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Jeff Bailey : 12/3/2005 12:26:07 AM

Pivot Matrix for Monday found at this Link

Pivot Matrix for the week of 08/01/05-08/05/05 at this Link

NASDAQ Summation Index ($NASI) 10-point box at this Link

7=July, 8=August, 9=September, A=October, B=November, C=December

NYSE Summation Index (NYSI) 10-point box Link

Jeff Bailey : 12/2/2005 10:10:06 PM

Closing U.S. Market Watch found at this Link

OI Technical Staff : 12/2/2005 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The Market Monitor has been archived.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 : 12/2/2005 9:49:20 PM

Closing Internals found at this Link

Jeff Bailey : 12/2/2005 9:41:39 PM

Current OPEN MM Profiles found at this Link

Today's Activity ... Swing trade bullish stopped on the remaining Goldcorp (GG) long at $20.75. ($+1.05, +5.33%)

Linda Piazza : 12/2/2005 3:51:57 PM

End-of-day and end-of-week decisions: Barring a strong thrust or strong decline, the OEX looks as if it might end the day somewhere near the top of that broadening formation again. If it violates that formation by just a little at the close, I would discount that violation a bit, as it's probably just shorts covering. However, that's a dangerous assertion in today's climate and with a potential inverse H&S with a neckline along that broadening formation's upper resistance. Without a big move either direction, you're going to have a difficult decision as to whether to hold either bullish or bearish positions. The presence of the potential inverse H&S suggests that bulls are trying here to break the OEX higher. The presence of the broadening formation shows that action is disorganized and perhaps emotion-based.

There's no evidence either way that I can find, so you're going to have to make decisions based on your own account-management style. If in bullish plays, I would not do anything that risks letting gains turn into losses. Consider partial profits at least, and full if you don't have enough of a cushion to weather the weekend's premium decay and then still get yourself out Monday with a profit if the OEX starts to head down. If in bearish positions, you likely don't have any cusion at all unless you're in a longer-term position you've been carrying for a while. Don't hold a bearish position over the weekend if you have too much at risk in that play.

Jonathan Levinson : 12/2/2005 3:44:52 PM

QQQQ daily chart at this Link with price glued to the upper rising resistance lines, the daily cycle sell signals stalled at the top.

Linda Piazza : 12/2/2005 3:42:51 PM

Advdec line at a new high for the day, QCharts value.

Jonathan Levinson : 12/2/2005 3:42:34 PM




Linda Piazza : 12/2/2005 3:42:22 PM

VIX fell again. Big surprise. At 10.98, it's just off its 10.95 low of the day.

Jonathan Levinson : 12/2/2005 3:42:15 PM

QQQQ has 30/60 min channel confluence lined up at 42.13: Link . However, these are no longer overbought cycles- far from it- and there's room for the channels to climb so long as price holds above the 42.01 72 SMA.

Linda Piazza : 12/2/2005 3:40:29 PM

Market on close orders in a few minutes. Although I don't have the (expensive) feed that tells us what those are, be aware that they could give us an initial bias for the last few minutes of the day. Any guess what that might be? Seriously, I don't know what that might be, but there's only been one direction most of the time lately.

Linda Piazza : 12/2/2005 3:37:19 PM

The OEX tests, once again, three-minute Keltner resistance, trying to break above it as I type on the new three-minute bar. So far that resistance had been holding. Next resistance at 580.14, and then at the top resistance of the broadening formation.

Linda Piazza : 12/2/2005 3:34:15 PM

SOX attempting a bounce from that 15-minute Keltner support I've been mentioning. Until the SOX breaks below that, strong bounce potential remains. SOX at 505.53 as I type, about to test the top of the small triangle it built on top of the steep climb.

Linda Piazza : 12/2/2005 3:27:55 PM

The OEX again approaches the upper resistance of that broadening formation from which it fell off the 11/23 highs. (How many times am I going to have to type that? Either fall away from it or break through it!) That resistance is at about 580.51 or perhaps just a touch higher. The OEX is also currently testing the three-minute Keltner resistance that held it back earlier today, with that resistance at 579.84 and the OEX at 579.71.

Linda Piazza : 12/2/2005 3:24:29 PM

VIX in danger of confirming a double-top formation, with a drop below 11.03, with the VIX now at 11.05.

Linda Piazza : 12/2/2005 3:23:52 PM

SOX still testing that 15-minute Keltner support from 504.01-504.34, with the SOX at 504.80 as I type. Until the SOX drops below that, it hasn't erased much bounce potential.

Linda Piazza : 12/2/2005 3:22:06 PM

I think the SPX has probably invalidated its H&S on its 15-minute chart, even though it hasn't risen past 1265 just yet (currently 1264.57) unless it turns around quickly and falls steeply.

Jonathan Levinson : 12/2/2005 3:20:45 PM

A big surge of volume for QQQQ just now: Link

Jane Fox : 12/2/2005 3:20:38 PM

Buyers are back TICKS +1000

Linda Piazza : 12/2/2005 3:20:38 PM

TRAN bouncing a little, back up toward the 30-minute 100-ema at 4132.98, with the TRAN at 4131.90. Really, I feel silly reporting these things, because nothing of magnitude is happening yet. On any day of the week other than a Friday, I'd say that we're setting up for another climb into the close just because bears haven't been able to drive prices lower, but I'm not sure how longs are going to feel about carrying over the weekend after so many weeks of gains. What am I saying? Longs feel good about everything right now!

Jonathan Levinson : 12/2/2005 3:15:55 PM

Multiday 15-min chart of QQQQ compressed at this Link with today's flat range succeeding only in relieving what were very overbought readings as of yesterday's close. That's either bullish, or just a delay as the longer cycles roll over. Given that the 30 and 60 min cycles have been declining tractionlessly as well today, I'm leaning toward the bullish side. While the price is overdue for a decline, the fact that it won't occur is an impressive sign of strength.

Linda Piazza : 12/2/2005 3:15:38 PM

The SOX tests potentially strong Keltner support, at 503.98-504.25 on 15-minute closes, with the SOX at 504.77. Until this is broken on 15-minute closes, strong bounce potential remains.

Jeff Bailey : 12/2/2005 3:15:12 PM

03:00 Internals found at this Link

Linda Piazza : 12/2/2005 3:13:48 PM

The SPX has neither invalidated nor confirmed that potential H&S on its 15-minute chart, with a neckline at about 1260.77 currently, but still descending. If the SPX climbs much higher than 1265.00, it will probably have invalidated it, unless it's quickly slapped back. SPX at 1264.26 as I type.

Jane Fox : 12/2/2005 3:13:35 PM

TICKS +800

Linda Piazza : 12/2/2005 3:10:14 PM

The TRAN has not closed below the 30-minute 100/130-ema's, as I reported earlier. Sometimes when I touch my mouse, it rolls into another symbol on QCharts, and that's what happened, I'm guessing. The TRAN still tests those averages, at 4132.88 and 4122.20, respectively. Bears might have felt a lot better if the TRAN had violated those averages. The TRAN is at 4126.30 as I type, still testing, testing.

Jonathan Levinson : 12/2/2005 3:09:05 PM

Volume breadth -1.35:1 on the NYSE, +1.04:1 on the Nasdaq.

Linda Piazza : 12/2/2005 3:04:49 PM

VIX hasn't been able to break above that next resistance, at 11.17-11.21. It's at 11.11 as I type, still well off the day's 10.95 low.

Jeff Bailey : 12/2/2005 3:03:36 PM

03:00 Market Watch found at this Link

Linda Piazza : 12/2/2005 3:02:58 PM

The OEX is doing absolutely nothing. I dialed down in time intervals on my Keltner charts and see that the OEX is hitting the bottom of the five-minute middle-sized channel, now at 478.40, on swing lows, but on swing highs, it's so far only hitting the top of the three-minute middle-sized channel, now at 579.73. I could say that suggests some weakness, but I'm not uttering that word other than to say I'm not uttering it.

Jonathan Levinson : 12/2/2005 3:02:35 PM

A wavelet downphase for QQQQ has dragged price down to the midpoint of the session range and is pulling the short cycle indicators back down. All of this action will either prove to be distribution or accumulation once the volume returns on Monday, and at this point, the intraday cycles are just flapping in the breeze as they would during a run-of-the-mill opex week. Link

Linda Piazza : 12/2/2005 2:58:03 PM

SOX dropping again. Next hurdle for bears is that the SOX needs to drop below 504.16 and stay there through 15-minute closes. SOX at 504.85 as I type, but I expect that support at 504.16 to be potentially strong. Will take a strong downthrust to get through it, likely.

Linda Piazza : 12/2/2005 2:56:32 PM

Last hour soon upon us, and what will it bring? The advdec line is dropping to retest the resistance that it inched above, to see if holds as support, as the VIX bounces more strongly, currently at 11.15. It the VIX keeps climbing, there may be hope for bears, but it's still tentative, and this 15-minute period is far from over. Needs to move above 11.17 at the least and stay there, and preferably above 11.22.

Linda Piazza : 12/2/2005 2:48:42 PM

SOX again dropped to the 15-minute 10-sma, now converging with the 21-sma, with those at 504.95 and 505.17, respectively. SOX at 505.34, having just attempted a bounce, but falling back a little. It certainly looks as if it could press higher again, and that decline below the 15-minute 10-sma has so far meant little. The SOX has not so far produced a new high of the day, however.

Jonathan Levinson : 12/2/2005 2:43:46 PM

Stepping away for 15 minutes.

Linda Piazza : 12/2/2005 2:43:32 PM

Before I could upload that post, the OEX was back below the mid-channel Keltner level, although not far enough below to say it's losing its support yet. There is nothing yet here that can be trusted. The VIX still holds its 15-minute support, but the support slides lower, so that's not intensely consoling to bears just yet.

Linda Piazza : 12/2/2005 2:41:45 PM

The OEX closed above the mid-channel S/R on the 15-minute chart. Once again, a downside target was set and then erased. The OEX had begun rounding over into the right shoulder for that small H&S that I showed earlier--a particularly dangerous spot in a bullish market, because it's one spot from which the bulls sometimes move to invalidate the formation. I'm not sure it's totally invalidated, though, but the OEX would have to fall through the neckline fairly quickly now to keep it as a possibility.

Linda Piazza : 12/2/2005 2:35:58 PM

Potential H&S on the SPX's 15-minute chart. It's just about to climb high enough to invalidate that formation, however, and I'd think a push much over 1265 would do it. It's at 1264.41 as I type. The neckline is currently at about 1260.90.

Linda Piazza : 12/2/2005 2:33:43 PM

The TRAN just closed a 30-minute period minimally below the 30-minute 100/130-ema's, but did so with a doji candle, a potential reversal signal, with a reversal, if it should occur, taking the TRAN higher again. Can't any sign be clear any longer?

Jane Fox : 12/2/2005 2:33:17 PM

First of all the bears had control then the bulls had control then back to the bears. Enough to make your head swim. Right now the wagon has no one at the reins. Link

Tab Gilles : 12/2/2005 2:33:06 PM

United Health Group (UNH) Making a multi year high today. Should make Cramer happy! Link

Linda Piazza : 12/2/2005 2:32:48 PM

The advdec line just closed a 7-minute period minimally above the resistance that's been holding it back all day so far. That's at -865 to -706 currently, with the advdec line now at -618, and we're off to the races again unless there's a quick pullback.

Jonathan Levinson : 12/2/2005 2:28:08 PM

This dull market has price back above the bottom of its range in a bullish wavelet trending move. The short cycle upphase is approaching the top, but a few more cents' upside could provoke a short covering surge as the entire day's range starts to get trapped underwater. 30 min channel resistnace is only at 42.09, but again, the sideways prints could create a springboard if the sellers don't step up soon. Link

Linda Piazza : 12/2/2005 2:25:43 PM

Advdec line now rising into that 7-minute resistance that I mentioned earlier. Advdec line at -853, resistance from -800 to -675.00.

Linda Piazza : 12/2/2005 2:23:46 PM

SOX made it back above that 15-minute 10-sma again.

Linda Piazza : 12/2/2005 2:23:14 PM

I haven't looked at INTC's daily chart for a while. It confirmed an inverse H&S on 11/22 and still has a way to go to meet the projected $28.39 upside target. However, today INTC approaches the gap lower from mid July, beginning to move into that gap now. There was a retest of that gap on 8/03, with a high that day of $27.63 before INTC began the long slide into the November 1 low. Wonder how investors are going to feel about sending INTC too much higher before that mid-quarter update? On 11/28, INTC had a big-volume day with a small range, with the close well off the high of the day. That can be a sign of distribution. That doesn't mean that the overhead supply can't be absorbed, but it could signal caution, because momentum can continue to carry prices higher as there's some distribution. I see a lot of mixed signals here, but then what else is new?

Jeff Bailey : 12/2/2005 2:21:40 PM

Bullish swing trade call option alert for two (2) of the Apache Corp APA Jan $70 Calls (APA-AN) at the offer of $2.40.

APA $67.87 here.

Tab Gilles : 12/2/2005 2:20:18 PM

Novell (NOVL) Here's an old tech stock making a yearly high. Link Link

Linda Piazza : 12/2/2005 2:17:59 PM

INTC approaching the day's high of 27.45 again . . . just hit it and exceeded it by a penny as I typed. Asian market commentators were speaking of tech strength in Asia last night due to enthusiasm over what INTC might have to say in its mid-quarter update next week. Hope it's good.

Jonathan Levinson : 12/2/2005 2:17:38 PM

Maybe bearish-divergences now qualify for "wall-of-worry" status...

Jeff Bailey : 12/2/2005 2:16:39 PM

02:00 Internals found at this Link

Linda Piazza : 12/2/2005 2:16:21 PM

The TRAN still tests its 30-minute 100/130-ema's, with those at 4132.98 and 4121.87, respectively, and with the TRAN at 4124.08. The TRAN spent a comparable amount of time testing these averages on the 30th, only to bounce strongly yesterday morning, so the fact that it's mired in these averages shouldn't be baken as confirmation of weakness just yet.

Linda Piazza : 12/2/2005 2:11:44 PM

Advdec line bouncing again. It may be showing a little more strength with regard to some Keltner lines on some time intervals, but that's tentative as yet. The resistance line that's been holding it back so far today, seen on the 7-minute nested Keltner chart I follow, is higher, now at about -626, but due to move higher if the advdec line bounces up toward it. Advdec line now at -926, and I wouldn't be surprised to see that Keltner line tested. So far, the 7-minute chart shows bearish divergence with each swing higher to test that resistance. Each swing is into a lower high with the RSI making a higher high. Balance that, though, again the bullish divergence on the 15-minute chart on the swing lows.

Jonathan Levinson : 12/2/2005 2:10:04 PM

Ten year note have returned hesitantly to positive, with TNX now down .2 bps at 4.519%, while IRX holds a 1.5 bp gain at 3.892%.

Jonathan Levinson : 12/2/2005 2:08:49 PM

Volume breadth holds at -1.4:1 on the NYSE, +1.1:1 on the Nasdaq.

Linda Piazza : 12/2/2005 2:07:29 PM

SOX still testing that 15-minute 10-sma that had been providing support since yesterday morning, testing it from the underside an dcurrently tring to break through. That average is at 504.93 and the SOX is three cents above that currently, but with the 15-minute period still having a number of minutes to go.

Jeff Bailey : 12/2/2005 2:03:45 PM

02:00 Market Watch found at this Link

Linda Piazza : 12/2/2005 1:56:59 PM

VIX still tentatively holding that Keltner support, the former resistance that I wanted to see it break above. The hold is only tentative, however, with some 15-minute candles with upper shadows. Support from 11.00-11.08 on 15-minute closes, with the VIX at 11.08 as I type.

Linda Piazza : 12/2/2005 1:54:56 PM

Here are some--only some--of the competing formations today, as seen on the OEX: Link

Linda Piazza : 12/2/2005 1:50:04 PM

The OEX hasn't given up testing that mid-channel resistance, former support, just yet. That's at 579.09-579.36 on 15-minute closes, with the OEX currently at 579.20, so in the middle of that resistance zone. You know, there's a potential H&S formation competing with the bigger potential inverse H&S formation and it's all just a mess, showing nothing so much as that bulls are bears are still battling it out.

Jonathan Levinson : 12/2/2005 1:48:40 PM

Volume breadth is -1.35:1 on the NYSE, +1.05:1 on the Nasdaq.

Jonathan Levinson : 12/2/2005 1:47:44 PM

This extended sideways bounce has been sufficient to reverse the short cycle to the upside, but that upphase is now as weak/corrective as the downphase that preceded it. Volume has fallen off a cliff, and it looks like the heavy hitters have already "lit out for the territories." Link

Linda Piazza : 12/2/2005 1:41:56 PM

The SOX's last 240-minute close was minimally above the 240-minute resistance then at 503.64, with the 240-minute close at 504.71. However, it wasn't a particularly convincing breakout because that 240-minute candle left a long upper shadow. Bears need to see the SOX drop back and stay back below that former resistance, currently at 503.71, and preferably below the next support at 501.14 before they gain any comfort at all in this topping-out process. SOX at 504.53 as I type.

Linda Piazza : 12/2/2005 1:33:41 PM

So far, the OEX holds beneath Keltner resistance from 579.04-579.36 on 15-minute closes.

Linda Piazza : 12/2/2005 1:28:55 PM

The TRAN sinks ever so slowly through the 30-minute 100/130-ema's, not having violated them on a 30-minute close, however. They're at 4133.30 and 4121.77, respectively, with the TRAN at 4126.92.

Jonathan Levinson : 12/2/2005 1:28:10 PM

QQQQ's bounce is so far just a wavelet upphase (middle oscillator pane), stalling and just now starting to turn the not-yet bottomy short cycle (top oscillator pane) up. This is all occurring within what should be 30 min and 60 min cycle downphases, and so the bounce should be weak and should fail at lower highs within the declining keltner35 channel. "Should" is operative here, because the action feels entirely unconvincing on this downphase- too slow, too sideways, and too weak given how overbought all these cycles were this morning. Link

Linda Piazza : 12/2/2005 1:25:36 PM

Hmm. What do you know. The VIX has broken above that benchmark resistance I was watching. It's come back down to retest it, and we have to see if that former resistance, from 11.00-11.07, holds as support on 15-minute closes before we get too worked up about bearish possibilities. If that support holds, however, matters look a wee bit better for bears. VIX at 11.10 as I type, with about five minutes to go in this 15-minute period.

Linda Piazza : 12/2/2005 1:22:33 PM

Although the OEX's decline has invalidated the smaller inverse H&S that had been visible on its five-minute chart, it hasn't come anywhere close to invalidating the larger one visible on its 30-minute chart. That one also has a neckline along the top of the broadening formation in which the OEX has been falling away from the 11/23 high. It looks to me as if the OEX would have to drop significantly below 576 in order to invalidate that larger formation.

Broadening formations at the top of climbs are not indicate of stable prices. They're indicative of some disorganization and perhaps some emotion-based trading. However, we saw another such formation--a well-formed diamond on the TRAN's weekly chart--get soundly violated to the upside on October 28, and then the TRAN climbed straight up in a vertical path. We can know that sometime in the distant past (smile) these formations were considered bearish, but that doesn't mean we should count on them remaining so now.

Jeff Bailey : 12/2/2005 1:16:23 PM

01:00 Internals found at this Link

Linda Piazza : 12/2/2005 1:14:50 PM

OEX 15-minute Keltner picture: The OEX lost the Keltner support that had been holding it up all day, setting up a potential 577.34 downside target. It did the samething yesterday morning, however, lowing that mid-channel support and setting up a downside target then even lower, but that target was never approached. As I type, it looks a if the OEX is headed up to retest the failed support to see if it holds as resistance. It's from 579.11-579.41 on 15-minute closes. It looks stronger than it did yesterday, so there's at least an even chance that it will hold as resistance now.

By the way, this dip invalidated the smaller inverse H&S, the one visible on the five-minute chart and with the neckline at the top of the broadening formation in which the OEX has been falling away from the 11/23 high. Strike one for the bulls, but they're far from being struck out yet.

Linda Piazza : 12/2/2005 1:10:48 PM

SOX rising now to test that 15-minute 10-sma from the underside, with that average at 505.07 and the SOX currently at 504.45. I caution that this is just the very shortest-term signal for a change in trend, and nothing that you can use to say, yes, the SOX is headed down now, and we're going to see a deep correction.

Like Jonathan, I'm still cautious about the pullbacks as they look corrective. The advdec line's bullish divergence also warns not to trust them too much.

Jonathan Levinson : 12/2/2005 1:07:50 PM

QQQQ daily chart update at this Link

Linda Piazza : 12/2/2005 1:06:08 PM

The advdec line is lower, but the 15-minute RSI is not--it's higher. That bullish divergence. Lately, bullish divergence has mattered a whole lot more than bearish divergences, so be careful with your bearish conclusions.

Often, once advdec line Keltner resistance (or support) has been maintained this long in the day, markets tend to continue the way they started--sort of sideways down this morning--but I've seen a few afternoon reversals.

Jonathan Levinson : 12/2/2005 1:05:10 PM

Crude oil holds green, down to a .35 gain at 58.825 from earlier high of 59.275. Ten year note yields are down to .4 bps at 4.525%, IRX up 1.3 bps at 3.89%.

Jeff Bailey : 12/2/2005 1:05:05 PM

01:00 Market Watch found at this Link

Jonathan Levinson : 12/2/2005 12:54:48 PM

Session lows for ES and YM. QQQQ is below the 72 SMA and approaches the 30 min channel bottom at 41.85. A break below that level would confirm a dowturn in the 30 min channel: Link

Jonathan Levinson : 12/2/2005 12:52:18 PM

The current dip feels so corrective and so sure to bounce that I'm now doubting my interpretation.

Jeff Bailey : 12/2/2005 12:52:17 PM

Inspire Pharma (ISPH) $4.91 -33.91% Link ... shareholder uninspired after after the FDA denied approval (for a second time) for the company's lead drug (diquafosol), which is designed to alleviate symptoms of dry eye.

Linda Piazza : 12/2/2005 12:47:47 PM

Advdec line testing the day's low, not below it yet, though, according to QCharts.

Jonathan Levinson : 12/2/2005 12:47:20 PM

Volume breadth is weaker at -1.4:1 on the NYSE, -1.07:1 on the Nasdaq.

Linda Piazza : 12/2/2005 12:43:33 PM

The SOX has dipped beneath the 15-minute 10-sma for the first time since yesterday morning, with that average at 505.65 and with the SOX currently at 504.63. We need to see a deeper drop in the SOX to undo the possibility of another bounce, however. I still believe it's likely that the SOX is topping out before a deeper pullback, but that doesn't mean momentum can't carry it a distance higher before it finishes that process.

Jonathan Levinson : 12/2/2005 12:39:48 PM

QQQQQ has broken below it's rising support line, but volume is very slim. In fact, volume has been very slim since 10:50AM- running at a fraction of the rate at which it was running before 10:50: Link

Jeff Bailey : 12/2/2005 12:34:43 PM

Overstock.com (OSTK) $41.25 +7.95% Link ... buyers and sellers continue to battle in this online retailer.

Short interest has grown to a record 7.17 million as of 11/15/05. Average daily volume of 441,671 has a days to cover of 16.23.

Volume brisk today at 820,667 with stock once again challenging its trending lower 200-day SMA Link

Linda Piazza : 12/2/2005 12:21:33 PM

The advdec line has definitely broken below the rising trendline off the day's low, but it hasn't dropped much since doing so, hinting at a possible fake-out move. It needs to drop precipitously and achieve a new low. The SOX is testing that MA that has been supporting it since yesterday morning, slipping a few cents below it. This is the point at which bears have gotten tapped lately, only to see things turn right around and markets get bounced. I'm not so sure it will happen today, but always keep that possibility in mind as it's happened over and over.

Jane Fox : 12/2/2005 12:17:54 PM

AD volume to new daily lows. I would just love the bears to stage a huge attack here and break yesterday's lows.

Jonathan Levinson : 12/2/2005 12:17:47 PM

Stepping away for a few minutes.

Linda Piazza : 12/2/2005 12:17:35 PM

SOX sitting right on the support that's been bouncing it, still not breaking through, though, but not able to bounce much above it despite trying for the last hour.

Jeff Bailey : 12/2/2005 12:17:34 PM

12:00 Internals found at this Link

Linda Piazza : 12/2/2005 12:16:41 PM

Advdec line turning down again, perhaps dipping just slightly below the rising trendline off today's low. Advdec line at -467 as I type.

Linda Piazza : 12/2/2005 12:15:34 PM

Here's how the SOX looks so far today in comparison to the 240-minute Keltner price target and resistance, obviously attempting a breakout, but not quite so obviously able to do it just yet with that upper shadow: Link

Jonathan Levinson : 12/2/2005 12:15:22 PM

Session low for YM, while QQQQ holds its lower rising intraday support line: Link

Linda Piazza : 12/2/2005 12:12:23 PM

Slightly lower low on the VIX, higher low on the 15-minute RSI. That might be suggesting a bounce attempt, but it has to get above the benchmark 11.04-11.13 resistance on 15-minute closes before I get too exited about a VIX bounce.

Linda Piazza : 12/2/2005 12:10:48 PM

The OEX's pattern is still in keeping with the small continuation-form inverse H&S on the five-minute chart, the one with the neckline at the top of the broadening formation, with Keltner resistance just above that, at 580.95 on five-minute closes. Meanwhile, the OEX continues to be squeezed between nearest Keltner support and nearest Keltner resistance on the 15-minute chart. Normally, all those tiny 15-minute candles withupper shadows would not be a bullish thing to see on a chart, but . . .

Jonathan Levinson : 12/2/2005 12:09:05 PM

Volume breadth +1.05:1 on the NYSE, more bullish at +1.75:1 on the Nasdaq.

Linda Piazza : 12/2/2005 12:06:37 PM

SOX bouncing again after trading sideways into that rising MA, the 15-minute 10-sma at 505.43. The SOX is at 506.51 as I type, with the high of the day at 508.34.

Jeff Bailey : 12/2/2005 12:02:36 PM

12:00 Market Watch found at this Link

Linda Piazza : 12/2/2005 11:57:36 AM

Is anything moving or did my charts die? Smile.

Jonathan Levinson : 12/2/2005 11:56:32 AM

QQQQ's 30 min cycle is in a weak/corrective downphase, while the 60 min cycle is on a preliminary sell signal, the 600 min stochastic in a new downphase in overbought territory and the Macd not yet confirming. If the sellers don't appear soon, these corrective downphases would have a good chance of being followed by impulsive upphases. Given the lack of downside price action, it would suggest a strong push to higher highs. Updated QQQQ chart chart at this Link

Linda Piazza : 12/2/2005 11:55:56 AM

BKX rising toward its 10-sma at 104.75, with the BKX now at 104.55. The BIX is a little above yesterday's close, off today's low, with the BIX at 364.27, below a trendline at about 365.40 and the 10-sma at 366.65.

Linda Piazza : 12/2/2005 11:49:56 AM

OEX clinging to mid-channel Keltner support, trading sideways while resistance moves down toward it. The advdec line clinging to first resistance, moving sideways along it. Given recent market activity, this suggests another bounce, but there's just no corroboration of anything today. I could just as easily say that the OEX is finding resistance at first Keltner resistance, at 579.74 on 15-minute closes, and has been doing so since the close of the 10:30 fifteen-minute candle. Or that the SOX attempted a bounce from the support that's been boucning it since yesterday morning, with that support now at 504.94 and the SOX now at 505.40, but that the SOX couldn't get very far and has so far not yet produced a new high of the day. I could mention that the TRAN looks as if it's invalidated the potential inverse H&S on its 30-minute chart, although it's still holding at the 30-minute 100/130-ema's.

Jane Fox : 12/2/2005 11:44:24 AM

Poor readers here I am telling them it is not safe to be short and Marc is telling bulls to be careful, however, that totally sums up the day so far doesn't it.

Jeff Bailey : 12/2/2005 11:42:12 AM

BOT $96.40 +0.66% ... Since IPO, range has been $79.00-$134.50. 38.2% at $100.20.

Jeff Bailey : 12/2/2005 11:40:54 AM

ICE $36.25 +3.54% ... challenges 38.2% retracement of IPO range ($44.21-$31.27).

Linda Piazza : 12/2/2005 11:38:44 AM

Advdec line popped above that first resistance line, the one that had turned it back earlier. It showed bearish value/RSI divergence, however, and now comes back to retest that line, now at about -240, to see if it holds as support now. Advdec line at -208 as I type, QCharts value.

Linda Piazza : 12/2/2005 11:36:43 AM

By the way, the OEX has invalidated that regular H&S visible on its shorter-term charts his morning. It's taken too long to drop down to confirm. Bears still do not have the strength to confirm such formations, although bulls aren't yet displaying remarkable strength, either. There's a large inverse H&S building within the broadening formation, visible on the 30-minute chart, and a smaller inverse one in the right-shoulder zone of the larger one, with the smaller one visible on the 5-minute chart, and with it having a neckline right along that broadening formation's top resistance, now at about 580.88, with Keltner resistance just above that, at 581.01 on five-minute closes. I've learned to hate days when you can see multitudes of contradictory formations, because they're a visual sign of the bear vs. bull fight going on underneath the surface. The competing formations show that it's not yet resolved.

Jeff Bailey : 12/2/2005 11:36:05 AM

Shoes ... NKE $88 +2.83% Link PSS $23.27 +0.60% Link GCO +0.81% Link

Linda Piazza : 12/2/2005 11:30:59 AM

The advdec line never printed a new low and has risen from a higher low to retest the Keltner resistance that turned it back earlier, with that resistance now at about -200, but with resistance extending up to about 745-765. The advdec line is now at -225, and it certainly looks possible to me that it's going to punch through that the bottom line of that resistance band, at least. It's possible but not yet probable.

Linda Piazza : 12/2/2005 11:28:54 AM

The TRAN just isn't making much progress toward confirming its inverse H&S on its 30-minute chart. After failing to push through the 15-minute 100/130-ema's, it's back to testing the 30-minute versions again, with those at 4133.49 and 4121.18, respectively, and iwth the TRAN at 4138.84, just having bounced off the 30-minute 100-ema. The TRAN needs to confirm that inverse H&S fairly soon, or else it will be invalidated because of the time it spend forming that right shoulder. That would indicate that bulls don't yet have enough strength to do so.

Linda Piazza : 12/2/2005 11:26:21 AM

SOX attempting a bounce from Keltner support and also from the 15-minute 10-sma at 504.17. Both have been bouncing the SOX. SOX at 505.71 as I type with a high of 508.34.

Jonathan Levinson : 12/2/2005 11:26:13 AM

Ten year notes have firmed, with TNX down to a .4 bp gain at 4.525%. IRX is up 1.5 bps to 3.892%.

Jonathan Levinson : 12/2/2005 11:23:09 AM

Volume breadth +1.1:1 on the NYSE, +1.7:1 on the Nasdaq.

Linda Piazza : 12/2/2005 11:22:28 AM

OEX 15-minute Keltner picture: The central-channel support continues to hold, with the OEX attempting bounces from that support, down to 579.26 on 15-minute closes. For the last 45 minutes or so, however, first Keltner resistance at 579.80 has also held on 15-minute closes although the OEX has pierced that resistance and then fallen back. It's being tested again as I type, with the OEX currently at 579.78. No outcome determinable at this time, and the RSI is chopping around in the neutral zone. The longer the OEX stays up here near yesterday's high, however, the more frightened bears are going to become and the more emboldened bulls will become.

Jane Fox : 12/2/2005 11:19:18 AM

I'm telling you it is not safe to be short TICKs +800

Linda Piazza : 12/2/2005 11:18:29 AM

The SOX tests support that's held it up since yesterday morning, at 504.22 on 15-minute closes. SOX at 504.65.

Linda Piazza : 12/2/2005 11:17:29 AM

The VIX still hasn't made it above the Keltner resistance that I'm wtching, at 11.14 on 15-minute closes, although it's testing first resistance at 11.10 on 15-minute closes. VIX at 11.09 as I type.

Jeff Bailey : 12/2/2005 11:15:17 AM

11:00 Internals found at this Link

Jane Fox : 12/2/2005 11:15:02 AM

The equity-only put-call ratios did lift off their lows during the correction Link Link If those lows actually remain in place, they would become sell signals. However, our computer projections do not expect sell signals to develop at current levels. Hence, the equity-only put-call ratios remain on buy signals at the current time.

Market breadth has remained relatively positive during this brief correction. For example, on Wednesday, when the Dow was down 82 and $SPX was down 8, advances and declines were roughly equal in "stocks only" and barely negative in NYSE trading. That's a positive divergence.

Finally, the volatility indices ($VIX and $VXO) rallied modestly during the correction, as one would expect them to. Yet they remain in an overall downtrend, which is generally bullish for the market.

The bottom line is this: the intermediate-term state of the market is still bullish, because we have no sell signals from our indicators. However, the fact that breadth didn't turn negative is somewhat analogous to $SPX not pulling all the way back to support. It sort of leaves a nagging feeling that maybe the correction didn't finish yet. In any case, though, if $SPX closes at a new high (as QQQQ did), then the correction is clearly over.

Jonathan Levinson : 12/2/2005 11:12:17 AM







Jonathan Levinson : 12/2/2005 11:11:52 AM

This is looking like bullish price action to me. The downphases are weak to non-existent, and, of course, price holds at the highs. The only bearish cycle interpretation I see is if this last high was the terminal push in the 60 min cycle upphase. With the 30 min, 60 min, daily and weekly cycles all at highs, overbought or in bearish divergent rollovers, there's significant downside risk. But the longer that the sellers remain absent, the more likely a bullish trending move becomes across these key cycles.

Linda Piazza : 12/2/2005 11:09:32 AM

Back. No new low on the advdec line. That's a danger for bears.

Jane Fox : 12/2/2005 11:04:41 AM

Here is Larry McMillan's weekly commentary Last week, we warned of the existence of an overbought condition. That condition resulted in the first correction in this market since the rally began in late October. While the 3-day correction did ease the overboughtness to some extent, it didn't really eliminate it, yet Thursday's strong rally appears to indicate that the market is ready to move ahead once again.

The major averages pulled back inside of their Bollinger Bands, so that was a relief of the overbought condition on their charts. The pullback, however, did not even reach the first support level nor did it reach the 20-day moving average. Consider the chart of $SPX Link The 20-day moving average is at about 1240. Moreover, there should be support at the levels of the August and September peaks -- at 1242 to 1245. Yet $SPX only pulled back to roughly 1250 during the correction. So, yes, the overbought condition was relieved since $SPX pulled back inside the Bollinger Bands, but it only barely did so before rallying strongly on Thursday. Normally, such a correction would test support and it still might -- but a breakout to new highs will be a clear signal that the correction is over.

I will finish this in my next post.

Jeff Bailey : 12/2/2005 11:04:13 AM

11:00 Market Watch found at this Link

Linda Piazza : 12/2/2005 11:03:19 AM

Stepping away for a few minutes. So far, the downturn from the OEX's broadening formation resistance still looks possible, but far from a done deal. Bears want a new LOD on the advdec line. Wish I'd had the courage to call a play, because this one might work, but it's just too iffy lately.

Linda Piazza : 12/2/2005 11:01:28 AM

The SMH's 15-minute candle did not ending the period at the 38.99 level, but instead dipped so that it closed that period not so far off the low, with that low at 38.87 and the close at 38.92. That suggests that the 15-minute period's high volume could still be distribution, and the SMH, at least could still dip. This is just a 15-minute chart, so don't make long-term decisions based on this, and recognize that I'm still a neophyte with this study.

Jane Fox : 12/2/2005 10:59:31 AM

The ADs were so easy to read yesterday but today is another story altogether. Link

Jeff Bailey : 12/2/2005 10:58:06 AM

Intl. Paper (IP) $33.46 +1.76% ... extends gains after yesterday's break above its trending lower 200-day SMA.

Linda Piazza : 12/2/2005 10:56:51 AM

The volume/price spread analysis (although mine is rudimentary) was telling the truth about the SMH, and it did pull back after that 15-minute candle indicated some distribution going on at the high. The current candle, if prices hold at or near the current 39.99 price, however, suggest another bounce attempt. The SMH and, by extension, the SOX, might not be through just yet.

Jonathan Levinson : 12/2/2005 10:56:37 AM

QQQQ is coming in for a retest of the 72 SMA support line at 41.97, but it's so far just a wavelet decline, due to end in roughly 5 minutes. The short cycle indicators are still rising. The brief higher high was too short and too brief to threaten the daily cycle top, but bears don't need to see a repeat. 30 min channel resistance is at 42.20. Link

Linda Piazza : 12/2/2005 10:54:37 AM

Advdec line dropping away from that resistance now. If my faith in technical analysis hadn't been so stripped recently, this would be a place for a tentative trial bearish play. The VIX hasn't cleared Keltner resistance that I'm watching, however, although it's bouncing off the day's low, having crated bullish divergence from as far back as November 18. My faith has been stripped, and for good reason. Technical analysis has not worked particularly well.

Currently, the OEX tests mid-channel Keltner support at 578.86-579.26, with that support weakening but still looking strong enough to prompt bounces unless the advdec line turns sharply lower and pushes the OEX lower. The advdec line did find resistance just where bears hoped, but has not dropped to a new LOD yet and so might just be in the process of broadening its bear flag into a rising regression channel that's more sustainable.

Jonathan Levinson : 12/2/2005 10:49:36 AM




Linda Piazza : 12/2/2005 10:48:03 AM

As I thought, the advdec line wasn't through climbing. Although it hasn't yet reached a new high of the day, the next Keltner resistance has been dropping toward it, and so it's closer to a test of that resistance, now at about 350 and spanning up to about 745 or maybe even a little higher. Advdec line now at 168, QCharts value. I don't know whether the advdec line is going to breach that resistance or not. That's what we're watching.

Jonathan Levinson : 12/2/2005 10:47:39 AM



Linda Piazza : 12/2/2005 10:46:17 AM

The SMH's current 15-minute candle showed relatively high volume on a relatively small-range candle in which prices got knocked back. I can't really use the SMH as an exact proxy for the SOX because of their components, but that does suggest a pullback, perhaps only a minor one. However, the SMH itself is at $39.03 currently, and I would think $40 a powerful price magnet.

Linda Piazza : 12/2/2005 10:43:44 AM

The SOX is climbing along its 15-minute 10-sma, it appears. It broke above it on a more parabolic climb about 30 minutes ago, and may need to steady sideways or drop down to that average again, now at 503.11. Watching the SOX's movements with relationship to that MA may tell us something about its short-term trend, at least. So far, it looks to me as if it's taking the move-sideways route, which would tend to suggest that as soon as that MA gets a little closer, it will take a dip down and try bouncing from it again. SOX at 506.93 as I type. Bears hope it breaks soundly through that average instead.

Jonathan Levinson : 12/2/2005 10:41:33 AM

Session low for GE here, -.78% at 35.47. I see no news bulbs to indicate fresh news as of this AM.

Jeff Bailey : 12/2/2005 10:40:34 AM

Yesterday's sector bullish % reversals ... Business Products reversed up to "bull confirmed" from "bull correction."

Forest/Paper reversed up to "bull alert" from "bear confirmed."

Linda Piazza : 12/2/2005 10:39:41 AM

The OEX ran up to test that broadening formation's resistance and now turns slightly lower. The advdec line hasn't quite climbed into what I would have considered next strongest resistance, however, and it hasn't signaled that the move is overdone to the upside on the shortest term charts. It's still possible that the advdec line could climb into 400-745 levels, at least. It's still within a rough sort of flag formation.

Jonathan Levinson : 12/2/2005 10:37:42 AM

The realtime CBOE total p/c ratio is down .34 to .50 here, verging on an extreme reading.

Jonathan Levinson : 12/2/2005 10:36:30 AM

72 SMA support rises to 41.96, the 30 min channel rising toward 42.20. Volume breadth is only strengthening here for the Nasdaq, now up to +2.2:1, and it looks like the bear trap has successfully closed from yesterday afternoon's 30 min cycle rollover and subsequent upside whipsaw. A very impressive display from the bulls. Link

Linda Piazza : 12/2/2005 10:37:18 AM

The SOX is now at 507.39, just off its day's high. Is it charting up to retest, again, the former ascendign trendline off April's low, with that trendline at about 520 now? The SOX has already retested this trendline, on October 3 and 4, piercing it both days and then falling away into October's low. I've tried fitting a Fib bracket to the SOX's climb off the April low, and I have to say that it fits fairly well right where the SOX is now, concurring with my impression that the possible exhaustion gap could be signaling that the SOX is topping out. However, I've been wrong about these fitted brackets before and it's also possible to fit it so that a climb to about 511.65 works well with the various retracements and swing highs and lows during the SOX's climb. If you consider that to have been a breakaway gap that formed when the SOX eschewed the formation of a right shoulder for a continuation-form inverse H&S, however, the upside target would be much higher.

Jeff Bailey : 12/2/2005 10:36:02 AM

10 Most Active ... CPN $0.35 -12.50%, QQQQ $42.11 +0.23%, SUNW $3.92 +1.03%, JDSU $2.72 -2.5%, INTC $27.35 +0.58%, SPY $127.03 +0.26%, EWJ $12.77 +0.15%, OVTI $21.63 +18.57%, AAPL $71.40 -0.36%, CSCO $17.65 -0.22%

Jeff Bailey : 12/2/2005 10:33:04 AM

Airline +2.01%, Homebuilders +1.13% and Semiconductors +1.13% pace gains.

Jane Fox : 12/2/2005 10:32:42 AM

Both AD line and AD volume are now making new daily highs so the bears have officially let go of the reins however, I am not entire sure the bulls have taken possession of them yet.

Linda Piazza : 12/2/2005 10:29:57 AM

The TRAN is moving higher, but not as briskly as some other indices. It's currently retraced about 50% of its range today, with that 50% mark at about 4140.90 and with the TRAN currently at 4140.67. The rise is in keeping with a rise after dropping into a right-shoulder level for a potential H&S, but it does look slightly bear flaggish currently. If it retraces more than 61.8% of the range, however, with that at about 4144.91, we have to question the bear-flag nature of the climb and have to be aware of the possibility that it will rise and test the neckline of its inverse H&S.

Jonathan Levinson : 12/2/2005 10:29:24 AM

QQQQ tests the premarket high, 30 min channel resistance rising to 42.16: Link

Jeff Bailey : 12/2/2005 10:28:34 AM

SPY Dec. $127 Calls (SPY-LW) $1.00 ... atop the SPY most active options. Dn 25 vs. 300 up. 5,438 traded. $123 Calls are #2 at 1,596 traded. 11:646

Jane Fox : 12/2/2005 10:27:48 AM

As Jeff noted in his 10:26 post the VIX is now making new daily lows confirming ES's new daily highs.

Linda Piazza : 12/2/2005 10:26:50 AM

SOX still charging higher, at 506.89 as I type.

Jeff Bailey : 12/2/2005 10:26:18 AM

VIX.X 10.99 -2.22% ... plunges to lows of the session/week. Sets up for test of WEEKLY Pivot.

Linda Piazza : 12/2/2005 10:25:47 AM

The OEX vclosed the last 15-minute period at that first Keltner resistance, as bears hoped it would do, and in keeping with a potential H&S, but prices are being carried above that now during this 15-minute period, with a little less than half the 15-minute period expended. A 15-minute close beneath that Keltner line, now at 579.93, would not necessarily undo the potential H&S, but it looks as if there's going to be a test of the broadening formation and 581.61 Keltner resistance instead. We have evidence here that you still cannot trust any signs of weakness, but I do have to say that the advdec line has been signaling since the start that movement was soon overdone to the downside and that there was bounce potential. Couldn't tell how much bounce potential, though, as the bullish divergences were signaled only on the three- through five-minute charts.

Jeff Bailey : 12/2/2005 10:20:34 AM

10:00 Internals found at this Link

Jonathan Levinson : 12/2/2005 10:20:18 AM

Volume breadth is up to neutral at +1.05:1 on the NYSE, neutral-positive at +1.15:1 on the Nasdaq.

Jane Fox : 12/2/2005 10:19:16 AM

The VIX is just about as hard to read as the AD line and volume. It is testing daily lows but still not making a new daily low supporting ES's new daily highs. It could be that the VIX is just being lazy today and has decided to follow ES instead of lead it. THis is going to a tough day to trade.

Linda Piazza : 12/2/2005 10:21:08 AM

This week, the SOX breaks out above the descending trendline off the March 2002 high, according to what I've drawn on my charts, but then there's that last gap, a seeming exhaustion gap to consider. Mixed evidence here, but I'd be worried still about that exhaustion gap. But look at it go! While I wouldn't advise new bullish plays, I sure would advise enjoying this if you're already long in SOX-related stocks. Keep moving those stops higher, though, and decide if you want to weather a possible retracement back to that gap, which wouldn't necessarily occur today, of course. It looks like a breakaway gap, as I mentioned yesterday, but it's at least the third gap, with there being a small and fourth one that began the rally, and those third gaps begin to show exhaustion of a move, although not precluding some further momentum to carry prices higher. While breakway gaps are often not retraced, exhaustion gaps are.

Jane Fox : 12/2/2005 10:15:45 AM

AD line is making new daily highs but at -143 the bulls shouldn't be tooting their horns too loudly. AD volume is now above 0 and the bears grip is starting to come undone.

Jeff Bailey : 12/2/2005 10:14:34 AM

Semiconductor Index (SOX.X) 504.31 +0.47% ... session highs. Gets a trade at MONTHLY R1.

Linda Piazza : 12/2/2005 10:13:05 AM

SOX just broke higher, at 504.21 as I type.

Linda Piazza : 12/2/2005 10:11:10 AM

Oh, by the way, within the OEX's broadening formation, it also has a large inverse H&S on the 30-minute chart, neckline currently at about 581.61, at Keltner resistance on 15-minute closes.

Linda Piazza : 12/2/2005 10:09:12 AM

Okay, here's my OEX impression, 15-minute Keltner chart, and take it for what it's worth in this environment: The OEX is building a potential H&S on its 15-minute chart. A rise up to test the next Keltner resistance at 579.90 on 15-minute closes is in keeping with a right-shoulder formation, but the OEX needs to produce 15-minute closes at or near that resistance to preserve a sense of weakness and the appropriate right-shoulder level. RSI has already confirmed a H&S (a ghost), leading the OEX, bears hope. However, the OEX's rise just now to test that Keltner resistance was a spike up and there's nothing weak looking about it yet. I see the H&S confirmation as a possibility but not a given, not even close in this environment. It's just too easy to spike the OEX up to that broadening formation's resistance and maybe a little past it. There's still much danger here for bears. OEX at 579.92 as I type.

Jane Fox : 12/2/2005 10:08:01 AM

It is just plain not safe for shorts out there.

Jane Fox : 12/2/2005 10:07:18 AM

They're bacckkk TICKS +800.

Jonathan Levinson : 12/2/2005 10:05:31 AM

Crude oil is up .45 at 58.925 for the Nymex reopen, TNX +1.2 bps at 4.533% and IRX +2.8 bps at 3.905%. These could all present headwinds for equities, but so far equities hold unchanged.

Jeff Bailey : 12/2/2005 10:04:09 AM

10:00 Market Watch found at this Link

Jane Fox : 12/2/2005 10:04:06 AM

ES's new daily highs is not confirmed by a VIX new daily low so I think it was a headfake.

Jonathan Levinson : 12/2/2005 10:03:15 AM

The wavelet cycle has just turned up and QQQQ popped back above the 72 SMA, the 30 min cycle channel flat and not yet turning down. Channel resistance is up at 42.13 on a break above the session high. Link

Linda Piazza : 12/2/2005 10:03:42 AM

The advdec line tries to rise again, and there has been tentative bullish divergence on the three-minute through five-minute charts at least. Watch for an OEX bounce up to next resistance at 579.86 on 15-minute closes or up toward the broadening formation and Keltner resistance from 580.83-581.57 on 15-minute closes. OEX at 579.58 as I type.

Linda Piazza : 12/2/2005 10:01:52 AM

TRAN still dropping. Now at 4124.49, still testing the 30-minute 100/130-ema's. No 30-minute close beneath them at the close of the just-completed 30-minute period, anyway. A close beneath them probably invalidates the inverse H&S I mentioned. However, until that happens, we have to assume that the TRAN has bounce potential from these averages and the right-shoulder level.

Jane Fox : 12/2/2005 10:01:38 AM

As far as the internals are concerned the bears still have a firm grip on the reins but man is it choppy out there which tells me that grip could be released at any time.

Jeff Bailey : 12/2/2005 9:59:35 AM

Swing trade stopped alert ... for Goldcorp (GG) $20.75 -1.55%

Jonathan Levinson : 12/2/2005 9:59:03 AM

The Fed actually tightened this AM, announcing a 3.75B weekend repo to refund 10.25B expiring, for a net drain of 6.5B. The highest rate submitted was 4.04% and the stopout was 4.02%, showing demand for the Fed's money growing above the 4% overnight target rate.

Linda Piazza : 12/2/2005 9:58:30 AM

For those of you who watch pivots, QCharts calculates the OEX's daily pivot at 578.77, just below the current price, but the OEX is also testing the 15-minute 100/130-ema's this morning, at 579.36 and 579.11, with the OEX now at 579.12. So, there's important support being tested. A failure through that support could get more downside going. We had the play setup a daily early, but from OEX 578.70. As I said yesterday afternoon, a new signal was given as the OEX tested that broadening formation's resistance, but I was too "weirded out," borrowing a phrase from my girls' teen years, by the action to take it, especially ahead of this morning's numbers, talked about even in Europe all week long.

Jonathan Levinson : 12/2/2005 9:57:24 AM

Linda, I don't see any way it could fail to be dollar bearish. Taking a Marc Faber/Warren Buffet view, Asian countries are net exporters, net creditors, net growers, etc. Anecdotally, there was a recent statistic to the effect that Shanghai will build more new office space this year than exists in all of Manhattan. The US is a net importer and borrower. Given the booming deficits, devaluation of the dollar is an obvious way to lessen the magnitude of that US-dollar denominated debt in real terms, as well as curbing the vast trade imbalance between Asia and the US. So, on that basis, a devaluation of the dollar would serve US interests, and this would explain why the Treasury has been so insistent that China revalue.

Linda Piazza : 12/2/2005 9:53:09 AM

Big drop in the TRAN. Poor TRAN. The money's gone elsewhere, at least for this morning. Be aware that there's a rather well-formed potential inverse H&S on its 30-minute chart, although not one at the bottom of a steep decline in comparison with the size of the formation, so perhaps not as reliable as some. The TRAN currently tests the 30-minute 100/130-ema's, the appropriate right-shoulder level and a potential bounce point. A 30-minute close beneath the 130-ema, now at 4120.32, would appear to invalidate that formation. TRAN at 4130.72 as I type.

Jane Fox : 12/2/2005 9:52:45 AM

I most certainly cannot get too bearish here.

Jonathan Levinson : 12/2/2005 9:51:20 AM



Linda Piazza : 12/2/2005 9:50:51 AM

Jonathan, from the reports I've read, a yuan revaluation is likely to be dollar negative as Asian currencies rise. Is that your impression? Have any ideas of what that will do to U.S. currencies?

Linda Piazza : 12/2/2005 9:49:51 AM

The OEX also balances on the 15-minute 100/130-ema's at 579.36 and 579.11, respectively. It's really not doing a good job yet of bouncing from them, although it's attempted a little rise. Still watching the advdec line, attempting a little rise of its own.

Jonathan Levinson : 12/2/2005 9:48:48 AM



WMT trades +.67% at 48.35 here.

Linda Piazza : 12/2/2005 9:48:20 AM

And there's the bounce attempt. You can certainly count on that more than on the downside. OEX bears want to see a tepid rise with any advdec line bounce, and would prefer to see resistance on 15-minute closes at a Keltner line currently at 579.97. OEX at 579.33.

Linda Piazza : 12/2/2005 9:46:36 AM

It looks as if the OEX is going to hold that mid-channel Keltner support, at least tentatively, into the first 15-minute close, but it looks at least as likely that it will drop toward 577.38 as climb toward next resistance, at 579.91. It's maybe slightly weighted toward the drop, but I'm just so unsure of the downside these days. The advdec line balances on potential support, with the RSI showing overdone conditions all the way up through the 15-minute chart. There has as yet been no bullish divergence, however, but there is an attempt to steady, so prepare for a possible bounce attempt. It's just possible, not certain.

Linda Piazza : 12/2/2005 9:44:23 AM

The BIX is slightly lower this morning, as yesterday's difficulty with the 10-sma might have suggested.

Jonathan Levinson : 12/2/2005 9:43:50 AM

Session low for QQQQ and NQ here. So long as QQQQ holds below the 72 SMA at 41.94, the intraday cycle bias will hold on the downside. With the 30 and 60 min cycles due for downphases, that intraday bearish bias could potentially last for hours. Link

Linda Piazza : 12/2/2005 9:42:57 AM

The OEX only barely maintains that mid-Keltner support, threatening to lose it. If it does, next support is at 577.32 on the 15-minute chart.

Jonathan Levinson : 12/2/2005 9:41:50 AM

Volume breadth is -1.4:1 on the NYSE, -1.1:1 on the Nasdaq.

Linda Piazza : 12/2/2005 9:40:23 AM

SOX 240-minute Keltner resistance now at 503.02, on 240-minute closes, of course, with the SOX currently at 503.18, testing it, nudging it higher.

Jane Fox : 12/2/2005 9:39:22 AM

Quite a difference from yesterday - the AD line is -610 and AD volume is below 0 so the bears have the reins this morning. Some how I don't think they will keep them though.

Linda Piazza : 12/2/2005 9:41:07 AM

The SOX is climbing again. I did some more studying last night in case I was wrong about my breakaway and measuring and exhaustion gaps, and everything I read again last night suggests that yesterday's gap higher on the SOX was an exhaustion gap. That doesn't mean that it can't climb higher--momentum can carry it higher. It does mean that that it looks to me as if the SOX is topping out. Time for that money to slosh into another index? Not, yet, according to the SOX this morning. It's zooming. I would not be entering new long positions on semi's, though, until you see if there's a gap fill and how it proceeds.

Jonathan Levinson : 12/2/2005 9:38:39 AM

The Fed has 10.25B in expiring repos to address in its 10AM announcement.

Linda Piazza : 12/2/2005 9:36:10 AM

The OEX holds, barely, to that mid-channel Keltner support I mentioned earlier.

Linda Piazza : 12/2/2005 9:33:45 AM

Again, conflicting information. The advdec line looks as if it could drop a little further, but the gap lower already makes it look as if it's nearing overdone on the downside.

Yet the OEX looks as if it's just beginning the pullback from that broadening formation that was suggested yesterday. It's currently testing 15-minute support at 579.21-579.45 on 15-minute closes, with the OEX at 579.15. If it can stabilize here while the advdec line finishes dropping, there's a chance that it can climb back to retest that broadening formation again.

Jeff Bailey : 12/2/2005 9:33:13 AM

Bullish swing trade raise stop alert for Goldcorp (GG) $21.05 -0.04% ... to $20.75 from $19.70.

Jonathan Levinson : 12/2/2005 9:32:57 AM

Volume breadth is -1.8:1 on the NYSE, 1:1 on the Nasdaq at the open.

Jonathan Levinson : 12/2/2005 9:32:26 AM

72 SMA support is at 41.94, with 30/60 min channel resistance at QQQQ 42.08-42.11, support at 41.75-.80. Link

Jonathan Levinson : 12/2/2005 9:16:18 AM

Not a lot of exuberance in Greenspan's speech, though, as the headlines indicate, he's not raising new issues either. Concluding paragraphs:

Crafting a budget strategy that meets the nation's longer-run needs will become more difficult the more we delay. The one certainty is that the resolution of the nation's unprecedented demographic challenge will require hard choices that will determine the future performance of the economy. No changes will be easy, as they all will involve setting priorities and, in the main, lowering claims on resources.

It falls to our elected representatives to determine how best to address the competing claims on our limited resources. In doing so, they will need to consider not only the distributional effects of policy changes but also the broader economic effects on labor supply, retirement behavior, and private saving. In the end, the consequences for the U.S. economy of doing nothing could be severe. But the benefits of taking sound, timely action could extend many decades into the future.

Jonathan Levinson : 12/2/2005 9:05:48 AM

Full text of Greenspan's remarks available at this Link

Jonathan Levinson : 12/2/2005 9:02:46 AM

Ten year note yields +1.2 bps at 4.533%, 13-week rate +2.3 bps at 3.9%.

Jonathan Levinson : 12/2/2005 9:01:55 AM




Linda Piazza : 12/2/2005 9:03:09 AM

Here's where the OEX ended the day yesterday, with respect to the broadening formation in which it's been falling away from the 11/23 high and with the black Keltner channel that usually contains most prices. Note the bearish price/RSI divergence building this week: Link Everything on that chart suggests that a pullback should be next, although another rise to test the resistance isn't precluded. Until that broadening formation's support or resistance are broken, the best trades appear to bearish trades at the top and bullish at the bottom, being careful to jump out of a trade quickly if you're wrong. So, we'll watch this formation and the Keltner resistance today.

Now that I've said that, I have to add that nothing that usually works in technical analysis is working. Not trendlines, not formations, not much of anything. At least, it isn't working for me. I'm a seasoned enough trader to know that when a strong trend is in place, you don't trust stochastics sell signals and lean more into watching bounces off moving averages, and you'll probably recall that many of my comments lately have related to how various indices have performed with respect to various MA's that have proven important in the rally. You haven't heard anything from me about stochastics, although I do watch RSI. Even watching MA's hasn't worked, however, as effectively as it has in the past.

Everything I watch and just plain common sense tells me to be careful about long positions right now, but I've been wrong. Just wrong. I've tried to adopt a methodology that takes the guesswork out, but whenever trades aren't working well, it's just good account-management sense to step back and paper trade for a while. We've had one successful play and one unsuccessful one this week, and that's not a record I want to keep. I honestly don't know if I have it in me to risk your money today, without taking some time again this weekend to do research again.

Am I biased? That could be it, although watching the advdec line would appear to take the bias out of my trading, and it worked marvelously to do that earlier this year. As of yesterday, it was still setting up in a way that usually forecasts a 3-4 point drop in the OEX. We certainly didn't see that yesterday. While it might have just been early, it kept me and traders from what would have been a successful long play yesterday.

Still, it's possible that I have some bias, but I'd rather call it gut instinct that something doesn't feel right here, something I can't pinpoint. Keene's wonderful Wrap last night explained some of the impressions I'd noted as tub-sloshing, and it's that tub sloshing and the absolutely unrelenting nature of the global gains that have me concerned. Did you read my Asia/Europe update this morning? The Nikkei has gained about 10% since the middle of November! They feel more like bear-market rallies--often explosive--than they do like measured and real gains. Then, there's my personal on-the-ground experience of this economy. Despite all the glowing numbers, including today's employment figures, that's not my experience. Do you know that out of the few writers on this board, two of our spouses have either lost or been told they're soon to lose their jobs? Through my daughters, I'm also in tune with what's happening with 20- and 30-somethings, too, and I see some troubling trends. Although the high-tech people are finding jobs again after they all lost jobs a few years ago, now I'm seeing some lower-level jobs disappear. One young acquaintance is now driving trucks after losing a lower-level management job and not being able to find another, then finding an apartment maintenance job and losing it to a Katrina evacuee who would accept a lower salary. (This is not any argument against employing Katrina evacuees: I'm proud of my city for taking on so many evacuees. Nor is it any disparagement of truck drivers, just a notation of what's happening in entry-level jobs.) With regard to crude costs not filtering through, tell that to my daughters' 20-something friends, who are selling their gas guzzlers in droves, trying to move closer to each other so that they don't have to drive so far to visit each other, and choosing motorcycles over cars. Tell that to the exterminator who told me that he's going to have to raise prices because the shipping costs on his supplies are so much higher.

So, until I figure out what's wrong, I'm going to be cautious again. It's bad enough losing my own money and sit-up-in-the-middle-of-the-night terrorizing to encourage you to lose yours.

Jonathan Levinson : 12/2/2005 8:50:38 AM

QQQQ's 30 min cycle rolled over yesterday afternoon, and was trying to whipsaw back up (to close a bear trap) as of the close, while the 60 min cycle rose steadily all yesterday and closed overbought and toppy, but not rolling over. These intraday cycles are like narrow pipes within the broader daily cycle, which itself appeared to have topped as of Monday, and is retesting that top today. A positive close for today would likely be enough to whipsaw the daily cycle oscillators back into an overbought/trending upphase.

I will post the intraday SMA and channel levels when they update at the cash open.

Jane Fox : 12/2/2005 8:50:26 AM

Dateline WSJ Weeks after rival General Motors Corp. announced plans to eliminate 30,000 jobs next year, some details are starting to emerge about job cuts and plant closings at the U.S.'s other big auto maker, Ford Motor Co.

Though Ford's plan, dubbed the "Way Forward," is still being formulated and is subject to change, the nation's second-largest auto maker is likely to shutter assembly plants in St. Louis, Atlanta and St. Paul, Minn., according to two people familiar with its product plans. Also slated for closure are an engine-parts plant in Windsor, Ontario, and a truck-assembly plant in Cuautitlan, Mexico, said these people.

Together, the plants employ about 7,500 workers, roughly 6% of the company's total North American work force. A Ford spokesman declined to comment on the plan, which is expected to be unveiled in January.

Jonathan Levinson : 12/2/2005 8:37:34 AM

Feb. gold is down .10 to 506.50 here, crude oil holding at 59.10.

Jonathan Levinson : 12/2/2005 8:36:45 AM

Nonfarm payrolls 215K vs. 210 exp., prior revised down from 56K to 44K.

Jonathan Levinson : 12/2/2005 8:32:48 AM

Session highs for equities, QQQQ to 42.05, ten year notes going positive as well, TNX down .2 bps to 4.519%.

Jonathan Levinson : 12/2/2005 8:32:03 AM











Jonathan Levinson : 12/2/2005 8:23:12 AM

Bonds hold fractionally negative with ZNZ5 down 1/16 to 108 33/64, TNX quoted higher by 1.2 bps at 4.533% at the cash open.

A dilemma: I can quote ZN in traditional fractions as I've been doing, or I can quote using a fixed denominator of /32- so curently, ZN would quoted at 108 16.5/32. If you have a preference, let me know via email support@optioninvestor.com and include my name in the subject line. Thanks!

Jonathan Levinson : 12/2/2005 7:52:28 AM

Feb. e-mini gold holds within its uptrend, an extended daily cycle upphase on the verge of trending. Link The "story" accompanying this impressive move is, as usual, Asian demand, and more particularly, Asian central bank demand. From China's "People's English Daily": Link

Jonathan Levinson : 12/2/2005 7:49:50 AM

Equities are up, ES trading 1265.75, NQ 1706.5, YM 10929 and QQQQ flat at 42.00. Feb. gold is up .4 to 507, silver is up .031 to 8.63, ten year notes are flat at 108 37/64, crude oil is up .625 at 59.10 and natgas is up .285 to 13.31.

We await the 8:30 release of Nonfarm payrolls, est. 210K, the unemployment rate, est. 5%, hourly earnings +.2% and the average workweek, est. 33.8.

Linda Piazza : 12/2/2005 7:21:07 AM

Good morning. The Nikkei soared again last night, and most other Asian markets gained, too, although China's was an exception. European markets post gains and the FTSE 100 has moved above 5,500. As of 7:10 EST, gold was higher by $1.60 to $507.90, and crude, up by $0.54 to $59.01. Last night, Kuwait said that OPEC considers renewing the spare capacity offered after Katrina and Rita. The president of OPEC has also said that quotas will not be changed at the next meeting, December 12. More details about Asian and European markets follows in succeeding paragraphs.

The Nikkei soared again in overnight trading, closing higher by 291.10 points or 1.92%, at 15,421.60. From its Thursday morning low to Friday's close, it gained more than 540 points. Since November 16, it has gained more than 1,400 points, near 10%. During that time, the Nikkei moved from printing four-year highs to five-year highs.

November's monetary base increased 1.5% year over year, with that a slowdown from the previous 2.8% year-over-year growth. The current account balances increased 2.5% year over year. The Bank of Japan's Muto appears to be less dovish than previously, and now says that the chance of a shift in monetary policy will increase next year. However, some speculate that the OECD and IMF are likely to join the Japanese government in urging that the central bank move with caution and not end the current quantitative easing policy too soon. In other economic news, the government reported that the real GDP rose 1.7% rather than the previously estimated 1.9%.

Technology issues and those related to consumer demand performed well. Auto makers performed well, reacting to U.S. sales figures. Brokerages climbed. An IPO for Japan's largest aluminum products maker jumped 27% higher at one point.

Semi-related issues tended to perform well throughout Asia, with those gains attributed by some to hope that Intel will raise forecasts in a mid-quarter update scheduled next week. Most Asian markets climbed, with China's the exception. The Taiwan Weighted gained 0.80%, and South Korea's Kospi climbed 0.32%. Singapore's Straits Times rose 0.93%, and Hong Kong's Hang Seng gained 0.88%.

China's Shanghai Composite dropped 0.41%, however. If Germany's representatives are to be believed, the subject of yuan revaluation will be tacked at this weekend's G7 meeting, but the tenor of the comments coming out of Germany suggest that there's unlikely be a resolution to the issue of the yuan's flexibility. Japan's minister of finance said that forex issues might be discussed, but also mentioned the global economy, crude costs and the ECB's rate hike. Japan's stance is that the yen's recent weakness when compared to the dollar reflects fundamentals--that Japan's rates are lower than the U.S.'s, but some question that conclusion when the Nikkei performs so well.

European markets gain, too, with the FTSE 100 noted as topping 5,500. Technology stocks gain in Europe, as they did in Asia. Nokia made a presentation in New York, maintaining its financial targets, and it rose as much as 2.5% at one point in today's trading. Mortgage bank Alliance and Leicester raised expectations and gained, and Munich Re gained on speculation that it would decrease its stake in Allianz and also on the beneficial effect of the ECB's rate hike. In other stock-specific news, Deutsche Bank upgraded Danone's rating to a buy rating, helping that company's stock to gain. One pressure on markets was Vodafone Group's decline after CSFB downgraded the company to a neutral rating due to the competition it encounters in European markets.

Several economic reports were released, too. In the U.K., the Industrial Relations Service announced that wage growth in the three months through October held steady at 3.0%. The IRS speculated that there will be some downward pressure on wage growth next year, perhaps not seen until the second half of the year. Also in the U.K., November's Halifax House price index rose 1.2% month over month, a stronger rise than has been seen recently. The three-month increase now stands at 4.5%, up from the previous 3.9%. Halifax's outlook is that prices will not rise sharply due to a slowdown in the economy but that housing prices will retain an underpinning. In the Eurozone, October's PPI was higher than expected, at 4.1%, but this number still decreased from September's 4.4%. Oil costs drove the figure to its higher-than-expected rate. Intermediate, capital and consumer goods prices were termed stable by some reports.

As of 7:10 EST, the FTSE 100 was higher by 23.50 points or 0.43%, to 5,509.60. The CAC 40 was higher by 9.07 points or 0.20%, to 4,645.53. The DAX was higher by 21.22 points or 0.40%, to 5,287.77.

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