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  Jeff Bailey   12/29/20,  8:54:47 PM
Pivot Matrix for tomorrow at this Link

  Jeff Bailey   12/29/20,  4:19:05 PM
Closing internals at this Link

  Linda Piazza   12/29/20,  3:52:50 PM
The $TRAN is now at 3035.22 as I type, well within a day's striking distance of the 3050.40 swing high from March, 2002. In fact, it's close enough today that we could probably consider this a test of that level. Tomorrow should be an important day, as we've certainly had another test of COMPX 2000, SPX 1100, and even a close approach to OEX 550 today. If the $TRAN should test that level and then be slapped back, that might put us on alert. If it should test it and then close above it, that puts on the Dow watch, waiting to see if it can confirm the closing high in its sister index.

Curiously, the SPX is ending the day right at an ascending trendline that I began on the monthly chart, with that line crossing candle bodies from September and October, 2001 (bottoms), and June, 2002 (top). I don't know if the line has any significance, but it's been on my chart, waiting for this test. It crosses at about 1108.

  Linda Piazza   12/29/20,  3:35:05 PM
Back to the drawing board with resistance on the OEX, but why bother? I'm listing hesitation points, not resistance points, it seems. The strongest next resistance could be presumed to be at the 38.2% retracement of the decline, just above 560. However, 553-554 looks as if it might offer significant resistance, too.

  Linda Piazza   12/29/20,  3:28:09 PM
The OEX is trying to break out of the rising regression channel that's been containing its climb since shortly after 11:00 this morning. It's climbed above another of the bullish retracement levels fitted to this morning's first two-minute range.

  Linda Piazza   12/29/20,  3:10:28 PM
Since about 11:10 this morning, the OEX has settled into a rising regression channel and has been tracking it fairly well. Support from that rising channel crosses now at about 546.60, just above the 546.41 level that shows up as a fitted retracement level based on the first two minutes of trading. The top of the channel currently crosses at 547.30, just above another fitted retracement level based on the first two minutes of trading.

  Linda Piazza   12/29/20,  3:06:03 PM
The Bond Market Association has confirmed its recommendation for an early close at 2:00 p.m. EST on Wednesday, December 31, and on Friday, January 2, 2004, with a full close recommended for New Year's Day. Equities markets will be closed for New Year's Day, but I haven't found any mention of early closings for either Wednesday or Friday.

  Jeff Bailey   12/29/20,  3:05:50 PM
03:00 Internals at this Link

  Jeff Bailey   12/29/20,  2:49:23 PM
02:00 NYSE NH/NL .... Hi Jeff, Yahoo has NYSE NH, NL as 546, 11

Yep... my 02:00 doesn't look right. My data vendor for NH/NL looks incorrect and doesn't make sense as it relates to 01:00 reading. Will use 546:11 for now.

They may have done same thing for A/D at 02:00 too!

  Linda Piazza   12/29/20,  2:35:03 PM
I've been thinking about the $TRAN approaching that March 2002 swing high. Specifically, I've been thinking about the timing of a test of that high and when the Dow might test its own March 2002 swing high, and how those events might relate to January's trading pattern. With the ATR (average true range) of the $TRAN currently at 31.97 points, that puts the transportation index possibly within a single day of testing that March 2002 high. Will that test be the catalyst for a big market move? If the $TRAN should fail in its test of that average, that could certainly be a stumbling block for the Dow. If the $TRAN should climb above that average, that may be the impetus that brings its sister index up to test 10,600 (10,635.20 was the closing high, I believe, achieved on March 19, 2002), with the outcome of that test being an important predictor of market direction for the intermediate term. That Dow test of 10,600 could come within the next week to two weeks, about the time many expect market highs to be hit before a January decline. I'm wondering if either the failure of the $TRAN in its test of that March 2002 high or the failure of the Dow to confirm within a couple of weeks any such new closing high on its sister index might be the catalyst for a January decline.

  Jeff Bailey   12/29/20,  2:28:59 PM
Stillwater Mining (SWC) $9.76 +8.68% ... Jeff: Do you see any news on SWC today? Stock seems to be up quite a bit even though mining stocks are strong.

I've been looking around Link (investor relations, then news releases) and can't find any news to explain today's outperformance. Bar chart Link does look as if it broke out of a little triangle though and might just be seing some strong demand build.

March Palladium futures (pa04h) $204.20 -1.42% not doing much.

Quick check of December MONTHLY Pivots has P= $7.84, R1 =$9.09, R2 = $9.84.

  Jeff Bailey   12/29/20,  2:16:34 PM
S&P Banks Index (BIX.X) 341.13 +0.86% .... session high and making a move above WEEKLY R2 here.

This should have bullish targets moving to WEEKLY R2s in the major indices.

  Jeff Bailey   12/29/20,  2:04:08 PM
02:00 Internals posted at this Link

  Linda Piazza   12/29/20,  1:57:56 PM
In reviewing my posts today, I seem to be talking on both sides of my mouth. I talk about how well the OEX is performing in relationship to Jeff's MRT system when applied to the first two-minute range. That's true. I mentioned that the daily Bollinger bands had expanded to allow for a moderate climb before the OEX bumped into the upper one again. That's true. I talked about weekly and monthly resistance from 544 up to 550, but with the strongest band perhaps being from 544-547. That's true, too. I talked about the OEX being about 11 points away from the 60-minute 100-pma, with a 13-point distance being about the maximum that was usually seen lately. That's true, too. Although some of my posts may have seemed contradictory, I've been trying to say that so far, volume patterns support the climb in the indices and that the OEX, at least, is behaving rather well if you have a bullish outlook for the day. However, I've also been warning that once the OEX cleared 531-533, I thought the 544-547 zone was the next strong resistance it would face, so I see some possibility here of a pullback to re-establish support. That's backed by the way the OEX has stretched out above its 60-minute 100-pma and by other evidence. I'm not so sure we'll have a deep pullback ahead of the first of the year, but maybe a pullback to the daily 21-sma by the end of the week or maybe even in the next couple of days? I would think that a likely occurrence.

  Jane Fox   12/29/20,  1:55:50 PM
The NYSE has suspended trading in Footstar (FTS) and has moved to delist the stock because of uncertainty over the shoe retailer's financial records. The delisting is pending the completion of various procedures, including any appeal by the company. The stock has not opened for trading due to the NYSE's action.

  Jeff Bailey   12/29/20,  1:52:14 PM
Ciena Corp. (CIEN) ... $6.08 -1.29% .... swing trade bullish stop alert triggered at $6.08.

From 12/23/2003 bullish profile of $6.03.

  Linda Piazza   12/29/20,  1:51:12 PM
The OEX has been in the process of testing that 546.20-546.41 support zone. So far, it's holding, but that hold is tentative. On a 60-minute chart, the OEX can be seen to be hugging that steep ascending trendline off the 12/10 low, the one I posted in a chart linked to my 9:59 post this morning.

  Linda Piazza   12/29/20,  1:44:38 PM
At 3024.04 as I type, the Dow Jones Transportation Index, sister index to the Dow, is now moving up to test the 3050.40 swing high from March, 2002. For the Dow, the swing high reached at that time was 10,672.80, so the Dow is farther away from confirming that previous high. Remember, though, that when we're thinking about Dow theory and the need for one index's high to confirm the other, we're talking about closing highs, so the TRAN would have to close above 3050.40 for this to count as a new high in relationship to that March 2002 high.

  Linda Piazza   12/29/20,  1:34:47 PM
So far, the OEX behaves fairly well, at least if you're in a bullish trade. While I see strong resistance continuing up to 550, using Jeff's MRT retracement system as applied to the first 2 minutes of trading to watch the OEX shows it behaving as it should. According to that system and the five-minute nested Keltner channels, it should have support now at 546.20-546.41.

  Linda Piazza   12/29/20,  1:26:53 PM
As a reminder to new and experienced traders, we'll soon be entering the normal stop-running time of day from 1:35-1:55, with the most usual time for that being 1:45. I can't help wondering if it's happening early today--right now. Remember that the outcome of that stop-running push tells us a lot about market strength and weakness. If the OEX is run up, as market participants may be doing now, but gets quickly slapped down, that tells us (and commercial traders) a lot about the markets. If it gets run up, hesitates, and then begins to ramp up again, that says something different. So while you can't count on the ramping up to be the final direction, this is an important time of day most days for those who want to see strength or weakness confirmed.

  Jeff Bailey   12/29/20,  1:24:25 PM
Buy program prem. alert SPX = 1,103.89 ... session high.

  Linda Piazza   12/29/20,  1:18:41 PM
In response to Ray's 12:59 post directed to new readers/traders, I'd like to suggest that experienced readers and traders spend some time this week reviewing trades and thinking about their strategies for this next year. Broaden your thinking beyond that review, though, and focus on life changes that might impact your trading this next year. Are you retiring, with more time to watch the markets day in and day out? Are you instead ramping into a new project at work that will limit your access to the markets? Have you found that a lack of patience (or too much patience) impacts your trades? All of these factors and many more can impact your trading. Markets change and our strategies should change with them. Our lives change, too, and our strategies sometimes need to evolve for that reason. I'm already thinking ahead to this spring, when the arrival of a new granddaughter will likely bring me away from the markets for a while near opex week. As an example of how lifestyle changes can affect our trades, I wouldn't want to be involved in plays that are going to require close attention to the markets at that opex cycle.

  Jeff Bailey   12/29/20,  1:11:44 PM
01:00 Internals at this Link

  Linda Piazza   12/29/20,  1:08:25 PM
The OEX is almost 11 points above its 60-minute 100-pma. It usually doesn't get much more than 11 points above that MA before it retreats. Sometimes it gets as far as 13 points above the MA, but until mid-December, the more average amount was 8 points, so the OEX is already extended to the upside by that measure. It doesn't always retrace all the way back to the 100-pma, but it does usually retrace back at least to its 60-minute 21-pma while the 100-pma continues rising, reducing the distance between them. That 60-minute 21-pma is currently at 543.36. So, while it's possible that those in bearish positions could see the OEX rise another couple of points today, it's also possible that those in bullish positions face a retreat down toward 544 sometime over the next day or so, with that test of the 21-pma then determining what happens next. I really don't expect a lot to happen over the next week absent some event to prompt a big move.

  Jonathan Levinson   12/29/20,  1:06:16 PM
The put to call ratio is now .52, VXO 16.64. Virtually no changes here.

  Ray Cummins   12/29/20,  12:59:09 PM
E-mail Replies: Option Basics -- Part II

Regarding guidelines for new readers/traders:

Developing a reliable and effective approach to trading is the first step in becoming successful in the options market. Managing a winning portfolio requires planning, patience and good judgment. In addition, you should use simple, proven methods for realizing profits and limiting losses. The first step in constructing a profitable system is to identify the proper risk/reward perspective and select a favorable trading strategy. Next, you must develop a technique for managing the position that fits your experience level and portfolio outlook. There are a number of factors necessary for a successful trading system but the most important components are: planning the trade, entering the position, and establishing the exit points. Each of these phases should be created (and modified) to fit the needs of a particular situation, and they must all be present in order to achieve consistent results. A successful system is one that will identify the most appropriate time to enter the market; when the potential for profit is most favorable, and exploit winning trades for maximum return while simultaneously limiting losses in those positions that don’t perform as expected.

  Jeff Bailey   12/29/20,  12:48:38 PM
Trimble Navigation (TRMB) $38.21 +4.85% Link .... continues to add X's to its bullish vertical count column. Update bullish vertical count now grows to $73.

Shown with 50-day Bollinger bands. (Low/Average/High)

  Jonathan Levinson   12/29/20,  12:43:21 PM
The fed has added a second repo, an overnight of 3B, bringing the net addition up to 3.5B for the day.

  Ray Cummins   12/29/20,  12:42:48 PM
Spreads/Combos & Premium-Selling -- E-mail Replies: Option Basics

(condensed) Hello Ray, I just began reading the newsletter last week and it seems like there is a great deal of things to learn. I know a fair amount about buying stocks but am a novice with options...what areas would you suggest focusing on before I start trading? KT

The most important factors in option trading are market movement, option volatility (with regard to pricing and probability), and time decay. The knowledge of these concepts is paramount to profitable trading and without a suitable basis, you will likely enter the market at a theoretical disadvantage. The primary requirement is familiarity with option pricing. In volatile issues, the emotional optimism of traders can cause prices to vary widely from their true worth. Without a realistic estimate of the value of an option, you will often pay an excessive amount for the rights inherent in the contract and that usually results in a much lower return (if any) when the issue finally makes the expected move. As intelligent traders, we have the ability to measure the value of an option through mathematical evaluation, but if you aren't partial to formulas, pricing models will help you determine the fair market value of an option. Many of the established tools (like the calculator at www.cboe.com) for pricing options are free and they should be used before opening any new position. As you will soon discover, the end result in option trading is almost always a product of what you know, and how well you act upon it.

  Jonathan Levinson   12/29/20,  12:34:24 PM
The put to call ratio is up to .53 for the past hour, VXO +.91% at 16.62.

  Linda Piazza   12/29/20,  12:20:25 PM
The 30-minute OEX Donchian channels reflect the new high hit today, with the upper boundary on the 20,2 and 5,2 channels now at that new high of 546.08 since it was hit within the last five 30-minute periods. This morning's first 30-minute period saw a new breakout signal given on the 30-minute Donchian channels, but those signals given during the first 30-minutes of trading are kind of dicey and untrustworthy. The advdec line remains strong, so while it's possible that we could see another breakout this afternoon, I do give some credence to those boundaries shown on the Donchian channel. Despite this morning's breakout, we don't see closes over that upper boundary frequently during the course of a particular day. For now, I consider the OEX still to be testing the 544-547 resistance zone, with the outcome as yet unknown.

  Jeff Bailey   12/29/20,  12:11:22 PM
Help Wanted Index (November) rose to 39 versus October's 37 reading. November's 39 reading was above economists' forecast for 38.

The Conference Board said that advertising rose in seven of nine U.S. regions in the last three months. Gains were strongest in New England, the East North Central region and the West South Central region. The Mountain and South Atlantic regions posted declines in November.

  Jeff Bailey   12/29/20,  12:05:37 PM
12:00 Internals at this Link

  Linda Piazza   12/29/20,  12:04:21 PM
The XAL has fallen back from its test of the December 15 short-term high of 61.92 and from its test of the upper envelope surrounding its 21-pma, and now it slips beneath that 21-pma. Just as the earlier resistance level was a possible turnaround point, this support level is one, too. The 30-minute indicators switched from a bullish outlook to a bearish one, but they've proven fickle today and the XAL now has moved into a consolidation zone that's held over several days. Below the current level lie the 60-minute 21-pma and 100/130-pma's, however, at 61.04, 60.64, and 60.89.

  Ray Cummins   12/29/20,  12:01:57 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: ImClone (NASDAQ:IMCL)

Shares of ImClone, which has been a long-time favorite both in the Spreads/Combos and Naked-Puts portfolios, are performing well today. The stock is up $1.52 at $41.53, despite any "real" news to explain the activity. Traders are attributing the rally to a brokerage upgrade (not confirmed) and "short covering" by conservative bears. Most analysts say the approval for Erbitux will not occur for a few months but there is always the possibility of an "early" announcement by the FDA and that may be the driving force behind today's activity. The next level of technical resistance is near $42.50 (OCT-DEC highs).

  Linda Piazza   12/29/20,  11:47:47 AM
So far, the advdec line is following Friday's pattern--a strong ramp up in the morning, followed by a bull-flag pullback and then a spurt upward at the end of the day. Of course, Friday's trading day was a shortened one, so I'm not sure that the comparison is apt.

  Ray Cummins   12/29/20,  11:41:25 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Microstrategy (NASDAQ:MSTR)

Shares of the popular provider of business intelligence software are in "rally mode" today, up $1.27 at $53.29 after Trenitalia, a subgroup of the Italian state railroads, announced it has deployed MicroStrategy's Business Intelligence Platform to analyze railroad ticket sales data. Trenitalia is one of the largest railroad firms in Europe, thus their selection of MicroStrategy will certainly impress analysts and other potential customers. Obviously, investors are also pleased with the news as they have pushed the issue to a recent high on robust volume. The next level of resistance is near $55, so there is room for additional upside activity at the current price.

  Jonathan Levinson   12/29/20,  11:39:37 AM
The put to call ratio is up to .50 here, still in extreme territory. The VXO has dropped to 16.04, now down .8% on the day.

  Linda Piazza   12/29/20,  11:34:50 AM
As of a few minutes ago, total volume was 317 million on the NYSE and 530 million on the Nasdaq. Volume is light, but not as light as I expected. New highs numbered more than 600, at 626, with new lows numbering only 8.

  Linda Piazza   12/29/20,  11:31:43 AM
The OEX is back up against the trendline I pointed out in the chart linked to my 9:59 post. It's also facing the underside of the consolidation zone that formed this morning, holding until about 10:30.

  Ray Cummins   12/29/20,  11:28:42 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Therasense (NASDAQ:THER)

Therasense is actually in the Naked-Puts portfolio but the spike in price amid a surge in volume warrants the attention of spread, combination and momentum players as well. Shares of THER are currently up $0.83 at $19.60 and traders are attributing the move to Friday's mention of Therasense by IBD on the "New America" page and the possible selection of the issue as a bullish candidate in a Thestreet.com newsletter.

  Linda Piazza   12/29/20,  11:23:21 AM
Sometimes when the first five-minute OEX range is too large and I switch to a 2MRT or 3MRT to watch the OEX, something will happen to confirm that the choice was probably a good one. That happened a few minutes ago. I decided today to watch the OEX based on the first two-minute range and when the OEX dropped back a few minutes ago, it dropped almost all the way to the high of the first two-minute range before finding support there and climbing. It's pausing again under the bullish #2 on the 2MRT system, at about 545.55.

  Jeff Bailey   12/29/20,  11:06:47 AM
11:00 Internals at this Link

  Linda Piazza   12/29/20,  11:02:12 AM
The Keltner channel support on the OEX five-minute chart is failing to hold, showing that, as Keene suggested earlier, this rally might not be as strong as it appears on the surface. Stronger Keltner channel support lies at 543.42.

  Ray Cummins   12/29/20,  10:56:20 AM
Spreads/Combos & Premium-Selling -- Portfolio Activity

The market is off to a great start this week with stocks moving higher in most of the major sectors. Among the best NASDAQ performers are biotechnology, semiconductor, and wireless stocks, while brokerages and steel companies are leading the broader market groups. In our portfolio, technology shares are the standouts with many lower-priced issues enjoying renewed buying pressure. One of the most encouraging moves is occurring in Digital River (NASDAQ:DRIV), which is up $0.92 at $22.87 on no news. Flamel Technologies (NASDAQ:FLML) is also trading higher, up $1.10 at $27.30, and today's activity has the issue testing a key resistance area near the December high and the top of its recent trading range at $27.60.

  Jonathan Levinson   12/29/20,  10:39:55 AM
NEW YORK, Dec 29 (Reuters) - Pennsylvania on Monday acknowledged Pittsburgh's long-term financial decline by declaring it "financially distressed" under a state law that will enable the city to regroup.

Years of declining population and industry led this year to deep cuts in the former steel capital's credit rating and city officials openly discussing bankruptcy as a potential option.

On Nov. 10, Mayor Tom Murphy asked the state to declare Pittsburgh "financially distressed," which could pave the way for a hike in commuter taxes, among other things, that could help plug a projected $42 million budget shortfall in next year's budget of nearly $400 million.

  Jonathan Levinson   12/29/20,  10:38:41 AM
Good news for bears is the second put to call reading of .46, VXO 16.73.

  Linda Piazza   12/29/20,  10:32:37 AM
The OEX may yet come down to test that Keltner channel support, now gathering thickly between 545-545.27.

  Jeff Bailey   12/29/20,  10:24:55 AM
QQQ $36.20 +0.97% ... here's updated QQQ chart with new WEEKLY pivot retracement. Link

  Linda Piazza   12/29/20,  10:20:37 AM
In my 10:12 post, I mentioned that if the OEX was as strong as it appeared to be, it would find support at one of the two Keltner channel support levels that were showing up. The OEX held above both of those levels, confirming the strength we've been seeing. It's holding just above the bullish #2 on the 2MRT system.

  Linda Piazza   12/29/20,  10:12:06 AM
We're seeing a reversal signal form on the five-minute OEX chart. Keltner channel support now gathers near 545.15 and then 544.75. If the OEX is as strong as it looks, then one of those support levels should hold it on any further decline.

  Jeff Bailey   12/29/20,  10:12:01 AM
QQQ $36.20 +0.95% ... just off session high of $36.25.

Swing trade bulls may be closed out at their bullish target of $36.25. If not, would look to lock in gains here.

  Jeff Bailey   12/29/20,  10:10:11 AM
10:00 Internals at this Link

Friday's closing internals at this Link

Volume levels just about double those found on Friday, so it would appear more traders back at their posts today.

  Linda Piazza   12/29/20,  10:07:04 AM
The airlines don't appear to be hurt by a suspected second case of SARS in Asia. The XAL charges up toward 62.00 and toward the short-term 61.92 high from December 15. While this could be a failure point for the index, the shape taken on the 60-minute chart may be that of a bullish right triangle with a flat top and a rising trendline for one side of the triangle.

  Jonathan Levinson   12/29/20,  10:05:19 AM
The first put to call reading has come in at .61, with the VXO up 1.4% at 16.70.

  Linda Piazza   12/29/20,  10:03:16 AM
The BIX shot above the descending trendline over last week's highs and climbed to 340 as I type. The 30-minute oscillators look strong, but this index will soon face resistance implied by its 30-minute 0.675% envelope surrounding the central 21-pma.

  Linda Piazza   12/29/20,  9:59:02 AM
In addition to resistance showing up on the weekly and monthly charts, the OEX faces this resistance today: Link So far, though, I'm with Jane that we'd better be watching TRIN and I'd add volume patterns before we start thinking bearish thoughts, though. We've got enough stacked against us with this light volume environment to be trying to swim against the trend. It's better to pass up a trade that might have been a great one, that turned out to do exactly what you thought it would do, than to get stuck.

Note: The OEX is pushing above that resistance line as I upload this post.

  Jonathan Levinson   12/29/20,  9:56:20 AM
There was 8.5B worth of repos expiring today, and 9B in 4-day repos has just been added for a net addition of 500M today from the fed.

  Jeff Bailey   12/29/20,  9:56:00 AM
S&P 500 Index (SPX.X) 1,100.59 +0.42% .... here's updated SPX chart with new WEEKLY pivot retracement and levels. Link

  Linda Piazza   12/29/20,  9:52:37 AM
The daily OEX Bollinger bands have expanded upward, so that the OEX has a few more points room to climb--up to 548.97--before hitting them again. From the current level up to 550, it's possible to point out resistance on the weekly and monthly charts in close intervals, making it difficult to say where strongest resistance might lie, but my best estimate is that the strongest was from 544-547, with the OEX currently challenging that zone.

  Linda Piazza   12/29/20,  9:42:31 AM
We're heading into the time of the first retracement of the day. As we do, the OEX is butting up against the 544-547 resistance level. It has not yet reached the bullish #2 watching the 2MRT system, but it's not looking as if it wants to retrace far, either.

  Linda Piazza   12/29/20,  9:33:54 AM
The OEX climb was so extreme during the first few minutes that I'm going to use a 2MRT system to watch it. The low-to-high range for that period was 542.78 to 544.15. For those who want to stick to a 5MRT, the low-to-high range was 542.78 to 544.67, with the OEX obviously above the 543.73 midpoint of that range.

  Jeff Bailey   12/29/20,  9:32:13 AM
Express Scripts (ESRX) $66.08 +0.71% Link ... Upside alert at $66.00, which I set earlier last week. Looks bullish for 1/2 positions, round to full should stock trade $67.00.

See Tuesday's 01:00 PM EST Update at this Link

  Linda Piazza   12/29/20,  9:30:35 AM
Didn't take long to test that OEX 544-547 zone, did it? The advdec line is strong, so I'm not making any decisions yet about whether the OEX will roll over after testing this resistance.

  Jeff Bailey   12/29/20,  9:24:21 AM
Ciena Corp. (CIEN) $6.16 .... edging up at $6.18 in morning's pre-market trade. Will raise bullish stop to $6.08. Still targeting $6.45.

  Jeff Bailey   12/29/20,  9:22:00 AM
QQQ $35.85 ... ticking higher at $36.05 in pre-market. Will raise swing trade bullish stop to $35.70. Still targeting $36.25

  Jeff Bailey   12/29/20,  9:15:32 AM
09:00 Update posted at this Link

  Linda Piazza   12/29/20,  9:09:20 AM
The OEX daily chart shows a series of small-bodied candles lining up just beneath the 544-547 resistance zone. Several show upper shadows. Is this consolidation before a push through that zone or hesitation before a decline? The daily 5(3)3 stochastics hint that it may be hesitation before a decline, but the strong and rising ADX level tells us not to trust oscillators such as stochastics. The 10-dma rises at a sharp angle, driving up to meet those small-bodied candles, with the 10-dma currently crossing at 539.44.

Still, the OEX has been climbing the upper Bollinger band on the daily chart since early December, and it will probably soon be time for it to retrace back to the central 20-dma near 532.50 to re-establish or confirm support there. Or not. Will that retracement happen this week? That's hard to say with the bullish tenor to the market through this season, although I wouldn't be surprised to see a dip to the 10-dma this week. Will that happen today? While it could, futures are up as I type, so markets don't seem predisposed to retrace today. However, today's volume is likely to be so thin that it's going to be difficult to make predictions, and I wouldn't be making them with real money unless it was risk capital.

  Linda Piazza   12/29/20,  6:24:57 AM
Good morning. In the last full day of trading this week, the Nikkei opened higher and climbed through the morning session. Nitto Denko Corp, a company that manufactures chemicals used in the manufacturing of semiconductors and other electrical components, upped its forecast, and electronics manufacturer Matsushita talked about plans to meet increasing demand for flat-screen televisions. Sharp said it would make capital investments intended to triple production capacity of large liquid crystal panels. Chipmaker Toshiba announced plans to decrease production costs, including making more of its PC's outside Japan. These developments helped to send tech stocks higher. With bad loans down from the year-ago level, according to Japan's top regulator and another source reporting separately, banks gained. Although the Nikkei could not hold onto all its gains and drifted down throughout the afternoon session, it still closed up 83.21 points or 0.80%, at 10,500.62. Volume was light ahead of the holiday that will begin after a half day of trading tomorrow. Of special note was the Japanese government's decision to allow considerable debt reduction to Iraq if other parties do the same during talks to be held in 2004.

Other Asian bourses were mixed. The Taiwan Weighted fell 0.89%. South Korea's Kospi gained 0.46% and Singapore's Straits Times gained 0.62%. Hong Kong's Hang Seng was flat, up 0.06%. A suspected case of SARS in a province neighboring Hong Kong sent travel-related stocks down in that region. China's Shanghai Composite dropped 1.21%. In China, a weekend gas explosion in a PetroChina oilfield killed more than 200 people, but one report said that oil-related issues recovered.

European bourses mostly trade higher. With most closed the end of last week, market watchers have waited to see how the bourses would react to the growing Parmalat scandal, but even Italy's MIB-30 was rising in early trading. French food and beverage group, Group Danone, did drop. Danone denied that it was interested in acquiring Parmalat assets.

Although some Asian airliners were hit by news of a suspected new SARS case, German airliner Deutsche Lufthansa rose after a company spokesperson confirmed that the company planned to return to profitability in 2004. Chip stocks performed well in early trading. Two French companies--water utility Veolia Environnement and pharmaceutical company Aventis--saw news-related gains. Veolia secured new contracts in Shenzhen, China and Shanghai, and Aventis submitted a new drug application to the U.S. Food and Drug Administration for a once-daily form of Allegra, its allergy drug.

As of this writing, the FTSE 100 was up 9.40 points or 0.21%, to 4454.10. The CAC 40 was up 4.89 points or 0.14$, to 3515.19. The DAX was up 27.84 points or 0.71%, to 3931.18.

  OI Technical Staff   12/26/20,  3:10:55 PM
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