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  Jim Brown   10/16/20,  4:04:57 PM
Earnings Alert

BRCM 0.14 est 0.13
EBAY 0.18 est 0.18, warned on EPS
MCHP 0.17 est 0.17, guiding hiigher
XLNX 0.16 est 0.15, light guidance
AMD -.09 est -.36, Guiding up
AVID 0.35 est 0.30
CREE 0.12 est 0.12
DCLK 0.04 est 0.03, guiding inline
LEXR 0.12 est 0.09, raising guidance
PMCS 0.00 est -.01
PLCM 0.13 est 0.09
RMBS 0.05 est 0.04
SUNW -.08 est -.08
WEBX 0.25 est 0.14, well above est
FCS 0.05 est 0.01, well above est
ATML -.07 est -.08
PXLW 0.02 est 0.04, warning

EBAY raised revenue guidance to actually what the
street was already expecting. Warned earnings will
not meet estimates. Stock is geetting hammered
in after hours.

  Jeff Bailey   10/16/20,  3:56:00 PM
BioLase Tech (BLTI) $13.60 +2.71% ... Hi Jeff: I always look forward to your excellant comments on pnf signals and day trades... Could you please comment on BLTI, I entered a bullish position today, hoping for a move at $16. Thanks,

First... I'd be careful with this one. There has been some question as to how the company recognizes revenues, and should it recognize upon shipment or receipt of payment. The company was late filing quarterly financials, and in late August and early September, was listed under stock symbol BLTIE.

Other than this type of stuff (which I generally try and avoid, especially if holding overnight as you just never know what might happen with financial issues), the PnF chart does look bullish for a bounce to your target of $16, maybe just under $15, as stock has pierced the $15 level two times, but there has always been enough sellers to push it back below $15 by the close.

I can't say that "I'm crazy about it," but that's due to some of the accounting stuff of late.

  Linda Piazza   10/16/20,  3:53:02 PM
Now might be a good time, ahead of tomorrow's option expiration (well, Saturday's, but we're not trading on Saturday) to check your accounts to make sure you don't have any options floating around in there that you'd forgotten. I've known of people who were assigned stocks because their call option had gone so far out of the money, they'd forgotten they owned them, and then the stock came back.

  Linda Piazza   10/16/20,  3:44:40 PM
Here's what I'm noting on the OEX daily chart: Link

  Linda Piazza   10/16/20,  3:21:09 PM
Anybody else dizzy? The OEX bounced exactly from the ascending trendline off the 10/7 low and it's now back at the 60-minute 21-pma. At least we know that trendline and that MA are important.

  Linda Piazza   10/16/20,  3:06:58 PM
That obviously was a "b" distribution pattern on the OEX five-minute chart after all, and it's broken to the downside. The OEX now tests the ascending trendline that has been supporting it since October 7. Will it this time?

  Linda Piazza   10/16/20,  2:55:04 PM
Is this a "b" distribution pattern forming after the steep fall on the five-minute OEX chart? Normally, I would say yes, but the fact that it's forming at this morning's equilibrium level, with some five-minute indicators trying to turn up, and the fact that it's also forming along the 60-minute 21-pma, makes me more wary of drawing that conclusion that I would be normally. Instead, the OEX might just be steadying here. This appears to be where the market "wants" to be. If you examine a 60-minute chart with a 21-pma, you see the OEX following that average with a few lazy dips below it, and four or five sharp spikes above it. It may or may not be be notable this time, however, that the spike was to a lower high. It's produced a couple of lower highs along the way.

  Linda Piazza   10/16/20,  2:50:11 PM
The OEX steadies at this morning's equilibrium level. It's uncanny the way that's done, isn't it? Like a rubber band snapping back.

  Linda Piazza   10/16/20,  2:43:38 PM
The OEX has ended up right back at a line extended from the apex of that triangle from this morning.

  Linda Piazza   10/16/20,  2:42:03 PM
Here we are again, with the OEX again testing the 60-minute 21-pma, and just below that, the rising trendline off the low of the 10:00 candle on 10/7. How many times have I typed that since 10/7?

  Jeff Bailey   10/16/20,  2:40:02 PM
S&P Banks (BIX.X) 323.49 -0.04% .... That sell program Jim mentioned at 14:33:09 really clocked the BIX.X on an intra-day chart.

  Linda Piazza   10/16/20,  2:35:46 PM
Well, it was fun while it lasted. Are the markets going to return to this morning's equilibrium level and rest there, as if the midday rise never happened? Perhaps.

  Jeff Bailey   10/16/20,  2:32:33 PM
02:00 PM EDT Market Internals ... some NH/NL observations, that might warrant some near-term attention as it relates to major indices hovering at their WEEKLY R1s. Link

  Linda Piazza   10/16/20,  2:03:01 PM
If the OEX continues moving up from here, the downside target predicted by the one-minute H&S was not met. While we don't give much credence to one-minute formations, this is one way I like to use them. However, there's no guarantee as yet that the OEX will continue moving up from here. Some five-minute indicators are turning up again.

  Jeff Bailey   10/16/20,  1:52:12 PM
Matrix Oberservations ... for those bulls looking to move to the sidelines on some of today's strength, now may be the time.

QQQ intra-day gains stopped at WEEKLY R1, while INDU/SPX are hovering right at their WEEKLY R1's, after a move back into their "zones of resistance."

Index Trader Wrap bulls can move out here, or simply raise stops to just under today's lows (hey, it may have worked with stop under Tuesday's lows) see what happens into Friday's close and get new WEEKLY levels after tomorrow.

As a non-matrix observation... the DJUSHB 526.66 +0.54% moved into its "zone of resistance" earlier this morning, but fades a little bit here.

  Jeff Bailey   10/16/20,  1:44:50 PM
Oh my! .... Netflix (NFLX) $51.95 +16% ... "short squeeze alert." ... I didn't see yesterday's Q3 report of $0.19 versus consensus of $0.10.

That bullish vertical count of $83 getting closer today. Link

  Linda Piazza   10/16/20,  1:44:47 PM
The OEX one-minute chart has a bit of a H&S look to it, with the neckline having been at 523.60. The shoulders may be too far out of proportion (too small) in relationship to the head for this to be a valid formation and it's a one-minute formation anyway and so not completely trustworthy. If it is valid, however, the predicted downside target is 522.20 or so. This isn't a tradable decline, of course, but we could watch to see if that downside target is met to gauge OEX weakness.

  Linda Piazza   10/16/20,  1:39:20 PM
That 10-minute reversal pattern (evening star) did confirm and the OEX now turns down. It remains above 522.90-523 possible support, however, but we'll just have to see if those levels support it as it retraces. The pullback does not look like the typical bull flag type of pullback, but I would imagine there's some emotion-driven trading going on today as bulls and bears battle it out. We're also moving into the usual stop-running time of day, so be careful about drawing conclusions too soon.

  Jeff Bailey   10/16/20,  1:36:45 PM
RF Micro Devices (RFMD) $11.38 +0.97% ... I am trying to set a reasonable stop loss on RFMD. As you may know, it has risen from a $4.55 April 30 low to yesterday's 11.75 high. Originally, I was targeting the 13.50 52 week high. I would appreciate your expertise and input.

Hmmm.... here's some work I've done on RFMD's bar chart. I'd suggest a trailing stop at $10.40. What do you think? Link

  Jeff Bailey   10/16/20,  1:17:33 PM
01:00 Update posted at this Link

  Linda Piazza   10/16/20,  1:10:50 PM
We have a possible reversal signal setting up on the ten-minute OEX chart. That doesn't necessarily mean that this is "the" reversal of the day, especially since we shouldn't count our formations before they confirm, but the OEX did approach the short-term high predicted by the five-minute Keltner channel. It's also hit an old ascending trendline I had on my 30-minute chart, with those old trendlines sometimes coming back into play. Perhaps that means nothing more than that we'll have a measured pullback, perhaps to 523.50-524, but be alert.

  Linda Piazza   10/16/20,  1:06:34 PM
Having predicted but missed several big moves lately, I feel for Jim who saw the up move developing but didn't jump on it because of the way the futures had been stopping out all plays. Been there, done that, all last week. I'm having sympathy pains.

  James Brown   10/16/20,  1:02:00 PM
I don't think he would mind, Linda.

  Linda Piazza   10/16/20,  1:01:27 PM
If we could just get Jim to step away more often, I know the markets wouldn't be mired in the middle of a chop zone so much. Isn't it uncanny how often this happens?

  James Brown   10/16/20,  1:00:41 PM
Yet another chip stock getting some analysts attention is Lam Research (LRCX). The company announced earnings yesterday and turned in 4c/share, beating estimates by a penny. Revenues were up 1.3% to $183.7 million. The company did say new orders were improving. Today the stock is down one percent but is getting a lot of attention. Adams Harkness raised their rating to a "strong buy". SG Cowen upgraded the stock to an "out perform", suggesting traders buy any dip. Fulcrum raised their LRCX price target from $25 to $35.

  Linda Piazza   10/16/20,  12:58:21 PM
The OEX has now retraced more than half yesterday's down move, and it's also now testing the midpoint of yesterday morning's gap (524.25). If it can sustain this level, a test of the top of the gap and then of yesterday's high appear to be next in line. This is truly a flagpole rise, however, and we should get a pullback to test and establish some of these support levels being crossed, such as 523.50 and 523.

  James Brown   10/16/20,  12:57:06 PM
Another big winner today is Q Logic Corp (QLGC). The company announced earnings yesterday and beat estimates of 35 cents by 2 cents. Revenues were up 23.5%. QLGC has seen three analysts start coverage of the stock with a "buy" in the last week. Today, Merrill Lynch upgraded their coverage to a "buy" and put a $65 price target on QLGC. Shares are currently up 4.68% and appear to be breaking out above resistance in the $52.50-53.50 region. Next resistance on the weekly chart is $57.00.

  Linda Piazza   10/16/20,  12:50:29 PM
Until proven otherwise, the current OEX five-minute pattern appears to be a measured accumulation pattern such as a "p" pattern, but the OEX could retrace further and the pattern could resolve into a flag. If it falls much below 523, however, before breaking to the upside, it's probably not an accumulation pattern.

  James Brown   10/16/20,  12:41:47 PM
Analysts are turning negative on St. Jude Medical (STJ) after the company beat earnings estimates by 2 cents yesterday. Revenues were up almost 18% but less than expected. This morning SG Cowen has downgraded the stock to a "market perform" while UBS has cut STJ to a "reduce". The stock has been volatile the last two sessions but not really reacting to these downgrades. STJ down 27 cents to $57.12.

  Linda Piazza   10/16/20,  12:41:18 PM
The OEX now deals with 524 resistance as the Dow deals with 9800. Even if the sentiment and trading pattern are going to remain bullish, I would expect a pullback here, possibly to 522.80-523 to test support, but that's not a given if shorts are running to cover.

  James Brown   10/16/20,  12:33:07 PM
Coach Inc (COH), the well-known designer of women's handbags and accessories, recently shot up above resistance near $30.00. The stock is slipping back just a tad during today's market "weakness" but we'd probably keep an eye on it for a bounce closer to $30. SG Cowen started the stock with an "out perform" this morning. The company is set to report earnings on Oct. 21st.

  Jeff Bailey   10/16/20,  12:33:07 PM
S&P 500 (SPX.X) 1,049.93 +0.3% ... session highs here and making a move back above its WEEKLY R1. I considered this a near-term level of resistance, and strength here looking bullish.

S&P Banks Index (BIX.X) 325.26 +0.5% also seeing session highs and challenging 52-week highs set on Tuesday.

  Linda Piazza   10/16/20,  12:31:21 PM
The OEX tests 523 resistance. It's also testing the bullish #2 on Jeff's 5MRT designation, with that level at 522.85. A sustained break over 523 will soon face next resistance, at 524, and then again at yesterday's high. Five-minute Keltner channels suggest 525 as a possible high, and the 60-minute Donchian channel suggests 525.90, yesterday's high. The Keltner channel suggests that a pullback to 522.50 might be possible as the OEX zigs and zags its way higher, if that happens.

  James Brown   10/16/20,  12:15:25 PM
Dow components Honeywell (HON) and Altria Group (MO) also reported earnings today. HON reported inline with 40c/share. Revenues improved 3.6% to $5.77 billion. The stock is the biggest gainer in the $INDU, up 2.5% to $29.87 but still under resistance at $30.00.

MO managed to beat estimates of $1.21 by a penny on growing revenues of $20.94 billion, up 4.7%. The stock is trading sideways near the $45 level and has been for a few weeks now.

  James Brown   10/16/20,  12:08:56 PM
For readers still following UTX and CAT, we have a good example of why we close most plays before an earnings announcement. UTX beat the street by 3 cents with $1.27/share and revenues up 9%. The stock is up 1% to $84.54. The stock may be higher but you can just hear the option premiums deflating. Meanwhile, CAT missed estimates of 74 cents by a penny with revenues rising 9% and the stock is down $5.57 or 7% to under $73. No need to wonder what happened to those calls.

  Linda Piazza   10/16/20,  12:08:31 PM
Although I began watching Keltner channels about the same time I did Donchian channels, I haven't watched them on a five-minute basis but on a thirty-minute basis. Studying the five-minute Keltner chart on the OEX now, however, I would suspect that we'd see a pullback to about 521.90-522 before the OEX can make much forward progress. This is just to benchmark my impressions, not a prediction. (Oops. Didn't type quickly enough. It's easy enough to "predict" that pullback to 522 now, since the OEX pulled back to 522.03 while I was typing.)

  Linda Piazza   10/16/20,  12:04:22 PM
OEX 523-524 becomes a possibility again if the break above the triangle is sustained.

  Linda Piazza   10/16/20,  12:03:07 PM
Finally, the OEX has broken above that triangle on its five-minute chart. It is also now back above the 30-minute 21-pma. However, we once again have not had even a single five-minute close above that average yet, so I wouldn't draw conclusions too quickly. Volume is light enough that the indices can get pushed one way or the other without the new levels being sustainable.

  James Brown   10/16/20,  12:02:37 PM
One of the out performers today is Northwest Airlines (NWAC). The company announced earnings this morning of 49 cents a share, which soared pasted estimates for a loss of 47 cents. NWAC is the fourth biggest U.S. carrier. Last year they reported a loss of 55 cents a share. The stock is up almost 12% despite comments from the CEO clearly stating that this quarter's profit does not "signal an end to our challenges..." (Reuters).

Continental Airlines (CAL) also reported earnings this morning and the No. 5 U.S. carrier followed NWAC's lead by reversing losses into a quarterly profit. CAL reported a profit of $133 million or $1.83/share compared to a loss of 58 cents/share last year. However, if you exclude the $100 million gain from selling ExpressJet (XJT) stock, CAL's results are just 49 cents/share, which still beat estimates of 42 cents. CAL stock is down 14 cents.

The XAL airline index is currently green.

  Jeff Bailey   10/16/20,  12:02:23 PM
PanAmSat (SPOT) $19.18 +6.37% ... takes over top spot for daily winner in NASDAQ-100. On Oct. 14, reported Q3 earnings of $0.14 per share, which was 2-cents better than consensus.

  Jeff Bailey   10/16/20,  11:59:19 AM
QQQ $35.22 +0.11% ... stopped on bearish day trade here. BLUE #2 just above at $35.24.

  Linda Piazza   10/16/20,  11:57:53 AM
If you're relatively new to options trading, one exercise you might try today is to pick a slightly OTM option on the OEX or your favorite index or stock and watch how it behaves if that underlying continues to trade sideways. You should begin to notice that the option decreases in value quickly as the day passes. Pick both a call and a put option and see if you notice differences.

  Jeff Bailey   10/16/20,  11:47:09 AM
Day Trade Short in the QQQ $35.16 here, stop $35.22, and target $35.01, a penny above that "bad tick" from earlier this morning at $35.00.

  James Brown   10/16/20,  11:46:22 AM
The surge in shares of United Parcel Service (UPS) continues today despite the market weakness. Boosting the stock this morning is an upgrade from JP Morgan from "neutral" to "overweight". JPM commented on the growing GDP as a favorable environment for the delivery giant. JPM upped their price target to $85, which is just a few dollars short of UPS' point-and-figure price of objective near $89. This week's series of new highs has pushed UPS to levels not seen since January 2000.

  Linda Piazza   10/16/20,  11:42:32 AM
I don't know if they turned out the lights at the exchanges, Jane, (see Jane's 11:40 post) but they must have barred the doors to the NYSE. Volume is anemic.

  Jeff Bailey   10/16/20,  11:37:14 AM
S&P 100 losers/winners Link in this morning's session have S -4.4% Link , BAX -4.05% Link , IBM -3.97% Link and CSC -2.68% Link . Gainers are EMC +4.04% Link , ALL +2.55% Link , HON +2.4% Link and UIS +2.15% Link .

  Linda Piazza   10/16/20,  11:34:16 AM
The OEX again attempts to break out of that triangle to the upside. It's now testing the top of this morning's gap, a level that has so far proven problematic.

  Jeff Bailey   10/16/20,  11:30:17 AM
11:00 Update posted at this Link

  Linda Piazza   10/16/20,  11:26:28 AM
Zig, zag goes the OEX. This seems like as good a time as any to do a little whining about yesterday morning. . . I mean a good time to discuss what I've learned about Donchian channels. As you know, I'd done a lot of backtesting of Donchian channel breakouts over the last week, and had found that if the OEX opened above the Donchian channel, it was usually a good idea to buy the open. In fact, it was almost always a good idea to buy the open. Almost without exception. Upside breakouts on the 9:30 open, even those that gapped, usually produced upside moves of 3 to 5 OEX points from the open, and produced them within that first 30-minute candle. Sometimes those moves were reversed on the next candle, or partly reversed, but I was prepared for that to happen yesterday and planned on a quick exit if the OEX stalled. Well, we got the quick exit all right, but it was in the wrong direction and we were stopped out for a loss.

I misinterpreted the size of yesterday's gap, and had not anticipated such a high opening. I'd thought the OEX would probably open somewhere near 523.50-524, and was even afraid it might open below 522.50, in which case I did not want to enter at the open. I'd added that now-laughable note to enter at the open if the open was above 522.50.

Last night, I again went back to the Donchian channels and scanned back. One benefit of using this method to study trading is that it's based on closing values, so it's easy to study in a backtest. I had to go all the way back to August 9, 2000 to find a 9:30 candle that behaved as yesterday's did. Even on that day, the OEX retested the day's high in that afternoon's trading, which the OEX did not do yesterday. So, while I'm no less chagrined to have underestimated the degree to which the OEX gapped yesterday morning, I'm reassured that yesterday was an aberration as far as behavior centering around Donchian channels is concerned. I never anticipated that these channels would be perfect, and my study shows they're far from being so. My backtesting had shown that they were perhaps best used as a confirmation tool of a breakout that was already determined by other means. I'm still interested in the times when they predict breakouts. I just wish yesterday's had worked as well as many of the other observed times.

  Linda Piazza   10/16/20,  11:18:21 AM
Reader Comment: This looks like a reverse H&S on the 5 minute compx chart. I know these don't always pan out but it looks clear to me.... Does it you?

Response: I see the formation you're noted, although I, too, have noticed that these often don't pan out. This interests me, however, as the neckline I've drawn is actually a longer-term ascending trendline drawn off the 30-minute chart. Link If this formation is valid, the COMPX probably needs to steady off about here and begin rounding up again toward that neckline. Good eye, A.

  Linda Piazza   10/16/20,  11:11:52 AM
I concur with the others who note the nature of the market today. The OEX has been zigging and zagging back and forth between the boundaries of its triangle on the five-minute chart. Right now, it's coiling up in the middle of this morning's gap.

  Linda Piazza   10/16/20,  11:05:37 AM
After nearing the bottom of the triangle I've been watching on the OEX five-minute chart, the OEX then moved again to the top of that triangle, testing the descending trendline off yesterday's high. It again overshot that trendline, but now falls back inside it again. Sooner or later--and probably sooner since the triangle now narrows toward its apex--the OEX should break out of that triangle in one direction or another. Maybe not, however. As Jim has warned us many times in the past, there's a real tendency to steady the markets from about midday Thursday during opex week. That could lead to the dreaded third possibility--the OEX trades sideways out of that triangle's apex without breaking one direction of the other. We should know within the next hour.

  Linda Piazza   10/16/20,  10:42:25 AM
The OEX began breaking down out of that formation, falling below this morning's open, as I was uploading my previous 10:40 post. That negates the possibility that this was a bull flag formation, then, as I stated in that previous post. Now I'm again watching that bottom trendline off the 10:00 low on 10/7, but the OEX is still within that triangle, still in the DMZ as far as I'm concerned.

  Linda Piazza   10/16/20,  10:40:05 AM
The OEX five-minute chart shows the possibility that the pullback since 10:15 ET could have been a bull flag pullback. It retraced about 50% of the flagpole rise that preceded its formation. However, it shouldn't fall beneath this morning's open before breaking to the upside if it's a classic bull flag.

Actually, the OEX remains between support and resistance, within the triangle formation seen on its five-minute chart, slightly above its 60-minute 21-pma and slightly below its 30-minute 21-pma. This remains the DMZ, and this is one of those days when I don't have a prediction for even the next few minutes.

  Linda Piazza   10/16/20,  10:36:11 AM
The OEX now moves inside the morning's gap and moves to test the 520.90-521.50 S/R zone.

  Jeff Bailey   10/16/20,  10:35:14 AM
Safeway (SWY) $22.60 -5.81% Link ... reported Q3 EPS of $0.47, which excluded a 1-cent charge for employee buyout and severance costs, which was a penny shy of consensus estimates. Stock hit lower after company provided Q4 guidance of $0.66-$0.69 compared to consensus of $0.71.

  Linda Piazza   10/16/20,  10:25:15 AM
The OEX falls back below the 30-minute 21-pma and now hugs the descending trendline off yesterday's high . . . finding support? Or as a preliminary move before declining beneath it again?

  Linda Piazza   10/16/20,  10:16:27 AM
The OEX is breaking above the upper trendline depicted in my 10:11 post and also above the 30-minute 21-pma, but there has not yet been a five-minute close above either. Volume is so light that we take great risks drawing conclusions today, too.

  Jeff Bailey   10/16/20,  10:14:01 AM
Dow Jones Home Construction (DJUSHB) 529.35 +1.05% ....

S&P Banks Index (BIX.X) 324.97 +0.41% ...

S&P 500 Index (SPX.X) 1,047.23 +0.04% ... back to unchanged.

  Linda Piazza   10/16/20,  10:11:46 AM
Here are the two trendlines I'm watching on the OEX, as seen on a five-minute chart: Link

  Jeff Bailey   10/16/20,  10:10:02 AM
UnitedHealth (UNH) $53.18 +3.6% Link ... reported Q3 earnings of $0.77 per share, which was $0.03 bettern than consensus. Company said revenues rose 15.9% year-over-year to $7.24 billion, compared to consensus estimates of $7.21 billion. Guidance given for fiscal 2003 is $2.91, which is above consensus of $2.85. Advest increasing its price target on the stock to $63.

  Linda Piazza   10/16/20,  10:09:40 AM
I just checked and that descending trendline off yesterday's high crosses just about at the same level as the 30-minute 21-pma, at 522.35. There are at least two levels of resistance there, then, and a move above the 30-minute 21-pma will mean a move above both. The OEX is still trapped between likely support and likely resistance.

  Linda Piazza   10/16/20,  10:07:20 AM
The OEX now faces the descending trendline off yesterday's high. That trendline lies at about 522.25, depending on how quickly it's tested.

  Linda Piazza   10/16/20,  10:04:22 AM
Times like this would seem ideal for a straddle: the VIX is low and the markets seem on the verge of breaking out again or breaking down.

Wrong. I've been tracking a QQQ October 35 straddle all week, for the purpose of seeing how it performed during just such conditions. Monday morning, when I first priced it, it was $0.85 x 0.95. This morning it's $0.30 x 0.55, and it has never been profitable as I've watched it. The problem with options made cheap because of the low VIX is that volatility is low, and some volatility is needed to make one side of that straddle be profitable enough to pay for the entire straddle.

  Linda Piazza   10/16/20,  9:59:47 AM
I would advise extreme caution when considering entering today. As of a few minutes ago, total volume was the lowest I've seen it for this time of day.

  Linda Piazza   10/16/20,  9:50:19 AM
I'm using this trendline as one guide to market decisions today: Link A break of this trendline would seem significant, but then look how quickly that 100-pma would be tested just below the trendline break.

  Jeff Bailey   10/16/20,  9:50:16 AM
S&P Banks Index (BIX.X) 323.57 -0.01% .... KeyCorp. (KEY) $26.21 -0.11% Link reported Q3 EPS of $0.53, which was a penny better than estimates. For Q4 said it sees EPS between $0.52-$0.55, with consensus at $0.54.

  Linda Piazza   10/16/20,  9:46:34 AM
Glad I'm not in an open position this morning, I'm watching as the OEX is batted back and forth between the 60-minute 21-pma's possible resistance and the possible support layered between 519-521.

  Jeff Bailey   10/16/20,  9:46:19 AM
QQQ $35.18 (unch) .... early gainers have MLNM +2.7%, EXPD +2.43%, VRSN +2.16%, being offset by losses in ERICY -3.06%, AAPL -4.6%, SEBL -3.8%.

  Linda Piazza   10/16/20,  9:43:26 AM
Note: As I typed, the OEX climbed above all the levels I was mentioning: The OEX tests the 50% retracement of the first five-minute range and climbs above that level as I type. There's another 50% level to be watched--the 50% retracement of the flagpole drop from yesterday's 3:48 high to this morning's low. That midpoint retracement is near this morning's open, so a climb into the morning gap will make it less likely that the bounce we're seeing now is simply a measured distribution pattern. That doesn't mean that the OEX will just keep climbing, but it makes that possibility that this is a bear flag less likely.

  Linda Piazza   10/16/20,  9:34:30 AM
The first five-minute OEX range included a high of 521.65 and a low of 520.45. The 50% retracement of that range lies at 521.05. That 521 level has been important in recent trading, so this coincides with historical S/R, and affirms the importance of this level.

  Jeff Bailey   10/16/20,  9:33:47 AM
Dow Industrials (INDU) 9,762 -0.41% Link .... CAT $73.01 -6.8% Link , IBM $89.50 -3.4% Link and HPQ $21.42 -2.14% Link show early weakness.

CAT's numbers were bigger disappointment.

  Linda Piazza   10/16/20,  9:29:03 AM
Several layers of support lie between OEX 519 and 520, including an ascending trendline off the 10:00 candle low from 10/7, the 30-minute 100-pma, and the 10-dma. That might be a first zone to watch for a possible bounce. Five-minute Keltner channels, which I haven't watched long, also indicate a possible pause somewhat higher, between 521-521.30. This doesn't mean that we'll get a big move up from those levels, but rather that we might get the first bounce that will tell us about market strength or weakness.

  Linda Piazza   10/16/20,  9:23:34 AM
European markets have turned down since my earlier report, with the FTSE 100 now down 40 points or 0.92%, at 4328.80; the CAC 40 now down 24.77 points or 0.73%, at 3350.21; and the DAX down 44.94 points or 1.26%, at 3525.64.

  Jeff Bailey   10/16/20,  9:22:03 AM
09:00 Update posted at this Link

  Linda Piazza   10/16/20,  9:17:59 AM
I'm giving myself credit for having a fairly good understanding of what's likely to happen on the OEX, but little credit lately for knowing how to enter and exit to take advantage of that knowledge. For several weeks, while always cognizant of the dangers in the market, I've also been pointing out the bullish possibilities, seeing the possibility of testing OEX 518, which was done; then 523, which was done, then 527-528 if 523 could hold, which target was not quite met. That knowledge hasn't helped me or you, however. Other than one and two-point moves over a few minutes' time, which I have a decent ability to predict, my timing has been off. Timing is everything with options plays. I saw the possibility that the OEX would go to 523 and when it found support at key averages and began moving up, I got us into a bullish play, but it wasn't the one that took the OEX up to 523 and we got stopped out. Then we missed the play that did take the OEX up to 523. That kind of thing keeps happening. A couple of weeks ago, I withdrew from issuing official signals until I felt more confident, and I'm going to do that again. I'll let you know what I see developing on the charts, and let you make your own entry and exit decisions based on that information. Meanwhile, I'll be paper trading the entries and exits I would have proposed, and when and if I get my timing back, I'll let you know. I take my responsibilities seriously, and if I'm not trading well, it's time to retreat until I figure out why that's true. Or maybe Jim has a replacement batter waiting in the wings and we can all happily benefit from a different viewpoint.

Meanwhile, I'm a stubborn person and I did more research on the Donchian Channel breakouts, especially those that occur on the 9:30 candle. When the markets settle down this morning, I'll let you know what I found.

  Linda Piazza   10/16/20,  7:12:54 AM
Good morning. The Nikkei closed over 11,000 in the overnight market, closing up 125.20 points or 1.15%, at 11,025.15. The Nikkei had opened slightly higher Thursday, but then began dropping. After September department store sales for stores operating in Tokyo fell 7.1% from the year-ago level and a retailer reported that warmer September weather hurt clothing sales, other retailers dropped. However, the Nikkei steadied just above 10,800 and then began climbing, closing on its high of the day. IBM's earnings, news that American funds were investing in Japan, and a weaker yen were credited with the climb. IBM competitor Fujitsu gained 7.3% after IBM reported that it would hire 10,000 new workers. Retail stocks remained weak, however.

Technology stocks mostly gained throughout Asia, although Asian bourses were mixed. The Taiwan Weighted gained a hefty 1.88%, and South Korea's Kospi gained 1.67%. Singapore's Straits Times gained a more modest 0.30%. Hong Kong's Hang Seng lost 0.24%, however, and China's Shanghai Composite dropped 1.27%.

European bourses are mixed as I prepare this report. Nokia, the world's largest manufacturer of mobile phones, reported Q3 earnings that rose 35% but sales that decreased 5%. The company plans to introduce 35 new phones this year, hoping to increase sales. Oracle and Siebel competitor SAP reported Q3 profit that climbed 25% and raised its forecast for the year. Revenue declined, but less than analysts had expected. Some believe SAP may have increased market share in the U.S.

Currently, the FTSE 100 has dropped 7.80 points or 0.18%, to trade at 4361.00. The CAC 40 has gained 6.49 points or 0.19%, to trade at 3381.47. The DAX has gained 7.70 points or 0.22%, to trade at 3578.28.

  Jeff Bailey   10/15/20,  10:13:36 PM
Nikkei-225 ($NIKK) 10,888.30 -0.11% Link is lower by 10 points early. Session low/high has been 10,831.76-10,917.47. If Nikkei-225 doesn't print a trade at 11,050 today, then we'd see a 3-box reversal lower on the PNF chart to 10,850 at this point.

The $NIKK PnF chart does show a "bullish triangle" pattern with the recent trade at 10,900, which would only be negated with a trade at 10,550.

  Jeff Bailey   10/15/20,  10:13:28 PM
Pivot Matrix for tomorrow posted at this Link

  OI Technical Staff   10/15/20,  10:13:18 PM
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