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  Jeff Bailey   10/31/20,  4:04:04 PM
Putnam New Opportunities Fund (PNOPX) Link .... According to Morningstar, top 5 holdings are ... PFE, QLGC, INTC, AZO, MSFT

 
 
  Jeff Bailey   10/31/20,  3:59:22 PM
QQQ $35.18 -0.62% ... stopped on day trade long at break even. That was a quick drop into 04:00. Still 15-minutes to go, but looks like everyone left at the 04:00 bell.

 
 
  James Brown   10/31/20,  3:58:14 PM
Does anyone remember a time when we've seen so many reverse head-and-shoulder patterns? I see dozens of them currently.

 
 
  Linda Piazza   10/31/20,  3:58:05 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
10/28: Entered a bullish OEX trade at OEX 515.75.
10/28: Exited at 518.31.
Result for that day: 2.56 OEX points our direction.
10/30: Entered a bearish OEX trade at OEX 518.
10/30: Stopped at 520.
Result for that day: 2.00 OEX points against us.
Results for the week: 0.56 OEX points our direction.

 
 
  Linda Piazza   10/31/20,  3:56:11 PM
Right now, it's 86 degrees here in Dallas, James. The poor kiddos here sweat inside their costumes.

 
 
  Linda Piazza   10/31/20,  3:54:05 PM
What was that? Out of the corner of my eye, I actually caught movement! The OEX five-minute candle is spanning more than a $0.50 range.

 
 
  James Brown   10/31/20,  3:51:46 PM
I hope everyone has fun tonight. It never fails. Every year Halloween turns out to be cold and it's currently snowing here in Denver. That should keep the trick-or-treaters to a minimum.

 
 
  Jane Fox   10/31/20,  3:46:03 PM
Linda, I've already beat you to the micro managing, I started that hours ago. (grin)

 
 
  Jonathan Levinson   10/31/20,  3:38:13 PM
The put to call ratio has made a new intraday high at 1.14.

 
 
  Linda Piazza   10/31/20,  3:37:47 PM
I'm making a conscious attempt not to micromanage today. It's tempting when days are this tight-range to see every blip as a sign of something about to happen. I keep tuning to the nested Keltner bands on the five-minute OEX chart, seeing now they're all aligning, though, showing the current equilibrium. I don't think the OEX can stay in a state of equilibrium forever, but it sure looks as if an effort is being made to keep it and the other indices there through today. I wonder if that effort will be successful over the next twenty minutes, though?

 
 
  Jonathan Levinson   10/31/20,  3:36:22 PM
I'm hearing that teachers pension funds in MA, RI, IA, PA, NY are looking to get out of Putnam- not a bullish development if true. These issues go to the foundations of investor trust in the market. Unlike the analyst antics last year, these matters go more to actual criminal intent. With crooked analysts, it's still the investor who pulls the trigger. Here, they're alleging straight out theft. Not good.

 
 
  Jeff Bailey   10/31/20,  3:14:19 PM
Microsoft (MSFT) $26.24 +0.42% ... afternoon high. Good to see the sleeping giant show a little life late in the day if looking for a QQQ rally to the close.

 
 
  Jeff Bailey   10/31/20,  3:13:10 PM
QQQ $35.33 -0.19% .... if the MARKET is going to run them into the close, this is the trigger.

day trade bull can raise stop to break-even here, and be ready to pull the plug on spike at $35.46.

 
 
  Linda Piazza   10/31/20,  3:12:46 PM
Jeff's 5MRT system validated the range-bound trading for the OEX today, too. The OEX has oscillated around the line drawn through the top of the first five-minute range, never varying far from that, and certainly not far enough to have crossed either the bullish or bearish #2.

 
 
  Jonathan Levinson   10/31/20,  3:11:42 PM
Another 1.1 put to call reading just released.

 
 
  Jonathan Levinson   10/31/20,  3:07:24 PM
Somebody check on Jeff :)

 
 
  James Brown   10/31/20,  3:02:01 PM
Boy, the way those major indices are moving today maybe the markets are celebrating El dia de los Muertos a couple of days early.

Normally the Day of the Dead is honored on Nov. 2nd.

 
 
  Jeff Bailey   10/31/20,  2:59:02 PM
Bond market closed.... QQQ $35.20 -0.5%

 
 
  Jeff Bailey   10/31/20,  2:57:10 PM
QQQ $35.27 ..... on 5-minute chart, sure looks like that 200-PD SMA has been in play as resistance intra-day doesn't it? That's probably the trigger to get some day trade bears to flinch is my thinking here. 2 minutes until bond market closes, and that $35.32 200-pd SMA may be the trigger a bull needs to get a rally going to target.

 
 
  Jeff Bailey   10/31/20,  2:54:07 PM
Bond market closes in 4 minutes. QQQ saw weakness into its close yesterday on bond selling. Will today's bond buying have inverse impact?

 
 
  Linda Piazza   10/31/20,  2:42:47 PM
A 30-minute OEX close over 520.93 would constitute an upside breakout of the (20,2) Donchian channel. The 21(3)3 stochastics are already pinned at levels indicating overbought conditions, meeting one parameter that I noticed was often associated with decent trades on this breakout system. However, ADX is still above 25, a condition that I noticed was sometimes associated with iffy trades. That wasn't always true, however, and I haven't yet been able to run enough tests to accurately correlate ADX values with the success of the trade. My initial impressions might be very wrong.

As I've cautioned before, I'm not trading based on this system--there are far too many false signals to do so now. I'm benchmarking these trades, however, so that we can see how they play out and perhaps hone the parameters to eliminate some of those false signals. In addition, don't assume the OEX is going to close above that channel until it does. I've watched numerous instances when an OEX close above that channel seemed a sure thing and it wasn't. That's why Donchian channels are such a powerful tool. A breakout above them means something.

 
 
  Jonathan Levinson   10/31/20,  2:40:13 PM
The CBOE put to call ratio has dropped to 1.1, and so it appears that the spike to 1.13 is a valid print. The VXO remains low, and so we can guess as to what's behind the sudden spike in the volume of puts over calls. This indicator can be read both ways- a large increase in put speculation is either to be faded as untenably pessistic, or it indicates an early leveraged move ahead of a large perceived downside price risk.

 
 
  Jeff Bailey   10/31/20,  2:35:49 PM
BIX.X / QQQ ... I have BLUE #6 for today's 5-MRT at 331.99, and it may take all of that to get the QQQ back to $35.48.

 
 
  Jeff Bailey   10/31/20,  2:30:31 PM
S&P Banks Index (BIX.X) 331.20 +0.48% ... "that's right baby... get a little rally going...."

QQQ $35.28 ...

Day trader's get "excited" over the smallest of things.

 
 
  Jeff Bailey   10/31/20,  2:27:15 PM
S&P Banks Index (BIX.X) 330.82 +0.37% ... thinking.... "C'mon you buggers, don't leave me hanging in the wind...." (see 14:23:17)

 
 
  Jeff Bailey   10/31/20,  2:24:22 PM
QQQ $35.19 .... should have gotten some fills.

 
 
  Jeff Bailey   10/31/20,  2:23:17 PM
Day trade long .... QQQ at $35.22, stop $35.04, target $35.48.

S&P Banks (BIX.X) 330.96 +0.41% making a session high.

 
 
  Linda Piazza   10/31/20,  2:20:43 PM
Yesterday a reader asked about placing a straddle at yesterday's midrange at about 519. The reader's question was a good one, and the low volatility made options prices lower, so it was a reasonable strategy to consider. I cautioned first that I'm terrible with straddles and second that I was worried about what would happen to those option prices if we had temporarily reached some kind of equilibrium in which those wanting to buy the dips were equally balanced against those taking gains. Today's trading pattern is just the kind of thing that I was afraid might happen. If I were in a straddle, you can be sure I'd have been making all the wrong moves today, probably exacerbating the effects of the premium-sapping inaction today.

 
 
  Jonathan Levinson   10/31/20,  2:14:30 PM
The put to call ratio has spiked to 1.13, either bad data or someone's taking a very large put position ahead of the weekend. VXO remains very low at 17.29.

 
 
  Jeff Bailey   10/31/20,  2:12:30 PM
Autozone (AZO) $96.31 -6.97% Link .... Jeff, There was a press release this am on AZO with a hedge fund sale dropping the price by over 6%. Can you offer any thoughts on the move and its impact overall on AZO.It would seem to me tis might be an opportunity for a reentry into the stock but I am confused as to the impact of the sale.

I see where ESL (the hedge fund) is selling 5.6 million shares, which is about 1/5 of ESL's total position. Hey, who can blame them right? We were bullish at $79, with the bullish vertical count of $90, and all be darned if the stock didn't trade the "90% of stocks that trade $90, trade $100."

I'd like to let AZO sit awhile, but the stock is ripe for a 2:1 stock split. I'd look for a bullish entry back near $91.

In the meantime, how about some seafood or Italian food at one of Darden's (NYSE:DRI) $20.86 -0.57% Link fine dining establishments as it look striking similar to AZO back in July.

Maybe I should give ESL a call and see if they'd be interested in rotating a little cash they've got on hand to some DRI? Have them build an initial position up to $22, then sit a bid back at $19.50, then get a break out going with a triple-top at $23.00.

 
 
  Linda Piazza   10/31/20,  2:08:17 PM
I've found these nested Keltner bands on a five-minute OEX chart particularly helpful in determining short-term support and resistance. You don't need to know much about these bands to glance at them and note where there's a confluence of lines at support and/or resistance or when the OEX is trading in the upper half of the longest-term of the nested channels (bullish) or in the lower half (bearish). Good thing, because I don't know much about them. I'm a one-thing-at-a-time person and right now I'm concentrating on learning as much as I can about Donchian channels, but I keep this chart on my screen all the time, too. Link Right now, the chart is showing me an OEX that's near an equilibrium state, balanced between support and resistance, but we knew that, didn't we?

 
 
  Linda Piazza   10/31/20,  1:57:24 PM
Reader M. reminds me that the sudden decline came right on cue, during the stop-running push I often mention. I was so lulled by the markets today that I didn't note the time. I thought surely it was approaching 4:00 or at least the bond market close at 3:00. Thanks, M. Remembering that this is a known phenomenon and that its purpose is to test support or resistance helps us to interpret what we're seeing.

 
 
  Jeff Bailey   10/31/20,  1:52:46 PM
QQQ $35.13 -0.72% .... did see some trade at $35.10. dat trade bears should have gotten some fills at $35.11.

 
 
  Linda Piazza   10/31/20,  1:50:48 PM
Any time you need the markets to move, just ask me to be immersed in preparing a post about how flat the indicators were and be posting it while the markets did, in fact, move.

 
 
  Linda Piazza   10/31/20,  1:48:47 PM
Could indicators be any flatter? I'm looking at a 60-minute OEX chart with flat MACD, flat momentum, flat RSI and flat CCI. I'm studying 60-minute candles that look smaller than the typical five-minute candle on other days. On a normal day, that might suggest to me that it was time for an explosive move, but I don't know that I'm convinced of that today. I've learned that my initial impression of the market, before the markets actually open, is often better than the in-the-heat-of-the-moment decisions, and I thought today might be one of these uncomfortable, miserable days.

Yet, I was thinking earlier that if I had a strong bias toward the market and had firm stops set and was either long or short the underlying rather than in options with time premium decaying by the minute, I wouldn't be uncomfortable with days like this. Jonathan mentioned a book that he was reading not too long ago that presented a premise like that.

 
 
  Jeff Bailey   10/31/20,  1:48:17 PM
01:00 Update at this Link

 
 
  Linda Piazza   10/31/20,  1:28:27 PM
Total volume as of a few minutes ago was 769 million on the NYSE and 1.1 billion on the Nasdaq, higher than I expected to see, actually. It feels as if we must still be in the 300-million range for each. Adv:dec ratios were 17:14 for the NYSE and 15:16 for the Nasdaq. Up volume was 1.7 times down volume on the NYSE but only barely higher than down volume on the Nasdaq.

 
 
  James Brown   10/31/20,  1:26:09 PM
from the HSY press release:

Top ten things Americans plan to do this Halloween

Purchase candy 77%
Distribute candy 68%
Carve a pumpkin 46%
Decorate their house 44%
Trick or treat with children 35%
Attend a Halloween party 31%
Make Halloween treats 25%
Dress up in a costume 25%
Visit a Halloween attraction 25%
Visit a haunted attraction 21%

Top five ways Americans plan to trick or treat with children this Halloween

In their neighborhood 81%
At a church or community function 33%
At a school event 24%
At a Halloween party 20%
In malls or shopping areas 16%

Top ten treats Americans prefer to hand out for Halloween

Chocolate 73%
Lollipops 47%
Hard candy 38%
Bubble gum 34%
Gummy candy 33%
Sour candy 32%
Raisins 13%
Money 11%
Fruit 11%
Cookies 10%

 
 
  James Brown   10/31/20,  1:24:32 PM
Interesting comments from a Hershey's Foods (HSY) press release:

Halloween isn't just for kids. A recent survey showed that an overwhelming majority of Americans of all ages plan to take part in Halloween festivities this year. A whopping 87% of Americans plan to participate in activities surrounding the fall holiday, making Halloween one of the most significant cultural events of the year, according to a recent survey commissioned by Hershey Foods.

Some people may have trouble deciding on a Halloween costume, but there's no doubt what treat this group prefers. Almost three-quarters of those surveyed - 73% - say chocolate is their preferred treat for avoiding Halloween tricks. Lollipops came in second, followed by hard candy and bubble gum. Gummy candy rounded out the top five treats.

 
 
  Jane Fox   10/31/20,  1:22:50 PM
Anyone look at UPS lately, I know the $TRAN is on an upswing but that stock is ridiculous.

 
 
  Jonathan Levinson   10/31/20,  1:20:55 PM
Augghhhh!

 
 
  Linda Piazza   10/31/20,  1:13:29 PM
Like Jane, I concluded early this morning that this was probably a good day to stay out of the markets. I thought about likely market psychology and although that's not always useful, I thought the thrust of today's trading would be to keep the Dow's head above 9800-level waters headed into the weekend.

 
 
  Linda Piazza   10/31/20,  1:11:09 PM
I'd rather be waiting in that dentist's chair, Jim. (See Jim's 13:02 post.) When I spent a number of hours in her chair last week, I had my choice of CD's and a warm compress behind my neck. Much better than watching the markets today.

 
 
  Jim Brown   10/31/20,  1:09:32 PM
Talk about Microsoft and Google today but very big bite for MSFT. I would not be surprised to see MSFT buying SYMC. I got some advertising from MSFT last week trying to sell Windows XP and Office XP. They were giving away a $69.95 copy of Symantec/Norton anti virus at no cost with each MSFT product. Could be a deal in the making there.

 
 
  James Brown   10/31/20,  12:59:23 PM
Potential put play... Biosite (BSTE) has been fading lower again and looks ready to break through support at the $25 level. Should this occur bears might be able to target a move to the $20 region.

 
 
  Linda Piazza   10/31/20,  12:52:37 PM
The OEX 60-minute 21-pma made a bullish cross of the 100-pma yesterday, but MA crossovers tend to be late. Now the 21-pma has risen to 518.28, and that may provide the first support should the OEX fall. Overhead, 521 is first resistance, of course.

 
 
  Linda Piazza   10/31/20,  12:48:26 PM
The Dow's range has narrowed to 9806-9810 over the last ten minutes.

 
 
  James Brown   10/31/20,  12:48:24 PM
Hitting highs not seen since November of 1999, shares of Zale (ZLC), the jewelry retailer, are up 5.3% after Goldman Sachs upgraded the stock from in-line to "out perform".

 
 
  Jeff Bailey   10/31/20,  12:40:48 PM
QQQ $35.22 -0.48% .... I'm starting on the 01:00 Update, but while I'm gone, will raise bearish target from $35.08 to $35.11 adjust stop to $35.36.

 
 
  Jonathan Levinson   10/31/20,  12:39:42 PM
The put to call ratio is down to .77, VXO 17.19. These VXO readings are at levels where the market appears to me to be begging for put buys. No way to time it, and I could be wrong, but that's how that one looks to me. 17.19? They're partying like it's 1999... 1998, in fact :)

 
 
  Jonathan Levinson   10/31/20,  12:36:31 PM
The US Dollar Index is sporting a sharp move up to 92.66, coinciding with the sudden selloff in metals. Metals have stabilized since, with silver now down 1.64% or 8.4 cents on the day at 5.051. Last night I stopped myself from bidding on a silver contract at 5.13, and am now glad I did.

The lesson I'm beginning to learn is that one takes a position when the market is begging you to do so. Patience is the art of waiting for that moment. At 4.80, I'll look at the charts again, and at 4.40-4.50, I'll back up the truck, but at 5.13 last night, it felt like a gamble. *Not* chasing a move reduces risk for me, though other traders profit from trend following/buying breakouts regularly.

 
 
  James Brown   10/31/20,  12:27:29 PM
Sector Losers:
_____________________
SOX semiconductors: -0.77%
XAL airlines index: -0.82%

 
 
  James Brown   10/31/20,  12:26:32 PM
Sector Winners:
_____________________
OSX oil service index: +2.33%
HMO healthcare index: +2.45%

BTK biotech index: +0.9%
DRG drug index: +0.78%

XBD broker/dealer index: +0.8%

 
 
  Linda Piazza   10/31/20,  12:25:19 PM
If that formation I was seeing on the OEX 60-minute chart, at the top of the rise since the 24th, was a diamond shape, then it has broken to the upside. The break is minimal, however, accompanied by a tall upper shadow for now. That puzzles me a little because when bearish patterns break to the upside, they usually do so explosively as relieved investors realize that their pessimism was misplaced. Something doesn't seem right. We'll see, though.

 
 
  Jeff Bailey   10/31/20,  12:21:03 PM
QQQ $35.28 -0.31% .... Hmmmm..... while there isn't a bank in the bunch, you'd think the banks and the QQQ were mirroring each other in past 15-minutes wouldn't you?

If there's one thing I hate more than anything, is being short when a short-covering rally takes place, which could build to a squeeze.

Day trade bear in QQQ from $35.24 well advised to tighten lower a stop to just above recent intra-day high of $35.33, and really want to see QQQ back below $35.24 here. QQQ just sitting on WEEKLY R1 of $34.27 like a granite perch all of a sudden.

On intra-day QQQ chart, I did place a downward trend from yesterday's 02:25 relative high of $35.84, attached it to today's 10:00 AM EST high of $35.47, and it was just tested as resistance at 12:00 PM EST at $35.33.

 
 
  Jeff Bailey   10/31/20,  12:15:27 PM
S&P Banks Index (BIX.X) 330.80 +0.37% ... session highs here and making way above WEEKLY R2 of 330.06. Current intra-day high is 330.81, smack on DAILY R1 of 330.81. If BIX.X were to make a move above this level, could spark a rally.

 
 
  Jonathan Levinson   10/31/20,  12:15:13 PM
Careful bears: gold and silver are getting abruptly slammed here, which sometimes precedes a flagpole rally as The Ben Bernanke Bid Blasters follow protocol. If so, we can expect an unsubtle vertical move upward in equities. First sign will a break above the highs of the day.

 
 
  Linda Piazza   10/31/20,  12:09:09 PM
I've talked a lot about Donchian channels over the last several weeks because I've been running some tests to see how they perform, but I already know they're a quick and easy way of seeing where next resistance lies. Although I'm using them to pinpoint breakouts, the fact that they're based on the highest high and lowest low during a period means that a quick glance at the channel shows you where resistance and support have been located over the chosen period. So, I know that over the last twenty 30-minute candles, 520.99 has been resistance for the OEX and 516.37 has been support, and I know that with a quick glance and not any kind of exhaustive study. Therefore, although I haven't run any tests on this method, some use the Donchian channels not as a breakout system, but instead trade from one side of the channel to the other. For that purpose, however, my original impression is that it would be better not to use the offset as I've been using it in my backtests when searching for breakouts, but instead to use no offset.

 
 
  Jeff Bailey   10/31/20,  12:02:49 PM
11:00 to 12:00 Internals .....

NYSE ... A/D 1606:1283 and 1685:133, while NH/NL 182:1 and 202:1

NASDAQ ... A/D 1358:1430 and 1444:1482, while NH/NL 180:6 and 201:9

 
 
  James Brown   10/31/20,  11:56:47 AM
Is it too late to buy Red Hat Inc (RHAT) the software company after shares have climbed higher 11 out of the last 12 weeks? Late in July shares hit $6.00 a share. Now they trade at $15.00. Well, First Albany doesn't think so and started RHAT with a "buy" rating this morning. The stock is trading at levels not seen since November of 2000.

 
 
  Jeff Bailey   10/31/20,  11:56:47 AM
Some surprises were found withing today's Chicago PMI (see 11:00 Intraday Update) with gains found in employment and some inflation.

May be why the markets seem to have this underpinning bid today.

 
 
  Jonathan Levinson   10/31/20,  11:56:10 AM
The US Dollar Index is also chopping along, nevertheless holding its gains in the 92.40 area. With a 9 week looking streak to overcome, this week's move is impressive. However, the strength in gold and the CRB are troublesome. It looks like the different markets are waiting for a break to the current deadlock.

 
 
  James Brown   10/31/20,  11:47:17 AM
Henry Schein (HSIC) recently broke out to the upside from a three-month consolidation between $55 and $60 and did it on rising volume. Shares hit a new all-time high this morning after Bank of America started the stock with a "buy" rating. We'd look for a dip and bounce above the $60 mark as an entry point for bullish plays BUT keep in mind that the company is set to announce earnings on Tuesday, Nov 4th. Estimates are for 92 cents.

 
 
  Jonathan Levinson   10/31/20,  11:45:40 AM
The put to call ratio eased to .83, VXO at 17.23. Bonds and gold are holding their gains, and literally nothing on my screen has budged in 30 minutes- the markets are in suspended animation.

 
 
  James Brown   10/31/20,  11:39:42 AM
Cigna Corp (CI), the insurance company, is soaring higher up nearly 17% after its Q3 earnings report. The company announced this morning and beat estimates by 28 cents. Net income came in at $1.39 per share but revenues dropped 6.1% from a year ago and just barely topped analyst estimates for the quarter.

Smith Barney is upgrading the stock on the earnings news from "hold" to "buy" and placed a $61 price target for CI. Currently the stock is approaching its 52-week highs from May & June near $57.50. The surge higher is also breaking out above its P&F bearish resistance near $55.

 
 
  Linda Piazza   10/31/20,  11:39:12 AM
Reader Question:Just noticed open interest in Dec SPX calls for 1125 is whopping 3340! Any comments on that meaning for year end????

Response: Great question. Long ago, I used to diligently watch the block trades on SPX options, setting up an entire Q-chart worksheet for that purpose. Ask Jim: I regularly bombarded him with questions about my observations. However, I never could find a way to use the information effectively for market timing. Are those SPX calls matched by an equal number of puts? Or are they matched by calls at a different strike, perhaps as part of a credit or debit spread? Were they sold at the bid or bought at the ask? Are they matched by November or January calls, perhaps, as part of a calendar spread? There were just too many possibilities. Sometimes I could see the position that was probably entered, but most times I couldn't without an exhaustive survey of other expiration months and other strikes, and even then I had to guess at how the various observations fit together. I know others have felt they benefited from watching block trades, but I haven't.

However, this reader wasn't asking about block trades, but about open interest although I suspect the reader was looking at the volume table instead. Q-charts list current open interest at 25,062, with volume currently at 6,220 but going up quickly as I watched. Volume could conceivably have been 3340 when the email was first written, but the same problems attach themselves to deciphering volume (some of which would be from retail traders and not from the block trades seen by institutional traders).

 
 
  James Brown   10/31/20,  11:28:11 AM
Teva Pharmaceuticals (TEVA) is down 2.5% after announcing plans to buy Sicor (SCRI) for $3.4 billion in cash and stock. TEVA had been consolidating sideways for a couple of months with higher lows and lower highs and this news originally sparked a breakout to the downside but shares have recovered quite a bit.

 
 
  Linda Piazza   10/31/20,  11:22:00 AM
I've been battling to stay connected to Q-charts this morning and then to call up charts once I'm connected. Perhaps some of you have had difficulty, too, but that's the reason behind my slower-than-usual postings. I'm certainly glad not to be in an OEX position this morning with these problems, however. Perhaps it wouldn't have made any difference, though, since the OEX still looks stuck between resistance and support every time I do get a chart.

 
 
  Jim Brown   10/31/20,  11:17:14 AM
LU +.14 on 78 million shares already traded today. Stock is up +36% in eight days to $3.38. Amazing what a return to profitability can do for a stock.

 
 
  Jonathan Levinson   10/31/20,  11:10:12 AM
The put to call ratio has spiked to .89.

 
 
  Jeff Bailey   10/31/20,  11:02:07 AM
Day trade short QQQ here $35.24 (to begin with), stop $35.41, target $35.08.

 
 
  Jane Fox   10/31/20,  10:59:57 AM
Linda, (10:50 post) I just started watching the BETA but apparently Jim has for some time now. But as Jeff so often says, "it is the divergences that give you a heads up." I find the BETA a very intriguing indicator because it follows ES so closely and that makes divergences all the more important.

 
 
  Jeff Bailey   10/31/20,  10:59:50 AM
Jeff: What are your other 4 top tech buys, besides SONE???

That's a trick or treat surprise for this weekend!

 
 
  Linda Piazza   10/31/20,  10:50:39 AM
Jane, instead of Dow theory, perhaps there's a Beta or NQ/ES theory we should be following. (See Jane's 10:45 post on the Futures side.) Instead of the Dow and the TRAN needing to confirm each other, perhaps ES and those indicators do. Many of us options traders are watching your notations on divergences.

 
 
  Jeff Bailey   10/31/20,  10:47:36 AM
QQQ $35.27 -0.35% ... lets back out here on this bounce. (see 10:37:19)

 
 
  Linda Piazza   10/31/20,  10:45:59 AM
The OEX is caught in today's version of the DMZ--between 521 resistance and 515-516 support. Meanwhile, however, there's a slight diamond-ish shape to the OEX pattern at the top of 60-minute rise. Those are usually (at least in classical technical analysis) resolved to the downside, although bearish formations have not typically played out as expected for the last six months. We'll see. Diamond shapes are not often seen, so perhaps I'm misinterpreting what I'm seeing, too, but they're formed first from an orthodox broadening formation (megaphone) that then narrows toward an apex.

 
 
  Jonathan Levinson   10/31/20,  10:38:42 AM
The put to call ratio is up to .62, VXO back down to 17.20. Gold futures made it up to 389.80, with ten year treasury bond futures now up 2.4 bps. Equities look completely oblivious to what the bond and treasury markets seem to be seeing. In fact, we're seeing strength everywhere so far, just like during the spring rally. But volatility is much, much lower now.

 
 
  Jeff Bailey   10/31/20,  10:37:19 AM
QQQ $35.15 -0.6% ... did trade $35.06, did NOT see 5-min close below $35.07, but if stopped out, so be it. For those controlling stops on their own (didn't place a hard stop with broker), let's look to sell strength at break-even back at $35.27.

5-minute Stochs oversold and turning higher from $36.07, so thinking some bounce should be seen.

 
 
  Jeff Bailey   10/31/20,  10:34:11 AM
Shoot! .... S1 Corp. (SONE) $7.93 +25.07% Link .... up big today after reporting quarterly earnings of $0.00, which was 13-cents better than forecast. Reason I say "shoot!" is this is a stock I was going to place in my "top 5" late October tech buys. This per Stock Trader's Almanac notes of "beaten down tech" are good buys in late October.

Stock has been building HUGE base for over a year, and bullish vertical count "was" hinting at $12.75. That's growing further today. I will still keep this one as an "October tech," but wouldn't it have been nice if SONE would have waited until Tuesday to release earnings?

 
 
  Linda Piazza   10/31/20,  10:34:05 AM
That descending trendline off the October 15 high continues to hold back OEX advances. Since yesterday morning, a couple of hourly candle shadows have pierced the trendline, but the OEX keeps falling back from that line. The 60-minute chart now has an inverse H&S look to it (only the left shoulder formed so far), with the previously remarked H&S formation being part of the head of the larger formation. Link When I notice a left-shoulder-and-head, I immediately start watching for the possibility that this type of formation could be in the making. If so, the first thing that hints is that the OEX might fall back now to form either one or two right shoulders, with that right shoulder forming in the 511-512 level. The next thing that tells me is that the OEX might then round up again and retest the trendline. This may or may not happen, but now I'll be watching and alert to the possibility that it could.

 
 
  Linda Piazza   10/31/20,  10:23:04 AM
As of a few minutes ago, volume patterns were positive, but volume remained very light, at 176 million on the NYSE and 329 million the Nasdaq. Even if I had been previously tempted to enter the market--which I hadn't been--that light volume would scare me, especially if considering bullish plays. The volume ratios themselves would worry me if considering bearish plays: adv:dec ratios were 18:9 for the NYSE and 17:10 for the Nasdaq. Up volume was about 2.6 times down volume on the NYSE but a tighter 1.6 times down volume on the Nasdaq.

 
 
  Jonathan Levinson   10/31/20,  10:23:04 AM
INTC, and QQQ and the Nasdaq futures are printing a low of the day, gold a high, now up 4.90 at 389.30.

 
 
  Jeff Bailey   10/31/20,  10:17:11 AM
QQQ here's my intra-day chart with 5-MRT. Also using same chart in last night's Index Trader Wrap. Link

Doesn't look like I'm going to get my target of $36.20 today, and for any sign of strength, really needs to work above $35.48. When I originally profile bullish from $35.27, with STOP at $35.07, I didn't have today's DAILY S1 of $35.07 observation.

What I would look to do for SHORT-TERM trader at this point, is look to take a profit from $35.27 on bounce back above $35.39 today, and monitor to see if QQQ can break above $35.48. If it can, then most likely can get another entry on a pullback, to then target a more achievable $35.77 today. Otherwise, stop can stay just below DAILY S1 of $35.07, but really looks like a quiet session ahead.

 
 
  Linda Piazza   10/31/20,  10:09:53 AM
Just to benchmark what I'm seeing, an OEX close above 520.98 this 30-minute period would constitute an upside breakout on the Donchian channel system I'm watching. I believe we would have exited this week's hypothetical long trade yesterday afternoon on both exit methodologies I've tested, but I can't be sure because the feed was not complete during the time period when we might have been stopped, and also can't be sure of the exact exit point. Neither the 21(3)3 stochastics nor ADX are at levels that correlated to some of the most profitable trades in my preliminary backtests, however, with the stochastics values too low and the ADX too high, so that gives some initial confirmation to my reluctance to go long this morning. The ADX/stochastics levels hint that the trade might be iffy, and that's how I was feeling about it anyway. A 30-minute close over 521 would be a breakout on anyone's system, but with a possible topside of 523-524 before the OEX hit strong resistance, that's an iffy trade at best. Of course, there might not be a 30-minute close over that level anyway, so this might be a moot discussion.

 
 
  Jonathan Levinson   10/31/20,  10:08:34 AM
Opening p/c ratio .55.

 
 
  Jonathan Levinson   10/31/20,  10:00:16 AM
The Fed has added a 2.5B weekend repo, covering the expiring 2.5B from yesterday, no net change.

 
 
  Jeff Bailey   10/31/20,  9:57:11 AM
Question ..... Good morning How do you view the bond market reaction to the GDP numbers?

Bond market looked "happy" or pleased to me. Since we didn't see a sharp sell, not even close to the July/August relative high YIELDS, bond market doesn't see another 7.2% quarter, but most likely more steady growth going forward. I (Jeff Bailey) can't venture a guess at what rate of growth, as I'm not an economist and wouldn't really know where to start.

 
 
  Linda Piazza   10/31/20,  9:54:39 AM
Because we didn't get complete data feeds on the OEX yesterday afternoon, I'm not sure we can yet trust the indicators on five-minute charts.

 
 
  Jonathan Levinson   10/31/20,  9:52:38 AM
Dec gold is up 2.40, silver up .028, with the HUI higher by 1.11 at 216.75, XAU +.54 at 98.14.

 
 
  Linda Piazza   10/31/20,  9:51:37 AM
The OEX is again falling back beneath the descending trendline from the 10/15 high.

 
 
  Linda Piazza   10/31/20,  9:48:01 AM
The OEX has moved back into the congestion zone from yesterday, primed to move up or down or just stay mired at this level most of the day, which is the option that I'm afraid will be chosen.

 
 
  Jonathan Levinson   10/31/20,  9:41:34 AM
Michigan sentiment due in 3 minutes, 89.5 exp.

 
 
  Jonathan Levinson   10/31/20,  9:35:10 AM
GE's printing a high here- it's early in the day, but that sets the tone for the moment.

 
 
  Linda Piazza   10/31/20,  9:34:43 AM
The OEX first five minutes spanned a high of 519.62 and a low of 517.53. I'm somewhat skeptical of that opening number, however, as it's exactly yesterday's closing level and although indices don't gap as often as stocks do, that exact opening just seems somewhat suspicious. The midpoint of that first five-minute range lies at 518.58, a level we should watch in early trading, during the first reversal that usually begins in a few minutes.

 
 
  Linda Piazza   10/31/20,  9:29:10 AM
Let's hope we get a consistent OEX feed today.

 
 
  Linda Piazza   10/31/20,  9:21:26 AM
I can see this weekend's headlines in the newspapers: Biggest GDP Jump in 19 Years, the Market (DJI) Closes 2% Higher on the Week. That's the headline I think some want to see produced this weekend, and all it requires is that the Dow close over 9800. Will that happen? I don't know, but I imagine there will be an effort to make it happen. However, despite the fact that I'm not particularly bearish yet and think the markets have been performing well, I learned back in March 2000 to heed warnings when they occur, and the VXO is screaming a warning. Perhaps that's a Chicken Little warning, but I'm not yet sure and so am wary of initiating new bullish positions today. Perhaps I'll feel differently after a weekend's reflection and study of the markets.

 
 
  Jeff Bailey   10/31/20,  9:19:35 AM
09:00 Update at this Link

 
 
  Jonathan Levinson   10/31/20,  8:51:35 AM
Sept personal speding dropped -.3 pct vs. -.1% expected. The personal income figure beat expectations of a .2 pct increase.

 
 
  Jonathan Levinson   10/31/20,  8:32:29 AM
U.S. Sept personal income rose 0.3 pct

 
 
  Jonathan Levinson   10/31/20,  8:02:43 AM
For those who did not believe the GDP data yesterday, you're not alone. A "stealth" internet poll involving linguistic survey bots characterized the generalized reaction to the data as one of "active disbelief". Note that I cannot vouch for their conclusions, but it's an interesting analysis: Link

 
 
  Linda Piazza   10/31/20,  6:40:31 AM
Good morning. The Nikkei opened flat and climbed for the first half hour, but then dove through the rest of the morning session. It spent the afternoon session in a tight range near the low of the day, closing down 135.97 points or 1.27%, at 10,559.59. That close means that the Nikkei ended the week below its 50-dma, an average it had just reclaimed on Wednesday. The loss was variously attributed to profit-taking after earnings, currency worries, the disappointing performance of U.S. markets yesterday, and disappointing economic numbers in Japan. Although the Bank of Japan raised its estimate for 2003 economic growth in Japan to 2.6% from the previous 2.3%, that good news was balanced by a September unemployment rate that remained at 5.1% and an unexpectedly steep decline in household spending last month. Economists had predicted a decline of 0.5% from the year-ago period, but the release showed a 1.9% decline instead. Reports also circulated that foreigners were net sellers in the Japanese markets, and banks and financials suffered.

Trading was mixed in other Asian bourses, as has been true often lately. The Taiwan Weighted dropped 1.03% and South Korea's Kospi fell 0.46%. Singapore's Straits Times gained 0.49% and Hong Kong's Hang Seng gained 0.38%. China's Shanghai Composite gained 0.27%.

Trading appears cautious in Europe ahead of this morning's U.S. economic numbers. ABN Amro raised its profit forecast and was gaining, but most markets are seeing a broad-based but shallow decline. Currently, the FTSE 100 has lost 16.90 points or 0.39%, to trade at 4284.00. The CAC 40 has lost 28.08 points or 0.83%, to trade at 3359.28. The DAX has lost 6.21 points or 0.17%, to trade at 3633.45.

 
 
  Jeff Bailey   10/30/20,  10:42:06 PM
Dow Industrials Chart (INDU) at this Link

I've place 3 levels of support and 3 levels of resistance in the perspective of a swing trader, that would normally hold a position anywhere from 1 to 3 weeks.

I would deem longer-term investment support from 9,250 to 9,400 and would continue to use the Dow Diamonds (AMEX:DIA) $98.30 point and figure chart's bullish vertical count of $106, equivalent to Dow Industrials 10,600 as the longer-term bullish objective. Traders and investors will remember how in March of this year, the DIA found its March low at the then bearish vertical count objective of $75, and since giving a reversing "buy signal" at $82 and establishing a bullish vertical count to $106, the DIA's point and figure chart has not given a sell signal. For the DIA to give a sell signal, a trade at $92.00 would have to be seen. DIA $92 would be equivalent to Dow Industrials (INDU) 9,200.

INDU PnF chart Link

DIA PnF chart Link

 
 
  Jeff Bailey   10/30/20,  10:08:11 PM
Stock symbol of the day for Friday ... Collegiate Pacific (AMEX:BOO) $8.05 Link

Stock showed up on a stock screen as bullish. The symbol caught my eye.

Company reported quarterly earnings late yesterday. Link

 
 
  Jeff Bailey   10/30/20,  10:04:34 PM
Ouch! Just noticing tonight that Russia's Moscow Times ($MTMS) 5,824.89 -9.41% Link fell 604.83 points on Thursday. Selloff began on Monday, after Russia's Mikhal Khodorkovsky, chief executive of Yukos, was detained by Russian secret service agents on charges of fraud and tax evasion. Link

 
 
  Jeff Bailey   10/30/20,  10:04:25 PM
Market Internals dating back to 09/22/03 at this Link

For a related article, see this Link

 
 
  Jeff Bailey   10/30/20,  10:03:50 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.

 
 
  OI Technical Staff   10/30/20,  10:03:40 PM
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