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  Jeff Bailey   10/19/20,  8:44:30 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jim Brown   10/19/20,  7:51:40 PM
TER earnings contined a drastic warning that customers sharply lowered capital spending in Q3 resulting in a "significant reduction in orders". Earnings guidance for Q4 was lowered to only +0.04 compared to +0.21 for Q3.

 
 
  Jeff Bailey   10/19/20,  7:10:30 PM
Stock to watch .... Triad Guaranty (TGIC) $53.00 -4.08% Link ....

I have no basis for this thought, but anything insurance that has a "broker commission paid under a purchasing agreement" might be suspect. Somewhat high volume 4 sessions ago.

 
 
  Jeff Bailey   10/19/20,  5:29:56 PM
Aetna (AET) $86.17 -11.8% ... lower at $85.00 and confirms it received a new subpoena from the New York Attorney General's office.

It had been rumored. Now it is fact.

 
 
  Jim Brown   10/19/20,  5:19:51 PM
Alert - Fannie Mae says the SEC informal inquiry has gone formal. That is not a good sign. FNM is trading down -$2 in after hours. Link

 
 
  Jeff Bailey   10/19/20,  5:03:50 PM
Closing Internals at this Link

 
 
  Mark Davis   10/19/20,  4:29:37 PM
Results are in and are 100% in favor of me calling out the specific SPX print for entry/exit on trades. Starting tomorrow I will go back to the way I have been calling trades. I am mildly surprised that futures traders are using my signals but I suppose it's a simple matter to just note the the futures print and enter/exit at the same time I call out the SPX cash index print. I am happy it is working well for many of you.

We could very well bounce tomorrow but there is a nasty looking bearish engulfing candle on the SPX daily chart... hardly a bull's dream play, especially considering the sharp -15 point reversal from SPX 1118 and the close near LOD. I will probably use any rally tomorrow to get short, subject to change depending on tomorrow's conditions, but I may not even get the chance considerning we are back below the 50sma. The only good thing I see for the bullish case is we are close to strong support levels and those "edge of the cliff" entries rarely work. Hopefully we will get a shortable bounce but as always we will follow price and not bias. If we rally we will jump on the rally train.

BTW, now that I know who my audience is (futures traders) I will tailor my posts accordingly, which means no more concurrent long and short plays. Thank you all for your input and I'll see you tomorrow at the bell.

 
 
  Jeff Bailey   10/19/20,  4:17:29 PM
Current OPEN MM Profiles at this Link

 
 
  Mark Davis   10/19/20,  4:08:10 PM
Stopped out of SPTKB (SPX Nov 1110 call) in AH @ 12.90, -$3.00, -18.87%

 
 
  Jim Brown   10/19/20,  4:01:54 PM
Alert - Earnings after the close

MOT est +0.19, actual = +0.20 beat
PLT est +0.43, actual = +0.49 BEAT!
STK est +0.32, actual = +0.39 BEAT!
STX est +0.04, actual = +0.11 BEAT!
TER est +0.23, actual = +0.21 miss
AMCC est -0.01, actual = -0.01
CAKE est +0.31, actual = +0.30 miss
CYMI est +0.39, actual = +0.41 beat
ERTS est +0.35, actual = +0.31 miss
MNST est +0.16, actual = +0.17 beat
SIMG est +0.11, actual = +0.12 beat

ERTS $750M buyback -$2 in AH
STX guiding higher (stock held)
MOT guides inline -$1 in AH
AMCC revenue light (stock held)

 
 
  Linda Piazza   10/19/20,  3:59:00 PM
I'm signing back on for an end-of-day post. Today proved that the sell-the-rallies approach still works with the OEX, and we didn't get a lot of warning that the touch of the 50% retracement of the October 7-14 decline was going to be the stopping point there. The little evidence we did garner came in the form of a miniature H&S at the top of the climb on the five-minute chart and the holding of resistance on the seven-minute Keltner chart. The OEX then plunged, rose into a right shoulder for a larger H&S, and now falls toward the 529.60-ish downside target, although I'm not sure it's going to be met this afternoon. The seven-minute Keltner channels actually do show a 529.77 downside target, so perhaps that target will be met either this afternoon or early tomorrow morning on follow-through to today's decline.

Then what? The OEX 530-ish zone is one of known historical S/R and at least one important Fib level can be found there, too. Some charts, such as the 30- and 60-minute charts, show a possibility for a continuation-form H&S to form, with a right-shoulder formation still needed. Such a right-shoulder formation might be blunted, perhaps stopped by resistance in the 532.38 zone, but could also rise into stronger Keltner and historical resistance near 533.50-535.25, retesting that descending trendline off the 10/7 one last time. Rollovers from that level would present new bearish entries, while a move much above 538.40 would be cause for bears to stand aside, as was true coming into today's trading.

 
 
  James Brown   10/19/20,  3:56:33 PM
We're also closing WHR today to avoid tomorrow's earnings.

 
 
  James Brown   10/19/20,  3:56:15 PM
We're also closing FLIR today to avoid tomorrow's earnings.

 
 
  James Brown   10/19/20,  3:55:52 PM
Remember, we're closing CMI at the close today to avoid tomorrow's earnings report.

 
 
  Mark Davis   10/19/20,  3:55:49 PM
This experiment with calling out specific option prices may be short-lived. It is really putting a kink in my normal trading style and I have already received a number of emails requesting I go back to calling out the current SPX print. It seems there are futures traders out there using my signals. Readers please let me know what you want and I will oblidge.

 
 
  Jonathan Levinson   10/19/20,  3:53:53 PM
The current session low is 35.90, 2 cents above the 35.88 support level that held for several tests yesterday.

 
 
  Jonathan Levinson   10/19/20,  3:51:46 PM
Session lows across the board. Other than for NQ, all of yesterday's flagpole rally has been reversed for the Dow and SPX.

 
 
  Jonathan Levinson   10/19/20,  3:41:39 PM
QQQ is looking considerably more bullish than the ES, which has retraced virtually all of yesterday's gains. Oncea again, QQQ and NQ are outperforming their peers. But even for QQQ, which has a high volume shooting star doji printing for its daily candle, the bulls appear to have fumbled their chance to blow the roof off today.

 
 
  Mark Davis   10/19/20,  3:37:38 PM
Current open interest...
SPTWT (SPX Nov 1100 put) = 48,405 - volume = 6,601
SPTKB (SPX Nov 1110 call) = 8,056 - volume = 753
There is a considerable imbalance between bears and bulls. This sometimes results in the larger group tipping the boat over by the sheer weight of their position.

 
 
  Mark Davis   10/19/20,  3:27:39 PM
75 minutes of bullish MACD divergence should start to kick in soon and drive prices higher.

 
 
  Mark Davis   10/19/20,  3:25:12 PM
Current spread for SPTKB is 14.00/14.80 but I do not believe this is the true spread. I believe someone has a bid in to BTO SPTKB @ 14.80 and MMs are not filling them (yet). They will if we move lower. I believe the true spread to be 14.00/15.50 and that is a guess based on the strike prices immediately above and below the Nov 1110 call. I also notice the "last" trade was @ 14.00, indicating somebody STC at the bid.

 
 
  Mark Davis   10/19/20,  3:21:37 PM
SPX just put in a minor new low... this is crunch time for bulls. Either we bounce from here and print a double bottom or it's time to break out the crying towel.

 
 
  Linda Piazza   10/19/20,  3:20:31 PM
Checking in for a moment, I see that the OEX did confirm the H&S on its 15-minute chart. The downside target for that H&S would be at about 529.60, so near the 530 level. 530 marks the 61.8% retracement of the rally off the August low. We don't know that the downside target would be met, but bearish traders need to again have profit-protecting plans in place for a test of that level, beginning at about the current level.

For those who are TRAN watchers, the TRAN is turning down from the double-top level, but is far from confirming that double-top formation yet and the TRAN hasn't even violated the ascending trendline off the August low. Still, the tweezer top at the top of the recent climb is an ominous signal.

 
 
  Jonathan Levinson   10/19/20,  3:15:23 PM
Today is a high volume day for QQQ, 108M shares so far according to IB.

 
 
  Jeff Bailey   10/19/20,  3:11:41 PM
03:00 Internals at this Link

 
 
  Jonathan Levinson   10/19/20,  3:09:21 PM
35.88 is next support, followed by 35.68. The synchronous 30 and 60 min channel downphases make the prospect of any bounce purely corrective, and we should not see a break of 36.22 in any event, with 36.09 new resistence based on the last wavelet high.

 
 
  Jeff Bailey   10/19/20,  3:03:43 PM
03:00 Market Watch at this Link

 
 
  Mark Davis   10/19/20,  3:01:17 PM
We have bullish MACD divergence on the SPX 1-min chart for the last hour now, along with an extreme CCI reading of -320 and a tweezer bottom, so this last swoosh down to 1104.28 should be the end of the decline. We will find out soon enough. Current spread on our long play is 14.00/15.50

 
 
  Jonathan Levinson   10/19/20,  2:55:39 PM
Session low for NQ and QQQ here. 30 min cycle channel support is at 35.95 currently, with the 30 min and 60 min cycles still in gear to the downside.

 
 
  Jeff Bailey   10/19/20,  2:55:22 PM
S&P Insurance (IUX.X) 275.46 -3.04% ... still holding its "Spitzer lows" of 273.47, but threatens to close below major horizontal support of 280. See prior WEEKLY Interval IUX.X chart at this Link

Side note: Weekly pivot levels as follows.... 248.37, 265.17, Piv = 290.26 , 307.06, 332.15. IUX.X has not traded a weekly pivot level this week.

 
 
  Jeff Bailey   10/19/20,  2:49:51 PM
Semiconductor Index (SOX.X) 389.41 +1.31% .... Still holding above WEEKLY Pivot (386.67) while session high was 395.63 compared to WEEKLY R1 (394.37).

see 02:47:18

 
 
  Mark Davis   10/19/20,  2:49:32 PM
Bulls need SPX to take out 1107.20 (on the cash index) to confirm the earliest signs of a trend change. Prices for our long play, SPTKB (SPX Nov 1110 call) are lingering right around our entry point, slightly higher, with the current spread printing 14.70/16.20. We entered @ 15.90 but if you split the bid you should have been able to enter @ 15.50 with no problem. I cannot emphasize enough the importance of splitting the bid. If you buy at the ask and sell at the bid, as I will be doing for official trade entry/exit points, you will reduce your profits.

 
 
  Jeff Bailey   10/19/20,  2:47:18 PM
November Crude Oil futures (cl04x) $53.45 -0.4% (30-min delayed) .... bounces back to test broken to the downside near-term upward trend.

Move much above WEEKLY Pivot $53.80 could have equities extending losses.

Session low was $53.59, right on WEEKLY S1.

 
 
  Mark Davis   10/19/20,  2:40:08 PM
Per my 14:05 post on entry/exit prices and splitting the bid/ask with limit orders. The official entry point for our long play, SPTKB (SPX Nov 1110 call) was 15.90, stop 12.90. Current spread is 14.40/15.90. If you put in a limit order right now and gave the Market Maker the fatter portion (i.e. BTO SPTKB @ 15.50), you would probably be filled.

 
 
  Jonathan Levinson   10/19/20,  2:39:14 PM
The current bounce from 30 min cycle channel support is counter to the ongoing but increasingly oversold short cycle downphase. A move above 36.22 that lasts for longer than 3-5 minutes should kick off a new short cycle upphase, but it will be running uphill against the 30 and 60 min channel downphases and shouldn't get far in any event.

 
 
  Jonathan Levinson   10/19/20,  2:22:44 PM
The 60 min cycle channel has only now rolled over, finally in sync with the 30 min cycle downphase. Channel support lines up at 36.00 QQQ currently.

 
 
  Mark Davis   10/19/20,  2:13:39 PM
Go long now... SPTKB (SPX Nov 1110 call) @ $15.90, stop $12.90

 
 
  Jeff Bailey   10/19/20,  2:12:06 PM
02:00 Internals at this Link

 
 
  Jonathan Levinson   10/19/20,  2:10:29 PM
Nymex crude is up to 53.40, down .275 currently.

 
 
  Jonathan Levinson   10/19/20,  2:09:07 PM
New lows across the board, with volume. QQQ 36.17-.22 is now resistance.

 
 
  Mark Davis   10/19/20,  2:05:43 PM
Effective immediately I am going to change entry/exit points back to specific strike prices and we will be entering at the ask and exiting at the bid. Calling out the current SPX print is more suited to futures trading and ES is already covered by Jim.

This will result in fewer trades and a greater lag time between when I see a trade and the time I get it posted on the monitor. I will adjust the entry/exit price to the exact time the post hits the monitor. This should eliminate any reader confusion about entry/exit prices and also provide for scrupulous accountability, however I encourage readers to try to split the bid/ask. I always do this with limit orders and you should be able to actually beat the posted entry/exit prices (and thus the posted gains) by incorporating this into your trading.

 
 
  Jeff Bailey   10/19/20,  2:05:13 PM
HMO comments ... Goldman Sachs out saying that today's selling in HMO sector is "overdone" and reminding investors that commissions are not paid under purchasing agreements for the large employer business. However, commission payment practices for smaller employer business may come under scrutiny and that bulk of liability rests with brokers, not HMOs.

 
 
  Jeff Bailey   10/19/20,  2:02:17 PM
02:00 Market Watch at this Link

 
 
  Jeff Bailey   10/19/20,  1:57:36 PM
NASDAQ Comp (COMPX) 1,936.27 -0.01% ... inches red.

NYSE Comp (NYA.X) 6,559.01 -0.2% ....

 
 
  Jonathan Levinson   10/19/20,  1:53:58 PM
Will the 3rd time be a charm? QQQ needs to break 36.17, hopefully with a burst of volume.

 
 
  Mark Davis   10/19/20,  1:49:50 PM
Stopped out of long play @ 1108.82, -2

 
 
  Jonathan Levinson   10/19/20,  1:49:06 PM
Session low for ES and SPY, with QQQ trading 36.22.

 
 
  Jonathan Levinson   10/19/20,  1:43:29 PM
And retreating, again.

 
 
  Mark Davis   10/19/20,  1:43:14 PM
This day is a trader's nightmare. I'm going to rent the movie "Van Helsing" tonight so I can relive today's action.

 
 
  Jonathan Levinson   10/19/20,  1:39:53 PM
Volume is picking up slightly for QQQ as it approaches 36.40. Bulls seem to be taking a run for the endzone.

 
 
  Mark Davis   10/19/20,  1:32:51 PM
SPX 1113, just above the 12:42 swing high, is the magic number to indicate a short-term trend change. We did have a nice bounce after a minor new low and as long as we remain above the 50sma @ 1110.10 I remain bullish, below bearish. TRIN has also come down slightly indicating we may be in the process of bottoming out. The 50sma is a very important level for SPX bulls to defend and buyers have appeared each time it dipped below that level (knock on wood, fingers crossed, garlic around neck, etc).

 
 
  Mark Davis   10/19/20,  1:18:57 PM
Close out short play and go long now...
Short @ 1111.87, closed out @ 1110.82, +1.05
Long @ 1110.82, stop 1108.82

 
 
  Mark Davis   10/19/20,  1:18:10 PM
That last minor new low may have been it... considering going long again.

 
 
  Jonathan Levinson   10/19/20,  1:17:45 PM
Careful bears: there's now an intraday double bottom at 36.18, with the last low at 36.17. A break above 36.40 could set this current rectangular range up as a launchpad.

 
 
  Jonathan Levinson   10/19/20,  1:16:39 PM
Session high for silver here at 7.145, with ten year notes in positive territory off their earlier lows, TNX currently -1.4 bps at 4.039%.

 
 
  Mark Davis   10/19/20,  1:07:50 PM
Short @ 1111.87, lower stop to 1111.87 and break even

 
 
  Linda Piazza   10/19/20,  1:06:43 PM
Before I sign off again, I just wanted to note that the OEX may be rounding over into the H&S noted earlier on the 15-minute chart. The TRAN, too, sets up a potential H&S with the head at the equal-high (10/7 high) area.

 
 
  Jeff Bailey   10/19/20,  1:05:27 PM
01:00 Internals at this Link

 
 
  Jim Brown   10/19/20,  1:04:58 PM
Earnings after the close

MOT est +0.19,
PLT est +0.43,
STK est +0.32,
STX est +0.04,
TER est +0.23,
AMCC est -0.01,
CAKE est +0.31,
CYMI est +0.39,
ERTS est +0.35,
MNST est +0.16,
SIMG est +0.11,

This is only a very small subset of the total earnings tonight but should be those most widely followed.

 
 
  Mark Davis   10/19/20,  1:00:02 PM
We were long overnight from 1111.59 and after all the gyrations today look where we are... 1111.48

 
 
  Jeff Bailey   10/19/20,  12:57:09 PM
12:52 Market Watch at this Link

 
 
  Linda Piazza   10/19/20,  12:56:14 PM
Reader Question Concerning Dividend Arbitrage: I'm currently researching the pros and cons of dividend arbitrage in the current arbitrage and am having great difficulty I was hoping that you may be able to aid me. The questions that are the basis of my study are what are the risks associated with dividend arbitrage in the current market and would it be advisable to pursue such a scheme or would this be foolhardy. Could you please help me out if at least by pointing me towards specific articles/websites, etc.?

Response: Although I'm sick and not officially on the Monitor this afternoon, I didn't want to let this reader go without an answer to this question before I left again. For those who don't know about dividend arbitrage, this practice involves buying a stock and a put on the stock, collecting the dividend on the stock, and then selling the put. A stock is expected to drop by the dividend amount on the day it goes ex-dividend. To employ this method, you hope to find a situation in which the put's time value is less than the dividend value. For example, if MadeUpStock is trading at $43.00, has a dividend of $1.00, and goes ex-dividend, you'd hope to find a $45.00 put at $2.75. Theoretically, the day the stock goes ex-dividend, you can collect the $1.00 dividend and then exercise the put to sell the stock at $45.00, collecting $46.00 when you spent $45.75 for the combined stock and put purchase.

However, you've just tapped the sum of my knowledge on the subject. All that research to find the hidden put with time value less than the dividend value, multiple commissions, and all for a pittance. Plus, as McMillan suggests, you're supposed to factor in the carrying costs for holding the position open. No, thank you, although for those willing to do the research, it's supposedly a risk-less play. I don't believe anything is riskless, but that's not why I'm not trading these. When I was first investigating the technique years ago, my traditional broker's fees were so high that it just never worked for me, and I never developed any enthusiasm for the play. Therefore, any information I can give about this type of option play would be based on academic study only, and not from actual experience. If you've been researching this matter, you probably have already read my preferred first source for information about options trades, McMillan's Options as a Strategic Investment. Perhaps some of the other writers will have had more experience with this technique?

 
 
  Mark Davis   10/19/20,  12:55:45 PM
That last switch from long to short was based upon a rising TRIN, early signs of MACD bearish divergence, the Dow's inability to break 10000 again and the fact that the overall trend for today is down, thus likely to remain down. I wanted to post the entry quickly and explain later so readers who wanted to could take positions.

 
 
  Jonathan Levinson   10/19/20,  12:54:44 PM
QQQ is stalled at 36.30. The 30 min cycle downphase is somehow still intact, but it's also on the verge of stalling. Look for a directional break of either 36.20 or 36.40 on expanding volume to resolve the deadlock.

 
 
  Mark Davis   10/19/20,  12:46:30 PM
Close out long play now and go short...
Long @ 1110.50, closed out @ 1111.87, +1.37
Short @ 1111.87, stop 1112.87
Jane's prediction from the Futures side of happy brokers and lots of chop is playing out.

 
 
  Jeff Bailey   10/19/20,  12:42:59 PM
Taser Intl. (TASR) $41.06 +7.85% .... in today's converence call, question was asked regarding recent offering to consumer. TASR said hardly any consumer units shipped with orders taken between $75-$80K. Notes they haven't advetised and has made just the one press release. Continues to focus on law enforcment until next year.

 
 
  Jeff Bailey   10/19/20,  12:38:16 PM
JP Morgan (JPM) $38.22 -2%.... trader talk/ rumor that Spitzer may be looking into derivatives market.

 
 
  Mark Davis   10/19/20,  12:36:45 PM
Dow 10000 is proving to be a much tougher nut to crack than I thought. What is it with these round number support/resistance areas? They make no sense at all... they are just numbers, but they have to be respected because it has been proven time and again that they are just as important as "real" TA support/resistance levels. Having said that, a second break above Dow 10000 should really ignite the afterburners. Another failure and well... fill in the blanks.

 
 
  Mark Davis   10/19/20,  12:25:31 PM
Dow 10000 is only 20 points away again. A break above Dow 10k "should" pull the other markets up.

 
 
  Jonathan Levinson   10/19/20,  12:25:28 PM
The bounce from QQQ 36.20 is very bullish, but there's still room for a failure below 36.60 to confirm the 30 and 60 min cycle tops. Anything at or below that will set up another retest of 36.20 support, with a higher likelihood of breaking it.

 
 
  Mark Davis   10/19/20,  12:24:29 PM
Long @ 1110.50, raise stop to 1110.50 and break even

 
 
  Jeff Bailey   10/19/20,  12:21:33 PM
Current OPEN MM Profiles at this Link

 
 
  Mark Davis   10/19/20,  12:20:51 PM
B-bands are converging on the SPX 1-min chart. We could be nearing the next move... hopefully UP.
Benchmarking... SPX = 1111.61

 
 
  Jonathan Levinson   10/19/20,  12:18:01 PM
Volume is trailing off as the indices stal out. The short cycles are stalled for QQQ, right on the line, and the 30 min cycle downphase is in effect but going nowhere for the past half hour.

 
 
  Jeff Bailey   10/19/20,  12:17:22 PM
Taser Intl. (TASR) $41.70 +9.3% ... edges above WEEKLY R2 ($41.55) here.

 
 
  Mark Davis   10/19/20,  12:16:41 PM
The Dow Transportation Index is the weakest index today, indicating traders are taking some money off the table. This "should" be a good sign for equities as it may be indicating a drop in oil prices is in the cards. It is also interesting to see the Dow outperforming SPX today for a change.

 
 
  Jeff Bailey   10/19/20,  12:13:55 PM
12:00 Internals at this Link

 
 
  Mark Davis   10/19/20,  12:08:04 PM
Above SPX 1112 we will raise the stop to break even

 
 
  Jeff Bailey   10/19/20,  12:06:25 PM
Taser Intl. (TASR) $41.07 +7.98% ... challenges opening session highs.

zone of resistance from $42.10-$42.17.

 
 
  Jeff Bailey   10/19/20,  12:05:29 PM
12:00 Market Watch at this Link

 
 
  Jeff Bailey   10/19/20,  12:03:03 PM
Parker Hannifin (PH) $69.82 +8.68% Link ... after reporting quarterly EPS of $1.11 vs. consensus of $0.83.

 
 
  Mark Davis   10/19/20,  12:02:10 PM
Reminder... SPX 50sma is 1110.10 and as long as we stay above that number long should be the place to be.

 
 
  Jeff Bailey   10/19/20,  12:01:48 PM
McDonald's (MCD) $29.22 +0.06% Link .... after reporting quarterly EPS of $0.61 versus consensus of $0.61.

 
 
  Jeff Bailey   10/19/20,  12:00:37 PM
Paychex (PAYX) $31.19 +1.13% Link ....

 
 
  Tab Gilles   10/19/20,  12:00:11 PM
The pattern I charted on 10/18/2004 on MMM @ 1:23:37 pm continues: Link

 
 
  Mark Davis   10/19/20,  12:00:01 PM
Stopped out of short play @ 1110.50, -1
Now long @ 1110.50, stop 1108.50
It is hard to believe we are only down -1 point after all these reversals.

 
 
  Jeff Bailey   10/19/20,  11:59:58 AM
Manpower (MAN) $44.02 +4.83% Link ... after reporting quarterly EPS of $0.85 (includes 8-cent gain) versus consensus of $0.67.

 
 
  Jeff Bailey   10/19/20,  11:58:25 AM
Kelly Services (KELYA) $26.95 (unch) Link ... after reporting quarterly EPS of $0.21 vs. consensus of $0.20.

 
 
  Jeff Bailey   10/19/20,  11:57:04 AM
Keane Inc. (KEA) $15.16 -1.36% Link .... after reporting quarterly EPS of $0.17 (ex-items) versus consensus of $0.16.

 
 
  Jeff Bailey   10/19/20,  11:55:48 AM
Jeffries Group (JEF) $36.08 +6.11% Link .... after reporting quarterly EPS of $0.51 versus consensus of $0.44.

 
 
  Mark Davis   10/19/20,  11:54:13 AM
Stopped out @ 1109.54 and break even
Now short @ 1109.50, stop 1110.50
Go long again with a touch of 1110.50
I don't know how these guys are finding my stops but it feels like my computer is bugged with a listening device.

 
 
  Linda Piazza   10/19/20,  11:52:44 AM
I've been battling a bug today and it's wrestled me down to the ground. I'll be offline for a while, hopefully to return this afternoon. As I type, the OEX is testing the mid-channel level on its 15-minute chart. If the OEX can steady here, it may try to rise again into a right-shoulder for a potential H&S formation, as I mentioned earlier. Bears would like to see continued five-minute closes beneath the Keltner line currently at 535.24 (which is also the location of the descending trendline off the 10/7 high), but would prefer fifteen-minute closes below the Keltner line currently at 534.17, setting up a potential test of 531.30. Bulls want to see 15-minute closes above the Keltner line currently at 534.24, and would prefer fifteen minute closes above the line currently at 537.05 and then a new high of the day.

 
 
  Jeff Bailey   10/19/20,  11:51:14 AM
Stanley Works (SWK) $44.87 +9.38% Link .... after reporting quarterly EPS of $0.76 versus consensus of $0.70.

 
 
  Jeff Bailey   10/19/20,  11:50:41 AM
Sell Program Premium .... SPX 1,109.74 , QQQ $36.25.

 
 
  Mark Davis   10/19/20,  11:50:02 AM
Long @ 1109.54, raise stop to 1109.54 and break even
Go short with a touch of 1109.50

 
 
  Mark Davis   10/19/20,  11:47:31 AM
The SPX 50sma sits @ 1110.10 and we're flirting with it again

 
 
  Tab Gilles   10/19/20,  11:45:24 AM
Came close to a Bearish Three Black Crows candle formation on the VIX: Link

 
 
  Jonathan Levinson   10/19/20,  11:44:03 AM
QQQ has broken back above 36.32, with the short cycle downphase stalling here within the hesitant 30 min cycle downphase. 30 and 60 min cycle resistance lines up at 36.60.

 
 
  Mark Davis   10/19/20,  11:40:25 AM
If we can take out SPX 1111 it would be a very early signal that the worst is over but would also still be vulnerable to reversal.

 
 
  Linda Piazza   10/19/20,  11:39:27 AM
The TRAN dropped striaght to the ascending trendline off the 10/13 low and sprang up from there. It sprang back to the 3370-ish support level, retesting it.

 
 
  Mark Davis   10/19/20,  11:31:09 AM
SPX is trying to stabilize in the 1110 area after overshooting the 1111 support area. If we roll over again I see us vulnerable to 1107.50 first, then 1105.

 
 
  Jonathan Levinson   10/19/20,  11:30:21 AM
QQQ finding resistance at 36.30.

 
 
  Linda Piazza   10/19/20,  11:24:12 AM
Those in bearish OEX positions should be considering profit-protecting plans for this level. It's the 38.2% retracement of the decline off the 10/13 high, and is also known historical S/R. The 50% retracement is at about 535.50, so it would be possible to see the OEX attempt a right-shoulder rise here as a possible support level is tested, with that right shoulder at about 535.50.

 
 
  Jonathan Levinson   10/19/20,  11:20:05 AM
QQQ put a low for this decline at 36.20 with a doji that has reversed to the current 36.27. Look for resistance at 36.30-.32 on the bounce.

 
 
  Jeff Bailey   10/19/20,  11:18:36 AM
Sell Program Premium .... SPX 1,109.54 , QQQ $36.23.

 
 
  Mark Davis   10/19/20,  11:18:33 AM
Go long again now... @ SPX 1109.54, stop 1107.54
I'm taking a gamble that this plane crash triggered terrorist fears and we will bounce if it turns out to be weather related or some other non-terrorist event.

 
 
  Jonathan Levinson   10/19/20,  11:18:02 AM
Here's the test of 36.20.

 
 
  Jim Brown   10/19/20,  11:16:32 AM
Plane crash now being called an accident. Eye witnesses saying it spun out of control and was not under control when it hit the ground.

 
 
  Linda Piazza   10/19/20,  11:13:22 AM
Those who just automatically jumped into a bearish play on an OEX touch of 538 are doing well now, but this is still an iffy time. The OEX is currently testing the descending trendline off the 10/7 high, slipping beneath it, but bears don't want to see a quick rebound now. That would mean that this was nothing but a stop run. By the way, in all those voluminous notes about the resistance the OEX was facing near 538, I forgot to mention the 200-sma at 538.26. I was so focused on the SPX's, more of a market mover than the OEX's, that I forgot to mention it.

 
 
  Jim Brown   10/19/20,  11:12:43 AM
News now reporting it was a small commuter plane

 
 
  Jeff Bailey   10/19/20,  11:12:36 AM
Taser Intl. (TASR) $39.53 +3.83% ... chairman says he will take some time off to enjoy life, remain on Board, but bringing someone else in for investor relations.

 
 
  Mark Davis   10/19/20,  11:10:30 AM
Stopped out @ 1111.69 and break even (insert bad words here)

 
 
  Jonathan Levinson   10/19/20,  11:10:27 AM
QQQ is breaking 36.30 here and a short cycle downphase is taking its first steps. A move below 36.20 will confirm it and roll the still-stalled 30 min cycle to the downside. 36.20 remains 30 min channel support. Alternatively, 10 minutes or so at or below 36.32 will also roll the 30 min channel.

 
 
  Jim Brown   10/19/20,  11:10:11 AM
ALERT - News on the wire reportng a plane crash into a building in downtown Atlanta.

No details yet available.

 
 
  Mark Davis   10/19/20,  11:09:34 AM
SPX "should" start to see support kick in around the 1112 area, if it gets that low.

 
 
  Mark Davis   10/19/20,  11:07:44 AM
We are still long @ 1111.69 from yesterday with the stop set to break even and I am inclined to just sit and wait this one out. I underestimated the bears this morning and we missed a nice scalp but we are still about +2 on our long play and only 25 points below Dow 10000. I'm still thinking they will close the day above 10000, although the tone of the market has suffered a definite body blow. A short from that level was just "too obvious" for my liking and that is why I did not take it. I will be disappointed if we are stopped out @ break even but it won't be the first (or last) time I've made a bad call, if you can say break even is a bad call.

 
 
  Jeff Bailey   10/19/20,  11:07:20 AM
HMO Index components at this Link

 
 
  Linda Piazza   10/19/20,  11:04:44 AM
So far, the OEX hasn't even been able to muster a right-shoulder rise. It's now retesting the descending trendline off the 10/7 high.

 
 
  Jeff Bailey   10/19/20,  11:03:14 AM
10:59 Market Watch at this Link

 
 
  Linda Piazza   10/19/20,  10:56:42 AM
Waiting for the OEX to push up into a right shoulder for the tentative H&S on its three-minute chart. That right shoulder would be at about 537-537.25. If the OEX zooms past that right shoulder and forms a new high, we know one thing. If it rounds over and then falls back beneath the descending trendline off the 10/7 high, we know something else.

 
 
  Mark Davis   10/19/20,  10:56:07 AM
We are still long @ 1111.69 from yesterday with the stop set to break even and I am inclined to just sit and wait this one out. I underestimated the bears this morning and we missed a nice scalp but we are still about +2 on our long play and only 25 points below Dow 10000. I'm still thinking they will close the day above 10000, although the tone of the market has suffered a definite body blow. A short from that level was just "too obvious" for my liking and that is why I did not take it. I will be disappointed if we are stopped out @ break even but it won't be the first (or last) time I've made a bad call, if you can say break even is a bad call.

 
 
  Jeff Bailey   10/19/20,  10:56:06 AM
Hartford (HIG) $53.50 -1.56% .... with a conventional and "fitted" 38.2% at this Link

PINK 61.8% would mark support dating through July 2003-Oct. 2003.

BLUE 50% would be close to PnF chart's bearish vertical count of $51.00.

Note: MMC Link has far exceeded its bearish vertical count of $36, which may hint something seriously wrong.

 
 
  Jonathan Levinson   10/19/20,  10:51:42 AM
The short cycle oscillators are downticking but not yet in a downphase, with the current bounce whipping the wavelet oscillator to a buy signal. A lower high below 36.57 should signal the start of an attempt on 36.32 QQQ support, the maginot line for the short cycle's delayed downphase.

 
 
  Mark Davis   10/19/20,  10:42:01 AM
Long @ 1111.69, lower stop to 1111.69 and break even
I do not want to get shaken out of this long play

 
 
  Linda Piazza   10/19/20,  10:41:07 AM
The scenario from my 10:33 post may be playing out. Look now for a potential rise toward 537 again.

 
 
  Jeff Bailey   10/19/20,  10:35:58 AM
S&P 500 Index (SPX.X) 1,114.59 +0.04% ... weakness in broader healthcare has zapped morning gains.

 
 
  Linda Piazza   10/19/20,  10:33:41 AM
Look for a possibility that the OEX may steady around 536.50 (may be steadying just ahead of that as I type) and then rise again, perhaps up to 537.10-537.30 (doing that as I type), and roll down again, this time below 536.50. If that happens, we may have the first inkling that the OEX is weakening, but if the OEX instead zooms away to a new high, we'll know something different. Those who like to hit specific targets with orders may already have jumped in with a bearish play on an OEX touch of 538, but TRIN and other measures aren't yet showing us that such plays are safe. They've got one thing going for them--the SPX was testing its 200-sma at the same time the OEX was testing that 50% retracement of the steep decline from 10/7, so stops are easy to define an account-appropriate distance above those levels. If you're wrong, you're going to know it fairly soon.

 
 
  Jonathan Levinson   10/19/20,  10:31:33 AM
The short cycle upphase for QQQ has stalled again, as it has many times since yesterday at 2:45PM. A move below 36.32 will kick off a new downphase, confirmed with a move below 36.20. The 30 min cycle channel is flattened, with channel support conveniently located at 36.20 as well.

 
 
  Jeff Bailey   10/19/20,  10:30:33 AM
Swing trade put alert .... for 2 Hartford Jan. $50 puts (HIG-MJ) at the offer of $1.55.

HIG $54.40 +0.09% here.

 
 
  Jeff Bailey   10/19/20,  10:26:48 AM
March McLennan (MMC) $23.02 -9.9% Link .... continues to exhibit weakness after New York Attorney General investigation.....

 
 
  Mark Davis   10/19/20,  10:25:49 AM
Long @ 1111.69, raise stop to 1113.69

 
 
  Linda Piazza   10/19/20,  10:24:40 AM
TRAN at 3379.82 after approaching the double-top zone. The ascending trendline off the 10/13 low would occur at about 3354 and perhaps would confirm a rollover in progress. We saw that the 3350 zone was important.

 
 
  Mark Davis   10/19/20,  10:24:05 AM
We have about 45 min of bearish MACD divergence on the SPX 1-min chart that appears to be kicking in... still, it will take more than a small pullback to change the bullish tone of the market.

 
 
  Jeff Bailey   10/19/20,  10:23:20 AM
Stem-Cell Bonds .... California (pronounced Cal-ee-fornia) Governor Arnold Schwarzenegger endorses proposal to sell $3 billion of bonds to fund stem-cell research. The initiative is a response to President Bush's decision to limit federal funding of research with embryonic stem cells.

Stem-cell stocks.... ASTM $1.10 +0.91% Link , CCEL $2.35 (unch) Link , STEM $2.06 +7.29% Link ....

 
 
  Tab Gilles   10/19/20,  10:21:30 AM
A break above 1125 would be bullish: Link

 
 
  Jonathan Levinson   10/19/20,  10:21:17 AM
From Greenspan's prepared remarks linked earlier by Jim:

In summary, although some broader macroeconomic measures of household debt quality do not paint as favorable a picture as do the data on loan delinquencies at commercial banks and thrifts, household finances appears to be in reasonably good shape. There are, however, pockets of severe stress within the household sector that remain a concern and we need to be mindful of the difficulties these households face.

In addition, a significant decline in consumer incomes or house prices could quickly alter the outlook; nonetheless, both scenarios appear unlikely in the quarters immediately ahead. If lenders, including community bankers, continue their prudent lending practices, household financial conditions should be all the more likely to weather future challenges.

Recall Franklin Raines' proposal yesterday to more aggressively exploit the subprime mortgage market.

 
 
  Jonathan Levinson   10/19/20,  10:18:06 AM
New session highs across the board. 36.80 is next fibonacci resistance, while NQ is headed for 1474 resistance on the way to strong resistance at 1480-82.

 
 
  Mark Davis   10/19/20,  10:18:05 AM
It won't take much more upside to shake bears out of their positions, as they have already endured a fairly serious goring this morning. Whether that happens or not is still unknown but odds favor the bulls at this point. If we move much higher above Dow 10000 bears should start to cave in and SPX 1120 will become the next target.

 
 
  Linda Piazza   10/19/20,  10:15:43 AM
SPX at 1117.41, with the 10-, 30-, and 200-sma's all between 1118.70 and 1120.34.

 
 
  Jonathan Levinson   10/19/20,  10:15:15 AM
Some big QQQ buy programs here- 2 candles exceeding 2.5M shares within 100 ticks each. 30 min channel resistance has risen to 36.66.

 
 
  Jeff Bailey   10/19/20,  10:14:07 AM
HMO Index (HMO.X) 872.95 -9.1% Link ... plunging..... don't know what's going on.... SIE -17% Link , HUM -10.9% Link , CVH -10.4% Link , WLP -9.6% Link , AET -8.9% Link , PHS -7.18%, HNT -7%, CI -6.7%, FHCC -5.02% ....

Might be "Spitzer releated"

 
 
  Linda Piazza   10/19/20,  10:12:32 AM
We may get our first sign of a rollover vs. breakout outcome from the TRAN's equal-top zone. The TRAN is at 3388.32 after having punched up to 3392.67, just a few points above the 10/7 high. As I mentioned, the TRAN has a history of slightly overrunning targets, so we should consider it still within the potential double-top zone. The TRAN's 60-minute Keltner chart shows definite bearish divergence unless the TRAN can zoom higher and carry its smallest Keltner channel higher along with it. There's also bearish price/MACD divergence. Careful here, market bulls and bears.

 
 
  Jeff Bailey   10/19/20,  10:12:24 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Jonathan Levinson   10/19/20,  10:09:45 AM
YM bulls are donning their "YM 10K" caps again.

 
 
  Linda Piazza   10/19/20,  10:08:38 AM
This 537.25-ish OEX zone was one identified as a possible rollover point. Many important Fib levels and averages come together in this zone. That means that it could be a breakout point, too. The OEX has climbed above the descending trendline off the 10/7 high, with that trendline now crossing at about 535.90, so perhaps those who have either bullish or bearish thoughts could use that trendline as a benchmark: bullish above and bearish below, but I have strong hesitations about the bullish viewpoint, with my hesitations detailed in other posts. The 15-minute Keltner chart shows a potential for the OEX to push up toward 540.87, and we know 540.80 is an important historical S/R zone, too. For now, I'm standing aside from suggesting bearish plays as I just don't yet see signs of a rollover in progress. I don't like to suggest countertrend bullish plays so near potential strong resistance, either, but for those already in bullish plays, have profit-protecting plans in place near 538.30-538.50, too, in addition to the 540-541 zone. That's a 50% retracement of the steep decline from the 10/7 high and that's another strong potential reversal point.

 
 
  Jonathan Levinson   10/19/20,  10:07:11 AM
QQQ is making new highs. The last pullback bottomed at 36.32, which is now support under the trending short cycle. Below that is 36.22, but it's no longer key range support. Bears will be looking for a break of that higher level to kick off the short cycle downphase.

 
 
  Mark Davis   10/19/20,  10:05:53 AM
Here shorty shorty shorty...

 
 
  Mark Davis   10/19/20,  10:04:35 AM
For the bullish scenario to remain strong I would expect to see SPX find support at the top of the opening gap, in the 1114.80 area. Much below 1114.80 and we would be in danger of filling the entire gap (down to 1114), which would also obviously take us back under 1115 resistance turned support and call the bullish scenario into question. Having said all that... I do not expect that scenario to unfold.

 
 
  Jim Brown   10/19/20,  10:02:03 AM
Remarks by Chairman Alan Greenspan
The mortgage market and consumer debt: Link

 
 
  Jeff Bailey   10/19/20,  10:01:58 AM
10:00 Market Watch at this Link

 
 
  Jim Brown   10/19/20,  9:59:26 AM
Greenspan speaks at 10:00

 
 
  Jeff Bailey   10/19/20,  9:59:02 AM
JAKKS Pacific (JAKK) $22.56 -6.54% Link .... reported quarterly EPS of $0.95 (ex-items) versus consensus of $0.64.

 
 
  Jeff Bailey   10/19/20,  9:57:45 AM
Illinois Tool Works (ITW) $90.39 -0.23% Link .... reported quarterly EPS of $1.09 versus consensus of $1.10.

 
 
  Linda Piazza   10/19/20,  9:57:18 AM
The OEX is jammed beneath 7-minute Keltner upper resistance, with that Keltner line at 537.35. It may now need to pull back to 535.95 or so to regroup. It's the depth of the pullback that will tell us much about strength or weakness.

 
 
  Jeff Bailey   10/19/20,  9:56:12 AM
Freeport McMoran (FCX) $36.07 -0.08% Link ... reported quarterly EPS of $0.10 versus consensus of $0.15.

 
 
  Jeff Bailey   10/19/20,  9:55:04 AM
Ford Motor (F) $13.18 -1.56% Link ... reported quarterly EPS of $0.28 (ex-items) versus consensus of $0.14.

 
 
  Jonathan Levinson   10/19/20,  9:52:59 AM
The Fed's open market desk has added a 2B repo against the 8.25B expiring today, which results in a big net drain of 6.25B for the day.

 
 
  Jeff Bailey   10/19/20,  9:52:56 AM
TRIN fell to 0.56 just after the open, but has been rising to current session high of 1.08.

 
 
  Mark Davis   10/19/20,  9:52:25 AM
TRIN has been steadily rising since the opening bell... starting from the .58 area and currently printing 1.15. I expect this is a reflection of bullish traders taking profits at obvious resistance and bearish traders establishing new positions for the same reason. I also fully expect shorts to be fried today... that's my very unscientific opinion

 
 
  Linda Piazza   10/19/20,  9:51:06 AM
Dow approaching 10,000.

 
 
  Jeff Bailey   10/19/20,  9:50:40 AM
VIX.X 14.49 -1.49% .... DAILY Pivots as follows ... 14.08, 14.46, Piv = 15.13, 15.51, 16.18.

 
 
  Linda Piazza   10/19/20,  9:50:31 AM
The OEX's 50-dma is at 537.71, with the OEX at 537.21 as I type.

 
 
  Jonathan Levinson   10/19/20,  9:50:20 AM
Gold and silver are holding their gains as the miners continue to creep higher. Bonds are still weak, with TNX +3.9 bps. QQQ's wavelet bounce is in progress, and bears will be hoping for a lower bounce high below 36.45- that lower high, if we get it, will set up the short cycle for a long-overdue downphase. But above 36.22, the QQQ looks bullish.

 
 
  Linda Piazza   10/19/20,  9:49:49 AM
Still watching the TRAN. It's headed up again to retest that 10/7 high. That high was 3389.20, and the TRAN is currently at 3387.60. The TRAN has a habit of overrunning targets, so I wouldn't be surprised to see it run up toward 3400, but so far, it's hesitating beneath that potential double-top zone.

 
 
  Jeff Bailey   10/19/20,  9:48:51 AM
Exar Corp. (EXAR) $14.98 +6.54% Link .... reported quarterly EPS (ex-items) of $0.02 versus consensus of $0.01.

 
 
  Mark Davis   10/19/20,  9:48:42 AM
There goes Dow 10000... now we wait to see if it holds

 
 
  Jeff Bailey   10/19/20,  9:47:32 AM
Ethan Allen Interiors (ETH) $35.56 +5.2% Link .... reported quarterly EPS of $0.51 versus consensus of $0.50.

 
 
  Jeff Bailey   10/19/20,  9:46:14 AM
EMC Corp. (EMC) $12.59 +3.53% Link ... reports quarterly EPS of $0.09 which matched consensus of $0.09.

 
 
  Jeff Bailey   10/19/20,  9:44:54 AM
Domino's Pizza (DPZ) $16.05 +0.94% Link ... reports quarterly EPS of $0.23 versus consensus of $0.22.

 
 
  Jeff Bailey   10/19/20,  9:43:38 AM
Morgan Stanley High Tech-35 (MSH.X) 459.27 +1.31% .... trades conventional 50% retracement and matches Wednesday's high.

 
 
  Linda Piazza   10/19/20,  9:43:24 AM
The OEX hit the 61.8% retracement of the 10/13-10/14 decline, near 536.87, and has pulled back slightly. On behalf of bulls, I'm worried about the rising wedge shape of the climb on the 30-minute chart, with the top of that wedge now at about 537.22. This is almost exactly at the 38.2% retracement of the rally off the August low, with that rally's retracement levels having proven important in succeeding months' trading patterns. I'd have profit-protecting plans in place if in bullish trades.

 
 
  Jonathan Levinson   10/19/20,  9:42:30 AM
The current pullback registered as a wavelet downphase only, and that downphase has now bottomed. Unless it starts trending, on a break below 36.30, we should see another upphase commencing within the next 2 minutes.

 
 
  Jeff Bailey   10/19/20,  9:42:18 AM
Diamond Offshore (DO) $32.61 -0.27% Link ... reported quarterly EPS of $0.10 (excludes multiple items) versus consensus of $0.05 per share.

 
 
  Mark Davis   10/19/20,  9:40:31 AM
If I were not already long I would be taking a position right here @ SPX 1115.60

 
 
  Jeff Bailey   10/19/20,  9:39:53 AM
Continental Airlines (CAL) $8.76 +0.57% Link ... reported quarterly EPS (ex-items) of $0.08 versus consensus of $-0.17.

 
 
  Mark Davis   10/19/20,  9:38:11 AM
TRIN is .69 and Dow is threatening to take out 10000, above which we should see even more short-covering. I would be very surprised if the 10000 number is enough to hold the markets back. Oil will continue to be a key factor and my guess is that it has already begun a retrace.

 
 
  Jeff Bailey   10/19/20,  9:38:02 AM
Amsouth Bancorp. (ASO) $24.91 +1.09% Link ... reported quarterly EPS of $0.48 versus consensus of $0.45.

 
 
  Linda Piazza   10/19/20,  9:34:51 AM
The TRAN touched 3389.12, just a little below the 10/7 high of 3389.20, and immediately pulled back, but not far yet. It's at 3382.91. We're in equal-high territory, here, with price/MACD bearish divergence. Careful.

 
 
  Jonathan Levinson   10/19/20,  9:34:31 AM
Silver and gold are strong this morning. HUI is up .59% at 222.67 and XAU +.94% at 99.31.

 
 
  Jonathan Levinson   10/19/20,  9:33:00 AM
QQQ has given up half of its morning gains here, but again, bears should be skeptical of any pullback above 36.22. Even the short cycle oscillators are still trending in overbought, very vulnerable to false signals.

 
 
  Mark Davis   10/19/20,  9:32:27 AM
Dow 10000 is within spitting distance and if we take that out it should have a very positive effect on all the markets.

 
 
  Linda Piazza   10/19/20,  9:32:22 AM
The OEX opens and immediately challenges the 30-minute 100/130-ema's at 535.79 and 536.50, respectively.

 
 
  Jeff Bailey   10/19/20,  9:30:58 AM
Taser Intl. (TASR) $38.07 Link ... jumps to $40.79 after reporting Q3 EPS of $0.19, which was 3 cents better than consensus. Revenues rose 210.3% year-over-year to $18.9 million versus consensus of $18.4 million.

Increasing revenue guidance on revenue growth for full year from +150% to +175%.

 
 
  Mark Davis   10/19/20,  9:29:55 AM
Good morning... and it does look like a good one (if you're long)! As Marc noted on the Futures Monitor the 200sma for SPX sits @ 1120 and that will likely be our first hurdle. We will undoubtedly see some short covering right out of the gate. I may try a short at some point today but unless the tone of the markets changes drastically I think we are headed higher so my intention is to keep the stop on our long play well away from the action. We are long from 1111.69 with a stop @ 1110 which I will adjust higher after I get a feel for what's happening.
At this point I believe a bottom has been put in @ SPX 1102 and I expect the tone to be bullish right up to the election. That could mean a lot of upside. We have been rangebound for quite a while (storing up energy) and when the range is finally broken the move could be quite powerful. If oil continues lower that could ignite a real flagpole type rally.

 
 
  Linda Piazza   10/19/20,  9:25:32 AM
As others have mentioned, equity futures are higher. Let's watch those OEX zones detailed in the last paragraph of my 22:56 post to see how the OEX behaves around them. On the Futures side of the Monitor, Marc has detailed two major hurdles for the markets, the SPX 200-sma at 1120 and the Nasdaq 200-sma at 1962.54, so watch the OEX's potential turning points in relationship to these, too. I'll also be watching for a possible TRAN test of 3400 and the top of its ascending regression channel, for a possible turnaround or breakout point on the TRAN, too.

 
 
  Jonathan Levinson   10/19/20,  9:22:32 AM
Yesterday's 30 min cycle upphase is trying to find a top here but the cycle channel continues to point up on QQQ. Current channel resistance is at 35.45. 36.22-25 should now act as support, and bears need to see QQQ below that level at a minimum before trusting any downtick. A short cycle downphase should commence at that level, and below 36.00, a 30 min cycle downphase will be in progress.

 
 
  Jonathan Levinson   10/19/20,  9:19:37 AM
Session high for gold here at 422.30.

 
 
  Jonathan Levinson   10/19/20,  8:31:44 AM
Gold is up to a session high, euros are holding their gains, and equities are slightly higher, with QQQ +.35 to 36.483. Bonds dived on the news, TNX +2.9 bps at 4.082% currently.

 
 
  Jonathan Levinson   10/19/20,  8:30:24 AM
Headlines:

8:29am U.S. SEPT. CPI UP 0.2% AS EXPECTED

8:29am U.S. SEPT. CORE CPI UP 0.3% VS. 0.2% EXPECTED

8:30am U.S. SEPT. HOUSING STARTS DOWN 6% TO 1.898 MLN UNITS

8:30am U.S. 2005 SOCIAL SECURITY COLA ESTIMATED AT 2.7%

8:30am U.S. SEPT. ENERGY PRICES FALL 0.4%

8:30am U.S. SEPT. FOOD PRICES UNCHANGED

8:30am U.S. SEPT. SINGLE FAMILY STARTS DOWN 8.2% TO 1.540 MLN

8:30am U.S. SEPT. MEDICAL PRICES UP 0.3%

 
 
  Jonathan Levinson   10/19/20,  8:23:02 AM
A rush of new highs for NQ and euro futures just now- could be some advance guesses or "insight" into the contents of the 8:30 data.

 
 
  Jonathan Levinson   10/19/20,  7:50:28 AM
Equities are broadly higher, with ES trading 1117.5, NQ 1469.5, YM 9986 and QQQ +.327 at 36.467. Gold is up 60 cents to 4180.1, silver +.026 at 7.015, ten year bonds down .062 at 113.172 and Nymex crude -1.025 at 52.65.

We await the 8:30 release of housing starts and building permits, est. 1950K each, CPI est. .2% and core CPI, est. .2%.

 
 
  Linda Piazza   10/19/20,  7:21:44 AM
Good morning. Most Asian bourses posted gains overnight, and all European bourses currently trade in the green. Despite a concerning book-to-bill result last night, techs took their cue from the performances of IBM, TXN, and Fujitsu after their respective earnings reports and updates, with all climbing. Crude dropped, easing pressure on crude-sensitive sectors such as airlines. Our futures climbed, too. As of 7:06 EST, gold was up 0.9 and crude down 0.57. More detail about Asian and European markets follows in succeeding paragraphs.

The Nikkei gapped higher Tuesday morning and then climbed through the morning session. During the afternoon session, the Nikkei coiled near the middle of the day's range, closing higher by 99.24 points or 0.91%, at 11,064.86. Although crude futures initially climbed in overnight trading, they then dropped to a three-day low after OPEC announced that September's production results were the highest in 25 years. That decline in crude futures helped Asian airline companies in specific and sentiment in general. Earnings reports from IBM and TXN, as well as an update from Japan's Fujitsu Ltd., helped tech stocks, with tech investors deciding to ignore negative implications from September's 0.96 book-to-bill number. Fujitsu credited higher demand for mobile phone base stations and chips for digital electronics for helping it to narrow its previous loss estimate, and the company gained 4.1%.

Most other Asian markets gained. The Taiwan Weighted climbed 0.62%, and South Korea's Kospi gained 0.88%. Singapore's Straits Times climbed 1.01%, and Hong Kong's Hang Seng rose 0.92%. China's Shanghai Composite gained 0.17%.

Currently, all European bourses post gains. About the time the European markets opened, crude began dropping toward its $52.59 overnight low, easing pressure on those bourses. As had happened in Asia, crude-sensitive sectors such as airlines rose. Reporting companies generally received a good reception, but investors didn't like Prudential's planned discounted share issue.

As of 7:06 EST, the FTSE 100 had posted gains of 44.20 points or 0.96%, to trade at 4,670.80. The CAC 40 had posted gains of 60 points or 1.64%, to trade at 3,719.81. The DAX had posted gains of 65.56 points or 1.67%, to trade at 3,980.73.

 
 
  Jim Brown   10/18/20,  11:10:14 PM
The SEMI Book-to-Bill ratio fell for the fifth consecutive month to 0.96 in September. This means that only $96 of orders were received for every $100 shipped. The BTB number is a three month moving average so the real number was even lower. The $1.394 billing was -10% below last months number but still +75% above the same period in 2003.

SEMI continues to proclaim 2004 a strong year for chips. The decline was expected based on all the earnings warnings from chip companies.

 
 
  Marc Eckelberry   10/18/20,  10:56:54 PM
7:29pm 10/18/04 Gartner Inc: Worldwide PC shipments up 9.7% in Q3 (DELL, HPQ, IBM) By Carolyn Pritchard SAN FRANCISCO (CBS.MW) -- Worldwide PC shipments rose 9.7 percent in the third quarter, according to research group Gartner Inc., slightly below previous expectations as they were hurt by slower sales in the U.S. market. PC shipments in the U.S. increased 5 percent in the quarter, below analysts' forecast of a more than 8 percent rise, with strong notebook shipments but weakness in demand for desktops. Dell (DELL) topped the shippers, with 7.9 million units and 16.8 percent of the market, followed by Hewlett-Packard (HPQ) at 7 million units and 15 percent of the market, and IBM (IBM) , which shipped 2.6 million units and took 5.6 percent of the worldwide market

 
 
  Linda Piazza   10/18/20,  10:56:22 PM
If you want the short version of this post, here it is: After a study of charts from weekly down to five-minute charts, I still reluctantly come to the conclusion that selling rallies probably remains the best idea. As I mentioned yesterday, the level near the OEX's close is one possible rollover point, as is the 536.50-537.25 zone. If markets retrace much more than 538.40, something more bullish may be happening.

Some say markets that have been in descending regression channels for the year are preparing for upside breakouts. The Russell 2000's breakout serves as one example, although the Russell 2000 has now come back to retest that channel. Others say markets such as the OEX and SPX are about to drop down through the lower half of those channels again. Let's take a top-down look at the OEX and see what we find. Weekly chart: The OEX is still in a pattern of lower highs and lower lows, below the 200-week sma and ema (536.93 and 542.44, respectively). MACD has flat-lined. The OEX is trying to steady at the midline of its descending regression channel and climb, which would be a short-term sign of strength that support could be maintained. We can't yet be certain that the OEX will be able to maintain that support, however, as its weekly 200-sma and -ema pressure it lower.

Daily: There was bearish divergence as the OEX hit equal tops, but now it attempts the already-noted rise from the midline of its descending regression channel. MACD turns below signal. A host of moving averages meet up with important Fib levels and historical S/R, especially near 537-537.40 and again near 540.80. The OEX ended Monday just beneath a 50% retracement of the 10/13-10/14 decline. With MACD turning below signal, it may be tough for the OEX to marshal the strength to battle through that resistance.

Sixty-minute chart: The climb off the 10/14 low looks like a potential bear flag climb, but a rather steep one, so perhaps it's something more bullish. Sixty-minute MACD made a bullish cross and now approaches the signal line. So far, MACD shows no sign of turning down, but the 535.30-ish resistance appeared to be too strong for the OEX Monday. That resistance was joined by a descending trendline off the 10/7 high, a trendline crossing at about 536 or slightly lower, if an internal or best-fit trendline is used. The pattern at the top of the climb could be a "p" accumulation pattern, but there's also a bit of a broadening look to that formation, an unstable pattern that is typically considered bearish. Pick your bias and you could read this chart either way. There's nothing on the 60-minute chart to show what will happen tomorrow, at least in my opinion.

Fifteen-minute chart: Here the OEX's climb off the 10/14 low reveals itself as a potential inverse H&S with an ascending neckline, but it's so roughly formed that it's difficult to rely on its potential. The neckline is difficult to pinpoint exactly, too, but may cross at about 536. A breakout above the descending trendline off the 10/7 high, the 536 resistance zone, and the 38.2% retracement of the decline of the 10/7 high would all occur at about the same time. Such a break might portend a climb up to the 50% retracement of that decline, at about 538.30, near another important S/R level. Hold on, though, before you feel too bullish, however, because 15-minute MACD flattens. The 15-minute Keltner chart shows the OEX at a critical juncture, trying to hold onto support at the mid-channel level near 534.33. A 15-minute close beneath the Keltner line currently at 533.13 would suggest that the OEX's smallest Keltner channel was turning down again.

Five-minute chart: This chart shows the OEX in the upper half--the bullish half--of the Keltner channels, attempting to form a miniature inverse H&S that has a neckline at about 535.50 and an upside target almost 2 points above that, if confirmed. However, unless the OEX can show five-minute closes above the Keltner line currently at 535.40, it's setting up potential bearish-divergence, Keltner style, on that chart. Bearish price/MACD divergence already shows up.

The longer-term charts depict prices that are still in a downward trend. The shortest-term charts, the 5- and 15-minute charts, show some ambiguity, with some bullish and some bearish signs. One of these days, the OEX is going to break out of that descending trendline to the upside, but until it does, I still can't find enough signs that such a breakout is imminent. So, for now, we'll have to consider selling-the-rallies to be in effect until proven wrong. Tomorrow, look for a rollover from Monday's closing level or perhaps from the 537 level, but if the OEX makes it above about 538.40, then we should probably all stand aside for the retest of the 200-sma and the outcome of such a retest.

 
 
  OI Technical Staff   10/18/20,  10:56:14 PM
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