Equity Index Update by Brad Sullivan

[HamzeiAnalytics]

Posted 08:35 CST

Equity Index Update
Monday October 24, 2005

The index market consolidated above the previous afternoon lows during a relatively quiet option expiration session. The vast majority of the trading on Friday stayed within the boundaries of Thursday afternoons final hour of trading. The DJIA and NDX had divergent sessions as CAT's earnings hurt the DJIA and SPX. Meanwhile, GOOG's earnings supported the technology sector. This session may become more important as the next few days of trading play out. The reason is that institutional flow seems to be moving towards certain technology issues with money garnered from selling energy and metal issues. If this trend continues, it will give the indices a supportive tone throughout the remainder of 2005. As I wrote last week, the upside won't throw in the towel until the money stays on the sidelines.

However, given the sharp reversal Thursday afternoon, plus the failure for the upside to generate consecutive strong sessions, I think we are in for another leg lower in the next couple of trading weeks. I think this is a buying opportunity into December expiration. Currently my positioning remains short 25% EMD, long 20% ER2 and POSITION LONG CHICAGO WHITE SOX.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:35 CST

Equity Index Update
Tuesday October 25, 2005

The index markets cheered the successor to Fed Chairman Greenspan in yesterday's action. Mr. Ben Bernake was nominated by President Bush to replace the Maestro. As is custom in our markets, the indices cheered the arrival of new blood with strong rally. In fact, the rally was strong enough to push all markets, save the DJIA, above their respective 200 day MA's. Technology issues continued to perform as market leaders - this in the face of a declining SOX and trouble in the Networking sector. The NDX now resides above ALL of its key moving averages.

The key question traders must ask themselves as we move forward through today and the remainder of the trading week, is whether or not yesterday's action is a turning point in the current trading decline? If the answer is yes, one must position themselves accordingly for a year end rally. If the answer is no, I suspect the next couple of days will provide an opportunity to establish or add to current short positions. In my opinion, and I will confess that I went aggressively long front month 1215 calls in the SP yesterday, as well as selling puts in front month Russell's, that today will be critical. If the indices fail to build on yesterday's rally, there is a potential for a similar reversal akin to last Thursday. While I view this chance as remote, it is worth keeping on the radar - particularly as the session wears on. In my opinion, the final two hours of trading will be critical in terms of the ensuing market direction over the remainder of the month.

The trading session was determined by supportive bids as the session wore into the afternoon, however, in the fixed income market the opposite was true. The long end of the curve struggled and gave back a fair amount of its rally from Friday. The dollar initially sold off, then rallied and is now lower across the board. Also of note was the fact that the energy issues, particularly XOM, CVX and COP rallied yesterday in the face of a down oil market.

In preparation for today, be ready for potential wide ranges and a choppy first 90 minutes of trading as the "racers" will be out in full force. I think the afternoon will shape up as the best risk reward opportunity for day trading, keep it close to the vest until 12:30cst. One final note regarding my positions...I covered the remaining 25% short position in the EMD contract near the close of trading yesterday. Still long the 20% ER2 position and the option positions mentioned above. With regards to the option positions, they are highly levered and I am looking at these as fluent trading position. Simply put, I am not looking to hold on for more than a couple of sessions.



Good Trading to All,

Brad

[HamzeiAnalytics]

Brad Sullivan's Morning Commentary

Posted 08:40 CST

Equity Index Update
Wednesday October 26, 2005

"Too soft was the King's bow..." This excerpt, from one of my favorite books (that I would highly recommend too any trader) The Broken Dice, described the index action yesterday - particularly as it related to my open option positions. Feeling relatively confident about my longs in spite of the early softness, I took a long steam, had lunch and a White Sox discussion when the phone rang. Never a good sign when your floor broker calls you and your only resting orders are stops...so it goes. My long 1215 SP front month options were stopped out for a small profit a bit above yesterday's session lows, as were my short calls in the Russell 2000. Then, the inevitable snap back rally hit in the afternoon and I was reminded of the aforementioned quotation. It relates specifically to utilizing incorrect tools for a trading position. When trading a directional option position a trader needs to sit through a bit of consolidation and have a longer term target in mind. Mentally, I figured 1190 in the SPZ contract was the line in the sand for the current upside bias to continue. I placed a protective money stop well above that level so I would not lose money. And like so many money stops...the market turned after filling my order. In the quotation, the King's bow refers to a soldier who loses his bow during a ship battle during the Viking times, he picks up the King's bow and misfires time after time and utters the line above. This comment is not about levels today...rather it is about knowing your bow and how to utilize it for profits.



Good Trading to All,

Brad

[HamzeiAnalytics]

Brad Sullivan's Morning Commentary

Posted 08:50 CST

Equity Index Update
Friday October 28, 2005

The index markets officially gave back the Bernanke rally - and then some - in yesterdays powerful decline. The hardest hit index was the Russell 2000 as it settled just above key trading support around the 625 level. The SPZ held above its recent trading lows as well at settlement, with a key support zone in reach that resides between 1175 and 1170. Volume was light across the index futures arena as the SP mini contract traded less than 1 million contracts. Without question, some of this volume concern was due to the continuing celebration in Chicago for the White Sox. If you are a fan, like many traders in this city, there was no chance you were making it in for the morning. The market now faces a few keys moving ahead in the near term, for both the bears and the bulls.

The first key is to get the White House indictments out of the way, that appears as though it will happen sooner rather than later. In addition, the market must digest earnings from MSFT, but also key Semiconductor issues MXIM and KLAC. MSFT looks like it will be a non event, however, early indications in the Semi arena look pretty painful on the heels of these earnings. The continuing fear of inflation will have two key pieces of information for the market to act upon. Today's release of the ECI (Employment Cost Index) and Tuesday's one day FOMC meeting. Accordingly, I would expect the market to spend a fair amount of time chopping around some of the established ranges we have produced for the month of October. That is until these issues get resolved.

I suspect that many players are continuing to lick their wounds in this back and forth trading action we have seen over the past several sessions. Typically, this type of volatility represents bottoming action. Of course, that does not mean the markets cannot head lower in the near term, it does mean that I continue to look for a tradable rally into the year end.

In regards to the trading action today, I would highly recommend not having any pre game notions of up or down. Once again, when day trading, the key is being flexible in your approach. For the SPZ I expect to find support from the 1185 to 1183.50 level...below this zone 1181 to 1179...followed by the key zone of 1175 to 1170, if the market fails to hold this final support zone on the close, a retest of the 1135 level looks possible. On the resistance side, we are opening in a key area of resistance from 1187 to 1190...for the market to generate much upside from here it will need a 30 minute close above 1190 before probing the 1192.50 to 1195 zone. Any settlement above this leaves me dazed and confused.

One final note, MSFT is up this morning, but, QCOM is down over -3.00 on possible antitrust fears in Europe. QCOM is the 2nd largest weighting in the NDX and will prove pivotal today.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:20 CST

Equity Index Update
Monday October 31, 2005

The index markets staged a sharp rally on Friday as the DJIA and SPX were both higher by 1.7% at closing. Most of the discussion about the rally seems to be centered on the GDP release, which turned out to be better than expected, with total GDP growing at 3.8%. In addition, the core PCE deflator slowed to +1.3% and on a year-over-year basis it remains below 2%. However, I suspect that the thrust of this rally came when only ONE OFFICIAL INDICTMENT was handed down - and it was not Karl Rove, but a man who answers to the name "Scooter." It appears as though the index market had placed a "Rove Put" with the drop on Thursday, and bought the market back just as quickly on Friday.

Another key leg in the rally was the often ignored ECI report. In this reading, total worker compensation increased to 0.8%, in line with consensus estimates for the 3rd quarter. Similar to past quarters, the growth continues to be driven by gains in the benefits component, while the wages and salaries component remained subdued. Without question this was a good sign to the FOMC, which is watching to see if inflationary pressures are having any influence on wages and salaries.

This week will bring a bevy of economic information that will most likely provide trading direction for the remainder of November. Tomorrow will be a one day FOMC meeting along with the ISM survey. Thursday will bring Fed Chair Greenspan to the HILL for testimony on the state of the economy. Friday will be the Non Farm Payroll report.

Overnight, the index futures are pointed higher, with the SPZ trading at 1204.50, up 4.75 on moderate volume. Index markets across the globe participated in strong rallies as Friday's market performance provided the catalyst. The dollar is stronger against the Euro and Yen markets, while little changed against the remainder.

All told, if one believes a large portion of the recent decline was due to overhanging issues at the White House, then Friday's rally should be the start of another leg higher. 1205 remains critical in SPZ.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:10 CST

Equity Index Update
Tuesday November 1, 2005

The index markets built on Friday's large gains throughout much of the session - however, minutes before the futures close, DELL announced a drop in revenue and earnings guidance. The futures market hit a vacuum on the sell side and settled at substantial discounts to their respective fair value readings. Rumors were all over the place, with MLynch's desk supposedly selling 1000 contracts at the market from the cash close to the bell...untrue. The facts are pretty simple in this explanation to the market drop. There were large sell orders at the cash close from a variety of institutional desks which knocked the SPZ contract from 1209.50 to 1206.20. The market stabilized, then came the DELL news and buyers went hand in pocket, giving a free ride lower to the day traders into the closing bell. This morning, the SPZ is back to the 1208 level, up 4.50 from the last trade in the futures pit. However, it is actually LOWER on the session due to the end of month settlement procedures at the CME. At the end of every month, each index settles at their respective fair value, regardless of last sale. Accordingly, the SPZ is lower by -1.75 at the current price level.

Today, the focus will be fourfold : the FOMC meeting, the ISM survey, any residual impact from DELL guidance and the continuing plight of QCOM's potential antitrust situation in Europe. Finally, the drop below 60 per barrel in Crude Oil and whether or not a continued decline will become the catalyst in a 4th quarter equity market rally. Out of the aforementioned focus, the most important in the near term might be the prices paid component of the ISM survey. If it moves dramatically above/below the consensus estimate of 75.0 it should have a large impact on the trading throughout the session.

Technically speaking, the indices are at key resistance levels. The Russell 2000 cash must move above 650 on a closing basis to put 680 on the map before the end of 2005. The SPX, while making headway into key early October price levels, needs to stabilize above 1200 and push above 1215 in the next few sessions to keep the upside momentum. Further, the NDX continues to be haunted around 1600 and will need to clear this hurdle before momentum players jump on the bandwagon. Where does this put the markets? Quite simply, we continue to be in a wait and see mode. The indecision of traders can be seen in the wide intra day ranges we have seen over the past several weeks. However, during this time, the net change has been muted. All of this typically adds to the potential for a "velocity" driven price move away from the current trading ranges. In the SPX, this would equate to a 3-4% move away from yesterday's close on the upside. On the downside, it would equate to a -3 to 4% move below 1170.

One of the keys to successful trading lies in the ability to understand what the market is focusing on that day, or week or quarter and acting appropriately. The current market, has a slew of potential catalysts, but, appears to be driven by order flow within a range each session. This type of environment is excellent for day trading. My advice : empty the bull/bear out of your head and let the market show you the direction for today.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:05 CST

Equity Index Update
Wednesday November 2, 2005

The index markets were able to digest a larger-than-expected increase in the Prices Paid component of the ISM Survey, as well as multi-month lows in two key technology issues - Dell Computer (NasdaqELL) and Intel (Nasdaq:INTC), and settle above the last prints from Monday's session. This morning, the markets are called to open around yesterday's trading lows in both the SPZ and NDZ. Much of the decline seems to be correlated with continued weakness in the domestic fixed-income markets. Whether or not this "tandem trade" will continue throughout the session is questionable at best. The fact is that a 4.6% yield on the 10-Year Note will have little impact on equities. Certainly 5.6% would be a different story, but the odds of that occurring seem extremely remote within the next six months.

The larger issue in the near-term may, in fact, be the continued softening of Crude Oil. The front month contract continues to spend time below $60 per barrel and with today's DOE Petroleum Stats at 9:30cst, the crude market seems poised to move lower. If that is the case, a move towards $55 per barrel would have a significant PSYCHOLOGICAL impact on the public, and the odds are that such a psychological uplift would manifest itself into an equity market rally.

Today's action will be largely dependent upon any breaking out of this week's trading range. Underneath the surface, the indices are building a constructive trading base from which to rally However, we are still confined within recent ranges and until a breakout occurs, the possibility of a test of the bottom end of the range remains. Keep a close eye on volume in the index minis, as total contracts traded has declined dramatically since mid-October. Globally, Japan is nearing 14000, European indexes are a bit softer after a strong open , and the dollar is mixed with strength against the Far East offset by softness against European currencies.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 11:45 CST

Equity Index Update
Thursday November 3, 2005

The index markets staged a rally yesterday, breaking above key resistance levels in most of the indices. Could it be that the widely anticipated year end rally is under way? Absolutely. Particularly when you look at the performance of the MidCap 400 (EMDZ emini contract). I have highlighted this index throughout the trading year as the best performer - it now stands within 2% of its all-time highs registered earlier this year. Without question, this is the index to be long.

In regards to the other indices, the NDX, while lower on the year, continues to build on a very impressive upmove. What is most impressive has been the ability for this index to shake off the negative headline earnings news from a few key components. Unchanged on the year is around 1621 and it looks like a chip shot to 1650 before the month of November is out. The SPZ crossed into positive territory on the year with yesterday's close. This fact alone should trigger buyers for a retest of the 1235 to 1240 level. Above this, everybody is looking for the 1250 to 1260 zone - I think 1275 is a trading target to keep in mind for closing out the books on 2005. The Russell 2000 broke above the key 650 level in the cash, I suspect we have an excellent chance of trading into the 680 level over the next few weeks. Finally, the laggard DJIA has awoken and appears to be pointing towards a test of the 10800 level in the near term.

As you can tell from my writings...the market action has proven bullish and - IN MY OPINION - no sense in fighting it. I am reminded of a trader I knew when I was a relatively young trader. I was bearish, even though the market had been bouncing off its recent lows pretty aggressively. When I gave him all the reasons for being short, he looked at me and said, "Kid, you shorts had your day, its the buyers turn." Apt analogy for our current rally. The action today will be keyed on Fed Chair Greenspan's testimony on the Hill, particular points traders will be watching for are any discussions on inflation and/or any hints of the FED stepping off the rate hike train.

In the immortal words of Michael Steinhardt, whose order I once attempted to fill in a fast moving stock back in 1996...: "I DIDN'T SAY BID 'EM, I SAID BUY 'EM YOU _ _ _ HOLE!!!" I expect we will see those orders in action today.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:15 CST

Equity Index Update
Friday November 3, 2005

The index markets finished moderately higher yesterday as equities were able to shake off another round of selling in the domestic treasury market, a sharp dollar rally, and surge of $2 per barrel in Crude Oil. The day's economic data was good, as non-farm business sector productivity jumped 4.1% in the 3rd quarter, significantly faster than the 2.5% consensus estimate. Meanwhile, labor costs (a key measure of inflationary pressures) fell 0.5%, the biggest decline in over one year. This component builds on the ECI report released earlier in the week that also showed little wage inflation.

The indices continue to benefit from money flow as players are moving back into equities for a hopeful year-end rally. The NDX benefited from upward guidance from Qualcomm (QCOM) and Amgen (AMGN). The Midcap index cleared the 720 level for part of the session before falling back -- at its session high, the index was less than 1% from all-time trading highs. The SPZ, ER2Z and DJI all probed higher levels in early trading before fading towards unchanged, then bouncing a bit higher into the bell.

Today's action should be based in response to the Non-Farm Payroll report. However, given the uncertainty around the reading, I think it is safe to say most players have discounted the results of this reading. Accordingly, the market should move on continued acceleration in global markets as the Nikkei crossed 14,000 last night. In addition, the DAX settled above 5,000 in yesterday's action and remains above that key psychological level this morning. The domestic index markets may be a bit "tired" due to the recent rally. However, that is no reason to fade the strength of the current move on a positioning basis. I suspect the indices (depending on which index) will consolidate within a 1 to 2% trading range over the next week, before attempting to ramp higher during expiration. It is critical, from a trading perspective, for players to not "lose" their positions during periods of inactivity. When position trading, the larger picture and trading scenario must come into play. When day trading, the trader should have little, if any, opinions about market direction.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:05 CST

Equity Index Update
Monday November 7, 2005

The index markets participated in a quiet, consolidation session on Friday. Volume flows ran 30% lighter across-the-board as players defended the closing range zone from Tuesday's breakout session, but largely deferred any purchases at higher price levels.
One market that was not quiet was the forex market. The US dollar staged a tremendous rally against the Euro, Yen, Swiss and British Pound. The most significant move occurred against the Euro, where dollar buyers and stop orders triggered a move from 120 to 118 before the session closed. Along these lines, the fixed income market suffered losses and traded to new recent yield highs by the close of Friday's trading. The current move lower in the 10-Year Note feels similar to the downdraft we are witnessing in Dollar/Yen. The market seems to bleed lower each week, and with every minor bounce comes the belief that the low print is in. I do not think we will see the low/high yield in the 10-Year Note for a fair amount of time. The key question is whether or not the uptick in yields and dollar strength is negative for equities.

Given the current rally in equities, the easy answer is "No". However, looking forward 4 to 6 months, a 5.25% 10 Year Note yield and 110 Euro could present problems for the index market. Until that time, I don't see how a move to 4.8% in the 10 Year Note is all that negative for equities. It seems to me that so many players "want" this market to move lower that it sets the table for further rallies. I expect the indices to chop around in a 1 to 2% trading band over the next week before gearing up for another leg higher into the December option expiration week.

Technically speaking, this consolidation is healthy for the indices. As I pointed out last week, it is in this environment that many traders "lose" their positions. Simply put, this would mean selling one's longs out during the basing phase. This week, much like Thursday and Friday, will test the patience of those that are long. However, the bigger picture is more upside.

The NDX settled in POSITIVE TERRITORY with Friday's closing print of 1628. Amazingly, that is only the 3rd close of the YEAR above UNCH. Further strengthening the bull case is that 1635 and change is the high from 2004 and the highest level since 2002. I don't profess to know a whole lot, but I do know that the odds for a test of 1700 in the NDX are better than 50/50 before 2006 rings in.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:30 CST

Equity Index Update
Tuesday November 8, 2005

The index markets participated in another lackluster session with light volume flows and tight trading ranges. On the close of trading, however, sellers were able to push the SPZ nearly -2.00 below fair value. The fact that we are currently trading another -2.50 lower in the premarket at 1220.25, should put some early selling pressure on the indices.

Overnight, the dollar continued to strengthen (particularly against its European counterparts) and the domestic treasury market rallied (with the TYZ contract currently trading at 108 '05, +10 ticks on the session). With so little happening over the past few trading sessions, it is worth noting a couple of undercurrents as the indices build their trading bases.

In my opinion, the most important aspect to the current rally is that only 2 of the 5 indices are positive in Q4 - the DJIA and NDX. Interestingly, these two indices have been the worst performers for much of 2005. While many traders may look at this fact in as a bearish, "fade-the-rally" piece of information, I look at it the other way (of course, only time will tell which way is correct). I view the current price levels as ideal base-building zones, just below recent resistance levels. Once the base is strong enough, I feel the indices will carry through to higher levels. In other words, while it may feel as though one is buying a sharp rally at current prices, the fact is that the majority of indices are in the RED for Q4. Simply put, if one is speculating on POSITIVE closing levels in 2005, then buying "in the red" during Q4 is a pretty good wager.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:05 CST

Equity Index Update
Wednesday November 9, 2005

The index market participated in a quiet rangebound trading session for the 3rd consecutive day. Given the bond market holiday on Friday, it appears as though the indices will continue to chop in their current range until next week.

One index that did test its upside resistance yesterday was the NDX. The index pressed towards the key resistance between 1635 and 1637 before falling back. I continue to believe that the pullbacks from recent trading highs will be smaller and shorter in duration, setting the table for further upside gains. In this index, I expect to see 1700 before year end.

Overnight, the bond market is slightly lower, the dollar is moderately higher, Crude Oil is down a fraction, and Gold is up more than $2. Fed speakers today are Philly Fed President Santomero at 10:00cst and Cleveland Fed President Pianalto, also at 10:00cst.



Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 09:00 CST

Equity Index Update
Thursday November 10, 2005

The index markets tested recent high levels with a strong late morning rally on the heels of a surprise upside guidance report from Broadcom (BRCM) at 10:30cst and the testimony on the Hill from oil executives. Buy stops were triggered across the index spectrum, particularly in the ER2 and EMD contracts as both gained substantially. However, by the early afternoon, the sellers were able to push the market back towards lower level in the SP, ND and DJIA. The ER2 and EMD settled around +1% higher than they were trading before the BRCM announcement.

This morning will bring the Trade Balance report and the preliminary Michigan Sentiment reading. Most players are bracing for an upside surprise to the U of M report as the consumer has not yet been hit with heating bills and the price of gas is dipping. Given yesterday's failure to build on the upside price movement in the late morning, it appears as though today should be relegated to a range-bound, listless session.

In the near-term, key psychological support in the ER2 is placed at 660. Below this, look for another run to 656. However, for the index to have any damage done, the sellers must push the index below 655 on a closing basis as Step 1. Step 2 would require a settle below 650. I continue to hold my long positions as much of what I had anticipated at the beginning of the week -- quiet and range-bound trading -- continues to play out. Next week will bring the PPI, CPI and option expiration. Enjoy the quiet while it lasts.

Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 08:25 CST

Equity Index Update
Friday November 11, 2005

The index markets staged a dramatic reversal after early selling pressure as a solid 10-year note auction and declining Crude Oil prices led the upward surge.

The Dow Transports, Broker Dealers, Biotechs, Financials and Internet related issues were the main beneficiaries of the money flow into equities. 4 of the 5 main indices are now higher on Q4, with only the Russell 2000 lagging in negative territory. For 2005, only the DJIA is lower, now down by -1.3% for the year after the recent run higher. I will once again invoke the "year ending in 5's" argument, something I have not done in a couple of months. A brief refresher on this fact is that in the history of the equity markets there has never been a DOWN YEAR THAT ENDS IN A 5. Even more appealing for those dip buyers is the fact that the average closing price in the DJIA at the end of these years is within 1% of the trading high for that year. In other words, we tend to settle on the highs. Will 2005 be different? Only time will tell, but given the amount of skepticism surrounding this bounce - at least amongst the traders I speak with - one has to believe the odds are tipping towards another +3 to 5% before Santa tarts down the chimney.

The financials exploded higher yesterday as players seem to be putting bets down on the end of our current tightening cycle in the not-too-distant future. The NDX broke above key resistance from the 1634 to 1637 zone and ran straight to 1650 before the bell rung. As I wrote earlier this week, I fully expect to see 1700 before the calendar turns over. Volume in the futures arena picked up significantly around the 1633 level after testing UNCH on the year in the morning sell off. It was about that time that I received a call from the best NDX traderI know at the CME who reiterated his bullish stance. He gained more confidence as he watched institution after institution taking offers, until the point where nobody was willing to sell - around 1638 in the NDZ. From there it was a straight shot to the close. On the close, I was told that Merril Lynch's desk was a heavy buyer in the PIT and in the Emini's as the market finished on the high trade for the session.

One of the key points I discussed earlier in the week was not "losing" your position in times of consolidation. Taking this concept one step further is to not "lose" your position when the market goes your way; in other words, anxiously taking profits without analyzing the situation properly. It is one of the reasons that I rarely "roll" stops on trading positions. I don't want to be taken out on a retracement, only to watch the market turn and rally sharply higher. This occurred yesterday in the ER2 and EMD as the early selling broke through key support zones. HOWEVER, the inability for the market to CLOSE beneath these levels left many scratching their heads and out of their respective long positions. In both indices, the marketplace was able to trigger sell stops, forcing the action to the "uncle point" for many players. The subsequent reversal was enough for many to head straight for cocktails. My point in this case is that a trader has to be able to stand with his conviction and not let the price action dictate his next move. Too many times the market goes right to the UNCLE point, forces players out, then reverses. The problem is that very few traders are able to reestablish the trade once they have been stopped out - even if it is the right trade to make. My point in this example is to reiterate what will be a key concept over the next few weeks as the market moves higher, along with sudden air pockets lower. Pick a solid level of support to exit out of longs if the market closes beneath that level. Otherwise, pretend it's like the Copper market, and ride the upside.

Good Trading to All,

Brad

[HamzeiAnalytics]

Posted 07:15 CST

Equity Index Update
Monday November 14, 2005

The index markets added to recent gains with a firm performance in light volume on Friday. The standout contract was the Midcap 400 (EMD mini symbol) as settlement was 722.30. The index now resides less than 1% below all-time trading highs. The DJIA made a run at its next key resistance level -- 10,700 -- and appears poised to challenge this zone during the upcoming week. The SPX moved higher and is now probing key resistance zones between 1234 and 1240. The NDX took a bit of a breather after the large gains throughout last week, yet the index still finished in positive territory and held above a key psychological level of 1650. It is worth noting that since the NDX closed in positive territory for 2005 on November 4, the index has not looked back and resides at nearly +2% YTD. Finally, the Russell 2000 remained bid during Friday's action and appears ready to test the key 675 resistance level.

Overnight, the index markets, treasury and currency markets are all quiet. However, one set of markets that is not quiet happen to be the METALS. Copper, Gold and Silver are back on the proverbial come line (although Copper never left). Keep a close eye on these markets if you are a multi-market trader. It appears as though the odds are tilting for a settlement near the highs at year-end, and I for one do not think those highs are in just yet.

Today's index action should be led by any significant moves in Wal-Mart (WMT) after its earning announcement. However, the most likely scenario is a quiet range session ahead of the key economic releases we get Tuesday through Thursday this week.

Good Trading to All,

Brad