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  Jeff Bailey   10/23/20,  6:09:10 PM
QQQ $33.76 in extended hours.

MSFT $28.91 +0.06% ... still falling at $27.71 here.

All eyes look toward Japan and Nikkei's open.

  Jeff Bailey   10/23/20,  6:04:21 PM
Pivot Matrix for tomorrow at this Link

**Note: For the BIX.X I could not get a full session of data. Therefore I would not draw correlations from its DAILY pivot levels. BIX.X finished 326.22 +1.16%

  Jeff Bailey   10/23/20,  5:09:08 PM
QQQ DAILY Pivot numbers for tomorrow (until I get matrix finished) ... S2=33.79, S1=33.98, P=34.24, R1=34.43, R2= 34.69

QQQ trading $34.00 here, after-hour low has been $33.94 so far

  Jeff Bailey   10/23/20,  4:19:48 PM
Microsoft (MSFT) ... now lower at $28.50. 5-minute range has been $29.53-$28.59. Wild and active

  Jeff Bailey   10/23/20,  4:16:02 PM
Microsoft (MSFT) $28.91 +0.06% ... jumping to $29.40 ... I haven't seen the numbers hit the wires yet.

  Jeff Bailey   10/23/20,  4:07:57 PM
California Micro Devices (CAMD) $8.50 Link ... higher at $8.79 after reporting Q2 (September) EPS of $0.04, which was bettern than $0.00 consensus. CAMD said revenues rose 38% year-over-year to $14.9 million, which was ahead of estimates for $13.6 million.

  Jim Brown   10/23/20,  4:03:23 PM

Earnings after the close: 
BOBJ est +0.16 act 0.17, beat by penny, guided up
CKP est +0.19 act 0.27, beat big
JDSU est -0.02 act -.01, guiding lower
MSFT est +0.29 act 0.30 guiding 29-30 cents Q4
SANM est +0.01 act 0.02, guiding up
TQNT est -0.07 act -.04
ZRAN est +0.21 act 0.21
UTSI est +0.45 act 0.46, trading down -$1
VRSN est +0.14 act 0.20
AMCC est -0.03 act -.02, beat by penny
GTW est -0.19 act -.20
ELX est +0.23 act 0.27
SFA est +0.27 act 0.28, beat a penny
NT est +0.00 act 0.04
ZRAN est +0.21 act 0.21

  Jeff Bailey   10/23/20,  4:03:08 PM
S&P futures (sp03z) I'm 1-minute delayed, but at 1,030.80, looks to try and settle above that 1,029.10 level and still tried to hold a bullish bias.

  Linda Piazza   10/23/20,  4:02:14 PM
Another stock below its 200-dma is Dupont (DD). DD fell below its 200-dma in late September and tested that average for almost a month before falling back below $40.00 on a closing basis yesterday. On-balance volume (OBV) has been decreasing while DD fell below and then tested that 200-dma. Today it's printing an inside day. It's interesting to look at DD on a weekly chart, however, as it's easy to see that DD tends to trade in 10-point ranges. This year, that 10-point range has been from $35-45. Is it headed back to $35 or up to $40? Those who like to trade inside-day patterns might take a look at the chart and see what they think. I'm cautious about trading DD now, since they just reported earnings today, however. I'd like to let it settle down and see if it tests $40-41 again and rolls down from there.

  Jeff Bailey   10/23/20,  3:58:54 PM
Short Squeeze Alert ... TheraSense (NASDAQ:THER) $16.74 +33.7% Link ... Company reported quarterly earnings that beat estimates by 6 cents. September 15 short interest was 2.3 million share, days to cover high at 6.57.

  Linda Piazza   10/23/20,  3:44:46 PM
AT&T (T) is breaking back below its 200-dma today. It hasn't been below that average since late July. It's also below its bearish resistance line on the P&F chart. It hasn't yet given a sell signal, however, and according to Stockcharts.com has a price objective of $49.00. T's descent has stopped just above $18.80-19.00 support. I note that it will take a trade at $18.50 to create a new sell signal.

  Jeff Bailey   10/23/20,  3:17:48 PM
QQQ $34.26 -0.87% ... after gap low at open to $34.15, qqq edged up to $35.07, then came back below WEEKLY S1 of $34.20 to see higher low at $34.10, to then edge back up to lower high of $34.46, and now pulls back to $34.20 and test of WEEKLY S1. Can the QQQ hold here, and appear "sold out" near-term, or are bulls waiting out tomorrow's Nikke-225 trade?

  Linda Piazza   10/23/20,  3:15:08 PM
If we had entered an OEX bearish trade yesterday morning on a Donchian channel breakdown and were using the first exit system I tested (exit on a 30-minute candle close two points above the previous candle's close, maximum 4-point loss on the trade), we would still be in the trade. As if we didn't already know that the volatility at the open was difficult for all traders, the backtesting showed that those 9:30 candles proved to be particularly pesky. If we were still in the trade at the open tomorrow morning, we'd be watching carefully for an open above the main Donchian channel I watch. An open above the top of the channel, currently at 515.59, would have us exiting at the open.

  Jeff Bailey   10/23/20,  3:10:17 PM
I wonder too ... Hi Jeff

I thought that the table of earnings was very interesting. One thought that came to my mind was...I wonder what those numbers were 2-3 years ago relative to the price of the markets. I guess that lends it self to what are we paying today for these earnings vs. 2-3 years ago? You do great work!

I wondered much the same when I was putting the table together and have always wondered if there was some way to try and predict the market on earnings/revenues/gross margins. For the most part, it seemed the charts were the first predictors. I do think there's some type of "rate of growth" in the fundamentals, or abating of accelerating deterioration that tends to be the trigger. Some fundamental models won't buy a stock until 3-quarters of consecutive growth are found.

  Jeff Bailey   10/23/20,  3:01:18 PM
Daylight Savings Time Ends this weekend, so those observing might make a note today to set your clocks back 1-hour over the weekend.

Not sure if the extra hour of sleep impacts trade, but Stockcharts.com shows 3-little bullish heads for Wednesday, Thursday and Friday of next week.

Will note that October 28 and 29 of 1929 will be the 74th anniversary of the great stock market crash, where the Dow Industrials fell 23.9% in two days.

  Jeff Bailey   10/23/20,  2:56:44 PM
S&P Banks Index (BIX.X) 324.92 +0.75% ... looks like somebody fed the hamsters over at S&P and getting some trade ticks now.

Shows a low/high of 324.92-326.48 ... but 5-minute bars don't begin until 02:30 PM EDT

  Linda Piazza   10/23/20,  2:56:17 PM
The OEX is back within today's version of the DMZ, but it's turning down again below the gap from 10/2-10/3, with price and short-term Keltner channels rolling down together. The oscillators on the 30-minute chart hint at possible weakness as the OEX falls back below the 30-minute 21-pma. Now that the OEX has tested key levels through the day, this downturn feels more significant, although it's still possible we'll see another test of 514-515 this afternoon.

  Jeff Bailey   10/23/20,  2:43:29 PM
New High and New Low breadth at both the NYSE and NASDAQ.

If looking for commonality from 09/10 to 09/12, might be of use in next couple of days as a benchmark. Link

Current assessment is we're not seeing quite as much bullish leadership as 09/10-09/12 if based on the 10-day average ratios.

  Linda Piazza   10/23/20,  2:32:30 PM
For reference, the FTSE ended the day down 45.40 points or 1.06%, at 4240.20. The CAC 40 ended the day down 38.41 points or 1.16%, at 3264.29. The DAX ended the day up 6.54 points or 0.19%, at 3497.14.

  Linda Piazza   10/23/20,  2:28:02 PM
I'm glad I didn't suggest that traders enter a bearish OEX trade on the first rollover at 514 this morning. Although I'd been waiting for the OEX to test 514 and it would have been possible for some to profit on the three-point move down if entries and exits were just right, something just didn't feel right about that rollover entry. Gives me hope I'm regaining my feel for the OEX. The OEX now rises toward those grouped 60-minute averages, and that test will be important for us to see. Why do such tests always occur in the last ninety minutes of trading lately, however?

With the Nikkei having dropped 826.55 points since Monday's close and closing near the bottom of a gap from early September, I'm not sure what to expect in the overnight market. I wouldn't be surprised to see the Nikkei attempt a bounce, either from the current level at the bottom of that gap, or from the 10,200 level, which also is a historical S/R zone. If so, our markets might begin the day tomorrow on a positive note, too, with that positive note sending the OEX up to test those averages if it hasn't yet done so. There are a lot of possibilities here, without much being resolved at this point.

  Jeff Bailey   10/23/20,  2:26:20 PM
Dow Diamonds (DIA) $96.29 +0.09% ... correction to earlier post. Looks like a "bad tick" above $36.38. Session high still $96.37.

  Jeff Bailey   10/23/20,  2:23:05 PM
Dow Jones Home Construction (DJUSHB) 550.49 +4.10% ... According to prior Index Trader Wrap, "this wasn't supposed to happen," until a test of 482.00.

  Jeff Bailey   10/23/20,  2:21:24 PM
Dow Diamonds (DIA) $96.30 +0.08% ... just got an upside alert I had set at DAILY Pivot of $96.38. There was some selling at that level that looks very similar to a computer being triggered to feed some stock out. How much?

  Jeff Bailey   10/23/20,  2:15:51 PM
KBW Bank Index (BKX.X) 931.38 +1.06%

Broker/Dealer Index (XBD.X) 630 +1.2%

S&P Dep. Receipts (SPY) $103.87 +0.32%

Hmmmm.... seems like not long ago, financial were trying to lead an advance at the then MONTHLY pivot (early October) and tech was lagging a bit. I sense that today don't you? In the next couple of days, will most likely be looking for tech strength from the bottom to be able to get the other major through a key level of resistance.

  Linda Piazza   10/23/20,  2:13:02 PM
As of a few minutes ago, volume patterns remained bearish, with adv:dec ratios at 14:18 for the NYSE and 12:18 for the Nasdaq. Down volume was only 1.1 times up volume on the NYSE, however, but 1.9 times up volume on the Nasdaq. Total volume was 1 billion on the NYSE and 1.3 billion on the Nasdaq. New highs numbered less than 200, with new lows at 23.

  Jeff Bailey   10/23/20,  2:10:56 PM
QQQ $34.44 -0.4% ... here's 60-minute interval chart of QQQ, which still gives some intra-day view, but helps bring into observation our old "cloned" trends. Looks like one of them in play today as "bearish support" Link

Might envision a QQQ pop to $34.75 find resistance, and if pullback, the today's lows become more important for support. Trader can use early October as historical test.

  Linda Piazza   10/23/20,  2:06:03 PM
I mentioned earlier today that I had backtested two types of exits on Donchian channel breakouts. The first, and more successful exit based on initial tests, was to exit a bearish trade on a two-point close above the previous thirty-minute candle's close (taking a maximum 4-point loss from entry). That hasn't happened yet. The second exit was on a close above the nested short-term Keltner channel. That happened on the last thirty-minute candle. Based on that type of exit, we would have entered a bearish trade yesterday morning at OEX 515.73 and exited this afternoon at 514.60. As I also mentioned earlier, ADX and 21(3)3 stochastics levels had tagged this as an iffy trade, likely to close somewhere near breakeven. That's about what happened. I'm not suggesting these entries or exits, but rather benchmarking them as they occur so we can see how they perform in real-time trading environment. We can also see which type of exit performs best in each case.

  Linda Piazza   10/23/20,  1:55:24 PM
As the OEX rises, the 60-minute 100/130 and 21-pma's roll lower, with those averages currently between 516.67 and 517.38.

  Jeff Bailey   10/23/20,  1:51:30 PM
01:00 Update at this Link

  Linda Piazza   10/23/20,  1:51:17 PM
The OEX now reaches a new high.

  James Brown   10/23/20,  1:42:16 PM
The homebuilders are certainly the standout leadership group today. Hitting new 52-week highs are: Centex Corp (CTX), The Ryland Group (RYL) and Beazer Homes (BZH)

  Linda Piazza   10/23/20,  1:42:08 PM
I keep thinking Q-charts is stuck, with the markets not moving much at all. The OEX tried to push above the previous high of the day, but hasn't been able to do so yet. As I mentioned earlier, the Keltner channels showed that level to be resistance, too, and a move above 514.50-515 would be short-term bullish. That might suggest a test of those 60-minute 100/130-pma's.

  James Brown   10/23/20,  1:40:08 PM
US Airways Group began trading under its new symbol UAIR just three days ago and the stock has been climbing higher. Shares up another 7.7% today despite weakness in the XAL airlines index.

  James Brown   10/23/20,  1:36:29 PM
Yesterday we put Netease.com (NTES) on the OI watch list as the stock had dropped to support at $60.00 underpinned by its simple 50-dma. Today that support is breaking with the stock down another 4.75%. Technically this looks like an entry for puts but you need to have a pretty good tolerance for risk to trade NTES.

  James Brown   10/23/20,  1:32:29 PM
We've been watching the short squeeze in TASER Intl (TASR) for days and weeks now and it just doesn't seem to stop. Shares are up another 8% today to $56.81. Just eight months ago the stock was trading near $3.75 a share.

  James Brown   10/23/20,  12:58:20 PM
Afternoon Sector Winners:

DJUSHB homebuilders: +3.05%
DRG drug index: +1.42%
BTK biotech index: +0.57%
BKX bank index: +0.57%

Afternoon Sector Losers:

SOX semiconductors: -2.66%
XAL airlines index: -2.11%
XAU gold & silver: -1.19%
INX Internet index: -1.51%
DDX disk drive index: -1.48%

  Linda Piazza   10/23/20,  12:57:12 PM
The OEX moves up toward the top of the gap from 10/2-10/3, just above 514, and toward the center of the nested five-minute Keltner channels I'm watching, near 514.45. Both these levels are near the current high of the day, at 514.58. A move into the upper half of the Keltner bands, above the top of that gap, and above the previous day's high would be short-term bullish and might predict a retest of the 60-minute 100/130-pma's. The OEX has not yet broken through that 514-515 level, however, and might find it tough to do so.

  James Brown   10/23/20,  12:52:24 PM
The recent consolidation in shares of Federated Dept. Stores (FD) may be ending. The stock is bouncing from the $45.30 level. This may be an entry point now that the $INDU is turning green again.

  James Brown   10/23/20,  12:45:35 PM
"The Other White Meat" advertising campaign for U.S. Pork producers is in jeopardy. A Reuters article is reporting that a federal appeals court is stating the marketing program is unconstitutional. Evidently the pork "checkoff" program garners 40 cents out of every $100 in hog sales to promote pork to consumers. Some smaller producers are challenging it because they claim it favors the large corporate farms. If this appeal sticks we could see the case go to the Supreme court.

Just last week the Eight U.S. Circuit Court of Appeals ruled that the beef "checkoff" program was unconstitutional. I don't know about you but those "Beef, It's What's For Dinner" ads always made me hungry.

  James Brown   10/23/20,  12:35:55 PM
FYI: shares of EBAY are trading down 2.78% and under the $55.00 mark and its simple 50-dma. The stock has bounced off its 100-dma twice in the last month and the stock is currently trading under this technical indicator at the moment.

  Jeff Bailey   10/23/20,  12:30:31 PM
SPY ... several requests for a SPY chart with WEEKLY/MONTHLY retracement. Here it is. Link

  James Brown   10/23/20,  12:21:19 PM
Let's hope so, Jane. But I'd feel a little late on the STX move. Maybe if it breaks $20.00.

  Jane Fox   10/23/20,  12:19:40 PM
James JBLU, AAI, STX and ACL were my swing trade favorites and look at them now. I wonder if it will be as much fun to trade them down as it was to trade them up.

  Linda Piazza   10/23/20,  12:18:19 PM
A traditional look at the OEX thirty-minute chart (no Keltner channels, no envelopes or Donchian channels) shows the OEX breaking down from a bear flag pattern during the 10:30 candle today, and now rising to test the underside of that broken supporting formation. During this 30-minute period, that rising resistance line lies at about 513.50-513.75, depending on how the bear-flag pattern was drawn.

  Jeff Bailey   10/23/20,  12:18:16 PM
Thanks Jane! I'm sure I speak for Kevin too.

Other traders also saying... $DXC

Ooops! Kevin did say he found $dxyo

Sounds like there may be a couple

  James Brown   10/23/20,  12:17:48 PM
Tenet Healthcare (THC) continues to get pounded. The company warned yesterday morning, this morning Bank of America is downgrading it to a "sell". (Yesterday Raymond James and Merrill Lynch also cut the stock to under perform and neutral, respectively.)

  Jane Fox   10/23/20,  12:15:28 PM
Jeff it is @dx.p for the pit traded index.

  Jeff Bailey   10/23/20,  12:14:22 PM
Jane Since you use TradeStation, do you know what the U.S. Dollar Index symbol for TradeStation is? Late last night a trader using TradeStation was wondering, but I don't know.

  James Brown   10/23/20,  12:13:21 PM
Defense company, Raytheon (RTN) announced earnings this morning before the bell and the company missed estimates by 2 cents, missed on its revenue numbers and guided lower. Net income was a loss of 8 cents a share vs. a profit of 36 cents last year. The stock gapped down this morning and is trading down 5.78%.

This is exactly the kind of news we'd want to hear with an OI put play on Alliant Tech Systems (ATK) but ATK just isn't moving!

  Jeff Bailey   10/23/20,  12:12:00 PM
Broker/Dealer Index (XBD.X) 622.90 +0.07% .... edges into positive territory.

SPY 103.44 -0.09%

  Linda Piazza   10/23/20,  12:02:26 PM
Five-minute Keltner channels show next likely resistance on the OEX just overhead at 512.85 or so, with next resistance above that near the day's high, between 514.40-514.70. A move up to that level and a rollover from there would now appear to relieve much of the oversold conditions as depicted by these channels. A move above 515 would put the OEX traveling through the upper half of the longer-term of the three channels I'm watching, indicating that the OEX had moved from a short-term weak position to a short-term stronger one.

  James Brown   10/23/20,  12:01:56 PM
It looks like we finally have a breakdown in the rising trend for JetBlue Airways (JBLU). The company announced earnings this morning before the bell and beat estimates by a penny with 39 cents per share. Revenues were up more than 65% for the quarter.

Investors are selling the news. The stock gapped down under the short-term support at $65 and is currently trading down 8.25%. If it breaks support at $60.00 (and its 50-dma) we might play it as a put. A simple 38.2% retracement of the March-October run up would put JBLU near $52.50.

  Jeff Bailey   10/23/20,  11:59:03 AM
Dow Jones Home Construction Index (DJUSHB) 542.07 +2.51% ... getting upside alert here per prior Index Trader Wrap of 10/15/03 Link .

  Linda Piazza   10/23/20,  11:55:38 AM
Yesterday, the Wilshire 5000 (TMW) eked out a close over 10,000, closing at 10,007.32, just above the 21-dma at 9992.07. This morning, the Wilshire fell below the psychologically important 10,000 level and below that 21-dma, now at 10,000.17, and the 30-dma, now at 9983.83. Is the decline a bull flag? Visually, the pattern looks as if today's bar fell out of what might have been considered a possible bull flag. So far, the decline has retraced more than 38.2% of the move from the 9/30 low to the 10/15 high, but it has not yet retraced more than 50%, so perhaps we can't yet rule out a pullback in the form of a bull flag. That 50% retracement lies at about 9,922, a historical S/R level. Daily oscillators look bearish, but they did in late September and in July, when the Wilshire also pulled back. The difference this time, however, is that the daily MACD continues to print those lower MACD highs, giving us a warning, and this time, RSI also printed a lower high, confirming that bearish divergence.

  James Brown   10/23/20,  11:51:35 AM
Shorts getting squeezed again??? Shares of Countrywide Financial Corp (CFC) vaulted more than 7% this morning after announcing strong financial results. Estimates had been for $5.28/share. CFC turned in $7.70/share. Net income total $1.1 billion, which is a 383 percent jump over last year's period.

CFC also increased its cash dividend from 14 cents to 20 cents and announced a 4-for-3 stock split.

  Jeff Bailey   10/23/20,  11:49:12 AM
Matrix Observations ... here's quick look at DAILY/WEEKLY matrix, where I've colored the DAILY levels that have been traded in BLUE. Link

Early thoughts are that dollar and higher YIELD have helped the SPY see a trade at its WEEKLY pivot, and thus my bullish thoughts for SPY at $103.40.

Now... with QQQ $34.17 -1.81% having some trouble hold WEEKLY S1 more firm now, on an intra-day basis, the matrix observations have me thinking of a roller coaster, where... the SPY may be in the trough of a dip and trying to pull up higher, but the QQQ is the tail end car, and its is still on the near-term downward slide.

Looking for some further dollar strength, selling in Treasuries, to hint that equities find the bid, similar to 09/10, 09/11, 09/12 scenario discussed in last night's Index Trader Wrap.

At 01:00 PM EDT, I'm going to discuss the Nikkei-225, and what I think needs to take place there in Friday's Trade, which we won't know what happens until after today's close. Just as 09/10 may have been an early bullish entry in the SPY based on 09/11 and 09/12 action, today me be early too.

I went to other sites to try and find a BIX.X trade, can't find any trade ticks for the BIX.X today. So... I'm using the KBW Bank Index (BKX.X) 925.26 +0.35% as my financial sector today.

  James Brown   10/23/20,  11:43:28 AM
Ouch! After the bell last night Macromedia (MACR) announced earnings that beat estimates by a penny with 14 cents a share. Revenues were up close to 5%. The bad news was future guidance. MACR expects the next quarter's revenues to come in the $85-95 million range, under consensus estimates near $99 million. The stock is down 33.5% and now trading under its simple 200-dma. Volume is huge at 11.2 million shares.

  James Brown   10/23/20,  11:38:47 AM
Not much action in Microsoft (MSFT) ahead of its earnings announcement after the close tonight. The stock is oscillating on either side of unchanged. Multex estimates are for 29 cents a share.

  James Brown   10/23/20,  11:35:50 AM
Yesterday after the close Capital One Financial Corp (COF) beat estimates by 11 cents with net income of $1.17 per share. Unfortunately, revenues were slightly lower than consensus estimates. Despite the light revenue numbers the stock shot up this morning and is currently up 3.5%. Short-term traders may want to keep an eye on this bounce from the $60 level.

  Jeff Bailey   10/23/20,  11:35:35 AM
11:00 Update at this Link

  Linda Piazza   10/23/20,  11:27:43 AM
So far, we would still be in the bearish trade based on a Donchian channel breakout, based on either of the two types of entries I've backtested. To exit during this 30-minute period, the OEX would have needed to have closed above 514.42 for the first type of exit I've been testing, the one that appears preferable, or above 514.61 for the second type of exit, a close over the top of the short-term Donchian channel nested within the larger one. Since our entrance would have been made on the 9:30 close yesterday at 515.73, we would not have yet enjoyed a large gain, however.

  Linda Piazza   10/23/20,  11:16:39 AM
The OEX did confirm that inverse H&S on the five-minute chart, shown in my 10:19 post, but then the OEX turned around and moved down, negating the pattern without ever approaching the upside target. When bullish patterns confirm and then don't fulfill their targets, then either the pattern wasn't a valid one (a possibility in this case) or else we're warned of increasing weakness (an even stronger possibility). The OEX now tests the previous day's low. If the OEX steadies here and moves up, we'll start watching for the possibility of another bullish pattern being confirmed--a double bottom. If the OEX instead falls, we'll look for a push through that important 511 level, with that marking the point at which the slide could grow steeper.

  Linda Piazza   10/23/20,  10:58:05 AM
I've been watching the OEX trading pattern in correlation with the 60-minute 1.35% envelope surrounding the 21-pma, thanks to previous work done by reader G. and Jim, although I think they both optimized the central moving average differently than I have and watch on a different interval chart. This morning, the OEX bounced from that bottom envelope which was at 511.46. As the OEX has been consolidating during the morning, that envelope has been turning down, and now measures 511.04. That's near the bottom of that gap from 10/2-10/3 and the 50-dma. As I mentioned earlier today, a break through those levels might suggest a steeper slide, with the OEX then sliding along the bottom boundary of that envelope. That hasn't happened yet, and may not happen, but the pattern on the 30-minute and 60-minute charts does look like a bear flag pattern rising into resistance. I'm just not sure how far it will rise before it breaks down, and a break through 511 would suggest a breakdown. I'm also not sure whether we might see a day or two test of overhead resistance, as the OEX consolidates yesterday's declines.

  Linda Piazza   10/23/20,  10:45:23 AM
I can't decide whether this is the highest test we're going to get or if the OEX might try for the 60-minute 130-pma. Over the last week, nested five-minute Keltner channels have been helpful in showing possible resistance or support levels, sometimes validating those we would have chosen from traditional studies of trendlines and S/R levels and sometimes showing new ones. Right now, the OEX is trading down within the shortest-term Keltner channel, but that channel is trying to turn up. Link Because this shortest-term channel (blue) and the middle-length channel (black) are traveling along the bottom of the longer-term (purple) channel for a while, conditions look oversold, and it appears that the channels need to align themselves a little better, with the longer-term channel moving down and the short- and middle-term ones moving up. Then the drop could resume without conditions looking so oversold. That would occur, it appears, on a test of 515.25 or so. However, oversold markets can become more oversold, and my reading shows me that Keltner channels can be used to trade breakouts, too.

  Jeff Bailey   10/23/20,  10:43:28 AM
S&P Dep. Receipts (SPY) 103.37 -0.18% .... I like this entry for partial bullish positions. Index Trader Wrap will start by following with stop of $102.20, target $106.25.

  Linda Piazza   10/23/20,  10:30:06 AM
The current action is the reason I didn't suggest a rollover trade when the OEX hit 514 and started down again. It just didn't feel as if that test were "it" just yet. The OEX has now confirmed the five-minute inverse H&S I mentioned earlier, in my 10:19 post, with a move through the neckline. We can now watch to see whether that upside target is met, which would be a sign of some short-term strength. If the upside target were met, that might be high enough to constitute a retest of the 130-pma on the 60-minute chart. As far as I'm concerned, we're still in a sell-the-rally mode as long as the OEX remains below those key 100/130-pma's on the 60-minute chart.

  Jeff Bailey   10/23/20,  10:29:53 AM
Index Trader Wrap likes bullish entries on SPY $103.61 +0.06% intra-day pullback to $103.40.

  Linda Piazza   10/23/20,  10:25:03 AM
I've been watching Donchian channels and other types of channels and envelopes for a while, benchmarking breakouts. Yesterday, if trading based on only Donchian channel breakouts, we would have entered a bearish position on the OEX at the close of the 9:30 candle, at 515.73. I've tested two types of exits. Both are mechanical exits. One requires an exit on a bearish entry when a 30-minute candle closes 2 points above the previous candle's close. The other uses two Donchian channels, one a shorter-term one, and requires an exit on a bearish trade when there's an upside breakout of the short-term channel. In most of the backtesting, the first of those two exits worked best. Link Neither of those exits would have been hit yet, however, and we would have come into today's trading still in a bearish trade. ADX evidence, not yet fully backtested, suggested this might be an iffy trade, and this particular trade still might be if the current candle were to close two points above the previous candle's close, for example. Stochastics evidence indicated the same, too, as my backtesting left me with the impression, also not fully backtested, that these trades performed better when the 21(3)3 stochastics were already pinned in oversold (or overbought, on a bullish entry) levels at the time the signal was given. The 21(3)3 stochs weren't quite to overbought levels at the time the trade would have been initiated.

  Linda Piazza   10/23/20,  10:19:20 AM
Here's something to watch on the OEX five-minute chart: Link

  Linda Piazza   10/23/20,  10:15:22 AM
The OEX test of its 10/2-10/3 gap has not been able to bring the OEX above the top of that gap. That level also represents the midline of its rising regression channel on the daily chart. It has, however, bounced from the bottom of the envelope I showed in my previous chart and from the 50-dma. I'm not issuing official or unofficial trade signals until my record improves again, but a violation of the bottom of the gap (511.20) and the 50-dma (511.07) might accelerate the declines again. That rollover play at 514 might have been an appropriate play to consider, too, but that first reversal period was not yet over and the bounce from the bottom of the 1.35% envelope on the 60-minute chart made me wonder if the OEX has finished testing the 514 level. Like Jeff, I wouldn't be surprised to see this be a consolidation day, especially as big range days tend to be followed by smaller-range days. We'll see, though. Earliest volume patterns supported a bearish viewpoint.

  Jeff Bailey   10/23/20,  10:03:20 AM
QQQ $34.27 -0.84% .... monitor closely here to see if we can pick up on support on pullback intra-day test of WKLY S1.

  Linda Piazza   10/23/20,  9:57:44 AM
Here are a couple of things I've been watching on the 60-minute OEX chart: Link

  Jeff Bailey   10/23/20,  9:57:28 AM
QQQ $34.36 -0.6% ... right at DAILY S1... if bulls can get a push back to DAILY Pivot, that would be viewed positive, then could look for intra-day bullish entry, on a retest and bounce from WEEKLY S1 of $34.20. I'll try and create a chart of the QQQ for what I think a bull looks for and needs to see going forward.

Again... may just be seeing some technical fill back higher of the morning gap lower and DAILY Pivot of $34.65 is above the gap, thus a better test for early strength.

  Jeff Bailey   10/23/20,  9:54:17 AM
Dow Diamonds (DIA) $96.08 -0.13% .... breadth positive at 18:12. EK -4.47%, T -1.9%, DD +1.5%

  Jeff Bailey   10/23/20,  9:50:44 AM
Gap fills back higher .... just looking around at some stocks, and seeing a lot of this morning's gap downs being filled back higher.

This is quick observation at this point so bulls don't get too overly eager. At this point, thinking morning rebound just some technical filling back up, but stocks do look to be showing some stability. We will see if bears get aggressive and try to get the ball rolling lower.

  Linda Piazza   10/23/20,  9:48:46 AM
The OEX now tests the 50% of the first five-minute range, at 512.44.

  Jeff Bailey   10/23/20,  9:47:02 AM
KBW Bank Index (BKX.X) 923.43 +0.16% and Drug Index (DRG.X) 308.63 +0.74% show early gains. This was something I thought an OEX bull needed to see. Some type of strength from banks or drugs.

S&P Banks BIX.X) .... doesn't appear to be coming across on my QCharts feed.

  Jeff Bailey   10/23/20,  9:43:58 AM
Index Trader Wrap for new bull entries today, early analysis is that if anything, today would be a consolidation day. Looking at the SPY $102.98 -0.54%, session low so far was opening 5-minutes of $102.68, which was 4-cents above today's DAILY S2. A very aggressive bull could take a low risk entry, but would suggest stop just below DAILY S2 at $102.59, as only level of support below would be the MONTHLY Pivot of 103.35.

A BEAR could also play this trade, on break of today's lows.

Only thing I see remotely bullish at this point is the U.S. Dollar Index (dx00y) 91.49 +0.25% showing some dollar strength.

  Linda Piazza   10/23/20,  9:41:46 AM
So far, the OEX has not been able to retrace more than 50% of the first five-minute range. I would like to see a bounce up to 514 or so and a rollover from there, but I'm not sure it's going to happen.

  Linda Piazza   10/23/20,  9:35:21 AM
The OEX first five-minute range included a high of 513.40 and a low of 511.47. The 50% retracement of that range lies at 512.44, and this level might be particularly important to watch in today's earliest trading as we watch for a possible bounce. So far, however, the OEX remains below that level, but the first reversal attempt does not usually begin for a few minutes. I will not personally be taking any countertrend bullish plays this morning if a bounce does occur.

  Jeff Bailey   10/23/20,  9:34:55 AM
QQQ $34.15 -1.2% .... I'm going to wait for about 30-minutes, let the 5-MRT develop and try to sort out early morning trade. Not looking good for bull entry at this point, but have to quickly run through some levels per last night's index wrap.

  Linda Piazza   10/23/20,  9:32:44 AM
The OEX approaches its 50-dma at 511.05.

  Jeff Bailey   10/23/20,  9:24:55 AM
09:00 Update at this Link

  Linda Piazza   10/23/20,  8:51:09 AM
For several weeks, I've been posting 60-minute OEX charts showing how the OEX has traded in relationship to the 100/130-pma's on that chart, at least over the last couple of months. In other periods, the corresponding 30-minute averages have seemed more important. I was gone yesterday morning when the OEX finally fell through the 130-pma after having tested both the 100 and 130-pma's Tuesday afternoon. Although I was gone, I hope some of you were able to capitalize on the trade. If you did and if that trade is still open, what now?

Although futures could do almost anything by the open, it appears that the open will send stocks and indices sharply down. With the OEX oversold across many intraday time frames, it's possible that there could be a countertrend bounce in the making sometime today, although it's not clear how strong any such bounce might be. Lots of people who want to hop on to the downside hope there's a bounce and those who are convinced markets should go straight up will help provide it. According to your own trading parameters, consider taking partial profit at the open and then using a trailing stop so that you can capitalize if the OEX continues straight down through the day but also have locked in some profit if the OEX instead bounces. If you had a profit target in mind and that target is hit at the open, you might take a lesson from Jim's account management style in his futures momentum trade, held overnight and exited when the target was hit during the night.

This early in the morning, it's difficult to judge where the OEX will open, but levels to watch for bounce potential include 511, 506.75-507, 503.50-504, and then support close to 500. Watch these zones, and maybe not the specific number. If the OEX should bounce, overhead levels to watch for a rollover include any of the previously mentioned levels if the OEX should open below them, then 513.40-514.50, and then near the 60-minute 100/130-pma's. Here's a chart with some of those levels marked: Link

  Jonathan Levinson   10/23/20,  7:58:29 AM
To partially answer Kevin's question, you can view the US Dollar Index under its symbol dx00y in Qcharts or Quote.com for free- just select "All Sessions" in the chart options, and you can view that and other futures symbols' night quotes. Or, you can simply refresh this Link

  Linda Piazza   10/23/20,  7:03:32 AM
Congratulations, Jim, on a great futures trade. For those of you who don't watch both monitors, Jim entered a momentum futures trade yesterday that hit its 17-point profit target in the wee hours of the morning this morning.

  Linda Piazza   10/23/20,  7:01:08 AM
Good morning. The Nikkei was hit with more than a little profit taking last night. The Nikkei opened in the red and began dropping. As dramatic as its 200-point loss was in the first thirty minutes, the drama hadn't ended. The Nikkei closed down 554.46 points or 5.09%, at 10,335.16, printing a new sell signal on its P&F chart. The Japanese trade surplus widened as exports and demand from the U.S. increased, but the focus was on earnings and the outlook for the next quarter. Warnings and announcements of job cuts, in the U.S. as well as in Japan, took their toll on sentiment. The biggest gainers of recent times were hit the hardest, including banking and Internet stocks. Sony dropped ahead of its after-the-bell earnings. Those earnings showed a mixed picture, with a 25% drop in Q2 earnings, but with its financial division showing strength. One article also reported a possible political scandal brewing, with that scandal involving the Japan Highway Public Corp. president, who warns that he can name officials in the ruling party who benefited from the massive infrastructure contracts he's been handing out. This comes as Prime Minister Koizumi faces a general election on November 9.

Elsewhere in Asia, other bourses tumbled, too. The Taiwan Weighted lost 1.48% and Singapore's Straits Times lost 2.16%. South Korea's Kospi fell 3.23%. Hong Kong's Hang Seng tumbled 4.10% and China's Shanghai Composite fell 0.81%.

European bourses mostly trade in the red, too, with currency and corporate profits concerns also being listed as a reason behind the declines. Chip manufacturer STMicroelectronics' earnings report will perhaps add pressure to chip-related stocks around the globe, already pressured by KLAC's statement last night. STMicroelectronics (STM) mentioned pricing difficulties when it reported a loss of 6 cents per share, but noted increased revenue quarter-over-quarter in each of its four product groups. Stock prices fell off sharply in early trading after the announcement.

Currently, the FTSE 100 has fallen 53.00 points or 1.24%, to trade at 4232.60. The CAC 40 has fallen 48.74 points or 1.48%, to 3253.96. The DAX has fallen 42.60 points or 1.22%, to 3448.00.

  Jeff Bailey   10/22/20,  1:18:46 AM
U.S. Dollar Index (dx00y) .... 30-minute delayed 91.22

S&P futures (sp03z) ... 5-minute delayed 1,024.70

Nikkei-225 ($NIKK) ... 10,465 -3.90% ... now lower by 424 points.

  Jeff Bailey   10/22/20,  1:18:35 AM
U.S. Dollar Index ($dx00y) ... 30-minute delayed 91.25 ... jeff, is there a way to get the dollar index overnight? I use tradestation.



I don't know if Tradestation has a symbol for the dollar. QCharts' symbol is cec:dx00y .

I'm going to dinner, but before I turn in, I'll try and post again before my head hits the pillow.

  Jeff Bailey   10/22/20,  1:18:26 AM
S&P futures (sp03z) settled 1,030.50 so bullish bias based on my fitted retracement would have been my analysis at the close.

Current trade is 1,024.00 as tomorrow's session is under way and it looks like bulls will be tested tomorrow.

Economic data due out before the opening bell for cash is weekly jobless claims. Economists are forecasting 1,000 new filings and 385,000 after last week's 384,000.

  Jeff Bailey   10/22/20,  1:18:19 AM
Nikkei-225 ($NIKK) 10,569.59 -2.94% Link ... Nikkei lower by 320 points in early going and this is a bit negative in my opinion. Earlier today we looked at the Nikke-225 and I thought 10,750 area would be an important level of support, where 10,750 would be the apex of the recent bullish triangle, where resolution of that triangle was to the upside.

Session LOW/HIGH so far has been 10,546.94-10,754, where opening trade was 10,754.10 and gap down.

  Jeff Bailey   10/22/20,  1:18:13 AM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   10/22/20,  1:18:03 AM
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