continues lower, but now shows extreme levels to the downside. Usually, when that happens, it's often setting up a down-all-day sort of day, but there was an advdec line bounce from these overdone levels on 10/25. Right now, you should be following your bearish positions lower with your stops, by an account-appropriate amount.

Jeff Bailey : 11/4/2005 10:50:34 AM

Sell Program Premium ... DIA $104.81, SPY $121.59, QQQQ $39.86.

Linda Piazza : 11/4/2005 10:50:08 AM

The OEX's important 240-minute 100/130-ema's at 558.14 and 559.50, respectively. It was the breakout above these averages, tested the early part of the week, that led to the retest of the descending trendline off the 9/09 high. Bearish traders need to see the OEX below that 240-minute 100-ema before they're safe from a bounce. The OEX is between them now, at 559.23.

Jeff Bailey : 11/4/2005 10:49:50 AM

Filled alert ... I was filled at $0.10 on the Merck MRK Nov. $27.50 Put (MRK-WY) in personal account.

Jane Fox : 11/4/2005 10:49:09 AM

TICKS -800.

Jonathan Levinson : 11/4/2005 10:49:02 AM

QQQQ - Exit Point Alert -

Out QQQQ at 39.85 +.35

Jeff Bailey : 11/4/2005 10:46:45 AM

QQQQ Option Chain ... intra-day at this Link ... I left options in same sort order as shown earlier.

Linda Piazza : 11/4/2005 10:46:22 AM

OEX Exit Point Alert
Now that our original first target has been hit, reset the stop to entry, at 562.09. Aggressive traders can keep the stop at the original level or reset it to 562.65, just above the HOD.

Jane Fox : 11/4/2005 10:45:57 AM

We had a shaky start today but we are now cooking on all burners. VIX is making new daily highs with each new low in the S&P futures confirming the bearishness.

Linda Piazza : 11/4/2005 10:42:01 AM

OEX Exit Point Alert
If you're a conservative trader and took only partial profit earlier, at 561.08, you might consider taking full profit at 559.70. The 559.50 zone has been long-term S/R for the OEX, and the important 240-minute 100/130-ema's are located just below that. If you're a more aggressive trader who did not take partial profit, I'd advise you consider taking partial profit there. The advdec line is set up for a possible down-all-day kind of day, but there are bulls out there waiting to spike the markets up higher. They've been rewarded for it in the past.

Jonathan Levinson : 11/4/2005 10:41:17 AM

QQQQ comes in for a test of 30 min channel support at 39.90 after breaking the 72 SMA at 39.99. Conservative traders can take a 30 cent gain on the short from 39.20. Because the 30 min cycle is so overbought, I will hold the stop at breakeven for the time being, looking for a 30 min cycle rollover. Link

Jane Fox : 11/4/2005 10:41:01 AM

You can put the Tylenol away now we have a direction. This is the kind of action I really like to see, both AD line and volume either above or below 0 and moving in the same direction. Link

Jeff Bailey : 11/4/2005 10:39:04 AM

NASDAQ-100 Bullish % ($BPNDX) Link ... did reverse back higher to "bull confirmed" with yesterday's action.

Linda Piazza : 11/4/2005 10:38:24 AM

Advdec still headed down, bullish divergence or not.

Jonathan Levinson : 11/4/2005 10:37:52 AM

Nasdaq volume breadth goes negative, -1.1:1 here.

Linda Piazza : 11/4/2005 10:37:10 AM

The TRAN has traded sideways out of its rising regression channel off last Thursday's low. It's being tentatively supported at the 19.1% retracement of that climb, with that at about 3945.54 if I've anchored the Fib bracket correctly. The TRAN needs to drop below that to avoid the impression that it might be trading sideways prior to rising along the underside of that rising regression channel. TRAN at 3944.36 as I type. Many have been watching the TRAN, treating its rise as a sign that markets are going to rally due to its "leading" index status. We need it to continue to drop today to help our bearish play.

Jonathan Levinson : 11/4/2005 10:36:56 AM

The Fed announces a coupon pass, no amount yet- this is equivalent to a permanent repo, adding to its dealers' reserves on a permanent basis.

Jeff Bailey : 11/4/2005 10:37:28 AM

Amgen (AMGN) $79.17 +2.12% Link ... tests its 50-day SMA. Gets a triple top buy signal at $79.00.

Linda Piazza : 11/4/2005 10:32:38 AM

OEX Exit Point Alert
Partial profit taken at 561.08. I was seeing bullish divergence on the advdec line as it tested one key support level, but just a little nervous about a spike out of nowhere. I'm keeping the stop for the rest of the position at 563.55 for now.

Jonathan Levinson : 11/4/2005 10:31:13 AM

Volume breadth is -1.4:1 on the NYSE, +1.5:1 on the Nasdaq.

Linda Piazza : 11/4/2005 10:31:12 AM

OEX Exit Point Alert
Don't wait to take partial profits. Take them here, with conservative traders exiting the whole position.

Jonathan Levinson : 11/4/2005 10:29:10 AM

A wavelet bounce is due within the broader short cycle downphase that has kicked off from the high. A lower high on that little wavelet upphase would confirm a top in the short cycle and set us up for a 30 min, 60 min and possibly daily cycle downphase, depending on where the intraday cycles eventually bottom. Or, bullishly, the wavelet bounce here will take us to new highs for the day, and resume the intraday cycle trending moves in overbought territory. Link

Linda Piazza : 11/4/2005 10:25:50 AM

Advdec is heading down again.

Linda Piazza : 11/4/2005 10:24:22 AM

The OEX has also been testing daily Keltner resistance at 561.67 on daily closes.

Jeff Bailey : 11/4/2005 10:22:20 AM

10:00 Internals found at this Link

Linda Piazza : 11/4/2005 10:22:16 AM

Advdec line approaching next support at about -500, with the advdec line currently at -349. If there's a bounce, we want the advdec line to stay beneath about +350.

Jonathan Levinson : 11/4/2005 10:20:40 AM

QQQQ - Stop Loss Adjustment Alert -

QQQQ short from 40.20, move stop to even

Linda Piazza : 11/4/2005 10:20:18 AM

Advdec line doing fine for our bearish play.

Linda Piazza : 11/4/2005 10:19:31 AM

OEX Exit Point Alert
Take partial profit at 559.70 if tested. Conservative traders should take full profit there.

Linda Piazza : 11/4/2005 10:15:39 AM

The OEX has a potential inverse H&S at the top of its climb. I know it's there and I'm watching it, and what we want to see now is for the OEX to fall beneath about 561.50.

Jane Fox : 11/4/2005 10:15:06 AM

The VIX is supporting the bearishness with new daily highs.

Linda Piazza : 11/4/2005 10:14:23 AM

I agree with Jane that it might be a nerve-wracking day. The advdec line still has plenty of room to fall, though, and we're going to hope it does. So far, it's finding resistance where we want, but now testing support.

Jane Fox : 11/4/2005 10:14:06 AM

Now we are getting some traction both AD volume and AD line are starting to fall and both are making new daily lows.

Linda Piazza : 11/4/2005 10:12:53 AM

OEX Trade Recap
Advdec line still finding resistance where we most want to see it find resistance.

Linda Piazza : 11/4/2005 10:10:45 AM

TRAN breaking down out of the latest and steepest ascending regression channel that began forming Thursday.

Jonathan Levinson : 11/4/2005 10:10:39 AM

QQQQ holding below R1 following an upper 30 min channel breach- stop just above and hopefully not too tight. Link

Linda Piazza : 11/4/2005 10:09:29 AM

OEX Entry Point Alert
Entry was made at OEX 562.09.

Jane Fox : 11/4/2005 10:09:24 AM

AD volume and AD line are both back above 0 and AD volume making new daily highs. This all very suspect though because they are basically gyrating around 0. Like I said this is going to be a Tylenol day.

Jonathan Levinson : 11/4/2005 10:09:03 AM

QQQQ - Entry Point Alert -

Short QQQQ at 40.20 stop 40.26

Linda Piazza : 11/4/2005 10:08:23 AM

OEX Entry Point Alert
Enter a bearish OEX trade here. Stop 563.55. We'll know soon if it's a bad entry.

Jonathan Levinson : 11/4/2005 10:06:59 AM

This slow rise on strong volume has pulled up all intraday cycle channels. The 72 SMA is up to 39.92. The short cycle upphase from yesterday's close has grown toppy, but possibly trending if the price can hold current levels.

Linda Piazza : 11/4/2005 10:05:31 AM

Advdec line still trying to climb.

Jeff Bailey : 11/4/2005 10:05:19 AM

10:00 Watch found at this Link

Linda Piazza : 11/4/2005 10:02:47 AM

Advdec line trying to climb again.

Jane Fox : 11/4/2005 10:01:53 AM

The markets are going to be giving us all a headache this morning so break out the Tylenol now.

Jane Fox : 11/4/2005 9:58:47 AM

Both AD volume and AD line are now making new daily lows and are below 0, this is quite bearish.

Jonathan Levinson : 11/4/2005 9:54:52 AM

Volume breadth goes neutral-negative on the NYSE, -1.07:1, and holds at +1.73:1 on the Nasdaq.

Jonathan Levinson : 11/4/2005 9:53:56 AM

A 6-day 3.25B repo drains net 2.25B, but demand was lighter by 1 bp with the stop out rate falling to 3.96.

Jane Fox : 11/4/2005 9:52:46 AM

The VIX is supporting each new low ES makes with a new high. Certainly looks like the bears have the reins this morning.

Linda Piazza : 11/4/2005 9:51:07 AM

Advdec line trying to rise again. I don't know why I haven't felt comfortable acting on the advdec line's action this morning, because resistance clearly held on first test, but I haven't yet.

Jonathan Levinson : 11/4/2005 9:50:58 AM

30 and 60 min channel resistance line up currently at 40.10 QQQQ. Link

Linda Piazza : 11/4/2005 9:49:52 AM

The TRAN is at the bottom of the steep rising regression channel that it began building last Thursday, with support at about 3953 and with the TRAN currently at 3954.59, but having dropped all the way to the bottom of that channel. Watching to see what happens with the TRAN, perhaps key to the short-term behavior of the other markets, too.

Jonathan Levinson : 11/4/2005 9:48:44 AM

The Fed has yesterday's expiring 5.5B overnight repo to address in the next ten minutes. The yield curve is flatter this morning, with the TNX down 2 bps at 4.624%, and IRX up 2 bps at 3.867%.

Linda Piazza : 11/4/2005 9:46:47 AM

I'm back. Advdec line still shows that resistance is holding.

Jonathan Levinson : 11/4/2005 9:46:47 AM

QQQQ is fading off its 40.08 high, not net stalling the short cycle upphase and testing round-number support at 40. The 72 SMA is up to 39.90, the 30 min channel still bullish. Link

Linda Piazza : 11/4/2005 9:41:33 AM

I'm having some computer difficulties this morning, and am switching computers while I run a virus scan on this one. I'll be booted up again in a few minutes.

Linda Piazza : 11/4/2005 9:40:53 AM

I think there's a definitive possibilility for a pullback this morning, but it's just not setting up clearly according to my methodology. The advdec line did hit that former support and it's turning back now, but may find support near today's low now. The first five-minute SPY candle's action with respect to volume did show a possibility of a pullback, too, according to the webinar I attended yesterday, but I'm far from practiced enough to trade based on that.

Linda Piazza : 11/4/2005 9:37:41 AM

I'm watching the SPY versus volume this morning to help give me some clues as to what's happening, and it's suggesting that just like yesterday, at the five-minute swing high at about 2:05, there's not much professional interest in the SPY at its currently level.

Jeff Bailey : 11/4/2005 9:37:25 AM

I'd be a buyer of the QQQQ at $38 too Marc. Problem is.... I don't think you're going to see it! Not for the rest of the year anyway.

Jonathan Levinson : 11/4/2005 9:37:05 AM

Pricewise, QQQQ is in a window for a short, breaking upper rising 30 min keltner resistance. But it's on a slow climb, and the TICKQ is moderate at +128. In other words, the move doesn't look like a panic spike to be obviously faded, although it could well reverse from this test of yesterday's high at resistance. Link

Linda Piazza : 11/4/2005 9:35:46 AM

Advdec line still rising, up through what should have been support and may now be resistance, up to about 1460, with the advdecline now at 852. Watching to see what happens next, but no clear clue. If you carried over a bearish position from last night, I'd advise adhering to your account-specific stops because there's not a clear setup here either direction. This former support may hold as resistance, but it may not, either.

Linda Piazza : 11/4/2005 9:32:23 AM

I'm watching the advdec line closely as it rises to retest what should have been key support.

Linda Piazza : 11/4/2005 9:31:34 AM

OEX bounces, with next Keltner resistance at 562.55 on a five-minute chart, 563.52 above that.

Jonathan Levinson : 11/4/2005 9:31:02 AM

Volume breadth is +1.36:1 on the NYSE, +1.86:1 on the Nasdaq at the open.

Linda Piazza : 11/4/2005 9:30:53 AM

Advdec line opens below key support, perhaps headed up to retest it.

Jeff Bailey : 11/4/2005 9:28:48 AM

Program Trading Levels for Friday ... HL Camp & Company has their computers set for program buying at $+3.85 and set for selling at $+1.35.

Jonathan Levinson : 11/4/2005 9:27:19 AM

Agree, Marc- although resistance is certainly a lot thinner than put support at 39, 38... and 37 and 36, for that matter. On a contract basis, support far outweighs resistance. Link

Jonathan Levinson : 11/4/2005 9:16:37 AM

Marc, that's the 30 min channel top currently. A failure at that level would result in a bearish divergence on the 30 min cycle if it breaks the premarket low at 39.92: Link

Jonathan Levinson : 11/4/2005 9:00:06 AM

Ten year note yields have fallen back into yesterday's range, down 2.4 bps at 4.62%. IRX holds a 1 bp gain at 3.857%.

Jane Fox : 11/4/2005 8:50:25 AM

Dateline WSJ U.S. payroll employment resumed climbing during October in the wake of the hurricanes, but the weak gain was less than half what Wall Street expected.

Non-farm payrolls increased by 56,000 jobs after an upwardly revised 8,000-job decrease in September, the Labor Department said Friday. The unemployment rate slipped to 5.0% last month, down from September's 5.1%. There were 150.1 million in the U.S. labor force last month, with 7.4 million of those out of work. Economists surveyed by Dow Jones Newswires and CNBC had called for an increase of 124,000 jobs and a 5.1% unemployment rate.

Linda Piazza : 11/4/2005 8:48:14 AM

Yesterday, the OEX pierced the descending trendline off the September 9 high and the daily 100/130-ema's, but it couldn't remain above that trendline. It ended the day below that trendline, the 61.8% retracement of the decline off that trendline and the 130-ema. It ended the day a few cents above the daily 100-ema at 561.18, with the OEX closing at 561.40. That looks more bearish than bullish.

However, the OEX did end the day slightly above the midpoint of the day's range, and above the 50% retracement of that decline off the 9/09 high and above the regression channel in which it had been rising off the October low. It also ended the day above the 240-minute 100/130-ema's. That's more bullish than bearish.

It pierced the 200-ema at 561.35, but fell back to close only a nickel above that, not a convincing penetration of that moving average. It touched the ascending average off the April low, broken through in early October, for the first time, with that trendline at the day's high exactly, and then the OEX fell back. That looks like a goodbye kiss, and it's more bearish than bullish.

I "attended" a CBOT webinar after the close yesterday, and the topic was the relationship between volume and price spreads or the range. Unfortunately, we don't have that volume to compare the OEX's behavior, and I'm not sure that the OEF, the Ishare S&P 100, has enough volume that it's a good proxy. However, I looked at the QQQQ, showing really big volume but a closing well off its HOD; the SPY, volume above that of the previous two days, with a narrower range. If I understood the seminar correctly, the QQQQ's action was likely showing that professionals were unloading to retail traders, and the SPY's, a similar action. The bigger volume showed that professionals were active in the market and the price action, that the price didn't move much, so that there was plenty of supply and the professionals were unloading it to retailers.

Please remember that listening to one webinar doesn't make me an expert on this, and the point was made that prices on an upward swing have some momentum and might carry higher for a while after you see signs that professionals are unloading their shares. However, gather all the evidence, and the OEX's action could be deemed neutral to perhaps slightly bearish. So we're going to have to see what happens today, but I'll look for the possibility of continued downturns through that descending trendline off the September 9 high, or for strong evidence that the OEX is going to punch through it and stay above it.

Jonathan Levinson : 11/4/2005 8:40:53 AM

Equities are reversing up here, QQQQ up 6 cents at 40.00. The move this morning is turning the 30 min cycle back up, an early abort to yesterday afternoon's downphase. The afternoon drop was too shallow to kick off a 60 min cycle downphase, still trending in overbought. The move is drilling the short cycle upward, midway through an upphase. The intraday bias is bullish above the 72 SMA at 39.88. Link

Jonathan Levinson : 11/4/2005 8:32:51 AM

Ten year note yields pulled back to a 1.3 bp gain at 4.657%, QQQQ is down 2 cents at 39.92, but the reaction has been muted overall, even as the data was being released.

Jonathan Levinson : 11/4/2005 8:31:51 AM

Headlines:

U.S. OCT. NONFARM PAYROLLS UP 56,000 VS.102,000 EXPECTED

U.S. OCT. JOBLESS RATE FALLS TO 5.0% VS. 5.1% EXPECTED

U.S. OCT. EX-KATRINA JOB GROWTH BELOW TREND: BLS

U.S. OCT. AVERAGE HOURLY EARNINGS UP 0.5%

U.S. OCT. AVERAGE WORKWEEK STEADY AT 33.8 HOURS

U.S. OCT. MANUFACTURING JOBS UP BY 12,000

U.S. OCT. PRIVATE-SECTOR SERVICES SHED 3,000 JOBS

U.S. AVERAGE HOURLY WAGES UP 2.9% Y-O-Y, MOST IN 2 YEARS

U.S. OCT. RETAIL SECTOR LOSES 5,000 JOBS

Jonathan Levinson : 11/4/2005 8:22:17 AM

Session low for YM here, QQQ down to unchanged at 39.94 and TNX quoted +2.3 bps at 4.669%.

Jonathan Levinson : 11/4/2005 8:14:35 AM

Ten year notes (ZN5Z) are at a new low for the move and a new multiweek low. Volume-based chart at this Link . On the daily TNX chart Link we see the upside trending move in the TNX showing now sign of weakness, with this break violating a 4-year declining resistnace line on the weekly chart. Link . While a bounce in the bond, pullback in the yield is due, the longer term view is suggesting a potentially important reversal in the direction of the yield. Following Ferguson's comments earlier this week, it could mean that the Fed is serious about fighting inflation, following up its words with actions already impacting the bond markets (weak) and the US dollar index (strong).

Jonathan Levinson : 11/4/2005 7:34:30 AM

Equities are lightly lower, ES trading 1222.5, NQ 1627.5, YM 10535 and QQQQ +.02 at 39.96. Gold is up .30 at 462.30, silver down .031 at 7.592, ten year notes -5/64 at 107 43/64, crude oil -.675 at 61.10, and natgas -.215 at 11.475.

We await the 8:30 release of the Employment Report, with nonfarm payrolls est. +100K, the unemployment rate est. 5.1%, hourly earnings est. .2% and the average workweek est. 33.7.

Linda Piazza : 11/4/2005 6:49:20 AM

Good morning. The Nikkei topped 14,000 last night, and most other Asian markets gained, too. European markets are mixed, however. As of 6:44 EST, spot gold was higher by 0.70, to $461.00, and crude, lower by $0.55, to $61.23. Our futures were near the flat-line, trading straight across the chart in a narrow range that widened only a little as European markets opened. More details about Asian and European markets follows in succeeding paragraphs.

With investors determined to the see Nikkei reach 14,000, the Nikkei opened and hit a 14,099.49 high within the first few minutes of trading. It reached another more-than-four year high and may have temporarily punched the Nikkei above a descending trendline off the late 1989/early 1990 high. It closed a little off that day's high at 14,075.96, up 181.18 points or 1.30%. Exporters such as Canon, Toshiba and Advantest gained, with Toyota Motor Company leading the bunch in early trading. However, the company reported after the close and missed expectations, so may give back some gains Monday. Financials gained.

Most other Asian markets gained, too. The Taiwan Weighted rose 0.92%, and South Korea's Kospi climbed 0.33%. Singapore's Straits Times rose 0.49%, but Hong Kong's Hang Seng declined 0.11%. One article speculated that interest-rate jitters may have led to this bourse's decline since it was interest-rate-sensitive issues that drove the index down. China's Shanghai Composite gained 0.44%.

European markets are mixed. Violence continued in poor Paris suburbs last night. The Eurozone's September PPI rose 4.4% year over year, 0.5% for the month, meeting expectations, and mainly driven higher by energy costs, which have decreased since September. September's unemployment declined to 8.4%, a surprise decline. In Germany, September's manufacturing orders data beat expectations. Some political focus attends to the EU Commission and its likely efforts to chastise Turkey for not enacting needed political reforms before membership, but with some new member states not so anxious to adopt the euro as they had been earlier.

Unlike in Japan, European automakers decline after yesterday's rise in crude prices. Oil majors climbed. British Airways PLC fell after its earnings report, and German sportswear maker Puma rose after its report.

As of 6:39 EST, the FTSE 100 was higher by 3.90 points or 0.07%, at 5,435.80. The CAC 40 was lower by 13.62 points or 0.30%, at 4,488.40. The DAX was lower by 12.22 points or 0.24%, at 4,998.78.

Market Monitor Archives