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  Jeff Bailey   12/15/20,  5:20:10 PM
CNF Inc. (CNF) alert ... cancel 09:38:51 day trade long for $33.27 entry.

  Jeff Bailey   12/15/20,  4:33:32 PM
Closing Internals at this Link

All day, data vendors continued to change internals and hourly quotes (I comprise table from multiple vendors). This will cause me to have to take extra time tomorrow to check things. Way too many revisions. I believe these numbers to now be correct.

  Jane Fox   12/15/20,  3:48:30 PM
Take a look at the $RUT.X or the ishares IWM. They are getting clocked today. Fits with the scenario I was talking about earlier doesn't it? I will be expanding on this tonight in the Wrap.

  Linda Piazza   12/15/20,  3:44:25 PM
Below 529.60-529.80, next support for the OEX might be found at the 30-minute 100/130-pma's. Those averages are currently located at 528.48 and 527.53, respectively. The 30-minute oscillators now are fully bearish, although until now I've been concerned about the slant on those oscillators. They slanted down at the flat angle that sometimes predicts that they're going to turn right back up again.

  Jeff Bailey   12/15/20,  3:44:02 PM
Swing Trade Stop Alert on QQQ bullish from $35.12 at $34.79.

  Linda Piazza   12/15/20,  3:39:33 PM
The OEX is now negative, and is now moving down toward that 529.60-529.80 next support.

  Linda Piazza   12/15/20,  3:22:43 PM
We haven't talked about it much, but when making decisions this week, traders should be aware that this is opex week and we should figure in normal opex craziness.

  Jeff Bailey   12/15/20,  3:18:56 PM
Jonathan's 15:12:42 comment. Never thought of that Jonathan. I wonder if one of the "Iraq debts" the U.S. is trying to get others to forgive is Saddam's margin call from being overly bearish these markets the past 5 months?

  Linda Piazza   12/15/20,  3:18:09 PM
The OEX has now fallen beneath the 30-minute 21-pma, the short-term (5,2) Donchian channel support, and mid-channel five-minute Keltner channel support. Unless the OEX is just overshooting these various forms of support, as is always possible, then we're possibly looking at a test of 529.60-529.80.

  Jeff Bailey   12/15/20,  3:12:15 PM
03:00 Internals at this Link

Some improvement in NH's. While A/D line begins to flatten out a bit, would have preferred to have seen same number of advancers for NASDAQ as 02:00.

  Linda Piazza   12/15/20,  3:08:15 PM
The hypothetical OEX 535/540 bear call credit spread I've been tracking is now only $0.55 underwater, and the sold call is now safely OTM. We'll have to see what happens the rest of the week, but so far, it's working out okay. Such a position does have a bias--a bearish to flat bias--but still it's worked out fairly well even with the OEX rising strongly several days.

  Jeff Bailey   12/15/20,  3:07:34 PM
QQQ $35.16 ... just sitting here. Since $35.12 entry, QQQ fell to $35.07. Remember that $35.08 level? Yep...

  Linda Piazza   12/15/20,  2:58:41 PM
The OEX may or may not be testing the bottom of this morning's gap (different charts show different opening levels for the OEX, some showing a gap opening and some not).

  Jeff Bailey   12/15/20,  2:56:40 PM
Swing Trade Entry point Alert - for bullish QQQ $35.12, stop $34.79, target $35.75.

  Linda Piazza   12/15/20,  2:56:08 PM
The BIX has now dropped below its 30-minute 21-pma, suggesting a further fall, perhaps down to 529 or so from the current 330.50. The SOX consolidates near its low of the day, near the bottom 1.35% envelope. The advdec line has maintained its downward spiral all day. While I wouldn't exactly call this a pop-and-drop day, all this contributes to the feeling that it's going to be difficult for the OEX to make much headway unless some or all of these conditions change. The OEX is back to testing its 30-minute 21-pma again.

  Jonathan Levinson   12/15/20,  2:53:17 PM
Note that the VXO came nowhere near making a new low even as the Dow and SPX made new highs- looks like a bearish divergence to me.

  Jeff Bailey   12/15/20,  2:47:00 PM
QQQ updated 60-minute chart. What I'm currently monitoring at MONTHLY Pivot and hourly SMAs, along with Oscillators. Link

  Jeff Bailey   12/15/20,  2:32:36 PM
Treasury's have seen notable reversal of gains, now losses with 10-year YIELD ($TNX.X) higher by 5 basis points to 4.292%.

Might look for equities to make a "Saddam statement" into the close with bullish move in last 90-minutes of trade.

It is rather amazing to this analyst how lack of Saddam finding was a negative. Now that he's found, it is also a negative.

  Linda Piazza   12/15/20,  2:26:29 PM
I'm getting inconsistent numbers on the OEX, so you might verify with more than one source the OEX values you're receiving. The values I see vary from 534.06 to 534.65, quite a difference.

  Jeff Bailey   12/15/20,  2:25:10 PM
Swing trade long ... in QQQ $35.27 for pullback entry of $35.12, stop $34.79, target $35.75.

  Jeff Bailey   12/15/20,  2:14:05 PM
02:00 Internals at this Link

Have had some problems with my data vendor.

I made a correction to the 01:00 NYSE new highs. Previous report of 438 was corrected to 407.

  Jonathan Levinson   12/15/20,  2:09:16 PM
I can't help but wonder where today's $7B from the FED has been placed, or maybe it hasn't as of yet. Any clue?

Has me wondering if there'll be a nice whopper bounce right after the bond mkt close...

There was a six month treasury auction, and I believe that part of last week's auctions might be coming due as well. Note that treasury futures have been firm all day, and recall that Al Green's top priority isn't the stock market, but keeping rates low. The money is most likely destined for the treasury auctions and preventing a selloff in bonds on today's "good" financial news.

  Linda Piazza   12/15/20,  2:07:18 PM
The OEX descended close to but not quite all the way to the 30-minute 21-pma at 532.54, with the OEX dropping to 533.34. (See my 13:22 post.) As I predicted in that post, the OEX dropped toward 533, but now we have to see how well the OEX holds up here before we can make further predictions. I've been documenting the SOX weakness, but the SOX currently attempts a bounce from the bottom 1.35% envelope band on its 30-minute chart. The presumption, again, is that it will roll down again after hitting resistance or perhaps even from here. In addition in the tech domain, the GSO also shows some weakness today ahead of ORCL's update, with the GSO dropping steadily from this morning's open. The GSO remains above its 30-minute 100/130-pma's, down about a point below the current GSO level. The BIX, not in the tech domain, of course, still clings to its 30-minute 21-, 100-, and 130-pma's, all closely linked. Thirty-minute oscillators have flatlined on that chart, so they're no good at predicting ultimate direction.

  Ray Cummins   12/15/20,  1:49:29 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Video Game Stocks

One group of stocks that most people would expect to flourish during the holiday season is video game manufactures, but that is not the case this time around. Case and point: both Electronic Arts (NASDAQ:ERTS) and Take-Two Interactive Software (NASDAQ:TTWO) have struggled in recent weeks and today the bearish trend is continuing with both stocks fading after early gains. ERTS is down $1.03 at $43.23 while TTWO is $0.90 lower at $29.43 and both issues are enjoying robust trading volume. The next catalyst for activity in this sector will be Take-Two's earnings call, scheduled for 12/18, and with our bearish positions expiring the next day, we hope the report is not too optimistic.

  Linda Piazza   12/15/20,  1:29:00 PM
Currently, the hypothetical OEX 535/540 bear call credit spread I priced more than a week ago when the OEX traded near 528 is only $0.90 underwater. Both options are now OTM, and it's paid (so far) to watch and wait this morning. We would have had the first trying moments today while in this position if it had been an actual position, but would have suffered far less heartburn than if we'd been in a December ATM put position purchased at the same time. When the OEX paused, I thought it wise to watch and wait, but had it continued climbing, that wouldn't have been true. There's still a significant chance we would have kept the full $0.95 credit at opex.

  Linda Piazza   12/15/20,  1:22:42 PM
(Note: I tried to post this immediately after my previous post, but couldn't post for a few minutes.) If I had to guess direction today for the OEX, then I'd be watching the way the 30-minute 21-pma (currently 532.17) rises while the OEX consolidates at the top of today's rise. There have been times when we've had a flagpole rally like today, small-bodied candles that trade straight out like today, and then a sudden drop to test the 30-minute 21-pma. So, I'd guess that as that average is rising toward 533, the OEX might even dip to test that support zone. After that, though, my guessing is through, as I'm not sure whether I expect the 30- and 60-minute 100/130-pma's to support the OEX this time or not.

  Jonathan Levinson   12/15/20,  1:21:37 PM
With the dollar's dive, the Euro's new alltime highs, and the multiyear new highs for gold, HUI is up 4.31 to 242.13, XAU +1.74 at 108.41.

  Linda Piazza   12/15/20,  1:15:44 PM
I think today is a day for "I believe" trading, a day in which you believe the markets will do something or other and then you act accordingly. You can believe that sentiment or perhaps actual benefits due to Hussein's capture will build on the gains already made and propel the typical Santa rally to continue, and enter a bullish position, setting a stop that will take you out if you're wrong. You can believe that Hussein's capture will have no effect on the markets and that the stasis since the markets made their original gains this morning is the effect of institutions selling into a retail-investor-driven rally. You can then take a bearish position and set appropriate stops. Perhaps that approach is as valid as any other as long as you set appropriate stops and really exit when they're hit. As to me, I don't believe. I don't believe that charts are giving me a clear signal as to what's occurring and so I'm taking a position, too--cash.

  Jeff Bailey   12/15/20,  1:09:41 PM
01:00 Internals at this Link

  Ray Cummins   12/15/20,  1:08:28 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Schnitzer Steel (NASDAQ:SCHN)

Jeff referred to the strength of the Steel sector in his 12:38 post and indeed, one of the best performing issues in our portfolio is SCHN. Today the stock is up $1.92 at $57.87 and there is little indication the rally will end in the near-term. From a fundamental viewpoint, fiscal 2003 has been a "record" year for Schnitzer and the company CEO recently noted that it was "truly gratifying to see all of our business segments showing significant gains over fiscal 2002, most of which were driven by improving market conditions." With that outlook in mind, bullish traders should monitor the issue for possible entry opportunities (long calls or short puts) and we will continue to look for favorable spreads and combinations as well.

  Jeff Bailey   12/15/20,  1:00:35 PM
QQQ $35.28 +0.1% ... had a question regarding "Max Pain" on QQQ at $34 and today's impact.

We might expect some higher adjustment based on this morning's trade where options trader's knee-jerk reaction has level moving higher with some call buying and unraveling of some puts as expiration now just days away. Maybe $35'ish. Later today we may want to note Friday's open interest either side of $34, take note of volume in various contracts, then check against open interest tomorrow.

  Ray Cummins   12/15/20,  12:55:55 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Digital River (NASDAQ:DRIV)

What's up with Digital River? The stock is down $1.86 at $23.15 and the only (public) news is Friday's announcement that its agreement with MLB Advanced Media, the interactive media and Internet company of Major League Baseball, will not be renewed for 2004. DRIV's CEO said he did not expect the MLBAM transition to have a material impact on their business and despite his confirmation of the company's 2003 and 2004 revenue and earnings guidance, investors are unloading the stock in droves. Since the issue traded as high as $25.50, we are certainly going to record it as a new (bottom-fishing) position in the Debit Spreads portfolio, however we will monitor its activity closely in the coming sessions to see if the recent "bearish" character has resumed.

  Linda Piazza   12/15/20,  12:48:10 PM
This OEX dip took the OEX down to 534.39, one cent off the low of the first possible shoulder in the possible continuation inverse H&S. The OEX then began the current bounce, but it's far too early for a trendline break if the formation is valid and if the two shoulders are to have any symmetry at all. I'm not at all sure I believe this is a valid formation, and continue to watch the SOX and the BIX, with the BIX still struggling with its 30-minute 100-pma and the SOX having dropped soundly beneath its version. That doesn't present a show of strength to back up an OEX climb.

  Ray Cummins   12/15/20,  12:46:17 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Career Education (NASDAQ:CECO)

One of our recent bearish plays is holding true to character today, starting another leg down despite the broadly bullish bias in the market. CECO shares were identified as an "early underperformer" by Briefing.com and the stock is now trading $2.37 lower at $37.90. Our bear-call credit spread (DEC-$50/$45) seems likely to expire at maximum profit and the issue certainly offers additional "premium-selling" opportunities with January options.

  Jeff Bailey   12/15/20,  12:43:04 PM
Semiconductor Index (SOX.X) 493.84 -0.46% ... after trading WEEKLY R1 507.46 at the open, pulling back into WEEKLY Pivot of 492.15 here. Will monitor for bounce from DAILY S1 of 490.54 as lower zone of intra-day support.

  Jonathan Levinson   12/15/20,  12:40:55 PM
The put to call ratio is down to .61, sinking steadily, with the VXO up 4.64% at 16.69. The weak put to call ratio shows everyone buying the bounce, not at all bullish up here. However, .61 is not yet extreme, though it's close. Definitely shaping up to be an interesting afternoon. The short cycle upphase in equities appears to be failing here.

  Jeff Bailey   12/15/20,  12:38:21 PM
Steel stocks lead the list of new 52-week highs today... IMY Link , IPS Link , ISG Link , IST Link , OS Link , SCHN Link , STLD Link , WPSC Link , X Link , ZEUS Link

  Ray Cummins   12/15/20,  12:36:59 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Shuffle Master (NASDAQ:SHFL)

Our other (new) synthetic position soared during this morning's rally and it appears there will be no opportunity to enter the suggested position. Shares of SHFL are up $1.94 at $34.87 and with the opening price above $34, there was little chance to initiate the play with a favorable debit.

  Linda Piazza   12/15/20,  12:29:10 PM
Each time I look at the CNBC screen, the Dow is either at 10105-10106 or 10111-10113.

  Linda Piazza   12/15/20,  12:22:47 PM
As usual, there's a tendency to micromanage on days like today, so I thought I'd mention the possible inverse H&S that's building on the OEX five-minute chart. While sometimes H&S (of each type) do serve as continuation patterns, that's more rare than the typical inverse H&S formed at a bottom and regular one formed at a top. So, the inverse H&S building at the top of a rise would be less likely than one building at a bottom, but still possibly valid. When I study the five-minute MACD, however, no bullish divergence set up between the first shoulder and the head, with MACD hitting a lower low as the head also did. That makes the formation even more doubtful. It's perhaps possible that the MACD may be setting up bullish divergence now (equal MACD low as the price perhaps makes a higher low), but the OEX would first need to move above the previous five-minute high before that bullish divergence is confirmed.

Now that I've said all that, however, we sometimes must consider that although a formation does not appear valid for one or more reasons, some of the psychology behind a typical H&S (both types) formation may be impacting the formation of a less-valid one. The neckline of this one would be at about 535.50, but it would have a minimum upside target of only about 537, and that might be in doubt because of the concerns I've listed.

  Ray Cummins   12/15/20,  12:20:35 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Concord EFS (NYSE:CE)

Our new synthetic position in CE was not available this morning as news regarding the merger with First Data (NYSE:FDC) was posted prior to the opening bell. First Data announced today it had come to an agreement with the U.S. Department of Justice, eight states and the District of Columbia on terms that will allow the two companies to complete their proposed merger by the end of the first quarter 2004. In addition, Concord and First Data agreed to new financial terms, changing the effective "buy-out" price for CE shares. Under the terms of the new agreement, FDC will exchange 0.365 of its common shares for every CE common share, thus valuing the transaction at $14.34 for current owners of CE. The stock rallied on the news, closing the pre/post-merger spread to approximately $0.50 and preventing any entry in the speculative play.

  Jeff Bailey   12/15/20,  12:09:10 PM
12:00 Internals at this Link

  Linda Piazza   12/15/20,  12:06:12 PM
The OEX now tests the top of that possible bull flag as the SOX again slips below its 30-minute 100-pma and the BIX again tests its version.

  Linda Piazza   12/15/20,  11:59:19 AM
The OEX does appear to have broken out of the bull flag to the upside, but investors don't appear any too sure about driving it higher. The last three five-minute candles since that break have been doji or near doji.

  Linda Piazza   12/15/20,  11:52:09 AM
OIN E-Mail Replies: Regarding trading opportunities in the coming weeks

(Prior to Saddam's capture) Hello WI, I don't know that I can contribute much about the individual days, as I'm away from a trader's almanac this weekend, but I can say that I anticipate light volume that might lead to choppy or unpredictable trading conditions. I will not be engaging in unhedged short-term directional options trades during this period because of those choppy trading conditions, but will be using the time to research the strategies I want to try into the beginning of the new year. We all know about the typical Santa Claus rally, and we also know of the tendency the last few years to see declines in January, so I'll be preparing strategies that might allow me to participate in any downside, if it should occur into January. I'm considering tactics such as the OEX bear call credit spread I've been following in the MM. I'll want to see how the markets behave first, though, so this will mainly be a time for me to research and watch.

  Ray Cummins   12/15/20,  11:45:48 AM
Spreads/Combos & Premium-Selling -- E-Mail Replies: Market Character & Trends - Part II

Regardless of whether the pre-January effect provides a profitable trading opportunity, it is important to remember that throughout the history of the stock market, there have been many lesser known trends that have perpetuated into well-defined cycles. Many of these are listed in the Traders Almanac and if you're interested in that type of information (and a myriad of other unique facts and illustrations about the stock market), order the book for a discounted price at this link: Link

  Linda Piazza   12/15/20,  11:42:34 AM
The OEX still has not retraced more than half the first one-minute range, still presenting the possibility that the pullback could be a bull flag pullback. It's a little rough looking, if it is. The current thrust is testing the top of the possible flag as I type. The BIX and SOX each try to bounce from their tests of their 30-minute 100-pma's, too, but it's far from certain whether they'll be successful.

  Jane Fox   12/15/20,  11:38:53 AM
A talkative but defiant Saddam Hussein has little incentive to divulge incriminating details about Iraq's weapons programs for it would strengthen the case for charging him with war crimes. Unless the U.S. cuts a deal with him, an unlikely scenario, he probably will insist charges that he was pursuing prohibited weapons were trumped up by the allies to justify the invasion.

  Ray Cummins   12/15/20,  11:36:14 AM
Spreads/Combos & Premium-Selling -- E-Mail Replies: Market Character & Trends

(condensed - and before Saddam's capture) Hi Ray: I would really appreciate if you could give me your perspective on what you think remains of our trading opportunities for the rest of the month - due to the forthcoming holidays & market closures. In other words, do you think that next week will give us good/normal trading opportunities or will it be below normal, due to low volume, etc. Are there any historical patterns that you know of that could provide insight? Thanks in advance for your response. WI

From my viewpoint, there will certainly be opportunities for trading if you are comfortable with techniques that benefit from volatile (potentially low volume) activity. I suppose some traders, especially scalpers, would thrive on these conditions, however they are probably not conducive to most spread and combination strategies. Regarding trends, there are a few well-known historic patterns and the one that always comes to mind in December is the "Pre-January Effect."

Read about that subject here: Link

  Jeff Bailey   12/15/20,  11:24:15 AM
11:00 Internals at this Link

  Jonathan Levinson   12/15/20,  11:24:03 AM
The put to call ratio is down to .66 for the 3rd half hour of trading, VXO up to 16.76. The "bounce" that the oversold short cycle oscillators are waiting for is more like a slope of hope, with equities continuing their slide. This is very listless trading with a mild negative bias off the highs. As usual, the futures market saw the entire bounce and correction, with the cash markets performing a gap and crap from the open.

  Ray Cummins   12/15/20,  11:12:33 AM
Spreads/Combos & Premium-Selling -- E-Mail Replies: Put-Selling Techniques

Hello Ray...Another question from your old put sellin' buddy. If you are lucky enough to sell a put on a upward trending stock (index) in an upwardly trending market do you ever take profits (buy your position back at a profit) prior to expiry and if the fundamentals are intact sell another higher strike of the same underlying either at the same or the next expiry if the trend remains intact? Could one do this on and on until say a trailing 20-dma was violated? I was reading about buying options and following the trend with a trailing 20-dma but what was intriguing to me was the thought of doing that with sold puts. As always, Thank You...RC

The strategy you mentioned certainly has its place in the "premium-selling" toolbox, and I think most professional traders would say you are simply "rolling for credits" -- a phrase coined by option guru Larry McMillan in the original bible of derivatives trading: Options As A Strategic Investment. As I recall, Larry's technique focuses on selling deep-OTM calls or puts, depending on the market environment, and suggests adjusting (closing if necessary) the positions each month or when dictated by a change in technical character.

One thought I would add to his approach is that in almost every case, any decision you make about a specific trade should be based on your analysis of the underlying issue and your forecast for its future movement. That assessment is then factored into the risk/reward outlook for the strategy (and the specific position) you are considering. Of course, that's a very subjective task and the best advice I can offer on the subject is: If conditions dictate that a new position in the issue is viable, based on the fundamental/technical indications, the size of the premium/credit, and your personal criteria regarding the profit/loss outlook, then it should be considered as a candidate along with any other potential plays currently being evaluated.

  Linda Piazza   12/15/20,  11:11:18 AM
The SOX fell back through its 30-minute 130-pma and the neckline of its supposed inverse H&S, as shown in my 10:33 post this morning. It now tests the 100-pma, however, and could find support there. The BIX has already fallen through its 30-minute 100/130-pma's, and now tests the 21-pma and could find support there. So far, their trading patterns look somewhat weak, but we can't rule out this possible support.

  Linda Piazza   12/15/20,  10:58:42 AM
While still strong, the advdec line is down to 1268 from its high near 3500 today. The trajectory has been down since about 9:45 this morning.

  Mark Wnetrzak   12/15/20,  10:57:39 AM
MSFT is grining out new lows, up 20 cents or .75% on the day.

  Linda Piazza   12/15/20,  10:56:25 AM
The BIX and SOX continue to hover just over their 30-minute 100-pma's, with the BIX already below its 30-minute 130-pma.

  Jeff Bailey   12/15/20,  10:51:08 AM
S&P Banks (BIX.X) 331.27 -0.05% ... session low of 330.97 comes just at its WEEKLY pivot. Some sector weakness suggesting further pullback of morning gains for major indices should BIX.X move much below the 330.00 level.

  Linda Piazza   12/15/20,  10:49:42 AM
More on the parking-lot survey this holiday season. We purchased a few last-minute holiday gifts this weekend, and stood in one line that stretched through half the store to check out. We've never had that happen since moving to Dallas two years ago, so either there's a pickup that's regional only or else retailers are going to do better this holiday season.

  Linda Piazza   12/15/20,  10:33:58 AM
Here's what I'm watching on the SOX: Link

  Jeff Bailey   12/15/20,  10:31:28 AM
QQQ $35.61 +1.04% ... here's 60-minute chart for new swing trade setup. Note POTENTIAL reverse h/s pattern. Link

If bull can get entry back in zone of support, then might bode well for end of year bullish bias. Today was icing on the cake, but should bring greater bullish bias to end of year. May look for mutual funds to now back off their selling with positive catalyst now at hand, which may have fund managers less worried about protecting year's gains.

  Linda Piazza   12/15/20,  10:28:07 AM
Interesting. The BIX traded all the way up to the 0.675% envelope surrounding its 30-minute 21-pma today, and then it dropped all the way below its 30-minute 130-pma. It now tests its 30-minute 100-pma and its 30-minute 21-pma, at 331.08 and 330.83, respectively, with the BIX at 331.08 as I type. A fall below that 30-minute 21- and 100-pma's would look bearish indeed for this index, and, perhaps for the OEX, too.

  Jane Fox   12/15/20,  10:25:44 AM
Last week I posted a chart of the spread between the $RUT.x and the $SPX.x and was reading this as bearish for the market overall but over the weekend I read about another scenario that could be taking place. The $RUT.X (Russell 2000 Index), which tracks U.S. companies with market capitalizations of less than $1.2 billion, is up 43% this year, compared with a 22% gain for the large-cap S&P 500-stock index. This is the fifth year in a row where small caps have outperformed their larger brethren. But money managers don't expect the streak to continue because of rising interest rates, a weaker dollar and higher valuations.

Wall Street expects to see a quarter-point interest-rate tightening early next summer, although not huge, small caps tend to be cyclical, and therefore more sensitive to a possible economic deceleration that higher rates could bring on in 2004. The current thought is that if you think the Fed is going to start to tighten, you want more exposure to large-caps and less to small caps. Every year the FED starting tightening resulted in a shift from small cap to large cap.

  Linda Piazza   12/15/20,  10:21:53 AM
The Dow retraced exactly to the midpoint of its first one-minute range and then turned up again. That presents the possibility that the Dow pullback, at least, could still be a bull-flag pullback. It has to reach a new one-minute high above 10,117.10 before that could even begin to be confirmed, however.

  Jonathan Levinson   12/15/20,  10:19:27 AM
The USD Index has been clocked down to 88.54 on my delayed chart, gold and silver back to almost unchanged. The equity bounce is very weak so far. Ten year bonds are almost back to unchanged, -.8 bps.

  Linda Piazza   12/15/20,  10:16:53 AM
We've got our worse-case scenario this morning for the hypothetical OEX 535-540 bear-call credit spread I priced more than a week ago. A Hussein capture wasn't factored into the play and now the OEX has traded above our sold strike. Actually, I'm glad this happened so that we can examine how such a situation could be handled and how it impacts the play.

Fortunately, there's still some time value left in the sold call, so no danger of assignment exists at yet, but this is always the first danger when you're in any credit spread. As I type, closing the spread would cost $2.00 (buying back the sold call at $3.30 and selling the bought call at $1.30), but since the participant would have taken in $0.95, the total loss would have been only $1.05 plus commissions. That's not fun, but again, an ATM December put purchased more than a week ago when the OEX traded near 528 would have lost far, far more.

Should the hypothetical play have been closed right now? If possible, it certainly should not have been closed at the open, because closing it then would have cost far more with the hiked-higher options prices at the open. With time value still existing in the sold call and with the possibility of a pop-and-drop opening in the making, and with the OEX still below the 535.95 we want it to be below at expiration, I probably would have advised watching and waiting.

  Jonathan Levinson   12/15/20,  10:13:13 AM
Gold is strengthening, with HUI now up 1.14 at 238.96, XAU +.52 at 107.19.

  Jeff Bailey   12/15/20,  10:10:43 AM
10:00 Internals at this Link

  Jonathan Levinson   12/15/20,  10:04:02 AM
The Fed has replaced 3B expiring with 10B in new repos, for a net add of 7B on the day via open market ops.

  Jane Fox   12/15/20,  10:02:44 AM
The International Securities Exchange (ISE) has filed a petition with the SEC protesting the CBOE's exclusive rights to the S&P 100 and S&P 500 options, the two most heavily traded index options. The ISE believes the single listing rights are bad for traders because it stifles competition. The CBOE, on the other hand, argues that competition stifles innovation and the exchanges will be hesitant to create new products if they know they will be required to offer them to other exchanges.

  Linda Piazza   12/15/20,  9:59:15 AM
The nested OEX five-minute Keltner channels show support gathering at 533.85, just above the 533.25 likely support indicated by other methods, as indicated in my 9:57 post.

  Linda Piazza   12/15/20,  9:57:16 AM
The midpoint of the first one-minute range for the OEX lies at about 533.25, at the top of a known S/R range from the weekly and monthly chart. Since even the first one-minute range was so large, candlestick theory holds that support should be found at that midpoint. Since it's the top of a known S/R range, there's even greater credence given to that likely support. A violation of that support would be important, then, but we haven't yet had such a violation.

  Linda Piazza   12/15/20,  9:44:30 AM
I've decided to dial down even further and watch the OEX using a 1MRT system, with the one-minute high and low at 534.77 and 531.78. Even the two-minute range looked too large, and there's some good correlation here with known support and resistance levels. Using that 1MRT system, the OEX is still within the neutral zone, not having moved above the bullish #2. Studying that one-minute chart, though, this pullback so far could be a bull flag.

  Jeff Bailey   12/15/20,  9:38:51 AM
Day trade long ... CNF Inc. (CNF) $33.24 +0.84% ... on trade at $33.27, stop $32.97, target $33.98.

  Jeff Bailey   12/15/20,  9:36:40 AM
QQQ $35.75 +1.38% ... stopped on swing trade bullish from $34.85.

May look to reload for bullish trade at weekly pivot

  Linda Piazza   12/15/20,  9:34:37 AM
The OEX first five minutes ranged from a high of 536.49 to a low of 531.78, with the midpoint at 534.14. The OEX is currently above that midpoint, indicating strength in the earliest trading (as if we didn't know that), but we should see a first retracement beginning soon.

Since that first five-minute range was so large, I will be watching the OEX based on a 2MRT rather than a 5MRT, with the two-minute high at 535.81 and low at 531.78. Even that's a rather large range.

  Jeff Bailey   12/15/20,  9:32:21 AM
QQQ $35.82 +1.64% ... session low so far $35.80

  Jeff Bailey   12/15/20,  9:30:53 AM
Dow Tranpsorts (TRAN 3,005.00 +0.71% ... new highs.

  Jeff Bailey   12/15/20,  9:26:52 AM
S&P 500 Index (SPX.X) chart with new WEEKLY levels. Link

  Linda Piazza   12/15/20,  9:23:08 AM
I'm studying the OEX monthly chart this morning. The 38.2% retracement of the decline from the March 2000 high to the July 2002 low lies a far 30 points ahead, at just above 561, so should not be a factor in today's trading. The OEX looks to open above the 531-533 zone, however. Next resistance shows up near 536, but that resistance was from 1998, and doesn't appear as strong as the 531-533 zone had appeared to be. Above that, next monthly resistance is near 545-548, and that zone appears to be much stronger. The daily ascending regression channel tops out at about 540 right now. The OEX has been climbing its daily Bollinger band for quite a while now, and so certainly looks extended on that basis, but we all know it can become more so.

How will Hussein's capture affect markets? I've heard debate this morning about the state of Iraqi oil fields and how long it will take and how much money it will require to repair them. I've heard about how the travel industry will benefit, although that's countered by arguments that terrorism will not decrease. We've seen the dollar improve and then lose some of its gains during overnight trading. Will shorts be more afraid or will institutions be more gleeful, selling into any climbs? I think I'm going to have to wait to see what happens on the open.

  Jane Fox   12/15/20,  9:16:40 AM
Morgan Stanley has ousted Steven Pelayo, a semiconductor-equipment analyst in the San Francisco office, for "selective disclosure" of information to a handful of clients. The 33 year old Mr. Pelayo, was allowed to resign voluntarily on Dec. 8 after the firm found evidence of "inappropriate dissemination" of his research views to only a few clients. Mr. Pelayo was a top-rated analyst in his sector in The Wall Street Journal's latest "Best on the Street" survey last May.

  Jeff Bailey   12/15/20,  9:10:51 AM
09:00 Update at this Link

  Jonathan Levinson   12/15/20,  8:42:18 AM
For all the excitement, the US Dollar Index only made it to 89.20, and is back down to 88.87. There's a gap to 88.55.

  Jonathan Levinson   12/15/20,  8:33:35 AM
The Empire State Manufacturing Index fell to 37.4 from its record 41 in November, beating estimates by .4. The futures bounced slightly on the minor news.

  Linda Piazza   12/15/20,  7:23:05 AM
Good morning. The Nikkei opened higher, climbed higher, and closed on the high of the day. The Nikkei closed up a whopping 321.11 points or 3.16%, at 10,490.77. The gains were broad-based. Factors sending the Nikkei higher included improved sentiment after Hussein's capture; a higher U.S. dollar, also helped by improved sentiment; continued reaction to Friday's tankan survey, excitement over Toshiba's reported development of the smallest hard-disk on record; and relief that noncombatant Japanese soldiers, promised to help rebuild Iraq, might see a more stable Iraq. Although gains were broad based, techs and banks led the gains.

Not all Asian bourses traded higher, however. Pakistan's bourse was down as the country dealt with an assassination attempt on the president, an attempt the president survived. Hong Kong's Hang Seng lost 0.59% and China's Shanghai Composite was flat, closing down 0.03%. The Taiwan Weighted gained 1.13% and South Korea's Kospi gained 1.99%. Singapore's Straits Times gained 0.89%.

CNBC commentators were talking about 12- and 15-month highs on some European bourses, with all European bourses that were open trading higher. Travel-related stocks led the pack as the biggest gainers in Europe, but car manufacturers also gained. Of interest to U.S. investors was the news that German chemical manufacturer Henkel will buy Dial (DL) and sell a hefty portion of its minority interest in either or both of two companies: Clorox (CLX) and Ecolab (ECL).

Currently, the FTSE 100 has gained 30 points or 0.69%, to trade at 4377.60. The CAC 40 has gained 43.94 points or 1.27%, to trade at 3514.54. The DAX had climbed 51.49 points or 1.33%, to trade at 3911.62.

  Jim Brown   12/15/20,  3:20:59 AM
Global chip equipment sales fall 14.5% m/m in Oct
TOKYO, Dec 15 (Reuters) - Global sales of chip-making equipment fell 14.5 percent month-on-month to $2.05 billion in October from a two-and-a-half year high in September, an industry group said on Monday.
The October figure was up 0.1 percent from a year earlier, marking the third straight month of year-on-year rise, Semiconductor Equipment and Materials International (SEMI) said in a preliminary release. The volatile data is largely seasonal. September sales hit $2.4 billion, the highest figure since April 2001.
Prompted by strong demand for digital cameras, flat-panel televisions and DVD recorders, semiconductor manufacturers have been ramping up production capacity.

  Jim Brown   12/12/20,  10:52:10 PM
2003 Annual Renewal Special

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  Jeff Bailey   12/12/20,  10:50:36 PM
Pivot Matrix for next week at this Link

Making note of QQQ WEEKLY R1 ($35.76) as it relates to Thursday's bullish swing trade target of $35.75 for the QQQ.

Begin to observe from the MATRIX, for the QQQ to have a shot at $35.76, then will most likely need the Dow Industrials (leader) to continue to trade strong above MONTHLY R2/DAILY R1 (10,070-10,075) zone on Monday. Otherwise, QQQ tentative support (dashed green) at DAILY S1/WEEKLY PIVOT needs to hold. If broken to downside, then next stop is DAILY S2 of $34.75, which would be 10-cents below entry. For most part, I'm not interested in holding the QQQ back to unchanged. If its going to ramp up, Monday is as good a day as any as MACD begins to turn higher from zero, but still BELOW its Signal. Stochastics have now recovered just more than 1/2 its way up to "overbought" area.

Here's QQQ chart with new WEEKLY Pivot levels and retracement. Link

I've marked the 10/24/03 relative low at 11/07/03 52-week high. QQQ has traded in this $2.50 range for just over a month, where the other major indices have been able to trade to the upside. With NASDAQ Comp. bullish % Link reversing lower this week to "bear alert," and NASDAQ-100 Bullish % ($BPNDX) Link "bear confirmed," QQQ bull more inclined to sell bullish targets, and raise stops to break-even .

  OI Technical Staff   12/12/20,  10:50:20 PM
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