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OI Technical Staff : 11/25/2005 9:59:59 PM

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Linda Piazza : 11/25/2005 1:00:10 PM

I'm going to take off now, a couple of minutes before the close. If you read my first OEX-related update this morning, you know what I expected, either a candle indicating indecision or an actual pullback. We're getting the indecision version, with the final verdict on the pullback delayed until next week. The SOX looks as if it's going to end the day just above the 483.30-ish current level of the descending trendline off the summer's high, but that's not a surprise given the nature of today's trading, and I wouldn't give too much credence just yet to a possible close above that trendline. Today's small candle and small range doesn't give too much validation of that close. The TRAN looks as if its H&S forming since Tuesday remains viable, so we have some things to watch for Monday.

Linda Piazza : 11/25/2005 12:53:05 PM

The TRAN did perhaps drop quickly enough that it hasn't yet invalidated that H&S formation. If you look at the TRAN on a 15-minute or longer-interval chart, that formation still looks viable, although the climb looks a bit too high on the 1- and 3-minute charts. There won't be time to confirm that formation today, even if it's going to eventually be confirmed, although there's still time for an invalidation. This is nothing new, but just what I've been saying all day.

Linda Piazza : 11/25/2005 12:50:33 PM

If the Dow should drop below 10,910.25, it will have confirmed a double-top formation on intraday charts, with the two highs Wednesday's and today's. I'd be surprised if "they" let that happen this afternoon in the next few minutes before the close, but it's possible.

Linda Piazza : 11/25/2005 12:46:42 PM

Even if QCharts hadn't decided that we all needed a holiday from the markets today and not printed today's values, I would have been hesitant to call any plays, as I mentioned this morning. The OEX had a couple of nice moves, one down and then one higher, but the range has been from a low of 582.01 to a high of 584.00, so that there was no "middle chunk" to trade. You would have had to be right on the money with exist and entrances to profit. This small-bodied candle is indeed indicative of indecision, but probably more indicative of what we could expect from a holiday session. The day isn't over yet, and the OEX is currently dropping below that trendline again, so it's possible that the range could change before the close, but the action is about what could be expected for the Friday after Thanksgiving.

Linda Piazza : 11/25/2005 12:40:00 PM

The SPX still follows that rising trendline off the 2:00 swing low on 11/22, but on the underside, and the OEX still follows an analogous trendline, but on the topside.

Jane Fox : 11/25/2005 12:39:21 PM

Just one glance tells you the whole story. Link

Linda Piazza : 11/25/2005 12:35:22 PM

Unless there's a quick reversal on the TRAN that leaves only a candle shadow at the current level, it's about to invalidate its H&S forming since Tuesday. The TRAN currently just tested a descending trendline off Wednesday's high, pulling back slightly from that. It's at 4185.79 as I type.

Linda Piazza : 11/25/2005 12:31:50 PM

The RLX has recovered off the morning's lows, climbing since about 10:30 and now between a 50% and 61.8% retracement of the day's range. Still could be a bear-flag climb.

Linda Piazza : 11/25/2005 12:28:51 PM

The TRAN is rising further into the 4180-4185 level appropriate for a H&S that's been building since Tuesday. It's possible, as I've said all day, that bulls could run this up into the close and invalidate the formation. TRAN at 4184.77 as I type.

Linda Piazza : 11/25/2005 12:25:05 PM

The SPX still looks less strong (I'm deliberately not using the word "weaker.") to me than the OEX. It's trading below that rising trendline off the 2:00 swing low on 11/22, rather than holding to it most of the day, as the OEX had done. (The OEX has broken below its analogous trendline a few minutes ago, but has since popped back above it.) Now on this current swing high, the SPX is so far showing bearish divergence with the 11:45 high, at least up through the five-minute chart, and at least tentatively. That rising trendline now crosses at just a touch under 1269, with the SPX at 1268.44 as I type.

Linda Piazza : 11/25/2005 12:21:27 PM

If the SOX hasn't invalidated that little H&S on its one-minute chart, it's certainly coming close to doing so now. It would take a quick decline below 483.50 to confirm it. SOX at 484.22 as I type, and looking more like an invalidation of that formation.

Jane Fox : 11/25/2005 12:20:09 PM

When these two look like this it means the bulls have the reins and you should not even think about shorting. Buy who is trading today anyway? Link

Linda Piazza : 11/25/2005 12:18:41 PM

The TRAN just flattens between a 50% and 61.8% retracement of the day's range, and under the 4180-4185 right-shoulder level for a potential H&S building since Tuesday. I thought earlier that we weren't like to see a confirmation today, both because of the bullish tendencies on a day like today and because I think time would run out before the TRAN would have time to roll down into the right shoulder, if that right shoulder is to be at all symmetrical to the left. I do, however, think there might be time to run the TRAN up into the close, if the bulls have the strength to do that, and invalidate the formation. As I said earlier, that might ultimately be a help for the bears because it might be a last dash toward a price magnet and likely strong resistance. The TRAN is at 4178.34 as I type, up 2.26 points.

Linda Piazza : 11/25/2005 12:13:55 PM

There's a little H&S possibility now on the SOX's 1-minute chart, neckline at about 483.60, if I've drawn it correctly. The SOX is at 483.89 as I type, in the right-shoulder level. A climb too much above 484-484.15 would tend to invalidate the formation.

Linda Piazza : 11/25/2005 12:08:27 PM

For the third day in a row, the SOX has punched above a descending trendline off the summer's high, with that trendline crossing now at about 483.20, if I've drawn it correctly. Both Tuesday and Wednesday, the SOX fell back to or below that trendline by the close, leaving only candle shadows above it. As I type, the SOX is at 483.64, just above that trendline, but still below both Tuesday's and Wednesday's highs.

Linda Piazza : 11/25/2005 11:54:55 AM

The TRAN moved straight toward that 4180-4185 level that marks the most appropriate level for a right shoulder for the potential H&S seen building since Tuesday, but it's now back at 4177.00, still within striking distance of either an invalidation of that formation or a confirmation.

Jane Fox : 11/25/2005 11:47:36 AM

TICKS +800 and AD line and volume took a huge jump upwards.

Linda Piazza : 11/25/2005 11:46:58 AM

The TRAN is just above the 50% retracement of the day's range, just below the 61.8% retracement, with the TRAN at 4176.53 as I type, and still within the appropriate right-shoulder level for a potential H&S that began building Tuesday. If the TRAN is going to confirm that formation, I'm not sure it will do so today as it might not have time to finish forming the right shoulder, although it's well within its possibility to invalidate the formation.

Linda Piazza : 11/25/2005 11:44:31 AM

The OEX just hit that rising trendline off the 2:00 low on 11/22 and started up again. It's above the 583.01 level that marks a 50% retracement of the day's range and near the 583.24 level that's the 61.8% retracement. The OEX is at 583.25 as I type.

Linda Piazza : 11/25/2005 11:31:56 AM

I've noticed something strange today. While the OEX appears to be clinging to the rising trendline off the 2:00 low on 11/22, staying just on top of that trendline, the SPX appears to be clinging to an analogous trendline, rising along it, but along the bottom of it. That could mean that big caps are outperforming other stocks or it could mean something simple, such as that I've drawn the trendlines wrong.

Linda Piazza : 11/25/2005 11:24:37 AM

The TRAN did rise this morning, but from above the 4163-ish zone, with the rise so far in keeping with a rise into a right shoulder for a H&S forming since Tuesday. I mentioned this possibility earlier today with the right-shoulder level being in the 4180-4185 zone. We've seen the TRAN start these formations and then invalidate them so many times that we absolutely know not to trust them to confirm or to meet any downside targets if they do, but they should still be watched. This is particularly true since volume patterns (high volume on the left shoulder, less on the head, etc.) and bearish divergences show us that this could be a viable formation. They've been showing us that for a long time, but short-term and maybe longer-term, too, market bulls don't want to see the TRAN fall below 4160, with the neckline probably a little higher than that. Bears don't want to see a new high on the TRAN, although ultimately that might help their case, too, if the TRAN goes ahead and charges up to what has for some time appeared to be its final destination. The TRAN is at 4173.41 as I type, down 2.67 points, but well off its low for the day.

Linda Piazza : 11/25/2005 11:13:08 AM

The OEX is following that rising trendline off the 2:00 swing low from 11/22. That trendline now crosses at about 582.80, if I've drawn it correctly, with the OEX at 583.05 as I type.

Linda Piazza : 11/25/2005 11:11:12 AM

RUT coiling up again.

Linda Piazza : 11/25/2005 11:06:18 AM

The RUT may be breaking down from its little bear flag climb, but it hasn't produced a new low yet, and the TRAN steadies near its opening level rather than breaks down from its flaggish-looking climb.

Linda Piazza : 11/25/2005 10:54:57 AM

The RUT is currently bouncing off its day's low, but the RUT has led other indices in breaking below its steepest trendline as it climbed since 11/16. A lower trendline, off the actual low on that day, crosses at about 667 currently, if I've drawn it correctly. The RUT is currently at 681.95, down 1.19.

Jane Fox : 11/25/2005 10:52:12 AM

Geesh the bears were able to force the AD volume and line to new daily lows and below 0 then the bulls said enough and brought them right back above 0. This just goes to show that, although we may think the bears have control at times, the bulls never really let go.

Linda Piazza : 11/25/2005 10:51:12 AM

The trendline that has been bouncing the SPX since 11/16 now crosses at about 1263.80, if I've drawn it correctly, but it's still climbing.

Linda Piazza : 11/25/2005 10:45:20 AM

Wednesday's low for the TRAN was 4161.52, with the TRAN now at 4165.88 and having dipped to 4165.19. If the TRAN should dip toward Wednesday's low, note the potential for another H&S to form on that chart, with a right shoulder rise into the 4180-4185 consistent with a right-shoulder formation. If the TRAN is going to fall, it sometimes dispenses with a right shoulder entirely, but remember the number of times we've seen H&S's set up on the TRAN over the last week, only to see them invalidated. We've seen bearish intentions at work, but not enough bearish strength to send the index lower again. At least not yet.

Linda Piazza : 11/25/2005 10:39:46 AM

QCharts still hasn't decided that we're trading today, so I'm flying half blind with elementary charts only.

Linda Piazza : 11/25/2005 10:39:02 AM

A rising trendline I've drawn as the OEX climbed after 11/16 now crosses at just over 581, so, if the OEX should continue dropping, that should be one place where the OEX could potentially steady, although the 581.80 swing low could serve that purpose, too. The steeper rising trendline off an 11/22 low at about 2:00 now crosses at about 582.50, so is even closer to the OEX's current 582.85 level.

Jane Fox : 11/25/2005 10:29:08 AM

For this bearishness to continue bears want to see the AD line and volume to new daily lows and below 0 ... for all the good it will do today.

Jane Fox : 11/25/2005 10:27:51 AM

Bears getting a little momentum here with the VIX testing new daily highs and AD line and volume falling.

Linda Piazza : 11/25/2005 10:24:17 AM

The RLX is contributing to some weakness, falling this morning below a rising trendline off the 11/16 low.

Linda Piazza : 11/25/2005 10:21:36 AM

TRAN dropping still.

Linda Piazza : 11/25/2005 10:21:20 AM

And almost before I could get that last post uploaded, the OEX was dropping back inside that coil again, dropping down from a near retest of Wendesday's high. Remember my scenario for a possible indecision-type day such as doji or for an actual decline, based on the way the OEX ended the day Wednesday, having pulled back more than 38.2% off the day's high by the close.

Linda Piazza : 11/25/2005 10:18:56 AM

The OEX is breaking above the coil in which it's traded today. Wednesday's high was 584.33, and I have a quote of 583.86 as I type, so not far away from Wednesday's high not. As is typical lately, I see bearish price/RSI divergence on the five-minute chart this morning, as the OEX attempts a retest.

Linda Piazza : 11/25/2005 10:12:27 AM

The SPX and OEX coil, but the TRAN has dropped back from just below its day's high. The TRAN has looked to be forming a broadening formation on top of its climb, seen on its 15-minute chart, with such formations--dare I say--typically topping formations, but with an upside break or downside breakdown difficult to identify since the formations broaden. I've half expected the TRAN to spend this week climbing into the 6220(now)-6275 next likely resistance region this week, although not certain that the TRAN can reach that upper resistance after such a strong climb.

Linda Piazza : 11/25/2005 9:59:36 AM

Keene, I did have QuoteTracker for a while, but stopped using it when I switched brokers. I'll have to see if it has feed from my current broker, too.

Linda Piazza : 11/25/2005 9:58:32 AM

The OEX hasn't yet quite been able to top Wednesday's high, if my broker's rudimentary charts are truthful. I see that the TRAN, at 4185.53 as I type, has been engaged in a test of Wednesday high, too, although hasn't yet topped it.

Linda Piazza : 11/25/2005 9:53:53 AM

The RUT is currently down $0.81, and has dipped today almost to the 581.40-ish level of next short-term support, but if it dips that low, look for a potential climb back toward 683-684. The RUT fell Wednesday beneath its 15-minute 21-ema, an average it had only briefly violated once in more than a week, and it appeared on Friday to be rising to retest that MA.

Keene Little : 11/25/2005 9:53:52 AM

Linda, I highly recommend QuoteTracker for just such a time. They're free but with a $70 annual registration fee you get more data and no ads. They take their feed from multiple sources including IB. I have it running all the time in the background and when QCharts lets me down (which is too often) I simply move over to QuoteTracker. I have no interest in the company but will glady endorse a product that is well worth the money. I consider it my dial-up backup (literally since when I'm on dial-up I prefer the less data intensive QuoteTracker over QCharts).

Linda Piazza : 11/25/2005 9:48:28 AM

Still no quotes on QCharts, but I see from Keene's comment that it's not just me. Needless to say, my comments are not going to be particularly helpful until QCharts gets this resolved, but I'll keep watching, and see if I can tell anything from the numbers themselves, via my broker. I won't have volume information or Keltner charts, unfortunately.

Jane Fox : 11/25/2005 9:41:42 AM

Isn't this fun. A buy program jerked the markets above their overnight ranges but it was not strong enough to sustain the climb and most markets have now fallen back into their respective ON ranges. YM is the exception and is still above ON range.

Linda Piazza : 11/25/2005 9:39:07 AM

I'm changing servers furiously on QCharts, to no avail so far. Everything else is working, but I'm going to close down everything and reboot. I see from my broker that the OEX has bounced up to invalidate that inverse H&S and retest Wednesday's high, but that's about all I can tell. Back soon.

Jane Fox : 11/25/2005 9:37:32 AM

VIX is bearish above its previous day range. AD volume is above 0 but AD line is -146 so I guess I will have to say the bears have the upper hand for now but that could change in a NY minute.

Linda Piazza : 11/25/2005 9:34:04 AM

Problems with charts. Working on it.

Jane Fox : 11/25/2005 9:25:21 AM

While the day after Thanksgiving officially starts the holiday shopping season, it is no longer the busiest shopping day. Last year, it was Saturday, Dec. 18, a week before Christmas. Last year, the Thanksgiving weekend rush accounted for only 9.2% of holiday sales. The busiest week was from Dec. 12 through Dec. 18, which garnered 22.5% of holiday sales, according to the International Council of Shopping Centers.

Jane Fox : 11/25/2005 9:23:38 AM

Dateline WSJ Bargain shoppers, facing frigid temperatures, woke up before dawn and headed to the nation's malls and stores Friday, the official start of the holiday shopping season, hoping to snap up early bird specials on items from toys to digital music players.

In an improving but still challenging economy, merchants are hoping for big crowds to set a positive tone for the entire holiday season.

At a Best Buy Co. store at CambridgeSide Galleria, in Cambridge, Mass., the line of about 400 shoppers snaked through the indoor mall for the 5 a.m. store opening, a scene that was played out across the country. Store staff allowed groups of shoppers inside, about a dozen every minute or so. The opening was orderly, despite some grumbling that not all shoppers were let in at once.

"The prices are much better than last year," said Shirley Xie, who was with Jen Lin, both from Medford, Mass. The married couple said they were enticed by deals such as a $379.99 offer for a Toshiba laptop computer, with a 15-inch screen, after a $370 instant rebate. The offer ended at noon Friday. Xie said a comparable laptop she bought last year as a gift cost about $600. The couple bought a pair of the Toshiba computers as gifts for a niece and nephew entering college.

Jane Fox : 11/25/2005 9:21:43 AM

Dateline WSJ New York Attorney General Eliot Spitzer has decided against pursuing possible criminal charges against former American International Group Inc. Chairman and Chief Executive Maurice R. "Hank" Greenberg in connection with the giant insurer's accounting scandal, a person familiar with the matter said.

Instead, Mr. Spitzer's office is focusing on civil-fraud allegations it lodged against Mr. Greenberg and the company itself in late May, the person said. As part of its focus on the civil suit, Mr. Spitzer's office is expected to amend the complaint as soon as next week to reflect new information, the person familiar with the matter said.

Mr. Spitzer backed off seeking possible criminal charges against Mr. Greenberg in June, the person familiar with the matter said. Mr. Spitzer's retreat from a criminal option doesn't leave Mr. Greenberg home-free, however. Federal prosecutors are in the midst of two separate criminal probes, one headed by attorneys in the Southern District of New York and one at the Justice Department in Washington

Linda Piazza : 11/25/2005 8:36:54 AM

At Wednesday's close, the OEX had retraced more than 38.2% of the day's range, with the daily candle leaving a longer upper shadow behind. The OEX often follows such candles at the top of a steep climb with either an indecision-type candle or a decline, perhaps one that begins to form a 4-6-point consolidation. Those are the two possibilities that we'll look for today. Remember that a candle indicating indecision can be a doji, and a doji is formed by both a punch higher and punch lower, so an attempt at or climb above Friday's higher is not precluded, even if a doji or spinning top or other such candle is to form.

Watch the TRAN. It produced a doji at the top of its steep climb. Its daily chart shows bearish price/RSI divergence going on since early November, while the TRAN has tacked on almost another 200 points. The TRAN has approached what should be strong resistance, shown to you many times, but hasn't quite touched that 4220-4275-ish resistance. That could still be a price magnet, or some may be deciding that the TRAN has come far enough.

Watch the SOX, too. It keeps punching above the descending trendline off the summer's high, but then dropping back beneath it again. That shows some sellers waiting at the higher price, but we don't know how deep the supply is up there. Bulls gapped the SOX higher and have kept it consolidating at the higher prices, so they have obviously been able to match supply with demand so far, but this is a tenuous situation for both bulls and bears, and should one or the other obviously win the battle, the SOX's action might impact other indices, too. If the bears temporarily win the day, look for a possible steadying near the 10-sma.

Today is a short day, with likely low volume, and bonds will not be trading, so there are even more reasons to be cautious than usual. In addition, any who become trapped in an options play today will lose some money over the weekend due to extrinsic price decay. I'm going to be wary of calling any plays under those conditions. I'll probably just be letting you know what I see without calling a specific play.

Linda Piazza : 11/25/2005 6:54:28 AM

Good morning. The Nikkei rose, but other Asian markets were mixed, as are European markets this morning. As of 6:41 EST, gold was lower by $0.60 to $492.30, and crude was down $0.13 to $58.71. More details about Asian and European markets follows in succeeding paragraphs.

Thursday, the Nikkei gapped higher, back above 14,800, but trended down all day. Last night, the Nikkei gapped lower, but then dipped to a rising trendline and rose the rest of the day. It closed higher by 41.71 points or 0.28%, at 14,784.29.

Technology stocks dropped, with Advantest being among those companies seeing stock declines. Financials performed well in early trading, however. Hitachi announced a joint venture with MasterCard Inc. Key Corp. and investment fund Oakhill Venture Partners. According to a Marketwatch.com article, the joint venture hopes to advance the use of the "Multos" operating system in IC-chip-embedded smart cards. Another development included an apparent punishment for some top execs at Fujitsu Ltd., with those having their salaries cut for three to six months after the recent debacle when the the Tokyo Stock Exchange couldn't open on time. Fujitsu was blamed for the incident.

Although a report last night showed that in November, prices in Tokyo fell more than expected, another reported showed that the October nationwide number stopped falling. Core prices were unchanged when compared to last October's prices. Also last night, the government announced plans to use part of a special fund to buy back government bonds, with Japan having the highest ratio of outstanding public debt to GDP in the industrial world.

Other Asian markets were mixed. The Taiwan Weighted gained 0.27%, and South Korea's Kospi rose 0.12%. Singapore's Straits Times dropped 0.46%, and Hong Kong's Hang Seng eased 0.02%. China's government said that it expects GDP growth of 8.6% in 2006, slowing from the previously estimated 9.2%. Estimates for 2007 are for 8.8% GDP growth for 2007, and 8.9% in 2008 and 2009. CPI growth might slip to 1.7% next year, down from this year's 2%, but then rebound beginning in 2007. Also, the country made further steps toward reforming foreign exchange by engaging in a first forex swap deal with local banks. In a future development, Interbank market members will be allowed to trade directly with each other. Also in China, the implied oil demand for October rose 5.4% from its year-ago level, with that number lower than September's climb but still high enough to cheer some watching China's economy. The Shanghai Composite rose 0.14%.

European markets are mixed this morning, with many having seen a down day yesterday after Germany's business confidence number dropped more than had been expected. On a day when retailers will be closely watched in the U.S., the U.K.'s retailer Tesco's earnings results have sent that company's stock and those of other retailers lower. Tesco's sales rose but did not meet forecasts or the growth seen a year earlier. One strong gainer in the U.K. has been British sugar refiner Tate & Lyle, reacting to a E.U. sugar reform that's beneficial to its earnings now and long term. Two bidders for British media buying firm Aegis may have dropped out of the bidding, the WSJ reported, and that company's stock dropped. In other stock-related news, Merrill Lynch upgraded Air France-KLM's rating to a buy rating, and that company's stock gained.

As of 6:38 EST, the FTSE 100 had gained 14.30 points or 0.26%, to trade at 5,525.30. The CAC 40 had gained 3.99 points or 0.09%, to trade at 4,590.83. The DAX had lost 1.40 points or 0.03%, at 5,186.58.

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