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  Jeff Bailey   12/31/20,  10:09:27 PM
Closing 2003 Dow Dogs at this Link

Does not include any dividends paid.

Sorted by stock price on 12/31/02, where the 10 Dogs of the Dow (10-highest dividend yielding on 12/31/02) are also dividend into the "Little Dogs" or lower priced, and "Big Dogs" or higher priced. Additional theory is that some years, the lower priced will outperform, simply based on investor psychology that a lower priced stock is cheaper, or holds greater value. While we know that the price of a stock doesn't represent any type of true value measure, there are some investors out there that do.

For instance... a $5 stock is more undervalued than a $50 stock.

Ever wonder why companies split their stock? You got it! To try and create the perception of "cheaper" and further attract investor capital.

Dow Dogs for 2004 ... MO, SBC, T, GM, JPM, MRK, DD, C, GE, XOM. (for a second-straight year, IP misses out as the 11th highest dividend yielding stock)

Little Dogs : JPM, GE, T, SBC, XOM

Big Dogs : C, GM, MO, DD, MRK

 
 
  Jeff Bailey   12/31/20,  9:51:06 PM
Closing "Beetle's Balanced Benchmark" for 2003 at this Link

Will rebalance as described in this past weekend's Ask the Analyst column.

Multiple requests to add the small-cap Russell-2000 and a broad-based foreign equity fund.

Good suggestions. Will certainly add the RUT.X with hypothetical $1,000, and will look for an iShare or ETF for foreign equity representation. I don't want to get too many different asset classes, as it may then begin to become too much to digest.

 
 
  Jeff Bailey   12/31/20,  6:28:43 PM
Pivot Matrix for Friday at this Link

New MONTHLY Levels

 
 
  Jeff Bailey   12/31/20,  4:42:59 PM
Closing Internals at this Link

 
 
  Jeff Bailey   12/31/20,  4:18:39 PM
QQQ $36.46 -0.27%

 
 
  Keene Little   12/31/20,  4:12:55 PM
I second and third everyone's New Year's wishes, and the comments about learning together through this. After two months of writing for OIN (already?) I can honestly say I've had a great experience learning from our readers. A more talented bunch of traders I don't think could be found anywhere else. It's certainly one of the reasons I've followed OIN for all these years now. See everyone bright-eyed and bushy-tailed Friday morning. We'll at least know who the party animals were--they'll still be sleeping it off.

 
 
  Jeff Bailey   12/31/20,  4:11:51 PM
Happy New Year! to all traders and investors in the market monitor as well as all contributing analysts in the MM.

 
 
  Jane Fox   12/31/20,  4:07:44 PM
Happy New Year all and I most definitely second what Jonathan said about this being a year of education. I used to teach software classes and I ended up learning more about the software than my students from their questions, which what I find here. The readers questions are truly wonderful and challenge me all the time. I am looking forward to more of those questions and learning from the other commentators.

 
 
  Jeff Bailey   12/31/20,  4:04:17 PM
NASDAQ Composite (COMPX) finishes out at 2,003.37.

Any thoughts on total manipulation in today's trade?

Jim Brown and I agree on something today anyway!!!

Two entirely different scenarios, but each looks to be in play.

 
 
  Jeff Bailey   12/31/20,  4:01:22 PM
Day trade bull entry alert ... while a trade at $36.30 probably sees a close of $36.37, its not worth it with for 15-minutes left in trade.

Cancel day trade bullish entry of $36.30.

 
 
  Keene Little   12/31/20,  4:00:00 PM
Jeff, was it you who guessed they'd close the NAZ at 2003? And they say this market isn't being manipulated!

 
 
  Jeff Bailey   12/31/20,  3:59:36 PM
QQQ $36.39 -0.46% ... dipped to $36.31 on that sell program.

 
 
  Jeff Bailey   12/31/20,  3:57:53 PM
Sell prog. prem. alert spx 1,110.30

 
 
  Linda Piazza   12/31/20,  3:57:18 PM
Happy New Year, everyone. Have a safe and fun holiday. We'll look forward to seeing you all next year.

 
 
  Jeff Bailey   12/31/20,  3:52:00 PM
Day trade long alert for aggressive bulls and those looking for a fight.... QQQ $36.38 -0.49% ... entry on pullback to $36.30, stop $36.26, target $36.57.

 
 
  Jeff Bailey   12/31/20,  3:49:10 PM
Better than Ali vs. Frazer ... here's intra-day chart of QQQ. Link

 
 
  Jane Fox   12/31/20,  3:47:39 PM
Jeff only 10 minutes to go to have the COMPX close over 2000 for 2003. It will be close.

 
 
  Linda Piazza   12/31/20,  3:47:22 PM
I'm still holding my OEX bearish position, although it's possible that I could get stopped out by the close. All afternoon, though, I've been trying to figure out how much danger there might be of a relief rally on Friday and early next week, in the happy event that there's no terrorist activity over the holiday. I think there's probably considerable risk of a relief rally, but the OEX still has that resistance lurking at 553-554, and I intended my position (ATM 550 put) to be held for a couple of weeks unless stopped. It's intentionally a small position, throwaway money if such a thing exists, so I'm just keeping to my stops and letting the markets do what they do.

 
 
  Jeff Bailey   12/31/20,  3:41:40 PM
NASDAQ Composite (COMPX) 2,007.66 -0.11% ... afternoon high has been 2,009.40, but needs something over 2,009.88 to finish positive.

Traders are "crazy" aren't they? Is 2,000 now back in play by the close?

 
 
  Jeff Bailey   12/31/20,  3:36:56 PM
DuPont (DD) $46.00 +0.5% Link ... Upside alert here and reversing upward PnF buy signal for this Dow component and one of 2004 Dow Dog candidates. Today's trade at $46 gives a preliminary bullish vertical count of... $61.

What are those 2005 $45 LEAPS going for today?....

 
 
  Jeff Bailey   12/31/20,  3:31:24 PM
QQQ $36.53 -0.10% ... Bulls can't complain about the late session rally. Swing trade long bull from $36.57 still has some work ahead, but with 45-minutes left in trade, there's still thought that bullish history is in play.

 
 
  Linda Piazza   12/31/20,  3:21:31 PM
Today is looking more and more like 12/22, when the second doji in a row was turned into a bullish candle by a strong run in the afternoon. In fact, it's beginning to look like a carbon copy of that day. We've still got MOC orders ahead of us, though.

 
 
  Linda Piazza   12/31/20,  3:14:46 PM
Here's what I'm watching on the OEX 60-minute chart: Link

 
 
  Jim Brown   12/31/20,  3:14:30 PM
Most readers do not realize the amount of education we get from this job. With dozens of emails a day pointing out different viewpoints as the markets progress we are constantly challenged and educated. We have a great readership and one of my projects for January is to get some of these great traders to contribute their thoughts to the monitor. Most are not shy about firing off those emails but disappear when I suggest they contribute for all to see. I am going to try and rectify that.

 
 
  Jeff Bailey   12/31/20,  3:11:34 PM
03:00 Internals at this Link

 
 
  Linda Piazza   12/31/20,  3:01:45 PM
Nasdaq back above 2000, at least temporarily.

 
 
  Jeff Bailey   12/31/20,  3:01:03 PM
AmerisourceBergen (ABC) $56.50 -10.86% ... released for trade.

 
 
  Linda Piazza   12/31/20,  2:59:57 PM
Wonderful sentiments, Jonathan, and I second them.

 
 
  Jonathan Levinson   12/31/20,  2:59:21 PM
As the year winds toward its unceremonious close, I want to thank everyone here at OIN, in the market and futures monitors, writers and subscribers for all of the company, support, insight and fun. This has been one of the most educational years I've ever spent in the markets, and I look forward to continuing to grow and helping all of us profit from that education in the year ahead. To a healthy, happy and prosperous 2004.

 
 
  Linda Piazza   12/31/20,  2:58:43 PM
The OEX overshot the Keltner resistance by a few cents, but that resistance is thinning out now, so it's possible that the OEX could rise. This is just zooming-around stuff, though, hard to predict and harder to trade.

 
 
  Jeff Bailey   12/31/20,  2:53:53 PM
McKesson (MCK) $32.40 +4.18% ... back higher again!.... Company announces it has been selected by Dept. of Veterans Affairs to be the VA's Pharmaceutical Prime Vendor.

This is the contract ABC lost, thus lowering of guidance.

 
 
  Jeff Bailey   12/31/20,  2:51:43 PM
Buy Program Prem. Alert ... SPX 1,107.77 ... my first buy/sell prog. prem. alert of the day.

 
 
  Linda Piazza   12/31/20,  2:51:15 PM
OEX Keltner resistance shows up now at 548.44-548.55.

 
 
  Jeff Bailey   12/31/20,  2:49:49 PM
AmerisourceBergen (ABC) $57.32 -9.73% ... halted. New is that they are revising fiscal 2004 earnings due to contract loss. Here's company's news release. Link

Headline is it sees fiscal 2004 EPS between $4.10-$4.20 (excluding items), versus current consensus of $4.53.

 
 
  Linda Piazza   12/31/20,  2:47:37 PM
An OEX close below 546 will close the OEX below the midpoint of Monday's strong bullish candle, with that move confirming the reversal signal known as an evening star. While the formation would not be classic since yesterday's doji did not sit above Monday's candle, Nison says that we should give indices some leeway, and we should also give more credence to patterns that form at resistance. I still have to add the caveat, however, that for many months, the red candle that completed a reversal signal often was the only red candle seen. That single red candle sometimes constituted the "pullback." Also, of course, the OEX has not closed and we can't know yet whether it will close below 546, so I'm not counting my reversal signals before they hatch.

 
 
  Jeff Bailey   12/31/20,  2:42:56 PM
2004 Dow Dogs based on 10-highest dividend YIELD look to be... MO, SBC, T, GM, JPM, MRK, DD, C, GE, XOM.

Once again, its IP at the number 11 slot on an intra-day basis and battles XOM for the number 10 position. (If my QCharts dividend yield calculation are correct).

 
 
  Linda Piazza   12/31/20,  2:40:49 PM
That drop took the OEX below its 30-minute 21-pma and down to its 60-minute 21-pma, an average it actually tracks more closely than it does the 30-minute version. It hasn't had a serious violation of this moving average since 12/10, longer than the OEX has held above the 30-minute version. Sixty-minute indicators are bearish, and the pattern on the 5-minute chart also looks bearish, but it just takes a single buy program on a day like today to turn things around.

 
 
  Jeff Bailey   12/31/20,  2:38:53 PM
Caterpillar (CAT) $83.11 -1.14% ... this year's biggest percentage gainer for the Dow Dog theory. Also today's biggest percentage loser.

Eastman Kodak (EK) $25.67 +1.3% .... this year's biggest percentage loser for the Dow Dog theory. Also today's biggest percentage gainer.

AT&T (T) $20.23 +0.99% ... this year's second biggest percentage loser for the Dow Dog theory. Also today's third biggest percentage gainer.

 
 
  Ray Cummins   12/31/20,  2:38:38 PM
Spreads/Combos & Premium-Selling -- On the "Watch" list: Symantec (NASDAQ:SYMC)

One of the "bearish" positions in our portfolio is back on the "watch" list after today's upwardly revised price target by Thomas Weisel. The brokerage raised their target to $40 from $35 while maintaining an "outperform" rating on the issue. The move is due to a "recent acceleration in their anti-virus business, increased percentage of recurring subscription-based revenues, success with new appliance-based products, solid exposure to the emerging international markets, and a well-executing management team." Our "bear-call" credit spread is short (calls) at $35 and with the stock trading near $34.70, the position certainly warrants attention in the coming sessions.

 
 
  Jeff Bailey   12/31/20,  2:31:46 PM
AmerisourceBergen (ABC) $57.32 -9.73% ... still halted, news pending.

 
 
  Jeff Bailey   12/31/20,  2:27:35 PM
QQQ $36.30 -0.71% ....

NASDAQ Comp (COMPX) ... 1,997.00 -0.64%

 
 
  Jeff Bailey   12/31/20,  2:14:18 PM
McKesson (MCK) $31.40 +0.96% Link ... Wow! Jumped from $31.00 to $33.00 in 30-minutes, and quickly back to current levels in last 30-minutes.

CNBC reported that MCK became volitile as it is competitor to AmericsourceBergen (ABC) $57.32 -9.73% Link which fell quickly before being halted, news pending at the NYSE.

Thomas Weisel said this morning that ABC was their 2004 stock to watch and placed bullish price target of $73 on stock.

 
 
  Jonathan Levinson   12/31/20,  2:12:32 PM
(REUTERS) BAGHDAD RESTAURANT DESTROYED BY BLAST, ON FIRE - REUTERS

(REUTERS) AT LEAST FOUR DEAD IN BAGHDAD RESTAURANT BLAST - IRAQI POLICE REUTERS

 
 
  Linda Piazza   12/31/20,  2:12:21 PM
The OEX fell out of the supposed bear flag and now, immediately, rises to test the broken support. We absolutely cannot put too much credence in these patterns as yet, though. While it's possible that some will decide to lessen their risk by selling at the end of the day, the put purchases Jim is advising and Jonathan reported as occurring may be the choice being made rather than selling equities.

 
 
  Jeff Bailey   12/31/20,  2:10:00 PM
02:00 Internals at this Link

 
 
  Jonathan Levinson   12/31/20,  2:08:18 PM
The p/c ratio is down to 1.38, still way high.

 
 
  Ray Cummins   12/31/20,  1:58:36 PM
Spreads/Combos & Premium-Selling -- Success Basics: Choosing A broker -- Part II

Many online brokers don't have all the features you need -- some have more limitations than others -- and with most discount brokerages, you can't place both a SELL-STOP order (to protect against downside losses) and a SELL-LIMIT order (to lock-in upside gains) at the same time. So, if you want to pay discount prices, plan to get discount service. However, if you want the best executions and/or you can't monitor your positions on a regular basis, pay someone to do it for you. You will almost always save more money than it costs. Of course, a personal broker can also teach you about trading (and position management) and that's the primary reason why many of our readers choose to pay slightly higher commission costs for the resources of a full-service broker such as Andrew Aronson or Alan Knuckman at onestopoption.com. For those of you who are comfortable with a discount brokerage, talk with other traders to find out how well a broker performs the most critical functions. Most financial websites have message boards where people can relate their past experiences and attitudes in regard to a particular aspect of trading or investing. Use these chat sites to narrow the field before conducting the final research on a prospective company. Also, consider using one of the established directories (www.investorlinks.com) to find potential candidates or one of the free rating services such as Gomez (www.gomez.com) to help with the initial selection process.

 
 
  Linda Piazza   12/31/20,  1:57:44 PM
Looking at today's decline, I see that the OEX has not yet retraced 50% of that decline, with that midpoint at 549.44. That means that the current five-minute pattern could still be a bear flag forming, although it's growing a bit long in the tooth.

 
 
  Linda Piazza   12/31/20,  1:47:37 PM
As of a few moments ago, the adv/dec ratios stood at 15:17 for the NYSE and 13:19 for the Nasdaq. Up/down volume remained roughly equal on the NYSE, with down volume slightly ahead. Up volume remained ahead on the Nasdaq, but by a much smaller ratio than the 2.4 we saw earlier. Up volume was only 1.2 times down volume. New highs were at 547 with 9 new lows. Total volume was 476 million on the NYSE and 1 billion on the Nasdaq.

 
 
  Jeff Bailey   12/31/20,  1:46:07 PM
NASDAQ Composite (COMPX) 2,003 .... QQQ $36.42.

 
 
  Linda Piazza   12/31/20,  1:42:21 PM
The OEX five-minute nested Keltner bands have again narrowed support and resistance into a tight range. That usually predicts a sharp move. We should also note that we're right in the middle of the usual 1:35-1:55 stop-running period. Some days lately, we haven't seen a move during this period, however.

 
 
  Jonathan Levinson   12/31/20,  1:34:15 PM
The p/c ratio continues ever higher, now up to 1.43, which is deep in extreme territory. VXO 17.60.

 
 
  Ray Cummins   12/31/20,  1:27:44 PM
Spreads/Combos & Premium-Selling -- Success Basics: Choosing A broker

One of our new subscribers asked for my thoughts on brokers: Should he use a deep discount (online) brokerage or pay the extra money for the full-service type?

Obviously, one of the first things you need to do before you begin trading is select a broker. The ultimate goal in this quest is to find a broker that gives you everything you need at the lowest possible cost. Among our readers, the most commonly used services are "discount" brokers such as Ameritrade, E-trade, Scottrade, Optionsexpress, Wall Street Access, etc. This category is designed for do-it-yourself traders that manage their own money without guidance from a professional financial advisor. These brokerages can make trades for you at a lower price because they provide very little in the way of "personal" service. However, that may not work for some people as the best "buy" and "sell" signals are useless unless you are able to act on them. In addition, "cheap" commissions are virtually meaningless if you can't close a trade or speak to a representative when the need arises. Indeed, a common complaint with discount brokers concerns "effective and timely" order execution and many professionals say this is the most important quality necessary in trading. (cont)

 
 
  Jeff Bailey   12/31/20,  1:25:51 PM
QQQ $36.39 -0.5% ... stop alert on day trade short

NASDAQ Composite (COMPX) 2,001.41.

 
 
  Linda Piazza   12/31/20,  1:13:43 PM
It's a long way until the market close today, but right now, I'm looking at two doji in a row on the OEX. Of course, I remember doing the same the afternoon of 12/22, when the OEX had so-far been printing its second doji in a row. That afternoon saw a strong spike, though, turning that doji into a bullish candle after all. The same thing could happen today, especially as I notice some similarities between today's trading pattern and that of 12/22. On that day, the OEX was hugging its 30-minute 21-pma just as it is today. The 21-pma was flattening, looking as if it wanted to roll down, just as it does today. It was the 13:30 candle that started the rally that took the OEX up to close at its high that day, so we're about 30 minutes away from the time of the move that day. Somehow, despite those similaries, the OEX behavior just doesn't feel the same to me today, though.

 
 
  Jeff Bailey   12/31/20,  1:08:28 PM
01:00 Internals at this Link

 
 
  Jeff Bailey   12/31/20,  12:57:35 PM
NASDAQ Composite (COMPX) 2,000 .... benchmarking QQQ $36.33.

 
 
  Ray Cummins   12/31/20,  12:56:38 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Oil Sector

I mentioned Tuesday the recent success we have enjoyed in the oil service sector but today it seems investors are supporting a different segment in the industry. Integrated oil companies are currently enjoying modest upside and one of the issues we highlighted yesterday, Total SA (NYSE:TOT), is among the the session leaders in that group. Other candidates for bullish positions include: BP Plc (NYSE:BP), Conocophillips (NYSE:COP), Chevrontexaco (NYSE:CVX), China Petroleum (NYSE:SNP), PetroChina (NYSE:PTR), Royal Dutch (NYSE:RD), Repsol (NYSE:REP), and Shell Transport (NYSE:SC).

 
 
  Jeff Bailey   12/31/20,  12:52:42 PM
NASDAQ-100 Heatmap at this Link

Look who is leading today's gainer list. Might tie in with those unhedged secondary offering shorts.

 
 
  Linda Piazza   12/31/20,  12:42:04 PM
The SOX fell below its 30-minute 21-pma today, and now forms what appears to be a distribution pattern, possibly a "b" distribution pattern. Just below 500 lies the support supposedly offered by its 30-minute 100/130-pma's, with those averages at 499.82 and 498.86. That support may be enough to alter the likely distribution pattern's resolution, sending the SOX back up to test the descending 21-pma at 507.63 instead of falling out of that pattern.

 
 
  Jeff Bailey   12/31/20,  12:40:32 PM
Day trade short stop adjustment alert ... after looking at 12:36:02 chart, will adjust stop UP to $36.39, to try and take out of play the intra-day trade up at RED #1 of $36.57.

Current trade update... day trade short QQQ $36.29, stop $36.39, target $36.21.

Note: this is entirely based on current thought of some asset realocation, nothing else, and trying to trade these levels.

 
 
  Ray Cummins   12/31/20,  12:38:52 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Entry Points?

A number of recently bullish issues in the industrial segment are consolidating during today's range-bound session. Among these issues, Genentech (NYSE:DNA), Meritage (NYSE:MTH), Winnebago (NYSE:WGO), Schnitzer Steel (NASDAQ:SCHN), and Trinity Industries (NYSE:TRN) may soon offer favorable entry points for new (long call or short put) positions.

 
 
  Jeff Bailey   12/31/20,  12:36:02 PM
QQQ intraday chart, with two scenarios. Link

 
 
  Jonathan Levinson   12/31/20,  12:33:00 PM
The put to call ratio has spiked to 1.22, which looks like bad news for bears. VXO is at 17.53. I'm guessing that the spike in the VXO is extra premium on big put purchases for portfolio insurance ahead of New Years'. But generally, a sharp spike in the p/c ratio is a buy signal. That said, the p/c has been very depressed for very long. This uncertainty is why we treat it as a secondary indicator only.

 
 
  Ray Cummins   12/31/20,  12:30:05 PM
Spreads/Combos & Premium-Selling -- Portfolio Activity: Rambus (NASDAQ:RMBS)

Shares of RMBS are enjoying another great day as speculation continues about a potential settlement in the current litigation with memory-chip maker Micron Technology (NYSE:MU). The stock is up $1.45 at $31.22 and analysts say that a positive outcome to the legal battle would increase Rambus' earnings substantially, thus translating to higher share values. Our recent "premium-selling" positions are comfortably profitable, but the issue may offer additional (bullish) opportunities in the coming sessions.

 
 
  Jim Brown   12/31/20,  12:28:50 PM
For those with long positions they want to protect over the New Years day period you can buy the Jan-QQQ $35 puts for 30 cents as I type this. If nothing happens you could probably sell them back on Monday for 20 cents (currently 25). This is cheap insurance against the terror alerts.

I personally do not believe there will be any event due to the excessive publicity and extreme security. Al-Queda likes to strike when nobody is looking. The entire "chatter" thing could have been just a ploy by them to make us run in circles to see how we would protect against that type of attack.

Either way I plan on remaining short until Monday. Just in case.

 
 
  Linda Piazza   12/31/20,  12:28:38 PM
Nasdaq up volume still exceeds down volume, but adv/dec ratios on both exchanges and up/down volume on the NYSE remained bearish as of a few minutes ago.

 
 
  Jeff Bailey   12/31/20,  12:27:22 PM
Day trade short alert in QQQ $36.29 here, stop $36.37, target $36.21.

May then look for QQQ day trade long, $36.20, stop $36.15, targets of $36.37 or $36.57. Will follow with intra-day chart.

 
 
  Linda Piazza   12/31/20,  12:20:25 PM
So far today, the OEX continues to find support along the descending trendline formed off yesterday's highs. It's sliding down along that trendline and candle shadows have pierced it, but the bodies still form above it.

 
 
  Linda Piazza   12/31/20,  12:17:31 PM
I mentioned earlier today the Bloomberg exclusive that MO would reduce prices on its four most popular cigarette brands, including Marlboro. MO certainly didn't appear to be benefiting from the announcement, trading in a tight range today, slightly underwater. While researching that information, I found another announcement about a new incentive plan. MO's new incentive plans announced today changes the discount plans available to wholesalers. Some may not like the change, either, with a maximum discount of 2.1 percent, opposed to the 3.5 percent some have been receiving. The new discount plan has two tiers. All wholesalers are given the same initial discount, but those who meet or exceed certain targets have the opportunity to earn more per carton. Wholesalers that might lose revenue due to the new 2.1 percent cap on discounts could raise prices to retailers or sell more of discount brands. One analyst figures that the new discount plan could save MO about $175 million next year, but that analyst ponders whether the company might be "penny wise and pound foolish" to institute these changes at this time. The switch could drive consumers away from MO brands and toward less expensive ones. Also, earlier this year when MO tried to institute changes in its discount plan, some wholesalers sued the company, so it remains to be seen how they'll react in this case. MO backed down in the earlier case.

 
 
  Jeff Bailey   12/31/20,  12:05:43 PM
12:00 Internals at this Link

 
 
  Jeff Bailey   12/31/20,  11:56:59 AM
NASDAQ-100 Components I like from bullish side and want to compare against what I believe is asset allocation has ESRX -0.74%, GRMN -0.73%, MSFT -0.54%.

 
 
  Jeff Bailey   12/31/20,  11:55:02 AM
QQQ $36.30 -0.71% .... session low/high has been $36.25-$36.64.

After losing RED #6, test of DAILY S2/WEEKLY R1 certainly in play ($36.20).

 
 
  Jeff Bailey   12/31/20,  11:52:49 AM
NASDAQ Comp. (COMPX) 1,997.71 -0.6% ... new session lows and back below 2,000.

Russell-2000 Index (RUT.X) 559.92 -0.98% ... still holding above session low of 558.92, but has been sideways at best.

 
 
  Linda Piazza   12/31/20,  11:47:44 AM
The OEX tests the midline support of the widest Keltner channel on the five-minute chart. This should be support, but now resistance lines gather thickly above the current OEX position, showing the difficulty the OEX will face if it tries to bounce. The possibility remains that the OEX could drop far enough today to confirm the potential reversal signal offered by Monday's big white candle and yesterday's doji, but that remains only a possibility so far today. Absolutely anything can happen the rest of the day, when volume should be expected to drop even lower than it is now.

 
 
  Jeff Bailey   12/31/20,  11:45:25 AM
Mortgage Bankers Assoc. Data table at this Link

The overall Mortgage Applications Index (seasonally adjusted) fell to its lowest level of the year and lowest reading since 565.5 for the week ended June 14, 2002.

 
 
  Jonathan Levinson   12/31/20,  11:37:16 AM
The put to call ratio has dropped down to .91, easing off its high at .99. If it continues dropping, it will confirm that the .99 spike was an isolated put buy. The VXO is up to 17.43.

 
 
  Linda Piazza   12/31/20,  11:27:02 AM
Since December 15, the OEX has always found support at its 30-minute 21-pma. It may have briefly slipped beneath that level, by a point or two, but it hasn't had a major violation since the 15th, and even on the 15th, it violated it by less than 2.5 points. That means that the OEX has just touched what could be major support at its 30-minute 21-pma. Bulls aren't out of danger, here, though, because a fall through this zone and a major violation of that average would signal a chance in tenor.

 
 
  Jim Brown   12/31/20,  11:26:11 AM
The FBI has issued an alert warning that anyone carrying an almanac or map could be a terrorist. Really! Link

 
 
  Linda Piazza   12/31/20,  11:21:19 AM
The OEX now tests the 30-minute 21-pma at 548.53, slipping beneath that average as I type.

 
 
  Linda Piazza   12/31/20,  11:19:33 AM
The OEX is trading in a tight pattern of higher highs and higher lows--a possible bear flag. From this point on, however, I caution that we ought not to be drawing too many conclusions from market action, especially based on what we're seeing on a five-minute chart. Note: As I began uploading this, the OEX began testing the lower support of that flag. .

 
 
  Jonathan Levinson   12/31/20,  11:11:14 AM
The put to call ratio has spike to .99 in what was most likely either bad data or a very large put buy. If that reading persists, then it could become a contrarian buy signal for equities, but it's more likely an isolated large trade. We'll see. VXO 17.36.

 
 
  Jeff Bailey   12/31/20,  11:09:14 AM
11:00 Internals at this Link

 
 
  Jeff Bailey   12/31/20,  11:04:37 AM
NASAQ Composite (COMPX) back above 2,000 again. Any bets on the NASDAQ's close for 2003? Hey! How about 2,003.00? 2,000.00 is rather round number though.

 
 
  Linda Piazza   12/31/20,  10:56:52 AM
Bloomberg TV is announcing that MO will reduce prices on its four most popular cigarette brands, including Marlboro.

 
 
  Jeff Bailey   12/31/20,  10:47:54 AM
S&P Banks (BIX.X) 343.51 +0.05% ...

 
 
  Jeff Bailey   12/31/20,  10:46:49 AM
Amex Gold Bugs ($HUI.X) 240.59 -1.96% ... also some asset allocation?

 
 
  Linda Piazza   12/31/20,  10:44:54 AM
As of a few minutes ago, adv/dec ratios were bearish on both the NYSE and the Nasdaq, a departure from earlier this morning, with those ratios at 12:17 for the NYSE and 9:19 for the Nasdaq. Up/down volume patterns were bearish on the NYSE but still bullish on the Nasdaq. Volume remained light, at 166 million on the NYSE and 413 million on the Nasdaq.

 
 
  Jeff Bailey   12/31/20,  10:40:36 AM
Russell-2000 Index (RUT.X) 559.62 -1.03% ... here's a 30-minute interval chart of RUT.X. This is perhaps our first observation of some asset allocation or end of year re-balancing. Link

My mindset at this point is that a lot of institutional market maker inventory has been shorted to the market as they had to provide liquidity to the markets at new highs. Computers may be turned on to buy back some of the shorted inventory and sit at 558.91 as a level. Only when computers fullfill their programs and cover some shorted inventory, does decline continue. Should bulls remain committed for higher prices, RUT.X shouldn't fall.

 
 
  Linda Piazza   12/31/20,  10:40:33 AM
The current OEX pattern looks like a bear flag rising into resistance. If so, it should break down before retracing more than 50% of this morning's decline, so should break down before moving above 549.44. However, in a light-volume environment, such levels can get overrun, and formations don't always pan out the expected way, either.

 
 
  Jonathan Levinson   12/31/20,  10:40:19 AM
The p/c ratio is up to .58 now, VXO at 17.50, a +3.12% move for the old VIX.

 
 
  Jim Brown   12/31/20,  10:32:51 AM
MSNBC just showed pictures of what they are calling the longest snake in the world. The python was 49 feet long and 950 pounds. What do you do with a nearly 1000 pound snake? Personally, I would stay as far away as possible and stay indoors at night. Link

 
 
  Linda Piazza   12/31/20,  10:30:17 AM
Jim has pointed out the likelihood that the dropping advdec line was purely due to a couple of sell programs. Let's look at other volume patterns, then. As of a few minutes ago, NYSE volume patterns were positive, with the adv/dec ratio at 16:12 and up volume 1.7 times down volume. Total volume was an extremely low 116 million. At that, we could put in a couple of orders and change the market! Nasdaq volume patterns weren't so positive and were instead mixed, however, with the adv/dec ratio at 11:17, but with up volume 2.4 time down volume. Total volume was 315 million shares.

 
 
  Jeff Bailey   12/31/20,  10:25:54 AM
Russell-2000 Index (RUT.X) 558.95 -1.15% ... notably weak early. Current level of trade would be 80.9% retracement from all-time high to October's lows at 558.91.

Certainly has the look of some end of year profit taking, re-allocation of assets.

For RUT.X chart, see 12/24/03 Index Trader Wrap chart shown in that wrap at this Link

 
 
  Jeff Bailey   12/31/20,  10:23:08 AM
QQQ $36.40 -0.43% ... here's intra-day chart of QQQ. Link

 
 
  Linda Piazza   12/31/20,  10:22:41 AM
In addition to the support offered by the trendline off the OEX 12/10 low--a rising trendline--the OEX also hit the descending trendline off yesterday's highs, with the two trendlines crossing at the same level, near 548.65. The 30-minute 18/21-pma's also cross near the level from which the OEX originally steadied. Will these various support levels be enough to steady the OEX after the morning's volatility eases? Perhaps, but that advdec line so far hints that the OEX is more likely to keep testing support than it is to be bouncing far.

 
 
  Jim Brown   12/31/20,  10:21:15 AM
The drop in the A/D line is purely sell program related as you can see by the chart. Two different programs, both strong, knocked the wind out of the major indexes. These were very wide programs taking -1000 issues off the A/D. It appears they were small cap related as that index took a big drop while the Dow hit was less. Link

 
 
  Linda Piazza   12/31/20,  10:16:36 AM
The OEX is finding support, at least temporarily, from the trendline off the 12/10 low.

 
 
  Linda Piazza   12/31/20,  10:11:48 AM
The OEX has stopped behaving as it should according to the 5MRT system, revealing that it's weaker than it appeared to be. The volume patterns were predicting weakness.

 
 
  Jeff Bailey   12/31/20,  10:09:27 AM
10:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Linda Piazza   12/31/20,  10:08:27 AM
If volume precedes price, then the volume pattern is predicting more weakness than we're seeing in the OEX. The advdec line just went negative.

 
 
  Jonathan Levinson   12/31/20,  10:08:22 AM
The put to call ratio has kicked off at .56, while the VXO is up to 17.16, a clear bearish divergence.

 
 
  Linda Piazza   12/31/20,  10:04:41 AM
The pattern on the five-minute OEX chart could be a "p" accumulation pattern, but I just can't ignore the weak advdec line or the way BETA dropped so quickly. The price chart is behaving just as it should for a bullish day but . . .

 
 
  Linda Piazza   12/31/20,  10:02:36 AM
The advdec line turns down again, but only minimally.

 
 
  Jonathan Levinson   12/31/20,  10:00:08 AM
Al Green has added a 6.75B 5-day repo, replacing the 4B expiring with a little 2.65B cherry on top. A bottle of Veuve Cliquot next to every Quotron at JPM and friends...

 
 
  Linda Piazza   12/31/20,  9:57:58 AM
So far, the OEX is behaving just as it should according to the 5MRT system, finding support at the bullish #2, but I'm keeping my eye on that advdec line, too. It's only mildly bullish, up by 380 issues, and should be a bit worrisome to bulls.

 
 
  Jonathan Levinson   12/31/20,  9:56:43 AM
A close below 36.30 on the Qs today would make an outside day key reversal down - the strongest of reversal signals. It's amazing how fast it fell apart just now. .12 in about 30 seconds. I think that shows what fluff these prices are based on.

Yes, I agree. I'd only add that we've seen more outside key reversals fail lately than in recent memory- I remember writing 2 up in Index or Futures Wraps, only to see further upside the day after. That said, I still believe in candlestick patterns, and a bearish engulfing daily is the pick of the litter. And yes, the QQQ is walking a tightrope between skyscrapers, imo.

 
 
  Jeff Bailey   12/31/20,  9:55:09 AM
Dow Industrials (INDU) 10,448 +0.22% ... holding near its highs of 10,454, which is right near DAILY R1 of 10,452. Trade at 10,460 may have the rats a running to cover their shorts.

 
 
  Linda Piazza   12/31/20,  9:53:05 AM
The advdec line dropped fast, from just below 1600 to 144 in less than 6 minutes.

 
 
  Jeff Bailey   12/31/20,  9:51:32 AM
QQQ $36.51 -0.13% .... comes back to kiss its DAILY Pivot of $36.48 and MONTHLY R1 of $36.50 with session low of $36.49.

 
 
  Linda Piazza   12/31/20,  9:51:31 AM
The OEX shows a breakout on the Keltner channels, with this being a time of great danger to both bulls and bears. Breakouts show that the OEX is too far extended, but such breakouts can build, too, as we all know. Keltner channel support is gathering near 549.40, but Jeff's 5MRT system hints that the OEX could find support higher, at 549.71. We can use these levels to watch whether the OEX is really as strong as it looks. (Note: 549.71 was broken as I typed, but barely.)

 
 
  Linda Piazza   12/31/20,  9:44:28 AM
We're now into the period of the typical first reversal period and there hasn't even been a hesitation. On Jeff's 5MRT system, the OEX has now climbed all the way to the bullish #4, with the OEX now above the psychologically important 550 level. If selling is going to hit, it should come soon, or else we're going to have the few shorts left be doing a lot of covering.

 
 
  Jeff Bailey   12/31/20,  9:43:30 AM
Ciena (CIEN) $6.48 +6.3% Link .... gosh darn it! Tried playing this one for a swing trade long, but stopped for small profit on Monday. Stock jumps to its 50-day SMA today.

 
 
  Jeff Bailey   12/31/20,  9:37:18 AM
Comcast Corp. (CMCSA) $32.54 +0.83% Link ... upside alert I had set as CMCSA works its way out of a nice 2-month base of support.

I made note a few weeks ago that company was raising its monthly cable fees, and may provide fundamental catalyst for bottom line growth. Also been reading that it is cable.

 
 
  Linda Piazza   12/31/20,  9:37:05 AM
What first reversal? (Grin) Actually, the first reversal typically begins in about three or four minutes. On the OEX, that first reversal will be coming as the OEX is approaching/has touched the bullish #2 on Jeff's 5MRT system.

 
 
  Jeff Bailey   12/31/20,  9:36:19 AM
QQQ Swing trade long update $36.63 +0.13% .... bulls long from yesterday's late session trade at $36.57 will continue to target $37.00, but I may revise this HIGHER after today's close based on new MONTHLY Pivot analysis.

Morning high so far has been $36.63 and this is 19.1% MONTHLY Retracement.

Will cancel the pullback bullish entry order also set up yesterday morning.

 
 
  Linda Piazza   12/31/20,  9:34:38 AM
I thought you did a good job with the candlestick interpretation last night, Jeff.

 
 
  Linda Piazza   12/31/20,  9:33:02 AM
During the first five minutes of trading, the OEX ranged from 548.83 to 549.28 with the midpoint at 549.06. The OEX is currently above that midpoint, showing strength in the earliest trading, but we need to watch the earliest reversal closely. The advdec line is positive this morning, backing up the impression of strength in earliest trading.

 
 
  Jeff Bailey   12/31/20,  9:26:50 AM
Thanks Linda for your 09:22:55 post regarding the OEX candle chart. I saw similar candle for the SPX in last night's Index Trader Wrap, but wasn't certain what pattern it was.

 
 
  Jane Fox   12/31/20,  9:26:49 AM
From the And the Beat Goes On column - the Parmalat scandal widens with eight new arrest warrants charging former top Parmalat officials as well as outside auditors with fraudulent bankruptcy. Among those named in the new arrest warrants are Parmalat's former CEO, one other former top financial official and two officials from Grant Thornton, Parmalat's auditor from 1990 to 1999. Now the U.S. SEC is getting in on the action with it own suit against Parmalat for "grossly overstating its assets" to U.S. investors.

 
 
  Linda Piazza   12/31/20,  9:22:55 AM
The OEX ended the day with a doji at the top of a steep climb, previously a warning sign of a possible impending reversal. However, even a cursory glance at the December climb shows several such patterns followed by strong days, so recent history argues against that interpretation. So does the 30-minute chart, showing neutral-to-bearish oscillators, but also depicting an index that was rising from its touch of the 30-minute 21-pma late yesterday afternoon. That rise brought it right up against the descending trendline off the day's highs, or may even have breached it by a minimal amount. Yesterday the SOX preceded the OEX in touching and reestablishing support at its 30-minute 21-pma, but then the SOX couldn't make any headway after trying to rise. So, we have lots of conflicting signals, which perhaps hints at choppy trading as some try to hold the indices up in the last day of trading this year while some try to lighten their risks ahead of any possible holiday event. I've been trying to balance year-end levels, holiday risks, and settlement for stock sales and purchases. Any sales today, for example, wouldn't be settled until after today, so wouldn't be on this year's books. Will that impact trading with a possible holiday event ahead of us? Perhaps, but perhaps everyone, even institutions, have become inured to the constant threats that never pan out over holiday periods.

 
 
  Jeff Bailey   12/31/20,  9:17:00 AM
09:00 Update at this Link

 
 
  Jonathan Levinson   12/31/20,  8:28:36 AM
8:30am U.S. WEEKLY INITIAL JOBLESS CLAIMS DN 15,000 TO 339,000

 
 
  Jonathan Levinson   12/31/20,  7:50:51 AM
From the New York Times:

If all of America's 500 largest companies had to make good on their promises to workers and retirees immediately, they would have to plug a $259 billion gap in their pension funds, according to a study by Standard & Poor's which will be published soon. A year ago, even though stock prices were lower, the same companies were considerably closer to meeting their obligations, being only $212 billion short.

Link

 
 
  Linda Piazza   12/31/20,  7:05:02 AM
Good morning. The Nikkei and South Korea's Kospi were closed in Wednesday's trading, while Singapore's Straits Times and Hong Kong's Hang Seng reportedly closed early, although my usual source for quotes shows the Hang Seng closed all day. News proved scarce out of the region. The Taiwan Weighted gained 0.41% and Singapore's Straits Times was flat, up 0.04%. China's Shanghai Composite lost 0.97%. Hong Kong's Industrial & Commercial Bank of China was halted for news, but I haven't been able to locate the subsequent news release or determine whether the news was released and trading opened during the trading day. Last night, news surfaced that China had consulted a foreign lab on a suspected SARS case.

European bourses show mixed trading patterns today, although some are already closed for the holiday, either closed all day or having closed early. A German hospital has reportedly been closed due to a terror risk, but the German DAX is closed today, so isn't showing German reaction to the news. The Parmalat scandal and the euro's continued rise against the dollar dominated the news on a day when news was scarce. European oil stocks rose, but the weak dollar continued to hurt companies that depend on U.S. sales. Articles mentioned cosmetics company L'Oreal and insurer Aegon, both dependent on U.S. sales, as being particularly hard hit.

The FTSE 100 closed early, up 8.60 points or 0.19%, at 4479.00. The CAC 40 has been trading near the flatline, currently down 0.49 points or 0.01%, at 3528.69. Reports indicated that French unemployment has unexpectedly decreased. The DAX was closed for the day.

 
 
  Jeff Bailey   12/30/20,  12:14:19 AM
2003 Dow Dog's article at this Link

AT&T (NYSE:T) $20.03, did edge out IP that day for the 10th Dow Dog.

CAT Link will most likely be this years "top dog" with a current 83.88% gain. That triple-top buy signal in March at $48 would have been a good trade (I think we profiled CAT as bullish back then).

What about the relative strength chart of CAT vs. the INDU

Oh my!... CATs rs chart vs. the INDU gave a buy signal in March (red 3) too. I'd be willing to bet a buck that 1 LEAPs call contract on CAT for January $50 2004 expiration would bring a pretty penny today.

 
 
  Jeff Bailey   12/30/20,  12:06:22 AM
Great info to go with this past weekend's Ask the Analyst column. Link

This is the MAIN strategy I used for client's longer-term investment management. The KEY was to reallocate those assets, bring them back to efficient frontier.

Take note of the number of times the word "risk" is used.

 
 
  Jeff Bailey   12/30/20,  11:59:34 PM
Just thinking ... some of today's losses in the Dow Industrials may be coming from Dow dog theory reallocation! I realize this as I begin working on this weekend's Ask the Analyst column.

 
 
  OI Technical Staff   12/30/20,  7:54:52 PM
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  Jeff Bailey   12/30/20,  7:54:11 PM
Pivot Matrix for tomorrow at this Link

 
 
  OI Technical Staff   12/30/20,  7:54:02 PM
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