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  Linda Piazza   10/15/20,  4:10:44 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
10/15: Entered a bullish OEX trade at OEX 525.43.
10/15: Stopped at 523.
Result for the day: 2.43 OEX points against us.
Results for the week: 2.43 OEX points against us.

  Jim Brown   10/15/20,  4:02:51 PM
Earnings After the Close:

AAPL  0.12  estimate +0.07
IBM 1.02 estimate +1.02, sees signs economy has stabilized
QLGC 0.35 estimate +0.35
SEBL 0.03 estimate +0.03
LRCX 0.04 estimate +0.03
MLNM -.10 estimate -0.28
NFLX 0.19 estimate +0.10
ALL 0.97 estimate +0.81
LEG 0.26 estimate +0.28
KFT 0.47 estimate +0.46

IBM said they expect to hire 10,000 next year.
QLGC said Hitachi using their product.
AAPL guiding up

  Linda Piazza   10/15/20,  4:01:45 PM
A reader's email reminded me to follow up on something I mentioned earlier today. I had mentioned that after the first drop, the rise appeared to be taking on a wedge-like shape (both sides moving in the same direction). Here's the wedge: Link For months these bearish rising wedges haven't been working as expected, but this one broke down as expected, about 2/3 of the way into the wedge. The OEX rose to retest that wedge again, and then fell quickly away. That's the way wedges used to work and will again.

  Jeff Bailey   10/15/20,  3:57:42 PM
Earnings Calendar I've gotten multiple questions from subscribers regarding when a company's earnings are scheduled for release. Here'a today's earning's calendar Link , which is posted under Events, on the OI site.

  Linda Piazza   10/15/20,  3:49:49 PM
The OEX now tests that descending trendline from the day's high and may be breaking back above it.

  Linda Piazza   10/15/20,  3:36:26 PM
Good entry Jim. As soon as his long signal appeared, I turned immediately to the one-minute chart on the OEX, and it started bouncing from that moment. Unfortunately, we can't always swing trade the OEX as he's trading the ES contract, as they're different animals.

A test of the day's descending trendline at about 522.75 is coming up. We don't have time to take advantage of such a signal on the OEX before the end of the day, but a move back over that trendline would be a bullish development.

  Linda Piazza   10/15/20,  3:29:29 PM
The OEX rises now and has regained 521, but for now this rise must be presumed to be a distribution pattern of some sort. There's now a descending trendline off the day's high, with several more touchpoints, and that trendline now crosses at about 522.70. Although a 50% retracement of the flagpole drop that preceded the current rise is at about 521.80, I would be hesitant to draw too many conclusions ahead of a test of that descending trendline. This is especially true since the OEX is now below the 30-minute 21-pma at 522.15. It is, however, above the ascending trendline off the 10:00 candle low from 10/7, having maintained that trendline as support for now.

  Linda Piazza   10/15/20,  2:59:05 PM
The OEX approaches that trendline from 10/7 as well as the 30-minute 100-pma at 518.90, the 30-minute 130-pma at 517.88, and the corresponding 60-minute averages layered underneath at 516.39 and 515.24. The bottom of the 60-minute envelope is also just beneath those 60-minute averages. I would imagine that the OEX is going to have difficulty plowing through these levels as easily as it did the drop from today's high, but so far nothing has stopped it. Those 100-pma's are important levels to watch, however, as a move below them and their corresponding 130-pma's would signal a change in overall market tenor.

  Jeff Bailey   10/15/20,  2:56:45 PM
QQQ $34.05 -0.78% ... downside alert here at $34.05, which I had set from this morning's "bad tick" observation. This reversal begins to look and build more negative on some "sell the news."

Traders/investors alerted to check positions and make sure not overweighted too much from bullish side. Assess near-term downside risk to WEEKLY Pivots.

  Jeff Bailey   10/15/20,  2:54:25 PM
Semiconductor Index (SOX.X) 473.38 -0.11% .... turns red for first time in session.

QQQ $35.08 -0.71% ... session lows

  Linda Piazza   10/15/20,  2:52:35 PM
The OEX now tests 521. The OEX had trouble breaking through 521, so it might serve as at least light support, although I would think 519.50-520 would be stronger than 521. A break below 519.50 will soon see a test of the 30-minute 100-pma, however, with that average at 518.92.

  Jeff Bailey   10/15/20,  2:43:28 PM
December Palladium Futures (pa03z) 191.65 -6.98% .... major breakdown in this metal's futures contract today. Here's the PnF chart from Dorseywright.com Link

Palladium producers discussed in recent sessions have North American Palladium (AMEX:PAL) $4.90 -5.03% Link now looking to show more formidable resistance at that bearish resistance trend, so more defensive on the palladium futures breakdown.

  Linda Piazza   10/15/20,  2:42:38 PM
Here's how the OEX currently trades in relationship to an ascending channel: Link The fall below the midpoint might predict a test of the lower line, although the Q-charts automatically drawn lower trendline is a little lower than I would draw one.

  Ray Cummins   10/15/20,  2:40:52 PM
Readers Write -- E-mail Replies

Regarding the earlier question about getting a fill by splitting the quote between the bid/ask spread:

From my perspective, you can get an occasional fill by splitting the quotes on higher-priced options with large bid/ask spreads. Keep in mind though, your fill may simply be the result of an opposing trader's order and not the market-maker moving to your price. Also, remember that a market-maker or specialist (who is not trading for his own account) must be able to complete a riskless transaction, either through a conversion or reversal (reverse conversion) before he will agree to buy or sell an option at a particular price. More about that subject here: Link

  Linda Piazza   10/15/20,  2:36:21 PM
That one-minute H&S neckline has been firmly broken now on the OEX. The breaking of that ascending trendline (see my 13:04 post) was a first sign of weakness after the OEX had begun climbing. While the OEX did make it above a 50% retracement of the day's range, it could not make it above a 50% retracement of the morning gap. As I mentioned this morning, I avoid trading through gaps like that if I can, because that midpoint too often becomes either resistance or support. I wouldn't have considered the climb off the day's low more than a flag or other measured distribution pattern until that 50% gap level was crossed, even though the OEX did climb above the 50% level of the day's range.

The OEX has done a lot of zooming around and has probably stopped out a lot of bullish and bearish players, but it's still above the ascending trendline established off the climb from the low of the 10:00 candle on 10/7, and it's still above the 60-minute 21-pma at 521.46. I'll be watching those levels as possible bounce points. The trendline currently lies between 519.90 and 521, depending on how it's drawn.

  Linda Piazza   10/15/20,  2:24:16 PM
The OEX is breaking below a H&S on its one-minute chart, with a neckline at 522.90. The predicted downside would be only 521.80 from that formation, but first the OEX is coming up to test the neckline again, to see if it really meant to break that neckline.

  Jeff Bailey   10/15/20,  2:17:03 PM
December Palladium (pa03z) 191.65 -6.98% ... this commodity futures contract hit lower this morning, and it would be my analysis that action here comes from the weaker auto sales data. Palladium is largely used in automobile manufacturing.

I'll follow with a Palladium PnF chart in a minute.

  Jeff Bailey   10/15/20,  2:12:34 PM
December Copper futures (hg03z) $0.898 +2.74% did set contract high of $0.902 this morning.

Phelps Dodge (PD) $57.05 +1.6% Link trades its bullish vertical count of $57.00 in today's trade.

Would look to take some profits off the table in PD at this bullish vertical count, and will look for any other copper producers, that may have further upside to counts. If memory serves me correct, others have exceeded their bullish counts.

  Linda Piazza   10/15/20,  1:59:51 PM
Don't you hate the way the markets maneuver right up to that critical level, whatever it might be, just before the release of information? If you're in a play that's about to be stopped, you know you're going to be in trouble if the number goes the wrong way, and the market will often be moving fast against you when you're stopped. Yet you hate to stop out just ahead of that number's release, because it might go your direction. That's why I prefer to be flat ahead of such releases.

  Linda Piazza   10/15/20,  1:56:51 PM
Remember, too, that the first direction is not always the final direction after the release of news. I'm not suggesting that you ignore signals or especially that you ignore stops, but only suggesting that you not jump to conclusions too quickly because of that initial volatility.

  Jeff Bailey   10/15/20,  1:55:23 PM
Defense Index (DFX.X) 179.33 +1.3% ... now challenging for today's sector winner, but more important, challenging downward trend on bar chart if taken from all-time highs of 218.15 found in May 2002, and recent relative highs of 181.28 found on September 8th at 181.28. I think DFX.X has near-term upside potential to the 192 level, which would be 80.9% retracement of all-time high to March lows of 125.90.

L-3 Communications (LLL) $45.72 +0.66% was stock mentioned yesterday in market monitor based on technicals and SG Cowen's thoughts that LLL was a large-cap defense stock that stood best chance for upside surprise in Q3 earnings.

  Linda Piazza   10/15/20,  1:44:15 PM
We're within that time zone when we usually see a stop-running push, but I'm wondering if that push won't be delayed until the release of the Beige Book. I've sometimes seen the push move the OEX right to the make-it-or-break-it zone just ahead of such 2:00 releases, however, ready to move up or down from there. I wouldn't be surprised, then, to see the OEX move up toward 524 just ahead of the release of the Beige Book. For that matter, I wouldn't be surprised to see it drop back to 522.50 or 521.50 just ahead of that release.

  Linda Piazza   10/15/20,  1:24:07 PM
KO is doing it usual opex thing this week. Today it's at $45.34 as I type, having gapped higher today. Often KO declines early in the opex cycle, looking as if it's nearing a breakdown, but then unexpectedly pops up to defy those that expected the breakdown. It doesn't always work that way, but it works often enough that I personally would certainly not play an expected breakdown in KO in the last two weeks of the opex cycle.

  James Brown   10/15/20,  1:13:25 PM
OI put play Merck & Co (MRK) is rolling over again under the $50 mark in contrast to the $INDU turning positive. MRK is currently down 1.2%.

  Linda Piazza   10/15/20,  1:11:40 PM
The OEX was not able to break above the midpoint of the morning's gap, so I would not consider the tenor of the trading bullish. (See my 12:59 post.) At least not yet. In addition, the OEX fell below the 50% retracement of the day's range and the ascending trendline that had been supporting it as it climbed off the low of the day. I consider this a sort of neutral zone for the day, but those two developments add a warning not to count bullish developments before they hatch.

  Linda Piazza   10/15/20,  1:04:26 PM
For the first time since the OEX reached its low of the day, it has fallen through the ascending trendline formed off that low of the day. It's a steep trendline and perhaps too steep to have been maintained, but that's an observation we should note.

  Linda Piazza   10/15/20,  12:59:08 PM
The OEX now approaches the 50% retracement of the morning gap, with that number at 524.25. The OEX has been steadily climbing since it hit the morning low, just above yesterday's consolidation zone and just above the 60-minute 21-pma. Once the OEX sustains a close over 524.25, I'd say the tenor of the day turns to bullish again, and we're again looking at the possibility of 526-528. Thirty-minute and 60-minute oscillators begin to look more bullish again, too.

Since I'm the queen of go-long-at-the-high and go-short-at-the-low lately, perhaps you should take these observations as a contrarian indicator?

  James Brown   10/15/20,  12:58:53 PM
The NRF also says that the average household spends about $42 on Halloween.

Considering all the money shoppers spend for decorations, costumes and candy... I'm surprised it's not more. I think my neighborhood easily doubles the average.

  James Brown   10/15/20,  12:56:18 PM
Interesting note...the National Retail Federation (NRF) expects Halloween-related sales to come in at $6 billion this year, down 15 percent from last year. Meanwhile, BuyCostumes.com says sales have already doubled over last year. (source: CNN)

  Linda Piazza   10/15/20,  12:53:42 PM
Something like that, Jonathan. If they include grandma purses with hidden gun compartments or quilted covers for their guns, my mother-in-law is their customer. She stalks through her house at night with a handgun in each hand. Her neighbors are always ducking when they spot her through her windows.

  Linda Piazza   10/15/20,  12:49:04 PM
James, my husband's gun-toting mama will probably be ordering something from that catalogue.

  Linda Piazza   10/15/20,  12:47:54 PM
The OEX has now broken above the 50% retracement of the day's range, but not yet above the 50% retracement of this morning's gap. I'd say that this makes the current level a sort of neutral zone, at least until that 524.25 level has been surpassed. This current level is the level at which I'd thought we'd be probably be initiating a long play today, with a stop below at 521, which was indeed where the OEX found support this morning, with a move up to 527-528. However, now when contemplating the same entry, we've this morning's failure to contend with and those midpoint retracement levels ahead or just behind us. It feels completely different than initiating the trade at this morning's open, if the OEX had opened near here as I expected, and riding the trade up to today's high and perhaps beyond to our target. The current levels shouldn't be strong resistance from a historical standpoint, but the fact that the OEX has struggled so long with the 50% retracement of the day's range means that it is important whether it "should" be or not. The 50% retracement of the day's gap may be, too, whether it should be or not. In addition, there's just the slightest hint of a wedge shape to the way the OEX rises into that 50% retracement of the day's gap. All this combines to make me hesitant to enter a trade I would have not hesitated to enter this morning. Talk about shock and awe. That's what I felt when the OEX opened so high, and I would have taken back that entry in a heartbeat if it hadn't triggered at the open.

  James Brown   10/15/20,  12:45:45 PM
oh I figured someone would fire off a few comments.

  James Brown   10/15/20,  12:43:33 PM
It's an ever-changing world. A Reuters article is reporting that Smith & Wesson, the 150-year-old handgun manufacturer, is going to be expanding into home decor. Look for their new catalog full of clothing, jewelry, and more to show up just in time for Christmas.

  Linda Piazza   10/15/20,  12:38:11 PM
In answer to Ray's 12:32 post with a reader's question about splitting the bid/ask spread, I can say that I have been successful at times in splitting the bid and the ask, but it's a often a question of how thinly traded the option might be. I'm fairly patient and if conditions are right will let my order sit for a while, and sometimes someone finally takes it. If an issue's options are thinly traded, however, that's not going to happen. You're at the mercy of that wide bid/ask spread. Those wide spreads in some issues have sometimes kept me from initiating a credit spread I wanted to open. I'm paying too much for the bought option and not getting enough credit for the sold one to make it worthwhile.

  James Brown   10/15/20,  12:37:31 PM
No kidding. I don't remember the last time I had pizza.

  Jim Brown   10/15/20,  12:36:48 PM
Would that 25% less fat mean that a large Supreme only had 750 grams instead of 1000 grams of fat? Let's see, that is about a 15 day allowance for me.

  Jeff Bailey   10/15/20,  12:35:56 PM
S&P 500 (SPX.X) 1,049.25 -0.02% ... right back to WEEKLY R1. Good place to be monitoring for any buy/sell program premium alerts.

  James Brown   10/15/20,  12:33:15 PM
Remember last week's news that Heinz (HNZ) would be coming out with a low-carb ketchup? Well now Yum! Brands (YUM) Pizza Hut chain is going to offer a low(er)-fat pizza, that has 25% less fat than their normal recipes.

  Ray Cummins   10/15/20,  12:32:36 PM
Reader's Write -- Questions for the OIN staff

Hello, I would like to ask a practical question. If the Bid/Ask spread is very wide, is it possible in real world to get in a fill by splitting the quote between them?. Recently on ELAB, I was planning to buy the Jan 40 straddle when the bid/ask was 7.20 x 8.00...I placed a limit order @ 7.60 ...never got a fill...then raised to 7.70 and never got a fill. Finally placed a market order and got filled @ 7.90. Same situation with KSWS...Was not able to get a fill by splitting the Bid/Ask spread.

I have heard that one can get fills by placing a price between the bid and ask . Is that True? I use OptionsXpress and Preferred Trade and have never been able to get a fill by splitting the quote. Have you encountered this? Thanks and I appreciate the OI writers sharing their experiences with me. Cheers, PA

Any comments from the OIN Market Monitor staff would be much appreciated!

  James Brown   10/15/20,  12:29:55 PM
Checking some of the non-business news...Americans have been asked to leave the Gaza strip (in Israel) after an attack killed three Americans near the Palestinian town of Beit Lahiya.

  Linda Piazza   10/15/20,  12:29:37 PM
The OEX now tests the 50% retracement of the day's range at 523.59. So far today it's fallen back from each test of this level, so we can see that its importance is being affirmed.

  James Brown   10/15/20,  12:26:45 PM
Afternoon Sector Winners:

SOX semiconductor index: +1.5%
DDX disk drive index: +1.48%
DFI defense index: +0.83%
GHA hardware index: +0.63%

Sector Losers:

OSX oil service index: -1.95%
XNG natural gas index: -1.37%
INX Internet index: -1.55%
DJUSHB homebuilders: -2.93%

  Jeff Bailey   10/15/20,  12:24:36 PM
S&P Banks Index (BIX.X) 323.83 -0.48% .... has been finding intra-day resistance at the 324.00 level and this may be a key point of resistance intra-day. Only "level" I see coming into play is today's DAILY Pivot of 324.42 and begin to think it will take a 5-minute close above 324.42, to have major indices having a shot to extend some of this morning's "recovery."

It would be foolish to say recovery, other than in context of today's trade. In the grand scope of things, today's trade is that of a hair on a frog.

  James Brown   10/15/20,  12:23:35 PM
Big Blue is currently up $1.65 or 1.77% in anticipation of its earnings report after the bell. Estimates for IBM are for $1.02/share.

  James Brown   10/15/20,  12:14:46 PM
I'm feeling a little seller's remorse on ERTS. We had a successful call play in September but the stock just keeps on climbing. The last two weeks has been a trail of small steps higher with a strong trend of higher lows. Earnings are expected one week from today.

  Linda Piazza   10/15/20,  12:11:55 PM
The OEX is now within striking distance of a 50% retracement of the day's range. A sustained move over that retracement level would change the day's tenor from bearish to at least neutral-ish if not bullish. We've still got the midpoint of this morning's gap as possible resistance, though, with that level at 524.25.

  Jeff Bailey   10/15/20,  12:10:06 PM
QQQ $35.42 +0.25% .... thoughts based on 10-minute chart and late Monday's bullish profile. Here's chart where I still show the 5-minute retracement (5-MRT), but use 10-minute to bring last week into view. Link

I should also add, that previous to recent BULLISH profile in QQQ, I thought BEARISH earlier on slip back below $34.70, which was stopped out for loss on Monday's gap higher open. This also would come into my current mindset for QQQ still rather bullish above $35.21.

  James Brown   10/15/20,  12:08:04 PM
Video game producer Take-Two Interactive (TTWO) is hitting new highs today up 2.8% to new all-time highs above $40. The stock rocketed higher in early September on a strong earnings report. The rest of September was spent in a bull flag pattern consolidating its gains. October's strength produced another breakout and we're seeing a trend of higher lows. Shares are overbought but investors could be making bets on a strong Q4 holiday season.

  Linda Piazza   10/15/20,  12:07:40 PM
That last OEX venture over 523 got knocked back fairly quickly, but the OEX is perhaps trying it again as I type. The OEX remains above that ascending trendline established off this morning's low.

  James Brown   10/15/20,  12:01:09 PM
Just a follow up on my TASR comments yesterday...the short-squeeze continues. TASR up 3.46%.

  James Brown   10/15/20,  11:56:31 AM
Moving our direction is our play-of-the-day Corinthian Colleges (COCO). Traders saw the technical breakdown and pounced on it today. COCO is down 5.3% but up slightly off its lows.

Also trading lower are fellow education stocks APOL, CECO, and EDMC.

  Linda Piazza   10/15/20,  11:53:53 AM
Here's an ascending trendline that's beginning to form on the one-minute OEX chart: Link

  Jeff Bailey   10/15/20,  11:53:10 AM
Ford Motor (F) $12.16 +1.75% ... GM has had a nice run since you profiled it, and I'm still holding the Dec 40 calls you profiled.

With earnings for F due tomorrow before the open the stock looks ready to break out to the upside or downside. Dorsey Wright currently has the bullish vertical count for F at 24.00 with a relatively low risk to reward ratio.

I'm thinking that even though it looks interesting it would be better to wait for the double top breakout at 13 to trade long. I'd appreciate your thoughts.

Yes... GM has had a good run, and today's earnings reports looks as if it may have been largely due to its GMAC division, and not from automotive sales. I'm not as "knowledgeable" about Ford (F) various business units outside of auto sales, but would probaly tend to lean toward the "wait and see" for $13.00 and market's response.

  Jim Brown   10/15/20,  11:53:06 AM
ICGE received a delisting notice from Nasdaq yesterday. Expect a reverse split announcement soon.

  Linda Piazza   10/15/20,  11:51:20 AM
Remember ICGE? Internet Capital Group reached a high of 212 in December '99. I was doing a Q-charts volume scan this morning, and it popped up. The mighty ICGE currently trades at $0.46.

  James Brown   10/15/20,  11:49:57 AM
As would be expected with the markets slipping backwards today, many of our call plays are edging lower. I was surprised to find that Cooper Industries (CBE) was bucking the trend. The stock has finally broken through resistance just above the $51 mark and is currently trading at new one-year highs. I could not find any news to serve as a catalyst for the move.

  Linda Piazza   10/15/20,  11:41:17 AM
The OEX struggles to move into the gap again, and also above the 523 resistance.

  James Brown   10/15/20,  11:40:36 AM
Weary shares of Medtronic Inc (MDT) got a lift this morning when Wells Fargo upgraded the stock from a "hold" to a "buy" on valuation. Unfortunately, for shareholders MDT found resistance at $46 and remains stuck in a descending channel lower. The stock has been a big under performer since early August and its P&F chart has reversed from a buy signal to a sell signal.

  James Brown   10/15/20,  11:35:24 AM
Insurance company Aetna Inc (AET) has been started with an "out perform" rating by CS First Boston this morning. Shares are not reacting to the rating news and continue to trade sideways above the $62 level. AET does have a bullish P&F chart with an ascending triple-top breakout but its daily (candlestick) chart is hinting at more resistance near $65.00. The current trend from its August lows has been a rising channel and a dip close to the $60 level would be an entry near the bottom of this channel. Earnings are expected at the very end of October.

  Linda Piazza   10/15/20,  11:28:03 AM
Jonathan, I can't help you out much, but I can tell you that I've traded those thinly traded XAU options at times, and you better be ready to pay the ask when you buy and sell at the bid. There's rarely any such thing as getting between the bid and the ask, and sometimes my order would just sit there even when I tried to buy at the ask and sell at the bid, and then the bid and ask would move away from my order. I don't trade the XAU options often for that reason.

  Linda Piazza   10/15/20,  11:19:26 AM
Since this morning's first five-minute range was such a small percentage of the day's move, I switched to a 10MRT designation to watch the day's action on the OEX. That ten-minute range included a high of 525.90 and a low of 524.75. On that expanded range, the OEX today traded below the bearish #4, but not all the way to the bearish #5. It's now above the bearish #3, and a move to 523.61 would represent a move back into the neutral zone, a move that should have stopped out bearish plays entered on this methodology, if I understand it correctly. That 523.61 level also comes close to the 50% retracement of the day's range, an interesting correspondence, I think.

  Linda Piazza   10/15/20,  11:14:07 AM
What a day, and I thought this morning it was all going to work out so well. My computer froze, which was the reason for my absence over the last few minutes. I had been in the midst of preparing an entry saying that although this morning's action had been disastrous to our long play entered at the open, the OEX had retraced only to the midpoint of its rising 60-minute regression channel. If it had steadied there, nothing really bad had happened, although we'd been stopped out of our play, so something bad happened to us! The OEX did steady at that level and now attempts a move up. The first hour's candle was a large bearish candle, and candlestick theory says we should find resistance at the midpoint of such a candle. That midpoint comes at 523.59, with the midpoint of this morning's gap just above that at 524.25. Although entering at this morning's low, when the OEX steadied above its 60-minute 21-dma and above the 521 support level, might have made a decent bullish entry, that remains to be seen. I wasn't online to monitor what was happening then and am not sure I would have been courageous enough to call an entry anyway as I try to avoid going long as an index or stock heads up into a gap or going short when it head down into one. There's just too much chance of there being gap resistance or gap support. Until and unless the OEX moves above the 50% retracement of the day's steep decline, we have to assume that this current rise might be a bear flag or some other measured distribution pattern.

  James Brown   10/15/20,  11:11:34 AM
The early morning strength powered by Intel's earnings news last night has faded for shares of Q Logic Corp (QLGC). The stock is currently up just 9 cents after running right into five-month old resistance near 53.50. QLGC was started with a "buy" this morning by American Technology Research. QLGC is also due to report earnings today after the bell. Estimates are for 35 cents.

  James Brown   10/15/20,  11:07:08 AM
The tennis match between the various broker ratings on ELX has begun again. This morning Emulex Corp (ELX) receives another upgrade to a "buy". This comes on top of yesterday's "strong buy" rating and in contrast to last week's "sell" rating on valuation concerns.

  Jeff Bailey   10/15/20,  10:52:51 AM
Dow Jones Home Construction (DJUSHB) 526.33 -2.76% .... lower after weekly MBA mortgage application index fell 20.5% to 649.6 from 817.3.

This may also help explain some of the early weakness in the banks this morning, despite better than expected earnings from some of the BIX.X components posted in this morning's market monitor.

  Jeff Bailey   10/15/20,  10:44:54 AM
Rumor circulating that there is and has been a large brokerage firm buying QQQ December puts in size.

I see QQQ December $34's (QAVXH) showing volume of 70,477, which is heavy considering open interest as of yesterday was 54,321. Bid/Ask of $1.05 x $1.10 here.

  Jeff Bailey   10/15/20,  10:40:41 AM
Coca Cola (KO) $45.30 +1.68% Link ... JP Morgan upgrading to "overweight" after CCE's quarterly earnings report. Earlier this morning Coca Cola Enterprises (CCE) $20.50 +4.06% Link reported Q3 EPS of $0.53, which was $0.08 better than consensus. Company raised fiscal 2003 guidance to $1.28-$1.30, which was well above consensus of $1.18.

JP Morgan upgrades KO after CCE did give cautious guidance for Q4, but JP Morgans sees that caution as an indicator that KO is committed to profits over volume and gives greater confidence in the firms Q3 EPS for KO following CCE's greater equity income contribution. JP Morgan thinks CCE will receive lower funding in North America in Q4 due to year-to-date volume weakness, which should help KO's Q4, and also points to recent dollar weakness versus the yen as a potential buffer to any earnings weakness.

  Linda Piazza   10/15/20,  10:27:22 AM
For all this sea of red and the steep declines this morning, the OEX remains above the ascending trendline that has been supporting it since the 10:00 candle low on 10/7. In fact, it hasn't even yet tested that trendline, crossing now somewhere near 519.21 and 520.40, depending on how it's drawn and how many shadows are included or not included. If it hasn't happened before then, that's the level at which we should start watching for the possibility of dip-buying. This morning's rise preserved the idea of a rising regression channel on the 60-minute OEX chart, with the OEX being knocked back when it hit the top of that channel, but negated the possibility of a H&S, since the OEX moved above an appropriate shoulder level. So, at least we got one question answered by watching today's action. We'll have another one answered if the OEX breaks below that rising channel.

  Jane Fox   10/15/20,  10:21:44 AM
Linda I will join the screaming match (post 10:17 in futures monitor) for I was just stopped out of a short at the high of a swing high.

  Linda Piazza   10/15/20,  10:21:04 AM
Early volume patterns were bullish, but those volume patterns have changed now, with advancers and decliners even on the NYSE as of a few minutes ago, and with decliners leading on the Nasdaq. Up volume was still ahead on both exchanges as of a few minutes ago. Volume was 168 million on the NYSE and 403 million on the Nasdaq.

  Jeff Bailey   10/15/20,  10:19:30 AM
MS Health Provider Indx (RXH.X) 328.00 -2% ... sector loser early after Triad Hospitals (TRI) $29.30 -11% Link guided Q3 (September) lower and said it will take a $50 million pre-tax charge for increased estimated allowance for doubtful accounts on balance sheet. After tax, the charge will reduce EPS by $0.41 per share. TRI now expecting to report Q3 of $0.09-$0.14, which is well below consensus of $0.48.

Raymond James cuts to "market perform" from "strong buy."

  Linda Piazza   10/15/20,  10:19:13 AM
The OEX is perhaps coming back to test that 521 level that was resistance yesterday, to see if it's going to hold as support.

  Jeff Bailey   10/15/20,  10:06:44 AM
S&P Banks Index (BIX.X) 323.85 -0.48% .... session lows for the BIX.X

  Linda Piazza   10/15/20,  10:04:14 AM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our OEX long play for a loss of 2.43 OEX points.

  Jeff Bailey   10/15/20,  10:01:23 AM
Analogic (ALOG) $47.85 -3.57% .... was halted earlier. Released and falling after reporting Q4 results, company said it plans to restate financials.

Q4 (July) earnings were reported today at $0.12 per share, which was $0.13 better than consensus for loss of a penny. ALOG said revenues fell 7.8% year-over-year to $82 million versus consensus of $78.2 million.

ALOG said it intends to restate 9-month period ending April 30, where purpose is to apply appropriate accounting standards to the recognition of software revenue by Camtronics subsidiary, and an inter-company loan from ALOG to B-K Medical Systems. CEO saying restatement will not have adverse impact on ALOG's outlook.

  Linda Piazza   10/15/20,  9:58:29 AM
Swing Trade Signals
I completely misread the level at which the OEX would open. I anticipated the open being somewhere near the current day's low, at 523.55. That's my fault for misreading that signal. If the OEX steadies here and can then sustain numbers above the 524.25 midpoint of the morning gap, I think we still have an opportunity of doing fine with the OEX Swing Trade long play, but it certainly would have been better to enter at the midpoint of that gap rather than at this morning's opening level. We're still not on solid ground here, however.

  Jeff Bailey   10/15/20,  9:55:42 AM
QQQ $35.56 +0.67% ... "bad tick" to $35.05 and session low has been $35.50 and our WEEKLY R1.

In past, we have noted that some "bad ticks" have actually been a destination (up or down) for the QQQ. While $35.05 could be keypunch error of $35.50, might be alert to downside should QQQ slip much below $35.40. Making note of this as $35.05 is WEEKLY 38.2% retracement.

  Jeff Bailey   10/15/20,  9:52:21 AM
Russell-2000 (RUT.X) 531.40 -0.08% .... slips red.

  Linda Piazza   10/15/20,  9:48:30 AM
The OEX is now below the midpoint of this morning's gap. If it's going to steady, it needs to do so soon.

  Jeff Bailey   10/15/20,  9:48:26 AM
QQQ $35.54 +0.59% .... after early jump to $35.85, has come back to fill its gap higher open. Looking to find early morning support here at WEEKLY R1 ($35.50).

  Jeff Bailey   10/15/20,  9:44:33 AM
S&P Banks Index (BIX.X) 325.08 -0.13% ... fractional losses in early going.

S&P 500 (SPX.X) 1,051.85 +0.24% .... holding above our "zone of resistance" and WEEKLY 19.1% retracement.

Somewhat tentative in early going.

  Linda Piazza   10/15/20,  9:43:34 AM
Swing Trade Signals
For now, I'm going to leave our official exit at 523, but conservative traders might want to exit at 524, which would represent a move below the midpoint of this morning's gap. As Jim mentioned, this now has the potential to be a pop-and-drop day.

  Jeff Bailey   10/15/20,  9:41:56 AM
SanDisk (SNDK) $80.24 +6.49% Link .... reported Q3 EPS of $0.60, which was 15 cents better than consensus. Revenues rose 99.4% year-over-year to $281.4 million versus consensus of $246.2 million.

In separate note, SNDK announced that it was advised by its Taiwanese law firm, Lee and Li, that one of Lee and Li's senior associates had fraudulently sold, and misappropriated the proceeds from, approximately 121 mln shares of SanDisk's United Microelectronics Corp stock held by Lee and Li on behalf of SanDisk. The current market value of the misappropriated shares is approx $100 million. Late yesterday Lee and Li stated that it will not let SanDisk suffer any loss as a result of its former employee's criminal acts. SanDisk is investigating whether it is insured against any portion of this loss.

  Linda Piazza   10/15/20,  9:39:37 AM
As gap support is tested, we're obviously hitting some of the 5MRT levels. The OEX is below the bearish #2, but above bearish #3 and also, perhaps more importantly, above the midpoint of the morning gap.

  Linda Piazza   10/15/20,  9:35:48 AM
The first five-minute OEX range spanned a low of 525.43 and a high of 525.90. We'll be watching the 50% retracement of that level in early trading, to gauge the OEX's early strength or weakness, and then we'll move on to other measures. The 50% retracement of that first five-minute range lies at 525.67, but that morning gap was so wide that I think that's going to be more important to watch. I think we're going to get a gap test--we should get one. The 50% retracement of that gap is at about 524.25, and that's the level we'll be watching as a gauge of market strength or weakness.

  Linda Piazza   10/15/20,  9:31:58 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We have entered a long OEX play at 525.43. Our target is 527-528.

This open is obviously higher than I'd anticipated, with our target not far ahead. We'll have to adjust our planned stop. The new stop is 523.00. If I'd anticipated a open this high, I frankly might not have initiated the play.

  Jeff Bailey   10/15/20,  9:28:46 AM
Wachovia (WB) $44.31 Link ... higher at $45.70 after beating estimates by 7 cents. (BIX.X component)

  Jeff Bailey   10/15/20,  9:27:54 AM
SouthTrust Corp. (SOTR) $30.93 Link ... lower at $30.91 after beating by 1 penny. (BIX.X component)

  Jeff Bailey   10/15/20,  9:26:05 AM
Northern Trust (NTRS) $47.73 Link ... reports Q3 earnings that beat estimates by 2 cents. (BIX.X component)

  Jeff Bailey   10/15/20,  9:24:08 AM
Huntington Bancshares (HBAN) $20.97 Link ... higher at $21.24 after beating estimates by $0.08. (BIX.X component)

  Jeff Bailey   10/15/20,  9:22:58 AM
FleetBoston (FBF) $32.63 Link ... higher at $33.25 after beating estimates by 3 cents. (BIX.X component)

  Jeff Bailey   10/15/20,  9:20:23 AM
09:00 Update posted at this Link

  Linda Piazza   10/15/20,  9:15:55 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
If the OEX opens above 522.50, enter long at the open. Target 527-528. Initial stop 520.75, to give us a $0.25 stop-running cushion below the 521 support level.

Thirty-minute, sixty-minute, and daily MACD are all bullish. The OEX is now in breakout zone, confirmed by push above the 523 resistance yesterday, and also confirmed by the Donchian channel studies I've been doing. While my backtesting makes it clear that we don't yet want to enter a trade based on Donchian channel breakouts, that breakout does confirm my own studies of the weekly chart, mentioned over the last two weeks, about where a breakout zone might be.

There's great danger here, and anyone who understands anything about the VIX knows what that danger is. We could be buying at the top this morning, so make careful decisions about whether you want to participate in this play.

  Linda Piazza   10/15/20,  7:17:21 AM
Good morning. With President Bush's visit looming and amid rumors that the Bank of Japan needed to intervene in the overnight market Monday night to weaken the yen against the dollar, currency fears resurfaced in Japan. President Bush is expected to pressure the Japanese to stop intervening in the currency market. The Nikkei opened just under 11,000 and then traded in a somewhat volatile fashion the rest of the day, trading in an almost 150-point range. The Nikkei closed down 66.48 points or 0.61%, at 10,899.95. Declines were broad. Banks and exporters fell, with the banks falling prey to profit-taking after their recent gains. Exporters Fujitsu and Nissan bucked the trend, with Nissan gaining ahead of its earnings report due tomorrow. Economic news included information that Japanese September corporate bankruptcies declined 18.2% year-over-year and that more global fund managers are overweighting Japanese equities.

Asian chip stocks turned in a mixed performance, and so did the Asian bourses. The Taiwan Weighted sank 0.24% and South Korea's Kospi lost 0.30%. Singapore's Straits Times gained 1.05% and Hong Kong's Hang Seng gained 1.69%. China's Shanghai Composite lost 0.37%.

Most European stocks currently trade in the green, many gaining more than 1%. Ericsson(ERICY) and Sony (SNE) announced that their mobile phone joint venture posted a Q3 gain and saw an increase in sales. The company saw a 42% year-over-year increase in units shipped. The company mentioned that the Japanese business had performed strongly. Amid all that positive news, however, was news that a larger proportion of lower-priced models in the current product mix will make it difficult for the company to repeat this quarter's level of profitability. Chip equipment maker ASML (ASML) reported an increasing order backlog at the end of Q3, noting that its net loss for the quarter decreased to 31 million euros, down from the Q2 loss of 64 million euros. A Marketwatch.com article quotes the CEO as saying that the company saw "signs of recovery riddled with inconsistencies."

Currently, the FTSE 100 has gained 53.20 points or 1.23%, to trade at 4387.30. The CAC 40 has gained 44.33 points or 1.33%, to trade at 3389.23. The DAX has gained 44.64 points or 1.26%, to trade at 3582.77.

  Jeff Bailey   10/14/20,  11:00:23 PM
Pivot Matrix for tomorrow posted at this Link

  OI Technical Staff   10/14/20,  11:00:13 PM
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