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  Linda Piazza   10/13/20,  5:24:11 PM
After hours warnings include warnings from SonoSite (SONO) and Lubrizol (LZ). SONO cited lower-than-expected sales for the current expectations that it will suffer a Q3 loss. The maker of medical products for ultrasound imagining mentioned that government sales came in lower than expected. LZ said FY03 earnings would come in below prior estimates due to lessening demand for finished lubricants.

  Jeff Bailey   10/13/20,  4:27:19 PM
Hollywood Entertainment (HLYW) $17.92 +1.41% .... lower at $16.70 after reporting Q3 (September) earnings of $0.32 per share, which was in line with consensus estimates of $0.32. Company said revenues rose 8.9% year-over-year to $402 million, which was below consensus of $408.8 million.

  Linda Piazza   10/13/20,  4:04:07 PM
The OEX ended the just below the midpoint of the day's range: neutral to slightly bearish. It ended above the 30- and 60-minute 21-pma's, although barely above them: neutral to slightly bullish. The volume patterns remains bullish all day, although volume was somewhat light: bullish. The OEX closed above 520, for its second-highest close this year, but closed below the 522.60 high of 9/18: somewhat bullish? The VIX closed at 17.56: scary. Daily MACD turns up, daily RSI turned back up after trying to slip down. Many moving averages now course up beneath the current OEX price: bullish.

  Jeff Bailey   10/13/20,  3:58:07 PM
QQQ $35.15 +0.39% .... will profile BULLISH on trade at $35.20

  Linda Piazza   10/13/20,  3:52:24 PM
The 30-minute indicators now look slightly more bullish or perhaps slightly less neutral-to-bearish, with CCI and momentum turning up and with MACD trying to curve up into a bullish cross from above signal. Whether this is anything more than the twitching back and forth we've had all afternoon, I don't know.

  Jeff Bailey   10/13/20,  3:44:01 PM
03:15 Update at this Link

  Linda Piazza   10/13/20,  3:34:59 PM
Complete inaction and then a lot of aimless zooming: that's how I'd describe a lot of trading days lately including today. I note that we would have stayed completely away from trading today if we were using the Donchian channel breakout system I've been watching. We would have avoided trading the chop in the middle. That doesn't mean it will work on breakouts all the time or that trading breakouts is always a good idea, but I'm just noting what I see real-time.

  Linda Piazza   10/13/20,  3:29:11 PM
I agree with Jonathan, Jane, and Jim about this not being a great day to trade, as we all thought coming into the day. I'm commenting on the developments as I see them occurring and mentioning certain points to watch, but that's for the consideration of those already in trades. I do note that the OEX again appears to be finding support at those 30-minute and 60-minute 21-pma's. That still leaves the possibility of higher interim highs intact, although not necessarily today. Not necessarily at all.

  Linda Piazza   10/13/20,  3:25:58 PM
A move over 520.50 will break the OEX above the consolidation zone in which it's traded since shortly after 1:00 ET.

  Linda Piazza   10/13/20,  3:00:56 PM
That possible H&S neckline on the OEX 60-minute chart has now risen to about 518.60, although that depends on how you draw the neckline.

  Linda Piazza   10/13/20,  2:57:56 PM
The OEX couldn't be hugging the 30-minute and 60-minute 21-pma's any tighter if it tried. The flat trading has flattened the indicators on those time periods, too, and they're not going to give us any clues as to final direction. I'm looking at Donchian channels, Keltner channels, envelopes, you name it, and the OEX is squarely in the middle of most of them.

  Linda Piazza   10/13/20,  2:42:05 PM
It will be strange to trade through 3:00 today with no bond market closing to anticipate.

  Linda Piazza   10/13/20,  2:33:43 PM
The current OEX five-minute pattern could be a bearish distribution pattern with it looking more like a wedge than a flag). If so, we have to look at the 50% retracement of the move that immediately preceded it, as the OEX should not trade higher than that level if this is truly a distribution pattern. That's at 520.41, a level the OEX has been testing for the last couple of five-minute bars.

  Jeff Bailey   10/13/20,  2:12:34 PM
Altera (ALTR) $18.91 +1.83% Link ... upgraded by Soundview to "outperform" from "neutral" this morning based on the firms valuation model and sources saying a fundamental shift is taking place in favor of ALTR, which has revenue potential in 2004-05 from current design wins. Soundview notes that ALTR trades at a 2% discount to Xilinx (XLNX) $29.97 -2.28% Link versus historical +6% premium.

  Jeff Bailey   10/13/20,  2:07:04 PM
Skyworks Solutions (SWKS) $10.86 +2.8% Link ... stock may see benefit after Reuters reported that Samsung raised its handset industry outlook to 460 million units from 435 million units. SWKS derives roughly 13% of its revenues from Samsung.

  Linda Piazza   10/13/20,  2:04:03 PM
If we were trading the Donchian channels as I tested them this weekend--as a breakout tool--we would not have entered a trade yet today. Currently, the OEX would have to close a 30-minute candle above 523.01 to signal an upside breakout and would have to close a 30-minute candle below 516.85 to signal a downside breakdown.

  Linda Piazza   10/13/20,  1:59:55 PM
The OEX bounces from the 60-minute 21-pma at 519.56 and the 30-minute 21-pma at 519.54. Let's see how far the bounce carries it. Since late on the afternoon of the 3rd, the OEX has essentially been testing these averages and then bouncing up a bit, then coming back to test them again.

  Linda Piazza   10/13/20,  1:56:53 PM
Volume patterns remain strongly bullish, but apparently there just isn't enough of it to hold those indices steady. Total volume as of a few minutes ago was 634 million on the NYSE and 992 million on the Nasdaq. Adv:dec ratios were 22:10 on the NYSE and 10:11 on the Nasdaq.

  Jeff Bailey   10/13/20,  1:47:16 PM
01:00 Update at this Link

  Linda Piazza   10/13/20,  1:43:38 PM
I just ran through my list of penny stocks I watch as a sentiment gauge. I don't trade these stocks. I've never owned or shorted a single share of them, but I do watch them to see how the underbelly of the market is behaving. That doesn't mean I've never owned a penny stock. Back in early 2000, I bought one that has since disappeared off the edge of the earth. Lesson learned. Today, the picture is mixed among these penny stocks. Some are up and some are down, but most are within some sort of consolidation pattern. The ones that are not consolidating tend to have already broken out (to the upside) of their consolidation patterns. So far, then, the bottom isn't falling out, at least according to the trading patterns of these particular stocks. This is not a suggestion to invest in penny stocks. This is just one more sentiment measure I watch.

  Linda Piazza   10/13/20,  1:36:48 PM
Here's where it gets dangerous. Perhaps. We are now officially within the 1:35-1:55 ET zone that does produce those stop-running pushes.

  Linda Piazza   10/13/20,  1:34:06 PM
Here's what I'm watching on the OEX 30-minute chart: Link

  Jane Fox   10/13/20,  1:30:12 PM
Linda, for the same reasons, I don't like them either. Just not patient enough.

  Linda Piazza   10/13/20,  1:28:11 PM
Perhaps you've heard me mention one of my weaknesses: straddles. Although I'm usually patient in trades--too patient for my own good--I'm terrible with straddles. I try to trade them and lower my basis. I don't know why I have that problem, but it's one of my known vices, so I don't trade straddles. However, with this being opex week and with the indices pinned near key levels--either breakout or breakdown--and with VIX levels so low, I was thinking today might be the day. I priced a QQQ 35 straddle early this morning after the QQQ had settled a bit near the high of the day since I don't like to buy at the open, and I've been tracking it since then. It was priced at $0.85 x $0.95 this morning, and I just checked it after this drop. It was $0.80 x $0.95. I still don't think I like straddles.

  Linda Piazza   10/13/20,  1:17:49 PM
Remember the possible 60-minute OEX H&S-ish formation I mentioned earlier this morning? It's still in play, with this dip rounding over the possible right shoulder. The neckline is at about 518.35 currently, but rising. Be careful about drawing too many conclusions too soon, however, because the OEX would have to test gap support and the 60-minute 21-pma, at 519.38 currently, before it can fall through that neckline.

  Linda Piazza   10/13/20,  1:14:56 PM
We're a little early for the usual 1:35-1:55 push, but movement has been so slow today that this dip feels like a big push. Perhaps it's beginning early today or perhaps this is just a few-issues sell program that will soon reverse. Whatever it is, the OEX looks to be heading down to test that morning gap.

  Ray Cummins   10/13/20,  1:13:57 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The last stock in our review of bearish portfolio positions is Inamed (NASDAQ:IMDC), which is down $1.69 at $69.81 on news that the National Center for Policy Research for Women and Families has again questioned breast implant safety ahead of the FDA panel review later this week. On Tuesday, a regulatory advisory group is expected to hear from medical experts and Inamed officials before deciding whether to recommend approval for the company's request to start selling implants filled with silicone gel, which were banned for most women in 1992. Proponents say the science still supports the "safety and effectiveness" of the implants, however the concern voiced by critics is the lack of adequate assurance of safety for Inamed's implants. A final vote is scheduled to take place by late Wednesday afternoon and that's the apparent reason for the cautious trading in the stock. The FDA will decide in the coming months whether or not to grant the approval but since the agency usually follows its panels' advice, the near-term direction for IMDC will likely be determined later this week.

  Jeff Bailey   10/13/20,  1:08:03 PM
Hollywood Entertainment (HLYW) $17.80 +0.73% ... reports earnings after the close. Seeing some unusual put volume in the Oct. $17.50's (HWQVW) of 921 with open interest of 772.

  Linda Piazza   10/13/20,  12:57:50 PM
I'm looking now for an OEX test of the 60-minute 21-pma at 519.43, within a penny of the top of this morning's gap.

  Linda Piazza   10/13/20,  12:54:50 PM
Now the 50% retracement of the OEX day's range is tested.

  Linda Piazza   10/13/20,  12:44:12 PM
Since breaking out of the presumed bull flag on the three- and five-minute OEX charts, the OEX has traded sideways. It's doing so exactly along the bullish #2 on the 3MRT system, so far remaining above the 50% retracement of the day's range. It's bullish that the OEX is maintaining levels in the top 50% of the day's range, but not-bullish that it can't move up after breaking out of that bull flag. Momentum has positive values on both the 30-minute and 60-minute charts, but most other indicators either flatten or else actually turn down. The exception is 60-minute MACD which still slants lazily upward. It looks to me as if the OEX is trying to steady here before attempting another push upward, but in this light volume, matters are even more uncertain than they usually are. Every time I study the daily chart, however, I note the similarity of the chart characteristics to those I kept seeing on tech stocks over the last month. I scan hundreds of charts every week, and I began noting the similarity back in September, but it was if the techs led the way and the OEX followed. I've mentioned this several times over the last week or two, but those tech stocks often managed to push to a new high after the chart showed these characteristics. Last week looked like an OEX rollover in progress, but today's white candle balanced on that 520 level--if it holds until the end of the day--looks decidedly less like a rollover and more like an impending breakout. I'm not making a prediction, but am noting the possibility. I've been saying since late September that this possibility existed. I just wish I'd bought long-term calls and held onto them since then, but sometimes I don't trust what I'm seeing.

  Jeff Bailey   10/13/20,  12:43:35 PM
Tax Code Maybe my head has been in the sand, but this weekend I saw a program on TV regarding small businesses being able to get some type of tax credit or write-off of $25,000 if they bought a truck or SUV for their small business. Here's an article I found using Google's search engine. Link

  Ray Cummins   10/13/20,  12:42:56 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

Another unexpected sell-off is taking place in eBay Inc. (NASDAQ:EBAY) shares after a surprise downgrade from Smith Barney. Analyst Lanny Baker issued a "sell" rating on the stock with a $48 price target in light of questions about growth at eBay Motors, the company's auto-sales unit, which he said accounts for 28% of its gross merchandise sales. The downgrade comes ahead of eBay's third-quarter earnings announcement, due on Thursday, and it was one of a number of comments provided by brokerages on the company's impending report. Deutsche Bank Securities analyst Jeetil Patel said global product listings were up 4% week-to-week and he maintained a "buy" rating on eBAy shares. FAC Equities analyst Youssef Squali maintained a "neutral" rating on the stock on valuation concerns but said he expected third-quarter results to be slightly ahead of consensus estimates, with gross merchandise sales up 53% year-over-year. Our bullish (credit-spread) position is not in danger at this point, but we will continue to watch the issue closely in the coming sessions.

  Jeff Bailey   10/13/20,  12:38:46 PM
Netflix (NFLX) $46.25 +3.56% ... Jeff: I bought 200 shares of NFLX at $41.25 based on you thoughts of a short squeeze in the stock and so far it is doing well. I'm thinking of writing some covered calls on the stock for October expiration. Where do you think this stock is headed into Friday's expiration? What are the chances of a $47.50 or $50.00 closing strike by Friday?

Hmmm.... I'd sit tight if possible, and stock may have $50.00 potential into Friday.

Today, if I could get a trade above BLUE #5 at $47.05 (5-mrt), I'd look to write the $50.00 call.

  Linda Piazza   10/13/20,  12:27:57 PM
When I have to wear my reading glasses to see the one-minute OEX candles clearly, you know the action has slowed considerably.

  Ray Cummins   10/13/20,  12:22:48 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The market is off to a great start this week with stocks moving higher in almost every major sector. Technology issues are among the best performers however biotech, financial, transportation, healthcare and housing shares are also enjoying buying pressure. Despite the bullish activity, the bearish portion of our portfolio has performed relatively well and it is especially surprising to see ImClone (NASDAQ:IMCL) trading lower after its recent announcement. On Friday night, IMCL said that the Food and Drug Administration accepted and granted accelerated review to the biologics license application for the colon-cancer drug Erbitux. Obviously, the decision doesn't mean that ImClone will receive clearance to sell the drug, but it's a major milestone because the original application for Erbitux was rejected by the FDA. Even so, investors are proliferating the age-old adage of "sell the news" and the stock is down over 5% in early trading -- which is a good thing since we have a number of bearish positions in the issue.

  Jeff Bailey   10/13/20,  12:18:01 PM
December Copper futures (hg03z) $0.879 +1.79% ... after triple-top buy signal on its PnF chart at $0.84, setting 5th consecutive contract high today.

Phelps Dodge (PD) $53.75 +0.69% Link hovering just under last week's 52-week high of $54.00.

Stocks within my QCharts Metals/Mining list show (NYSE:BBL) +4.98% Link , (NYSE:RTP) +4.04% Link , (NYSE:RIO) +3.9% Link leading gains, while PY -1.02% Link and HSVLY -5.4% Link see losses.

  Linda Piazza   10/13/20,  12:15:43 PM
The OEX did break above the morning's descending resistance line, but now slides down along it. It has not yet retraced more than 50% of the day's range. Here's a three-minute chart showing these developments: Link

  Linda Piazza   10/13/20,  11:55:00 AM
The OEX appears to be attempting an upside breakout of the bull flag on its three- and five-minute charts, but the breakout is tentative and uncertain as yet.

  Linda Piazza   10/13/20,  11:47:55 AM
The OEX has now risen to test the upper boundary of the possible bull flag. That flag resistance is now at 521.90, just above the bullish #2 on the 3MRT. So far, the resistance is holding.

  Jeff Bailey   10/13/20,  11:42:04 AM
December Palladium futures (pa03z) 210.00 -0.23% are down $0.50. Producers Stillwater Mining (NYSE:SWC) $6.55 -0.6% Link lower by $0.04, while North American Palladium (AMEX:PAL) $5.50 +1.85% Link gaining $0.10 after setting 52-week high earlier this morning at $5.65.

  Linda Piazza   10/13/20,  11:40:37 AM
So far, OEX 521.24 is holding, with three-minute stochastics hinging up again. However, if that's a bull flag, it's an ugly one with the OEX showing a tendency to fall out the bottom of the flag. These are the kinds of moves that come on low-volume days, however.

  Jeff Bailey   10/13/20,  11:35:01 AM
11:00 Update posted at this Link

  Linda Piazza   10/13/20,  11:31:55 AM
Below the OEX 521.24 level that marks a 50% retracement of the day's range lies the top of this morning's gap at 519.44. The OEX 60-minute 21-pma currently lies at 519.20, so this morning's gap level might combine with support from the 21-pma to steady the OEX if the OEX should continue declining. The OEX traded near that 60-minute 21-pma through much of last week.

  Linda Piazza   10/13/20,  11:25:42 AM
We'll soon get a test of the 50% retracement of the current day's range. If the current pattern is some kind of measured accumulation pattern after today's spike up, then it should break back to the upside before retracing lower than 521.24 or so. If it's a flag, it looks as if it's breaking to the downside, but I'll wait for that 521.24 level before drawing too many conclusions. So far, OEX 522.50-523.50 has held as resistance, however.

  Linda Piazza   10/13/20,  11:06:36 AM
The current OEX five-minute pattern looks like a bull flag forming just under resistance. If so, it should break to the upside before retracing half the day's range. That 50% retracement of the day's range lies at about 521.24.

  Linda Piazza   10/13/20,  11:03:51 AM
One last note on the Donchian channels. One factor I like about this method is that it's based on closing values on the 30-minute chart. That made it easy to backtest and would make it easy to trade, too. For example, the last 30-minute candle came very close to a breakout. The upper Donchian channel was at 522.60. The OEX traded as high as 523.01 during that 30-minute period and was clearly above the Donchian channel. However, it did not close above 522.60. No breakout.

  Linda Piazza   10/13/20,  11:00:16 AM
Obviously I need to do more testing on my Donchian channel information. Although I wanted to do a relatively blind test on a period chosen at random before, now I want to test a period of time when the OEX was known to be consolidating. How will the system perform then? I'm not sure, and I probably will not have time to complete the research until this weekend. However, these are my original impressions, not yet confirmed: These trades tended to do better when the 21(3)3 stochastics were already pinned in overbought (on bullish breakouts) or oversold (on bearish ones) at the time of the breakout, contrary to what I would have expected. Also, if the OEX opens outside the channel, it's usually a good idea to enter on the open. If a play is ongoing and the OEX opens inside the channel, it's usually a good idea to close the trade at the open.

  Linda Piazza   10/13/20,  10:53:32 AM
Trading Donchian channel breakouts on the 30-minute chart with Donchian channel settings of (20,2) and these exit parameters is not a fail-safe system. Last week, using this system, we would have we would have entered a bullish trade Oct. 7 at the close of the 3:00 candle, at 519.50, and would have been stopped at 517.94 on Oct. 8 at the close of the 9:30 candle, for a loss of 1.56. We would have entered a bullish trade on 10/9 at the close of the 9:30 candle at 521.25, and would have been stopped at the close of the 2:00 ET candle at 519.23, for a loss of 2.02, for a total loss that week of 3.58. The week before, we would have entered a bearish trade on 9/30 at 497.63, and been stopped 9/30 at 501.19 for a loss of 3.56; entered a bullish trade 10/01 at 505.82 and exited 10/02 at 508.94 for a gain of 3.12; entered bullish 10/3 at 514.05 and exited 10/3 at 517.59 for a gain of 3.54. The total gain for the week would have been 3.10 OEX points. That's not stellar, but it's better than the actual performance of the OEX trades that week. One problem did appear to be the number of losing trades in a row might be higher than most of us want to endure.

To help solve that problem, I tried other parameters to refine the trades. I tried using crossovers of the 100-sma and 100-ema to guide the trades, taking bullish trades only when the 100-ema was above the 100-sma and bearish trades only when the opposite condition existed. That reduced the gains, although they were still respectable. Then I tried using the 100-ema only, taking bullish trades only when price was above the 100-ema and bearish trades only when the price was below the 100-ema. That also reduced the performance, although the gains were still quite healthy.

  Linda Piazza   10/13/20,  10:45:16 AM
Continuing in my examination of how to exit a trade entered on a Donchian channel breakout, I calculated the figures for the same time period (as in my 10:36 and 10:40 posts), changing the rules again. In addition to the exit rules I'd established in the second set of calculations, I allowed for no more than a 4-point loss from the entry. That meant that if the OEX was slowly creeping down, but each candle closed within two points of the other, the trade would still not endure more than a four-point loss. The trade was also closed at the open if the open was inside the channel. That set of parameters resulted in 34 trades, for a profit of 91.24 OEX points. Again, remarkable! Out of those trades, six endured the maximum 4-point loss, a hefty 18% of the trades. Most losses and gains were minimal. What this system did allow, however, was participation in the big moves. This caught one 35.93 point move to the downside, one 13.29 move to the downside, and one 19.52 move to the upside, for example.

Obviously, my random choice of a time period turned out to be a volatile time period. Perhaps that's the point, however. In order for the OEX to close outside the Donchian channel, the OEX has to be experiencing more than the usual volatility. I've been looking for a method to identify those times when the OEX is consolidating as those times are deadly for options players. I'm not sure this is it, but I'm sure I'm interested in investigating it further. (More to follow.)

  Jeff Bailey   10/13/20,  10:41:04 AM
Cummins Engine (CUM) $51.35 +1.08% Link .... since China has their currency pegged to the dollar, and noted bullishness in China Yuchai (CYD) $19.23 +8.7%, thought I'd take a look at CUM.

CUM just gave triple-top buy signal at $51, and bullish vertical count column (X's from $45-$51) bullish to $66.

Back in November (red B), CUM gave buy signal at $26, and resulting bullish vertical count was to $52. As such, might play bullish 1/2 here, then add on further bullishness above $53.

  Linda Piazza   10/13/20,  10:40:05 AM
Next, when testing methods of entering and exiting trades based on Donchian channel breakouts, I covered the same period (as in my 10:36 post), but changed the exit rules. This time, the trade was exited the first time there was a thirty-minute close two points higher than the previous thirty-minute close on a bearish trade and two points lower on a bullish trade. The results were remarkably different. This allowed the trade to continue through some of the big runs. For the same time period, there were 32 trades (23 fewer) for a profit of 54.64 OEX points. Remarkable! However, I noticed some 6-9 point losses sprinkled among the gains. Some of those losses occurred when the OEX opened the day inside the channel when a trade was open. (More to follow.)

  Linda Piazza   10/13/20,  10:36:46 AM
After noticing how Donchian channels caught that breakout that ran so long, I spent the rest of last week trying to refine entries and exits. Should the exit occur at the first close back inside the channel? A cursory examination showed that wouldn't work. The OEX often closed in and out of the channel as it completed the big run. This weekend, I confirmed that impression. I selected a time period from random, scrolling through the chart so I wouldn't remember exactly what happened. That time period was July 18-September 18, 2002. Entering on the first 30-minute close outside the offset Donchian channel and exiting on the first close within it resulted in 55 trades, for a total loss of 5.84 points during that period. That wasn't exactly the result I'd hoped to see. (More to follow.)

  Jeff Bailey   10/13/20,  10:33:16 AM
Children's Place (PLCE) $26.73 +5.95% ... stock continues to add gains. Shorts look under pressure.

  Linda Piazza   10/13/20,  10:30:43 AM
I considered most of last week untradable for OEX traders. We need different conditions than do futures traders. Trading chop is deadly to our accounts. I spent the week investigating several new charting methods and became intrigued with a couple: Keltner channels and Donchian channels, both available on Q-charts. If you were reading my commentary from Monday, you noted my original explorations and then I became more and more intrigued with Donchian channels. The initial information I read suggested they could be used as a breakout tool although later explorations suggested that they were used just as normal channels were, with the OEX expected to trade from one side of the channel to the other. When I snapped a Donchian channel on the OEX 30-minute chart, breakouts were few and far between. I found only one in recent times. Did that mean that the original information was wrong? The idea kept nagging at me, however, and I tinkered with the offsets, setting the Donchian channel on the 30-minute chart at 20 with an offset of 2. I immediately found a breakout that ran for a long distance--just the kind of trade we need for the OEX. I was more intrigued. (More to follow.)

  Jeff Bailey   10/13/20,  10:30:36 AM
S&P Banks Index (BIX.X) 323.53 +1.15% .... upside alert here at WEEKLY R1 of 323.40 also comes with major indices at their WEEKLY R1's. Can play bullish here with further upside targets of WEEKLY R2's, and look for support at WEEKLY pivots.

  Linda Piazza   10/13/20,  10:27:53 AM
The OEX draws close to the 10/9 high of 523.41. As I mentioned last week, we have some weekly closes in that area: a 5/05/02 weekly close at 523.24, a 5/12/02 weekly open at 523.82, and a 5/26/02 weekly low of 523.31. I would expect a move over 524 to perhaps prompt more short-covering then, perhaps driving the OEX toward that top Bollinger band near 528. First, though, the OEX would have to plow through that weekly resistance, and I'm not sure whether that will happen.

  Jeff Bailey   10/13/20,  10:26:25 AM
General Motors (GM) $43.88 +2.54% Link .... new 52-week high after Prudential suggesting that GM is most likely to surprise to the upside on strength in rich product mix. GM reports quarterly earnings Wednesday morning before the open with consensus at $0.67 per share.

  Linda Piazza   10/13/20,  10:23:11 AM
So far, the OEX three-minute chart shows each retracement or slight pullback at about 19.1% of the previous move. If that continues to hold true, the OEX would steady here at its current 522.51 level, which is about a 19.1% retracement of the move immediately preceding this retracement. (Note: As I typed, the OEX began moving up again.)

  Jeff Bailey   10/13/20,  10:22:43 AM
S&P Banks Index (BIX.X) 323.23 +1.05% ... strong morning for the BIX.X and just fractions from WEEKLY R1 of 323.40.

Tomorrow morning we'll get earnings from bankers ASO and BAC.

  Linda Piazza   10/13/20,  10:20:42 AM
The OEX has now reached bullish #3 on the 3MRT system. Based on that, if in a bullish trade, you would now be placing your stop at the 520.63 top of the first three-minute range.

  Jim Brown   10/13/20,  10:18:26 AM
VIX - On 9/2 you suggested "backing up the truck" on puts at vix 17.50. here we are now 0.32 away (according to Qcharts) from your target. lately, former "reliable" indicators seem to be no longer reliable. your comments would be welcome. Thanks for reading. Rick

Very good point. The VIX is showing 17.73 this morning BUT this is the new VIX not the VIX we have been watching for years. The VIX calculation changed on 9/22. The old VIX, now called the VXO or $VXO is only 19.29 and well above the back up the truck stage. Also, while VIX signals are VERY reliable in the long term they can take several days to react. However, I would still start loading the truck if the VXO hits 17.50.

  Jeff Bailey   10/13/20,  10:17:23 AM
China Yuchai Intl. (NYSE:CYD) $18.87 +6.72% Link .... China-based diesel engine manufacturer challenging 52-week highs set on September 8 of $19.87.

  Jeff Bailey   10/13/20,  10:09:44 AM
SPX daily interval chart with new WEEKLY pivot levels. Support 1,025, near-term resistance 1,048.8 Link

  Linda Piazza   10/13/20,  10:09:40 AM
The OEX is now above the bullish #2 on the 3MRT system, giving a bullish cast to the day. It faces 522.50-523.50 resistance, but the daily Bollinger bands suggest an eventual upside near 528. Again, that's not a given and especially not a given today, especially as I trust little I see today. I would trust this more if we'd seen a retracement of any significance and then a push to a new high on volume.

  Linda Piazza   10/13/20,  10:01:33 AM
So far, there's been no retracement below the 50% retracement of the first five-minute range, but there are still a few minutes left in the usual first retracement period. Still, so far, this is not looking particularly bearish. This isn't investment advice to plunge in with OEX call purchases, however, as the OEX soon hits that 522.50-523.50 resistance. I'm leery of any trading pattern on my own behalf today and suggest you be so, too. If you're entering the market today, consider doing so with lottery money only.

  Linda Piazza   10/13/20,  9:48:19 AM
We have a H&S-ish formation on the OEX 60-minute chart, one with an ascending neckline. If this is a valid formation (and I'm not sure it is), the right shoulder should probably begin rounding over somewhere before 522.50 or so. If you're considering entering bullish now, consider watching how the OEX behaves near that right shoulder and then near the possible neckline, currently just over 518 but rising as time proceeds.

  Linda Piazza   10/13/20,  9:44:37 AM
Because the OEX first five-minute range was fairly large and most of that early range occurred in the first three minutes, I'm switching to 3MRT to watch the OEX action today. For those who do not have the three-minute intervals on their charts, the range was a low of 519.44 and a high of 520.63.

  Linda Piazza   10/13/20,  9:39:06 AM
The OEX 522.50-523.50 zone offers historical resistance, but daily Bollinger bands now suggest a possible high of 528. The OEX doesn't always hit the top Bollinger band after crossing the 21-dma, but it usually does if it pierced the bottom Bollinger band and then moved up. It did that. That doesn't mean it will reach 528 today (or ever). It might take several days to reach that high, if it does hit the top Bollinger band. Perhaps this fits with Jim's test-of-Dow-10,000-this-week theory?

  Jeff Bailey   10/13/20,  9:37:52 AM
QQQ $35.16 +0.42% .... those that may have carried QQQ bearish profile over the weekend from $34.71, may have been stopped at the open above $35.11. Those that waited for 1st 5-minutes can place stop at session high of $35.19, or look for pullback to close out at $35.05.

  Linda Piazza   10/13/20,  9:34:55 AM
The first five-minute OEX range included a high of 521.07 and a low of 519.44. The 50% retracement of that first five-minute range lies at 520.26. As usual, we'll watch this level in early trading as a gauge of early market strength or weakness. There's a big gap to be watched, too, so that the top and midpoint of that gap may be more important to watch than the 50% retracement of the first five-minute range.

  Jeff Bailey   10/13/20,  9:32:46 AM
QQQ here's new daily interval chart of QQQ with WEEKLY pivot analysis levels. Support $34.75, resistance $35.52. Link

  Jeff Bailey   10/13/20,  9:18:41 AM
09:00 Update posted at this Link

  Linda Piazza   10/13/20,  9:17:43 AM
Jim mentioned this weekend in his wrap that he didn't expect the real market direction to appear until Tuesday and that's my thought, too. At least several reasons exist that might lead to erratic trading conditions today: the Nikkei was closed for a holiday so that we're trading without the reaction of the world's second-biggest economy, the bond market holiday today, and likely light trading volume due to the Columbus Day holiday. Because of those conditions, we may not be able to trust any setups we see, and so I'll be unlikely to issue official Swing Trade signals today. If volume proves stronger than I expect it to be, we'll consider those signals. Otherwise, this may be a day suitable for scalping but not much else.

I did research this weekend about a system that would help us identify strong directional movements as they're beginning. It's not foolproof and it may be unworkable due to the percentage of trades that suffer losses, but it does pick up those big directional moves we all want to catch. I haven't considered the OEX particularly tradable lately and have been researching several methods that would help improve the performance of the OEX trades. For several months, however, the OEX has been in a broad consolidation pattern, trying to establish an equilibrium or support level. We need a little less consolidation and a lot more directional moves if we're to profit on the OEX. We can't make money on a steady diet of two and three-point moves our direction and the occasional loss. My trading account verifies that information. Perhaps instead we need big directional moves that enable us to endure the small losses that draw down our accounts. After the market opens and we can pay attention, I'll begin posting some of the information.

  Linda Piazza   10/13/20,  7:12:46 AM
Good morning. The Nikkei was closed due to a holiday, but that didn't stop speculation on how President Bush's late-week meeting with Prime Minister Junichiro Koizumi might affect currency issues. Soon-to-be-ex European Central Bank President Wim Duisenberg also commented, saying that Asian countries should allow their currencies to fluctuate more freely. The dollar is expected to weaken against the yen this week, as most deem Japan reluctant to intervene ahead of President Bush's visit. The perceived growth in Japan's economy also strengthens the yen.

Other Asian bourses were mixed. Chip stocks generally gained, although Samsung Electronics reportedly did not tack on gains after announcing Friday that it would increase chip sales next year. The Taiwan Weighted closed up 1.75%, but South Korea's Kospi dropped 0.11%. Singapore's Straits Times gained 0.27%, and Hong Kong's Hang Seng gained 0.22%. China's Shanghai Composite lost 0.31%.

Most European bourses currently trade higher. Earnings season is powering up in Europe this week, too, and confidence builds that earnings reports will show higher demand and sales. German insurers rose after a media report that they may be allowed to lower their tax bills by deducting stock market losses. MSFT and VOD announced a deal or collaboration at the ITU Telecom World 2003 trade fair, but the print media was not yet covering the deal as this report was prepared, so I could not verify details.

Currently, the FTSE 100 has gained 30.00 points or 0.70%, to trade at 4341.00. The CAC 40 has gained 37.38 points or 1.13%, to trade at 3343.50. The DAX has gained 59.87 points or 1.72%, to trade at 3531.12.

  Jeff Bailey   10/12/20,  11:06:25 PM
Pivot Matrix for Monday at this Link

  OI Technical Staff   10/11/20,  10:34:28 PM
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