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  Jeff Bailey   12/24/20,  2:08:01 PM
Pivot Matrix for Friday at this Link

From the looks of things Keene (Daily S2-R2 range) a cup of coffee is going to cost more than what the markets might range on Friday.

 
 
  Keene Little   12/24/20,  1:37:16 PM
Jeff, can I retract that double-or-nothing wager? Quick look at the waves on the NDX tells me to expect an up day on Friday. I hope not by much otherwise it blows up my EW count on that index, and if that happens, then I can see a labored rally into the new year.

However, I'll hedge myself by saying if we drop below Tuesday's low out of the gates on Friday, then I believe that will be good indication that the rally is finito. I'll have more in my swing trade recap later.

 
 
  Jeff Bailey   12/24/20,  1:26:39 PM
Closing market internals at this Link

 
 
  Jeff Bailey   12/24/20,  1:10:22 PM
Equity markets are closed. From all of us to all of you. Have a Merry Christmas! Link

Jonathan plays a mean set of drums.

 
 
  Keene Little   12/24/20,  1:08:25 PM
Ah Jeff, you're such a dreamer. But you're right--I've got to go study my waves to see what they're telling me.

 
 
  Jeff Bailey   12/24/20,  1:07:09 PM
You study your waves and I work on the pivots.... I'll be back with you on that bet a little later. Might just get that 32-points back on Friday.

 
 
  Jane Fox   12/24/20,  1:02:53 PM
I'm going to buy coffee futures you two!

 
 
  Keene Little   12/24/20,  1:01:42 PM
Tell you what Jeff. We'll go double or nothing. Today wasn't telling enough. I need to see a down day on Friday also. So down day on Friday, I get two cups of coffee. An up day on Friday, we're even.

 
 
  Jeff Bailey   12/24/20,  1:00:02 PM
From drinking 20-cups of coffee each day!

Looks like I'm going to gain a couple of ounces today, as I owe you a cup of coffee. I might add... a cup of coffee I so desperately need after today.

Between me and subscribers, I think Lee has friends at cattle farm in Washington.

Dow Industrials (INDU) 10,305.56 -0.31% closes down 32.67 points. Bah Humbug! Bulls got Scrooged I say!

 
 
  Keene Little   12/24/20,  12:57:08 PM
Jeff, you're so skinny. How the heck can you eat that much?!

 
 
  Jeff Bailey   12/24/20,  12:55:26 PM
Mad Cow After I finished up last night's Index Trader Wrap, I was aware of mad cow reports. By the time I had made a trip to the bank, I felt hungry. On way home (10:00 PM MST) I drove through McDonald's drive through and got a Big Mac and Quarter Pounder with cheese. It wasn't until after I ate it that I remembered mad cow reports.

 
 
  Jane Fox   12/24/20,  12:54:58 PM
WSJ is saying corn futures are been pushed lower as a result of the mad cow scare. "Chad Henderson, grain analyst and market adviser for Stewart-Peterson in West Bend, Wisc., said there was "lots of technical damage." With the speculative commission houses so long, he said, the heavy liquidation would likely leave a lasting dent in the corn market. " All analysts and traders are predicting limit-down sessions on live cattle futures that may continue for the remainder of 2003.

 
 
  Linda Piazza   12/24/20,  12:54:51 PM
For those of you celebrating tomorrow's holiday, have a great time with family and friends. For those of you not celebrating this holiday, take a breather and spend some time with family and friends anyway!

 
 
  Linda Piazza   12/24/20,  12:52:47 PM
We're seeing a clean break out of the symmetrical triangle on the OEX five-minute chart and also a break below the trendline that has supported prices since 12/10. This is a change in tenor, then, with that trendline having been tested and holding several times over the last few sessions. However, as Keene has mentioned on the futures side, we're going to see another light-volume holiday-shortened trading day on Friday, and we could see prices amble around a bit more then. Also as Keene said, this isn't bullish action.

 
 
  Keene Little   12/24/20,  12:49:34 PM
Jim has mentioned this before. With all the scare talk about potential terrorist activity over the holiday period, consider how you can hedge your portfolio. Whether it's with puts or futures, or simply stop levels, I think it's a good way to protect yourself in the event of a horrible event.

And let us all pray we don't see any terrorist activity so that we can all enjoy our families and friends over this joyous holiday without the heartache of dealing with more death and destruction.

 
 
  Jeff Bailey   12/24/20,  12:45:57 PM
Amazon.com (AMZN) $53.50 .... stopped day trade long alert.

 
 
  Linda Piazza   12/24/20,  12:38:50 PM
I'll be glad to see this year draw to an end and the next year begin. It's been a tough year for a technical trader. I know that sometimes many of us, me included, come across as "too bearish," but I really haven't considered myself particularly bearish for a while. I've just been worried about the vulnerability to the downside while fully cognizant of the gains that have been made, and now I'm again growing worried about that vulnerability. I came onto the MM to represent the self-taught trader, not the trader with all the answers, so I'm always just aware enough that I might not have all the information or experience to always allow for the possibility of further gains. Maybe the VXO will return to those historical lows that were seen a decade ago. Maybe this is a new bull market. Who am I to say?

My frustration this year has been that the normal technical signals for an impending pullback--even a modest and normal pullback--have not signaled such pullbacks. Even bull markets, even strong bull markets, have pullbacks while weak hands are shaken out and strong hands buy the weakness. That's just natural. Markets have rhythms, too, ebbing and flowing, or they should, so the failure of that kind of behavior always leaves me in a defensive posture, afraid that the next pullback will be "the" one.

 
 
  Jeff Bailey   12/24/20,  12:33:48 PM
Amzon.com (AMZN) $53.78 +2.5% ... raising day trade stop alert to profitable at $53.50.

Just bumping up against the upper-end of our regression channel.

 
 
  Jeff Bailey   12/24/20,  12:31:52 PM
Amazon.com (AMZN) $53.82 +2.53% ...

 
 
  Linda Piazza   12/24/20,  12:29:54 PM
Yesterday's OEX candle was a small-bodied candle at the top of a rise. While it wasn't a doji, such small-bodied candles can still serve as the second candle of a potential three-candle reversal signal known as an evening-star formation. This one wouldn't have been classic at any rate, because it wasn't preceded by a large white candle, but rather by a large white candle that was then followed by a doji, a bullish candle, and then yesterday's small-bodied candle. Still, since yesterday's small-bodied candle formed under the known 544-545 resistance zone, I was watching this morning's behavior and giving the idea of a potential reversal at least some small credence. So far, there's no confirmation of the potential reversal, although we again have a small-bodied candle.

 
 
  Jeff Bailey   12/24/20,  12:27:08 PM
QQQ $35.97 +0.36% ....

 
 
  Jeff Bailey   12/24/20,  12:23:24 PM
12:00 Internals at this Link

Big board breadth now positive. Traders might try and paint the indices green by close. It's going to be close with just 34-minutes left in today's trade.

 
 
  Linda Piazza   12/24/20,  12:19:04 PM
We have a dreaded symmetrical triangle setting up on the OEX. I say "dreaded" because lately the things break one direction and then the other. Knowing about that propensity, though, keeps us skeptical about jumping on a trade when there's a false break one direction or the other.

 
 
  Jeff Bailey   12/24/20,  11:52:39 AM
Amazon.com (AMZN) $53.66 +2.24% ... trades upper-end of our regression channel. raise stop alert to break-even for day trade bulls

 
 
  Linda Piazza   12/24/20,  11:52:14 AM
Since about 10:55, the OEX has been declining while the advdec line has been improving. That's divergence, but I'm not sure how it will be resolved. Since the OEX approaches five-minute Keltner support near 542.75 and also approaches that trendline off the 12/10 low at about that same place, I'd guess that the improving advdec line may be pointing to an impending bounce attempt, but . . . something just doesn't feel right.

 
 
  Jeff Bailey   12/24/20,  11:48:59 AM
QQQ $35.98 +0.39% ... session low/high so far $35.80-$36.02.

 
 
  Jeff Bailey   12/24/20,  11:42:19 AM
Hovnanian Enterprises (NYSE:HOV) $88.58 -1.47% Link .... With the home sales below estimates but up and HOV at support here in the 87.50 area do you have any comments for new entries? Any and all comments welcome ...

I know NOTHING about HOV as it relates to its business. PnF analysis shows stock recently generating additional buy signal and support firm at $83, with bullish vertical count of $106 from September (column of X's from $49-$67) still in play. Only concern, thus 1/2 bullish positions at this point is the "high pole warning" (column of O's from $95-$83). Can play long here, stop $82.

 
 
  Linda Piazza   12/24/20,  11:31:19 AM
The pharmaceutical index $DRG.X performs well today, climbing above the November highs. I'm wondering: are institutions or funds positioning themselves into more defensive stocks again?

The weekly chart shows the index trading in a rising regression channel since hitting July 2002 lows. I'm always skeptical that such a climb off lows could be a bear-flag climb, however, but I can't discover any bearish divergence on the weekly MACD/price comparisons. The channel is rather wide, too, and not a channel that I would characterize as being a tight pattern of higher highs and higher lows. as is typical of flags. Still, traders should perhaps watch for a climb above 350 before deciding that the strength is more than a bear-flag climb. In June, the index was turned back at 350.29.

 
 
  Jeff Bailey   12/24/20,  11:13:26 AM
11:00 Internals at this Link

 
 
  Linda Piazza   12/24/20,  11:08:37 AM
As Jane often notes on days like today, they may not be good for trading, but they can help confirm S/R levels. Today the OEX has twice bounced off the ascending trendline off its 12/10 low, and it did so once yesterday, too. If that trendline is ever broken, we'll know that the break might be significant.

 
 
  Jeff Bailey   12/24/20,  11:02:22 AM
Amazon.com (AMZN) $53.40 +1.78% ... session high. Here's what I think just took place. Link

Based on addition of regression channel, will RAISE STOP ALERT to $53.75 should AMZN trade BLUE #2 of $53.95.

 
 
  Linda Piazza   12/24/20,  11:01:48 AM
The advdec line has continued to improve since about 9:40 this morning. It's still negative, at -231.

 
 
  Linda Piazza   12/24/20,  11:00:24 AM
Thanks, Jane, for the compliment on my 10:31 post, but all my analysis says is that this is a complicated subject! I've been writing back and forth with another OIN reader this morning, discussing what we think will happen with implied volatility over the next month. A trader would have to have a bias about the change in implied volatility as well as change in price before deciding on an optimum strategy if considering employing spreads in the manner we've been discussing. I'm not sure that would be so easy to do in the heat of the battle when trying to swing trade the OEX.

 
 
  Jeff Bailey   12/24/20,  10:49:09 AM
Dow Industrials (INDU) 10,322.67 -0.14% .... lower by 15 points.

What kind of coffee do you like Keene? Just in case MCD doesn't try and fill its gap back higher?

 
 
  Jane Fox   12/24/20,  10:41:59 AM
Linda - great analysis (10:31 post)!

 
 
  Jeff Bailey   12/24/20,  10:37:49 AM
AMEX Gold Bugs ($HUI.X) 229.38 +1.01% ... trying to get a bounce going after testing rising 50-day SMA. Either that or us beef eaters are going to be eating gold instead of meat!

 
 
  Jonathan Levinson   12/24/20,  10:37:45 AM
The put to call ratio started at .85 and has lowered to .79- at the high end of neutral.

 
 
  Linda Piazza   12/24/20,  10:31:01 AM
Continued discussion from 10:27 post: I'm as bad as the next person in talking about time premium decay while neglecting to mention the part that changes in implied volatility can play on a spread's performance. Because I had not previously engaged in swing-trading spreads and because I usually do let them run until option expiration, I'm usually studying their performance at option expiration if the OEX (or other underlying) is at a certain price at opex. However, if we're going to consider swing-trading spreads, the subject grows much more complicated. Depending on the spread being considered, an expansion in volatility can be deleterious or beneficial to the position. For example, if one enters a bullish spread such as a call debit spread when volatility is low, and the underlying then climbs, with IV expanding quickly, the spread may actually shrink instead of widen, and traders might find themselves in the unhappy position of losing money on the spread as the underlying climbs. In that position, it would have been far better to have simply purchased a call position. Conversely, if one enters a bearish put spread at a time when volatility is low, and implied volatility increases, traders benefit as the spread widens.

This subject is too complicated for me to explain in the Market Monitor, and sometimes feels too complicated to bother to understand, even for someone like me with a physics and mathematics background, who loves math and charts and figures. However, we need to understand what can happen before we even consider employing such tactics on a short-term basis. This is one of the reasons I've employed spreads in a Mike Parnos CPTI style rather than as short-term trading vehicles. It's also one of the reasons that I benchmarked those options prices yesterday so we can watch how various trades unfold. I also suggest that anyone considering these types of plays spend quite a lot of time with Chapter 37: "How Volatility Affects Popular Strategies" in McMillan's Options as a Strategic Investment before undertaking trading spreads as a short-term trading strategy. As with all options trades, you can be right with direction but still lose money if you're not also right about the different factors that go along with the direction taken. Those factors include timing, but must not exclude changes in implied volatility.

 
 
  Jane Fox   12/24/20,  10:28:32 AM
The health implications of the Mad Cow scare are minimal but the economic implications are substantial for the U.S. cattle industry, the single largest part of the American agriculture sector. U.S. consumers spend more than $50 billion on beef annually and the cattle industry generates about $180 billion in economic activity. Not only will the food and restaurant industries have to deal with consumer fear of eating beef, a fear that depressed European beef sales for years, but U.S. trade partners are expected to swiftly ban imports of U.S. beef. Several nations, including Japan, South Korea, Australia, Singapore, and Taiwan, halted U.S. beef imports just hours after the announcement.

 
 
  Jeff Bailey   12/24/20,  10:27:47 AM
Ciena (CIEN) $6.11 +0.18% ...

 
 
  Linda Piazza   12/24/20,  10:27:22 AM
Yesterday, in response to readers' requests that we consider swing-type options plays involving spreads, I benchmarked some January OEX options prices so that we could observe their performance over the next days to weeks. In response, I received the following email, copied here with the author's permission: Taking into consideration an OTM OEX bear call credit spread might be a good idea, but one can do that with a much better risk:reward by entering an intermarket OTM credit spread between OEX and RUT. There is a long and short term close correlation between RUT and OEX (currently RUT:OEX=1.0132), but there is also a huge disparity in IV between both indices. RUT calls with strike prices above 550 are currently (note: as of yesterday morning) trading with an IV of app. 23%, OEX strikes with an IV of app. 13% (10% disparity in absolute terms, 80% in relative terms). Note: I have not verified this information independently.

This position includes a naked index option, so would not be suitable for most of our readers, but this experienced trader brings up another topic related to spreads that I was going to gradually introduce this week: the part that implied volatility plays on how a spread performs. (Thanks, F.H., for your detailed analysis of this position and for the impetus to hasten this part of the discussion. F.H. provided far more details about the position than I've included here, for any who might be interested.) continued

 
 
  Linda Piazza   12/24/20,  10:25:42 AM
The OEX's behavior hasn't yet ruled out a possible bear flag, but like my fellow commentators today, I'm not putting too much credence (or any of my money) on today's market behavior.

 
 
  Jeff Bailey   12/24/20,  10:24:37 AM
Day trade long alert .... Amazon.com (AMZN) $53.01 +1.1% Link here, stop $52.60, target $54.99.

Might have been a trap for bears at $47.00. Been hearing that online retailers stole some of Christmas spirit from brick and mortar.

 
 
  Keene Little   12/24/20,  10:22:23 AM
True Jeff. And oh by the way, I am currently flat. How's that for conviction?

 
 
  Jeff Bailey   12/24/20,  10:21:45 AM
Considering today's volume Keene the cup of coffee bet may be only excitement as it relates to the major indices.

Some bears in Overstock.com (NASDAQ:OSTK) $22.00 +15.19% are a bit excited today! So are bulls. Did everyone get their "top 50" picks?

 
 
  Keene Little   12/24/20,  10:18:57 AM
If you didn't read Jeff's and my commentary last night, we have a cup of coffee riding on a wager as to who will be right today. I say DOW will close down today, Jeff says up. So far I can't tell who might win.

 
 
  Jeff Bailey   12/24/20,  10:16:03 AM
Dow Industrials (INDU) 10,326 -0.11% .... session low remains 10,305 and didn't see test of DAILY S1. Dow's day before Christmas up 8 of last 12 still in play for 9 of 13.

MCD $23.93 -5.37% ... opening 5-minutes was low of session at $23.10.

GM $53.03 +2% continues to impress. Dow breadth now mixed with A/D 14:16

 
 
  Linda Piazza   12/24/20,  10:14:54 AM
The BIX continues to find support at its rising 30-minute 18/30-pma's, but the index hasn't been able to make it above yesterday morning's high and oscillators no longer look as if they want to support the bullish case. They're flattening.

 
 
  Jeff Bailey   12/24/20,  10:14:21 AM
QQQ $35.95 +0.3% ...

 
 
  Linda Piazza   12/24/20,  10:11:24 AM
The OEX is rising above the level that would have marked the 50% retracement of the flagpole if the current rise had been a bear-flag rise. However, it's only barely above that level, so I'm still giving it a little leeway since this is a low-volume day. However, the advdec line has been improving, too, while still remaining negative, so I'm keeping an eye on both.

 
 
  Jeff Bailey   12/24/20,  10:06:05 AM
Overstock.com (OSTK) $21.00 +10% Link ... upside alert here at $21.00

BIIIIIIG short interest

 
 
  Jeff Bailey   12/24/20,  10:05:25 AM
10:00 Internals at this Link

Yesterday's internals at this Link

Check out the volume today.

 
 
  Jonathan Levinson   12/24/20,  10:05:15 AM
We have new homes sales disappointing, a mad cow (disease) outbreak, heightened terra (or) alert, and the NQ is up 2, Dow futs down just 15? Here's the possible culprit: Link

 
 
  Jonathan Levinson   12/24/20,  10:01:27 AM
New home sales 1.08M vs. expectations of 1.12M.

 
 
  Linda Piazza   12/24/20,  10:00:58 AM
With the Dow trying to hold over 10,300, I wouldn't be surprised to see a measured distribution pattern such as a bear flag form on the OEX now. If so, we'll see a tight pattern of higher highs and higher lows, with that pattern breaking to the downside before the OEX retraces higher than 542.63.

 
 
  Jonathan Levinson   12/24/20,  9:59:35 AM
A 2.75B onvernight repo for 12.75B added today, 16.25B expiring, net drain of 3.5B.

 
 
  Linda Piazza   12/24/20,  9:53:09 AM
The GSO software index's 30-minute chart also shows that index springing up from a test of its 30-minute 18/21-pma's, but that spring has brought the index right up into yesterday's congestion zone.

Scanning the various charts, I see indices that are trying to adopt some strength, but about to face various resistance levels, so perhaps the strength could be tempered? It's just dangerous to make any predictions and especially to act on any predictions in a low-volume environment. All know that today is supposed to be bullish, so there might be continued attempts to buy dips, but that's got to be tempered by worries about terrorism and the impact of mad cow disease on certain companies.

 
 
  Jeff Bailey   12/24/20,  9:49:55 AM
QQQ $35.90 +0.13% ....

 
 
  Linda Piazza   12/24/20,  9:49:46 AM
The BIX 30-minute chart shows the index springing up from a test of its 30-minute 18-pma, with oscillators looking as if they want to confirm the strength. At 338.30 as I type, the BIX soon faces yesterday's 338.61 high.

 
 
  Jeff Bailey   12/24/20,  9:48:19 AM
S&P Banks (BIX.X) 338.30 (unch) ....

 
 
  Linda Piazza   12/24/20,  9:47:55 AM
The SOX just hasn't been able to make it above round-number resistance at 500 and gap resistance near 502, but it looks as if it's going to try again. It's at 499.36 as I type.

 
 
  Linda Piazza   12/24/20,  9:46:12 AM
We haven't seen much of a bounce attempt so far. The five-minute nested Keltner channels show resistance gathering thicker than support on the OEX, so if the OEX does gather the energy to bounce, it's going to be tough going. In a light-volume environment, that might not stand in the way of a market determined to bounce, however.

 
 
  Jeff Bailey   12/24/20,  9:44:34 AM
Dow Industrials (INDU) 10,311 -0.26% ... session low so far 10,305.

MCD -5%, GM +1.4% rest are fractional gain/loss. Breadth negative at 24:6.

 
 
  Jeff Bailey   12/24/20,  9:42:32 AM
QQQ $35.84 (unch)

 
 
  Linda Piazza   12/24/20,  9:40:54 AM
The advdec line continues to drop, corroborating the bearishness seen in other indicators. However, the OEX, at least, is an an inflection point--that trendline off the 12/10 low. I would expect at least a mild bounce attempt near here as we come into the time of the usual first retracement attempt. If we don't get at least a mild bounce attempt here, then markets are really bearish.

 
 
  Jeff Bailey   12/24/20,  9:39:40 AM
Restaurant stocks sorted by % decline in early trade. Link

Notable gainer not shown is Landry's (LNY) $26.30 +3.13%.

 
 
  Jonathan Levinson   12/24/20,  9:37:59 AM
Check out the US Dollar Index. This last bottom is the bear market low- stop-run, anyone? Link

 
 
  Linda Piazza   12/24/20,  9:37:48 AM
Earlier, Jonathan posted a funny quote for today. Here's my favorite quote for today: Remember not to confuse brains with a bull market. (McMillan, Options as a Strategic Investment, 727)

When I last read those words, we were in a bull market and they probably didn't seem funny at the time, but they sure do now. My recommendation for the day, as this year of an intermediate bull market winds down, is that you spend some time reviewing material that you haven't read for a while or first read when you were an inexperienced trader. This is a witticism that won't impact my trading, but as I'm reviewing old texts this week, I'm finding a lot of information that has more import than it did when I first began trading.

 
 
  Linda Piazza   12/24/20,  9:36:15 AM
The advdec line is at -1000, a bearish development so far.

 
 
  Jonathan Levinson   12/24/20,  9:33:07 AM
Feb gold is up .60 at 412.20, HUI +.80 at 227.90 and XAU +.24 at 104.06.

 
 
  Linda Piazza   12/24/20,  9:33:04 AM
During the first five minutes of trading, the OEX ranged from a high of 543.12 to a low of 542.18, with a midpoint at 542.65. The OEX is currently below that midpoint, but we've seen this behavior in early trading several times over the last week or two, with little impact on later trading. However, the OEX does currently head down to test once again the rising trendline off the 12/10 low with that trendline currently just below 542.

 
 
  Jeff Bailey   12/24/20,  9:31:40 AM
Semiconductor Index (SOX.X) 498.83 -0.22% Link ...

 
 
  Jeff Bailey   12/24/20,  9:30:06 AM
Micron Technology (MU) $13.53 +2.6% Link ....

 
 
  Jeff Bailey   12/24/20,  9:27:38 AM
QQQ $35.84 .... trading flat at $35.84 in pre-market trade. swing trade bull alert from yesterday's entry of $35.70. Will raise stop from $35.20 to $35.25. Target remains $36.25.

 
 
  Jeff Bailey   12/24/20,  9:23:00 AM
Ciena Corp. (CIEN) $6.04 ... trading $6.06 in pre-market. swing trade bullis profile alert will have me suggesting the raising of a stop just below yesterday's low. Raising stop to $5.99, target remains $6.45.

 
 
  Linda Piazza   12/24/20,  9:21:09 AM
I'm still under the impression that the goal of funds and institutions is to keep the indices as near current levels as possible into the end of the year, and I'm still operating under that thesis this morning. However, while the incidence of a single case of mad cow disease is not going to undermine the U.S. economy, it will seriously impact select companies, perhaps making it more difficult to maintain this always-go-higher-never-retrace tenor to the markets. With the Dow's strength being of primary importance, and with MCD being the only Dow stock that might be hit particularly hard by this news, let's see what happens when the markets open.

 
 
  Jonathan Levinson   12/24/20,  9:10:31 AM
9:07am ITALY'S PARMALAT FILES 'FAST-TRACK' BANKRUPTCY - FT.COM

 
 
  Jonathan Levinson   12/24/20,  9:08:53 AM
Al Green has already launched a 10B 15-day repo, refunding an expiring 7B 14 day repo for a net 3B addition. We await news regarding the expiring 9.25B added yesterday.

 
 
  Jeff Bailey   12/24/20,  9:05:40 AM
09:00 Update posted at this Link

 
 
  Jonathan Levinson   12/24/20,  8:28:36 AM
8:30am WEEKLY U.S. JOBLESS CLAIMS DIP 1,000 TO 353,000

 
 
  Jonathan Levinson   12/24/20,  8:28:13 AM
8:30am U.S. NOV. DURABLE GOODS ORDERS PLUNGE 3.1%

 
 
  Jonathan Levinson   12/24/20,  8:09:50 AM
We await initial claims est 355K and durable orders for Nov, est .6%.

 
 
  Linda Piazza   12/24/20,  6:59:57 AM
Good morning. After a one-day holiday Tuesday, the Nikkei treaded water in early trading, dipped 74 points below its day's high early in the afternoon, and then managed to climb back near the flat-line level by the close. It closed down 1.24 points or 0.01%, at 10,371.27. The big news circulating had been Japan's immediate halting of U.S. beef imports after the discovery of mad-cow disease in a single cow in Washington state. Japan is the biggest consumer of U.S. beef, according to a Bloomberg article. Later South Korea and Singapore also banned U.S. beef, and this morning, more countries are doing the same. However, beef imports do not control the Japanese economy, and gains in shipping companies and retailers offset losses in beef-related stocks. Tech-related stocks turned in a mixed performance. The news about mad-cow disease perhaps contributed to weakness in the dollar, however, which did negatively impact exporters. Although the Nikkei will be open tomorrow, it will close early December 30 and remain closed until January 5, so we should perhaps expect thin trading in the days leading up to that holiday.

Elsewhere in Asia, bourses mostly traded higher. The Taiwan Weighted gained 0.21%, but South Korea's Kospi ranked as one of the few declining bourses, losing 1.16%. Troubled credit card company LG Card dropped again after a media report that few expressed any interest after LG Group proposed to sell the unit. Singapore's Straits Times gained 0.29% and Hong Kong's Hang Seng gained 0.29%. China's Shanghai Composite gained 0.88%.

European bourses mostly trade higher this morning, with many already closed for the holiday, but talk on CNBC Europe and in print media also centers around the likely impact of a case of mad-cow disease on U.S. soil. An existing EU ban already controls most U.S. beef imports and it's acknowledged by European commentators that the U.S. economy is not built on beef sales, but dollar weakness and other factors are being closely watched.

Also being closely watched today is troubled Italian dairy company Parmalat, with discussion this morning on CNBC Europe centering on whether the company should be allowed to "go to the wall." It's expected to file for bankruptcy today, and now discussions broaden into whether other European companies could be perpetuating this kind of fraud. These kinds of companies "travel in packs," one CNBC Europe commentator worried this morning, going on to mention the disclosures in the U.S. that closely followed the Enron debacle. Nevertheless, most European bourses hold up fairly well. The FTSE 100 trades up 10 points or 0.23%, at 4450.90. The CAC 40 trades up 7.70 points or 0.22%, at 3507.79, with that 3500 level being closely watched. Germany's DAX is one of the bourses already closed for the holiday.

 
 
  Jeff Bailey   12/23/20,  11:14:17 PM
Express Scripts (ESRX) ... doing some checking into Banc of America history on ESRX. I will note that on April 9, 2003, Banc of America initiated coverage of ESRX with "buy" rating. On April 9, 2003, ESRX opened at $54.75, closed $55.00 that day.

Over course of next couple months, ESRX eventually traded $75. Now making notes that recent low of ESRX was right around $55.00.

Here's bar chart of ESRX, where I set beginning of time to Banc of America's initiation of coverage. Any guesses as to who might have been a buyer recently at $55? Link

 
 
  Jeff Bailey   12/23/20,  8:52:22 PM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   12/23/20,  5:47:19 PM
The Market Monitor has been archived. To view Tuesday's entries, please click this Link

 
 

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