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  Jeff Bailey   10/28/20,  6:34:57 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   10/28/20,  4:20:54 PM
JDS Uniphase (JDSU) $3.47 -3.18% .... stock did battle back a bit from opening lows of $3.40. File today's volume of 184 million shares away in your logbook. Not every share was short, but will eagerly await November 15 short interest.

 
 
  Linda Piazza   10/28/20,  4:01:08 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
10/28: Entered a bullish OEX trade at OEX 515.75.
10/28: Took profit at 518.31.
Result for that day: 2.56 OEX points our direction.
Results for the week: 2.56 OEX points our direction.
I'm probably going to regret that exit tomorrow morning when we wake to higher futures, as the Donchian channel breakout system predicts we may get. However, our past history with overnight trades has not been good lately, and the drop in the VXO might be serving a warning.

 
 
  Linda Piazza   10/28/20,  3:57:35 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
I've decided I'd rather not risk holding over with the VXO dipping so low. Exit now.

 
 
  Jeff Bailey   10/28/20,  3:56:14 PM
QQQ $35.17 +2.8% .... Jeff: Which target if long the QQQ?

OK, futures look to settle strong and upside risk is at 1,051.80. That's about another 0.7% upside in the S&P. With QQQ at $35.17, roughly 1.5% from current levels would be $35.70. Hmmm.... that's upper-end of next "zone resistance" and pretty close to MONTHLY R2.

If it is within your tolerance for risk, I'd hold QQQ overnight. May not be any further computer levels into 04:15 PM EST close until WEEKLY R1 ($35.27). Right?

 
 
  Linda Piazza   10/28/20,  3:56:07 PM
Swing Trade Signals
Jim just posted information about the VXO, the old VIX, dropping quickly on this afternoon's rally. That worries me, and I advise all traders to take that into consideration when considering holding over.

 
 
  Linda Piazza   10/28/20,  3:53:06 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Unless stopped, my plan is to hold this OEX long trade overnight, but that can be a risky proposition lately. We have lots of evidence that this could be a viable trade, but many of our overnight trades have not worked well. Conservative traders might elect to exit early.

 
 
  Linda Piazza   10/28/20,  3:47:08 PM
I didn't make the decision to enter today's OEX long trade based on the Donchian channel breakout, but that breakout did signal a long trade just after our entry, on a 30-minute close at 515.90. If we were using that methodology that I backtested, we'd be setting a 514.50 stop right now, as that's two points below the last 30-minute close. I wanted a breakeven stop, however, because . . . well, because I didn't want us to end the day with the trade underwater and then carry over until tomorrow.

 
 
  Linda Piazza   10/28/20,  3:38:33 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
Going into the close, raise the stop to 515.75, our entry level. I'll probably keep the trade open overnight, unless we're stopped, but check tomorrow morning, as I may lower the stop to accommodate early volatility.

 
 
  Jeff Bailey   10/28/20,  3:38:22 PM
TheraSense (THER) $17.98 +4.77% .... session highs here. (to the trader that shorted the stock after I profiled intra-day stop at $17.62 14:08:28, hope you get covered by close).

 
 
  Linda Piazza   10/28/20,  3:35:46 PM
The OEX is again looking overbought on a five-minute basis, with Keltner bands suggesting that a pullback, if it happens soon, might find first support near 515.50-516.

 
 
  Linda Piazza   10/28/20,  3:24:55 PM
There's the OEX pullback being predicted by the five-minute OEX Keltner bands. The OEX is at first support indicated by those bands, with next support between 514.60-515.20.

 
 
  Linda Piazza   10/28/20,  3:18:40 PM
So far, no pullback, and the support indicated by the five-minute Keltner bands is rising, but the OEX still looks overbought on a five-minute basis. As it looks overbought on that short-term basis, it's now testing its 21-dma, currently at 516.33.

 
 
  Linda Piazza   10/28/20,  3:09:33 PM
The nested five-minute Keltner bands suggest that the OEX needs to pull back on a short-term basis, perhaps to test the 515.25-515.50 support, perhaps lower.

 
 
  Linda Piazza   10/28/20,  3:06:37 PM
Jonathan just mentioned that we all just lost IB. The same thing used to happen with Fidelity all the time when there was a big volume spike. Think we could start using this as some kind of sentiment indicator?

 
 
  Linda Piazza   10/28/20,  3:02:22 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We were triggered on an OEX long when the OEX traded 515.75. Our initial stop is 513 and our initial target is 520.

The OEX closed above the Donchian channel on the last 30-minute period, with a close over 515.03. That adds confirmation to the long trade.

 
 
  James Brown   10/28/20,  2:58:39 PM
Yet another retailer breaking out today (albeit a drug retailer) is Walgreens (WAG), currently up 3% to a new yearly high. The stock is also breaking out above it very long-term trend of lower highs on its weekly chart.

 
 
  Linda Piazza   10/28/20,  2:52:55 PM
Swing Trade Signals
Don't jump the gun on that potential bullish entry, because it's entirely possible that the OEX could roll down from the current test of the 60-minute 100-pma instead. If that happens, we could be looking at a bearish entry, but that's more difficult to pinpoint an entry level. I placed the entry for the possible long position high enough to make sure the OEX had adequately tested that moving average before we entered long.

 
 
  James Brown   10/28/20,  2:51:28 PM
Shooting higher is Home Depot (HD), which after a 7-day consolidation is breaking out to new highs, up more than 4% today. It's rival and OI call play LOW is only up 1.66% but also breaking out to new highs.

 
 
  Linda Piazza   10/28/20,  2:49:30 PM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Go long the OEX on a trade of 515.75. Target 520. Initial stop 513.

 
 
  Jeff Bailey   10/28/20,  2:49:16 PM
Buy program alert SPX 1,040.01 ... sends SPX to highs of session.

 
 
  Jeff Bailey   10/28/20,  2:48:35 PM
QQQ $34.83 +1.8% ... just off new session high. On sell program, QQQ slipped to $34.63 and rather large intra-day 5-minute volume of 4.9 million shares were seen. That has been absorbed at this point and may pressure short-term bears into close.

S&P Banks Index (BIX.X) 325.90 +0.18% at afternoon highs here, but still work to be done intra-day to get morning high of 327.53.

Still.... current intra-day technicals looking bullish.

 
 
  Linda Piazza   10/28/20,  2:48:19 PM
Swing Trade Signals
I'm considering a long OEX trade on a move above OEX 515.75, if that should occur. (Not sure it will.) I'm not sure whether I would make that an official trade, but I wanted to give everyone a chance to look at their charts. That would represent a move over the 60-minute 100-pma and a move above the neckline of the inverse H&S on the OEX 60-minute chart.

 
 
  Jeff Bailey   10/28/20,  2:44:49 PM
Semiconductor Index (SOX.X) 481.46 +4.19% ... back to test its session high of 482.27, which came right at the FOMC announcement. A break to session high could be sector signal for gains broader market gains.

 
 
  Linda Piazza   10/28/20,  2:43:14 PM
A steep ascending trendline has been building off Friday's OEX low, with that ascending trendline now crossing at about 512.75.

 
 
  Ray Cummins   10/28/20,  2:42:47 PM
Spreads/Combos/Premium-Selling -- Portfolio Activity

Readers of the Spreads/Combos section are also benefiting from the bullish activity in Icos (NASDAQ:ICOS) as the issue was recently listed as a put-credit candidate. Another new pick in that category, Sina Corporation (NASDAQ:SINA) is not performing as well, despite the fact that the company posted a record quarterly profit and predicted strong revenue growth through next year as it raised its advertising rates up to 30%. Our bullish spread at $35 is currently "deep-in-the-money" but traders are cautioned to monitor daily any positions in the volatile Internet group.

 
 
  Jeff Bailey   10/28/20,  2:39:02 PM
S&P 500 Index (SPX.X) 1,037.17 +0.58% .... steady with FOMC announcement level. Have seen multiple sell program get absorbed. Could see near-term short-covering on SPX move above day's highs, worthy to play long above 1,039.30.

 
 
  Linda Piazza   10/28/20,  2:38:38 PM
Here's a five-minute trendline that may be important for the short-term, based on the behavior of the last four five-minute candles: Link

 
 
  Linda Piazza   10/28/20,  2:35:44 PM
The rolldown from resistance is going to be more difficult to identify than a spike through the 60-minute OEX 100-pma would be. Would that occur at 513.60, near the bottom of the consolidation band for the middle of the day? Would it be 512.90-513, the location of the midline support on the five-minute Keltner bands and the 30-minute 21-pma? Would it be closer to 511.65, the location of the 60-minute 21-pma? Or maybe 511.20, the bottom of the 10/2-10/3 gap?

 
 
  Jeff Bailey   10/28/20,  2:35:27 PM
Treasuries find reversal to buying after FOMC and this is perhaps the most notable change since 02:15 PM EST. 10-year YIELD ($TNX.X) now lower by 4.6 bp at 4.219% and most likely some near-term unwinding of pre-FOMC decision.

The AMEX Gold Bugs Index ($HUI.X) 214.39 -2.13% has seen bid from session lows of 212.74.

 
 
  James Brown   10/28/20,  2:26:02 PM
Current OI call play ICOS is hitting a new 52-week high today and continuing to build on its reverse H&S pattern breakout.

 
 
  Linda Piazza   10/28/20,  2:22:11 PM
The OEX hasn't decided yet where it's going. It's tested the 60-minute 100-pma now. It hasn't been able to climb above it, but it hasn't fallen steeply, either. I could make a case for a bearish trade with a stop just over the 60-minute 100-pma or could make a case to wait for and expect a bullish trade, on an OEX move above that 100-pma.

 
 
  Jeff Bailey   10/28/20,  2:21:11 PM
Buy/Sell Program's just after FOMC alternating buy/sell program premium alert. First was buy, then just offset with sell. SPX 1,037 here.

 
 
  Linda Piazza   10/28/20,  2:17:45 PM
The OEX now moves up to test its inverse H&S neckline and the 60-minute 100-pma. Here's where we see how strong the index is. Remember that the first move after an importance announcement is sometimes reversed.

 
 
  Jeff Bailey   10/28/20,  2:13:21 PM
Fed leaves rates unchanged

Benchmarking .... INDU = 9,677, SPX = 1,037, OEX = 514.15, NDX = 1,396, QQQ= 34.72, TNX.X = 4.301%, $USD.X = 91.91 (30-MIN DELAY),

 
 
  Jeff Bailey   10/28/20,  2:11:42 PM
TheraSense (THER) $17.67 +2.97% ... and there you go. Just post your strategy and the stock will fullfill. THER fell to $17.61, so blow it out here at $17.74.

 
 
  Linda Piazza   10/28/20,  2:10:27 PM
To benchmark the Donchian channel setup for this thirty-minute period when the FOMC concludes its meeting, an upside breakout would occur on a close above 515.03 this period, and a downside break would occur on a close below 506.98, which would be unlikely to happen. The 21(3)3 stochastics have been pinned in levels indicating overbought conditions for a while, which was one characteristic seen in some of the best-performing trades in my backtest, but ADX remains near 20, with that sometimes signaling trades that closed near the breakeven level.

I've cautioned several times that I'm benchmarking these levels only and not trading them, but I want to confirm that the 60-minute 100-pma crosses at 515.46, just above that 515.03 Donchian-channel breakout level. For those traders considering trading the OEX from the long side, I would not act ahead of a test of the 60-minute 100-pma.

 
 
  James Brown   10/28/20,  2:10:04 PM
The strength in the SOX (+4%) is also lifting OI call play in QLGC (+3.3%). Shares are trading above the resistance last week at $54.35 but are still under the $55 mark (potential round-number resistance).

 
 
  Jeff Bailey   10/28/20,  2:08:28 PM
Thera Sense (THER) $17.87 +4.13% ... What is your exit strategy on THER??

Let's move stop up to $17.62 and just under BLUE #3. I think it worth the FOMC to see what the market reaction is. If THER were to spike to $19.00, then look to take profits.

 
 
  Linda Piazza   10/28/20,  2:03:49 PM
Gravity-defying stock: On the 21st, a reader wrote about MMM, asking about the hammer seen on the 20th, a potential reversal signal when it comes at the time of a rally, and then the potential bearish confirmation on the 21st. I commented on the bearish potential, but then added these words, " Having said that, I want to confess, as I have at other times, that I don't have a good feel for MMM. Every time I've seen a potentially bearish pattern develop and acted by buying puts, MMM has defied odds and climbed, so I'm personally a little afraid of MMM on the bearish side. Right now, MACD remains strong, so I would be personally wary of acting until MMM actually turns down, and then I'm not sure how far it might retreat. That climb has a lot of the look of a bearish rising wedge to it, however, and MMM has outstripped several rising trendlines and moving averages. I would suspect that it needs to come down and test $71-73, at least testing that gap if not filling it. It's perhaps got vulnerability down to $68-70. Now that I've mentioned that as a possibility, it will probably climb straight to $80." While MMM hasn't yet made it to $80.00, I was right to be wary of any potentially bearish setup and to suggest that the reader wait until MMM showed actual weakness, since MACD was strong. This happens every time with MMM.

 
 
  James Brown   10/28/20,  1:49:57 PM
Strength in the RLX retail index is also showing up in OI call play Best Buy (BBY). The stock has broken out above resistance at $55 and is trading near its high for the day up 3.7%.

 
 
  James Brown   10/28/20,  1:44:41 PM
Profit target alert! -- Current OI call play Autozone Inc (AZO) is quickly approaching our first target at the $100 level. Short-term traders may want to begin thinking about taking some money off the table.

 
 
  Linda Piazza   10/28/20,  1:42:18 PM
For the last three days of trading, the bodies of the OEX daily candles have mostly been encompassed by the 10/2-10/3 gap. Friday's decline spiked the candle shadow far below that gap, but the body was entirely within that gap. Yesterday's close was a few cents below the bottom of the gap, but mostly those bodies have been contained within it, showing its importance. Now we just have to decide if that gap support is going to hold and the OEX will move up from here or if that gap support has only temporarily arrested the OEX's decline toward the bottom of its ascending regression channel.

 
 
  Ray Cummins   10/28/20,  1:27:24 PM
Spreads/Combos/Premium Selling -- Portfolio Activity

Another issue worth noting is Electronic Arts (NASDAQ:ERTS), which is now testing its 30-DEMA (daily chart) on higher than average volume. A move below the current trading range would indicate a bearish change in character, suggesting further declines. Our put-credit spread is short at $95, thus conservative traders should monitor the issue closely in the coming sessions.

 
 
  Linda Piazza   10/28/20,  1:23:46 PM
Yesterday, the Wilshire 5000 (TMW.X) closed back above 10,000. Today, it's climbing, too, and is trying to clamber back above the midline of its rising regression channel and the 10-dma. So far, it has not been able to do either, but as I speculated might happen with the indices today, it's now primed to either fall back from that resistance toward the bottom of its channel at 9800 or move above it, hinting at a retest of the 10,180-10,200 S/R zone and the recent highs. Link I like to study the Wilshire every now and then because it's the broadest of our markets and we're not as familiar with the "sticking points," as both Jane and I have been known to call them, on this chart. We get a fresher view of what's happening. In this case, however, that view shows us what the other indices do: price patterns that look strong while bearish divergence shows up on the indicators.

 
 
  Ray Cummins   10/28/20,  1:13:59 PM
Spreads/Combos/Premium Selling -- Portfolio Activity

Among the broader market groups, Biotech stocks are performing well and one of the bellwether issues, Biogen (NASDAQ:BGEN), is trading higher after the company posted third-quarter earnings that exceeded analysts' expectations on increased sales of its multiple sclerosis drug, Avonex. Unfortunately, that does not bode well for our recent (bearish) premium-selling position in the issue, which involves a short call at $40. A move through the recent resistance area near $39.75 would signal our exit in the position.

Another disappointing issue is Cummins (NYSE:CUM), which fell over $3 this morning after saying that it now expects full-year earnings to be at the low end of its previous estimates, due to "uncertainty in the marketplace." Our bullish (put credit) spread is in jeopardy with the stock only slightly above the sold strike and it may be prudent to exit the play to limit potential losses.

 
 
  James Brown   10/28/20,  1:10:33 PM
Afternoon Sector Winners:
_________________________

SOX semiconductor index: +3.83%
DDX disk drives index: +2.77%
NWX networking index: +2.35%

XBD broker-dealer index: +1.61%
BTK biotech index: +1.17%
RLX retail index: +1.61%
XAL airlines index: +1.21%

Losing Sectors are located in the energy sectors...OIX, OSX, UTY and XNG but all are down modestly.

 
 
  Jeff Bailey   10/28/20,  1:05:36 PM
S&P Banks Index (BIX.X) 324.96 -0.1% .... BAC $73.08 -0.66% and FBF $38.79 -1.04% are primary weakness. Other than these two, breadth positive at 13:9, with only FBF changed by more than 1%.

 
 
  James Brown   10/28/20,  1:01:30 PM
Jumping higher today is Estee Lauder (EL). The stock announced earnings this morning before the bell and beat estimates by a penny with 33 cents per share. Revenues were up almost 9%. The stock had been consolidating in the 36-37 range and is currently trading under late summer resistance near $38.00.

 
 
  Jeff Bailey   10/28/20,  1:00:42 PM
Thera Sense (THER) $17.60 +2.56% .... getting upside alert here. This was yesterday's bullish day trade target. I would suggest those that held overnight simply raise stops to $17.45 here, which would be just under today's BLUE #3. Just don't know what kind of further bullish response might come from FOMC meeting. Also, this is stock with HEAVY short interest and break above 10/23/03 highs might get exciting.

 
 
  Linda Piazza   10/28/20,  12:50:04 PM
Volume patterns remain bullish as we await the FOMC decision--or more probably await the statement that accompanies that decision. Total volume is 704 million on the NYSE and 973 million on the Nasdaq. Other volume patterns are similar to those previously posted. New highs now number 383, however, with only 11 new lows.

 
 
  Linda Piazza   10/28/20,  12:42:47 PM
I keep doing that trick where you look away from the screen and then look back, seeing if anything has moved. The OEX hasn't.

 
 
  James Brown   10/28/20,  12:41:44 PM
Lifepoint Hospitals (LPNT) reported Q3 earnings yesterday after the close and beat estimates by 6 cents. Net Income was 42 cents a share with revenues up nearly 25%. This morning Raymond James upgraded the stock from a "market perform" to a "strong buy" claiming the stock has an attractive valuation. Shares are up more than 10%.

 
 
  James Brown   10/28/20,  12:29:09 PM
King Pharmaceuticals (KG) is down almost 22% after reporting Q3 earnings this morning that were in line with expectations. Net income was 41 cents per share. Revenues were up 34% but the company guided lower for the fourth quarter. Bank of America has downgraded the stock to a "neutral" and shares gapped lower and just kept falling this morning. Currently, KG is at its low for the day near $12.44.

 
 
  Ray Cummins   10/28/20,  12:27:44 PM
Spreads/Combos/Premium Selling -- Portfolio Activity

Equity values continued to move higher today, building on Monday's optimistic session, and there were a number of bullish issues in our portfolio. One of the best performers is Lam Research (NASDAQ:LRCX), which is up over 10% at $28.16 after an industry trade group said late Monday that orders for chip equipment placed with North American manufacturers rose in September for the third straight month.

LRCX was listed as a candidate for a bullish "premium-selling" play and a synthetic position, and it has been profitable in both respects. Other strong issues in the chip segment include Cymer (NASDAQ:CYMI), Novellus (NASDAQ:NVLS), Photon Dynamics (NASDAQ:PHTN) and our new position in the Semiconductor Holdrs (AMEX:SMH).

 
 
  James Brown   10/28/20,  12:23:50 PM
MedImmune Inc (MEDI) gets a very small boost from RBC Capital who starts coverage on the stock with an "out perform". The stock has been falling fast this month and volume has been strong on the declines. Investors and analysts have been concerned over the less than stellar launch for its FluMist product. The stock is strongly oversold and has achieved its original P&F downside target near $27.00 but from the looks of it the selling may not be over yet.

 
 
  Linda Piazza   10/28/20,  12:11:00 PM
The OEX moves back toward the neckline of its potential inverse H&S and toward the 60-minute 100/130-pma's, currently at 515.53 and 515.36, respectively. At the same time, RSI curves up again toward its own neckline of a lop-sided inverse H&S. So far, however, these feel like aimless gyrations more than anything.

 
 
  James Brown   10/28/20,  12:04:26 PM
Asian Internet stocks continue to suggest possible entry points for traders aggressive enough to play them.

Netease.com (NTES) has bounced from its simple 50-dma and the $60.00 level but remains under its short-term trend of lower highs (which almost looks like a bull flag). A move over $67.50 could be a momentum entry point. HOWEVER, the company announces earnings after the close today. Estimates are for 32 cents. The most recent data still puts short interest in NTES at 46% of the float. Be careful. Fellow Asian Internet stock JCOM went into free fall after its earnings report.

Speaking of J2 Global Communications (JCOM), the stock has been consolidating slowly above support at $30.00 with a trend of lower highs. A breakdown under $30.00 could lead to a test of $25.00 or its 200-dma near 22.50. (the most recent data put short interest near 37% of the float, but this was before the sell-off occurred).

Meanwhile, Sina.com (SINA) has broken out to the upside from its recent trend of lower highs. The move was fueled by its earnings report yesterday. The company beat estimates by 2 cents with 21 cents/share. Revenues were up more than 200%. The company also guided higher for the fourth quarter. This morning Piper Jaffray raised their price target on SINA from $32 to $51. SINA is trading just under $45 right now.

 
 
  Jeff Bailey   10/28/20,  11:56:46 AM
JDS Uniphase (JDSU) $3.39 -5.41% .... per today's 11:00 Update, JDSU priced $400 million at a conversion price of $4.94.

This $4.94 now becomes a level for a longer-term bull to be looking for an action point.

The reason I think this, is that these are Zero Coupon, so no interest payment is being made to the holder of the $400 million offering. The ONLY reason anyone would want this convertible, is so that they could BUY the stock at $4.94.

By the looks of JDSU's chart, a bull or prior short could have bought all the JDSU he/she wanted below $4.94 since April 2002.

 
 
  Linda Piazza   10/28/20,  11:52:43 AM
On the OEX five-minute chart, it looks to me as if the OEX broke out of the bull flag to the upside, but then just trended sideways instead of moving up--typical range-bound or before-the-important-event type trading. It's probably dangerous now to examine the charts too minutely, looking for something that's going to predict future direction. Personally, I could see the markets going either direction. With the OEX in particularly, there's the bullishness implied by that possible inverse H&S and possible higher low on the daily chart balanced against the inability to climb above the 30/60-minute 100/130-pma's.

 
 
  James Brown   10/28/20,  11:44:28 AM
After several weeks of fighting with the $20 level and its simple 200-Week Moving Average, shares of EGL Inc (EAGL) have crashed. The company warned for its third quarter. Consensus estimates had been 20 cents a share. The company is now expecting 12 cents per share for Q3. Deutsche Securities has downgraded the company from "hold" to "sell" and cut their price target from $18 to $14. The stock is currently down more than 15% and trading just above its 200-dma near $16.

 
 
  Linda Piazza   10/28/20,  11:42:33 AM
That possible OEX inverse H&S I've been depicting has still not confirmed, but like the other writers on the futures side of the Monitor, I don't expect that much will happen between now and the conclusion of the FOMC meeting. After that meeting concludes, we'll have to see how serious the bullish traders are about sending the indices higher.

 
 
  Linda Piazza   10/28/20,  11:18:04 AM
As of a few minutes ago, volume patterns were bullish, with adv:dec ratios at 18:11 for the NYSE and 19:10 for the Nasdaq. Up volume was not quite double down volume for both the NYSE and the Nasdaq. Total volume was 422 million for the NYSE and 635 million for the Nasdaq.

 
 
  Linda Piazza   10/28/20,  10:59:42 AM
The current OEX five-minute chart pattern could be a bull flag. If so, it should probably break to the upside before retracing more than 50% of its flagpole rise. In this case, it's somewhat difficult to decide where that 50% level would be. Do we count as part of the flagpole rise the rise off the low from yesterday afternoon, including this morning's gap? Do we instead count from this morning's opening low? If we do the latter, the OEX should not dip further than 513.44 before rising and breaking that flag to the upside.

 
 
  Linda Piazza   10/28/20,  10:46:00 AM
Here's something else I'm watching on the 60-minute OEX chart: Link

 
 
  Jeff Bailey   10/28/20,  10:37:13 AM
Taiwan Semiconductor (TSM) $11.34 +8.62% Link ... higher after reporting Q1 EPS of $0.11, which was a penny better than consensus. TSM said revenues rose 33.4% year-over-year to $1.60 billion compared to consensus of $1.56 billion.

Looking forward, the world's largest chip foundry predicted semiconductor industry would finish 2003 with growth of about 13%-15%, which is above TSM's prior thoughts of 9%-10% five months ago. For 2004, TSM expects industry revenue growth to improve to between 15% and 20%.

 
 
  Linda Piazza   10/28/20,  10:34:22 AM
The last 30-minute OEX candle did not close above 514.69, and so there was no Donchian channel breakout signal during that 30-minute period. Looked like a sure thing for a while, didn't it? That's why I warned not to jump to any conclusions because that often happens. Since Donchian channels are based on the highest high or lowest low during a certain time period and since I've got my channels offset two candles, a breakout would occur this current 30-minute period on a close above the same 514.69 level. In the next 30-minute period, that figure will be moving up to 515.03, however, the intra-candle high from the just-completed 30-minute period.

 
 
  Linda Piazza   10/28/20,  10:26:53 AM
Whatever else happens today, the current OEX action certainly draws attention. It currently tests the upper boundary of the 30-minute (20,2) Donchian channels, the neckline of a possible inverse H&S formation on the 30/60-minute charts, and the 60-minute 100/130-pma's. Will the bullish potential be confirmed or will the OEX roll over now, rejecting that potential bullish action? As long as the OEX remains below those 60-minute averages, the presumption is that we'll see a rollover, but with the potential inverse H&S sitting on the chart, that's not a strong presumption and I wouldn't be taking bets either direction just yet.

 
 
  Linda Piazza   10/28/20,  10:18:15 AM
Remember that I'm not suggesting a long trade based on a Donchian channel breakout system, but am only benchmarking what we see right now so we can see how these trades perform in real trading situations. Today, I will not personally be trading the OEX ahead of the FOMC meeting results, even though such a trade might be profitable and so I'm not suggesting such trades for others, either.

 
 
  Jeff Bailey   10/28/20,  10:17:55 AM
QQQ $34.64 +1.25% ... morning gap higher came just above WEEKLY Pivot of $34.38, and morning low has been $34.37. Good bullish long in my opinion into fed, with rather tight stop just below morning low.

 
 
  Linda Piazza   10/28/20,  10:15:51 AM
For benchmarking purposes, a thirty-minute close this thirty-minute period above 514.69 would indicate a Donchian channel upside breakout. Don't assume that the OEX will close above that channel, however, no matter how high it might move above it during the middle of this thirty-minute period, because a close outside the channel often looks like a sure thing, but doesn't occur after all. The 21(3)3 stochastics have been trending near the levels indicating overbought conditions since yesterday morning, one condition I've found in some of the upside breakouts that ended up performing best. The ADX has declined and registers 19.88, with cursory observations showing me that breakouts that occurred when ADX measured near 20 were sometimes iffy trades, resulting in a breakeven exit. So, we've got mixed evidence right now, but last week's hypothetical Donchian channel breakout trade performed well despite an ADX level that was similar.

 
 
  Jeff Bailey   10/28/20,  10:14:53 AM
December Fed Funds Futures (ff03z) 99.00 .... predicting 0% chance for any Fed action. (100 - 99.00) = 1.00%

 
 
  Linda Piazza   10/28/20,  10:09:08 AM
If that OEX inverse H&S I depicted yesterday and in my 9:51 post is valid, and if it is confirmed, the upside target is somewhere in the neighborhood of 523.80-524. The upside target is difficult to determine since the neckline could be considered sloping or straight across. However, before I would consider that formation confirmed, I would need to see the OEX above the 60-minute 100-pma, currently at 515.58, and I'm just leery of any action ahead of the conclusion of the FOMC meeting.

 
 
  Linda Piazza   10/28/20,  10:04:11 AM
The OEX is in the process of testing the 30-minute 100-pma, the first of the 100/130-pma's combos that it will test on the 30-minute and 60-minute charts. A rollover here would make a good bearish entry, while a punch through the 60-minute 100-pma at 515.59 would make a solid bullish entry. . . or at least they would on any other day than a day that sees the conclusion of an FOMC meeting. I'm afraid we might see some false breakouts today, with the indices then maneuvered back where they're "supposed" to be.

 
 
  Linda Piazza   10/28/20,  9:59:07 AM
That formation I showed in my 9:51 post is even more clear-cut on the OEX 30-minute chart, and the 30-minute 100/130-pma's come even closer to the neckline. I'm not particularly bearish or bullish right now, with oscillators mixed up across different time frames and with the OEX in the DMZ between the 50-dma and the 21-dma, and between the 60-minute 100/130-pma's and the 60-minute 21-pma.

 
 
  Jeff Bailey   10/28/20,  9:58:12 AM
December Gold Futures (gc03z) 385.40 -0.72% ... lower by $2.80 with FOMC ahead this afternoon.

 
 
  Jeff Bailey   10/28/20,  9:55:01 AM
Oxford Health (OHP) $42.70 -7.15% Link ... stock hit lower on company's comments regarding "challenging" business climate to grow membership, while at the same time trying to battle higher medical costs. Here's a Link to a Reuters story.

Stock looks vulnerable once again back to mid-$30's.

 
 
  Linda Piazza   10/28/20,  9:51:20 AM
I'm still watching this OEX formation, which I mentioned late yesterday on the Monitor: Link

 
 
  Jeff Bailey   10/28/20,  9:45:22 AM
Thera Sense (THER) $17.30 +0.81% ... day trade bulls that may have held the stock overnight from yesterday's bullish entry, simply move stop up under this morning's low of $17.00. Re-establish new "BLUE" 5-MRT for today's 5-MRT ($17.00-$17.25).

 
 
  Linda Piazza   10/28/20,  9:41:45 AM
I mentioned in my 9:36 post that I wouldn't be surprised to see the indices maneuvered up/down to key levels just ahead of the 10:00 numbers. For the OEX, those key numbers might be near the 100/130-pma's, on either the 30-minute (514.74 and 515.29, respectively) or the 60-minute chart (515.56 and 515.38, respectively). If the OEX retreats ahead of that 10:00 release instead, then the 50-dma at 511.84 and the 60-minute 21-pma at 511.49 might suggest a pullback to that zone ahead of the 10:00 release.

 
 
  Linda Piazza   10/28/20,  9:36:14 AM
The OEX first five-minute range included a high of 513.04 and a low of 511.78. The midpoint of that range lies at 512.41, and this figure might be helpful to watch in early trading, to gauge market strength or weakness, but once again today, we also have a gap to watch. So far, the OEX is above both that midpoint and the gap, but the usual first reversal typically does not begin for a few minutes.

In a pattern that's become typical lately, I wouldn't be surprised to see the indices maneuvered up/down to key levels just ahead of the 10:00 numbers, primed to bounce or fail, depending on those numbers. I would be cautious entering any positions ahead of the FOMC meeting, however, particularly if volume is light today.

 
 
  Jeff Bailey   10/28/20,  9:16:43 AM
09:00 Update posted at this Link

 
 
  Linda Piazza   10/28/20,  7:21:08 AM
Good morning. I mentioned yesterday in the Market Monitor that the Nikkei ended Monday's session in position to retest its 50-dma at 10590.84. Last night, the Nikkei did test that average, rising as high as 10592.05. It could not hold onto all its gains, however, and closed below the 50-dma, although it did gain 106.89 points or 1.02%, to close at 10561.01. Due partly to a newspaper report that the bank UFJ Holdings' net income for the first half amounted to more than twice the projections, banks gained. Retailers gained, despite a Ministry of Economy Trade and Industry report that September retail sales fell 2.2%. Many tech stocks also gained, but the weakening dollar affected some exporters. A report circulated that Japan might sell U.S. treasuries to raise cash for its intervention efforts in the currency markets. After the close of trading, Sony reported new strategy plans, including releasing up to 20,000 employees. Sony had previously announced a deal with Samsung to produce LCD panels, among other efforts, and the company reported the signing of that deal. The company also may expand into China, one newspaper reported.

Taiwan Semiconductor (TSM) reported earnings that were considered bullish, and the company gave a bullish forecast for the fourth quarter, too. In addition, the World Semiconductor Trade Statistics reported that the Asian chip market (ex-Japan) would increase 18.2% this year and by even higher amounts in the succeeding two years. Those two developments sent many chip-related stocks higher in Asian bourses. The Taiwan Weighted gained 1.96%, and South Korea's Kospi rose 1.81%. Singapore's Straits Times rose 1.37%, and Hong Kong's Hang Seng rose an even greater 2.91%. China's Shanghai Composite closed flat, down 0.01%, however.

European stocks trade higher in what are described as broad-based gains. The Ifo Institute released its business climate index number, showing a rise in October to 94.2 from September's revised 92. The number surprised to the upside. Both the current-conditions and future-expectations components rose. Chip-related stocks rose in reaction to TSM's earnings report, and some tobacco stocks gained after a report yesterday that RJR and B&W, owned by British American Tobacco, would merge. The dollar was higher against the euro in early trading, and automakers were gaining. One stock not participating in gains today is Ericsson, declining after a Morgan Stanley downgrade to underweight. The firm also cut Ericsson's price target. The firm mentioned its bleak outlook for the telecom industry.

Currently, the FTSE 100 has gained 12.20 points or 0.29%, to trade at 4263.50. The CAC 40 has gained 31.50 points or 0.95%, to trade at 3338.09. The DAX has gained 53.64 points or 0.53%, to trade at 3570.74.

 
 
  Jeff Bailey   10/27/20,  1:07:56 AM
Nikkei-225 ($NIKK) 10,560 +1.02% Link

 
 
  Jeff Bailey   10/27/20,  1:07:48 AM
S&P 100 Index (OEX.X) 510.77 -0.09% ... OEX chart with new WEEKLY and current October monthly pivot retracement. Link

 
 
  Jeff Bailey   10/27/20,  1:07:41 AM
Pivot Matrix for Tuesday at this Link

 
 
  OI Technical Staff   10/27/20,  1:07:31 AM
The Market Monitor has been archived. You may view it and any previous days here: Link

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