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  Jeff Bailey   10/30/20,  4:55:40 PM
Pivot Matrix for tomorrow at this Link

1) OEX session high came at WEEKLY R1 (move above signals further strength) while correlative support once again back lower at 513.

2) QQQ Daily S1 is $35.07. Same as today's profiled stop for bulls. May want to edge stop just below.

3) BIX.X first to trade WEEKLY R2 this week. Support at 327-328

4) INDU shows early correlative support at 9,745. Give additional 10-point to potentially important intra-day support of 9,735.

  Jeff Bailey   10/30/20,  4:06:04 PM
American Power Conversion (APCC) $17.90 +1.58% Link ... Jumps to $19.11 in after-hours on headline EPS of $0.26, 5-cents better than consensus.

I'm thinking some of the upside attributed to power outages in the Northeast earlier this quarter.

  Linda Piazza   10/30/20,  4:05:37 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
10/30: Entered a bearish OEX trade at OEX 518.
10/28: Stopped at 520.
Result for that day: 2.00 OEX points against us.
Results for the week: 0.56 OEX points our direction.
I believe we're set up fairly well for a test of the 60-minute 100/130-pma's tomorrow morning, although the spotty OEX feed makes that impossible for me to say for certain since I'm not sure where the OEX actually closed.

  Jeff Bailey   10/30/20,  3:55:31 PM
Biovail Corp. (BVF) $23.97 -10.66% ... will NOT want to carry this one overnight. Close out before closing bell.

  Jonathan Levinson   10/30/20,  3:54:57 PM
The Options Price Reporting Authority (OPRA) is currently having technical difficulties. As a result, no options market data is reliable and therefore is unavailable. Options market data will return when OPRA has resolved their pricing issues.

  Jeff Bailey   10/30/20,  3:53:58 PM
Buy/Sell Program Alerts .... after bond market's 03:00 PM EST close, I see on 5-minute bars 3 sell program and 1 buy program premium alert.

  Linda Piazza   10/30/20,  3:51:24 PM
Subscriber M. reminds me to mention that the OEX inverse H&S did not fulfill its upside target. As I've often mentioned and others have, too, the confirmation of a bullish formation, such as a move across an inverse H&S neckline, is one bullish sign, but then we need to watch whether the minimum target is met. This one wasn't, at least yet. We must keep in mind, as M. also reminds me, that the OEX could be just coming down to test its neckline to see if it's now support. Thanks, M.

The OEX feed remains spotty, and IB, at least, is still not providing options pricing information.

  Jeff Bailey   10/30/20,  3:47:23 PM
QQQ guessing at today's close, but using current session high/lows of $35.86/$35.15 and guessing at a close of $35.27, DAILY pivot levels would be...

S2= $34.72, S1= $34.99, P= 35.43, R1= $35.70, R2= $36.14.

  Linda Piazza   10/30/20,  3:41:29 PM
Donchian channel breakout update: I believe the hypothetical long OEX trade was probably exited at the conclusion of the last 30-minute candle. I'm not sure, because I don't have correct numbers for the OEX, but on one system the trade would have been exited if the OEX closed below the shorter-term channel at 517.64 on the last 30-minute candle, or if that candle closed below 516.99 by the other system. Since I don't know where that 30-minute period actually ended, I'm not sure about this exit, and am not sure about any potential gains or losses for the hypothetical trade. It was entered at OEX 515.90.

  Jeff Bailey   10/30/20,  3:38:39 PM
QQQ $35.32 (unch) ... here's my thoughts for holding bullish QQQ trade overnight, and what I would look for tomorrow.

In the morning, we will get a 5-MRT. Based on that 5-MRT, I (a bull in the QQQ) will want to see a BLUE #6, which HAS to be above today's high preferably above WEEKLY R2 of $36.34, to allow for target potential of $36.20. . If I don't get that, then my inclination will be to SELL strength.

Until tomorrow... will stick with profiled stop at this time.

  Jonathan Levinson   10/30/20,  3:37:43 PM
Another example of why we always suggest using live stops on open positions. I'm afraid to leave an unfilled order open without an auto-stop programmed at this point- you never know when the platform is going to go dark.

  Linda Piazza   10/30/20,  3:33:18 PM
Still no correct data on the OEX and IB is reporting technical difficulties in the options-pricing market, so that no options prices are available.

  Linda Piazza   10/30/20,  3:24:45 PM
Either the OEX is sitting completely still, or we're still not getting up-to-date feed on it.

  Linda Piazza   10/30/20,  3:21:50 PM
It looks as if the OEX is now headed down to test the 60-minute 100/130-pma's, currently at 516.20 and 515.93 respectively. I'm not inclined to enter an OEX trade with less than 45 minutes to go today, however, even if those averages are violated to the downside or if the OEX hits them and appears to bounce. Sigh. Our trade today might have been the right one, but we were stopped by $0.28. Part of the responsibility of this task is setting the right stops, however, but every time I try to narrow those stops, this kind of thing happens and I vow I'm going back to four-point stops.

  Linda Piazza   10/30/20,  3:06:13 PM
As Jim sometimes says: Can I have my trade back? The shoulda/woulda/coulda's are getting to me, as setting a wider stop would still have us in the trade, perhaps at least able to get out at a smaller loss, if nothing else.

  Jonathan Levinson   10/30/20,  3:05:33 PM
GE is at a low of the day below 29.

  Jeff Bailey   10/30/20,  3:04:02 PM
Microsoft (MSFT) $26.17 -2.09% .... BIG drag on the QQQ and now approaching its 200-day SMA of $25.98.

  Jeff Bailey   10/30/20,  3:02:15 PM
Sell Program Premium Alert ... SPX = 1,050.36 ... QQQ = $35.46

  Jane Fox   10/30/20,  3:02:13 PM
Linda I'm with you on straddles and strangles. I just tinker with them too much.

  Linda Piazza   10/30/20,  2:56:40 PM
Reader Question: Even though the yo-yo action is getting nauseous, do you think placing a straddle with the oex in the middle of this afternoons range at 519 would be a prudent approach to this kind of volatility even though it is range bound? Sell each position as it reaches max profit at respective support/resistance levels?

Response: The SEC does not allow us to offer investment advice to individual traders, so I can't make a specific recommendation. A further problem--often confessed in the Monitor--is that I have a sort of short circuit in my brain when it applies to straddles and strangles. I just cannot put them on effectively. I can do a covered call and let it sit there until expiration. I can put on a directional trade and feel comfortable and calm with wider stops than I would ever recommend to the general readership. I can put on a spread and let it sit there until expiration. But let me put on a straddle or a strangle, and I'm going to sell one side too soon or try to trade one side to lower the basis or do something else dumb. It's as if someone put a whole box of Godiva chocolates in front of me and told me not to taste them. Can't do it.

For that reason, I'm not experienced with straddles or strangles, so I can't offer educated suggestions. The VIX is low, as we've all mentioned, making options somewhat cheaper than they would be if the VIX were higher. That's in your favor. However, I'm worried about what will happen to those option prices if we've temporarily reached some kind of equilibrium in which those wanting to buy the dips do battle with those wanting to harvest gains. Today's GDP should probably have produced some volatility and it didn't, so I'm worried about that possibility. Perhaps some of my co-writers, more experienced in straddles and strangles, might have suggestions.

  Jeff Bailey   10/30/20,  2:46:25 PM
Darden Restaurants (DRI) $21.07 +1.65% Link ... unlike the major indices, DIR built gains from early morning break above it 50-day SMA. Not a lobster-fest at this point, but now into its gap from 09/24/03 close of $21.37, when the Red Lobster crab promotion brought in more customers than expected, and DRI lost money due to its success.

X gets the square at $21.00.

  Jonathan Levinson   10/30/20,  2:43:16 PM
Looks like Panera Bread's (PNRA) getting toasted.

  Jeff Bailey   10/30/20,  2:40:44 PM
Market breadth for 02:00 .... Briefing.com corrected their 02:00 Internals. I updated my prior 14:09:10 post.

  Jeff Bailey   10/30/20,  2:37:58 PM
Russell 2000 Index (RUT.X) 533.40 +0.29% ... just noting that the RUT.X did make a new 52-week high today with trade above its matching 10/15/03 and 10/17/03 matching highs of 534.25. Doesn't seem to have created the euphoric move higher at this point does it? We'll see as we near the close.

  Linda Piazza   10/30/20,  2:34:10 PM
I was surprised that the OEX did not test 523-524 this morning when it opened above the descending trendline off the 10/15 high. Will that test come now? I keep watching the daily chart, seeing today's trading represented as a doji through most of the afternoon. The last 90 minutes of trading can change that candle's shape dramatically, of course, but unless the OEX climbs strongly the rest of the day, the candle is likely to be a doji or another possible reversal signal, a hammer, or worse--a bearish candle. Coming after yesterday's doji and with the low VXO, I remain wary of entering bullish positions now, although I still don't feel particularly bearish or bullish, but am just trying to be alert to what's happening. As I mentioned earlier today, the top of the ascending regression channel on the daily chart lies near 528-529 and a climb that high would turn a potential doji or hammer into something else, but I'm just not sure how likely it will be for new bullish positions to be added above 524.

  Jeff Bailey   10/30/20,  2:31:37 PM
Ooooeeee! As INDU made a session high, QQQ came right up to $35.64, but couldn't make the move. QQQ may have to reload back at $35.42?

On October 15, the INDU wasn't able to make a new session high. So... thinking we're seeing some DIVERGENCE to 10/15/03 today.

  Jeff Bailey   10/30/20,  2:29:11 PM
Dow Industrials (INDU) 9,835 +0.6% .... just made a session high.

  Jeff Bailey   10/30/20,  2:27:02 PM
Be alert for any program trading alerts should QQQ move above $35.64.

  Jeff Bailey   10/30/20,  2:23:25 PM
QQQ I added an old chart of QQQ that I had shown on 10/15/03 for my prior 14:16:21 post. The trader that sent me the question must have a photographic memory.

  Jeff Bailey   10/30/20,  2:16:21 PM
Excellent observation from QQQ trader, and this provides EXCELLENT test for today's session... Jeff, the Q's look very similar to the pattern on 10/15/03? Thoughts?

Yes! Almost exactly at this point. On 10/15, Q's gapped higher, sold back, then tried to rally from morning low, to find resistance back higher at $35.50 (similar to today's rebound to $35.64) and late in the day, finally gave up the early morning low $35.23 to close $35.18.

Since today's is SIMILAR so far, I guess I'm looking for DIVERGENCE, but have a stop just below today's lows.

If there is any DIVERGENCE so far today, that that seen on 10/15/03, it was the ability of the QQQ to move above morning resistance of $35.50. Right?

Hey! Here's a chart I had created on 10/15/03 early that morning. Check it out. Link

  Jonathan Levinson   10/30/20,  2:11:24 PM
The put to call ratio is up to .85, VXO 17.55. This is a sudden spike in the put to call ratio, potentially bullish.

  Jeff Bailey   10/30/20,  2:09:10 PM
01:00 to 02:00 Internals .....

NYSE .... A/D 1,685:1,461 to 1,790:1,420

NASDAQ ... A/D 1,585:1,431 to 1,627:1,449

  Linda Piazza   10/30/20,  2:08:50 PM
Could the OEX be squeezed any tighter into the apex of this triangle? Link

  Linda Piazza   10/30/20,  2:04:46 PM
Here's one trendline I'm watching on the OEX five-minute chart: Link

  Jeff Bailey   10/30/20,  2:02:41 PM
QQQ $35.50 ... here's chart for 13:50:02 post. Link

  Jeff Bailey   10/30/20,  1:59:49 PM
Biovail (BFV) $24.00 -10.4% .... day trade long ... would move stops up to break even at this point, or just under BLUE #1 of $23.64.

  Linda Piazza   10/30/20,  1:54:34 PM
As of a few minutes ago, the adv:dec ratios were 17:15 for the NYSE and 16:15 for the Nasdaq. Up volume was ahead of down volume, but not by a high proportion on the NYSE. New highs were an enormous 818. Can that be right? New lows measured 15. Total volume was 966 million on the NYSE and 1.4 million on the Nasdaq.

  Jeff Bailey   10/30/20,  1:50:02 PM
QQQ $35.47 +0.42% ... volume almost non-existant. Here's updated intra-day chart, what I think needs to happen for bullish gains. Link

  Jonathan Levinson   10/30/20,  1:40:33 PM
The US Dollar Index blasted through 92, last quote on my delayed chart at 92.17, coinciding with the dumping in gold and the miners, with Dec gold down 2.90 at 384.10 currently, HUI -4.73 at 217.68.

  Jeff Bailey   10/30/20,  1:36:13 PM
01:00 Update at this Link

  Linda Piazza   10/30/20,  1:14:09 PM
To benchmark the hypothetical Donchian channel long trade entered at the close of the 2:30 candle on 10/28 at 515.90, the trade would still be open according to either of the two exit types I've tested. At the conclusion of the current 30-minute period, the trade would be exited on a close below 518.05 by the system that exits on a 30-minute close 2 points below the previous 30-minute close or at 516.37 by the system that exits a bearish trade when the OEX closes below a shorter-term (5,2) Donchian channel.

  Jonathan Levinson   10/30/20,  1:13:58 PM
The put to call ratio is .67, and by my short term indicators, this bounce is done or very close to it. If so, that will make a lower high and a possible head and shoulders setup, bad news for bulls. That's a big if, though, and we'll wait for more of a pullback to confirm whether this bounce is finished or not.

  Linda Piazza   10/30/20,  1:07:02 PM
What did I do wrong with the OEX trade? Maybe nothing except set the stop too tight, setting it at 520 rather than just over the day's high, but that remains to be seen. The worst thing I did wrong was not listen to my own impressions before and as the market opened. A pullback and bounce from above those 60-minute 100/130-pma's was a bullish signal and a break below them would be a bearish signal, I said early this morning. What happened as the day progressed, however, was that the OEX showed early weakness in failing to sustain levels above the descending trendline from 10/15. The first hour's candle showed a shadow that pierced that descending trendline but a candle body that closed beneath it. The index dropped, then climbed in the expected bear flag pattern. That pattern retraced right to the expected 50% of the day's range and then the OEX fell through the bottom support. That was the point at which the trade was entered. The stop was set just above this morning's gap, as the OEX should not have been able to move back above that gap if the tenor of trading remained bearish.

  Linda Piazza   10/30/20,  12:57:00 PM
Swing Trade Exit Point Alert - OEX/SPX/DJX/DIA/SPY
We were just stopped out of our bearish OEX position at 520, with an entry at 518, for a two-point OEX move against us.

  Linda Piazza   10/30/20,  12:51:20 PM
Swing Trade Signals
By the time I could type and post that last entry, the OEX had begun moving up. We won't save much now by exiting early, so let's see if the stop holds.

  Jeff Bailey   10/30/20,  12:50:36 PM
Buy program alert SPX 1,049.99.

  Jeff Bailey   10/30/20,  12:49:53 PM
Notable intra-day reversal in gold taking place. Gold Bugs Index ($HUI.X) 219.67 -1.23% saw morning high just like broader averages spike higher, but unlike broader market averages, gold stocks continue their morning reversal lower.

  Linda Piazza   10/30/20,  12:49:40 PM
Swing Trade Signals
I'm considering an early exit.

  Jonathan Levinson   10/30/20,  12:48:26 PM
Ten year treasury note futures are down 8.3 bps today. Note that the Fed said that it continues to see risks of disinflation etc., and yet bonds have been dropping ever since. This indicates to me an utter lack of belief for the Fed's words being displayed by the bond market.

Following Jim's words just posted, it's not that the Fed will spend your money trying to prove that they're right- it's that they'll spend your children's and their children's money and so on. Deflation is scary, but hyperinflation is not mardi gras either, and the Fed appears bent on provoking it. Rant off.

  Jeff Bailey   10/30/20,  12:46:58 PM
Biovail (BVF) $23.45 -12.5% .... was halted for trading after opening gap lower to $23.85. Release for trade now after reporting Q3 EPS of $0.22, which was $0.17 below consensus.

Stock was halted on what is said to be a technical problem with specialist post. CEO saying it expects to MEET or EXCEED 2004 forecasts.

Day trade long here, stop $23.13, target $25.50.

  Jim Brown   10/30/20,  12:46:38 PM
More GDP email:

By the way this what I am hearing, they adjust up GDP for the increasing processing power of computers based on the 1996 computer performance. That plus increased defense spending I think then adds up to 7.1%, strip out defense, the one off Tax cut dollars, and the computer weighting out of the GDP, you probably get down to 2.5-3.5%, (more in line what GE sees). In my mind the Fed is like a town hall, you just can't fight it. Martin

Agreed, they are right even when they are wrong and they will spend all of your money to prove it.

  Linda Piazza   10/30/20,  12:39:45 PM
The OEX 518.30 resistance did not hold. Next resistance appears to be 519.30-519.50. So far, I'm not liking this action, though. If the OEX were forming a right shoulder on the five-minute chart, it should be rounding down by now.

  Jeff Bailey   10/30/20,  12:38:56 PM
QQQ $33.50 +0.56% .... OK.... making way above some early intra-day resistance. Some bearish eyes should be on the highs.

  Jeff Bailey   10/30/20,  12:37:54 PM
Buy/Sell Program alerts ... haven't gotten a program alert since 11:10 AM EST and buy program alert.

SPX traded up to 1,047.26 on that alert, 1,048.73, so shorts should be getting jittery in here.

  Jeff Bailey   10/30/20,  12:34:50 PM
Gold/Silver Index (XAU.X) 99.37 -0.08% .... after trading psychological 100.00 level, back near session lows. Last night I was looking at Barrick Gold (ABX) $19.55 -0.45% and rather amazed at just how this hedger has underperformed those that don't hedge.

  Jeff Bailey   10/30/20,  12:31:56 PM
Dow Diamonds (DIA) $98.18 +0.31% ... just noticing that this morning's low was $97.74. If memory serves me correct, yesterday we thought sign of strength with trade at WEEKLY R1 of $97.75.

OK.... can tie that with today's QQQ low. Now pretty sure of importance of day's lows after "good news" from GDP data.

  Jeff Bailey   10/30/20,  12:20:00 PM
Akamai Tech (AKAM) $8.19 +37% ... Jeff: I bought 1,000 shares of AKAM on your alert this morning, but wanted to check short interest. I can't remember where to go for short interest. Could you also comment on potential short squeeze targets?

I go to the NASDAQ site at www.nasdaq.com, then type in whatever stock you want (up to 10) in that quote grid. Then click the "flash quotes" button. A new page pops up. In that scroll down menu box that currently says "FlashQuotes" go in there and select "Short Interest".

I too took a day trade long based on 9.38 million shares short, with days to cover still high at 5.61. But I've got an intra-day target of $8.40 (just under BLUE #6), but do like the bullish vertical count.

I also took a fitted retracement from the August low, fit 50% at the June 20 relative high of $5.93, to build a 100% retracement target to $8.61.

On a stock like AKAM, where fundamentals are still very "iffy," and no earnings, I'm much more aggressive with protecting gains. If up $700.00 on 1,000 share, there's no way I'm giving back more than $350.

  Jonathan Levinson   10/30/20,  12:07:31 PM
Jon - Again, thanks for the GE tie-in. Am currently using it as a monitor for a new ES short. Am biting my desk trying to keep from shorting ES, here at 1045, but will not do so until GE breaks down from support line on 2-min chart; a trade at 29.08 will trigger me. Thanks again for the tool!

Always a pleasure!

  Jeff Bailey   10/30/20,  12:07:24 PM
HMO Index (HMO.X) 760.57 -2.46% ... weighed lower today by Aetna (NYSE:AET) $55.85 -5% after reporting Q3 EPS of $1.27, which was $0.04 better than consensus. AET said revenues fell 7.5% year-over-year to $4.47 billion versus the $4.44 billion consensus. Guidance for 2003 by AET was for EPS between $5.00 and $5.05, versus FirstCall $5.09.

  Linda Piazza   10/30/20,  12:06:58 PM
Here's one formation I'm watching on the OEX five-minute chart: Link

  Jeff Bailey   10/30/20,  12:03:13 PM
11:00 to 12:00 Internals .....

NYSE .... A/D 1434:1470 and 1611:1443 while NH/NL 333:9 and 369:11

NASDAQ ... A/D 1281:1550 and 1495:1482 while NH/NL 332:2 and 359:3

NYSE showing improvement, while NASDAQ still rather neutral, but improving.

  Jonathan Levinson   10/30/20,  11:52:14 AM
The XAU has just broken 100. Another bottle of champagne for the goldbugs!

  Linda Piazza   10/30/20,  11:50:46 AM
The OEX trades sideways out of that bear flag after breaking out of it. That's a sign we've seen often, usually promising a move higher. As I type that move begins, and now we'll watch to see if resistance holds.

  Jonathan Levinson   10/30/20,  11:47:29 AM
The put to call ratio is up to .67, VXO up to 17.70.

  Linda Piazza   10/30/20,  11:46:43 AM
Several methods of technical analysis pinpoint OEX 518.30 as light resistance now. Jeff's 5MRT system puts the bearish #2 near that level. The rising trendline off this morning's low (2-minute chart) crosses just above that level. The nested five-minute Keltner bands show that's likely to be next light resistance, too. Let's hope it's more than light resistance. Stochastics on the two-minute oscillators are attempting to turn up again, so the OEX might retest that broken support, now likely to be resistance.

  Jeff Bailey   10/30/20,  11:43:21 AM
QQQ here's intra-day 5-minute bar chart of QQQ, and thought per this morning's bullish profile. Trying to get inside a bears mind, figure out what he/she is doing. Link

Note the two volume spikes at both ends of session high/low. I think this defines the day's range, which becomes rather important considering it is a day of major economic news. The news was "good" and conventional logic is for a more higher. Now testing that conventional logic.

With short interest in the QQQ at record highs, the QQQ right at 52-week highs, I thought it worth the risk for bullish trade to see what happens.

  Jonathan Levinson   10/30/20,  11:43:07 AM
It's no wonder that many doubt the veracity of the number. Here's the government's record with the recent initial claims data:

week orig revised

10/09 382K 388K

10/16 384K 390K

10/23 386K 391K

Pro forma is pro forma, as much in the public sector as in the private.

  Linda Piazza   10/30/20,  11:41:29 AM
The OEX broke out of the bear flag, but it's not unusual to see a retest of broken support, so I wouldn't be surprised to see another rise to 518.30. Our first hope on the way to our target is to see the OEX below 517.40 support, however.

  Jonathan Levinson   10/30/20,  11:40:02 AM
Looking at my intraday chart of the S&P futures, I see that the best GDP # in 19 years (allegedly) was faded within 1 hour of its release, with the S&P futures now down a point.

  Linda Piazza   10/30/20,  11:38:13 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
We have entered a bearish OEX trade at OEX 518, with a stop at 520 and a target at 511-513. I expect some hesitation and a bounce attempt between 515-516, and wanted us to have some cushion before that level was reached.

  Linda Piazza   10/30/20,  11:36:00 AM
Swing Trade Entry Point Alert - OEX/SPX/DJX/DIA/SPY
Enter a bearish OEX trade here. Stop at 520, just above this morning's open. Target 511-513. Risk-averse traders might wait for a test of the 60-minute 100/130-pma's, or might enter a partial position here and round up to a full position on a move below 515.

  Jeff Bailey   10/30/20,  11:30:47 AM
11:00 Update posted at this Link

  Jonathan Levinson   10/30/20,  11:26:10 AM
The US Dollar Index is up to 91.79, and Dec gold is flat at 387, with HUI -.89 at 221.52, XAU +.42 at 99.86.

  Jim Brown   10/30/20,  11:18:03 AM
Here is an example of some of the emails:

"The GDP grew by the largest amount in 20 years" is the headline today and will be in the papers tomorrow. Does anyone recall or care what the GDP grew by just prior to the bubble burst in 2000? 4th quarter GDP growth in 1999 was 7.1%. This would have come out in the first quarter of 2000 just prior to the market collapse. Clearly, the FED knows that this recent GDP growth was driven by temporary demand from the latest refi boom and the $26 billion that the government gave us during the quarter, yet they want everyone to think the economy is taking off in some sustainable fashion. Don't you think it is quite a coincidence that the GDP growth just outpaced the growth seen just prior to the market collapse by .1%? If today's number came in at 7.1% growth or less instead, the headlines of "highest since 4th quarter 1999" could be an ominous warning sign. MC

  Linda Piazza   10/30/20,  11:16:12 AM
I'm watching now to see if the OEX retraces more than 50% of the day's range, near 518.65. If so, this probably isn't a measured distribution pattern and we would need to wait for a rollover at a higher level before considering a bearish trade. With the VXO as low as it's been, I'll probably stand aside for a test of 523-524 and not participate in a bullish trade.

  Jim Brown   10/30/20,  11:15:44 AM
I am surprised at the number of emails I have received this morning that think the GDP is a phony number. The basic theory is that the government can fake the number (it is only an estimate at this stage anyway) to continue to juice the markets. They can then revise it later. Last year they revised down several quarters at once long after the fact. The Jobless claims have been revised up so often it is a joke. Most readers have not seen +7.2% growth in all the weekly/monthly numbers we have been getting. GE led the list of major companies saying "no recovery yet". There is definitely a disconnect between corporate outlooks and economic reports.

  Jonathan Levinson   10/30/20,  11:09:20 AM
The put to call ratio is up to .62, with the VXO up .60 at 17.75. These low readings despite the morning's bearish price action are exactly what a bear wants to see. The bulls are drunk with complacency now, even when price drops over 10 points in 2 hours. This is a necessary condition for a deep correction, and one we haven't seen since last year. Just anecdotal, but the readiness of the p/c ratio to spike to 1.0 on the slightest hint of selling all year has been a thorn in my bearish hide.

  Linda Piazza   10/30/20,  11:03:57 AM
Swing Trade Signals
I'm considering a bearish entry here, but it's risky ahead of a test of the 60-minute 100/130-pma. I'd just like to give us a little leeway with our stop.

  Jim Brown   10/30/20,  11:01:12 AM
Privacy Warning
One of our writers brought this to my attention yesterday. If you type your phone number into Google in the format 303-797-0200 Google will return your complete address plus a link to Yahoo Maps and MapQuest.

Think about it. Anybody with your phone number can get a map direct to your house instantly. Lets say you buy something expensive and the sales clerk asks for your phone number to go on the credit card receipt. This is an instant pointer to your house for anyone thinking you may be a robbery target. Perverts could track down your kids. Irate employees, salesmen, old flames, stalkers, etc.

The potential here is huge. How many times do you give a phone number to people that you would not give a map to your house? If you give them the number now they HAVE a map to your house.

Example: Link

If you would rather NOT have your info public then click on the phone icon after the search and select "remove my address" from the Google phone book.

Knowledge is power and I would rather not give that power to some people.

  Jonathan Levinson   10/30/20,  11:00:08 AM
was today a Steve McQueen or what? best, Tom

In case anyone was wondering, today was a pure Steve McQueen move, smoking tires and all: Link

  Linda Piazza   10/30/20,  10:48:43 AM
If the current OEX move is a measured distribution pattern and not a true bounce, it should break to the downside again before retracing more than 50% of the flagpole drop. That would occur near 518.65, just below the bottom of this morning's gap. The OEX should not be able to fill the gap again, then, if this is a distribution pattern such as a bear flag.

  Jeff Bailey   10/30/20,  10:48:19 AM
CBOE Internet Index (INX.X) 166.90 +2.07% ... upside alert set above today's high of 168.59.

Akamai Tech (AKAM) $7.67 +28.8% Link looks to be the driver. Gave triple-top buy signal at $6.00, current bullish vertical count growing to

  Jeff Bailey   10/30/20,  10:45:37 AM
QQQ $35.34 +0.05% ... correction to early posts regarding today's high of $36.00. That was a "bad tick" at the open, where session high has been $35.86. Keep this bad tick in mind though. It may well be that this was a buy stop order (buy to $36, then stop).

  Linda Piazza   10/30/20,  10:39:41 AM
The 60-minute OEX chart shows an expanding megaphone formation that Pring calls an orthodox broadening formation. These are indicative of emotion-based trading and usually resolve by a move to the downside, but not always. We've seen a lot of these set up during this year without the expected resolution. Since they're broadening formations, however, the trouble is in deciding when the break has occurred, since each zig-zag moves the prices higher and lower than the last high and low. We can use the 60-minute 100/130-pma's and the just-underneath-them 21-pma as our guide to a downside failure, however.

  Jeff Bailey   10/30/20,  10:35:58 AM
QQQ $35.29 -0.08% ..... trying to stabilize a bit here. Intra-day bulls would like to see QQQ trade sideways for about hour or 90-minutes, hold the session low of $35.15, then look for strength to show up above $35.50, maybe bring some short-covering in, and should move above day's high be seen, look for major short-covering to drive price higher into WEEKLY R2 goal.

Keep eye on CBOE Internet Index (INX.X) 166.40 +1.77% as a strength sector for QQQ intra-day trader. I can't think of a better sector to be showing gains at this point. It's "overvalued" by all fundamental accounts, but starting to make way back above its 21-day SMA.

EBAY $57.91 +1.24% Link at its highest level since reporting earnings.

  Linda Piazza   10/30/20,  10:34:31 AM
Daily OEX RSI hooks down. Daily 21(3)3 stochastics still turn up. Daily MACD flattens. Can you interpret direction from that? I can't.

  Linda Piazza   10/30/20,  10:33:30 AM
To benchmark the hypothetical long trade on a Donchian channel breakout on Tuesday, the trade came close in the last 30-minute period to being exited on the basis of both types of exits I've tested, but the close was just barely above the exit signal for both. Is that a good thing? Time will tell.

  Jonathan Levinson   10/30/20,  10:33:28 AM
The put to call ratio has risen to .60, a very tame bounce considering the selloff seen since 10AM, with VXO up .62 to 17.77.

  Jeff Bailey   10/30/20,  10:29:49 AM
QQQ $34.24 -0.22% ..... session low has been $35.15, right at 5-MRT red #4. Now its has to fight to get back above WEEKLY R1 $35.27.

  Linda Piazza   10/30/20,  10:29:47 AM
I would expect to see some sort of measured distribution pattern form now, taking the OEX back up toward this morning's gap. If that doesn't happen and the OEX instead falls through 515 support, it's time to consider a bearish position.

  Jeff Bailey   10/30/20,  10:26:46 AM
QQQ $35.20 ... sliced below RED #3 ... really wanted to see stability for bull entry there. If some traded long at $35.27, not looking good on such a decline without a stall at that level. Keep stop firm as profiled.

  Linda Piazza   10/30/20,  10:26:07 AM
Here's the 60-minute chart from earlier this morning. It looks as if the OEX will test the three types of support between 515 and the current level: Link If the OEX should break below that support, that's a signal for a bearish play. If it instead finds support here and bounces back above the descending trendline, we might have to reluctantly consider a bullish play despite the low VXO.

  Jeff Bailey   10/30/20,  10:24:25 AM
OEX 516.77 -0.36% .... DAILY S1 here, DAILY S2 of 515.15 now in play, and per last night's Index Wrap, this is perhaps the most IMPORTANT intra-day support level. (515)

  Jeff Bailey   10/30/20,  10:22:39 AM
QQQ $35.33 +0.02% .... QQQ has now backfilled its gap higher from early this morning. For renewed sign of intra-day strength, will need to see something above $35.50.

  Jeff Bailey   10/30/20,  10:20:23 AM
Garmin Ltd. (GRMN) $50.45 -2.9% Link .... today's trade at $51 gives 3-box reversal and now has the bullish vertical count column complete to $79 (unless stock were to trade $55 in today's session).

Look for good bull entries in here, with support firm at $48.

  Jeff Bailey   10/30/20,  10:16:22 AM
QQQ $35.41 +0.24% ... trading right around 5-MRT RED #2 here. RED #3 lower at $35.28, which is very close to WEEKLY R1 of $35.27.

  Jonathan Levinson   10/30/20,  10:16:16 AM
HUI is currently down .74 at 221.67, XAU is up .51 at 99.95, with Dec gold now down 20 cents at 386.80.

  Jonathan Levinson   10/30/20,  10:12:43 AM
The fed has just announced what should be its last repo for the day, another 2.5B in overnights, for a grand total of 16B, that's 16 thousand million dollars, added to today to replace 18B in expiring/maturing repos today, for a net drain of 2B.

  Jeff Bailey   10/30/20,  10:12:26 AM
Per Linda's 10:07:16 .... I think that is what I like about the pivots Linda. Not just looking for correlations in the pivots themselves, but to try and tie in with other levels or trends outside of pivot analysis. Bollinger Bands, conventional retracement, old gaps, moving average, what have you.

  Linda Piazza   10/30/20,  10:11:44 AM
The OEX is right back in the middle of yesterday's congestion zone--right back in the middle of the triangle delineated by the rising trendline off the 10/24 low and the descending trendline delineated by the descending trendline off the 10/15 high. When this happens after a spike down or up, I always think of the index as calling for a "do over," as if it didn't really mean to move the direction it did. Sometimes those do overs result in a reversal, but sometimes they result in a move in the original direction, too.

  Jeff Bailey   10/30/20,  10:08:28 AM
Day Trade Long setup for QQQ $35.41 +0.22% .... looking bullish entry at $35.27, stop $35.07, target $36.20.

  Linda Piazza   10/30/20,  10:07:16 AM
It's nice to have another set of eyes watching the OEX, Jeff. Readers are getting double the benefit--your perspective from a pivot-analysis study and mine that looks at the OEX using different types of analysis. It's interesting how often those pivots pinpoint the same levels that would be seen from historical S/R studies, with the two confirming each other. Jeff mentioned that today's OEX high occurred exactly at an important level in pivot analysis. OEX 520.90-521 show up repeatedly as highs, lows, opens, and closes over the last months, estabilishing that level as historical S/R, too. I didn't mark it as resistance on my 60-minute chart this morning because I wrongly assumed the OEX would open above that level. These opening levels always catch me flatfooted.

  Jonathan Levinson   10/30/20,  10:06:06 AM
The opening put to call ratio was .56, still too low but not off the charts as I might have guessed. So far, the GDP ramp is quite tame, and looking progressively less bullish as the session progresses. Dec gold is back in the green now, up .40, silver is rising, treasuries are off their lows, and the bounces on equities are so far of the dead-cat variety.

  Jonathan Levinson   10/30/20,  10:04:15 AM

  Jeff Bailey   10/30/20,  10:03:36 AM
Sector Action now mixed, 50/50.

Gains ... Internet +2.29%, Biotech +1.01%

Losses ... Disk Drive -1.1%, Oil -0.88%, Homebuilders -0.75%

  Jeff Bailey   10/30/20,  10:02:08 AM
QQQ $35.38 +0.13% .... rather notable reversal has taken place from the session high of $36.00. First sign of weakness would be QQQ back below WEEKLY R1 of $35.27, where QQQ has wanted to close above last 2 sessions.

  Jonathan Levinson   10/30/20,  10:01:27 AM

  Jeff Bailey   10/30/20,  9:59:20 AM
S&P Banks Index (BIX.X) 327.96 -0.07% .... DAILY Pivot at 327.65 (see OEX comments)

  Linda Piazza   10/30/20,  9:58:06 AM
The OEX 60-minute 100/130-pma's lie below at 515.97 and 515.73, respectively. If the OEX continues to fall, we could see a test of those important averages today. A bounce from them will be a long signal while a fall below them will constitute a signal for a bearish entry. I rather expect to see another attempt to breach the descending trendline off the 10/15 high before we would see any test of those averages, however, with the outcome of the trendline test determining the tenor for the morning's trading.

  Jeff Bailey   10/30/20,  9:57:06 AM
S&P 100 Index (OEX.X) 518.49 -0.01% ... here's the first test for morning strength. DAILY Pivot of 518.30. If the MARKET is going to ramp to new highs, this would be the point to look for bounce.

Note .... session high has been 520.99, which is RIGHT AT WEEKLY R1 of 520.99.

  Jeff Bailey   10/30/20,  9:55:44 AM
Akamai Tech (AKAM) $7.36 +23% Link ... higher after reporting Q3 (non-GAAP) loss of $0.03, which was better than the consensus for a $0.07 loss. AKAM said revenues rose 18.1% year-over-year to $41.8 million, also above consensus of $38.5 million.

  Linda Piazza   10/30/20,  9:53:56 AM
The OEX moves down to test this morning's gap, also inching below the descending trendline that it popped above this morning. A fall below yesterday's close would be short-term bearish. This possibility of a pop-and-drop opening, exacerbated by that low VXO, has kept me cautious about long positions this morning.

  Linda Piazza   10/30/20,  9:50:41 AM
If the VXO were near 21 right now, I'd be suggesting buying calls on this dip back to the descending trendline, with a risk down to maybe 516-517, but that low VXO just scares me out of wanting to take a bullish position. I remember feeling the same way when the VXO approached 30 again after having traded in a higher range for a while, but still . . . I know seasoned professionals must be wary, too, and that keeps me from wanting to jump in with a bullish position right now.

  Jeff Bailey   10/30/20,  9:48:38 AM
QQQ $35.57 +0.67% .... session high has been $36.00 and has seen trade above DAILY R2. While QQQ tends to "over do" things on the upside and downside, now needs another major index to show a new high to build above morning high.

MACD Oscillator on daily interval bar does show crossover above its Signal, by fractions.

  Jonathan Levinson   10/30/20,  9:47:07 AM
The VXO is up .16 at 17.31 currently. Should be interesting to see the put to call ratio for the first half hour.

  Linda Piazza   10/30/20,  9:46:48 AM
The OEX falls below the 50% retracement of the first five-minute range. It has not yet retraced the morning's gap, however, and it seems to have found support on the descending trendline from the 10/15 high. So far, then, I'd deem this behavior not-bullish, but not yet particularly bearish, either.

  Jeff Bailey   10/30/20,  9:46:15 AM
S&P 500 Index (SPX.X) 1,051.68 +0.34% ... session high so far has been 1,052.82. Didn't get a 52-weeker at this point, or DAILY R2 at this point.

Sector action broadly positive with only the Oil Index (OIX.X) 279.94 -0.57% in the red. Broad rally looks to be underway and quite bullish at this point.

  Jeff Bailey   10/30/20,  9:42:40 AM
10-year YIELD ($TNX.X) .... now higher by 8.5 bp at 4.357% ... may have calmed down a bit.

Not overly inflative data in the Q3 deflator. There was a pick up, but wasn't as inflative as some might of thought based on the GDP number itself.

  Linda Piazza   10/30/20,  9:39:07 AM
I would be rather surprised if the OEX didn't make at least a mediocre attempt at 523-524 after popping above the descending trendline. That would be a bad sign, in my opinion, a possible hint of a pop-and-drop opening. I'm not sure about the OEX's ability to climb above that 523-524 level toward the top of its ascending regression channel, however. The P&F chart says the OEX can climb far higher, but it doesn't promise that it will do it in one straight push.

  Jeff Bailey   10/30/20,  9:36:50 AM
Darden Restaurants (DRI) $20.95 +1.2% Link ... upside alert here above 50-day SMA. (per prior bullish profile)

YUM! Brands (YUM) $34.00 +0.23% Link ...

  Linda Piazza   10/30/20,  9:36:39 AM
The first five-minute range of the OEX included a low of 519.63 and a high of 520.99. The midpoint of that range lies at 520.31, and we might be particularly interested in watching how the OEX performs in relationship to that midpoint as well as in relationship to this morning's gap. So far, the OEX remains above the midpoint of that first five-minute range, but the first reversal typically does not begin for a few minutes, so it's too early to draw conclusions.

  Jonathan Levinson   10/30/20,  9:34:00 AM
Jim notes that it is Snow day, with John Snow slated to indulge us with more obfuscation and bluster. The last time he talked up the "strong dollar", it tanked for approx. 1%. Link

  Jeff Bailey   10/30/20,  9:32:42 AM
QLogic (QLGC) $57.65 +1.17% Link .... received an upside alert here at $57. This was a bullish vertical count target dating back to April's bullish profile and spread-triple-top buy signal. Over time however, multiple buy/sell signals currently has the bullish vertical count of $72.

  Linda Piazza   10/30/20,  9:32:09 AM
The OEX does not open as high as I expected--I'm learning that I'm not particularly good at judging where the OEX will open. That opening level did pop the OEX above the descending trendline off the 10/15 high, however, suggesting a climb toward 523-524 at least. Be careful if contemplating a bullish entry, because OEX calls are sure to be inflated this morning.

  Jonathan Levinson   10/30/20,  9:30:57 AM
TRINQ at .38, TICKQ +169 shows extreme buying pressure. If equities don't pullback within the next few minutes, we could be sitting on a tidal wave of buying. But so far, no short covering panic, and the year highs on the futures are intact.

  Jeff Bailey   10/30/20,  9:29:31 AM
Thanks Jonathan (09:27:39) post..... in last night's Wrap, we discussed the possibility of a GDP coming in "hot" like it did, so wanted to closely monitor gold and bonds.

  Jonathan Levinson   10/30/20,  9:27:39 AM
Jeff... live Dec gold futures are currently trading their session low of 385.50, down 1.50 on a dramatic Steve McQueen-180 degree reversal. Bonds are also selling off sharply, ten year treasury futures down 7.6 bps.

  Jeff Bailey   10/30/20,  9:26:07 AM
December Gold Futures (gc03z) 389.60 +0.67% (30-minute delayed) easing off morning high of 392.00 ...

10-year YIELD ($TNX.X) higher by 10.1 bp at 4.376% and session high YIELD here....per last nights Index Trader Wrap.

  Linda Piazza   10/30/20,  9:19:34 AM
Here's what I'm watching on the OEX 60-minute chart this morning: Link With daily 21(3)3 stochastics turning up again and MACD trying to do so, and with the OEX above the midline of its rising regression channel, I'm reluctant to assume that traders will heed the concerns arising from the low VXO and sell into this morning's opening highs. That ascending regression channel shows that the OEX could move up to 528-529 before hitting the top of the channel. Yet Bollinger bands, historical S/R, and 1.35% envelopes surrounding a 60-minute 21-pma hint that resistance could be found between 522.70-524 and between 525-526. Bullish entries remain scary with the VXO hitting historical lows. If the OEX opens near 522.70-524 historical resistance, as seems possible, this would be a scary time for a bullish entry for that reason, too. I don't want to step in front of a speeding bullish train or a speeding bearish one, but would instead like to wait until the early volatility settles to make a decision.

  Jeff Bailey   10/30/20,  9:18:36 AM
09:00 Update at this Link

  Linda Piazza   10/30/20,  8:57:56 AM
For the last two weeks, I've been following hypothetical OEX trades based on the Donchian channel breakout signals I've been testing. Based on that signal, we would have entered a long trade on 10/28 at the close of the 2:30 candle, at OEX 515.90. I've tested two exit systems, but neither would have yet triggered an exit. Last night, ahead of the GDP number this morning, I wasn't sure if that would have been a good thing, but this morning, it appears that it would be, at least at the open this morning. This is supposed to be a somewhat mechanical system, but to be honest, I don't know if I would have had the guts to leave that trade open overnight with yesterday's aimless wandering and the GDP ahead this morning. However, I'm benchmarking the trade as we go along as if it were a mechanical system, seeing how it ends. Last week's hypothetical bearish trade netted 6.77 OEX points, so the system has so far worked well over the last two weeks, but I know from my own backtesting that it doesn't always do so. My future tests will be designed to try to eliminate as many iffy entries as possible.

  Linda Piazza   10/30/20,  7:22:39 AM
Good morning. The Nikkei opened almost forty points below Wednesday's close, dropping through early trading. In the afternoon, it clambered up to breakeven levels, but fell back toward its opening level by the close. The Nikkei closed down 43.66 points or 0.41%, at 10695.56. Ahead of U.S. Treasury Secretary John Snow's testimony before Congress today, the dollar weakened and many exporters declined. Many banks and tech stocks also declined. Hitachi's earnings results disappointed and the company led the declines among tech stocks. Across Asia, many telecoms were weak.

Other Asian bourses were mixed. South Korea's Kospi rose 0.81%. Government figures showed better-than-expected factory production numbers for September, with higher overseas demand for Korean goods being cited as the catalyst for the increased production. Samsung's earnings report showed that the demand for the company's flash memory chips soared as consumers bought digital cameras employing Samsung's product. The Taiwan Weighted gained 0.20% but Singapore's Straits Times lost 0.41%. Hong Kong's Hang Seng gained 0.11% but China's Shanghai Composite lost 1.24%.

European bourses are also mixed ahead of this morning's important U.S. economic numbers. Many telecoms are weak in Europe, too. Investors also noted lower trading revenues at Deutsche Bank, apparently focusing on that number rather than the higher net profits. To balance those worries, the October French business confidence index rose to a higher-than-expected 95, with production expectations, order books, and outlook on foreign orders all improving. As of this writing, the FTSE 100 has gained 17.80 points or 0.42%, to trade at 4283.50. The CAC 40 has lost 3.21 points or 0.10%, to trade at 3363.74. The DAX has gained 5.18 points or 0.14%, to trade at 3620.60. Also perhaps of interest, Russia's Moscow Times is down another 3.21% this morning, trading at 6223.10. Last Friday, the index closed at 7059.23. Stock market losses began earlier this week with the arrest of Russia's richest man, CEO of AO Yukos Oil Co. He was charged with tax evasion and fraud.

  Jeff Bailey   10/29/20,  10:54:53 PM
Attention Dorsey/Wright point and figure chart subsribers ... I'm just noticing a new feature in their "Database" section, which lists by sector, the number of stocks hitting new 52-week highs and lows.

Banks showed 82 new highs and 1 new low (SBIB).

Semiconductors showed 37 new highs and 0 new lows.

Precious Metals showed 9 new highs (ABER, BVN, GG, GSS, IAG, IMPUY, NEM, PAL, PDG) and 0 new lows.

  Jeff Bailey   10/29/20,  10:54:44 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   10/29/20,  10:54:35 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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