TRADER'S TALES

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February 4th, 1999
PLEASE REMEMBER TO RELOAD FOR CURRENT REPORT
This section updated by 6:00 A.M. EST every trading day.
Note: Symbol for OEX above 600 level is OEY.

TRADER'S TALES

February 4th, 1999
9,400 OR BUST
The 9,400 level on the Dow Jones Industrials will tell the tale of the tape today as this recent trading range will now test the upper end of its channel on the eve of a non-move by the FOMC on interest rates while the Bond Market will once again be on the defensive as we look to test the 125'0" key support level today on the 30 Year U.S. Treasury Bond and recent highs in the Nasdaq indices as we will look to trade in the direction away from the 1278 pivot on the SP99H March '99 SPX Futures today

NEW INTRANIGHT GLOBEX SPX FUTURES CHART
Updated at 5:45 A.M. E.S.T.
February 4th, 1999

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February 4th, 1999@ 6:00 A.M. E.S.T. Update
(1) Here is the recap from our forecast for Wednesday, February 3rd, 1999:
Wednesday, February 3rd, 1999 will see the Dow open a bit lower as the Globex Spoo's are trading on the defensive here just about the magical Devil's number of 1266.66 and we will look to trade in the direction away from the 1269 pivot today as we will look to the Internet Index and the 30 level on the $vix as well as our items to watch below.
Here are the key items we will watch out for today:
THINGS TO WATCH

1 The Russell 2,000($rut) is now testing the all mighty 420 support here and we must stay above this key level here. We will look simply to trade in the direction away from the 420 level with a reminder that a break of this level to the downside would be very negative indeed...

2 The Advance/Decline lines (A/D lines) have broken down here and we are now in danger of a selloff unless we are able to turn this thing back up here. It will be very critical how we do this morning and we will look to trade in the direction of the movement of the A/D lines today.....

3 The Dow Jones Industrials($indu) are now trading on the defensive and in spite of the rebound late yesterday afternoon we will be looking at a possible selloff unless we can retake the 9300 level. Look for the Dow to trade in the range of 9200 to 9300 today with a break of either level a singal of the near term trend to come...

4 The Nasdaq 100 ($ndx) had a major selloff yesterday and our chart stochastics have turned quite negative. We will look to trade on the defensive here today and in the direction away from the 2095 pivot this morning. Keep an eye on MSFT, INTC, CSCO and DELL for a guide to how we move this morning..

5 The Beta Index Index ($nhb) cratered yesterday and in spite of the late afternoon rebound still lost 18.44 points. We will look to try and hold the key 1350 support here and trade in the direction away from the unchanged level this morning.

6The Internet Index($iix) has confiremd the Sell signal on the Daily stochastics here and we will look to trade in the direction away from the 775 level this morning as we look to focus in on the big names such as YHOO, AOL and AMZN... of 774.08....

7 Finally,the March Spoos (SP99H) are now trading on the defensive in a bearish atmoshpere and we will look to short any rallies as long as we trade below the 1269 pivot. We will look to trade in the direction away from the 1269 pivot this morning along with our if.. then.. parameters and our support/resistance levels as outlined below.. ........

Here are your Spoo's upside and downside targets once again for today
based on the 1265 February 2nd, 1999 SP99H close:
Upside:. 1269 (Today's pivot), 1275 (Tuesday's pivot), 1290 (Monday high),
Downside: 1266.6 , (Devil's number), 1262 (Globex low), 1238 (Limit down -27 and fibonacci )

Wednesday, February 3rd, 1999 will see the market open a bit lower at the opening bell as the Fair value for the premium of the SPX Futures to the SPX cash index is $5.58 and we are now trading as of this writing at a premium of $3.41 to the index. In other words, the Dow should trade just above the 9250 level this morning ....
We will look to the 10:00 a.m. window and the 1269 pivot in the March Spoo's and once again trade the OEY NB's as we look to the $vix movement, the Beta Index and the Dow 9300 level as well as our key support/resistance levels in the March Spoo's and our if.. then.. parameters as outlined below............ .
Remember to keep your stops tight and always have your entry/exit strategy prepared based on your support/resistance parameters......... also remember to watch all of your indicators as well as our if.. then.. parameters and we will see you after the 10:00 a.m. window today ......nuff said!

(2) Here is the actual market movement for Wednesday, February 3rd, 1999:

Wednesday saw the Dow open up and test the 9300 level only to sell off and drop 61 points to the 9239 level whereby the market was able to stabalize and the March Spoo's slowly worked their way up toward yesterday's 1269 pivot around the Noon hour. The 1269 pivot was penetrated around Noon and so was the 9300 level on the Dow. The market then trended up gently toward the key 9400 level late in the afternoon only to fall off and close just below the key resistance as most of the other Nasdaq indices traded modestly higher on the session toward their old highs. The only negative item in the aftermath of the FOMC decision was the fact that the Bond Market continues selling off and is now testing its critical support at the 125'0" level..a break of which would have serious ramifications for this market as we shall explain in section #5 below.

(3) And our actual trades for Wednesday, February 3rd, 1999:

Once again we went ahead and traded the OEY NB FEB 610 Put options yesterday as we saw weakness in the Market after the 10:00 a.m. window. The trade allowed us to take a few ticks on the position and we gradually worked our way out of the trade as the market trended up toward our exit parameters. Once the Nasdaq 100 2095 level was surpassed at around 11:00 a.m. our signal to get ready to abort the trade was clear. In fact the March SPoo's were about to touch the 1269 pivot just after 11:30 and we exited our last position in the OEY NB's as we went to the sidelines watching the Dow break past the 9300 level. We did not trade for the rest of the session and we will be looking to the Bond Market as well as the Dow 9400 level as we explain in section #5 below. .

(4)Now here is the most recent recap from the CME home page:

GLOBEX PRICES AS OF 02/04/99 03:00 AM TRADE DATE: 02/04/99

CONTRACT LAST NET CHGE CONTRACT LAST NET CHGE S&P 500 MAR99 1282.60B +410 EURO $ MAR99 95.00A -.5 E-MINI MAR99 1282.50 +400 JUN99 95.01 -.5 JUN99 1291.50B +100 SEP99 95.01A +.5 NSDQ100 MAR99 2132.00 +600 DEC99 94.71 +1.5 GSCI FEB99 134.20P ---- MAR00 94.88B +.5 JUN00 94.825B UNCH CONTRACT LAST NET CHGE EURO CAN MAR99 95.03P ---- EUROFX MAR99 1.1295 -46 LIBOR FEB99 95.0525P ---- FX/BP MAR99 .69220B -150 MAR99 95.015P ---- FX/JY MAR99 128.18B +85 TURN DEC99 92.75P ---- FX/SF MAR99 1.5999B +19 MEX CETE MAR99 69.00P ---- BP/DM MAR99 2.8196P ---- MEX TIIE MAR99 67.00P ---- DM/JY MAR99 65.095P ---- J-YEN MAR99 8831 -76 B-POUND MAR99 1.6376A +28 D-MARK MAR99 .5767 -31 SWISS FR MAR99 .7057 -40 CAND $ MAR99 .6625A +16 AUST $ MAR99 .6377 -40 F-FRANC MAR99 .17250P ---- M-PESO MAR99 96150P ---- REAL MAR99 .54700P ---- RAND FUT MAR99 .164375P ---- RUBLE MAR99 36000P ---- KIWI FUT MAR99 .5515P ----

(5) Here is our forecast for Thursday, February 4th, 1999
Thursday, February 4th, 1999 will see the Dow open higher above the 9400 level on the Dow and we will look to the Bond Market as well as the movement in the March Spoo's along with our items to watch below in order to trade this morning.
Here are the key items we will watch out for today:
THINGS TO WATCH

1 The U.S. 30 Year T-Bond(US99H) will now attempt to stay above the key 125'0" support here and we will look to this index as a guide to today's trading as this market rally may have trouble here if we were to fall below this key support. We will look to this index for refrence today in order to gauge the extent of the morning market strength....

2 The Russell 2,000($rut) has stabalized above the 420 level and we will look to trade away from the unchanged level in this index today as we look to gain some ground on the 420 support here...

3 The Dow Jones Industrials($indu) will surely test the 9400 resistance on the open this morning and we will look to this number as a barometer to today's market strength or weakness. Look for the Dow to trade in a range between the 9425 level and the 9325 level with a break of either a signal of the near term trend to come..

4 The Nasdaq 100 ($ndx) will once again test its all time high today and we will look to trade in the direction away from the 2121 pivot as we look to the 2126 closing high and the 2150 intraday high on the Nasdaq 100.

5 The Beta Index Index ($nhb) strengthened into the close yesterday and we will once again look to the old highs just below the 1385 level .

6 Finally,the March Spoos (SP99H) are ticking up here on the Globex and are still a good 10 points below the 1294 contract high. We will look to the cautious side as we approach the old high. We will look to trade in the direction away from the 1278 pivot this morning along with our if.. then.. parameters and our support/resistance levels as outlined below.. ........

Here are your Spoo's upside and downside targets once again for today
based on the 1279 February 3rd, 1999 SP99H close:
Upside:. 1283 (Globex high), 1290 (Monday high), 1294 (Contract high),
Downside: 1279 , (Today's pivot), 1266.6 (Devil's number), 1252 (Limit down -27 )

Thursday, February 4th, 1999 will see the market open higher at the opening bell as the Fair value for the premium of the SPX Futures to the SPX cash index is $5.28 and we are now trading as of this writing at a premium of $10.73 to the index. In other words, the Dow should trade above the 9400 level this morning after the open ....
We will look to the 10:00 a.m. window and the 1278 pivot in the March Spoo's and trade that OEX option that fits our parameters as we look to the Bond Market, the Dow 9400 level, our key support/resistance levels in the March Spoo's and our if.. then.. parameters as outlined below............ .
Remember to keep your stops tight and always have your entry/exit strategy prepared based on your support/resistance parameters......... also remember to watch all of your indicators as well as our if.. then.. parameters and we will see you after the 10:00 a.m. window today ......nuff said!

(6) Here is our suggested Trades for February 4th, 1999

TRADES FOR February 4th, 1999
{It is recommended that you trade OEX options after 10:00 A.M. E.S.T. for the best results}

ITEM TO TRADE AT WHAT PRICE IF........ THEN....... Exit position only if.....

OEX
FEBRUARY 650 CALL
OPTIONS At Limit The MAR SPX Futures stay above the 1278 level and the OEX stays above the 635 level as well as the Nasdaq 100 trading above the 2,121 level Buy on on any retest of the 1278 level on the Dec Futures Index or any retest of the 635 level in the OEX or as long as the Nasdaq 100 index stays above the 2,121 level. The 1278 level in the Mar SPX Futures or the 635 level in the OEX fail to the downside or the Nasdaq 100 goes below the 2,121 level.

OEX
FEBRUARY 620 PUT
OPTIONS At Limit The MAR SPX Futures stay below the 1278 level and the OEX stays below the 635 level as well as the Nasdaq 100 trading below the 2,121 level Buy on on any retest of the 1278 level on the Mar Futures Index or any retest of the 635 level in the OEX or as long as the Nasdaq 100 index stays below the 2,121 level. The 1278 level in the Mar SPX Futures or the 635 level in the OEX are penetrated to the upside or the Nasdaq 100 goes above the 2,121 level.

(7) Finally, here are your February 4th, 1999 Trader's Tales
SUPPORT AND RESISTANCE targets for the various indices as follows:

SUPPORT/RESISTANCE
FIGURES
SUPPORT RESISTANCE TREND RES/SUP BROKEN?

MAR SPX FUTURES 1250 1294 Neutral Watch 1294 contract high

DOW JONES INDU. 9100 9400 Neutral Watch 9400 resistance

DOW JONES UTIL. 295 300 Bearish Watch 295 support

DOW JONES TRANS. 3150 3400 Neutral Watch 3150 support

MAR T-BOND YIELD 5.05% 5.30% Bullish Watch break 5.30% resistance
NASDAQ 100 INDEX 2000 2150 Neutral Watch 2,126 old high

S&P 100 INDEX (OEX) 610 643 Neutral Watch 642.57 old high

THE BETA INDEX 1350 1385 Neutral Watch old high

OEX VOLATILITY 25 30 Neutral Watch break of trading range here

T-BOND FUTURES 125'00" 126'18" Bearish Watch 125'00" final support

GOLD FUTURES 285 290 Neutral Watch 290 resistance

THE JAPANESE YEN .8800 .9000 Bullish Watch 9000 resistance

THE U.S. DOLLAR INDEX 9500 9600 Neutral Watch 9600 resistance
EURO DOLLARS 95.00 95.10 Neutral Watch 95.00 support

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