Option Investor
Printer friendly version
  Linda Piazza   11/21/20,  3:58:08 PM
Swing Trade Summary: OEX/SPX/DJX/DIA/SPY
This was not a great week for my Swing Trades, but the two entries I did not make (one because it happened so quickly I wasn't able to get the post entered before the OEX had dived significantly and one because of server problems) would have more than countered these losses. I'm not sure that next week will present great trading opportunities, either, but instead may be a week that sets us up for the great opportunities that will come the following week. I expect next week to be one in which upside resistance is tested and established, but let's see what develops.
11/17: Entered a bullish OEX trade at OEX 514.49.
11/17: Stopped at 512.75.
Result for that day: 1.74 OEX points against our position.
11/19: Entered a bearish OEX trade at OEX 514.98.
11/19: Stopped at 517.50.
Result for that day: 2.52 OEX points against our position.
Results for the week: 4.26 OEX points against our position.

  Linda Piazza   11/21/20,  3:44:50 PM
When I discussed Panera Bread (PNRA) earlier today, it was testing its 200-dma, but I said that I thought this was probably a point from which it would bounce. It sure did, moving up to 38.57 as I type. It doesn't hurt that the CEO was on CNBC (after I wrote about it), but it was ready to bounce up and test the neckline of its recently confirmed H&S. I suspect there's a day or two more of testing that overhead resistance before it finally decides whether it's rolling over or popping back through that violated H&S neckline.

  Linda Piazza   11/21/20,  3:28:25 PM
In reference to Jonathan's 15:22 post (perhaps on the futures side), I use two stochastics settings. The 5(3)3 setting is twitchier, showing when the market "wants" to go a certain direction, alerting me sooner. Of course, that means you get false signals that way, so I combine that with a longer setting. That way, the shorter one warns me when my position might be at risk or whether I ought to prepare to enter a position, and the longer one gives me more reliable information. However, although previous to this year MACD had never been one of my favorite indicators and stochastics were, MACD has been much more reliable than stochastics this year. That and Fib retracement levels. You have to keep flexible, as I'm sure Jonathan would agree, because markets change. I agree with Jonathan's assessment that, whatever you use, it's important that you know its strengths and shortcomings.

  James Brown   11/21/20,  3:26:21 PM
Phelps Dodge (PD) still looks weak after breaking the $60 level yesterday. A retest of its simple 50-dma could be a good bet.

  James Brown   11/21/20,  3:24:57 PM
Today's loss in MRK is worth $7 billion in market cap.

Today's cancelled drug is the 2nd in two weeks. Their pipeline of 5 big potential winners has just shrunk to 3.

  Jonathan Levinson   11/21/20,  3:22:06 PM
I notice on all your charts, MM entries, etc that your Stochastic settings are 10,10. I use 5,3. I would prefer to hold a position for a few days rather than intra-day. Would 10,10 or 10,5 give a smoother trend??. I know it would take longer for Stochastics to move between over bought/sold. Your thoughts would be appreciated. Rich R

Combined with the different timeframes I watch, these settings are the "kung-fu" to my system. 10(10) is a hybrid of slow/fast stochastics offered through Prophet on Quotetracker. These settings applied to the timeframes I watch measure cycles in those timeframes, and I use my intraday tick charts to refine/refute those signals. On the intradays, I use 26-3-18 and 52-3-30, and wait for them to all line up. The Macd is a standard 12,26,9, and I use the histogram to measure the "wavelets" within the stochastic cycle on that short timeframe. The nightly futures wraps follow these closely. It doesn't much matter what you use, as long as you use it consistently and can meaningfully trust the signals with an acceptable margin of risk. These settings have become pretty steady for me- now, if only the market would cooperate :)

  James Brown   11/21/20,  3:20:07 PM
The 3:15 PM ET update: Link

  Linda Piazza   11/21/20,  3:10:59 PM
As the OEX has been declining, the 1.35% envelope surrounding the 30-minute 21-pma has been rounding down, too. That means two things: any attempts to rise will face the resistance offered by the 21-pma, currently at 513.39, all that much sooner; and if the OEX should break through today's low, the envelope now slopes down all the way to 506.46, offering more potential for downside. I still think it's risky this late on an opex Friday to enter a position on that breakdown, if it should occur, however, especially if using November options. If using December options, you're going to face the normal deflation that occurs over the weekend after opex, coupled with perhaps choppy trading in next week's light-volume environment.

  Linda Piazza   11/21/20,  3:05:51 PM
Now we have a steady decline for the last hour, as seen on the OEX five-minute chart. The current pattern looks like a miniature bear flag rising after the last decline. Note: As I typed, this began breaking down.

  James Brown   11/21/20,  2:54:27 PM
While not as exciting as the Star Trek drama in the FuturesMonitor...I mentioned BGG as a stock to watch yesterday. It looked like a good entry point starting to bounce from its simple 50-dma. Shares are up 3.5% today.

  Linda Piazza   11/21/20,  2:51:26 PM
Glad I could help out everyone's short positions with my 14:40 post, because the markets dived right after it appeared. So far, our afternoon bounce took the OEX only up to 512.76, which was the reason I didn't want to risk a long entry today. I'm still not sure how much downside is possible, either, the reason I didn't want to risk a bearish play.

  Linda Piazza   11/21/20,  2:40:05 PM
I'm studying the OEX five-minute chart, noting all kinds of possibilities. Pick your bias, and I can see a chart formation that might support it. Thinking bullish into the close? There was a rough and misshapen inverse H&S with a confirming break of the neckline and a retest of that neckline level. (Of course, the OEX heads back down again to test the descending neckline one more time, which it really should not be doing.) Thinking bearish into the close? The pattern since about 10:30 could be a bear flag rising off the 510 support, with the OEX even now falling to test that bottom support of the flag. Thinking the indices will get pinned? The OEX has been wandering between about 511 and 513 most of the day. It's dangerous to micromanage right now.

  Linda Piazza   11/21/20,  2:31:21 PM
I watched the Peter Jennings report to which Jim referred, too. While I understanding that we didn't have computer animation to analyze what happened in 1963, I do wonder why no one had noticed that the Texas governor was not sitting at Kennedy's height but in a jump seat and that he was turned when struck. That seemed apparent enough from the video, so why all the "magic bullet" stuff?

  James Brown   11/21/20,  2:28:42 PM
(a reader) Dan says,

I'll bet the python could get a job at Putnam.

  Jim Brown   11/21/20,  2:21:15 PM
I did consider it was a setup to finally close all the lose ends but then the press today is a little more likely to go for the scoop than play the party line. My interest level 40 years later has dropped considerably.

  James Brown   11/21/20,  2:19:56 PM
Be thankful that most of us live and work where the only snakes we have to deal with are the human kind...

Python swallows Bangladeshi woman
Date: November 22 2003

A python killed and half-swallowed a woman in south-eastern Bangladesh, police said yesterday.

Basanti Tripura, 38, was collecting fruit with a friend in a forest when she was attacked on Tuesday, a police official said. She was swallowed up to her waist.


  James Brown   11/21/20,  2:19:34 PM
I did see something on the Discovery channel that debunked a lot of the myths surrounding the JFK assassination...

One was it couldn't have been Oswald (alone) because how could Oswald fire 3 times from the 6th story and be in the 2nd story lunchroom of the Depository building 90 seconds later when a cop charged in?

Well they proved that was easily possible.

  Jonathan Levinson   11/21/20,  2:17:36 PM
There were a whole slew of facts I had never heard in there, Jim. Seemed a little too pat for me, but I'm just a young'un.

  Jim Brown   11/21/20,  2:16:05 PM
I don't know if anyone watched the Peter Jennings report on the Kennedy assassination last night but I was surprised to learn that Oswald had tried to assassinate somebody else with the same rifle prior to Kennedy and the bullet was deflected by a window frame and missed the target.

  Jim Brown   11/21/20,  2:08:00 PM
Excerpt from Ferguson's speech:

The sustainability of the recovery will depend importantly on future trends in employment, household spending, and business investment. Twice before in this recovery we have seen short periods of strong growth, followed by a return to sluggish, subpar growth. Given the strength of the incoming data that I have just outlined, the risk that the economy will again stall out must be given a smaller probability than that assigned just a few months ago, but the risk cannot be discounted completely. For example, the strength in consumer spending in the third quarter might prove to be temporary--a one-time surge related to the fiscal stimulus. Indeed, analysts who subscribe to this view would take some solace in the latest data on non-auto retail sales. Under these circumstances, businesses likely would remain very cautious about the demand conditions they expect to prevail in the year ahead. This would make them reluctant to expand and hire new workers--factors that would hold down economic expansion in 2004. While the consensus forecast for next year calls for a growth rate of 4 percent (on a fourth-quarter-to-fourth-quarter basis), which seems reasonable, a weaker outcome than that is not hard to imagine.

  Jim Brown   11/21/20,  2:04:54 PM
Speech by Vice Chairman Ferguson on the economic outlook Link

  Jim Brown   11/21/20,  2:01:26 PM
FOX is reporting a twin engine plane crashed into a building in Georgia. Update, it does not appear to be terrorist related.

  Jim Brown   11/21/20,  1:56:26 PM
I believe that Monday could be a bounce day if there are no material events over the weekend. Thanksgiving week has traditionally been bullish as well as this week. The terror threats are the only thing holding us down other than some mutual fund shuffling. I believe the historical trend will be hard to buck and I suspect that trend for next week is keeping the bottom under the market today. Traders may not want to make big buys but they are willing to nibble at support.

  James Brown   11/21/20,  1:55:50 PM
Biovail (BVF), currently down almost 18% on news of an SEC probe into its accounting practices is trying to stem the flow of blood with an announcement. The company has just okayed a stock buy back program of 13.1 million shares or 10% of the stock's float.

  Linda Piazza   11/21/20,  1:52:52 PM
A reader wrote asking about the possibility of a relief bounce Monday if no terrorists' attacks endangered U.S. interests this weekend. Like Jeff, I tend to believe that markets cycle and they're hit by bad news when they wanted to go down anyway and bounce on good news when they wanted to go up anyway, so what does the chart show about a possibility for a relief bounce Monday?

I've been studying this daily chart, noting how close the OEX is to the bottom support that has held (with a few small violations) since May. Link Although today's candle can change greatly by the end of the day, here are the possibilities: it can stay as it is, a doji or near doji printed at the bottom of a decline. That's a potential reversal signal, but one that would need to be confirmed by Monday's trading pattern. Because the OEX has been showing weakness as it approaches the top of this channel (with the approaches getting further and further away before the OEX rolls down each time), I don't expect the OEX to go far before turning around again--perhaps up to the massed averages and perhaps up to midline, but I don't even really expect the OEX to hit the midline if it were to bounce on Monday or Tuesday. What if the OEX instead declines through the rest of the day today? That will produce a bearish candle with a small upper shadow, but will bring the OEX even closer to that trendline support. I would then wonder about the possibility that Monday would be some kind of consolidation day--some small-bodied candle, perhaps a doji. What if the OEX climbs the rest of the day today? Then it's producing another potential reversal signal, with a candle springing up from above support. In that case, I'd still be looking for a rollover beneath the midline of this channel.

Note that broken ascending trendline on the RSI and how the RSI now shows the slightest upturn as if it's perhaps wanting to go back up and test that trendline? The point at which it hits that trendline again would be the point at which I'd be particularly watchful for a rollover, if not before. The next time the OEX hits the lower trendline support of that channel, I'd also be particularly alert to the possibility that the OEX could fall out of the channel. The blue horizontal line seen on the chart is a 19.1% of the rally from March, a rather minimal retracement amount to be expected. That's at about 502.60.

  Jim Brown   11/21/20,  1:46:52 PM
On the Kennedy thread. I had cut high school that day with my best friend and we had taken our girlfriends to the lake. When the news came across the radio that he had been shot my girlfriend said "good, I am glad the jerk is dead". For somebody that had never given politics much thought until then it was a wake up call. I was astounded that any American could say something like that. That was our last date.

  James Brown   11/21/20,  1:46:21 PM
FYI: follow up on PNRA for Linda, I think they guided higher by a penny for Q4.

  James Brown   11/21/20,  1:43:55 PM
Another James out there is confirming my suspicions... The "day the music died" was when the plane went down with Buddy Holly, Richie Valens and the Big Bopper.

Everyone remembers the song "American Pie" by Don Mclean, right?

  James Brown   11/21/20,  1:38:22 PM
For all of our California readers...check out the new state seal: Link

  Jonathan Levinson   11/21/20,  1:37:53 PM
Could well be, James. I was born at the tail end of the 60s myself. Grew up on Led Zep, Van Halen and the like... Still can't believe they killed JFK, let alone MLK, let alone Bobby Kennedy.

  James Brown   11/21/20,  1:36:22 PM
I thought the "day the music died" was when Buddy Holly's plane went down..?

  Jonathan Levinson   11/21/20,  1:33:49 PM
It's probably not much more than an X-File to most people, James. The day the music died.

  James Brown   11/21/20,  1:32:47 PM
Wow! That's an interesting factoid. Most Americans were not even alive when JFK was assassinated 40 years ago.

  James Brown   11/21/20,  1:29:53 PM
Strength in the DJUSHB homebuilder index has translated into a strong move for new OI call play HOV. We listed it last night with a trigger to go long at $85.51. Shares of HOV pushed through that level today and the stock is currently up more than 2.3% near $86.50.

  Linda Piazza   11/21/20,  1:27:20 PM
Remember that I said that I was using today to experiment, and that one experiment was in drawing trendlines on the advdecv chart, seeing if trendlines held any relevance? Here's what just happened: Link

  Linda Piazza   11/21/20,  1:23:24 PM
Reader Question: Looks like OEX 5min is forming reverse Blockhead& Shoulder w 2nd right shoulder neckline just above 512. NHB breaking up 15 min MACD crossing. Am I seeing that correctly?

Response: I've been watching that formation on the five-minute chart, not knowing if I should call it an inverse/reverse H&S or not. The right shoulder was much extended in comparison to the left shoulder, so that it wasn't classic, but the current drive over the neckline certainly seems to confirm its importance. I'm just not sure if the OEX is strong enough to push above 515-516, and so was reluctant to suggest a play despite my stating earlier in the Monitor that I thought we'd see a settling at 510 or possibly a little lower and then a climb, perhaps to 515-516. That climb is a countertrend climb on an opex Friday with the U.S. facing a terrorist threat, and so the upside target is even more suspect than it would usually be. Maybe I'll be kicking myself at the end of the day if the OEX behaves exactly as I thought it might, because buying a November 510 call position when the OEX was down at 510 and then riding it up to 515 would certainly have made for a happy end-of-week gain, but it was too much of a gamble for me, and so too much of a gamble to suggest to readers.

  James Brown   11/21/20,  1:23:05 PM
As you may have heard on CNBC... Eli Lilly (LLY) is seeing some "sell the news" weakness after the FDA finally approves its Cialis drug today. The LLY-Icos partnership to market Cialis is a major threat to Pfizer's dominance in the ED market with Viagra. Pfizer has good reason to be worried. Cialis was quickly adopted by a significant portion of the overseas market where the two drugs competed.

Shares of LLY had surged more than $7 to the $72.50 level in the last two weeks and are currently slipping back toward the $70 mark.

  Jonathan Levinson   11/21/20,  1:06:01 PM
Bonds are in a very narrow range, with a slight drift higher, ten year note futures up .11% or 1.1 bps. Gold is up 2.10, silver .023. The big question for equities is "to bounce or not to bounce". The 30 minute timeframe looks bullish for the indices, but shorter intraday cycles are slightly toppy- a good recipe for indecision.

  James Brown   11/21/20,  1:05:40 PM
The 01:00 PM EST update is posted: Link

  Linda Piazza   11/21/20,  12:56:56 PM
I've been spending some time scanning individual stock charts, seeing what's going on in the underpinnings of the market. Here's what I'm noticing: breakouts aren't working well any longer, even with volume confirmation and other bullish signs. After a few days, the stock usually turns around and heads back below the trendline it just broke through. Breakdowns are working well, and usually suddenly when they occur. No slow and sure. Better be in ahead of time. Of course, with the way the markets have been behaving this week, that's perhaps a no-brainer, but it's showing up in the underpinnings as well as on the indices. One caveat, though: stocks approaching either a 50% retracement of the rally or their 200-dma's don't seem to want to decline beyond those levels. But if they're pretty far above those levels and show bearish tendencies, look out below!

  Linda Piazza   11/21/20,  12:30:10 PM
I'm trying hard not to micromanage today, as I know the usual tendency to play pin-the-stocks on opex Friday from about 11:00 on. I think Keene said earlier that we might be seeing that process begin, and that's certainly possible. My desire not to micromanage today comes from a tendency that I've seen often at the end of opex week, with a false breakdown or breakout that gets quickly corrected, leaving the unlucky bull or bear holding options bought at the top or bottom of the day's range. I'm aware that we've seen several days when the bottom just fell out after a period of testing overhead resistance and failing to move higher, but those moves are almost impossible to catch unless you're already positioned correctly.

So, today is a great day to test those new indicators you've never tested. I'm putting trendlines on the advdecv chart, for example, seeing if there's any relevance in such trendlines. Since a similar day's experimentation resulted in a study I did on Donchian channels and another in the pitchfan chart I sometimes show, I actually welcome an occasional untradable day or two.

  Linda Piazza   11/21/20,  12:12:51 PM
Do any of you watch trendlines on the advdecv charts? I've begun doing so, and the advdecv (3 minute) hits one just over 1000 and another just under. I'm just benchmarking this as I haven't been watching trendlines on this indicator long and I'm not sure whether this has any relevance. As of a few minutes ago, adv:dec ratios (different than advdecv, which subtracts rather than calculates a ratio) were 19:12 for the NYSE and 15:14 for the Nasdaq, with up volume bigger on both exchanges.

  Jonathan Levinson   11/21/20,  12:00:37 PM
I'm hearing trader chatter to the effect that the US is warning of a possible Al Quaeda plot against US interests.

  Linda Piazza   11/21/20,  12:00:36 PM
The OEX could not make it above the 512.50 five-minute high produced at 10:30 this morning, with 21(3)3 stochastics showing bearish divergence between those two price highs. That shows that the weakness continues, although I remain uncertain about the ability to push much below 509-510.

  Jonathan Levinson   11/21/20,  11:59:46 AM
Brown and Co....also know as JPM.....what idiots...I sent them a check for $10.00 to obtain a statement from a closed account, and they send it back.......saying complete the enclosed account application to open your account......How stupid can they be?

Well, it's one way to make it through the day.

Gold is holding its gains, as are equities and bonds. Everything is up, and so I don't need to check to know that the US Dollar Index is down.

  Linda Piazza   11/21/20,  11:45:29 AM
The OEX has popped above the descending trendline formed off this morning's five-minute highs, and has come back down to retest that trendline's support, too. Now it's ready to climb, but its first task is to climb higher than the 512.50 high at 10:30 this morning. Above that level, next resistance gathers just over 513, but the OEX will find strongest resistance today between 515-516.

  Jonathan Levinson   11/21/20,  11:39:53 AM
The Fed has announced a coupon pass, which is a permanent addition to reserves- no amount set yet.

  Linda Piazza   11/21/20,  11:24:33 AM
Here are two reasons why the OEX might be expected to mount at least a tepid bounce attempt, and two reasons why the index would look particularly weak if it doesn't: Link

  Jonathan Levinson   11/21/20,  11:21:56 AM
Hi Jonathan, As you know Jeff puts out the Camp buy and sell numbers for program trading... and by accident I started to leave the values as triggers of alerts in Qcharts... One of the things I have noticed is that old numbers tend to trigger something... I generally see the move up to today's trigger point long before it is hit and know when program trading is taking place by somebody... not necessarily using the same trigger... today so far I have seen spikes up in the futures for buys buy zero ones for the sells... kinda interesting...

Keep us posted, AB.

  Linda Piazza   11/21/20,  11:15:20 AM
What's my best guess at this point as to what might happen? I didn't want to enter a bearish position today on a break of 511.75, which I think would have made a good entry on any other day, because I, too, think the OEX may find support relatively soon. I'm not sure that's going to happen, of course, but I was thinking 508-510. I was afraid that 510 would hold, and mentioned in a previous post seeing support layered in one-point intervals down to 508. However, I have an old descending trendline that the OEX came down and touched today, with the last 30-minute candle shadow piercing it and the current one trying to climb from its support, so that's why I thought 510 might possibly hold.

I'm somewhat conservative on the possible upswing, too. As I mentioned earlier, I'm thinking maybe 515-516, and I'm not sure about that. OEX 518 is the top of the recent range, as I mentioned earlier, but I'd think selling would pick up as that level was approached, so I'm thinking the OEX would likely get stopped near its 60-minute 100/130-pma's. However, this is opex Friday, so indices behave strongly. I'm not entering the market based on these guesses, and you should do so only if they conform to your own and you feel like risking the price of a good dinner on a cheap option.

  James Brown   11/21/20,  11:06:58 AM
The 11:00 AM ET update: Link

  Linda Piazza   11/21/20,  10:58:20 AM
Yesterday afternoon, I was following the way the SOX and BIX behaved in relationship to their 30-minute 100/130-pma's. Both moved up to test those averages ahead of the other indices, showing strength in these indices that sometimes serve as leading indicators for the other indices. The BIX moved above those averages and surged higher. That stayed my hand from entering a bearish position before OEX popped higher that last time--a good thing--but I mentioned that we were either seeing a sign of new strength or the best shorting opportunity of the week. Then the plunge came during the time we were offline, and I was not able to post my entry. Today, it's apparent that the SOX did roll over from its test of those averages, and that was the best shorting opportunity of the week. The SOX now has pierced its bottom 1.35% envelope, a sign that it might be time for a bounce attempt. I would expect such an attempt to see resistance at just under 505, if the SOX does attempt a bounce. It's also possible that the SOX could just continue to slide along that envelope. (See my Traders Corner article if you want to see research about how likely an index might be to slide along an envelope or to bounce from it--basically, the slope of the envelope doesn't appear to impact the likelihood that there will or will not be a bounce.)

The BIX, however, declined yesterday to test its 30-minute 130-pma, closing only $0.10 below that average. Today, it moved up to test the 30-minute 21-pma and now turns down toward the 100/130-pma's again. The outcome isn't yet settled on the BIX, as it's caught between support and resistance.

  James Brown   11/21/20,  10:46:11 AM
Keeping an eye on EBAY. The stock failed to react yesterday to news that AT&T had filed a patent lawsuit against EBAY and its subsidiary PayPal for secure transactions over the Internet. Jim mentioned the news yesterday and it certainly sounds frivolous. According to one Reuters article check out what AT&T is asking from the courts:

The long-distance company asked the court for a permanent injunction preventing eBay and PayPal from using the technology. It also asked for the profits and revenues the companies gained from its use, and an award of compensatory damages.

The market declines today have shares of EBAY falling fast (-2%) towards support near $50.00 and its simple 200-dma. Should EBAY break $50 bears might target $45.00 even though there is potential support in the $47.50 range.

  Jonathan Levinson   11/21/20,  10:45:53 AM
Two consecutive readings of 1.0 for the put to call ratio. VXO is currently 20.40.

  Linda Piazza   11/21/20,  10:38:38 AM
I see possible support for the OEX in one-point intervals from here to 508, then again at 506. The break of this morning's "b" distribution pattern suggests a drop of 2-4 OEX points, so down to 509 or possibly 507.

  James Brown   11/21/20,  10:35:44 AM
Norway appears to be taking the lead in the free trade battle. The Norwegian government said it will impose a 30% tariff on a list of U.S. products if President Bush doesn't drop the steel tariffs.

  Linda Piazza   11/21/20,  10:34:36 AM
We did have a minimal break of the 511.75-ish support on the OEX, but as I mentioned earlier, opex Friday sometimes sees some false breaks and I didn't want to take them too seriously too soon. This just doesn't look like a strong trading pattern to me, and we're not seeing even the minimal degree of bounce I expected to see. If I'd had a prediction, it would have been that the OEX moved up to just under 515 and meandered there from about 11:30 on today. If you've been trading for a long while, though, you've seen how treacherous opex Friday's can be--actually any Friday. I can't tell you how many times I've seen a great setup on a Friday only to have it abort and then finally come to fruition on Monday or Tuesday of the next week. That's fine if you're patient, have a conviction about the final direction, and can weather a Friday-afternoon move against your position. That's not so fine if you buy slightly OTM options on an opex Friday, expecting a move that never comes.

  Jonathan Levinson   11/21/20,  10:33:29 AM
Gold is up 2.80, XAU +.30 and HUI +1.15. I'm really hoping that world's biggest hedger's decision to stop shorting gold on the forward markets isn't a classic topping signal. Hopefully they see rising prices and rising demand.

  Linda Piazza   11/21/20,  10:28:46 AM
Well, Jane, so we get you to do the forward thinking, me to do the analysis, and then if I could just get Jonathan to agree to illustrate with a cartoon, we'd have something going, right? (Re: Jane's analysis weeks ago that food-related companies might be impacted by the diets, my look at PNRA, and Jonathan's hilarious take on the markets.)

  Jane Fox   11/21/20,  10:26:22 AM
Linda (10:22 post) your analysis of stocks during the day is amazing. Good job!

  James Brown   11/21/20,  10:23:13 AM
Last night Autodesk Inc (ADSK) jumped from a 3 cent loss last year to a 20 cent profit for the third quarter. ADSK's 20-cent announcement beat estimates by 4 cents. Revenues soared 24%. The stock was upgraded this morning by Merrill Lynch to a "buy" and shares are up 17.5% to new one-year highs.

  Linda Piazza   11/21/20,  10:22:03 AM
PNRA: Hmm. Jane really is onto something. While complimenting her for seeing early that the craze over the Atkins and South Beach diets might have economic import on food-related companies, I kidded around that maybe we all ought to short Panera Bread, making sure I mentioned that I was not offering investment advice. However, take a look at PNRA, for those of you who want to make your own decisions. It's got a P&F triple bottom breakdown sell signal produced on November 19, with a downside projected to 31 (so far). There's a bullish support line at $33.00, though, so I would expect some hefty bounce potential at that level. The bar chart shows that a fairly well defined H&S, with the neckline broken on 11/14. That H&S projects down to about $29.00. Anyone considering a bearish position in PNRA has a quandary, though. It's sitting right on its 200-dma and right above some weekly support at about $36.90. While a break of the H&S neckline and the 200-dma would be significant, PNRA has not yet risen to test that broken neckline and this would be a perfect spot for it to do so, to find support at the 200-dma and then bounce up to test $40.00. If I were considering this, I think I'd wait for that bounce and then a rollover, and I'd be really, really watchful at $33.00, perhaps setting a profit target for just above that level. In addition to showing up as support on the P&F chart, an ascending trendline from the weekly chart shows up there, too. The 5(3)3 stochs are showing that they want to turn back up again, often a first hint of such a bounce. I won't be following this trade, and just looked at the chart since I'd mentioned it while complimenting Jane.

  James Brown   11/21/20,  10:18:22 AM
On top of Nordstrom's (JWN) strong earnings report last night the stock is getting upgraded by A.G.Edwards (buy) and J.P.Morgan (overweight).

  Jonathan Levinson   11/21/20,  10:13:55 AM
The Fed announces a 4 day repo of 3B, replaces the expiring overnight repo in the same amount.

  Linda Piazza   11/21/20,  10:08:05 AM
Maybe we just all short Panera Bread instead? (See Jane's 10:05 post.) Note: This is not investment advice, but only a follow-up to an article's headline that said that bread-related companies were meeting to discuss how to combat the slower sales due to the impact of the Atkins and South Beach diets.

  James Brown   11/21/20,  10:07:30 AM
Ah... CNBC shedding some light on the bounce in the XAL. Congress just passed some bill that would make it easier for airlines to handle pension funding requirements.

The bill will allow airlines to temporarily adjust the way they calculate "anticipated future returns on investments..." (Reuters)

  Jonathan Levinson   11/21/20,  10:06:41 AM
Thanks, Linda- note that the YM chart counts ticks per bar, and not time, which is why there will be subtle differences between your OEX chart on a 5 minute basis and my 75 ticks per bar. It should be most similar to a 3 minute chart, I think.

  Jane Fox   11/21/20,  10:05:22 AM
Unfortunately Linda (9:55 post) I haven't been able to figure how to play the low carb craze. Does anyone know how to buy Macadamia Nut futures?

  Linda Piazza   11/21/20,  10:05:01 AM
The inverse H&S that Jonathan pointed out on the YM in his 9:52 post is also visible on the OEX five-minute chart if you squint just right, but I have to confess that without Jonathan's chart as a guide, I don't know that I would have seen anything resembling a H&S in that squiggle at the bottom of the five-minute chart. That makes me wonder if it's a valid formation on the OEX. Without Jonathan's nicely formed picture of the YM inverse H&S (which may or may not confirm), the five-minute pattern looks a lot like a "b" distribution pattern, likely to break to the downside, and likely to predict 2-4 more downside points.

  James Brown   11/21/20,  10:01:47 AM
Early morning sector leader is XAL airlines index. The XAL is up 2.42% after five consecutive losses. The sector is bouncing from prior support near 59-60.

  Linda Piazza   11/21/20,  9:55:02 AM
CNBC has been promoting several spots where they discuss the implications of the Atkins and South Beach diets on several food-related stocks. Marketwatch featured an article about the impact on the bread-related companies, too, I believe. I have to tell you that Jane scooped them all, writing me weeks ago suggesting we look at stocks that might be helped by the Atkins and South Beach diets! I didn't know enough about the diet to even think of its impact on the bread-related companies. Good thinking, Jane. You were on the right track.

  Linda Piazza   11/21/20,  9:45:45 AM
Is the OEX establishing a new range? Over the last several weeks (if memory serves me correctly since Q-charts has erased last week's intraday charts), the OEX had a range of about 516.70-525, with a few spikes either direction of that range. Over the last week, it has been trading in a range from about 511.75 to 518, with a few spikes outside that range. I've found that equities that tend to trade in ranges usually establish a new range after they break out of the old one, either a higher or a lower range, depending on the direction of the break. The range is usually roughly equal in size, but this OEX one is a little tighter, and I'm not sure if that same observation would hold true for an index. However, that's going to give a break of 511.75 more significance, but I'm not sure we should draw too many conclusions about a brief break of that level today.

  Linda Piazza   11/21/20,  9:39:35 AM
The OEX first five-minute range included a high of 513.25 and a low of 511.59, with the midpoint at 512.42. The OEX currently trades above that midpoint, indicating early strength, with this being a first indicator we can use this morning. We'll need more to corroborate that impression. I'm not sure how valid that midpoint will be today, since that first candle had a small range. As Jeff commented yesterday, this can sometimes tell us something about the expected range for the day, too, although that's not an iron-clad rule, of course.

  Linda Piazza   11/21/20,  9:36:58 AM
Reader Question: Are Nov OEX options already expired or are they expiring after the close today?

Response: OEX November options actually expire tomorrow--expiration days are usually Saturdays--trade through today, and are settled at today's close. That closing value "is calculated using the last (closing) reported sales price in the primary market of each component stock on the last business day before the expiration date," so today in this case. Here's the complete information about the OEX options: Link Here's a link for all index options, including the European-style XEO options on the OEX, which also settle based on today's closing prices, as stated above with reference to the OEX. You can also find information about SPX options at this link: Link

  James Brown   11/21/20,  9:27:12 AM
The morning update is posted. Link

  Linda Piazza   11/21/20,  9:19:39 AM
I'm operating under a bit of a handicap this morning since Q-charts has deleted all last week's intraday information, but we're starting the morning with European markets moving up and our futures higher, too. The nested five-minute Keltner channels I watch showed that the OEX was way overstretched on a five-minute basis and probably needed to bounce up to 513.50-514, where it would face first resistance or maybe up toward the 515-516 level where it would face even stronger resistance. While the distance from this morning's open up to 516 might provide us with some nice profits if we were to participate in a bullish play, I can't bring myself to consider such a play right now. The weakness we've seen this week has produced sudden plunges. That, coupled with the threat--really the probability--of more attacks occurring somewhere in the world this weekend, and with the known opex shenanigans, makes me extremely leery of taking what I now consider to be a countertrend play. We'll see if there's an opportunity to enter a bearish trade, too, but I'm going to be keeping the pin-them-to-key-numbers tendency of opex Friday in mind as I make any decisions.

Believe me, I'd like to enter, if only to erase my abysmal record this week. I missed one great trade, waiting for one last uptick I expected but didn't come before the bottom dropped out of the market. I was typing an entry when that happened, and the drop was so sudden, I was leery of entering at that point when put options were likely to be highly inflated. I would have had to have been assured of a further big drop, which did in fact happen, but wasn't assured by any means. Yesterday, I prepared another entry but the server problems did not allow me to post it, and by the time I could post it, I had grown wary again. That leaves me with two badly performing trades for the week and two missed opportunities. I've learned from past experience, however, that the very worst circumstances under which to enter a trade are those in which you hope to make up for past losses. No cowgirl trades for me, today, then, and I'm going to be especially cautious.

  Jonathan Levinson   11/21/20,  9:19:19 AM
Gold is solid on news that Barrick is ceasing all hedging operations. This is BIG and bullish news for the gold sector.

  Linda Piazza   11/21/20,  7:30:58 AM
Good morning. The Nikkei traded in a volatile 130-point range, but managed to close down only 12.87 points or 0.13%, at 9852.83. The Bank of Japan concluded a two-day meeting, with the as-expected decision to leave interest rates unchanged. They also increased their outlook for the Japanese economy for November, only a day after the government raised its estimate for the economy after the strong trade surplus figures. Many techs remained weak, but banks recovered from early weakness. Boeing’s (BA) decision to contract out work for a proposed jet to three Japanese industrial companies sent their shares higher. The Nikkei will be closed for a holiday on Monday.

Although most Asian bourses traded lower or closed flat, South Korea’s Kospi eked out a 0.13% gain after strong exports sent the GDP higher for the quarter concluded in September. The GDP climbed 1.1% over the previous quarter and 2.3% from the year-ago period. Elsewhere in Asia, the Taiwan Weighted fell 0.07% and Singapore’s Straits Times fell 0.31%. Hong Kong’s Hang Seng closed down 0.05%. China’s Shanghai Composite declined 1.09%.

Although many Eastern European markets are closed today, Western European bourses trade higher or flat. Insurers recoup some of their losses from the previous day, after the Istanbul blasts. Some techs gain after ASML and STM made bullish statements at a European Morgan Stanley tech conference. Initially, techs had traded lower after disappointing earnings results by Brocade and Novell. Airliners did not rebound after yesterday’s losses.

As of this writing, the FTSE 100 has gained 10.40 points or 0.24%, at 4318.30. The CAC 40 has gained 24.10 points or 0.72%, at 3348.49. The DAX has gained 11.33 points or 0.31%, at 3649.37.

  Jeff Bailey   11/21/20,  2:47:33 AM
Goldman Sachs (GS) $91.76 -2.31% ... Thursday afternoon I was getting mutliple alerts on my QCharts trade station. One alert was GS achieving its 60-minute interval chart head/shoulder top pattern at $92.15. Link

This trade was profile in both the Market Monitor and 11/14/03 11:00 AM EST intraday update. Link

James... if you read this, could you also give quick update tomorrow in an intra-day?

  Jeff Bailey   11/20/20,  9:59:54 PM
Japan's Nikkei-225 ($NIKK) 9,785.87 -0.81% Link ... Lower by 79 points in early going. Session high/low so far has been 9,888.93-9,758.34

As such, could not currently chart an "X" to 9,900. After that check, could not currently chart a 3-box reversal to 9,700 either.

  Jeff Bailey   11/20/20,  9:22:18 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   11/20/20,  9:18:55 PM
Buy/Sell program premium alerts ...In the 9am intraday, after the futures number, you give the HL Camp program buy and sell data. How can this help me in short term trading? Thanks. Dick

One article you might read is in the Ask the Analyst column, that I wrote this weekend. It is at this Link

Maybe you have read that and you are still wondering, but if not, it might hold the answer to your question.

I use QCharts and can set alerts at both the buy and sell premium levels given each day.

At the bottom of the article that I've provide a link to, I've listed other symbols that might work with the trading software you are using.

There were quite a few (more than usual) program premium alerts generated today. And per this evening's Index Trader Wrap (11/20/03) Link has me further thinking much of today's trade was option expiration related.

With my $PREM.X chart set at 5-minute increments .....

Sell premium alerts with SPX 5-minute range .... 09:30(cash catching up/lower to futures 1041.13-1038.19) , 09:35 (1038.62-1037.30), 09:40 (1038.11-1037.05), 09:45 (1037.27-1034.34), 10:05 (Leading Indicators 1040.93-1039.95), 12:00 (Philly Fed 1043.59-1041.97), 14:10 (1044.93-1043.31), 15:05 (1040.84-1037.98), 15:10 (1038.08-1036.94), 15:20 (1037.61-1033.93), 15:35 (1035.60-1034.68).

Buy premium alerts with SPX 5-minute range .... 10:45 (1040.40-1041.92), 12:40 (1042.55-1044.76)

I list these just in case you aren't able to get the buy/sell program premium alerts, but can maybe look at an intra-day chart of the SPX or even a stock you might trade on an intra-day basis, and see if these alerts might have alerted you to a move in the security you were trading.

Trader's should just immediately think a buy or sell program MEANS buy or sell. At 12:39:00 in the 11/20/2003 Market Monitor, I tried to interpret, based on chart observation, what the 12:00 sell program might have been.

  OI Technical Staff   11/20/20,  8:44:58 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.


Market Monitor Archives