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  Jeff Bailey   10/24/20,  4:19:06 PM
QQQ $34.20 +0.08% ... closed right on this week's WEEKLY S1.

  Jeff Bailey   10/24/20,  4:11:26 PM
SPY 103.46 +0.08% .... oh the frustration right now. Stop a little too tight at $102.20 and session low of $102.18. The only cure for this frustration is to not use a stop, and that is not an option when trading the underlying security.

If the scenario of 09/10-09/15 is till in play, there should still be time for one more bull trade in Monday or Tuesday's session.

  Jeff Bailey   10/24/20,  4:03:32 PM
Dow Diamonds (DIA) $96.00 +0.05% ... trying to finish the session on a positive note.

  Jeff Bailey   10/24/20,  4:01:58 PM
Thanks Linda for your comments at 12:19:03. I'm still trying to figure out why my computer won't allow the market monitor to refresh more than one or two times, before it becomes stuck. I then miss some very good comments in the market monitor. Just wanted to say thanks for your response, as well as Jame's earlier comment as to a "doji" type candle.

  Linda Piazza   10/24/20,  4:01:16 PM
Potential reversal signal on the OEX daily chart. Maybe we'll get that test of the 60-minute 100-pma after all on Monday. Even though our Donchian channel breakout trade was a hypothetical trade only, I'm certainly glad I hypothetically fudged on the exit and took hypothetical profit at the close of the 3:30 candle!

  Linda Piazza   10/24/20,  3:56:28 PM
Good. This bounce sets the OEX (and other indices) up to retest broken support. Monday, I'll be watching the 10/2-10/3 gap level, the 50-dma, and the 60-minute averages. The 60-minute 21-pma lies at 512.33 currently, and the 60-minute 100/130-pma's are at 516.17 and 515.80, respectively. We'll be looking for bounce-and-rollover entries until and unless the OEX punches back up through the 60-minute 100-pma.

  Jeff Bailey   10/24/20,  3:52:04 PM
Buy Program Prem. Alert SPX= 1,027 (RIGHT AT WKLY S2/MONTHLY R1)

  Jeff Bailey   10/24/20,  3:49:34 PM
Holy Cow! ... QQQ $33.90 -0.76% ... go figure

  Linda Piazza   10/24/20,  3:38:28 PM
We would not yet have exited that hypothetical Donchian channel breakout OEX bearish trade, at least based on the most profitable of the two types of entries I backtested. We would have exited if the previous 30-minute close had been above 409.31, but that 30-minute close was 508.96. When I was doing the backtesting, I noted dates and times of each entry and exit, but did not exit based on whether there was a near-exit signal on the 3:30 candle on a Friday afternoon. In reality, I probably would have fudged on that exit and considered it close enough, exiting at 508.96. The entry was at 515.73 on Wednesday morning, on the close of the 9:30 candle below the Donchian channel. I don't think I would have wanted to stay to see what MOC orders might have been or to wait out the weekend. With that exit, the trade followed the OEX for 6.77 points. That's not bad, but it took three days to accomplish that 6.77 point move in our favor, and so gains might not have been as strong as they might have been if the drop had occurred in one day.

  Jeff Bailey   10/24/20,  3:24:51 PM
QQQ $33.74 -1.25% ... stopped on prior bearish profile from $33.70. If I get stopped on SPY two cents above today's low and QQQ 2 cents above afternoon high, then fitting end to my day.

  Jeff Bailey   10/24/20,  3:11:48 PM
QQQ $33.61 -1.63% .... There was a "bad tick" to $34.41 about 10-minutes ago. I'm not sure if that's a keypunch error equivalent to $33.61 or not, but doesn't make much sense with current levels of trade. "There's no way" the QQQ could rally higher to the close.

As such.... will lower day trade bearish trade to $33.74 here. With just 45-minutes to go in the session, will look to end flat on QQQ trade at $33.41.

  Linda Piazza   10/24/20,  2:53:40 PM
The OEX bounces from that shaded support zone pictured in my 14:07 post. The shortest-term of the nested Keltner channels I'm watching has begun to turn up, relieving some of the oversold pressure, but it probably needs to cycle up toward 509.50-511 to relieve more of the oversold pressure. Turning to other charts, I note that this would also bring the OEX back up to test its violated 50-dma, currently at 511.30 and would also retest the bottom of the 10/2-10/3 gap. It would also retest the 30-minute 21-pma. I'm not sure the OEX can climb that far, and particularly that it can climb that far today, but a rollover in that area, or even up near 513.50-515, might provide a good bearish entry early next week.

  Jeff Bailey   10/24/20,  2:52:58 PM
Sell Program Prem. Alert SPX=1,022, SPY= 102.60

  Linda Piazza   10/24/20,  2:32:39 PM
For reference, here's how the European markets ended today's trading: The FTSE 100 closed flat, down 1.20 points or 0.03%, at 4239.00. The CAC 40 also closed flat, up 1.98 points or 0.06%, at 3266.27. The DAX fell 44.50 points or 1.27%, to 3452.64. Each now trades below its (simple) 50-dma, although some are close enough that they could still be considered as testing that average.

  Jeff Bailey   10/24/20,  2:26:41 PM
10-year YIELD ($TNX.X) ... lower by 9.4 basis point. I would think more defensive sign from market here, which is just below yesterday morning's low YIELD of 4.22%. No key economic data released today to have bond bulls buying, but more likely some asset allocation away from stock and getting parked into bonds.

  James Brown   10/24/20,  2:22:57 PM
Ouch! JetBlue Airways (JBLU) is losing altitude quickly on a downgrade from JP Morgan. JPM cut it from "neutral" to "under weight" (a.k.a. reduce or sell) on valuation concerns. The stock is down almost 10% and near its lows for the day.

  Linda Piazza   10/24/20,  2:07:10 PM
Where is next OEX support? Here are some ideas, based on the daily chart: Link

  Jeff Bailey   10/24/20,  2:06:23 PM
QQQ $33.52 -1.87% .... traders should make the tie in current QQQ trade with the INDU trading its MONTHLY 38.2% retracemenet of 9,504.

While the QQQ's 5-MRT and RED #3 represents an intra-day $33.51 support level, it is my thinking that it is the INDU trading a LEVEL in the MONTHLY retracement, which has some QQQ firming.

This is more of an observation a short-term trader in the QQQ would use with a broader observation from pivot analysis in another major index. If the INDU loses the 9,500 level, then that gives greater thought to QQQ at MONTHLY Pivot.

  James Brown   10/24/20,  1:46:58 PM
Afternoon Sector Winners:

Winners are few and far between today

XAU gold & silver index: +1.83%
UTY utility index: +0.04%

Afternoon Sector Losers:

Just about everybody else!

XAL airlines index: -3.00%
NWX networking index: -2.27%
GHA hardware index: -2.15%
DJUSHB homebuilders: -2.03%
GSO software index: -1.98%
XBD broker/dealers: -1.54%

  Linda Piazza   10/24/20,  1:44:38 PM
Reader Comment: QQQ at $33.43 and NASDAQ 1842.55 good buying trigger, we are very over sold on the 180/120/60 minute chats and the Daily %K is very low as well. Thoughts?

Response: The SEC prevents us from answering individual emails if that information might be deemed investment advice, so I'm not able to answer this specific question. Here's what I can say, however. As the chart posted in my 13:05 post demonstrates, the COMPX 1842 level is near/at the bottom of the 10/2-10/3 gap. As I mentioned in that post, I am always watchful and expectant that there will be at least temporary gap support at either the top, middle, or bottom of a gap. As I also mentioned in that post, if that gap support does not appear, at least temporarily, then things look bad indeed.

My personal trading style does not usually include counter-trend trades, and I consider a buy-the-dip trade such a countertrend trade now as the focus now seems to have shifted toward sell-the-rally trades. Having seen severely oversold markets become even more oversold, I'm not personally tempted to step in right now, although that's not saying it couldn't be a profitable trade. As I type, the COMPX is moving up from the level mentioned in the email. However, it's rather like stepping in front of a train that's scheduled to stop, but not yet putting on the brakes or, since the COMPX has begun moving up, like jumping on a train that might be going your direction, without knowing if it will travel all the way to your destination.

  Linda Piazza   10/24/20,  1:24:21 PM
The VXO (old VIX) currently measures 19.92, down from the day's high of 20.39. The VXO has been trying to break back over 20.00 today.

  Linda Piazza   10/24/20,  1:20:46 PM
Benchmarking the hypothetical OEX bearish trade, on a Donchian channel breakout, we would now be setting an exit on a close of the current 30-minute candle above 508.95.

  Linda Piazza   10/24/20,  1:14:24 PM
So far, the OEX hasn't been able to climb even to the 508.75 first resistance, and the nested Keltner channels on the five-minute chart show first resistance drifting downward, now at about 507.75-507.80. Those five-minute channels also show that the OEX has been oversold on a five-minute basis for a long time and that the channels need to realign within each other, perhaps with a rise back toward 509.30-510.70. I'm not sure that's going to happen, however, as this might be one of those cascading days when the OEX can't pick itself up even on a five-minute basis.

  James Brown   10/24/20,  1:13:19 PM
FedEx Corp (FDX) made some interesting comments about China today. Not only are they expanding in China, which is their fastest growing market, but the company predicts China will become the top market in the world for cargo (Reuters).

  James Brown   10/24/20,  1:07:26 PM
There is an interesting article out by Forbes in the last couple of days. If I asked you which dead celebrity earns the most money today, I'm sure most of you would correctly guess Elvis Presley but did you know he earned $40 million last year?

Just a few of the Top Ten dead celebrity money-makers are: (these five all made more than $15 million/year)

Charles Schulz
John Lennon
Theodor "Dr Seuss" Geisel
Dale Earnhardt

Old Blue Eyes, Frank Sinatra came in at No. 11, earning $7 million last year.

  Linda Piazza   10/24/20,  1:05:19 PM
Here's an interesting COMPX chart from a knowledgeable subscriber and trader: Link (Note: This chart was obviously produced earlier today, when the COMPX traded higher.) I usually expect to find at least temporary gap support at the top, middle, or bottom of a gap, so this would be a prime level from which to see a bounce, but it's also significant if there's no support. Notice the correlation of the 38.2% Fib level with the top of the gap. Thanks, T.G.

  Jeff Bailey   10/24/20,  12:59:55 PM
Be alert for support at S&P futures (sp03z) 1,015.50 per last night's Index Trader Wrap. I'm delayed quotes, but see session low so far of 1,016.50. I would think some bullish bias comes into play there, but bearish bias now higher at 1,029.10.

Futures 1,015.50 might be a place to be alert for a "buy program premium alert." So far today, I haven't been alerted to one.

Per this morning's 09:00 Update... program buying at $-0.55, selling at $-2.15. Those using Qchart, the symbol is INDEX:PREM.X

  James Brown   10/24/20,  12:57:33 PM
It was just a couple of days ago that Lucent (LU) beat earnings estimates of a 4 cent loss by breaking even on the quarter (minus all the items and charges). Revenues were less than expected but shares still rose strongly and both Morgan Stanley and Goldman Sachs upgraded the stock. Now Deutsche Bank is cutting LU to a "sell". The stock is down 6.7%.

  Jeff Bailey   10/24/20,  12:53:22 PM
Dow Industrials (INDU) 9,506 -1.11% Link .... turning to the Dow's chart, currently testing its MONTHLY 38.2% retracement. While daily interval Stochastics "oversold," MACD still trending lower toward zero suggests MONTHLY Pivot of 9,400 in play, but would certainly have to be alert to support there.

I've been looking on INDU's point and figure chart, where 9,400 was a prior "spread-triple top" dating back to early August. The 9,350 level and lower was most likely a prior bearish level that shorts were leveraging off of, and I would expect that to be near-term target that should serve formadable support. Could get a bounce all the way back to 9,700.

  Linda Piazza   10/24/20,  12:52:41 PM
A bounce might be in order. If so, the OEX will hit first resistance near 508.25.

  James Brown   10/24/20,  12:48:36 PM
Yesterday, Robert Mondavi Corp (MOND), the California-based wine maker, announced first-quarter net income of 60 cents a share, up from last year's 49 cents and above current estimates of 51 cents. The company also raised its fiscal 2004 earnings estimates by 6 cents to a range of $1.86 to $2.01.

Today the stock is soaring, up more than 7 percent on upgrades from Wachovia, Prudential and Thomas Weisel.

  Jeff Bailey   10/24/20,  12:45:18 PM
SPY 102.20 -1.07% ... stopped on yesterday's bullish profile from $103.40.

  Jim Brown   10/24/20,  12:44:23 PM
That touch of 9500 was the first profit target for the Editors Play from October 12th. The initial plan called for an exit of 1/2 position of our DJX Nov-96 puts at 9500 and the balance at 9300.

  Jeff Bailey   10/24/20,  12:43:43 PM
It's not a garage sale by any means, but QQQ $33.62 -1.6% at session low and nearing RED #2 of $33.59.

  Linda Piazza   10/24/20,  12:43:07 PM
The OEX is now within one possible support zone, from 506.50-508. Be careful.

  Linda Piazza   10/24/20,  12:41:33 PM
On the OEX 30-minute chart, the decline since the 21st has a bit of a falling wedge shape, with such a shape being a formation that usually breaks to the upside. The problem is that every way I try drawing the lower boundary, it appears that the last two thirty-minute candles are breaking through to the downside. All this spring, we saw rising wedges, supposedly bearish formations that usually break to the downside, fail to perform as expected. Are we now moving into a phase when bullish falling wedges don't perform as expected? Over the last couple of days, we've noted a couple of other potentially bullish formations that either failed to confirm or failed to reach upside targets after they did confirm. This can be important information.

  James Brown   10/24/20,  12:39:29 PM
Announcing earnings after the bell last night was McKesson Corp (MCK). The company beat estimates by a penny with 53 cents a share. Revenues jumped almost 23% yet the conference call was less than exciting. The company's drug wholesale business could see weaker margins and they lost a major contract with the U.S.'s largest hospital company HCA Inc. (HCA).

The stock is seeing some selling pressure. MCK gapped lower under support at $32.00 and has produced a fresh double-bottom sell signal on its P&F chart. Currently, the simple 200-dma is holding up as support but if it and support at $30.00 breaks then look for a move to P&F support near $26.00. Merrill Lynch has downgraded the stock to "neutral" on the earnings news.

  Jeff Bailey   10/24/20,  12:38:59 PM
Sell Program Prem. Alert ... SPX = 1,020.25 ... SPY = $102.40.

  Linda Piazza   10/24/20,  12:32:59 PM
Benchmarking new exit on hypothetical Donchian channel breakout bearish OEX trade: the new exit would be a 30-minute close this 30-minute period over 510.19, two points above the last 30-minute close at 508.19.

  Jeff Bailey   10/24/20,  12:30:48 PM
U.S. Dollar Index (dx00y) 91.17 -0.37% ... (30-minute delayed quote)

  James Brown   10/24/20,  12:30:14 PM
Potash Corp of Saskatchewan (POT), producer of various feeds, fertilizers, potash, phosphates and nitrogen products, is finally starting to see some profit taking from its recent rally toward the $82 level. Giving it a nudge lower is J.P.Morgan who cut the stock to "under weight" this morning. I'd be watching the $75 level and the 72.50 area (near its 50-dma) for potential support.

  Jeff Bailey   10/24/20,  12:28:51 PM
QQQ $33.70 -1.35% ..... can look Day trade short and would want to see a 5-minute close below $33.72. Still want to short the break, as QQQ could fall quickly.

  Jeff Bailey   10/24/20,  12:25:17 PM
Biotechnology Index (BTK.X) 455.55 +0.12% .... claws its way back into positive territory.

  Jeff Bailey   10/24/20,  12:23:23 PM
Geeminny .... QQQ $33.77 -1.17% ... kissed the $33.71 level twice.

Is it the Stochastics at "oversold" on the daily, or what is it that just doesn't seem to have bulls caving in? Session low of $33.71 has been traded twice on in 5-minute charts, but you can see how WEEKLY R2 is now intra-day resistance.

  Jeff Bailey   10/24/20,  12:20:15 PM
Darn! Thanks James. If it were a hammer in DRI, I could have brought in some crab legs to hammer on for lunch.

  Jeff Bailey   10/24/20,  12:19:16 PM
TASER Intl. (TASR) $55.60 -1% Link ... I was very interested in James' comment yesterday on Taser. I believe you first mentioned it back in Sept. on the MM when I first learned about it. Then I heard ;on the radio that the Chgo. Police dept. was ordering their Stun Guns; So I bought a hundred shares @ $30.00; Wish I had bought more. The old Hindsight!!! Anyway, writing to ask your opinion of the stock at this level. I didn't know that the rise was short covering. I thought it was due to more orders, etc. What would your opinion be at this level? Is there a strategy other than a trailing stop? Or would you consider it a longer term hold? There are no options available. Could it still be a Buy? I know you can't offer investment advice, but I'd like your opinion and projections for the stock, if you can. Thanks a lot. Your comments on the MM are very insightful and helpful regarding the various stocks and indexes you mention. Keep up the Great Work. Thanks again.

Well... I'd be careful and guarded of your gains (at you bought 100 shares, I should have done the same!) as stock is close to its bullish vertical count of $61.00 and traded morning high of $58.49.

How about this.... with further reward to bullish vertical count of $2.51 (from today's high) how about cutting the risk/reward profile to similar RISK $2.51 from current levels of $55.60, so snug a stop to ... $53.00?

From what I've seen in recent week or so, analysts are quick to make an "overvalued" call on a stock that has had big moves. I would suggest a protective put, which provides protection should a downgrade be given in after-hours or pre-market, but TASR doesn't trade with options.

Look at the PnF chart... Just note this was a $4.00 stock, and now trades not far from its bullish vertical count. Is it worth the risk....

  Linda Piazza   10/24/20,  12:19:03 PM
Jeff, Nison might call yesterday's DRI candle a shooting star, a candle with a long upper shadow and small real body near the bottom of the day's range. (See Jeff's 12:07 post.) If such a candle occurs at the top of a rally, it's a bearish sign because there was an attempt to pierce higher prices but the bears drove prices back down. However, he gives an example of a shooting star that occurs after a downturn similar to the one DRI produced yesterday, and says that the implications are not as bearish in that case.

  James Brown   10/24/20,  12:16:48 PM
FYI: Microsoft (MSFT) is down more than 7% with volume topping 107 million shares, making it the most active on the NASDAQ. -- Average volume is just 51 million shares.

  James Brown   10/24/20,  12:13:06 PM
More analyst disagreements... shares of Business Objects S.A. (BOBJ), a French software firm, reported earnings that beat estimates by a penny at 17 cents. The stock is up almost 12% on the news and gapping above resistance at $30.00. While Janney Montgomery has upped the stock to a "buy", Wedbush Morgan has cut the stock to a "hold". Looks like stock is near the top border of a very wide channel.

  James Brown   10/24/20,  12:09:47 PM
Sorry, Jeff. That was not a "hammer" candlestick. It almost looked like a gravestone doji but not quite.

  Jeff Bailey   10/24/20,  12:07:11 PM
Darden Restaurants (DRI) $19.94 +1.47% ... got hit lower yesterday below the $20.00 level, trying to reclaim today. 200-day SMA of $19.70 trying to serve some support. Bulls would sure like to see DRI hang in here, then spring forward above the 50-day SMA and $21 level. Get that 21-day SMA to curl higher. Link

I'm not a candlesticker, but was that a "hammer" that formed yesterday? Linda? Anyone???

  Linda Piazza   10/24/20,  12:00:49 PM
Benchmarking the hypothetical OEX Donchian channel breakout bearish trade: We would now be resetting our exit point, with that exit now being on a current 30-minute candle close above 510.72, two points above the just-concluded 30-minute candle's 508.72 close. We would have entered on the close of Wednesday's 9:30 candle, at 515.73.

  Linda Piazza   10/24/20,  11:56:37 AM
Obviously that OEX formation that was looking too bearish to be the usual W-shaped double-bottom in the making was bearish after all. (See my 11:11 post.) The OEX now approaches the 506.50-508 support zone, however, so be careful with stops if in a bearish position.

  Jeff Bailey   10/24/20,  11:56:06 AM
Sector action now has AMEX Gold Bugs ($HUI.X) 218.73 +2.22% and MS Health Provider (RXH.X) 324.80 +0.47% only two sectors in the green.

  Jeff Bailey   10/24/20,  11:51:43 AM
Dow Industrials (INDU) 9,533.20 -0.82% ... moving to session lows here. Could drop quickly to 9,500 level.

  Jeff Bailey   10/24/20,  11:49:51 AM
QQQ intra-day 5-min chart with 5-MRT as well as WEEKLY/MONTHLY pivot retracements. Link

  Jane Fox   10/24/20,  11:44:41 AM
The Airline stocks, JBLU (-8.42%) and AAI (-2.17%) I loved to swing trade have been taken to the woodshed for a good talking to.

  Jeff Bailey   10/24/20,  11:40:45 AM
QQQ $33.75 -1.19% ... sees its first 5-minute close of the day below WEEKLY S2 of $33.78. Session low so far $33.71, a penny above trigger for day trade short entry $33.70.

  Jane Fox   10/24/20,  11:39:12 AM
Linda with the range trading of late, we have all been chopped up.

  Linda Piazza   10/24/20,  11:37:56 AM
If Jim and Jane are mentioning their regrets today (futures side), I'll mention mine, too. Too bad we didn't really enter the OEX bearish trade on the Donchian channel breakout. My backtesting showed me it would possibly be an iffy trade, however, perhaps only breaking even.

  Jeff Bailey   10/24/20,  11:37:08 AM
11:00 Update at this Link

  Linda Piazza   10/24/20,  11:33:26 AM
As of the close of the just-completed 30-minute OEX candle, the hypothetical Donchian channel breakout trade would now target an exit on a close of the current 30-minute candle above 511.69.

  Linda Piazza   10/24/20,  11:14:37 AM
And that is the conundrum, isn't it, Jonathan, with these upgrades and downgrades. (See Jonathan's 11:01 post on the futures side, regarding an analyst upgrade from "sell" to "hold.") Just doesn't make sense.

  Linda Piazza   10/24/20,  11:11:25 AM
The OEX has risen to 511.14 on this upswing, not quite hitting the 511.32 level required for a confirmation of the double-bottom on the OEX five-minute chart. This rise doesn't look like the typical rise confirming a double bottom, however. The shape isn't the typical W-shape. This continues to look more like a bearish rise into resistance.

  Jeff Bailey   10/24/20,  11:01:28 AM
Buy/Sell Program Premiums ... ok, I give. what is one and where do they originate from?

Here's an article Link that discusses the buy/sell program premium alerts, which are "created" from arbitrage between futures and cash trade.

  Jeff Bailey   10/24/20,  10:56:32 AM
Sell Program premium alert once again. SPX 1,026

  Linda Piazza   10/24/20,  10:55:29 AM
I'm not seeing much change in the volume patterns. Adv:dec ratios are still at the levels I reported earlier, still bearish. Volume remains light enough that the patterns could be changed around with some ease, however. As long as those patterns remain bearish, I tend to interpret the chart patterns in a bearish manner, and so see the OEX climb as a possible bear flag rising into resistance. I'm trying to keep any bias from my interpretation, though, and have also previously noted the possibility of a double-bottom (see my 10:29 post).

  Jeff Bailey   10/24/20,  10:53:52 AM
Dow Breadth still negative, but slight improvement at 22:8

T +4.9%, SBC +1.29%, EK +0.82%

MSFT -6.2%, HPQ -2.1%, DD -1.79%, AA -1.4%

  Jeff Bailey   10/24/20,  10:48:09 AM
QQQ $33.87 -0.86% ... recent morning low found some support at its WEEKLY S2 of $33.78. Opening bell low has been $33.72.

  Jeff Bailey   10/24/20,  10:46:19 AM
Dow Industrials (INDU) 9,568 -0.46% ... back between its MONTHLY R1 and WEEKLY S2 of 9,574.

Don't know what is holding things together, but bulls have been holding tough in early going.

  Linda Piazza   10/24/20,  10:43:45 AM
For the last couple of days, we've seen some potentially bullish formations confirm, but not meet their upside targets, confirming the weakness. The formation mentioned in my 10:39 post would not produce a tradable upside target, but watching first whether the formation is confirmed and second whether the upside target is met helps us to understand underlying strength or weakness. Also, if in a bearish trade, it's useful to watch out for these types of patterns, of course.

  Linda Piazza   10/24/20,  10:39:51 AM
Double bottom on the OEX five-minute chart? It's a possibility. It would be confirmed on a move above 511.32, the peak between the two 509.40 troughs. If confirmed, the upside target would be about 513.20, give or take a few pennies.

  Jeff Bailey   10/24/20,  10:34:53 AM
QQQ $33.80 -1.05% .... Day trade short in QQQ on break lower of $33.70, stop $34.15 to begin, target $33.30.

  Linda Piazza   10/24/20,  10:33:29 AM
As might be expected from the morning's trading pattern, volume patterns are bearish, with adv:dec ratios at 10:18 for the NYSE and 9:17 for the Nasdaq. Volume was light, however, measuring 227 million shares on the NYSE and 415 million on the Nasdaq, as of a few minutes ago. Down volume far outstripped up volume.

  Jeff Bailey   10/24/20,  10:31:34 AM
Buy/Sell Programs Excluding first sell program at the open, where cash caught up to future, have seen 6 sell programs and no buy program premium alerts.

  Linda Piazza   10/24/20,  10:30:22 AM
In the interest of benchmarking the hypothetical bearish OEX trade based on Wednesday morning's breakout, the stop now would be reset for the current 30-minute period to a close (not intra-period trade) over 511.97, two points over the close of the just-completed 30-minute candle.

  Jeff Bailey   10/24/20,  10:22:10 AM
NASDAQ-100 Gainers/Losers ....

Gainers .... IACI +1.7%, ERICY +1.6%, ICOS +1.2%, AMGN +0.9%

Losers .... JDSU -7.9%, VRSN -6.9%, MSFT -6%, ADCT -3%, FLEX -3%

  Jeff Bailey   10/24/20,  10:14:42 AM
INDU/SPX/OEX did find selling when they entered early morning zones of resistance.

  Jeff Bailey   10/24/20,  10:10:19 AM
AT&T (T) $19.86 +3.7% ... higher on Wall Street Journal report that it and Bell South (BLS) $25.88 -0.19% have revived merger talks.

  Linda Piazza   10/24/20,  10:03:34 AM
The first 30-minute candle today closed at 510.73, so if we had entered a trade Wednesday morning based on the Donchian channel breakout methodology I'm watching and were using what appears to be the preferred exit system, we would now have a stop set at 512.73. That's just below the morning's high, so we might actually have fudged a little and set it at 512.80 to give us a couple of cents clearance over the day's high. Maybe not, though.

  Jeff Bailey   10/24/20,  10:02:07 AM
CBOE Internet (INX.X) 156.87 +0.06% ... edging green. Joins Biotech (BTK.X) +0.2% and Semiconductor (SOX.X) +0.24% for fractional tech gains.

QQQ $33.97 -0.58%

  Jeff Bailey   10/24/20,  9:59:12 AM
S&P Banks Index (BIX.X) 324.54 -0.51% ... Just under its WEEKLY R1 of 325.93. Session high has been 325.20.

As such, I'm not thinking major market strength at this point. Would want to see the stronger BIX.X give more bullish signal of broader market rebound if BIX.X were above WEEKLY R1.

  Linda Piazza   10/24/20,  9:56:40 AM
The OEX is rising to test the 50-dma at 511.37. When doing so, it's also testing the bottom of the 10/2-10/3 gap, having fallen below that gap this morning. The 10/2 close was at 511.20 and the 10/2 intraday high was 512.14. Just over OEX 511 is the 50% retracement of the day's range (not the first five-minutes). I'm watching those three-minute and five-minute oscillators as they cycle up, seeing if they begin rolling over as the OEX approaches that 511-511.40 zone. I'm too worried about Friday bounce potential to suggest a bearish trade on a rollover there, but I'm watching.

  Jeff Bailey   10/24/20,  9:53:43 AM
Sector Action broadly lower. Bucking early weakness is AMEX Gold Bugs ($HUI.X) 217.27 +1.54%, Health Provider (RXH.X) +0.49%, Biotech (BTK.X) +0.33%, Semiconductor (SOX.X) +0.01%.

Weakness finds Airline (XAL.X) -1.49%, Networking (NWX.X) -1.48%, Software (GSO.X) -1.31%

  Jeff Bailey   10/24/20,  9:51:06 AM
This may be it INDU, SPX, QQQ have moved back into recent "zones of support," which are currently deemed "zones of resistance" after morning violations to the downside.

  Jeff Bailey   10/24/20,  9:47:24 AM
QQQ $33.82 -0.85% ... 5-MRT now in place. See "blue #3" at $34.06? That would be a fill the gap higher level to yesterday's morning's lows, and may be tough to crack to upside. "blue #4" at $34.14 would be fill the gap higher to yesterday's last 5-minute bar. Might look for a Day trade short in that area.

  Linda Piazza   10/24/20,  9:46:36 AM
As I've mentioned, I'm not calling trades this week but rather am testing several systems. One is a Donchian breakout system I've been backtesting. I've tested two types of exits, and one shows a better performance than the other in preliminary backtesting. That's a system that exits on a thirty-minute candle that closes two points above the previous candle's close in a bearish trade, but with a maximum four-point loss on the trade. By that exit system, we would still be in a trade entered at the close of Monday's 9:30 candle, at OEX 515.73. Our exit would now be reset at 2 points above the close of the current OEX thirty-minute candle, wherever that close might be.

By the second exit system--a close above the top of a nested shorter-term Donchian channel--we would have exited yesterday at the close of the 1:30 candle, at 514.60. My supposition when backtesting was that this system didn't perform as well because it sometimes ended the trade prematurely. For example, if we were using that system, we would have exited yesterday, but would have been entering again on the close of the current 30-minute candle if it closes below 511.21, because that signals another breakout. However, we would have missed the move from 514.60 down to 511.21. The first exit system never took us out of the trade, so we wouldn't have missed that move.

  Jeff Bailey   10/24/20,  9:42:30 AM
CNBC's Morning Call will discuss Money Supply. I will be interested in listening to that. May tie in with recent Index Wrap and give us some additional thoughts/analysis. Link

  Jeff Bailey   10/24/20,  9:38:39 AM
Dow Industrials (INDU) 9,550 -0.65% .... below WEEKLY R2 of 9,574.

Early breadth negative at 28:2

T +2.81%, but it is smaller weighting than MSFT -6.6%.

Most heavily Dow price weighted finds PG -0.45%, IBM -0.2%, UTX -0.68%, MMM +0.15%, CAT -0.78%

  Linda Piazza   10/24/20,  9:35:14 AM
The OEX first five-minute chart spanned a large range, so the 50% retracement might be important to watch in early trading. That five minute range had a high of 512.78 and a low of 509.97. The 50% retracement lies at 511.37, a level of historical S/R, too. We'll watch that 50% level during the first retracement that usually begins in a few minutes.

Since the range was so big, I'll be using a 3MRT today instead of a 5MRT. The 3-minute range included a high of 512.78 and a low of 510.35.

  Jeff Bailey   10/24/20,  9:34:50 AM
QQQ $33.84 -0.99% .... session low sow far $33.72. Trying to hang onto WEEKLY S2 of $33.78 and overlapping MONTHLY 38.2% retracement.

  Jeff Bailey   10/24/20,  9:32:07 AM
S&P Dep. Receipts (SPY) 102.85 -0.48% .... session low so far has been 102.81. A penny above WEEKLY S2.

  Linda Piazza   10/24/20,  9:31:56 AM
The OEX moves below the 50-dma.

  Linda Piazza   10/24/20,  9:28:21 AM
As I scan stock charts this morning, I notice something curious: MACD, RSI, and stochastics bearish divergences are beginning to matter again. I notice many stocks that began rounding over, displaying such divergence, and then suddenly plummeted, displaying the weakness that had been suggested by those divergences.

  Jeff Bailey   10/24/20,  9:18:15 AM
09:00 Update posted at this Link

  Linda Piazza   10/24/20,  6:53:02 AM
Good morning. The Nikkei ended Thursday's trading at gap support, after having dropped 826.55 points since Monday's close. I had mentioned late yesterday in the Monitor that I wouldn't be surprised to see the Nikkei attempt a bounce, either from Thursday's closing level at the bottom of that gap, or from the 10,200 level, which also is a historical S/R zone. The Nikkei bounced from both. It opened up and bounced to a high of 10,480.53. In the afternoon session, it fell, reaching a low of 10,186.77, but then bounced from that level near 10,200 support and closed flat, up 0.54 points or 0.01%, at 10,335.70. Automakers and computer-related shares led the early bounce, although both were mixed by the close of trading. NEC raised its income forecast, citing an improvement in its semiconductor business, sending related stocks higher, too. Banking stocks surged and financials were strong. Sony continued its decline after Thursday's earnings report. After the close of trading, Toshiba reported, echoing Sony's statement that it would cut its full-year earnings target.

Singapore's Straits Times was closed for a holiday, but Singapore was included in a list of countries receiving broker downgrades. Others were South Korea and Hong Kong. South Korea's Kospi ended down 0.79% and Hong Kong's Hang Seng ended flat, down 0.01%. The Taiwan Weighted dropped 0.57% and China's Shanghai Composite dropped 0.35%.

Many European bourses trade near the flatline, although Germany's is an exception. Trading was described as thin. European banks gained in early trading. As of this writing, the FTSE 100 trades down 0.90 points or 0.02%, to 4239.30. The CAC 40 trades up 6.83 points or 0.21%, to 3271.12. The DAX has fallen 31.37 points or 0.90%, to 3465.77.

  Jeff Bailey   10/23/20,  9:30:10 PM
Nikkei-225 ($NIKK) 10,427.19 +0.89%

U.S. Dollar Index (dx00y) 91.30 +0.03%

S&P futures (sp03z) 1,023.30 -0.5%

  Jeff Bailey   10/23/20,  9:24:31 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,  9:24:26 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.

  OI Technical Staff   10/23/20,  9:24:15 PM
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