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  Linda Piazza   10/10/20,  4:00:48 PM
We had no Swing Trade entries this week, and I have to say that I'm glad we didn't. If nothing else, premium decay would have sapped our premiums, and I can see little opportunity for us to have benefited from option plays this week. For those of you who were quick enough to get in on either of the two plays offered yesterday, congratulations!

One new tool I've been evaluating this week is Donchian channels. It offered one signal, a long yesterday morning at the first 30-minute close, with an entry at 521.24. If the exit had been on the first close back inside the Donchian channel, we would have exited at 522.62. As I mentioned yesterday, that wasn't much of a breakout, but if we'd ended this week with a 1.38-point gain, I probably would have felt pretty good because it could have been a lot worse. I haven't yet had enough time to backtest this system, but was just watching it during this week's trading, seeing what happened. I'm also watching Keltner Channels. I thought they did a pretty good job Wednesday morning of predicting (or rather, hinting at) a move down, although that move also was not big, and yesterday morning predicting a move down, with that move somewhat bigger. Again, I just began watching these Monday when I decided that I would use the expected low-volume day to research new tools that might be helpful to us, so I'm far from experienced at using these tools.

  Jeff Bailey   10/10/20,  3:53:33 PM
03:15 Update at this Link

  Linda Piazza   10/10/20,  3:47:08 PM
Jane just mentioned Fib levels, and I have to say that since March, they've become one of my favorite tools, too. Often when other tried-and-true tools of technical analysts were failing to prove useful, Fib levels helped to quantify the likely support and resistance levels, and to measure strength and weakness. That's one reason that I've been interested in watching Jeff's 5MRT, at least to measure what's happening during the day's trading. From watching the 5MRT today, I'd give a slightly bearish cast to the day, but only slightly bearish. We traded the bearish #3 on the OEX today, but mostly stayed between the opening level and the bearish #2.

  Jeff Bailey   10/10/20,  3:18:21 PM
Motorola (MOT) $13.75 +0.14% ... Holding gains but slipping to lows of the session after Detwiler Mitchell says it is hearing that a Wall Street Journal article from a couple of weeks ago, regarding MOT having trouble with its new camera phones at Verizon (VZ), which were downplayed by MOT, may have spread to Asia, and that new models in China and Korea are at risk. The firm's sources indicate that a software problem in some handsets has resulted in suspension of orders for camera sensors from Fujitsu, who is the primary supplier to Motorola Asia. Detwiler Mitchell has heard that the original forecast of sensor shipments from Fujitsu to MOT was approx. 2.9 million units for 2003, and this was recently reduced by approx. 25%.

Intra-day 5-minute chart sure looks like somebody has been sitting some offers steadily at certain levels on MOT... doesn't it? Look at today's first 30-minutes of trade, then again from 11:00 to 02:15.

  Linda Piazza   10/10/20,  3:16:21 PM
The Wilshire 5000 will most probably print a doji today, having traded in a 50-point range today. That doji occurs during consolidation above 10,000, however, and does not have the same bearish implications that it would have if it had printed at the top of a rally. That doesn't mean that the Wilshire won't decline. RSI and stochastics both show bearish divergence with price, so it looks as if the Wilshire is due for either consolidation while the indicators catch up or a downturn. I keep looking at those bunched MA's only 100 points or so below the current value, and wonder if they won't provide support before the Wilshire declines too far.

  Jeff Bailey   10/10/20,  2:55:12 PM
Thanks Linda! ... I had typed my 14:53:12 comment and didn't see yours.

  Jeff Bailey   10/10/20,  2:53:12 PM
Bond market is closed and will not open up until Tuesday morning (closed for Columbus Day). Jonathan sent me a link explaining the Dark Cloud which is supposed to have a follow through bearish day after the gap higher session like we had yesterday.

QQQ $34.76 +0.21% sitting right at RED #1, where session high has been BLUE #2 and low was right between RED #1 and RED #2.

Maybe get some "defensive" selling into the close by equity traders, with bond market closed on Monday?

  Linda Piazza   10/10/20,  2:50:16 PM
Okay, I've got my shoes laced up. (See Jeff's 14:31 post and Jonathan's 14:33 post.) According to Litwick.com, Jeff, a bearish dark cloud cover requires these developments: first, a long white candle, then a candle on the second day that opens above the high of the previous day, but closes below the midpoint of the first day's candle body. Although I wouldn't call the QQQ's daily candles bullish by any means, they didn't meet these requirements, at least not in the classic sense. Tuesday's candle was the last white one, and it wasn't a larger-than-normal candle. Wednesday's candle did not close below the midpoint of Tuesday's candle body, either, I don't believe. That doesn't mean that the QQQ's won't retrace to test that gap. I'm just commenting on the pattern.

  James Brown   10/10/20,  2:47:01 PM
One stock that is climbing higher into the weekend is Magna Intl (MGA). The stock is breaking out above its simple 50-dma but is still struggling somewhat with the bottom of the gap from early September.

  Jeff Bailey   10/10/20,  2:39:08 PM
Zoltek (ZOLT) $5.17 +52% ... ugh! I saw this one on the percentage gainer list yesterday, but didn't think much of it on break above $3.00. Link

When markets trade new highs, I'll look for some of these smaller cap stocks for breaks from consolidation for short-term trades.

  James Brown   10/10/20,  2:36:02 PM
Shares of General Dynamics (GD) are still climbing higher but have not been able to break out above its simple 50-dma. The company just received another $98 million contract from the U.S. yesterday.

  Linda Piazza   10/10/20,  2:33:26 PM
I can't believe Jeff chastised me a while ago for wanting to find an opportunity to short SSCC (Smurfit Stone Container Corp.) and he's talking about ripping up teddy bears. (Grin.) I never did short it, by the way.

  Jeff Bailey   10/10/20,  2:31:28 PM
Dark Cloud Cover Bearish pattern ... Looks like the QQQ posted a Dark Cloud Cover Bearish pattern yesterday... thoughts would be welcomed....as such do we sell-the GAP ??

This question was sent to me yesterday morning, just seeing it now. This sounds like a candlesticker question, of which it is all Japanese to me.

Anyone in the monitor wish to comment? How long will the dark cloud stay around for? The MARKET certainly seemed to want to sell it yesterday afternoon.

  Linda Piazza   10/10/20,  2:30:53 PM
As of a few minutes ago, volume patterns were mixed with adv:dec ratios at 17:15 for the NYSE and 13:18 for the Nasdaq. Up volume was ahead on both indices, but more strongly ahead on the Nasdaq, which seems contrary to expectations. Concentrated buying in certain issues, perhaps? Total volume was 739 million on the NYSE and 1.1 billion on the Nasdaq.

  Jeff Bailey   10/10/20,  2:27:19 PM
Forest Labs (FRX) $47.88 +0.44% Link ... I've been disapointed with my bullish FRX profile of recent weeks and not sure if decline from $50 has been FRX specific or broader drug-related out of favor. Will note here that the FDA's deadline on FRX/NTII's Memantine for treatment of severe Alzheimers is October 19, which give FRX one week to get its act together.

NTII $6.29 +3.28% still rather strong, so not thinking the market has any negative news out of the FDA.

  James Brown   10/10/20,  2:27:19 PM
Jeff, forget the ripped teddy bear. Give me a picture of the tattered Lazy-boy chair. Shares of La-Z-Boy (LZB) are down more than 10 percent after warning for its Q2 results this morning. Estimates had been for 41 cents a share. LZB now sees earnings in a range from 26 to 29 cents.

  Jeff Bailey   10/10/20,  2:20:23 PM
AMEX Gold Bugs (AMEX) 199.66 +1.45% back to test the 200.00 level yet again. In July (07/22/03), an HUI.X close above its rounding lower 21-day SMA seemed to be the trigger for a strong upside move days later. Very similar oscillators now as back then on the daily chart.

  Linda Piazza   10/10/20,  2:14:07 PM
I keep thinking about likely direction this afternoon. If you had planned on the usual October dip and were heavily short or heavily into put positions and saw the last weekend before opex week staring at you without the indices declining markedly, what would you be doing? Either hoping a lot or maybe liquidating some of those positions. What if more were looking at those new highs, though, and going long earlier in the month? It's difficult to guess who would cave in first.

  Jeff Bailey   10/10/20,  2:12:43 PM
Vermont Teddy Bear (BEAR) $5.00 +8.69% Link .... just messing around here with chart symbols, but with the holiday shopping season rapidly approaching, BEAR's PnF chart could be poised for big move on break at $5.50. I've never been in one of their stores, but my nieces just love the place, the bears, the clothes. I was thinking of getting "Drake" the dog one this holiday season. Within a week, I'll have that picture of a shredded teddy bear I'm looking for in PLCE.

  Jeff Bailey   10/10/20,  2:04:53 PM
Children's Place (PLCE) $25.38 +6.37% ... hey Jonathan... you've always seem to find some funny pictures. Do you have one in your archive of a Teddy Bear with its buttons, arms, legs and ears being ripped to shreds?

  James Brown   10/10/20,  1:58:38 PM
While marveling at the altitude that shares of JBLU have achieved I was also struck by the gravity defying gains in shares of Urban Outfitters (URBN). Shares of URBN hit another new high today on an upgrade from UBS to a "buy" after the company posted strong September same-store sales. UBS has slapped a $38 price target on the stock. The company has received some potentially negative headlines concerning a new game called "ghettopoly", which some consumers are calling racists and offensive. What bears are likely to find offensive is the 270% gain in shares of URBN from its February '03 lows. Shares are VERY overbought right now and way overdue for a consolidation.

  Jane Fox   10/10/20,  1:56:04 PM
JBLU and AAI two of my most favorite stocks to trade. Maybe time to move on to others.

  James Brown   10/10/20,  1:49:54 PM
The XAL airline index is finally seeing a down day after two full weeks of steady gains. Yet the best profit-taking sellers could muster today is only a 1.75% drop. Traditionally, one would have expected a bigger decline with oil futures rocketing higher in the last two sessions to new highs above $32 a barrel. (jet fuel being a major expense for the airlines).

What should be contributing to the weakness in airlines are negative comments this morning from UBS on three discount airlines. UBS has downgraded American West (AWA) to a "neutral" from a "buy". AWA is down 7% on the cut.

UBS also downgrades JetBlue (JBLU) and AirTrain (AAI) from "neutral" to "reduce" (a.k.a. sell). Shares of AAI are down almost 10% and JBLU is down 4%.

  Jeff Bailey   10/10/20,  1:48:32 PM
01:00 Update posted at this Link

Check out PAL

  James Brown   10/10/20,  1:37:42 PM
Bullish traders may want to keep an eye on shares of Taro Pharmaceutical (TARO). The stock has been bucking the declining trend in most of the drug stocks and is out performing the biotech group. Shares broke above resistance at $60 two days ago and are currently trading near all-time highs. A pull back to $59 or $60 might work for a short-term entry point.

  Linda Piazza   10/10/20,  1:35:56 PM
The 30-minute momentum indicator I've been watching (after noting Jim's comments) this week is now registering a negative number, while the 60-minute is now moving up and remains positive.

  James Brown   10/10/20,  1:21:41 PM
Juniper Networks (JNPR) is suffering some profit taking after reporting a profit of $7.2 million or 4 cents a share. Last year the company lost about $88 million for the same quarter. A couple of analysts (JMP & Wachovia) have upgraded JNPR to a "market perform". Unfortunately, the selling today is painting what looks like a bearish engulfing candlestick pattern, which usually forecasts a reversal when seen at the top of a trend like this....although we are seeing a very small bounce off today's lows.

  Linda Piazza   10/10/20,  1:19:49 PM
The OEX 30-minute 21-pma has been holding back the OEX all day. That average (exponential) is currently at 519.91, just under 520 resistance.

  James Brown   10/10/20,  1:16:15 PM
Bear Stearns is also upgrading Gap Inc (GPS) to an "out perform". GPS reported very strong September same-store sales yesterday of +13% versus estimates for a gain of +5%. The stock was moving yesterday on the SSS news but there has been little reaction today. If you're glass is half full then at least GPS is not seeing any profit taking today and holding above the $19 level.

  James Brown   10/10/20,  1:15:41 PM
The RLX retail index may be down a couple of points but that isn't stopping shares of Hot Topic (HOTT) from hitting new all-time highs again. It was just a couple of days ago that HOTT pre-warned positive earnings results for the Q3 (they report on Nov. 19th). This morning Bear Stearns is pouring more fuel on the fire with an upgrade to "out perform" for HOTT.

  Linda Piazza   10/10/20,  1:02:53 PM
If you scroll back on an OEX 60-minute chart to Wednesday's close, the chart configurations look much as they do now. The OEX had been trading below the 21-pma, and the 21-pma was rolling down. MO, RSI, CCI, and MACD were all near their equilibrium levels. The OEX had just bounced from the rising trendline off the 10/07 candle low from 9:30. I'm not saying the result will be the same (Thursday morning's big rise off the 60-minute 21-pma), but I'm just noting the similarities.

  Jeff Bailey   10/10/20,  12:55:53 PM
Southern Peru Copper (PCU) $24.75 +2.48% Link ... by golly, here's another copper-sounding-producer on the move.

  Jeff Bailey   10/10/20,  12:53:16 PM
Hmmmm.... short interest building in the QQQ, QQQ going higher... am I to think the big guys have been short the QQQ all the way up?

  Linda Piazza   10/10/20,  12:53:00 PM
Should I mention the latest possible inverse H&S showing up on the OEX five-minute chart? I think not. One danger of days like today is that you're studying every squiggle, trying desperately to discern some pattern that's going to predict direction. Likely, there isn't one. It's going to be someone pushing a button somewhere and triggering a sell or buy program that does it.

  Jane Fox   10/10/20,  12:51:56 PM
Jeff your interpretation is exactly right, but it is usually the other way around, the small get crushed while the commercial make all the money. Isn't this one odd? Maybe the small guys are following the Pnf charts and the commercials are not.

  Linda Piazza   10/10/20,  12:51:24 PM
I'm looking at the Wilshire 5000, still above 10,000 support, still below 10,170 resistance. Is it bullish that it's maintaining that support? Is it bearish that it can't move above that resistance? I note the 10-, 21-, and 30-dma's all clustered between 9914 and 9946, so it might not fall far if it did decline.

  Jeff Bailey   10/10/20,  12:49:02 PM
Thanks Jane! ... but what does it mean? I'm not up to speed on these kinds of charts. Looks like commercials have been shorting and getting crushed, while small traders have been net long and making money since June based on a time comparison with the PnF futures contract.

  Jeff Bailey   10/10/20,  12:41:34 PM
Goodness me... ... Aluminum Corp. China (ACH) $44.35 -1.96% Link ... made note of this "China" stock in 10/02/03 market monitor just before the close and haven't kept up with it. Has been a "gap fest" higher on the bar chart. I was listening to some guy last night on CNBC while writing the Index Trader wrap and his thoughts on industrial metals prices on the rise, where China was seen as not having near enough supply of industrial metals to serve its growing needs.

  Jane Fox   10/10/20,  12:40:30 PM
Jeff here is a Commitment of Traders graph of Paladium for your reference. Link

  Linda Piazza   10/10/20,  12:37:26 PM
I just realized that some of my sent mail had not been delivered. If you've been waiting for a reply from me today, it should be on its way now.

  Jeff Bailey   10/10/20,  12:23:36 PM
December Palladium (pa03z) 212.00 -1.39% .... I've got to get to work on some Paladium stocks (see Tuesday's market monitor 01:09:48, 02:11:32) Link . I'm just noting that this contract traded 220 yesterday and again today and this has its futures contract giving a double top buy signal at $218, negates the prior bearish vertical count, and has bullish vertical count initialized at 250. For those of you PnF-ers that are handcharting this commodity on a PnF chart, Dorsey/Wright is using 4-point box scale. Support looking firm at $204.

Stillwater Mining (NYSE:SWC) $6.70 +0.29% Link is supposedly the largest producer of palladium.

  Linda Piazza   10/10/20,  12:19:46 PM
Here's another possibility seen on the OEX 60-minute chart: Link

  Jeff Bailey   10/10/20,  12:09:23 PM
Computer Assoc. (CA) $24.30 -6.3% Link ... stock weak for a second session after some "fuzzy accounting" was discovered yesterday in SEC investigation. I'm setting a downside alert for bullish trade at $22. Pretty good fit from retracement if taken from the July 2002 lows to just this recent 52-week closing high of $28.96, where a 38.2% retracement of the bullish move is at $20.70. I've also placed a regression channel on the stock, where base regression channel intersects at $20.70. Also see a rising 200-day SMA at $19.50.

  Linda Piazza   10/10/20,  11:57:53 AM
Here are a few things I'm watching on one version of my 60-minute charts: Link

  Jeff Bailey   10/10/20,  11:50:47 AM
QQQ here's intra-day chart and update to yesterday's bearish profile. Link

  Linda Piazza   10/10/20,  11:46:01 AM
The OEX now hits a rising trendline (including shadows) from the 10/07 low hit during the first 30-minutes of trade on that date. This appears to be a kind of make-it-or-break it line, with a fall through here perhaps hinting at a retest of the 60-minute 100- and 130-pma's, currently at 513.46 and 512.62, respectively. As I type, the OEX is bouncing from this line, currently at about 517.10. The last bounce from this line at 3:05 yesterday rose to a high of 519.56 this morning, so we can now start watching to see if we get a higher high or whether the OEX turns around and falls through that line.

  Linda Piazza   10/10/20,  11:40:22 AM
Aaah! There, I have that out of my system.

  Jeff Bailey   10/10/20,  11:38:52 AM
11:00 Update posted at this Link

  Linda Piazza   10/10/20,  11:31:04 AM
Gaps can be powerful support or resistance. Note today that the OEX keeps testing the upper gap support from this morning's gap. The COMPX fell below this morning's gap, but then found support at the 1906 level that represented the 50% retracement of the larger and more significant gap from yesterday. It's now having trouble clearing the 1910 bottom of this morning's gap.

  Linda Piazza   10/10/20,  11:20:22 AM
Great definition, Jonathan! See Jonathan's 11:15 definition of "whoosh" on the Futures side, if you're not watching both Monitors.

  Linda Piazza   10/10/20,  11:18:23 AM
The upside target for the inverse H&S that formed on the three-minute chart this morning was not met, with that upside target being 520.50, and the OEX high after its confirmation being 519.56. Now there's a chance that another inverse H&S is forming, this one most visible on the one-minute OEX chart. It may be rounding into a right shoulder now, and has a descending neckline at about 418.20, depending on how it's drawn. For clarification, these one-minute and three-minute patterns are certainly not tradable on the OEX, but watching them does help us assess strength or weakness, and so I think they're valid to watch for that reason.

  Linda Piazza   10/10/20,  11:05:13 AM
I don't think the 30-minute indicators I use could be any flatter. MACD, RSI, CCI, stochastics: they are each at or near their equilibrium levels. Some turn slightly up and some turn slightly down. A whoosh either direction would be needed to align them, and they're not going to predict that whoosh. If you are already in plays, particularly if they're OTM options, this market action is going to eat up a lot of your option premium. Unless there's more movement soon, consider stops that relate to lost premium as well as the value of the underlying.

  Linda Piazza   10/10/20,  10:58:36 AM
For reference, yesterday's OEX low was 516.51.

  Linda Piazza   10/10/20,  10:56:45 AM
The COMPX has closed this morning's gap, but has not yet retraced 50% of yesterday, which will occur at about 1906.

  Linda Piazza   10/10/20,  10:48:24 AM
It looks as if there's been a breakdown out of that five-minute OEX possible bear flag, but the OEX paused right at the top of the gap from yesterday. That pause is tentative as yet, however, but I'm not going to consider this bear flag confirmed just yet.

  Jeff Bailey   10/10/20,  10:48:22 AM
Bad feed from my Qcharts this morning. 3-times now I've seen different H/L for my first 5-minute bar. Recent adjustment has 5-minute showing $34.84-$34.83. I'm going with $34.84-$34.72

  Linda Piazza   10/10/20,  10:44:32 AM
I was listening to the UPS CEO speak on CNBC this morning. His take is that there is a recovery, but that its progress is erratic. I hope I'm paraphrasing him correctly. UPS would be a good first barometer as they would see increased traffic if a recovery were underway, and he felt that they were seeing that increased traffic.

  Linda Piazza   10/10/20,  10:41:32 AM
This still looks like a bear flag rise on the five-minute OEX chart, but I'm still distrustful of everything I see. The OEX keeps turning down from that 30-minute 21-pma while it keeps hugging the 60-minute one. The 60-minute 21-pma is currently at 518.41, and the OEX is again testing it. I'm glad to read Jonathan's and Jim's posts on the Futures side, and see that I'm not the only one finding confusing signals. It's as if you wake and think your vision has dimmed, only to find out that the electricity's gone out and the lights aren't on.

  Jeff Bailey   10/10/20,  10:39:14 AM
Pretty quiet even within the daily pivot matrix. Major indices tracked in pivot matrix show all having traded their daily pivot to the upside, with the OEX high of 519.49 just above its daily pivot of 519.47. OEX 518.62 here.

  Jeff Bailey   10/10/20,  10:36:04 AM
Ask Jeeves (ASKJ) $21.28 +0.52% Link ... Kaufman Bros. raising estimates on ASKJ after strong-than-anticipated secular growth trends in sponsored search results reported by Yahoo! (YHOO) $42.75 (unch). Firm believes that ASKJ will directly benefit from Google's actions through higher monetization of traffic. Raises Q3 estimates to $0.08 from $0.06 and Q4 to $0.11 from $0.10, which would be above respective consensus of $0.06 and $0.10. Reiterates its buy rating and target of $29.

  Linda Piazza   10/10/20,  10:35:21 AM
Reader Question: Would love your opinion on CA after big drop yesterday. News on CFO leaving. PF reversal met.

Response: Don't you love Stockcharts.com new price targets and the fact that they let you know when the target has been met? I have no problem calculating targets. My problem is that Stockcharts offsets the numbers on the side, and I can never figure out which number goes with which box.

Before I answer the question, I have to preface my answer with some caveats. First, the SEC does not allow us to give individual advice, so I can only assess what I see on the chart in this forum and let individual traders make decisions based on this information. Also, I'm a technical trader and not a fundamental one, so I'm not the best person to assess how a stock is likely to react to bad news. In my personal trades, I usually find it safest to let the reaction to the news settle out, primarily so that I don't pay those inflated option premiums when a stock is first reacting to news. That doesn't mean that it's not possible to make money buying options on such a move. My trading style is just different. I want to make a considered decision. I don't know whether the reader is considering a bullish or a bearish play, and it's probably better that I don't know, but one suggestion to this trader if considering an entry today is to study an intraday chart using Jeff's 5MRT system to help guide the trading. With those caveats, here's what I see on the daily chart: Link

  Linda Piazza   10/10/20,  10:19:27 AM
Studying the 30-minute and 60-minute OEX charts using a 1.35% envelope surrounding a central exponential 21-pma gives different views of what's happening. On the 60-minute, the OEX is above the central average, while momentum, RSI, and CCI have curled upward just the slightest amount. Momentum (I'm still using 21) measures a positive number, as does CCI. MACD histogram values are slightly negative, but it's always the slowest to change. On the 30-minute, however, the OEX remains below the central average, although its being tested again as I type. RSI, always the fastest to move, hinges up. Momentum looks as if it's trying to do so, too, and has a positive value, but it and CCI are much more tentative than on the 60-minute. The MACD histogram also shows a slight negative value, but is definitely trying to flatten and maybe even to curve up along the signal line. In the shortest term, there's more weakness than on the slightly longer-term of the two charts, then.

  Jeff Bailey   10/10/20,  10:16:57 AM
QQQ $34.90 +0.57% .... In last night's Index Trader Wrap, I added a new PINK trend to the Q's and said I would work on a regression channel for the Q's. I did this last night and simply took a new regression from the 02/13/03 low to current trade and get pretty good fit with the QQQ rise.

Mid-point of this regression does look to find some significance per yesterday's late trade, and so far today, serves support. Upper end of this channel is at around $36.45, while base is at $33.25.

MONTHLY Pivot is at $33.21 and might make nice fits with regression, while next week we might get a WEEKLY level up near $36.50.

With daily Stochastics looking to roll lower right now, I lean a little more toward some softness, and look for another good pullback entry point.

  Linda Piazza   10/10/20,  10:03:11 AM
If the current rise in the OEX off the low from yesterday afternoon is some sort of measured distribution pattern such as a bear flag, then the upside target for the inverse H&S on the three-minute chart should not be met. That 520.50 target would retrace more than 50% of the flagpole drop that preceded the formation of this possible flag. That will give us one test to watch. In addition, a move up to 520.50 will mean that the OEX has moved above the bullish #2 on Jeff's 5MRT system, giving a bullish cast to the day's trading. Bearish distribution pattern or bounce from the 60-minute 21-pma after finding support there? We now have a couple of things to watch to help us decide.

  Jeff Bailey   10/10/20,  9:48:10 AM
QQQ $34.93 +0.6% .... I'm going to make slight adjustment to previously profiled bearish stop. Stop of $34.05 was eyeballed just above WEEKLY R1 of $34.99. With 5-minute bar now developed, I see BLUE #4 at $35.06. For those willing, would edged a bearish stop up to $34.11 for today's session.

  Linda Piazza   10/10/20,  9:46:16 AM
I'm using the 5MRT to watch the OEX's behavior this morning rather than the 3MRT I use on the days when we see a big move early in the day. The OEX's shape on the five-minute chart appears to be a bear flag rising after yesterday afternoon's precipitous drop if you look at five-minute and longer charts, but there's a problem with that analysis. (Keep reading.) As I was yesterday, I'm going to be cautious today about the level at which I consider such formations confirmed. For example, this flag is forming just above the gap from yesterday morning, and there's always a strong possibility that gap support will hold, so I wouldn't consider this one confirmed until a drop below that gap. Also, if you study this formation just right, perhaps on a three-minute rather than a five-minute chart, it has a definite inverse H&S look to it, with the OEX just now moving above the neckline. If that's a valid formation and if the upside target is met, that projects up to 520.50.

  Jeff Bailey   10/10/20,  9:44:18 AM
Texas Instruments (TXN) $25.21 +0.88% Link ... Deutsche Securities upgraded TXN to "hold" from "sell" and raised their target to $22 from $16 based on the likelihood for continued bullishness toward semiconductor stocks and upside potential for consensus EPS forecasts. While a positive reporting season suggests trading upside for the stock, the firm thinks the current valuation of 36-times CY04 estimates remains stretched.

  Linda Piazza   10/10/20,  9:38:47 AM
The Dow tests 9700 again, and this test will be important to anyone trading the OEX, too.

  Linda Piazza   10/10/20,  9:37:25 AM
The first five-minute OEX range was from a high of 519.39 and a low of 518.46. The 50% retracement of that first five-minute range lies at 518.93. Let's watch this level for signs of early strength or weakness. We had a gap this morning, but I'm not sure whether it's a big enough gap that the gap will need to be retested. What may be more important is the top of the first five-minute range, because that first five-minute candle retreated when it hit the 30-minute 21-pma, currently at 519.31.

  Jeff Bailey   10/10/20,  9:32:33 AM
QQQ $34.81 +0.34% .... will continue to hold bearish profiled trade from yesterday at $34.71, stop at $35.06 and targeting $34.18

  Linda Piazza   10/10/20,  9:28:43 AM
It hasn't been a good week to trade the OEX, in my opinion. The first three days of the week, we had premium-sapping consolidation, especially deadly in the week before opex week. Unless you had faith in the slight uptick in oscillators at Wednesday's close and went long, you were doomed to staying out of the first swoosh up or buying when the markets were moving fast. When you're buying calls that way, you're likely to find that you paid an exorbitant price for those calls and that they don't escalate much as the markets finished their climb. Yesterday's swoosh down might have been easier to anticipate, but I sure didn't have faith enough to do so with such a bullish tenor predominating. I thought there would and should be a test of OEX 519-520, but I didn't anticipate the big swoosh and didn't want to jump into puts ahead of what I thought might be a smaller pullback. Unless you were already in those puts, you were again doomed to paying big prices for buying when the markets were moving fast.

Because the week has been so difficult to trade, I've been using my time exploring new technical analysis tools that might help us. I also invite you to watch some of the futures trades going on, as I think trading futures might have been a better exercise this week. There are times when one type of trading works well and times when it doesn't, and this hasn't been a good week for the OEX. Again, that's just my opinion.

Yesterday, the OEX printed a high-wave candle, with both opening and closing prices near the 60-minute 21-pma. That's where the OEX spent most of the week, oscillating above and below the average. Ordinarily such a high-wave candle would be a trend-reversal signal, but since that high-wave candle came during what might legitimately be termed consolidation around that 60-minute 21-pma, I'm not sure what to make of it, especially since the day ended with the RSI kicking up again after it had begun a rollover. MACD is flat. I think the OEX is trying to establish the 515.50-519.50 zone as support before it pushes up again, but whether that attempt will be successful or not is certainly in question, especially with seasonal patterns in mind. If this zone doesn't hold, the OEX may need a deeper retracement, at least to 511.50, and then perhaps down to the 496-498 zone, to establish a firmer footing. Some aspects of that weekly chart I posted earlier this week sure make me wonder whether we're going to see that seasonal pattern assert itself this year, however.

  Jeff Bailey   10/10/20,  9:28:25 AM
Novartis (NVS) $39.81 Link ... higher at $40.40 after its breast cancer drug Femara was found to be so successful in a major international trial that scientists stopped the testing half way through to allow all patients to take advantage of the stunning success rates.

  Jeff Bailey   10/10/20,  9:20:45 AM
09:00 Update posted at this Link

  Linda Piazza   10/10/20,  7:30:04 AM
A study of the five-day charts of the FTSE 100, CAC 40, and DAX show them all to be near their week's highs, having all bottomed Tuesday and then begun moving up in sometimes-choppy patterns. The Nikkei has a somewhat different pattern. It closed the week about 77 points higher, but off the week's opening high. The Nikkei dropped into Thursday's trading but then recovered to close the week higher but below the highs attained Monday morning.

  Linda Piazza   10/10/20,  7:01:07 AM
Good morning. The Nikkei opened more than 130 points higher than Thursday's close and began moving up from there. By its close, it had gained 254.60 points or 2.42%, to close at 10,786.04. It had traded as high as 10,852.42. Ahead of a holiday Monday that will close the Nikkei, the Bank of Japan concluded a two-day meeting, with the decision made to ease monetary policy to compensate for the deleterious effect of the rising yen. The Bank of Japan will do this by increasing its goal for the outstanding balance of deposits in current accounts that the BOJ retains for private institutions. This change will raise the reserves made available to lenders, allowing them to continue lending money to companies. Exporters led the gains, due both to enthusiasm prompted by improved U.S. employment figures and by a report that speculated that Casio may have topped its own first-half estimates. Resona Holdings, the bank that was a recipient of a government bailout, rose after reports that it was making headway in its effort to rid its books of problem loans and overhaul its balance sheet. Other banks rose in tandem. Technology stocks gained.

Semiconductor stocks had a mixed performance throughout Asia, however, with Samsung Electronics and Singapore's Chartered Semiconductor rising, but United Microelectronics and Taiwan Semiconductor slipping lower, each by 0.7%. Almost all Asian bourses closed higher, however. The Taiwan Weighted rose 0.83%, and South Korea's Kospi gained 2.95%. Singapore's Straits Times gained 0.46%, and Hong Kong's Hang Seng added 1.15%. China's Shanghai Composite gained 2.54%.

Many European bourses trade slightly either side of the flatline, however, in what is described as a choppy session. As I began this report, most were trading slightly down, but some now trade slightly above the flatline as I conclude the report. Much discussion in both the print media and on CNBC World this morning centered on the euro's rise against the dollar, and automakers declined as the euro inched higher. In addition, French August Industrial Production fell 0.9% month-over-month, surprising economists who had predicted a 0.3% gain. The summer's heat wave and unemployment impacted spending on manufactured goods. In stock-specific news, General Electric is involved in another possible M&A deal with an over-the-pond company, with GE saying it would bid for British medical products group Amersham. Also, Morgan Stanley raised its rating of German drugmaker Schering to overweight from equalweight, with Schering having announced this week that it had a breakthrough related to the detection of Alzheimer's disease.

Currently, the FTSE 100 trades down 0.90 points or 0.02%, at 4313.00. The CAC 40 trades down 3.76 points or 0.11%, to 3321.23. The DAX has risen 2.80 points or 0.08%, to 3484.70.

  OI Technical Staff   10/9/200,  10:59:52 PM
We are having server problems on one of the monitor servers. The monitor may not be available for long periods overnight. We hope to have this completed before the market opens.

  Jeff Bailey   10/9/200,  10:59:37 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   10/9/200,  10:59:27 PM
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