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  Jeff Bailey   10/20/20,  5:06:45 PM
Texas Instruments (TXN) $25.67 +2.8% ... continues to build gains in after-hours trade to $27.70. Guidance given for Q4 is EPS of between $0.42 and $0.50 compared to consensus of $0.45.

 
 
  Jeff Bailey   10/20/20,  4:36:30 PM
Texas Instruments (TXN) $25.67 +2.84% Link ... released for trade and higher at $26.70. Confusing earnings report, but all charges and add-backs has quarterly EPS at $0.12, which was 3-cents better than consensus and number most feel is the comparable number to analysts estimates.

Including all items, which most feel is not comparable, TXN said it earned $0.25 per share (includes a $0.13 per share gain for sale of Micron (MU) stock, which was reported back on July 10, 2003).

 
 
  Jeff Bailey   10/20/20,  4:28:37 PM
Cendant (CD) $19.76 +2.3% Link .... higher at $20.00 after reporting earnings of $0.47 per share, which was 2-cents better than consensus.

 
 
  Jeff Bailey   10/20/20,  4:24:49 PM
TASER Intl. (TASR) $43.60 +3.8% Link ... stock jumping to $46.50 in after-hours on headline EPS of $0.25, which blows out consensus of $0.06.

 
 
  Jeff Bailey   10/20/20,  4:22:58 PM
Texas Instruments (TXN) $25.67 +2.84% ... halted ahead of this afternoon's earnings.

 
 
  Linda Piazza   10/20/20,  4:04:24 PM
Just to benchmark what I'm seeing, the OEX closed above the (20,2) Donchian channel on the 30-minute chart, with a close above 520.44. I tend to discount what I'm seeing today because today is the first Monday after opex and because the volume was light, but I also note that the OEX is back above the 60-minute 21-pma and that 60-minute MACD histogram has registered a positive number. CCI and momentum remain negative, however. RSI runs up in full bullish mode. The Keltner channels show next resistance near 522, which is also the location of a descending trendline that I've drawn off the 10/15 high.

 
 
  Jim Brown   10/20/20,  4:00:04 PM
Earnings after the close:

CD est 0.45 act 0.47
TXN est 0.09 act 0.25, includes .13 for MU stock sale (.12net)
ALTR est 0.11 act 0.11
JCOM est 0.27 act 0.28
THQI est 0.01 act 0.03, CFO has resigned
LNCR est 0.55 act 0.59
SLAB est 0.24 act 0.29

TXN Book-to-bill 1.08

 
 
  Linda Piazza   10/20/20,  3:58:55 PM
I just accidentally clicked "weekly" when I meant to click "60-minute" and discovered that the OEX has been trading just under its weekly 130-pma for eight weeks: Link

 
 
  Linda Piazza   10/20/20,  3:54:45 PM
Less than five minutes to go. Will the OEX close above 520.44 top of the Donchian channel or won't it? Again, do not trade on this information, but I am watching to see how the OEX behaves in relationship to the Donchian channel today and then how it opens tomorrow. The OEX often falls back inside that channel before the close of the 30-minute period, however.

 
 
  Linda Piazza   10/20/20,  3:52:27 PM
The 5MRT system would have had us entering a bullish OEX trade at 519.55 just after three this afternoon with the first upside target of 520.39 having been met today. I suspect, however, that the tight first five-minute range would have led us to widen that system, perhaps even using the first 30-minute range. We would not have entered an OEX trade with that tight of a target. This does benchmark another day, however, in which that 5MRT helped us gauge the strength or weakness in the OEX, showing us more strength than we thought underlying the OEX.

 
 
  Linda Piazza   10/20/20,  3:38:32 PM
There was no 30-minute close above 520.44 in the last 30 minutes, so there was no breakout above the Donchian channel during that time period. The OEX has broken above the 519.75 level that the Keltner channels predicted might be next resistance, however. The OEX did pause at that level for about 15 minutes before the current push up, verifying that they had identified a possible resistance level, but there's now been a breakout of the Keltner channels, and my reading this weekend suggested they can also be used to identify breakouts, too. I haven't even checked this information, much less backtested it. The breakout for the current 30-minute period on the Donchian channel is again 520.44, so there would need to be an OEX close above that level for the channels to identify a bullish play as I've set up the parameters. Sometimes these 30-minute closes look like sure things, but then the OEX retreats to close back inside the channel again. Don't trade based on a Donchian channel breakout anyway as I'm only benchmarking what I see so we can establish whether these are helpful tools. I tend to agree with Jim, too, that we may be seeing a lot of opex related trading today.

 
 
  Linda Piazza   10/20/20,  3:20:55 PM
There's a big inverse (continuation) H&S-ish formation building on the OEX, best seen on a 240-minute-to-daily chart. I'm not going to post it because it's too malformed to give serious consideration to the possible neckline and targets. I do mention it, however, because there's a certain market psychology behind the formation of such patterns and perhaps the market psychology is showing bears that there's some danger here in taking too strong a stance without being aware of all possibilities. So far, the OEX appears to be just testing broken support from last week, and it has not so far retraced even half of Friday's bearish candle, but we should keep open minds about all possibilities, too.

 
 
  Linda Piazza   10/20/20,  3:13:32 PM
Here is why I've temporarily given more importance to the 60-minute OEX chart than to the 30-minute chart, although my studies confirm that at other times, it's best to watch the corresponding 30-minute averages: Link

 
 
  Linda Piazza   10/20/20,  3:06:07 PM
The OEX heads up to test the 519.75 level that should be next resistance. However, if the OEX should close this 30-minute candle above 520.44, there will have been an upside breakout of the Donchian channel I've been watching. There was not a close below the channel during the 2-2:30 ET time period.

 
 
  Jeff Bailey   10/20/20,  2:53:52 PM
Wrigley (WWY) $55.58 -0.83% Link .... reported intra-day its quarterly earnings of $0.50 per share, which was in line with consensus estimates of $0.50 per share.

 
 
  Jeff Bailey   10/20/20,  2:51:06 PM
E.Piphany (EPNY) $6.10 +0.3% Link ... stock jumped intra-day from $5.50 to as high as $6.54 after reporting intra-day a quarterly loss of $0.04 per share (ex-items), which was narrower than consensus for loss of $0.09 per share.

 
 
  Linda Piazza   10/20/20,  2:42:25 PM
The OEX again tested the 60-minute 100-pma at 517.65. Just below that is the 60-minute 130-pma at 516.60. The Donchian channel setup I'm watching shows possible support at 517.77 and again at 516.73, each corresponding fairly closely to those averages. The Keltner channels I'm watching show possible support having been at 517.84 and then at 517.58, and then at 516.21. They're also showing that the OEX might have difficulty climbing above 518.80-519.75 in this current upward push.

 
 
  Jeff Bailey   10/20/20,  2:42:22 PM
China Eastern Airlines (CEA) $16.95 $3.86% Link .... I don't know much/anything about CEA, but has the "China theme" attached.

PnF chart shows a "low pole warning" developed in May/June from $10.50-$14.50, and in August (just after Red 8) gave triple-top buy signal at $15.00 and build its current bullish vertical count to $23.50. Getting a bounce today after a 3-box reversal back lower, and bulls can play this one bullish, stop $14.00 and target $23.50.

 
 
  Jeff Bailey   10/20/20,  2:33:17 PM
01:00 and 02:00 Internals ....

NYSE .... A/D 1653:1453 and 1639:1502 while NH/NL 131:11 and 140:12

NASDAQ .... A/D 1566:1466 and 1561:1519 while NH/NL 134:7 and 143:7

 
 
  Jeff Bailey   10/20/20,  2:11:44 PM
Treasury Budget for September showed surplus of $26.4 billion, which was slighly better than the $25.0 billion forecast. For fiscal 2003, deficit is $374 billion. Here is a Link to the Treasury and Director of the Office of Management and Budget.

 
 
  Linda Piazza   10/20/20,  2:01:52 PM
A 30-minute close below OEX 516.73 during this (2-2:30 ET) 30-minute time-period would be a close outside the Donchian channel as I've set it up, indicating a breakout move beginning to the downside. Other methods of studying the OEX hint that it's unlikely for that to happen. The OEX 60-minute 130-pma is at 516.58, so I certainly wouldn't draw any conclusions about the OEX breaking down until that average was breached, and I wouldn't trade on this Donchian channel information alone. My backtesting has shown that in a trending market, it's a spectacular way of finding a breakout move, but that in a range-bound market, it's going to provide the same false signals that other methods of technical analysis often do. Right now, however, the OEX remains trapped in that DMZ between support and resistance.

 
 
  Linda Piazza   10/20/20,  1:52:54 PM
The OEX did pause at 518.80-518.90--for all of about three minutes, I think.

 
 
  Jeff Bailey   10/20/20,  1:50:43 PM
01:00 Update posted at this Link

 
 
  Linda Piazza   10/20/20,  1:47:17 PM
Remember that it's the time of day when we often see a stop-running move that sometimes continues and sometimes reverses. I've noticed that the move tends to come later over the last few weeks--somewhere around 2:00 ET instead of the 1:45 move we used to see. Also, on tight-range days, sometimes we don't see it at all.

 
 
  Linda Piazza   10/20/20,  1:40:02 PM
Based on the various channels and moving averages I'm watching today, it might be possible that the OEX would pause here at the 518.80-518.90 level, but it doesn't look as if a bounce would carry it far if it should try to bounce.

 
 
  Linda Piazza   10/20/20,  1:28:36 PM
Here's something I'm watching on the daily OEX chart: Link I didn't include RSI, but it's actually turning up along a similar trendline, giving a different view. I'm not overly bearish, but am keeping my eye on this MACD bearish divergence as a sign that the OEX might have to come down and test deeper support, perhaps either to 514 or even deeper, near 500. I still wouldn't consider that a bearish development, however, but rather just a normal and needed retracement of gains. My interpretation right now is that the OEX is currently testing support broken last week, but that it will probably roll down at some point when that test is concluded, and retest support, perhaps down near 514. That's just an untested scenario I'm building, however, to explain the differences seen in RSI and MACD in relationship to their respective descending trendlines. If the OEX instead turns up strongly, it's going to tug that MACD up through that trendline.

 
 
  Linda Piazza   10/20/20,  1:04:10 PM
Although my 13:00 post mentions that pushing through the closely linked 30-minute 21-pma and 100-pma could be tough for the OEX, the COMPX has already pushed through a similar resistance zone, with the same averages also closely linked. Like the OEX, however, it remains below the 60-minute 21-pma.

 
 
  Linda Piazza   10/20/20,  1:00:54 PM
The OEX currently does battle with the closely linked 30-minute 21-pma and 100-pma, with those averages now at 519.18 and 519.60. The 21-pma has just crossed under the 100-pma, a bearish development. However, since MA crosses tend to be late, this one could just be confirming the weakness we saw this morning. It looks as if this 519.50-521 zone should be tough for the OEX, however.

 
 
  Linda Piazza   10/20/20,  12:48:48 PM
CNBC commentators have been mentioning the light volume today. As of a few moments ago, total volume was 535 million for the NYSE and 813 million for the Nasdaq. Advancers led decliners on both exchanges, but by modest ratios on both. Up volume also was bigger than down volume on both exchanges, but also by modest amounts.

 
 
  Jeff Bailey   10/20/20,  12:42:00 PM
Jo-Ann Stores Class B (JAS.B) $24.78 -1.58% Link ... Broker Stephens reiterates their "overweight" rating and raised their bullish target to $46 from $30 saying they believe that shareholders will vote to merge the class A and B shares at the November 4 meeting, which should help improve the stock's liquidity, which larger institutional investors prefer. Stephens also cites the company's fundamental progress with its new superstors and the stock trading at a discount to peers.

Here's PnF chart of class A $28.47 -1.24% Link .

Currently, each of the Class A shares has one vote per share, while the Class shares has no voting rights. If merger of A and B were approved the Class A will be reclassified into 1.15 common shares, resulting in the issuance of about 1.16 million additional shares that would increase total outstanding shares by about 8%.

 
 
  Linda Piazza   10/20/20,  12:24:37 PM
We're now seeing an OEX test of the 10-dma at 520.02, the 30-minute 21-pma at 519.62, and various channel and envelope methods that show resistance at that zone. If the OEX can punch through this zone which I would extend up to 521 because of the known historical S/R there, then we might look for a test of 522.50-524. Until the OEX moves out of this area between the 519.50-521 resistance and the support it's been testing today, however, it's still in the DMZ as far as I'm concerned.

 
 
  James Brown   10/20/20,  12:22:48 PM
Afternoon Sector Losers:
________________________
INX Internet index: -4.59%
BKX banking index: -0.39%

Fractionally lower:
DRG drug index, OSX oil services, XNG nautral gas, RLX retail index.

 
 
  James Brown   10/20/20,  12:21:04 PM
Afternoon Sector Winners:
________________________
GSO software index: +1.01%
SOX semiconductors: +1.24%
BIX banking index: +1.11%
XAL airlines index: +2.73%

 
 
  Jeff Bailey   10/20/20,  12:08:44 PM
11:00 and 12:00 Internals ....

NYSE ... A/D 1432:1464 and 1492:1532 with NH/NL 87:7 and 112:11

NASDAQ ... A/D 1251:1555 and 1424:1507 with NH/NL 107:7 and 123:7

 
 
  James Brown   10/20/20,  12:03:17 PM
Speaking of sentiment indicators, the old VIX (now VXO) has been pretty much stuck between 20 and 19 for more than a week.

 
 
  Ray Cummins   10/20/20,  12:02:30 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies Part III

In addition, there is a great "free-ware" program that downloads data from the CBOE website and displays a quote montage along with the Greek values available from Rocky Point Software; Link

 
 
  James Brown   10/20/20,  12:00:56 PM
Hmmm... just read an article where Merrill Lynch chief U.S. equity strategist Rich Bernstein expressed the opinion that most investor sentiment indicators are useless.

 
 
  Ray Cummins   10/20/20,  12:00:08 PM
Spreads/Combos & Premium-Selling -- E-Mail Replies Part II

For those readers who don't have proprietary software, there are option pricing and volatility calculators at various sites on the Internet. One of the most popular "free" tools is available at the CBOE website; Link

 
 
  James Brown   10/20/20,  11:54:24 AM
The 8,000 lb. gorilla in retail, Wal-Mart (WMT) reported this morning that its October sales are on track. The stock isn't doing much but it is green. Earnings are in November.

 
 
  Ray Cummins   10/20/20,  11:51:04 AM
Spreads/Combos & Premium-Selling -- E-Mail Replies

(condensed) Hey Ray, I'm a new subscriber and I been fairly successful with some of your recommendations (mostly buying calls on naked put plays) but I continue to read a lot of stuff about volatility and "fair" value, etc. Why is it so important to understand all the complexities of option pricing? Why can't I just buy an option and wait for the market to move in the right direction? RT

The most important factors in option trading are market movement, option volatility (with regard to pricing and probability), and time decay. The knowledge of these concepts is paramount to profitable trading and without a suitable education in these areas, you will certainly enter the market at a theoretical disadvantage. The primary requirement is familiarity with option pricing. In volatile issues, the emotional optimism of traders can cause prices to vary widely from their true worth. Without a realistic estimate of the value of an option, you will often pay an excessive amount for the rights inherent in the contract and that usually results in a much lower return, if any, when the issue finally makes the expected move.

As intelligent traders, we have the ability to measure the value of an option through mathematical calculations, but if you aren't partial to formulas, pricing models will help you determine its "fair" value. Many of the established tools for pricing options are free and they should be used before opening any new position. Remember, in the majority of trading techniques, the end result is almost always a product of what you know, and how well you act upon it.

 
 
  Linda Piazza   10/20/20,  11:50:42 AM
I barely got my 11:45 post out before this climb started. It looks now as if we could see a test of OEX 519.75-520.75.

 
 
  James Brown   10/20/20,  11:47:47 AM
1 million Songs!...Apple Computer (AAPL) is reporting that Windows users have already downloaded more than 1 million copies of its iTunes for Windows digital jukebox software -and- purchased more than 1 million songs in three and a half days. The Windows version was launched last Thursday. Users can "purchase" a song for 99-cents.

 
 
  Linda Piazza   10/20/20,  11:45:39 AM
The OEX did break out of the five-minute (presumed) bear flag pattern, but instead of falling precipitously, it's drifted sort of sideways/sort of down. We saw this kind of behavior a lot during the rally days, with the result usually being that the OEX turned up again and climbed to a new short-term high. I'm not sure that's going to happen this time, however, but this non-breaking-down-as-expected behavior has certainly alerted me to watch for that to happen.

 
 
  James Brown   10/20/20,  11:42:10 AM
Dental stocks feeling some pain today. Patterson Dental Co (PDCO), DENTSPLY Intl Inc. (XRAY), Sybron Dental (SYD), and Young Innovations (YDNT) have all been downgraded from "out perform" to "neutral" by R.W.Baird.

 
 
  Jane Fox   10/20/20,  11:42:05 AM
Mark Phillips was quoted in an article in the latest Futures Magazine. Congrats Mark.

 
 
  Ray Cummins   10/20/20,  11:39:38 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The market is off to a lackluster start this week with most stocks moving sideways on relatively low volume. Among the best performers in our portfolio are Stryker (NYSE:SYK) and eResearch Technologies (NASDAQ:ERES), both of which are trading higher on analyst upgrades. There are few other stand-outs in the hi-tech segment however, Broadcom (NASDAQ:BRCM), Photon Dynamics (NASDAQ:PHTN), Linear Technology (NASDAQ:LLTC) and Novellus (NASDAQ:NVLS) appear to be stabilizing after recent selling pressure. On the downside, Genzyme (NASDAQ:GENZ) seems to have taken a turn for the worse as the stock is down almost 3% amid a slump in the biotech sector. Our bullish position may be in jeopardy if the issue continues to slide, thus traders should monitor the stock closely in the coming sessions.

 
 
  James Brown   10/20/20,  11:37:37 AM
Polaris Industries (PII) has displayed amazing strength the last few weeks. Shares hit new all-time highs as of Friday just under $84.00. The company announced earnings on the 14th, which had beat estimates by 2 cents with $1.74/share. This morning the stock is being cut to a "hold" on valuation concerns by A.G.Edwards.

 
 
  James Brown   10/20/20,  11:32:51 AM
FYI: I heard yesterday that the Feds had already caught the man who planted those plastic bags on the planes.

 
 
  James Brown   10/20/20,  11:31:47 AM
As if plastic bags filled with play-do shaped like C4 explosives and box cutters weren't exciting enough the newswires are now saying that Southwest Airlines (LUV) is "studying new in-flight entertainment".

The company announced earnings this morning. LUV reported in line with estimates of 13 cents/share. Revenues were up almost 12% to $1.55 billion.

 
 
  Linda Piazza   10/20/20,  11:30:37 AM
The OEX remains in today's version of the DMZ--between the central 60-minute 21-pma's and resistance near that 520-521 level and the 60-minute 100/130-pma's and the support offered there. The OEX pattern since hitting its low is consistent with a bear-flag rise, but nothing is certain while the OEX remains in this DMZ.

 
 
  Jeff Bailey   10/20/20,  11:26:43 AM
11:00 Update posted at this Link

 
 
  James Brown   10/20/20,  11:25:35 AM
Trigger Hit! -- One of our new put plays from the weekend newsletter Genentech Inc. (DNA) has hit our trigger to open bearish plays. The stock has broken its supporting trendline that began in June and is trading below the recent support at $77.60 formed in the last month. Our trigger to short it was $77.50. Shares are currently down 2.3% at $77.25.

This play may not be for everyone. Please see the play description here: Link

A trade under $77.00 would be a quadruple-bottom sell signal on its overextended P&F chart.

 
 
  James Brown   10/20/20,  11:21:34 AM
Target reached!...our current OI put play in Martek Biosciences (MATK) has already surpassed our initial target of $44.00. Short-term traders should be considering some profit taking on their bearish positions or adjusting their stop loss to protect a profit. We're encouraged by the healthy volume on the last four days of declines but shares are now short-term oversold and due for a bounce. Our secondary target is round-number support near $40.00.

 
 
  James Brown   10/20/20,  11:17:11 AM
Current OI put play Merck & Co continues to build on its trend of lower highs but traders need to be planning their exits. Earnings are Wednesday before the opening bell. That means we need to exit tonight or tomorrow before the close. Estimates are for 85 cents/share.

 
 
  Linda Piazza   10/20/20,  11:04:55 AM
Back to traditional and more familiar tools: If the current rise off the OEX low is a bear flag, then it should break to the downside before retracing more than 50% of the flagpole decline. That 50% level is at 518.60. This approximate zone keeps getting confirmed as important by several different methods of technical analysis--a 50% retracement of the first five-minute range, historical S/R from daily and weekly chart, five-minute Keltner channels, and other methods.

 
 
  Linda Piazza   10/20/20,  10:59:57 AM
The OEX paused below 518.50. Is it rounding over below 518.50? (See my 10:32 and 10:41 posts). That rounding-over process is tentative so far, but if the OEX is rounding over here, the five-minute Keltner bands I've been watching continue to be predictive of where support and resistance will be found. Even if the OEX isn't rounding over here, it has paused beneath this level, I think confirming the usefulness of this tool so far.

However, I also note that the 60-minute chart is still showing the OEX finding support at its 100-pma, currently at 517.57. Although there have been candle shadows below this level, candle bodies are forming above it. I mentioned this morning that the 60-minute 21-pma showed the slightest hint of an upturn within a generally rounding-over shape, and that hint has become stronger. The 30-minute chart looks much more bearish, as I also mentioned this morning, with the OEX below the corresponding averages and with the 21-pma rounding definitely down to meet the 100-pma, with the 1.35% envelopes rounding over, too, of course. Indicators on that 30-minute chart also look much more bearish. Until the OEX has turned below the 60-minute 100/130-pma's, however, I don't think we can consider the bearish tenor confirmed.

 
 
  Jane Fox   10/20/20,  10:59:12 AM
Jeff, great call on EBAY.

 
 
  Linda Piazza   10/20/20,  10:41:26 AM
We got the bounce from OEX 516.50-516.90. Now let's see if the OEX turns down below 518.25-518.50. (See my 10:32 post.) Five-minute 5(3)3 stochastics are only just now beginning a move up, so have plenty of room to run. If the OEX can make it above that 518.50 level, it might then rise to test 519.50-520 again.

 
 
  Linda Piazza   10/20/20,  10:32:37 AM
I wouldn't be surprised to see another bounce attempt from OEX 516.50-516.90, but I would expect it to find resistance now at about 518.25-518.50.

 
 
  Linda Piazza   10/20/20,  10:26:23 AM
The OEX tests the 60-minute 100-pma. The 130-pma is just below, at 516.43. If the OEX falls through both these averages, I would expect the next bounce attempt between 511.30-514. That's a wide range, but there are several levels of gaps, historical S/R, trendlines, and other possible supports layered through that zone. It's difficult to predict what might stop the OEX. First, it has to fall through those moving averages, however, and there's no certainty it will. It has fallen through the corresponding 30-minute averages, however, and looking pretty bearish if you just study the 30-minute chart with various indicators and with a 1.35% envelope surrounding a 21-pma.

 
 
  Jeff Bailey   10/20/20,  10:25:12 AM
Qchart .... I'm seeing several bad/inaccurate percentage gain/loss calculations for some indices this morning and session high data.

S&P Banks Index (BIX.X) 322.69 -0.14% (not +1.17% as displayed by my QCharts)

 
 
  Jeff Bailey   10/20/20,  10:22:12 AM
S&P 500 Index (SPX.X) new WEEKLY retracement on daily interval bars. Link

 
 
  Linda Piazza   10/20/20,  10:17:28 AM
For reference, the OEX 60-minute 100/130-pma's are currently 517.52 and 516.44, respectively. I expected we'd get a test of the 60-minute 21-pma this morning when the OEX bounced, and then a rolling over, due to the rolling over of the various channels and envelopes, and then another test of those 100/130-pma's. I'm not sure what happens after that test, however. A fall through those would portend more weakness, although there's next support near 514 (gap, historical, bottom 1.35% envelope surrounding the 60-minute 21-pma, etc.)

 
 
  Linda Piazza   10/20/20,  10:10:27 AM
Right on schedule, the OEX turns down again. The OEX created an evening-star three-candle reversal pattern on its five-minute chart, after testing that S/R zone identified by the various channels and envelopes I was watching this morning. So far, they're all working fairly well, although they're not predicting ultimate direction, of course. Since all those channels and evelopes slant down, however, they're suggesting that selling these tests of resistance is a better idea that buying dips today. We'll see how predictive they've been, however, as the day's trading plays out.

 
 
  Linda Piazza   10/20/20,  10:03:37 AM
The OEX also tests its daily 10-dma at 520.05.

 
 
  Linda Piazza   10/20/20,  10:01:35 AM
The OEX has just moved above the neutral zone defined by Jeff's 5MRT system. For those who prefer to watch moving averages, the OEX continues to move up from the 60-minute 100-pma, after testing that average and the 60-minute 130-pma on Friday. I'm watching the 60-minute 21-pma show the slightest uptick this morning, but Friday it began a rounding-over process, along with the 1.35% envelopes that surround it. That hints that the OEX might have difficulty moving above that average, evidence that correlates to that shown on the Donchian (30-minute) and Keltner (five-minute) channels I'm watching this morning, too. However, the OEX now moves into the resistance zone defined by those various methods, and it's barely slowing. This may be opex expiration related, so I'm giving this volatility some time to settle before I make any decisions about direction, but I was inclined to think this morning that the bounce from the 100-pma indicated a test of the 520-521 level, although I wasn't sure what would happen after that, and that wouldn't be a big enough move to trade on the OEX. My best guess is that the OEX would turn down again after a test of those levels, however, and head back down to test those 60-minute 100/130-pma's again.

 
 
  Jeff Bailey   10/20/20,  9:57:47 AM
JDS Uniphase (JDSU) $3.82 -2% Link .... Smith Barney initiates coverage of JDSU with "sell" rating with firm saying they still think JDSU's market (optical) is a couple of years away from a recovery and while JDSU's non-telecom businesses have helped stabilize results, there has not been enough disclosure to give them full credit. Smith Barney also views valuation rather high and a hurdle given that abut 50% of revenue and over 100% of operating income are derived from more industrial business that would not trade at the multiples found in the telecom sector itself. Smith Barney's price target is $3.50.

 
 
  Jeff Bailey   10/20/20,  9:49:01 AM
Black & Decker (BDK) $42.99 -0.62% Link ... slight weakness at the open and some cite today's news out of Home Depot (NYSE:HD) $36.26 +0.3% Link launching its new Ridgid brand of professional-grade power tools as potential negative for BDK. HD saying its 30+ new Ridgid tool launch is largest product launch in company's history.

 
 
  Linda Piazza   10/20/20,  9:40:56 AM
By watching combinations of the Donchian channels, the 30-minute 21-pma at 520.67, Keltner channels, and historical S/R, I would expect the OEX to find next resistance between 519.90 and 521. Again, I'm watching a combination of new tools to see which might be helpful to us, and benchmarking the levels they're showing so both you and I can see which are useful and which are not.

 
 
  Jeff Bailey   10/20/20,  9:40:24 AM
eBay (EBAY) $55.50 +1.13% .... looking to write a Nov. $55 call on trade at or above $56.00. This may be suitable for those holding a Jan. expiration, or the underlying stock itself.

See this weekend's Ask the Analyst column and discussion of "high pole warning." Link

 
 
  Linda Piazza   10/20/20,  9:37:17 AM
The OEX appears to be bouncing from the 60-minute 100-pma, but is currently testing the 30-minute 130-pma. Lately, the 60-minute 100/130-pma has been more important to watch, but sometimes the OEX alternates and trades in closer relationship to the corresponding 30-minute averages.

 
 
  Linda Piazza   10/20/20,  9:35:47 AM
In the first five minutes of trading, the OEX hit a high of 518.87 and a low of 518.18. The midpoint of that range is 518.53, useful to watch in earliest trading most days. However, today's range was a tight range, and that midpoint might not be especially significant--at least it wouldn't if this area were not also historical support/resistance that shows up on the daily and weekly charts.

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

 
 
  Linda Piazza   10/20/20,  7:12:22 AM
Good morning. The Nikkei opened in negative territory Monday morning, dipped slightly, and then began climbing. While it closed about 50 points of the day's high, it still closed up 123.82 points or 1.12%, at 11,161.71. This was a 16-month high. The gains came despite a Bank of Japan cautionary statement about the effects of the rising yen, but today the dollar firmed against the yen. Brokerages led the gains as investors hoped that those companies would report strong first-half earnings. Banks and some techs did not participate in the gains, however. Sony lost ground after a media report that it might cut as many as 10% of its workforce over the next several years. Sony reports at the end of this week.

Most other Asian bourses gained, too. The Taiwan Weighted gained 0.58% and South Korea's Kospi gained 1.13%. Singapore's Straits Times gained 0.45% and Hong Kong's Hang Seng gained 0.86%. China's Shanghai Composite declined, however, by 0.81%.

Many European bourses trade up, too, as the dollar firmed against the euro, too. According to a CNBC World report last night, U.S. Treasury Secretary John Snow confided in a Times of London interview that the recovery in the U.S. would lead to higher interest rates. French automaker Peugeot Citroen gained after reducing targets but German automakers generally declined. Market gains are spotty as markets react to earnings announcements as they're released, but a better-than-expected earnings announcement by Citigroup apparently impacted European markets, too, improving market outlook according to speculation in one news source.

As of this writing, the FTSE has gained 16.90 points or 0.39%, to trade at 4360.90. The CAC 40 has gained 13.31 points or 0.40%, to trade at 3367.03. The DAX has gained 29.71 points or 0.84%, to trade at 3546.38.

 
 
  Jeff Bailey   10/19/20,  1:04:11 AM
Pivot Matrix for next week at this Link

In PINK I've made note of QQQ $34.20 and not too far from the $34.25 discussed in Thursday's wrap. So... QQQ has a habit of overdoing things a little (note QQQ traded MONTHLY R2, NDX didn't) and I think best pullback bullish entry trade to look for a bounce is actually IN BETWEEN the WEEKLY S2 and S1.

The BIX.X will probably be the key sector for strength and will note two correlation of 320 and 317, which will be important sector support for the major indices that traders should monitor.

Shorts may still be jittery and eager to cover. Note eBay (EBAY) with lofty valuation closes near session high, and Amazon.com (AMZN) $59.69 -0.36% which isn't "cheap" finished down just $0.22, while Yahoo! (YHOO) $42.24 +0.07% edged up 3 cents.

 
 
  OI Technical Staff   10/19/20,  1:04:01 AM
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