Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Jeff Bailey   10/18/20,  5:21:21 PM
Dow Diamonds (DIA) $99.64 +0.16% .... $99.79 in extended session.

IBM $85.92 +1.26% .... $88.09 in extended session.

 
 
  Jeff Bailey   10/18/20,  5:14:52 PM
November Crude Oil (cl04x) ... $53.15 $-0.52 ... live quote from NYMEX

 
 
  Jeff Bailey   10/18/20,  5:13:09 PM
QQQ $36.14 +1.43% ... $36.32 in extended session.

 
 
  Jeff Bailey   10/18/20,  5:04:25 PM
Semiconductor HOLDRs (SMH) $29.92 +0.53% .... $30.40 in extended session.

250,000 went by at $30.30.

WEEKLY Pivot levels as follows .... $28.50, $29.13, Piv= $30.25 $30.87, $31.99.

Texas Instruments (TXN) $21.09 -0.61% .... $22.05 in extended session.

 
 
  Jeff Bailey   10/18/20,  4:46:33 PM
Closing Internals at this Link

 
 
  Jim Brown   10/18/20,  4:31:06 PM
Alert - Late Earnings Update

RE est -0.36, actual = +0.20 BIG MISS Link
CTS est +0.10, actual = N/A
MVK est +1.36, actual = +1.60 BIG WIN Link
SWK est +0.71, actual = +0.76 guiding higher
TXN est +0.27, actual = +0.32 BEAT Link
STLD est +0.27, actual = N/A

TXN - orders down about -7% due to lower demand for products.
TXN guiding inline on earnings, slightly light on rev.

IBM comfortable with current estimates and with current business outlook.

 
 
  Jeff Bailey   10/18/20,  4:20:43 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Closed out the Swing trade short for QQQ at $36.20 ($-0.63, or -1.77%)

Day trade long the Isonics Class C Warrants (ISONZ) at $3.13, closed $3.50. ($0.37, or +11.82%).

 
 
  Jeff Bailey   10/18/20,  4:08:04 PM
Buy Program Premium DIA $99.73, SPY $111.85, QQQ $36.21.

 
 
  Jeff Bailey   10/18/20,  4:07:23 PM
Bearish swing trade stop alert ... for the QQQ $36.20

 
 
  Jim Brown   10/18/20,  4:06:21 PM
Alert - Earnings after the close

ET est +0.18, actual = +0.21 beat
RE est -0.36, actual =
CTS est +0.10, actual =
IBM est +1.14, actual = +1.17 Big beat
KFT est +0.45, actual = +0.44 miss
MVK est +1.36, actual =
SWK est +0.71, actual =
TXN est +0.27, actual =
CKFR est +0.26, actual = +0.29
CGNX est +0.24, actual = +0.25
JCOM est +0.31, actual = +0.32
JDAS est +0.03, actual = +0.04
STLD est +0.27, actual =

LF cutting estimates.

IBM confident for 2005, backlog $110 billion in orders.

ETrade raising guidance

Kraft guiding lower

JCOM raising guidance- 2005 rev +40%

CKFR guiding inline

 
 
  Jeff Bailey   10/18/20,  4:03:01 PM
November Crude Oil futures (cl04x) $53.58 -2.45% .... updated 30-minute interval chart with QCharts' WEEKLY Pivot levels and near-term upward trend at this Link

 
 
  Mark Davis   10/18/20,  3:59:50 PM
LOD = 1103.33
HOD = 1114.46
Current print = 1114.04
TRIN = 0.96

When you step back and look at the totality of today's action, long doesn't seem like such a dangerous position to hold overnight.

 
 
  Jim Brown   10/18/20,  3:53:58 PM
In the stranger than fiction department GOOG was down -$3 this morning and is now up +4 ahead of their earnings this week. Shorts are getting killed once again. This will eventually end badly but until shorts learn their lesson and quit shorting long enough for the new 225 million shares to begin coming to market the pain will continue. The next lockup release is Nov-15th.

 
 
  Linda Piazza   10/18/20,  3:53:09 PM
The OEX has been stalling all day at the 50% retracement of the 10/13-10/14 decline, but we don't have a bearish MACD cross on 15-, 30-, or 60-minute charts to show us that the OEX is rolling over just yet. The formation itself looks a bit like a "p" accumulation pattern, suggesting that there could be more upside. We're seeing conflicting signals.

 
 
  Mark Davis   10/18/20,  3:50:09 PM
Long @ 1111.69, raise stop to 1110, hold overnight

 
 
  Linda Piazza   10/18/20,  3:47:19 PM
An OEX drop much below 534 will negate the potential inverse H&S on its five- and seven-minute charts.

 
 
  Linda Piazza   10/18/20,  3:37:33 PM
Nothing much is happening on the OEX's chart. The OEX is still trapped between Keltner support and Keltner resistance, with the possibility remaining to head either direction.

 
 
  Stephen Tetreault   10/18/20,  3:33:50 PM
Talking Heads all over the airwaves talking about how undervalued the semi/chip bubble land firms are, and how they are compelling strong buys here are some stats on a few, and these estimates have note yet been revised down to meet lower guidance, of the favorite sons and daughters TXN Forward P/E = 19 P/S = 3.20
KLAC Forward P/E = 20 P/S = 5.28
RIMM Forward P/E = 35 P/S = 16.20
AMAT Forward P/E = 18 P/S = 3.80
XLNX Forward P/E = 23 P/S = 6.15
MXIM Forward P/E = 21 P/S = 9.55
NVLS Forward P/E = 26 P/S = 2.80
INTC Forward P/E = 18.5 P/S = 3.99
Maybe they need to issue some Preparation H when they come on and tout the sector as extremely undervalued as demand is slowing, inventories rising and where are the new drivers even SIA and SEMI are talking about a significant slow down. These are trading stocks at best, not yet a value in my humble opinion?

 
 
  Linda Piazza   10/18/20,  3:28:03 PM
The OEX's 7- and 15-minute Keltner charts show the OEX balancing above mid-channel Keltner support, but facing potential Keltner resistance. If the OEX can maintain seven-minute closes above the Keltner line currently at 534.42, it will continue to challenge that overhead resistance. It's building a potential inverse H&S on the seven-minute chart, and a breakout could set up a test of 537.

 
 
  Linda Piazza   10/18/20,  3:21:06 PM
The TRAN now looks as if it's tilting down toward 3360, but a five-minute close above 3376 may change that outlook.

 
 
  Mark Davis   10/18/20,  3:18:43 PM
stepping away for 20 min...

 
 
  Mark Davis   10/18/20,  3:16:38 PM
Go long again @ 1111.69, stop 1109

 
 
  Mark Davis   10/18/20,  3:15:02 PM
Stopped out of long play @ 1112 and break even

 
 
  Jeff Bailey   10/18/20,  3:09:07 PM
03:02 Market Watch at this Link

NYMEX Nov Crude Futures settled $53.67

 
 
  Mark Davis   10/18/20,  3:01:23 PM
Long @ 1112, raise stop to 1112 and break even
We were lucky to snag +2 on that short play and I believe we are headed higher, although that is far from a sure thing at this point. A new HOD, especially a spike to 1115 would absolutely fry the shorts.

 
 
  Jonathan Levinson   10/18/20,  2:59:50 PM
TNX is curent unchanged approaching the cash close for treasuries. Looks like a nothing day for bonds, consolidating Friday's move up in the TNX.

 
 
  Linda Piazza   10/18/20,  2:59:08 PM
This last push sent the OEX above the presumed neckline area for the H&S that the OEX never finished forming on the five-minute chart, but the OEX had already met the downside target for the formation. If the OEX turns down from its current test of the 535 area, it will have created bearish divergence, Keltner style on that chart. Support still looks relatively strong near 533, however.

 
 
  Jonathan Levinson   10/18/20,  2:50:20 PM
35.88 held and QQQ bounced on higher volume. This hasn't killed the short cycle downphase, but it's imminent. 30 min channel resistance has crept up to 36.25, and it appears that an uptick is building. If this doesn't fail shortly, then we'll be looking at a trending move for the 30 minute cycle that had been rolling over just minutes ago.

 
 
  Jeff Bailey   10/18/20,  2:50:17 PM
QQQ $36.16 +1.47% ... session high and DAILY R2.

 
 
  Linda Piazza   10/18/20,  2:49:42 PM
The TRAN rises to test gathered Keltner resistance on the five-minute chart. A rollover here (3375-ish level) would create bearish divergence, Keltner style, but that rollover hasn't happened yet.

 
 
  Jeff Bailey   10/18/20,  2:49:08 PM
Some warrant info regarding ISON .... at this Link

More complex than this, as warrants have different exercise price relative to common.

Magic number might be $10.00 on ISON $5.97 +77.4% common

 
 
  Mark Davis   10/18/20,  2:45:39 PM
Stopped out of short play @ 1112, +2
Now long @ 1112, stop 1110

 
 
  Linda Piazza   10/18/20,  2:43:01 PM
The presumed 534.20 neckline area for the H&S formation that the OEX didn't bother to finish forming did hold as resistance on the retest. The OEX is now approaching the presumed downside target for that H&S, if it had completed. Also, the seven-minute chart shows that it's approaching likely strong Keltner support in the 533.00-ish region. I was going to type that it was likely time for another test of 534, but that began as I typed.

 
 
  Mark Davis   10/18/20,  2:41:32 PM
Watch the 1110 area for a potential bounce point. Keep in mind also that the SPX 50sma @ 1108.99 (call it 1109) is another potential support area just below.

 
 
  Jeff Bailey   10/18/20,  2:35:21 PM
Day trade bullish exit alert .... for the Isonics C Warrants (ISONZ) $3.50 bid here.

 
 
  Linda Piazza   10/18/20,  2:29:44 PM
On the TRAN's five-minute Keltner chart, resistance appears to be forming over the TRAN's current level, so that it appears easier for the TRAN to drop than to rise much above 3375.74. That fits with the potential for a H&S to form on the three-minute chart.

 
 
  Jonathan Levinson   10/18/20,  2:28:46 PM
This would be a fine spot for a lower price and wavelet oscillator high for QQQ. Anything below 35.10 should set us up for another test of 35.88.

 
 
  Jeff Bailey   10/18/20,  2:27:23 PM
Day trade long alert .... for the Isonics C Warrants (ISONZ) $3.13 +111% here, stop $2.95, target $3.50.

 
 
  Mark Davis   10/18/20,  2:23:27 PM
Short @ 1114, stop 1112
Go long again with a touch of 1112

 
 
  Jonathan Levinson   10/18/20,  2:19:30 PM
Still more bouncing above 35.88 QQQ, but the tops are getting lower and the short cycle is in a downphase. The 30 min cycle channel is still flat, but if price doesn't get back above 36 very soon, it will roll over, making a break of 35.88 support much more likely.

 
 
  Jeff Bailey   10/18/20,  2:18:15 PM
AAPL $36.38 $46.37 Link (has exceeded bullish triangle pattern probability of $44.50) , RIMM $84.87 +3.8% Link nearing its bullish vertical count of $87.

 
 
  Mark Davis   10/18/20,  2:18:13 PM
SOX 380, SPX 1111 and Dow 9900 are closely linked today. I am watching all three for a breakdown or bounce. So far they are holding and we have sideways action going into the last 1 1/2 hours of trading.

 
 
  Linda Piazza   10/18/20,  2:17:45 PM
Here's a daily chart of the TRAN, showing its long-term ascending regression channel (there's another off the August low): Link

 
 
  Jeff Bailey   10/18/20,  2:16:13 PM
United Tech (UTX) $89.00 -2.91% Link .... breaking below early August lows.

 
 
  Mark Davis   10/18/20,  2:10:52 PM
SOX below 380... strike that, back above again.

 
 
  Jeff Bailey   10/18/20,  2:08:29 PM
02:00 Internals at this Link

 
 
  Jim Brown   10/18/20,  2:08:15 PM
The Software Holders have broken their downtrend and could be one factor supporting the Nasdaq now that chips are losing their luster. The leaders are Adobe which broke out to a new 52-week high and SYMC up strongly today after a little profit taking last week. These sub indexes do not get the attention they deserve but provide stealth support.

SWH Chart: Link
ADBE Chart: Link
SYMC Chart: Link

 
 
  Linda Piazza   10/18/20,  2:00:57 PM
Keltner support may join up with historical support near 532.80-533.50 to produce another try at a bounce. Bears will want to see the OEX turned back at a lower five-minute high if such a bounce does occur. The five-minute chart looks to me as if the OEX was trying to produce a H&S and just dipped beneath the neckline without bothering to form a right shoulder. If that's true, bears hope to see a retest of the presumed neckline area near 534.25 fail and the OEX turn lower from there.

 
 
  Mark Davis   10/18/20,  1:58:54 PM
This market is changing faces more often than Cher at a Botox clinic (I used to date her when she was in her 60s)

 
 
  Jeff Bailey   10/18/20,  1:57:24 PM
01:55 Market Watch at this Link

 
 
  Jonathan Levinson   10/18/20,  1:52:24 PM
QQQ has yet to test 35.88, but it's looking hopeful, particularly with the short cycle oscillators just beginning to print their first sell signals and the 30 min cycle upphase stalling with a bearish divergence against the higher price high.

 
 
  Keene Little   10/18/20,  1:52:14 PM
As oil continues its march higher (despite today's pullback), here's an update to the chart I showed last week. This chart shows my EW count for the rally and I've got a potential top in oil price just above the current level. I'm counting the final 5th wave of this rally as an ending diagonal--an ascending wedge, as drawn on the chart. As such, each wave within the 5th wave is a 3-wave move and therefore I'm looking for only one more push higher to finish the rally. Link

If the 5th wave is to equal the first wave (within the larger 5th wave up from the Sept 30th low), then the fib target is 55.65 which is what I gave last week. As the move up gets closer to finishing, and assuming today's low is it for the pullback, I can start zeroing in a little closer to a potential top. If we get two equal legs up from the last pullback on Oct 13th, then the fib target is 56.35. Therefore, unless this picture changes, the EW picture says the top will be between 55.65-56.35.

Oil stocks peaked on Oct 7th and may be the leading indicator for oil prices. If we do see oil top soon, that could be bullish for stocks. If the EW picture for oil changes I'll let you know since this is likely to have an impact on the direction of equities over the next month.

 
 
  Linda Piazza   10/18/20,  1:49:53 PM
We have a broadening formation at the top of the climb on the OEX's 30-minute chart.

 
 
  Linda Piazza   10/18/20,  1:49:04 PM
That 50% retracement of the 10/13-10/14 decline, at about 535.30, has proven tough for the OEX. Now the 30-minute 100/130-ema's slant down to join that resistance, too, with those averages at 535.87 and 536.63, respectively.

 
 
  Mark Davis   10/18/20,  1:46:56 PM
Stopped out of long play @ 1111, +4
Short @ 1114, lower stop to 1112

 
 
  Jeff Bailey   10/18/20,  1:44:13 PM
Lehman 1-3 year iShares ... 2 trades at 40 contracts each were at the offer of $0.45 at 12:13:12 PM EDT.

Might also be related to time benchmark of November Crude Oil futures moving below their WEEKLY Pivot just after 12:00 PM EDT.

 
 
  Tab Gilles   10/18/20,  1:41:38 PM
Expecting a pullback for oil. Entry point for MUR: Link

 
 
  Jonathan Levinson   10/18/20,  1:41:15 PM
Back. The 30 minute and 60 minute cycle upphases are catching up to the move in price, with QQQ's 30 min cycle top now at 36.20, with the 60 min up to 36. The short cycle channel is topped at 36.12 right now, and so the short cycle is finally back within the 30 min channel. In other words, price is consolidating its recent gains, and the indicators are catching up to the move. I expect bulls to have a tough time advancing above the 36 level, and 36.20 should be the top of any brief spikes from here. QQQ bears will want to see price below 35.88 support before trusting any pullback.

 
 
  Mark Davis   10/18/20,  1:41:01 PM
Long @ 1107, raise stop to 1111
Short @ 1114, lower stop to 1114 and break even

 
 
  Mark Davis   10/18/20,  1:36:38 PM
Now short @ 1114, stop 1115
Still long @ 1107, raise stop to 1109 This is a risky (but calculated) play but we now have the market bracketed with puts and calls and a +7 point gain locked in... hard to beat that position.

 
 
  Stephen Tetreault   10/18/20,  1:33:32 PM
Potential After-hours earnings contagion and or support from IBM, TXN, SWK,KFT, JCOM and MVK; will the buyers front run these firms, or retreat and book profits ahead of earnings. I’m guessing after the disappointing stream of forward guidance we have seen of late, I would not want to be long these issues; the risk reward is not in a favorable position, as we have continued to see weak guidance (Like MMM today) and a sell-into the earnings mantra. Hence the bulls may wavier into the close as the Euphoria and giddiness wears off and reality sets in

 
 
  Mark Davis   10/18/20,  1:31:48 PM
Go short with a touch of SPX 1114

 
 
  Linda Piazza   10/18/20,  1:31:03 PM
If crude should close to where it is now ($53.48), it will have completed a rough evening-star formation on its daily chart. That doesn't mean that it will have truly reversed course, however. So far, either the 50-dma or 100-dma has held as support and no pullback's trough has violated the previous peak. As I and several others have commented, though, crude has climbed much further above its 50-dma than it usually does, so it's seemed that it was due for either a sideways consolidation or a pullback for a while. Remember that it's possible that a "reversal" in a strongly-performing entity will be nothing more than a sideways consolidation.

 
 
  Mark Davis   10/18/20,  1:28:18 PM
Starting to see bearish MACD divergence... may be worth a counter short play, stand by

 
 
  Tab Gilles   10/18/20,  1:23:37 PM
Several sectors that look ready to rally: Link Link Link GSA largest % of the NDX., the beaten down sectors of XLV & DRG. Look for market rotation out of sector that have performed well into those that have done poorly.

 
 
  Linda Piazza   10/18/20,  1:16:00 PM
The Russell 2000 opened near its 200-sma today, dipped below it and has now bounced back above it. The Russell 2000's 200-sma is at 569.58 and the Russell 2000 is at 572.28 as I type.

 
 
  Mark Davis   10/18/20,  1:15:09 PM
Stepping outside for some fresh air... we had the first real rain of the season yesterday so the air actually IS fresh. I love the smell of a new rain on the redwood trees.

 
 
  Linda Piazza   10/18/20,  1:14:08 PM
The Nasdaq's 200-ema is at 1906.52, just above the day's 1904.50 LOD. On the daily chart, does the Nasdaq's formation look like a rough (and badly drawn) diamond to anyone but me? Link That's typically a bearish shape, but we all know better than to count on prices breaking out the typical direction, and instead should be prepared to watch for a breakout in whatever direction that breakout occurs. I haven't included oscillators, but daily MACD began flattening at the time the Nasdaq began forming this potential diamond, which would be consistent with the formation of a consolidation-type pattern, whether reversal or continuation.

 
 
  Mark Davis   10/18/20,  1:09:59 PM
B-bands are getting pinched very tight on the SPX 1-min chart. We may be about to see a good move. If it's up then shorts will be fried. If it's down shorts will still be nervous until SPX drops below 1109... currently printing 1112.49

 
 
  Mark Davis   10/18/20,  1:07:14 PM
SOX 380 could be an important level to watch today. It was violated convincingly this morning with a LOD @ 374.67. It then rallied back above to HOD @ 383.48 before dropping back, currently printing 381.53. I would not want to see the SOX drop back below 380.

 
 
  Jonathan Levinson   10/18/20,  1:06:00 PM
Stepping away for 30 minutes here.

 
 
  Jeff Bailey   10/18/20,  1:05:16 PM
01:00 Internals at this Link

 
 
  Mark Davis   10/18/20,  1:01:23 PM
Very shallow retracement so far and SPX is setup perfectly to print a fresh buy signal. All it would take is about a 1 point rally on the SPX cash index to trigger a MACD bullish cross. If instead we roll over with a bearish kiss there is still strong support just below @ the 50sma (1109).

 
 
  Jeff Bailey   10/18/20,  12:58:37 PM
12:50 Market Watch at this Link

 
 
  Jim Brown   10/18/20,  12:56:59 PM
Earnings after the close

ET est +0.18
RE est -0.36
CTS est +0.10
IBM est +1.14
KFT est +0.45
MVK est +1.36
SWK est +0.71
TXN est +0.27
CKFR est +0.26
CGNX est +0.24
JCOM est +0.31
JDAS est +0.03
STLD est +0.27

 
 
  Linda Piazza   10/18/20,  12:56:29 PM
It was when crude started dropping near 11:00 that the TRAN began climbing, reaching a higher (than Friday's) high. The 10/7 high on the TRAN was 3389.20, and the TRAN is now at 3372.57, looking as if it's going to challenge that 10/7 high. Keep an eye on the TRAN for either a new relative high (triggering more short-covering in the broader market, perhaps) or for a rollover beneath that 10/7 high.

 
 
  Stephen Tetreault   10/18/20,  12:53:09 PM
We just witnessed what I call a ridiculous pole-rally, where a few participants through the leverage of futures and options jumped the markets very hard (just threw money, not caring what the fills were, and they were writing puts in earnest, forcing hedging by the options pit players to remain delta neutral); now that they all ran up the pole, it will be very difficult for them to get off, with out falling and getting hurt.

According to my data we have see 73% program trading today, and in an anemic volume environment we have see hot money players making the rounds in the high-beta players, the highly shorted stocks and those with out short-able shares and/or the ability to hedge with puts.

This is a highly manipulated environment today, and not for the weak at heart, or for those without great executions. Most of the bubble stocks caught a nice tail wind, on the back of the decrease in crude prices and speculative forces, now the real test will be whether the indexes continue with a tail wind or will the cold breeze peter out into a flu like cold?

 
 
  Jonathan Levinson   10/18/20,  12:50:57 PM
The 30 minute NQ chart paints one of the clearer pictures of the current move: Link . The 30 min cycle (and 60 min as well) is in a strong early upphase. Look for QQQ support at 35.88, below which is 35.80 and 35.67-.71. A short cycle downphase is due now, but if 35.88 doesn't crack right away, it will prove to be a trending move in that short timeframe.

 
 
  Linda Piazza   10/18/20,  12:49:13 PM
The OEX charged up to challenge a best-fit (or interior, depending on the writer) descending trendline off the 10/7 high. This would be one appropriate place for a bearish entry, but the shape of the climb off Thursday's low now has a broadening shape, and they're notoriously difficult to trade and not particularly amenable to technical analysis. There's the possibility of a climb up toward 538.30 before we even know if this potential bear flag has retraced too far to still be considered a bear flag.

Mark said something this morning about the difficulty with deciding on entries because we all knew a bounce could be coming but that a rollover is expected from some level, too. There was always the chance that each rollover could be "it," and those who wanted to participate might have to face some whipsawing action. I got caught up again thinking that we were seeing an early morning breakdown even though all my posts since last night were saying that's exactly what I didn't want to see. I was leery, but not leery enough, apparently.

 
 
  Mark Davis   10/18/20,  12:44:54 PM
Well, we got our short-covering frenzy @ SPX 1110 and it has taken us all the way to 1113.75 (HOD). Watch for another round of even more significant short-covering should SPX crack the 1115 level. SPX 1109 (50sma) should now act as fairly strong support... the longer we stay above 1109 the stronger the support becomes.

 
 
  James Brown   10/18/20,  12:44:30 PM
OI put play FLIR is nearing our secondary target of $51.50. The stock is down another 2.2% and under recent support at $54. If you haven't already exited the next couple of points may be a good place to do so.

 
 
  James Brown   10/18/20,  12:42:01 PM
It may be time to exit the APOL put play. The stock is up sharply (+4%) and breaking back above round-number resistance at the $70.00 mark. Morgan Stanley upgraded the stock this morning with plenty of positive comments to boot. The next level of resistance for APOL is the late September lows near $71.75.

 
 
  Jeff Bailey   10/18/20,  12:41:24 PM
QQQ $36.03 +1.12% ... just off session high of $36.11 and WEEKLY R1.

SOX.X 382.68 +0.34% .... no trade at WEEKLY Pivot (386.67).

 
 
  James Brown   10/18/20,  12:38:54 PM
OI call play Progressive (PGR) is up 2.26% to 88.40 after announcing results from its Dutch auction to buy almost 17 million shares of its stock at $88 per share.

 
 
  Linda Piazza   10/18/20,  12:37:47 PM
The OEX now tests the 50% retracement of the 10/13-10/14 decline. It's climbed above the 15-minute 100/130-ema's at 533.76 and 534.57, respectively, so it may try to use those averages as support as it consolidates ahead of a test of that 50% level, just above 535.30. The formation as the OEX climbed no longer looks like a bear flag, but rather like a broadening formation, an unstable formation that's indicative of emotion-based trading. Those who entered a bearish position on a break below this morning's bear flag saw the OEX climb above the appropriate right-shoulder level (see my 11:41 post) and probably should have stopped themselves out as it did, depending on their trading styles.

 
 
  James Brown   10/18/20,  12:36:39 PM
OI call play OSIP is pushing higher as well. OSIP is up more than 3% and breaking out over resistance at $64.60 (65.00) and its simple 100-dma.

 
 
  Mark Davis   10/18/20,  12:36:00 PM
In hindsight, this morning was a well orchestrated shaking of the tree. Maybe all the sideline money Jim mentioned in the Weekly Market Wrap is beginning to be put to work.

 
 
  Jeff Bailey   10/18/20,  12:35:30 PM
December Crude Oil (cl04z) $53.05 -1.7% ... 30-minute delayed ....

 
 
  James Brown   10/18/20,  12:34:56 PM
For the stock traders out there... McDATA Corp (MCDTA) is on the move, up 5.7% to $6.28, and breaking out over its simple 200-dma and exponential 200-dma to hit new 5 1/2 month highs.

 
 
  Jeff Bailey   10/18/20,  12:31:19 PM
Bearish swing trade raise stop alert .... Will raise stop on QQQ bearish trade from $36.10 to just above WEEKLY R1. Raise stop to $36.20.

QQQ $36.06 here.

 
 
  Jonathan Levinson   10/18/20,  12:29:15 PM
Session lows for gold, silver, ten year bonds and nymex crude. THe TRINQ is buried at .33, not the lowest we've ever seen but in extreme territory. The fact that this move is perfectly countercyclical to all cycles from daily down to the short cycle should have bears very nervous- it came precisely at the moment when appeared least likely to occur. The last time I saw one of these moves launch in this way, it reversed completely within two days. The important point, however, is that it's already held this long. Look for QQQ 35.88 to hold as new support.

 
 
  Linda Piazza   10/18/20,  12:24:16 PM
The last five-minute OEX chart I showed this morning depicted the 100/130-ema's and said that a five-minute close above those averages would show a change in trend today. Boy, did it! The first five-minute close above those averages was at 532.05, and the OEX just rocketed up from there. The OEX now approaches a 50% retracement of the decline from the 10/13 high to the 10/14 low, with that retracement at about 535.30-535.35. This potential bear flag is wide enough now that it might be retracing the bigger decline, from the 10/7 high, and the 50% retracement of that decline is at about 538.30.

 
 
  Jeff Bailey   10/18/20,  12:23:58 PM
Buy Program Premium .... SPX 1,113 , QQQ $36.00.

 
 
  Jonathan Levinson   10/18/20,  12:21:39 PM
Gold, silver and oil down, equities hitting new highs across the board.

 
 
  Jonathan Levinson   10/18/20,  12:15:56 PM
Nymex crude is now down 1.20 at 53.725, -2.18%.

 
 
  Mark Davis   10/18/20,  12:14:40 PM
Long @ 1107, raise stop to 1107 and break even

 
 
  Jonathan Levinson   10/18/20,  12:13:02 PM
Wow! New highs across the board, reversing the 30 and 60 min cycle downphases and threatening the daily as well.

 
 
  Mark Davis   10/18/20,  12:12:37 PM
Bears had better give it their best shot here... further upside (above 1110 on the cash index) could trigger significant short-covering.

 
 
  Linda Piazza   10/18/20,  12:12:26 PM
Reader Question: Would you be so kind post input on market monitor regard several items, since we are not familiar with the OIL Index symbol also some of the companies that are related in that index, to be honest we have not concentrated in that sector, with crude oil rising on a daily basis and reading other sources stating the prices are still low compared to years ago.

Any company symbols that are related in that field and the oil index is highly appreciated, these will be entered into our daily streamer to watch and actioned as we see accordingly.

Response: QCharts symbol for crude for November delivery is cl04x. I haven't been watching individual stocks as closely as have some of the other writers. I know subscriber/contributor Tab G. has been watching these stocks and often follows MUR. I know Jim has also been putting together a list of not-closely-followed stocks in the industry in preparation for a project he's doing later in the year, so he might have some input. Perhaps Jeff has also been following some stocks in the industry and would like to chime in with input. However, to get you started, you might take a look at the XOI, the AMEX Oil Index. Here's a component listing of that index: Link (You'll have to click "Show Index Components" underneath the graph. Also try the OIX, the CBOE Oil Index, with components listed here: Link Some other writers might know other possibilities that you should consider, such as an iShare or Holdrs, such as the OXH, the Oil Service HOLDRS Index. I haven't traded any of these and so can't advise you about volume or other important factors when considering these, but perhaps this information will help you get started.

 
 
  Jeff Bailey   10/18/20,  12:12:23 PM
Buy Program Premium .... SPX 1,111 , QQQ $35.93

 
 
  Jonathan Levinson   10/18/20,  12:10:23 PM
This latest spike has violated all intraday channels and is on low volume- it should reverse back to the 35.80 level. If not, then we're at the start of a very powerful trending move.

 
 
  Jeff Bailey   10/18/20,  12:09:05 PM
12:00 Internals at this Link

 
 
  Jonathan Levinson   10/18/20,  12:07:07 PM
30 min and 60 min channel resistance are being tested for the first time since 1:45PM on Friday at 35.80. A failure to reverse immediately will see the 30 min channel downphase abort and a new upphase kick off within the next 10 minutes. 35.67-71 QQQ should now act as support.

 
 
  Mark Davis   10/18/20,  12:04:33 PM
Dow 9900 seems to be holding up the rally train (for the moment).

 
 
  Mark Davis   10/18/20,  12:02:56 PM
SPX is only 1/4 point from a new HOD... TRIN still bullish and short-term trend has definitely reversed to bullish

 
 
  Jeff Bailey   10/18/20,  12:02:31 PM
12:00 Market Watch at this Link

 
 
  Jeff Bailey   10/18/20,  12:00:11 PM
VIX.X .... 15.25 ... session low and WEEKLY Pivot.

TRIN 0.88

SPX.X 1,107.75

 
 
  Mark Davis   10/18/20,  11:55:22 AM
If we can take out the last swing high in the 1107.50 area that may provide enough fuel to launch us above the 50sma @ 1108.99. TRIN is saying yes.

 
 
  Jonathan Levinson   10/18/20,  11:49:28 AM
This morning's action is actually an extension of last week's op-ex tractor beam, at least for QQQ and NQ which continue to drift sideways within Friday's range. This is currently bullish, in my view, because the clock is running against the 30 and 60 min cycle downphases.

 
 
  Linda Piazza   10/18/20,  11:48:09 AM
Here's an OEX five-minute chart with the (blue/purple) 100/130-ema's. These have shown some importance today, so bear watching. Note that while we've been watching a potential H&S, there's also a potential for an inverse one with the neckline roughly at the 130-ema: Link A five-minute close above the 130-ema on this chart would represent a change in trend, but so far, these averages are holding.

 
 
  Jonathan Levinson   10/18/20,  11:45:09 AM
Nymex crude is down 1.46% or 80 cents to 54.125 here. QQQ continues to outperform its peers.

 
 
  Mark Davis   10/18/20,  11:44:50 AM
This is one of the toughest trading days in recent memory. Things are looking bullish again and if SPX can regain the 50dma @ 1108.99 it should trigger some short covering. My bias is still down longer-term but we could bounce all the way to the 1130 area first and if we rally to that level traders may be thinking 1102 was "the" bottom. As always, follow price action and not what you KNOW is right.

 
 
  Linda Piazza   10/18/20,  11:41:53 AM
The OEX is rising from the possible (revised) neckline just above 530, into a potential right shoulder for a H&S formation. If this formation is going to complete, the OEX probably shouldn't rise too much above 532.30-532.60.

 
 
  Mark Davis   10/18/20,  11:40:08 AM
Stopped out of short @ 1107 and break even
Now long @ 1107, stop 1105

 
 
  Mark Davis   10/18/20,  11:36:49 AM
Go long again with a touch of 1107

 
 
  Linda Piazza   10/18/20,  11:30:13 AM
The OEX now tests the underside of the former supporting ascending trendline off Thursday's low.

 
 
  Jonathan Levinson   10/18/20,  11:28:34 AM
The 30 and 60 min cycle channels continue to point south, the short cycle still more ambiguous and choppy. Bears still have another few hours left to these longer downphases, but QQQ will need to stay below the 35.67 line to avoid stalling them. Nymex crude is hitting a session low as I type at 54.275.

 
 
  Linda Piazza   10/18/20,  11:25:02 AM
The OEX hovers just over 530, forming a potential bear flag on the five-minute chart.

 
 
  Mark Davis   10/18/20,  11:24:03 AM
SPX 50sma is 1108.99 and HOD is 1108.24. The current SPX print is 1104.55. This can be viewed as a failed attempt to regain the 50sma... a bearish development from any angle. Until/unless bulls rally back above the 1106 area the downtrend remains intact and the wimpy little (short-lived) bounce from 1102 to 1113.50, after dropping like a rock from 1142 to 1102 looks very bearish on the daily chart.

 
 
  Jeff Bailey   10/18/20,  11:13:15 AM
11:00 Internals at this Link

Should current NH/NL ratio at the NASDAQ hold to the close, this would have its 10-day NH/NL ratio reversing back lower at 64%.

 
 
  Linda Piazza   10/18/20,  11:10:24 AM
Even those trading the OEX should keep an eye on the SPX. The 200-ema is at 1100.80, joining forces with possible round-number support at 1100. As I type, the SPX is at 1104.19.

 
 
  Mark Davis   10/18/20,  11:07:52 AM
1103.50 has been violated (only briefly so far) and we could be in "underthrow" territory with that 1103.33 print, however I do not see 1103.50 as a strong support area so we should continue lower eventually.
The 1102 swing low is a different story and 1100 is just below that so if 1103.50 gives way we will drop into stronger support areas. If they give way it could get ugly very fast. SPX 1100 is as much of a headline number as Dow 10000.

 
 
  Jonathan Levinson   10/18/20,  11:04:19 AM
New session low for QQQ at 35.41 here. Next support is at 35.35, followed by 35.28, below which the bears should be in complete control. The 60 min channel is finally downticking here, in sync with the 30 min channel and the daily cycle.

 
 
  Jeff Bailey   10/18/20,  11:01:17 AM
10:55 Market Watch at this Link

 
 
  Jonathan Levinson   10/18/20,  11:01:06 AM
QQQ has stabilized again, back to its 8AM levels at 35.48 from a low of 35.43. The Dow, on the other hand, is stalled right at the lows with no bounce whatsoever. A short cycle channel downphase is in effect for QQQ, but the oscillators are mixed and there's still little directional conviction.

 
 
  Mark Davis   10/18/20,  11:00:47 AM
Short @ 1107, lower stop to 1107 and break even
SPX currently printing 1104.04. It took a while (and we had to sacrifice -2 points) but I think we have a good trade here that may last several days.

 
 
  Linda Piazza   10/18/20,  10:56:45 AM
One possibility for the OEX is that it's now forming a different continuation-form H&S with a neckline near 530 rather than along the bear flag support. If so, there could be a bounce from the current five-minute period's candle, up toward 531.25-532 to form the right shoulder. Bears would prefer a rollover beneath the bear-flag's former support, however, at the lower end of that range, and a lower (than Thursday's) low.

 
 
  Mark Davis   10/18/20,  10:55:57 AM
Next support for SPX on a swing low basis is 1103.50, then 1102, then round number support @ 1100. I do not think 1100 will hold, although it may take more than today to take it out. SPX just printed a swing low @ 1103.86 which could be considered a bounce from the 1103.50 swing low area... currently printing 1104.64 and trying to flash a buy signal (MACD has turned up sharply but has not crossed yet to confirm the short-term buy signal). The 1106 area should now be resistance.

 
 
  Jonathan Levinson   10/18/20,  10:49:39 AM
Once again, the YM is far weaker than the NQ, just printing another set of lows here. NQ is selling as well, but is in suspended animation compared with YM.

 
 
  Linda Piazza   10/18/20,  10:49:10 AM
Bear flag breakdown. As I type, the OEX is threatening to break down out of the bear flag, suggesting that it may instead just foregoing the rest of the climb. Confirmation needs to include at least a drop below the 530.75 low seen earlier this morning, however. Those taking new bearish entries should be aware of the potential for a bounce from an equal low level.

Note: Confirmation came as I typed. Be prepared to accept the risks if you're in a bearish play and be ready to jump out if the OEX switches directions.

 
 
  Jeff Bailey   10/18/20,  10:47:29 AM
TRIN 1.10

VIX.X 15.49

SPX.X 1,105.42 -0.25% ...

 
 
  Mark Davis   10/18/20,  10:47:10 AM
New lows for the Dow and SPX... maybe we have our break

 
 
  Jonathan Levinson   10/18/20,  10:45:08 AM
Session low for YM futures here. Nymex crude is down .425 to 54.50 currently.

 
 
  Jeff Bailey   10/18/20,  10:42:33 AM
Check Point Software (CHKP) $20.47 +14.22% Link .... higher after reporting quarterly earnings that beat estimates by $0.02. Guided Q4 higher to $0.28-$0.29 per share versus consensus of $0.27. Sees revenues between $136-$144 million versus consensus of $140.4 million.

 
 
  Mark Davis   10/18/20,  10:41:49 AM
Jeff we were thinking the same thing at the same time re: HOD/LOD

 
 
  Mark Davis   10/18/20,  10:40:40 AM
This a very tough day to trade. Just as you think the short-term trend is confirmed, it reverses again. HOD is 1108.24, LOD is 1105.56 and it will probably take a break on one of those two numbers to establish a real trend. I have changed my mind about 5 times already as to whether I should be long or short. We're in a definite downtrend but "should" be bouncing (deadcat style at least) today. The failure to do so would be very bearish IMO.

 
 
  Jeff Bailey   10/18/20,  10:39:59 AM
VIX.X 15.43 .... pinned between DAILY Pivot and WEEKLY Pivot.

TRIN 0.95.

SPX.X 1,107.12 .... right in that little zone from WEEKLY/MONTHLY retracement.

Breaks of day high/low most likely dictates any directional trade from here.

 
 
  Jonathan Levinson   10/18/20,  10:38:08 AM
Our working range has narrowed to 35.52-35.70 with another wavelet reversal to the most recent decline. The short cycle oscillators are now a choppy mess, trying to turn up based on the higher wavelet low just printed but opposed to the ongoing 30 min cycle downphase.

 
 
  Jeff Bailey   10/18/20,  10:32:45 AM
December Crude Oil futures (cl04z) 53.75 -0.4% ... 30-minute delayed, but sitting just on top of my 61.8% fitted retracement level of $53.66. Session low has been $53.65.

 
 
  Jeff Bailey   10/18/20,  10:30:32 AM
S&P 500 Index (SPX.X) with WEEKLY and MONTHLY Pivot retracement at this Link

 
 
  Jonathan Levinson   10/18/20,  10:30:19 AM
The 30 min channel resistance line was never touched, and the channel never turned up. Support remains at 35.35, with the rising pattern from the cash open now violated to the downside. An attempted short cycle oscillator upturn is aborting here, and a break below 35.45 should see acceleration to the downside.

 
 
  Linda Piazza   10/18/20,  10:29:29 AM
The SOX is below its 50-dma today, with that average at 383.35 and the SOX now at 367.77.

 
 
  Linda Piazza   10/18/20,  10:26:09 AM
As the OEX tests bear-flag support, watch for a breakdown or the possibility that the OEX may yet rise into a right shoulder for a continuation-form H&S that's showing up as a possibility on its intraday charts. Sure wish TRIN were giving us a clue as to likely direction, but it's not, so it would take faith and bravery to jump into a bearish play right now. Although I hope the OEX does bounce into a right shoulder to give want-to-be-bears more distance from possible support before a bearish play was entered, I wouldn't suggest a long play on a bounce, as this does look like a possible bear flag.

 
 
  Mark Davis   10/18/20,  10:20:26 AM
Stopped out of long play @ 1106.53 and break even
Still short @ 1107, lower stop to 1108.50

 
 
  Linda Piazza   10/18/20,  10:19:49 AM
Bear flag support on the OEX is now at about 531.

 
 
  Jonathan Levinson   10/18/20,  10:18:25 AM
Nymex crude is currently down .10 at 54.825, -.18% for the day. Gold is up 30 cents to 420.50, but HUI is down 1.02% at 225.06, XAU +.1% at 99.99.

 
 
  Mark Davis   10/18/20,  10:18:19 AM
Now short @ 1107, stop 1109

 
 
  Jeff Bailey   10/18/20,  10:17:37 AM
Current OPEN MM Profiles at this Link

 
 
  Mark Davis   10/18/20,  10:16:30 AM
Long @ 1106.53, stop 1106.53 and break even
Go short with a touch of 1107

 
 
  Mark Davis   10/18/20,  10:12:24 AM
Long @ 1106.53, raise stop to 1106.53 and break even
Go short immediately if stopped out

 
 
  Linda Piazza   10/18/20,  10:12:10 AM
The TRAN tests 3350 again, at 3350.81 as I type.

 
 
  Linda Piazza   10/18/20,  10:11:40 AM
The OEX still struggles with Keltner resistance near 532, but as it does, five-minute MACD makes a tentative bullish cross. Mixed signals, but mixed signals go with the territory when the OEX establishes an equilibrium position on its five-minute Keltner charts. It hasn't quite established an equilibrium position on the 15-minute chart, though, and doing so would likely mean a climb up toward 534-535.

 
 
  Jeff Bailey   10/18/20,  10:11:01 AM
10:00 Internals at this Link

Friday's internals at this Link

 
 
  Jonathan Levinson   10/18/20,  10:10:57 AM
It's not looking very bear flaggish anymore for QQQ, and volume is picking up. The 30 min cycle channel has flattened, with resistance at 35.77 currently. 60 min resistance is 35.87.

 
 
  Mark Davis   10/18/20,  10:08:21 AM
In case some of you think I am one coconut short of a palm tree here is my thinking today... even if we are headed lower we "should" bounce today and start forming the right shoulder of a potential H&S pattern on the SPX daily chart, thus my long bias; however if we drop immediately lower it could be the start (continuation) of a sharp decline, and I wouldn't want to miss that either, thus the potential short plays. I'm willing to risk a point here and there to catch the larger move. As I typed this SPX made a new HOD so it looks like we may have caught the bottom. If we wouldn't have been stopped out by 2 cents on the initial long position we would be in the green right now but those things happen sometimes and you can't let them rattle you.

 
 
  Linda Piazza   10/18/20,  10:06:43 AM
The OEX now struggles with that Keltner resistance near 532 on the five-minute chart. On that chart, support looks roughly equal to resistance and the channels look to be establishing an equilibrium position. When that happens, the OEX tends to cycle back and forth between channel lines, cutting across Keltner resistance and support lines rather freely until there's a breakout of a channel. The smallest Keltner channel is only about a point wide and the middle one, the one that usually contains the OEX movements, is less than three points.

 
 
  Jonathan Levinson   10/18/20,  10:03:14 AM
The Fed has announced a 8.25B overnight repo against 11.75 expiring for a net drain of 3.5B.

 
 
  Jeff Bailey   10/18/20,  10:02:53 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   10/18/20,  9:59:08 AM
The OEX is rising from the support of its bear flag (H&S?) into the next Keltner resistance, just above and below 532.

 
 
  Jonathan Levinson   10/18/20,  9:56:49 AM
There's a small uptick in volume on the rise so far, and it's looking like a potential bear flag for QQQ above 35.50. A break either below 35.50 on expanding violume or above 7200-tick SMA resistance at 35.63 should resolve it.

 
 
  Mark Davis   10/18/20,  9:52:59 AM
Go long again... 1106.53, stop 1105.53
Same drill... go short immediately if stopped out

 
 
  Jeff Bailey   10/18/20,  9:52:55 AM
TRIN 0.96 -31.9% .... WEEKLY Pivot levels as follows .... -0.71, 0.38, Piv = 1.58, 2.68, 3.88.

 
 
  Mark Davis   10/18/20,  9:51:40 AM
Stopped out of short play @ 1106.58, -1
Not a good start for the week

 
 
  Jeff Bailey   10/18/20,  9:51:20 AM
VIX.X 15.70 +4.38% .... DAILY Pivot Levels as follows .... 13.66, 14.38, Piv = 15.43, 16.15, 17.20.

 
 
  Jonathan Levinson   10/18/20,  9:50:00 AM
QQQ is drifting almost perfectly sideways since the cash open, and the 30 min cycle downphase is strengthening. However, the 60 min cycle channel remains flat. It will take a move to the 35.35 level to get things moving.

 
 
  Linda Piazza   10/18/20,  9:49:50 AM
That bear flag on the OEX's intraday chart is beginning to have a H&S-ish look to it. At least, it has a left shoulder and head. If the OEX is going to form a continuation-form H&S here, then it's likely going to rise into at least a blunted right shoulder. The OEX's five-minute Keltner chart shows much resistance gathering near 532.15, so it may be possible that the OEX gets stopped there on the first rise of the day. After that, we have to see what happens. I would think that if a H&S is going to form, we might see a rise up toward 533.40-534.00. Maybe that's just wishful thinking, however. I don't like amateur-hour entries.

 
 
  Mark Davis   10/18/20,  9:49:46 AM
Stopped out of long play @ 1105.58, -1
Now short @ 1105.58, stop 1106.58 with SPTWT (SPX Nov 1100 put)
That stop got us by 2 cents before reversing... hopefully it's a weak bounce and not a real reversal. I might have to do something bad otherwise.

 
 
  Linda Piazza   10/18/20,  9:44:35 AM
The OEX still holds its bear-flag support, not yet having broken through.

 
 
  Linda Piazza   10/18/20,  9:43:32 AM
The TRAN drops quickly after falling beneath 3350. It's at 3340.01 as I type, having dropped 10 points in a few minutes.

 
 
  Mark Davis   10/18/20,  9:42:23 AM
Long @ 1106.68, raise stop to 1105.58 S
Go short immediately if stopped out

 
 
  Linda Piazza   10/18/20,  9:36:36 AM
The OEX still tests that bottom support of its bear flag.

 
 
  Mark Davis   10/18/20,  9:34:29 AM
Go long now... 1106.64, stop 1104.64

 
 
  Linda Piazza   10/18/20,  9:32:16 AM
The OEX comes down to test the bottom support of the bear flag on the 30- and 60-minute charts, with that support near 530.75-530.80.

 
 
  Jonathan Levinson   10/18/20,  9:31:51 AM
Bonds are flat with TNX unchanged at 4.055%, +.2 bps.

 
 
  Mark Davis   10/18/20,  9:30:56 AM
Good morning... Futures are telling us there will very likely be no opportunity to get short before we approach support areas so I will be looking for a chance to get long this morning, the closer to 1100 the better, but I'll take a shot when things look right.

 
 
  Jonathan Levinson   10/18/20,  9:26:10 AM
A 30 min cycle downphase is carrying through from Friday's close, and the 60 min cycle is trailing behind it, only now beginning to roll over. If QQQ stays below the 36.58 level for the first 20 minutes, we will see the 60 min cycle join in to the downside. Current channel support for both cycles lines up at 35.35.

 
 
  Jane Fox   10/18/20,  9:25:17 AM
Dateline WSJ - On a Friday afternoon last month, the nation's largest insurance companies were served with subpoenas from the New York attorney general asking an explosive question: Had they ever engaged in bid-rigging?

By the next week, several of the biggest insurers told the attorney general's office they had paid kickbacks for having business steered to them and had submitted sham bids to mislead customers. Their panicked responses revealed evidence of a broad scheme of collusion and price-fixing within the $1.1 trillion insurance industry.

It's the same kind of cartel-like behavior carried out by organized crime," Attorney General Eliot Spitzer privately told his top officials, according to people who heard the remarks. "It's like the Mafia's 'Cement Club,' " added Peter Pope, deputy attorney general in charge of the criminal division, at the same meeting. Mr. Pope was referring to construction projects in which a corrupt contractor rotated cement companies into jobs based on kickbacks.

Mr. Spitzer's office last week charged that Marsh & McLennan Cos., the world's largest insurance broker, with as much as 20% of the market, played the part of the corrupt contractor. In a civil complaint filed Thursday in a New York state court, Mr. Spitzer alleged that New York-based Marsh cheated corporate clients by rigging bids and collecting big fees from major insurance companies for throwing business their way.

 
 
  Linda Piazza   10/18/20,  9:23:36 AM
Equity futures were lower. The cash markets don't always open in accordance with the position of futures, but if the cash markets do, it's possible that the OEX could open near the bottom support of its potential bear flag or even break down out of that bear flag at the open. That would not be an ideal bearish entry, and one that I actually hope doesn't present itself, but we have to see what happens. I'm going to be cautious about suggesting any new entry until some of the Monday-after-opex week volatility settles down, but that may mean another new bearish entry is missed. There's just too much potential of a successful retest of last week's low and the markets beginning a new bear flag climb from there.

 
 
  Jonathan Levinson   10/18/20,  7:56:46 AM
Equities are lower, ES trading 1105.5, NQ 1430.5, YM 9898 and QQQ -.15 to 35.48. Gold is down .3 to 419.19, silver -.057 to 7.053, ten year notes -.046 to 113.1719 and Nymex crude -.175 to 54.75.

There are no major economic reports scheduled for today.

 
 
  Linda Piazza   10/18/20,  7:09:23 AM
Good morning. Asian bourses were pressured by rising crude, reaching an overnight high of $55.33. European bourses also come under pressure, although crude had dropped $0.08 as of 7:05 EST, and although various ECB members attempted to reassure markets. Continued declines in insurers also pressure European markets. Our futures held up relatively well until European markets opened, and then dropped. Gold had climbed $0.06 as of 7:05 EST. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei opened just above 11,000 but soon dipped below that benchmark level and fell toward the day's low of 10,914.47. This was just a point above Friday's low, and the Nikkei attempts to form a double-bottom. Although the Nikkei climbed off that low of the day to close at 10,965.62, down 17.33 points or 0.16%, it has not yet confirmed that double-bottom formation.

Auto manufacturers climbed in early trading after Friday's U.S. economic numbers showed an increase in auto sales. Banks dropped in early trading as a result of a reduce recommendation by Credit Suisse First Boston. NEC dropped after reporting a wider-than-expected first-half loss, and Hitachi and Softbank both dropped due to company-specific developments. With crude for November delivery topping at $55.33 during the overnight session, commodity-related stocks rose again in Asia, but the sector's performance proved uneven, with some falling. Japanese steelmaker JFE Holdings dropped 3.1%, for example.

Other Asian markets turned in mixed performances. The Taiwan Weighted lost 0.84%, but South Korea's Kospi gained 0.75%. Singapore's Straits Times lost 0.61%, and Hong Kong's Hang Seng declined 0.19%. China's Shanghai Composite gained 0.37%.

Currently, many European bourses trade lower although crude has pulled back below $55.00. Greenspan wasn't the only one trying to calm markets fearful of rising fuel costs' likely effect on economic recovery. Some ECB members were doing the same this weekend and this morning. Insurers continued last week's declines, taking combined blows from the effects of recent hurricanes and New York Attorney General Eliot Spitzer's investigation into bidding practices.

As of 7:05 EST, the FTSE 100 had climbed off its day's low, gaining 1.70 points or 0.04%, to 4,624.40. The CAC 40 had dropped 9.69 points or 0.26%, to trade at 3,661.07. The DAX had dropped 13.09 points or 0.33%, to trade at 3,909.02.

 
 
  Linda Piazza   10/17/20,  11:05:11 PM
The OEX's 60-minute chart shows the OEX climbing in a possible bear-flag formation. If this rising formation really is a bear flag, then it's likely to break down before it retraces much more than 50% of the steep decline that immediately preceded it, Thursday's decline. That 50% retracement occurs at about 535.30.

Before reaching even that high, the OEX will face another Fib level--the 50% retracement of the climb off the August low. That important 50% level lies just under 533.60, and may have been at least partly responsible for Friday's retreat from the 534 S/R level. Bears should therefore look for a possible rollover beneath that 533.50-534 zone for a new entry. It would be preferable if that entry presented itself after the usual Monday-after-opex volatility has settled down somewhat. If the OEX is able to push through that zone, look for any rollover beneath the 50-dma as a possible bearish entry, but preferably below 535.30 or so. I'd rather not see the OEX move too high because it's now back above the confirmation level for its double-top formation on the daily chart, and too high a move will suggest that the confirmation was a fake-out move.

I'm not looking for a long entry now, but we should keep an eye out for the possibility that this bias is a wrong-headed one. As I mentioned Friday, we haven't yet seen a higher low on the weekly OEX chart, but a push higher again now could set up that higher low, and we should always remain open to that possibility. Until we do see a higher or equal low, hopefully accompanied by bullish price/oscillator divergence, we should consider the downtrend from this year to remain in effect, however.

One worry is that Monday might be particularly volatile due to opex settlement issues, as I mentioned earlier. It would perhaps be better if markets spent Monday setting up the ideal play rather than rolling over right away, but we may not luxury of a perfect setup out of the chop of Monday's volatility.

 
 
  OI Technical Staff   10/17/20,  11:05:01 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

Disclaimer: Stocks discussed in the Market Monitor are for educational purposes only and any analysis is not meant to imply a recommendation for or against that stock. The analysts in this forum as on any other website are prohibited by the SEC from giving any specific advice to ANY individual trader. All information posted is for ALL readers and is not meant to be directed to any individual. Our analysts cannot answer any email questions regarding any specific stock. Please do not ask and please do not take offense if requests are denied.

Results posted in the Market Monitor are hypothetical and OIN does not claim that any reader achieved these exact results. Due to the lag time between research, writing, posting, uploading, reading and execution there will be differences between the actual signal given and the fill achieved by the reader. Fills may be better or worse but in many cases they will be different. The writers will make every effort to give advance notice of intended signals and indicate potential price targets. Your individual results may vary depending on your activity level and aggressiveness. This forum is intended as an education service only. Trading involves risk and should not be attempted by anyone not ready to accept this risk. By acting on any signal in this forum you agree and personally accept this risk.

 
 

Market Monitor Archives