Option Investor
Printer friendly version
  Jeff Bailey   11/18/20,  8:08:47 PM
December Gold futures (gc03z) $400.00 +0.6% ... trades the $400 level. May be brought on by weakness in Asian markets.

  Jeff Bailey   11/18/20,  7:51:09 PM
Nikkei-225 ($NIKK) 9,714.06 -1.85% Link ... down 182.99 points in early trade. Session low/high so far has been 9,691.19 and 9,804.70, so no change would be seen on the Pnf chart at this point.

  Jeff Bailey   11/18/20,  7:47:24 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   11/18/20,  5:49:48 PM
S&P futures (sp03z) settled 1,032.80. Currenly trade fractionaly lower at 1,032.40 as traders await market openingings in Asia. Here is my fitted retracement chart of the S&P futures, where I have a downside alert set at 1,029.10 to alert me to any negative reaction should Asian markets see overly negative trade to today's dollar weakness. Link

  Jeff Bailey   11/18/20,  4:01:22 PM
Buy/sell program alerts ... time 14.47.41, Sell prog SPX 1036.88

time 14.58.56, buy prog spx 1036

please some explain , which direction is market moniter guiding us thanx

Please read this weekend's Ask the Analyst column at this Link

  Linda Piazza   11/18/20,  3:54:25 PM
No inverse H&S on the five-minute OEX chart. The OEX of course dropped down to the head level again, and now below it as I type.

  Linda Piazza   11/18/20,  3:37:03 PM
There's the possibility of an inverse H&S setting up on the OEX five-minute chart. There's already a left shoulder and head, and the current pullback could be forming the right shoulder. If the OEX should round up from somewhere above 513 and then push above 514.25, the upside target would be somewhere near 516, if I've done my math correctly. All that depends on MOC orders, though.

  Linda Piazza   11/18/20,  3:30:50 PM
The OEX steadied above the 511.75-512.25 next support, but the time for MOC orders approaches. I missed today's entry: no excuses. It would have been a good one, but I just could not convince myself that one touch of the 60-minute averages during the first 30 minutes was all we were going to get. After the OEX dropped an entire point while I was trying to post the next entry--a break of the 50-dma--it was too late to enter. There wasn't enough downside left before next fairly significant support. We will have other entries, however, in the future. I hate missing good plays during opex week, though, because the percentage returns can be so big. Although I don't like to trade front-month options during opex week, I know some of you do, and catching a play as it moves across an option's strike price can be great.

  Linda Piazza   11/18/20,  3:09:54 PM
OEX 511.75-512.25 appear to be next support below this level. Below that, 510 comes next, and then stronger support near 508. I sure hope some of you were quicker on the draw than I was today, and are enjoying your bearish gains.

  Jeff Bailey   11/18/20,  2:58:56 PM
Buy Program .... SPX =1,036 , BIX.X = 326.22

May be correlative to NDX 1,375.14 -1.33% having just traded its WEEKLY S2 of 1,372.40.

  Linda Piazza   11/18/20,  2:54:06 PM
Donchian channel update: Friday, the 2:00 thirty-minute candle closed outside the Donchian channel, triggering a bearish trade if we had been following the Donchian channel breakout system I've been testing. That trade triggered at the close of that 30-minute candle, at 520.61. With one exit type (close above a short-term Donchian channel), that trade would have been exited yesterday when the 15:00 candle closed at 514.97. The gain would have been 5.64 OEX points. The other type of exit, a two-point close above the previous 30-minute close, would have triggered this morning at the first 30-minute candle's close, at 518.47, for a gain of 2.14 points. No new breakout signal has since been given.

This pinpoints the Donchian channels' excellence in catching big moves a few points after that move has begun, but also pinpoints the need to find a better exit strategy. One exit worked relatively well, but that exit doesn't produce the biggest gains, at least in my backtests, frequently stopping plays out too soon.

By the way, the Donchian channels show that 511.75 is likely to be next support, a level I mentioned in a previous post.

  Jeff Bailey   11/18/20,  2:49:24 PM
VeriSign (VRSN) $15.00 -4.2% Link ... getting downside alert here at what I thought yesterday was good bullish entry. Would look to play it safe here with U.S. Dollar getting pounded lower at this point and not take a bullish trade as it would appear sellers are getting a little more aggressive with stocks.

Stock still bullish longer-term, with first sign of weakness at $13.50.

  Jeff Bailey   11/18/20,  2:47:21 PM
Sell Program ... SPX= 1,036.88 , BIX.X = 326.16,

  James Brown   11/18/20,  2:27:48 PM
Back to the Future? Or Party like it's 1999? Pick your cliche 80's title but the National Retail Federation is saying that some of this year's hottest toys will be a blast from the past. Remember the Care Bears? My Little Pony? Hits from the 80's. Remember Hot Wheels Cars? A hit from the 70's. Then there is the perennial Barbie.

The NRF expects this holiday season to be the best year for retailers since 1999. The November/December shopping season is expected to bring in $217 billion, up 5.7% from last year. Many retailers can bring in half their annual sales just in the November-December time frame. (source: CNN)

  Jeff Bailey   11/18/20,  2:27:24 PM
S&P Banks Index (BIX.X) 326.46 -0.82% ... did get an alert at WEEKLY S2 of 326.35, when session low of 326.34 was just traded.

For a day trade bear in the major indices, you may want to monitor the BIX.X if a trade you are holding intra-day reaches its WEEKLY S2, if BIX.X is just sitting right here at its WEEKLY S2. Might mark a session low.

  Jeff Bailey   11/18/20,  2:23:54 PM
Amgen (AMGN) $59.25 -1.15% ... will cancel day trade short from $59.97 profiled entry.

  Linda Piazza   11/18/20,  2:19:26 PM
Remember last week when I posted a chart showing how the OEX had behaved in a progressively weaker fashion each time it tested the 60-minute 100/130-pma's? I had suggested that I didn't expect it to bounce from the next test of those averages. Here's what happened: Link We can remember this sort of behavior for future reference.

  Jeff Bailey   11/18/20,  2:15:23 PM
S&P Banks Index (BIX.X) 326.51 -0.81% ... on the alert here. While BIX.X should find some technical support at the 325.00 level, may not be too many computers set for buying some regional bank stocks until 322, if BIX.X breaks much below 326. Here's BIX.X chart with WEEKLY/MONTHLY pivot analysis retracement. Link

  Linda Piazza   11/18/20,  2:10:16 PM
OEX 511.75-513 looks like a possible bounce zone for the OEX.

  Linda Piazza   11/18/20,  2:05:41 PM
Based on this chart, it looks as if OEX 501-502 could be an eventual target: Link I wouldn't count on that happening on one straight shot, however.

  Linda Piazza   11/18/20,  2:01:10 PM
Well, at least we now know the correct interpretation for the falling wedge vs. symmetrical triangle question on the OEX: Link Today was not my finest in terms of trading abilities, as I always intended an entry on a rollover, but just didn't get it done soon enough. I was typing the entry as the OEX began falling out of the bear flag, but once it began falling, the fall happened too quickly. The 30-minute chart had only then begun to show some of the characteristics I wanted to see before considering an entry.

  Jeff Bailey   11/18/20,  1:54:39 PM
S&P 500 Index (SPX.X) 1,039.92 -0.35% .... was and am monitoring for a sell program premium alert back near this level. I saw where the $PREM.X fell to -$1.37, but not quite the -$1.38 to generate a sell program alert.

I'm just noticing now that the sell program alert noted earlier, which came at SPX 1,043.44, might tie in with today's DAILY Pivot of 1,043.09.

  Linda Piazza   11/18/20,  1:48:46 PM
I've waited too late. I should have entered at the break below the 50-dma, which I was trying to do, but by the time I could get the post prepared, the OEX had plunged a point.

  Jonathan Levinson   11/18/20,  1:44:23 PM
The CBOE has not corrected that 2.89 print, but the most recent reading is .78.

  Linda Piazza   11/18/20,  1:42:53 PM
The OEX now tests the bottom boundary of the falling wedge I depicted in my 12:57 post. If it falls through here, we may be entering a bearish play, but I'd like to see one more push higher first.

  Linda Piazza   11/18/20,  1:37:56 PM
The OEX has been clinging to its 50-dma, currently at 516.17, but was turned back by the resistance near 519. I thought we might get one more attempt at either the 517 or 519 levels before the OEX rolled over with that rollover perhaps not taking place until tomorrow, but I'm not sure if that's going to happen now. I've been watching 30-minute MACD, RSI, and momentum, wanting to see MACD flatten (happening) and then roll down into a bearish cross (not yet happening), RSI flatten (happening) and then begin to tip over (not yet happening), and momentum flattening (not happening--it's still headed up) and then rolling over. We may need to consider a bearish entry soon.

  James Brown   11/18/20,  1:30:50 PM
Afternoon Sector Winners & Losers:

XAU gold & silver index: +3.6%
DJUHSB homebuilders: +1.93%
DRG drug index: +0.63%

INX internet index: -0.54%
GSO software index: -0.93%
BTK biotech index: -1.10%

  Linda Piazza   11/18/20,  1:30:11 PM
The OEX has remained within the neutral zone of the 5MRT system all day today.

  Linda Piazza   11/18/20,  1:23:16 PM
Here's an alternative interpretation of the OEX three-minute chart, different than the one portrayed in my 12:57 post: Link This portrays a more bearish outlook.

  Linda Piazza   11/18/20,  1:16:05 PM
We're approaching that stop-running time of day, so be careful. On the OEX, I'll be watching particularly closely if 517.50 is approached, as that's the descending trendline off today's highs. A move above that will be an upside break of the falling wedge, which might portend a retest of the day's high and the 519 zone. A rollover there might be the last hurrah.

  Jonathan Levinson   11/18/20,  1:09:32 PM
Bad data from the CBOE, from the looks of it: put to call ratio 2.89 for the past half hour? I'll wait to see if it's corrected.

  James Brown   11/18/20,  1:08:52 PM
Biotech/drug developer MedIummune (MEDI) offered an earnings warning before the bell today. Q4 estimates had been 46 cents. The company now sees 28 to 36 cents per share. The disappointment comes on lower than expected FluMist sales. Deutsche Securities has cut MEDI to a "sell" and lowered their price target from $31 to $15. Shares of MEDI are down 4.5%.

  Jonathan Levinson   11/18/20,  1:06:06 PM
The US Dollar Index is down to 90.65, Dec gold up 7.10 to 398.60 and HUI +9.35 to 231.21. Bonds and equities are still just south of positive. The divergence between gold and the mining stocks is telling, and I'm inclined to follow the larger capitalization of the HUI and XAU to confirm the dollar weakness. I don't see equities rallying with this kind of intermarket situation playing out, but options expiration continues to distort price action, which seems to me to be the cause of the listless trading in the indices so far today.

  Linda Piazza   11/18/20,  1:02:52 PM
Hmm. I hadn't noticed until I read Jim's 12:50 post on the futures side that the Dow had made equal lows while the OEX was making lower lows. The NDX also made lower five-minute lows, with the OEX often following an NDX pattern more closely than a Dow pattern. Today, the OEX seems a mixture of the two, producing its own separate (falling wedge) pattern.

  James Brown   11/18/20,  1:00:33 PM
Shares of Adobe Systems (ADBE) had fallen from $46 to $40 in the last week and a half with yesterday's session trading in a very narrow range between 40.00 and 40.50. This morning the stock got a bounce to 41.55 when SoundView started coverage with an "out perform". Unfortunately, the bounce is already failing and the stock is trading at its lows for the day. Bears might want to watch for a breakdown under the $40 mark. It's P&F chart shows support near $35 and this would coincide with its simple 200-dma.

  Linda Piazza   11/18/20,  12:57:46 PM
Here's something that keeps bothering me about the OEX three-minute chart: Link I'm expecting a rollover, but I keep watching this formation as it sets up, wondering if it's possible the OEX is going to break to the upside, as this formation hints that it could do.

  Jeff Bailey   11/18/20,  12:56:22 PM
Pacholder High YIELD Fund (NYSE:PHF) $9.07 +0.4% ... Upside alert set here at new 52-week high.

Discussed in prior months that "junk bonds" should do well in recovering economy and backdrop of lower interest rates. Today's 52-week high may be on heels of Fed comments that inflation not a factor at this point to influence rate hikes.

  James Brown   11/18/20,  12:46:21 PM
As a follow up to the CTX comment traders might notice that the DJUSHB homebuilding index is up nearly 2% and second only to the XAU gold & silver index (+2.82%) for today's biggest gainer.

  Jonathan Levinson   11/18/20,  12:45:13 PM
No pullback in mining shares, with HUI up 8.15 to 230.01, XAU +2.83 at 102.85. Congratulations goldbugs! Dec gold is currently up 5.50 at 397, silver up .14 at 5.367.

  James Brown   11/18/20,  12:44:29 PM
High-flying homebuilder Centex Corp (CTX) is hitting yet another all-time high after announcing a 2-for-1 stock split and higher dividend. The company announced the split this morning and said they would keep their 16 cent cash dividend unchanged but will pay it on a post-split basis (effectively doubling it). The dividend and stock split are subject to shareholder approval to be voted on sometime in the next four months.

  James Brown   11/18/20,  12:36:23 PM
One of the big percentage losers today is Jo-Ann Stores (JAS). The company announced earnings last night of 54 cents. This beat the estimate by 2 cents but the company guided lower going forward. This morning has been a parade of downgrades and the stock gapped lower. Currently JAS is down 17.26% and hovering above the $20.00 mark.

  Jonathan Levinson   11/18/20,  12:21:03 PM
The put to call ratio is up to .72, VXO 18.70. This is beginning to feel like classic opex action as we chase the price going net nowhere.

  Linda Piazza   11/18/20,  12:16:52 PM
The OEX broke slightly below the previous five-minute low, which means either that the OEX is setting up a possible bull flag (pattern of lower highs and lower lows after a steep climb) or that it's doing just what it looks like it's doing--rolling over after testing the important overhead resistance. I've been somewhat confused by the still-rising 30-minute momentum, the time of day (not the usual time to see a big move), and the still-bullish adv:dec ratios, but this doesn't look like a typical bull flag, either. A typical flag moves in a tight pattern in relationship to the move that preceded it, and this isn't a tight pattern of lower highs and lower lows, but a rather wide one in relationship to the move that preceded it. It still doesn't quite feel like the time to enter a bearish play, instead feeling like the OEX may be squiggling around a while longer before it finally rolls over, but I could be really wrong.

  James Brown   11/18/20,  12:14:24 PM
Yahoo! Inc (YHOO) is developing into a tempting bearish trade candidate. The stock faltered yesterday on very strong volume after MSFT announced at Comdex it was developing its own search technology. This sent the entire Internet sector lower and the INX broke its simple 50-dma. Yesterday, YHOO traded below its 50-dma but managed to close above it and the round-number $40 support-resistance level by the closing bell. Today it may not be so lucky. The stock is falling again and is back under its 50-dma and the $40 mark.

It's P&F chart is also showing a fresh "bullish signal reversed" and a new double-bottom sell signal.

  Jeff Bailey   11/18/20,  12:14:23 PM
Index Trader Wrap .... bearish profile for an SPX December 1,040 put (SPQXH) bid/offer $18.70 x $19.30. Those that trade stops can place stop above at 1,055, target 1,015 into next week.

Target would be between our MONTHLY 61.8% retracement of 1,019.84 and MONTHLY S1 of 1,013.19.

Would look to control trade by LOWERING a stop to 1,040, IF SPX trades the 1,033 area, which is MONTHLY Pivot.

  Jeff Bailey   11/18/20,  12:10:46 PM
S&P Banks Index (BIX.X) 327.67 -0.46% ... has really been flat to lower the entire session and for the first time since late September, threatens to close below its rising 21-day SMA.

As it relates to OEX/SPX, the BIX.X WEEKLY S2 of 326.35 become a more important level of support near-term, and if broken to the downside, could bring a more notable wash lower for the major indices.

Yesterday, the OEX 516.28 (unch) did see trade at its WEEKLY S2 of 512.02, but got nice bounce. My thinking here is if BIX.X breaks below yesterday's low of 327.06, could be an intra-day negative trigger for broader market selling.

Combine that observation with the U.S. Dollar Index (dx00y) 90.80 -0.78% and potential negative carry over into tomorrow's Nikkei-225 trade, and bulls should be more cautious.

  Jeff Bailey   11/18/20,  11:51:37 AM
Sell Program ... SPX 1,043.44

Will note that yesterday's first buy program, which looked to really get a move going higher near the close, came at 1,040.00, so would simply use the above alert as an alert to some positioning going on.

  Linda Piazza   11/18/20,  11:51:04 AM
We have a lower high on the OEX five-minute chart. Will we now have a higher low as the OEX approaches 516.50 possible support?

  Linda Piazza   11/18/20,  11:37:35 AM
Although I'm an OEX trader primarily, I like to watch what's happening underneath the index prices. I often scan charts to see what's going on, even if I'm not often trading individual stocks. Today, as I'm scanning charts, I'm somewhat surprised to be seeing a lot of tech charts with the recent pullbacks looking a lot like the pullbacks in September and October--bull flag pullbacks in those cases. CY, QCOM, and QLGC are only a few of the examples I happened across just pulling up random stocks. In those previous pullbacks, indicators had turned down, too. Is it possible these stocks and others could just be engaging in a normal pullback and that they could try for new highs again? That possibility can't be ruled out from the performance of these stocks, I was surprised to find. A lot will depend on how the current patterns are resolved. Isn't that the way it always goes, though?

  Linda Piazza   11/18/20,  11:25:40 AM
Good thing I didn't trust that early test of the 30-minute and 60-minute 100/130-pma's because we may be getting another one. The OEX broke through resistance near 517.50 and now heads up to test the previous day's high and then those averages again. For reference, the 30-minute 100 and 130-pma's are at 519.25 and 519.36, closely grouped just over 519. The 60-minute 100, 130, and 21-pma's are at 519.18, 518.91, and 518.74, also closely grouped near 519. If the OEX makes it over all those grouped averages, it's stronger than we imagined, but I wouldn't rule out a false breakout above those averages. In fact, I wouldn't rule out anything at this point, but am just watching for a rollover after a more prolonged test.

  Jonathan Levinson   11/18/20,  11:10:35 AM
Bonds are almost back to unchanged, gold and silver holding their gains but not breaking out, despite the ongoing weakness in the US Dollar Index. HUI is up 7.05 at 228.91, however, with XAU up 2.64 at 102.66. The CRB is up 1.51 as well. Equities are really up in the air here, with cycles in different timeframes battling each other, resulting in uncertain chop so far. This could conceiveably continue all the way into opex Friday, although such would surprise me.

  Linda Piazza   11/18/20,  11:06:14 AM
OEX 517.50 did hold as resistance, at least on the just-concluded test. OEX 515.80-516 is now firming up as possible support, with the OEX perhaps settling into a kind of equilibrium until either the bears or the bulls overcome the opposite side.

  Jeff Bailey   11/18/20,  11:05:46 AM
Redbook chain-store sales index showed a -2.9% month-to-date decline from October. The mid-month reading is only half the picture for November, given Redbook's month-to-date reading of November 15.

S&P Retail Index (RLX.X) 374.02 -0.09% did reverse earlier gains from 379 on this report.

  Linda Piazza   11/18/20,  10:57:41 AM
OEX 517.50 or so looks like a fairly significant resistance level now, so I'll be watching to see if the OEX can break over that level or whether it rounds down at that point, forming a lower high. I'm going to be cautious about bearish positions with adv:dec ratios at 18:11 for the NYSE and 16:11 for the Nasdaq, as of a few minutes ago, though.

  Jeff Bailey   11/18/20,  10:57:17 AM
AMGN and QQQ .... day trader's note that QQQ $34.62 -0.14% session low of $34.54 has been slightly below WEEKLY R1 of $34.59, which most likely becomes correlative with AMGN session low of $59.34.

Will keep bearish day trade AMGN profile open, but for those that can monitor AMGN trade, may look for AMGN to rally back to $59.97, look for some intra-day consolidation there, before implementing the short. AMGN $59.71 here.

  Jeff Bailey   11/18/20,  10:47:08 AM
Longs Drug (LDG) $23.80 +8.81% Link ... stock higher on rumor that company is takeover target. Soloman Smith Barney saying take profits as company is not in play.

I would note that LDG has recently achieved its bullish vertical count of $22.00 and if long the stock, would tend to agree with Soloman and look to book some gains with stock having achieved a bullish vertical count.

  Jeff Bailey   11/18/20,  10:45:24 AM
U.S. Dollar Index (dx00y) 90.80 -0.8% .... session lows and looks to be dragging stocks along for ride.

  Linda Piazza   11/18/20,  10:44:38 AM
As the Dow tests 9700 (falling minimally below it now), the OEX tests its 50-dma, currently at 516.17.

  Jonathan Levinson   11/18/20,  10:44:11 AM
The put to call ratio has risen to .61, VXO +.02 at 18.84.

  Jeff Bailey   11/18/20,  10:41:25 AM
Amgen (AMGN) $59.50 -0.73% .... Day trade short on trade back higher at $59.97, stop $60.65, target $58.30.

  Linda Piazza   11/18/20,  10:40:08 AM
Dow 9700 being tested now.

  Linda Piazza   11/18/20,  10:39:05 AM
Maybe that single touch of the overhead averages was it? If so, I've missed an ideal entry, but I just didn't trust that single touch as being the only test of those overhead averages.

  Jeff Bailey   11/18/20,  10:24:30 AM
Autozone (AZO) $90.83 -0.05% Link .... stock is on my list for a pullback entry to $86.00 level, where I then look for the stock to begin a bounce back higher, with potential catalyst being a 2:1 stock split. Nice retracement on this one from the February lows of $58.21 to recent all-time high of $103.53. Reason I think this is we were bullish the point and figure chart at $77, and can really see now how this retracement may have been in play as stock firmed at the 61.8% retracement of $75.52, moved above 50% at $80.87 on 07/28/03 to $82.97 in strong fashion, then came back to test the 50% at $80.87, before rocketing higher to the then bullish vertical count target of $90.

Should AZO announce a 2:1 split, I could view the stock on a post split basis on the PnF chart, by changing the box size to 2. Like this Link

  Jonathan Levinson   11/18/20,  10:20:29 AM
The US Dollar Index is currently 90.77, right at support. A break of current levels and the last gasp at 90.00 will be in play.

  Linda Piazza   11/18/20,  10:19:47 AM
Adv:dec ratios were bullish as of a few minutes ago, at 20:8 on the NYSE and 18:8 on the Nasdaq. Up volume was ahead of down volume, too, by a hefty percentage on both. Total volume was 143 million on the NYSE and 296 million on the Nasdaq. New highs numbered 141 and new lows only 9.

  Jonathan Levinson   11/18/20,  10:13:20 AM
The 1st half hour's put to call ratio was .53, too low for bulls' comfort. The VXO has pulled back to 18.82. Bonds are recovering and metals advancing.

  Jeff Bailey   11/18/20,  10:12:30 AM
Netease (NTES) $42.21 +4.18% ... noticing 1,000 contracts traded in the November $40 puts (NQGWH) and has me thinking a naked put seller selling $0.55 premium at the $40 strike into Friday's expiration.

Not a bad trade in my opinion.

  Linda Piazza   11/18/20,  10:08:32 AM
If this is the big rollover beginning and if that single touch of the important overhead averages is it, then I'm flat-out going to miss the entry because I don't trust it yet. If you do, feel free to enter a bearish position, perhaps setting a stop just above 521, but I'm not going to be doing that yet. I'd rather miss the entry than risk enduring hours or days while those averages are tested before finding out I'm on the wrong side of a trade.

  Linda Piazza   11/18/20,  10:02:07 AM
Here's what the OEX is up against right now: Link Although the OEX could just rebound from this resistance, heading down again, I halfway expect it to spend some hours testing this resistance before giving up. If that's true, we don't want to be sitting in puts all those hours, so let's watch carefully. We also don't want to let a rollover get away from us, but I'm really worried about a false breakdown and then push higher. There's still too much oversold pressure in the intraday charts.

  Jeff Bailey   11/18/20,  9:59:56 AM
Cendant (CD) $21.48 +1.99% Link ... this morning's trade at $21.54 was a penny above its July 2001 relative high of $21.53. Bulls long from $17.50-$18.00 should be raising stops to $19.45 at a minimu. I've had a fitted retracement on CD from $21.53 to $11.03. This has 61.8% at $17.51 and 80.9% at $19.52.

  Jonathan Levinson   11/18/20,  9:58:38 AM
Bonds are weak, gold and equities are strong, with Dec gold up 2.90 at 394.40, silver up 6.3 cents or 1.21%, HUI +3.28 at 225.14.

  Jonathan Levinson   11/18/20,  9:52:29 AM
The fed has announced a 4.75B overnight repo, for a 7.25B net drain against the 12B expiring.

  Linda Piazza   11/18/20,  9:50:47 AM
So far, the OEX has held above the 517.32 midpoint of the first five-minute range. The early retracement period has only just begun, however, and could continue another 15 or 20 minutes, but so far, it's looking as if a continued test of 519-521 could be in order today. I wouldn't bet yet on the OEX moving any higher than that, although it's of course possible. I'm not betting with my money on a call play, though. If the OEX does push above that resistance zone, I'll be forced to reconsider.

With the OEX holding above that midpoint, I'm not ready to bet on a rollover yet, either. We'll see, but so far, the "testing overhead resistance" thesis still seems in effect.

  Jeff Bailey   11/18/20,  9:44:26 AM
QQQ $34.86 +0.54% ... very tight/small first 5-minute bar has RED #6 lower at $34.66, which would be a backfill of this morning's gap higher. Might look for QQQ to fill this gap in first couple of hours of trade, then work its way back higher above $35.00 by the close.

  Linda Piazza   11/18/20,  9:40:19 AM
As the OEX rises to test both the 30-minute 100/130-pma's and their 60-minute counterparts (all between 518.92 and 519.43), MACD moves up on both chart, along with momentum, RSI, and CCI. MACD moves up from below signal, however, although the histograms are now positive. CCI remains red on both, and momentum remains below zero on both. I'd like to wait for at least a flattening in the MACD today before I draw any conclusions about a possible rollover occurring, but soon the OEX will move into a zone from which that rollover might eventually occur.

  Jeff Bailey   11/18/20,  9:36:34 AM
Home Depot (HD) $36.45 +2.9% Link ... Dow component higher after reporting Q3 (October) EPS of $0.50, which was $0.04 better than consensus estimates. HD said revenues rose 14.7% year-over-year to $16.6 billion versus the $16.2 billion consensus. HD reiterated its annual sales growth objective and guidance of 9% to 12% and raised its full year EPS growth guidance to 15%-17% for fiscal 2003 from 9%-14%. HD noted comparable store sales increased 7.8%, the company's best quarterly comp performance since Q4 of 1999.

  Linda Piazza   11/18/20,  9:34:32 AM
The OEX first five minutes hit a high of 518.35 and a low of 516.29, with a midpoint at 517.32. The OEX currently trades above that midpoint, indicating strength in earliest trading, but we should get more reliable indicators after the first reversal that usually begins in a few minutes. That midpoint lies right at historical S/R, so its importance is validated.

  Linda Piazza   11/18/20,  9:27:42 AM
Yesterday's trading produced an OEX candle that sprang up, with the OEX closing only cents above its 50-dma. The OEX is now below the 60-minute 100/130-pma's and in the bottom half of the ascending regression channel that has been in place since May. That spring means there's the possibility that the OEX could be setting up a higher low, but for now, the other conditions mean we're looking for opportunities to enter bearish positions on failed rallies. Yesterday afternoon, the OEX reached one resistance zone, from about 516.70-517.25, but closed slightly below that zone. Another, stronger resistance zone begins just above 519 and extends up to 521. I'm not sure which zone will stop the OEX (of course, I could be wrong in the idea that either will stop it), but we'll be watching. I suspect today might be a day that sets up a play for the rest of the week rather than a day in which we actually enter a play, but I could be wrong there, too.

Why not play the upside? There may not be that much upside. We tried it yesterday and were stopped out about a point before the turnaround. One phenomenon that's staying my hand, too, is that calls lose value quickly when they go out of the money, more quickly than do puts. That's of special concern during opex week, when all options are going to be losing time premium quickly. If we're on the wrong side of a call play, we're going to suffer more than if we're on the wrong side of a put play.

I'm expecting to be called away from the computer for about ten minutes sometime during the first hour of trading, so if you see a rollover occurring, feel free to enter without me. Just be careful about drawing conclusions too soon, as we've all seen a lot of false moves lately.

  Jeff Bailey   11/18/20,  9:20:44 AM
09:00 Update posted at this Link

  Jonathan Levinson   11/18/20,  8:58:09 AM
The Fed has a 12B overnight repo expiring today. We await the announcement at 10AM.

  Jonathan Levinson   11/18/20,  8:28:44 AM
CPI unchanged, 0%.

  Jonathan Levinson   11/18/20,  8:20:10 AM
Awaiting the CPI at 8:30, expectation of .1%, with the core CPI expected at .1% as well.

  Linda Piazza   11/18/20,  7:21:21 AM
Good morning. The Nikkei opened near the flat line in Tuesday’s trading, but early trading was volatile. The Nikkei fell to its day’s low, then climbed, then fell again early in the afternoon session. This time the low was a higher low, and the Nikkei climbed into the close. The Nikkei closed up 110.22 points or 1.13%, at 9897.05. Exporters again declined in early trading, but some electronics or computer-related stocks climbed even during that earlier, volatile trading. By the end of the day, recently pummeled Internet and banking stocks had benefited from dip-buying. Two major drugmakers announced that they were in talks to merge, with excitement over the deal credited with driving the Nikkei higher, although it was perhaps also just time for a bounce to relieve oversold pressure after the recent deep losses. The dollar had also inched up against the yen. Automakers did not participate in the recovery, however, closing lower.

Elsewhere in Asia, the Chinese government decided to allow Hong Kong banks to conduct personal yuan services, offering yuan deposits and foreign exchange services, for example. The move was meant to better meld the Chinese and Hong Kong economies, some stated, as well as to relieve pressure on the yuan. The policy change will occur January 1. The decision helped Hong Kong’s Hang Seng post a 0.25% gain, but China’s Shanghai Composite was still one of the region’s declining bourses, losing 0.87%. The Taiwan Weighted lost 0.22%, but South Korea’s Kospi gained 0.82%. Singapore’s Straits Times gained 0.60%.

European markets are mixed, although the markets we watch most frequently in this forum were all making small gains as this report was prepared. Vodafone (VOD) reported first half earnings that included increased revenue and profit that climbed, and said it would increase its dividend and enact a share buyback program. The company did say that it expects the next half’s margins to be lower, but the stock surged in early trading, carrying related stocks higher, too. Takeover talks drove German banks higher, with rumors circulating that a U.S. bidder was seeking shares of Commerzbank. Telecoms rose throughout Europe after Vodafone’s results. Mostly, bourses across the world were relieved to see the steadying in the overnight markets.

As of this writing, the FTSE 100 had gained 18 points or 0.41%, to trade at 4396.90. The CAC 40 had gained 11.13 points or 0.33%, to trade at 3370.43. The DAX had gained 23.29 points or 0.63%, to trade at 3697.83.

  Jeff Bailey   11/17/20,  11:58:08 PM
Pivot Matrix for tomorrow at this Link

  OI Technical Staff   11/17/20,  11:58:00 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

  Jeff Bailey   11/17/20,  11:57:53 PM
Nikkei-225 ($NIKK) 9,836.81 +0.51% Link


Market Monitor Archives