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  Jeff Bailey   10/22/20,  5:36:15 PM
QQQ $34.20 ... downside alert in after-hours at WEEKLY S1. Short-term bulls might sleep well tonight if they close out here, or lower stop to $34.56. Im closing out here at $34.23.

 
 
  Jim Brown   10/22/20,  5:23:04 PM
Earnings ALERT !
See KLAC news in future monitor

 
 
  Jim Brown   10/22/20,  4:20:44 PM
KOMG 40 cents, -13 cents items = 27 cents, vs est 20 cents

 
 
  Jim Brown   10/22/20,  4:18:37 PM
LLY 66 cents inline

 
 
  Jim Brown   10/22/20,  4:17:25 PM
SYMC 49 cents, est 45, reported before the close. 2:1 stock split,

 
 
  Jim Brown   10/22/20,  4:16:00 PM
TKLC inline at 8 cents, nongap at 12 cents

 
 
  Jim Brown   10/22/20,  4:15:15 PM
KLAC 18 cents vs 17 est, guided way below estimates

 
 
  Jim Brown   10/22/20,  4:13:03 PM
CTXS inline guidance at 19 cents for qtr, higher for the year

 
 
  Jim Brown   10/22/20,  4:12:25 PM
EFII 24 cents vs 22 est, raising guidance

 
 
  Jim Brown   10/22/20,  4:11:03 PM
AFL 47 cents, estimates 46 cents.

 
 
  Jim Brown   10/22/20,  4:08:58 PM
MERQ reports inline, guides lower

 
 
  Jim Brown   10/22/20,  4:08:09 PM
FLEX beats by a penny but guides inline

 
 
  Jim Brown   10/22/20,  4:07:42 PM
VRTS 18 cents inline

 
 
  Jim Brown   10/22/20,  4:06:47 PM
BVSN reported a loss of -17 vs estimates of +01 cents. Revenue missed as well

 
 
  Jim Brown   10/22/20,  4:06:13 PM
Computer Associates guided lower for the current quarter

 
 
  Jeff Bailey   10/22/20,  4:01:24 PM
QQQ $34.56 -1.95% .... I don't have real time S&P futures (sp03z) quotes, but at 10-minute delayed, I'm seeng futures at 1,028.00, and this would be below our 1,029.10, so I take on a bearish bias into the close.

As such, a QQQ bear may once again look to hold overnight, but lets keep stop as previously outlined of $34.74.

 
 
  Linda Piazza   10/22/20,  3:53:52 PM
Here's a rundown of how some of the key indices I watch are performing in relationship to their 21- and 30-dma's, with those averages closely linked on most of the charts. The NDX has not yet fallen beneath its 21 and 30-dma's. The Dow tests those averages as the close nears. The SPX does, too. The OEX has fallen beneath them. The SOX hasn't even begun to test them, sitting far above them. Surprising me, the Russell also hovers above these averages, although not as far above them as does the SOX. The Wilshire 5000 tests them, sitting slightly above them. The TRAN sits far above them.

 
 
  Linda Piazza   10/22/20,  3:45:27 PM
I had almost mentioned when I made my last post that OEX 513-513.20 might provide possible support, based on the Keltner bands, but I omitted that part of the post when the OEX was already slightly below 513 when I posted it. However, that below-513 level was just a shadow on the five-minute candle. Here are the Keltner bands on which I've been making some observations about possible support and resistance: Link

 
 
  Jim Brown   10/22/20,  3:41:06 PM
If you want to see relative strength look at MMM. Up +0.30 today and a new 52-week high.

 
 
  Linda Piazza   10/22/20,  3:25:47 PM
That OEX resistance zone did hold and the OEX now heads sown to test the low of the day.

 
 
  Jeff Bailey   10/22/20,  3:14:18 PM
North American Telecom (XTC.X) 530.66 +0.16% .... creeps green for first time today.

 
 
  Jeff Bailey   10/22/20,  3:11:50 PM
QQQ $34.61 -1.75% ... here's an updated 10-minute interval chart of QQQ (allows more time observation), but some things I'm looking at, where $34.20 may be MAX decline target. Also give similar bullish divergence in MACD. Link

 
 
  Linda Piazza   10/22/20,  3:08:53 PM
The OEX fulfills the minimum upside target predicted by its double-bottom on the five-minute chart. This differs from a similar period early today when it confirmed a double-bottom, but then could not move higher. Next resistance lies from the current level up to 515.50. If the OEX makes it past that level, then we might be looking at another test of the sixty-minute 100/130-pma's. Those are such important averages that it might be expected that the OEX would need to retest them, but I wasn't sure earlier that the OEX could rise that high today. I'm still not sure.

 
 
  James Brown   10/22/20,  2:59:19 PM
$60K seats! -- An EBAY auction, arranged by the Today show, recently sold the last two seats on the last Concorde flight for $60,300. Proceeds are going to charity. The flight is from New York to London, a return trip on a normal British Airways flight is included.

 
 
  Ray Cummins   10/22/20,  2:58:56 PM
Spreads/Combos -- Reader's Write E-mail Replies

Hello Ray, Could you please help me out on this? Several weeks ago I bought call options on a stock. Several days later I entered a limited order to sell these calls in the spread. Three times during the day it hit the bid price that matched my price, however my order was never filled! My question is; does the market maker has the responsibility to fill this at the bid? Thanks in advance! TG

(Reply from Andrew Aronson of OneStopOption) In theory you should have been filled. All of the exchanges are now linked to one another and if a bid matches an offer at a different exchange, the quote board highlights the match. The market maker then has the option of sending your order to the exchange that is bidding your price, if he/she does not wish to fill it. However if the order had a qualifier such as "All or None," these orders do not have to be filled. My guess is your order was on a different exchange than the one bidding your price for the option. Your quote system may only give you the best bid and offer regardless of the exchange. In other words, your order may have been on the CBOE and the bid was on the AMEX.

At OneStopOption, we offer clients the ability to route their order to the exchange of their choice. In the future you could call the brokerage firm and inquire where your order is placed. Then ask if you could move your order to the exchange that is bidding your price. This should help you get filled in the future. Andrew Aronson; V.P. Investments, OneStopOption; Link

 
 
  Jeff Bailey   10/22/20,  2:55:04 PM
In futures monitor Jim just closed out a nice short trade. Per Index Trader observations from Monday night, I thought that capture of nice 7.6 gain made sense. Here's the chart of the S&P futures, where we would look for some bullish bias to be found. Link

 
 
  James Brown   10/22/20,  2:55:02 PM
Trick or Treat?... a Reuters article is reporting that Norway has bestowed a start-up grant of $7400 to a 33-year old women to launch her new business, Forest Witch Magic Consulting. A list of services includes potions, spells and fortune-telling.

I was going to come up with a witty comment for a spell on Secretary Snow but the magic words allude me.

 
 
  Linda Piazza   10/22/20,  2:53:19 PM
The OEX approaches the upside target predicted by the confirmation of the double-bottom on its five-minute chart, but it hasn't quite made it to that 514.30-ish level yet. If it confirms a bullish pattern, but can't meet the upside target, that's a further sign of weakness.

 
 
  Ray Cummins   10/22/20,  2:51:34 PM
Spreads/Combos -- Portfolio Activity

Earlier, Jeff Bailey mentioned that SICOR (NASDAQ:SCRI) shares have rallied today on news that Israel's Teva Pharmaceutical Industries (NASDAQ:TEVA) is in talks to buy the generic drug-maker in a deal that could be worth over $2.5 billion. A report from a foreign newspaper also said that Sandoz, the generics division of Swiss giant Novartis AG was interested in a potential acquisition. SICOR company officials confirmed later that preliminary discussions were underway concerning a possible merger or other business combination, but that no agreement has been reached with respect to any of these potential transactions and no assurance can be given that any transaction will be consummated. Our new "bullish" calendar spread at $22.50 required an adjustment (or early exit) to remain profitable and adept traders were able to transition to a diagonal position; FEB-22.50C/DEC-25.00C, for a debit of $0.40-$0.60. SCRI shares will have to finish the December expiration period above $23.85 for the spread to achieve a profit.

 
 
  Linda Piazza   10/22/20,  2:50:15 PM
I agree with the term "pullback" that James used in his 14:44 post, too. Until we see the OEX violate 500, it's still just oscillating within an ascending regression channel. That doesn't mean that I'm ready to buy the dips right now--not while the OEX is below its 60-minute 100/130-pma's. I switch to sell-the-rallies mode then. That also doesn't mean that I'm sure the OEX is going to bounce from the bottom of that ascending channel once again, as it's been doing over the last months.

 
 
  Linda Piazza   10/22/20,  2:46:13 PM
As I'm sure James knows (his 14:44 post), volume confirmation isn't as important in a downturn as it is in an upside breakout. In fact, if it's too strong in a decline, that can signal that some accumulation is going on.

 
 
  Jeff Bailey   10/22/20,  2:45:34 PM
QQQ ... Day trade bear may now look to lower stop profit to $34.74 (Just above 5-MRT RED #2). This should be protection against 5-minute interval chart having MACD move above zero level.

 
 
  James Brown   10/22/20,  2:44:20 PM
A reader brings up a good point. Volume is kind of light for the size of this pull back. Do we still have a drought of investors willing to sell?

Personally, I just see this as overdue profit taking and the low volume is a problem we've endured for weeks.

If you have thoughts on the low volume, feel free to comment.

 
 
  Jeff Bailey   10/22/20,  2:43:16 PM
QQQ $34.61 -1.78% .... 5-minute interval chart really showing some of that bullish divergent from about 11:00 AM EST on the intra-day MACD.

 
 
  Linda Piazza   10/22/20,  2:42:30 PM
On 10/2, the OEX closed at 511.20, although it hit an intraday high of 512.14, before gapping up the next morning. Today, the OEX decline slowed as it approached the bottom of that gap, with the OEX low of the day being 512.36 so far. OEX 512 also coincides with some historical support, so it's difficult to say how much that gap factors into this support level and how much the historical support does.

The OEX has now confirmed the mini-double-bottom I mentioned on the OEX five-minute chart. There's now an upside target near 514.30, coinciding with possible light resistance between that level and 515.40. The 21- and 30-dma's lie within that zone, too.

 
 
  Jeff Bailey   10/22/20,  2:40:47 PM
Utility Index (UTY.X) 291.70 +0.05% ... has been either side of unchanged in recent hour.

 
 
  James Brown   10/22/20,  2:39:47 PM
As the worm turns... Symantec (SYMC), known for its anti-virus software, is due to report earnings after the bell tonight. Estimates are for 45 cents. The stock has been slowly churning sideways with a bullish tilt in its higher lows and investors are ready to hear how it did this quarter.

Anyone in I.T. knows that this last year has been one of the worst with the Blaster worm, SoBig worm and more. Investors are hoping that the onslaught of viruses and worms will translate into big profits for SYMC and rival Network Associates (NET). NET announces tomorrow before the market's open. Estimates are for 11 cents.

 
 
  Jeff Bailey   10/22/20,  2:34:35 PM
Marvell Technology (MRVL) $41.94 -5.17% Link .... I would appreciate your input on mrvl. I would like to get back in with 2 to 3 months out opt. But the rsi and slow and fast stochastics indicate a sell for now- is this correct? I sold my nov. 40's at mrvl peak.How is Drake? thank you for your time- I do appreciate it and know how busy you are.

I've only sold the tippy top on one stock in my life and it looks like you recently did well with your exit point.

For a 2 to 3-month time horizon, I would think something near $38-$39 good bull entry, where MRVL should find support at $37 (buy signal at $37 moved higher to $43, and pullback to $37 found buyers to new high of $44). Stock looks quite strong. One strategy for a trader that might buy 2 calls or more is to leg into a new position (take a partial at first) on a dip back to the rising 21-day and 50-day SMA ($40.25). Then sit tight for a week or two. Then revisit and could average up on break to new highs.

Drake the dog is doing better. He was immobilized last week with either a pinched nerve in his back, or something. $85 later and some good Pfizer pain medication and he is back to his old self. Playing out in the sprinklers as I write.

 
 
  James Brown   10/22/20,  2:31:03 PM
Our aggressive put play in DNA is performing well again. Yesterday's bounce towards the $80 level has, in hindsight, proven to be a nice entry point for anyone brave enough to take it. DNA hit a new relative low this morning and the weakness in the BTK (-4.6%) doesn't hurt.

 
 
  Linda Piazza   10/22/20,  2:27:38 PM
The OEX 60-minute candles are getting smaller as the OEX slides down toward the bottom of this next possible support zone, near 512.40 as I mentioned earlier. We still haven't seen more than a minimal bounce attempt since early this morning. The five-minute chart does, however, show a possible double-bottom that would be confirmed on a move above 513.32, with a minimal upside target of just under 514.30. If that should happen, that would bring the OEX up to test what should be at least light resistance near 514.50-515.50. I noticed at least one other instance today, however, when the OEX formed a double bottom on the five-minute chart, then confirmed it, but could move no higher and did not meet the upside target. Let's see what happens this afternoon, and whether there's even a confirmation.

 
 
  James Brown   10/22/20,  2:21:22 PM
Feeling the most pain today
are the following sectors:

DDX disk drive index: -6.76%
BTK biotech index: -4.49%
DRG drug index: -3.46%
XAL airlines index: -3.95%
GHA hardware index: -3.46%

Also down more than 2 percent are: GSO (software), INX (Internet), SOX (semiconductors), XBD (broker dealer),

 
 
  Linda Piazza   10/22/20,  2:18:17 PM
As would be expected, the adv:dec ratios show far more decliners than advancers. As of a few minutes ago, the ratios were 9:22 for the NYSE and 7:24 for the Nasdaq. Down volume was 4 times up volume on the NYSE and 3 times up volume on the Nasdaq. Total volume was 1 billion on the NYSE and 1.4 billion on the Nasdaq.

 
 
  Jeff Bailey   10/22/20,  2:10:22 PM
Some quick PNF comparisons for major world indices and possibly U.S. dollar impact.

Dow Industrials ($INDU) Link

Japan's Nikkei-225 ($NIKK) Link

Germany's DAX ($DAX) Link

Hong Kong's Hang Seng ($HSI) Link (currently pegged to the dollar)

Observations would be that Japan's $NIKK might be first place to monitor for weakness. I would currently have to views the 10,700 level as a near-term level of support. This would be the apex of the recent bullish triangle.

 
 
  Linda Piazza   10/22/20,  2:08:36 PM
Unlike the OEX, which fell beneath its 60-minute 130-pma on a closing basis on today's second hourly bar, the NDX only closed below its corresponding average during last hour's bar, and only barely. It now rises to test that average again, showing more resilience than the OEX.

 
 
  Linda Piazza   10/22/20,  2:05:18 PM
Not much of a bounce attempt so far. Lately that afternoon push has been coming just after 2:00 ET rather than 1:45 ET or so, but it may not come at all today. The five-minute Keltner channels now look as if the OEX might face first resistance between 513.50-514 and then again just under 515. An old trendline on one of my charts links up with possible resistance near 515, so that fits with historical resistance, too. If the OEX should be able to push past this next resistance, a test of the 60-minute 100/130-pma might be in order again, although right now it doesn't appear as if that will happen soon. Such a test would afford market participants another opportunity to enter a bearish position on a rollover beneath those averages and a bullish one if the OEX should push back above them. That bullish possibility doesn't appear to be the mostly likely scenario, but I'm keeping in mind that the OEX has only retraced to the midline of its ascending regression channel so far today, not a particularly bearish thing to do. Just keeping an open mind.

 
 
  Jeff Bailey   10/22/20,  2:01:59 PM
QQQ and eBay ... It's notable that the QQQ has violated Friday's lows, but eBay hasn't violated its low set on Friday at $53.70 at this point.

I'm kind of using EBAY as a pulse stock in the QQQ, as it may have been one of the bigger NASDAQ stocks to "disappoint" on earnings, or forward guidance.

 
 
  Jeff Bailey   10/22/20,  1:54:34 PM
Dow Industrials (INDU) 9,583 -1.68% .... just a note that it program trading curbs would kick in should the Dow fall 180 points from yesterday's close. This would equate to an INDU trade at 9,567.64.

 
 
  Linda Piazza   10/22/20,  1:54:31 PM
I wasn't here to see it, but the 30-minute Donchian channel (20,2) setup I've been watching would have signaled a bearish entry this morning at 515.73. Due to the way the breakouts work, the Donchian channel system (not just my setup, but all breakout setups on Donchian channels) miss the first part of a move, but since they sometimes catch moves that carry on for more than 10-15 points, that's okay if we could just avoid the false signals. Curiously, the ADX today was about 22 when the signal was given, again suggesting an iffy trade, like Monday afternoon's upside breakout. When doing the backtesting, signals given when the OEX was near 20--just above or just over--tended to be breakeven or result in slight gains/slight losses. The OEX climbed 2.09 points after giving that upside breakout signal Monday afternoon, but it's unlikely that we would have exited exactly at the top, so that trade would probably have been breakeven. Today's, so far, looks as if it would be more profitable. As I've mentioned before, I'm benchmarking my impressions so that we can watch how well these trades perform in real life.

 
 
  Jeff Bailey   10/22/20,  1:48:33 PM
01:00 Update at this Link

 
 
  James Brown   10/22/20,  1:43:55 PM
Stock Split?- - For everyone following Electronic Arts (ERTS), which was just highlighted on CNBC and has been on our watch list for days...the company announces earnings after the close and odds for another stock split are pretty good.

ERTS last split its stock 2-for-1 on September 11, 200, when shares were trading near the $100 level. The stock is currently down $2.41 to $102.23. Estimates for tonight's earnings report are 44 cents.

 
 
  James Brown   10/22/20,  1:39:00 PM
Analysts have mixed opinions on Amgen (AMGN) after the company announced earnings after the bell yesterday. Net income came in at 53 cents, or 3 cents better than expected. Revenues jumped 47% to $2.21 billion. What is interesting is that the sell-off in AMGN began five days before the earnings report on the failed rally at its 50-dma. Today shares are down another 5.2% toward support near the $60 mark but under its 200-dma.

Morgan Stanley has downgraded the stock to an "equal weight" from an "over weight" while Buckingham has upgraded the stock to a "strong buy".

I've posted a daily chart and a weekly chart of AMGN. On the daily you'll see the breakdown under its 200-dma and the 38.2% retracement of the Nov-July run up. On the weekly you'll see AMGN at support of its 200-week ma near the $60 mark. If it breaks $60.00 the next strongest support is near $53.00 (blue line on the weekly). Link

 
 
  Linda Piazza   10/22/20,  1:37:22 PM
Was that the bounce? If so, it was even more tepid than I expected, but perhaps it's coming as the OEX approaches 512? We're approaching the time of day when we often see a stop-running push. As we approach that time of day, the OEX also approaches the bottom of the gap from the 10/2 close to the 10/3 open. The OEX is already below both the 21- and 30-dma's, with only the 50-dma at 510.72 below it to offer support now. Other than that MA support, however, historical support lies near 507 and 504.

 
 
  Linda Piazza   10/22/20,  1:20:59 PM
The OEX has fallen beneath the 60-minute 100/130 pma's this morning, with the fall gaining strength and speed once the OEX moved through those averages. That signals a change from a buy-the-dip mentality to a sell-the-rally one. Those averages currently measure 518.06 and 517.11. Nested five-minute Keltner bands and the 60-minute 1.35% envelopes surrounding a 21-pma suggest that it's possible to see a bounce begin anywhere from the current level down to 512.40, but that bounce might get stopped at the 514.40-515.50 zone rather than carrying the OEX all the way back up to test the 60-minute 100/130-pma.

 
 
  James Brown   10/22/20,  1:15:19 PM
Just a little follow up on AMZN. Shares are down 7.3% near the $55 level after their earnings report last night. Yesterday I was watching the following two puts:

AMZN NOV 60 put (ZQN-WL) trading near $5.90 (+2.10, +55%)

AMZN NOV 55 put (ZQN-WK) trading near $2.55 (+0.90, +55%)

 
 
  Jeff Bailey   10/22/20,  1:08:18 PM
Index Trader Wrap ... at this point, I haven't seen anything at this point from the major indices that doesn't have me thinking SPX vulnerable to WEEKLY S2 and NDX/QQQ vulnerable to WEEKLY S1s.

BIX.X 322.81 -0.6% may be only sign in the matrix, as it holds rather tough at WEEKLY Pivot (322.88), but its daily interval chart still has Stochastic high relative to the other major indices, as if it and the NDX/QQQ might line up for a test of their WEEKLY S1s.

 
 
  Linda Piazza   10/22/20,  1:07:46 PM
Of course I miss the one directional day we've had in a while! Here's what I see as I return: Link

 
 
  James Brown   10/22/20,  1:06:51 PM
Potential put candidate? Shares of Allergan Inc (AGN), the biotech/pharmaceutical(eye care) company, continue to look weak. The company reported Q3 earnings this morning before the bell, which turned out a profit compared to a year-ago loss. Earnings came in at 57 cents, which were in line with estimates.

After months of consolidation in the $75-$82 range the recent weakness could be forecasting a deeper retracement for the stock. I'd keep my eye on the 200-dma near $72.50. This area coincides with bullish support on its point-and-figure chart.

 
 
  James Brown   10/22/20,  12:53:34 PM
I'm just repeating part of their comments about the action in SIRI.

 
 
  Jeff Bailey   10/22/20,  12:52:59 PM
James (per 12:38:56) ... wow... that's crazy. I'd hate to think institutions were buying WorldComm below $5.00 just because it was liquid.

Thanks for telling me what CNBC was saying though. I'm not saying YOU are crazy, just the thought of buying any stock because it is liquid. Some options traders won't touch an option if it doesn't see a lot of volume. In my opinion, that is just as crazy. All that really matters is price action. Sometimes, volume studies can be used to ascertain interest and disagreement, but that's about it (in my opinion).

 
 
  James Brown   10/22/20,  12:52:22 PM
For anyone who was brave enough to hold on to their MRK puts, congratulations. The stock is getting hounded today for a 6.6% loss after missing earnings by 2 cents (83c vs. 85c estimate), missing revenues ($5.76B vs. $5.87B estimate) and offering a less than exciting forecast for the remainder of 2003.

 
 
  James Brown   10/22/20,  12:44:24 PM
A.G.Edwards is coming out in favor of some auto-related stocks. The analyst there started coverage on specialty retailers O'Reilly (ORLY) and AutoZone Inc (AZO) with a "buy" and upgraded truck manufacturer PACCAR (PCAR) from a "hold" to a "buy".

The upgrade doesn't appear to be helping PCAR who is now down two sessions in a row despite beating estimates by 9 cents (yesterday morning). The stock looks like a short-candidate but it is approaching support at $74.00.

 
 
  James Brown   10/22/20,  12:38:56 PM
Jeff, part of CNBC's comments on SIRI yesterday were that institutions/money managers who normally don't trade $2.00 stocks were making an exception in SIRI because it is so liquid.

 
 
  Jeff Bailey   10/22/20,  12:37:33 PM
Per Jane's 12:32:23 ... Jim Brown along with a trader sent me an e-mail yesterday regarding some comment by CNBC about SIRI. I missed it, but whatever they said, it seems to be in play. All I can think of is the $5.00 level for NASDAQ requirement.

I think Programmer's Paradise (PROG) $5.05 Link may have made similar move in recent months.

 
 
  James Brown   10/22/20,  12:34:03 PM
Bitter Beer Face! Adolph Coors Co (RKY) is down again and hitting a new relative low after breaking its simple 50-dma two sessions ago. The stock was hit with another downgrade this morning, this time from Deutsche Bank who adjusted their rating on RKY from "buy" to "hold". This is the third downgrade this month. Prudential recently cut RKY from "over weight" to "neutral-weight" and Bear Stearns cut it from "out perform" to "peer perform".

The stock appears to have put in a double-top near the $57.50-58.00 region. While one might expect to find support at its simple 200-dma near price support at $52.50 I get the feeling that tomorrow's earnings announcement (before the opening bell) may not be that enthusiastic. At least that's what the week long trend of gap down openings is telling me! Estimates are for $1.47/share.

 
 
  Jane Fox   10/22/20,  12:32:23 PM
Jeff your SIRI (+0.11) is at another 52-week high today. Great pick!

 
 
  Jeff Bailey   10/22/20,  12:28:43 PM
QQQ $34.65 -1.7% .... Day trade bear may further lower stop to $34.84. Seeing some of that bearish divergence in MACD on 5-minute interval. QQQ has been sitting between RED #2 and RED #3 for last 1.5 hours.

 
 
  James Brown   10/22/20,  12:24:49 PM
Ouch! Tenet Healthcare (THC) is down almost 13% after warning for its Q3 earnings. The company is blaming bad debts from uninsured patients. The company is also under investigation by the feds for recruiting and billing practices. Q3 estimates had been for 20 cents a share. Now THC is saying their short fall would be close to 20 cents a share. The company also warned that the rest of 2003 remains in question and they would not meet their previous estimates.

This is an industry wide problem. We recently heard from Triad Hospitals (TRI) and HCA Inc (HCA) who both had to drastically increase their bad debt reserves.

 
 
  James Brown   10/22/20,  12:17:56 PM
That's funny Jon. I wonder what brand it was.

 
 
  James Brown   10/22/20,  12:16:59 PM
Yesterday shares of Schlumberger (SLB) were trading near a 52-week high ahead of its Q3 earnings report. Last night the company announced net income of 41 cents, beating estimates by 2 cents. Unfortunately, revenues were below estimates. The stock is being downgraded from a "buy" to a "hold" by Smith Barney and from an "over weight" to an "equal weight" from Morgan Stanley.

In response the stock is down 6.6% and breaking support at its simple 50-dma and is approaching support at the $47.75 level. The P&F chart is producing a "high pole" warning.

 
 
  Jeff Bailey   10/22/20,  12:16:15 PM
SICOR (SCRI) $24.80 +19% Link ... higher after confirming it is engaged in discussions concerning a possible merger or other business combinations. SCRI made a point to say that there is no assurance that any transaction will be consummated.

There is some speculation that TEVA Pharma (TEVA) $55.80 -3.02% Link may be the potential acquirer.

Not sure if any traders/investors hold SCRI in their account, but will make following notes, and let you decide. In late March (just before Red 4) SCRI gave triple-top buy singal at $17.00, and resulting column of X built a bullish vertical count to $32.50. You might use this as one potential, but no assurance, price for a buyout. Can also use the triple top buy signal and Professor Davis' study for 28.7% average gain from $17, to derive a bullish target of ($17 * 1.287) $21.87 which the stock has achieved, to weight the risk from current levels of trade.

Right now, it looks like the MARKET has assumed a deal is in place, but I have no idea of what the price of the deal might be. With that said, would simply assess risk/reward from current levels of trade to reward $32.50 and risk back to yesterday's close.

 
 
  James Brown   10/22/20,  12:12:19 PM
What is this world coming to? Wrigley's (WWY) says it will be raising its 5-stick packs of gum from 25 cents to 30 cents. Its Doublemint, Juicy Fruit and Big Red brands have been 25 cents for the 5-stick pack for 16 years.

 
 
  James Brown   10/22/20,  12:09:03 PM
The post-earnings depression in IBM is getting a little shove (lower) today with the market weakness. If Big Blue breaks its simple 50-dma (today's low near 87.90) we could see it retest its 200-dma near $83.80.

The GHA hardware index looks primed for some profit taking too. Watch for a move under the 245-244 level.

 
 
  Jeff Bailey   10/22/20,  12:06:10 PM
Index Trader Wrap .... For more hesitant bulls that still want to buy a pullback in the SPX, may want to wait this session out, and let's take a look at S&P Futures (sp03z) 1,031.50 -1.14% at the close, based on Monday evening's Index Trader Wrap. Will want to see futures hold a close above 1,029.10, and if so, then we can set up an actionable bullish entry at a level higher than current trade from our pivot matrix.

 
 
  James Brown   10/22/20,  12:05:16 PM
Currently we have three Dow components in the green. PG is up 28 cents, MMM is up 50 cents and MCD is up 31 cents.

Leading the losers are:
MRK down $3.09 or 6.3%
DD down $1.71 or 4.17%
and JPM down $1.49 or 4.03%

 
 
  Jeff Bailey   10/22/20,  11:57:45 AM
Seagate Technology (STX) $22.58 -23% Link ... hit lower after reported Q1 (September) EPS of $0.40 per share, which was 4 cents better than consensus estimates. STX said revenues rose 10.2% year-over-year to $1.74 billion, which was above consensus of $1.64. Stock hit sharply lower after company said demand for its computer hard drives may be be as strong as usual in the current quarter, and said price competition has been steeper than expected.

Also contributing to weakness was company saying the SEC had issued an investigative request for all analyst reports on the company over the past 3.5 years.

I think a lot of today's weakness in MXO Link is attributed to STX's comments/news.

 
 
  Jeff Bailey   10/22/20,  11:07:22 AM
S&P Banks Index (BIX.X) 322.26 -0.74% .... has seen test of WEEKLY pivot (322.88).

We can now see the stagger of the major indices in the WEEKLY pivot with INDU/SPX/OEX weak, NDX/QQQ/BIX a bit stronger in the pivot.

Bull looks for stability to show up in INDU/SPX/OEX at some point, to then think bounce in the making.

Daily interval chart of SPX still DOES NOT have Stochastics at oversold, so thinking we may still edge lower toward WEEKLY S2 at this point.

 
 
  Jeff Bailey   10/22/20,  11:02:11 AM
SPX 1,033.07 -1.23% .... session low so far has been 1,032.04, and looks to have WEEKLY S1 (1032.66) in play as support.

Excellent place for bullish SPX entry, especially for trader that may be short the QQQ $34.69 -1.58%, with tight stop just above at $34.96. Somewhat of a synthetic hedge as SPX is at level where we'd look for some institutional computers to be buying.

 
 
  Jeff Bailey   10/22/20,  10:58:41 AM
Per Jonathan's 10:50:33 when we've seen this type of divergence with bond/gold, it has been gold equities to give back gains.

 
 
  Jeff Bailey   10/22/20,  10:36:14 AM
QQQ $34.75 -1.4% ... quick review of yesterday's bearish profile and current update of plan. Also thoughts looking forward to potential test of WEEKLY S1 for bullish entry. Here's intra-day chart. Link

 
 
  Jeff Bailey   10/22/20,  10:18:05 AM
JP Morgan (JPM) $35.17 -4.09% Link ... reported Q3 EPS of $0.78 per share, which was 3 cents better than consensus. JPM said revenues rose 12.6% year-over-year to $8.22 billion, which was below consensus of $8.64 billion.

JPM is second-highest Beta of Dow components at 1.874, with Intel (INTC) highest Beta of 2.048. (I didn't know JPM's Beta was that high)

 
 
  Jeff Bailey   10/22/20,  10:03:48 AM
DuPont (DD) $39.15 -4.39% Link .... lower after reporting Q3 earnings of $0.13 per share (ex-items), which was 2 cents better than consensus of $0.11. Company said revenues rose 12% year-over-year to $6.14 billion, also ahead of consensus for $5.81 billion. DD reaffirmed 2003 outlook for EPS of $1.60, which was in line with consensus for $1.60.

Including charges, DD said it saw an $873 million loss, or -$0.88 per share, which included a textile-related charge of just over $1 billion. DD said its chemical business is being hurt by higher energy costs.

 
 
  Jeff Bailey   10/22/20,  9:58:02 AM
Internet Security (ISSX) $16.69 +15.4% Link ... higher after reporting Q3 EPS of $0.12, which was a penny better than consensus. Revenues fell 2.8% year-over-year to $60.1 million versus consensus of $59.1 million. ISSX guidance for Q4 was for EPS of $0.13-$0.17 and revenues of $61-$66 million, where respective consensus is at $0.13 and $63 million.

 
 
  Jeff Bailey   10/22/20,  9:46:47 AM
QQQ $34.83 -1.2% .... day trade short from yesterday afternoon can further lower stop to $34.96 here. QQQ has been sitting in between its 5-MRT of $34.81-$34.93 since the open.

 
 
  Jim Brown   10/22/20,  9:41:14 AM
AMZN trading under $55, down -6 from yesterday's $61 level.

 
 
  Jeff Bailey   10/22/20,  9:20:12 AM
09:00 Update posted at this Link

 
 
  Jeff Bailey   10/22/20,  9:17:06 AM
09:00 Update at this Link

 
 
  Jeff Bailey   10/22/20,  8:38:48 AM
QQQ $34.93 .... lower stop from yesterday's day trade short to $35.10.

 
 
  Linda Piazza   10/22/20,  6:25:21 AM
Good morning. The Nikkei fell Wednesday, once again on fears engendered by the yen's rise against the dollar. The Nikkei declined 141.90 points or 1.29%, to close at 10,889.62. Bank and financial issues led the declines. The Nikkei's P&F chart now shows that it has created a high-pole warning. As Jeff mentioned the other day, we shouldn't take these high pole warnings as sell signals, but this one does warn us that the Nikkei has retraced much of its most recent gains. The Nikkei will not create a sell signal until and unless it trades below 10,850.

Many other Asian bourses declined, too. The Taiwan Weighted fell 0.32%. South Korea's Kospi ended flat, declining only 0.08%. Singapore's Straits Times fell 1.20%, and Hong Kong's Hang Seng fell 0.10%. China's Shanghai Composite closed higher, however, by 2.47%.

The Bank of England met today, with the 5/4 decision to keep rates steady a close one. Some had expected a rate hike, and their statement suggested that rates might be hiked this year, rather than next year. The sterling was climbing on that news. Most European bourses, including the FTSE 100, currently trade down, with German banks being listed as among the decliners. Currently, at 6:25 ET, the FTSE 100 has fallen 35.50 points or 0.82%, to trade at 4316.80. The FTSE 100's P&F chart shows the FTSE having achieved an ascending triple top breakout signal on October 13, with an upside target of 4950 (not verified). The CAC 40 has lost 20.44 points or 0.61%, to trade at 3342.86. The DAX has lost 32.90 points or 0.92%, to trade at 3547.18.

 
 
  Jeff Bailey   10/22/20,  3:12:04 AM
pivot matrix for tomorrow at this Link

 
 
  OI Technical Staff   10/22/20,  3:11:57 AM
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