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  Jeff Bailey   10/22/20,  7:03:30 PM
Last 3 week's pivot matrix at this Link

 
 
  Jeff Bailey   10/22/20,  6:54:49 PM
Pivot Matrix for next week at this Link

 
 
  Jeff Bailey   10/22/20,  4:51:56 PM
Closing Internals at this Link

 
 
  Mark Davis   10/22/20,  4:24:00 PM
Readers may wonder why I didn't just stay short all day, since the long plays only resulted in extra commissions. The answer is... Once you take profits they can't take them back.

Have a great weekend everyone!

 
 
  Mark Davis   10/22/20,  4:21:11 PM
Daily Trade Recap
Short @ 1108.63 (overnight), exit @ 1104.14, +4.49
Long @ 1104.14, exit @ 1104.14, +0.00
Short @ 1104.14, exit @ 1097.14, +7.00
Long @ 1097.14, exit @ 1097.14, +0.00
Short @ 1097.14, hold over the weekend
Total for today = +11.49
Total for week = +25.41

 
 
  Jeff Bailey   10/22/20,  4:18:57 PM
This weeks CLOSED MM Profiles at this Link

 
 
  Jeff Bailey   10/22/20,  4:11:55 PM
Current OPEN MM Profiles at this Link

 
 
  Mark Davis   10/22/20,  4:04:17 PM
The only positive thing I can find for bulls to hang their hat on over the weekend is that we did not take out the Oct 20 low @ 1094.25... LOD today was 1095.29

 
 
  Linda Piazza   10/22/20,  4:00:32 PM
Have a good weekend, everyone.

 
 
  Linda Piazza   10/22/20,  3:57:28 PM
Yesterday and today, the SOX met resistance at its 100-ema.

 
 
  Mark Davis   10/22/20,  3:57:18 PM
Short @ 1097.14, hold over the weekend

 
 
  Jeff Bailey   10/22/20,  3:56:06 PM
Bearish Day trade exit alert .... for Travelzoo (TZOO) $57.00 here

 
 
  Mark Davis   10/22/20,  3:55:39 PM
Panic is setting in now that traders realize the Dow will probably close at a new yearly low. It will take a Hurculean effort to prevent that with only 5 minutes left.

 
 
  Jonathan Levinson   10/22/20,  3:52:26 PM
35.90 QQQ held for the bounce, showing the short cycle is not ready to turn up, and that the 30 minute cycle downphase is alive and well. Next channel support is 35.65 on the way to the h&s objective of 35.55.

 
 
  Mark Davis   10/22/20,  3:47:23 PM
The short play may be ill-advised but with +11 or so in the bank I'm willing to risk a little for the potential of a complete breakdown.

 
 
  Linda Piazza   10/22/20,  3:44:29 PM
Mark, the TRAN's behavior has me stumped. If you come up with a logical explanation for its climb while energy costs soared, let me know. I've been wondering if its behavior wasn't hinting that the economic recovery was stronger than people thought, but we're not really seeing that in economic numbers being released around the globe.

 
 
  Mark Davis   10/22/20,  3:42:38 PM
Short @ 1097.14, raise stop to 1099.14

 
 
  Linda Piazza   10/22/20,  3:42:33 PM
The OEX tests first Keltner resistance, at about 526.00-526.16. The OEX hit bottom support on the 7-minute chart, but not on the 15-minute one. If the OEX can produce 15-minute closes above the Keltner line currently at 526.57, it may avoid reaching that 524-ish downside target predicted by the 15-minute Keltner channel. It's just touch and go from here on, and those in bearish plays should be making their exit plans if they intend to exit. Sometimes on a Friday afternoon, I just keep tightening my stop until I'm taken out, allowing me to participate in gains as long as they're being made, but it's your choice how you do this, if you intend to do so. Of course, if you exit this afternoon, you run the risk of the OEX and other markets gapping down Monday morning and heading off to the races, to the downside, but there might instead be bounce attempts, at least up to key levels such as SOX 400 or SPX 1100, depending on where the indices end the day. Balance your risk vs. reward and make a decision. I think I'd take at least partial profits.

 
 
  Mark Davis   10/22/20,  3:41:15 PM
Stopped out of long play @ 1097.14, +0.00
Now short again @ 1097.14, stop 1098.14
I thought that might happen, considering all the angst among the bullish crowd

 
 
  Mark Davis   10/22/20,  3:38:40 PM
Linda I have been thinking about the TRAN lately. If we get a reversal that's bearish right? Maybe not... because that would probably mean energy prices are coming down and that would be bullish for equities... a strange situation indeed.

 
 
  Mark Davis   10/22/20,  3:35:28 PM
Stopped out of short play @ 1097.14, +7
Now long @ 1097.14, stop 1097.14
Go short again immediately if stopped out

 
 
  Linda Piazza   10/22/20,  3:33:43 PM
Although not classic, we have a bearish engulfing candle today on the TRAN. It's not classic because the candle's body doesn't engulf all of yesterday's candle, small upper shadow and all. Almost but not quite. Barring a strong bounce from the TRAN, all of yesterday's range was encompassed within today's range, however, so I think we'll call it close enough. Needless to say, this can be a potential reversal signal. The TRAN's last reversal, 10/07, didn't take it much lower, but the rising bearish wedge-ish shape of the TRAN's climb makes me wonder about this time. The TRAN has obviously been in a strong uptrend, so we can't trust anything that the oscillators might tell us. A sell signal by an oscillator in a strongly trending entity might mean nothing more than a sideways consolidation on the way. We can trust moving averages, however, and the TRAN has traveled far, far away its important moving averages. The 200-ema and -sma are way down just above 3000.

 
 
  Jim Brown   10/22/20,  3:33:13 PM
GOOG 35 million shares traded today. There are only around 30 million available for trading. Does this give you a clue as to the churn rate?

 
 
  Mark Davis   10/22/20,  3:28:59 PM
Maybe all the money is going into GOOG today

 
 
  Jeff Bailey   10/22/20,  3:25:00 PM
SPX 1,096 , QQQ $35.80

 
 
  Jeff Bailey   10/22/20,  3:24:30 PM
VIX.X alert 15.27 +5.02% .. back above WEEKLY Pivot

 
 
  Mark Davis   10/22/20,  3:23:57 PM
Here comes the guillotine...

 
 
  Mark Davis   10/22/20,  3:23:01 PM
We have a double bottom on the SPX 1-min chart but that doesn't mean it will hold.

 
 
  Linda Piazza   10/22/20,  3:21:48 PM
I've been watching CSCO, GE, and MER with relationship to their 200-week ema's and sma's. GE is caught between the 200-sma and the 200-ema, one resistance and one support, while CSCO loses the battle with both, but MER looks a bit different. It's climbed above both and even appears to have rejected its confirmation of a well-formed H&S on that chart. Link However, all is not perfect here, as the climb looks like a potential bear flag, and the last three weeks have produced candles that are indicative of indecision as MER climbs. OBV, on-balance volume, has been in a downtrend since . . . well, since a long time, but that downtrend has been in place the last three weeks while MER climbed and produced those weekly candles indicative of indecision. So, while we must be open to the possibility that this bellwether stock might be showing at least an attempt at strength on that weekly chart, and the daily one shows a just-confirmed inverse H&S, its efforts are not entirely convincing as yet. MER today tests its 200-ema on the daily chart, with that 200-dma proving to be an inflection point in early September. It's at 53.05.

 
 
  Mark Davis   10/22/20,  3:21:47 PM
Short @ 1104.14, lower stop to 1097.14
Go long immediately if stopped out

 
 
  Jeff Bailey   10/22/20,  3:19:28 PM
Bearish day trade lower stop alert .... for Travelzoo (TZOO) $57.60 -5.52% to $58.36.

 
 
  Mark Davis   10/22/20,  3:19:02 PM
This is the flip side of shorts trying to call a top. Granted, it is a high odds play for going long, but if if fails the consequences could be disastrous.

 
 
  Jeff Bailey   10/22/20,  3:15:48 PM
03:00 Internals at this Link

 
 
  Jonathan Levinson   10/22/20,  3:15:42 PM
QQQ back to 35.80.

 
 
  Jonathan Levinson   10/22/20,  3:10:30 PM
QQQ needs to clear 35.91, then 36.00. A short cycle upphase will start on the move above 36 if it holds for longer than 2 minutes or so.

 
 
  Jeff Bailey   10/22/20,  3:07:20 PM
03:00 Market Watch at this Link

 
 
  Mark Davis   10/22/20,  3:06:29 PM
TRIN @ 1.32

 
 
  Jim Fabyn   10/22/20,  3:05:04 PM
10 Yr Note TYZ04 pit close, highest since April.

 
 
  Linda Piazza   10/22/20,  3:04:45 PM
The TRAN's 30-minute 100/130-ema's are at 3371.12 and 3361.12, and the TRAN does trade somewhat in response to these averages, sometimes finding support or resistance at them. The TRAN is at 3376.13 as I type.

 
 
  Linda Piazza   10/22/20,  3:02:23 PM
The OEX's 15-minute chart shows that 524.20-525 is a definite possibility this afternoon, but have those profit-protecting plans in place.

 
 
  Linda Piazza   10/22/20,  3:00:42 PM
The OEX 60-minute and daily Keltner channels both show a potential downside of 522. Don't count on that being reached, or count on it being reached this afternoon especially, but this allows you to assess risk vs. reward. The 60-minute chart shows the OEX now touching nearest support, however. By the way, the H&S on the 60-minute chart, continuation form, has now been confirmed. Maybe. I think the neckline has already been breached, but the neckline on this formation is somewhat rough, and it's just a judgment call where it would go. If I'm correct about that neckline and if a sudden spike higher doesn't show this breach to have been a fake-out move, the targeted downside is near 518.

 
 
  Mark Davis   10/22/20,  3:00:37 PM
The guillotine has not dropped yet but the guy has his hand on the cord.

 
 
  Jonathan Levinson   10/22/20,  2:59:13 PM
If 35.80 QQQ support lets go, I'd look for next support at 35.55. Seems to be holding, so far, but no bounce yet.

 
 
  Mark Davis   10/22/20,  2:55:54 PM
If the Dow closes at a new yearly low that will be big headline news and they will be talking about it all weekend. I guarantee you they are thinking about it right now.

 
 
  Linda Piazza   10/22/20,  2:55:28 PM
Next Keltner potential support for the OEX is at 525.27.

 
 
  Jonathan Levinson   10/22/20,  2:54:19 PM
New session lows across the board, QQQ printing 35.80.

 
 
  Linda Piazza   10/22/20,  2:54:00 PM
The TRAN tests 3380.

 
 
  Jeff Bailey   10/22/20,  2:52:50 PM
Sell Program Premium .... SPX 1,098.16 , QQQ $35.84 , TNX.X 3.991%

 
 
  Jim Brown   10/22/20,  2:52:13 PM
Alert - Dow new low for the year at 9782. This is the make or break point for the market sentiment.

 
 
  Jonathan Levinson   10/22/20,  2:49:02 PM
New lows breaking for NQ futures here. QQQ just printed 35.86, as the 30 min cycle channel support falls to 35.81.

 
 
  Linda Piazza   10/22/20,  2:48:34 PM
The TRAN couldn't get past 3400, even with NYMEX closed.

 
 
  Linda Piazza   10/22/20,  2:46:24 PM
The OEX turns down from the ascending trendline off Wednesday's low. A new low would confirm the failure of that trendline test, but the OEX may just be widening its pattern into a bear flag. Those in bearish positions need to decide if they're going to hold over the weekend or not and when they want to take profit if they won't be holding over the weekend. I think I'd lean toward taking at least partial profit sometime this afternoon. The double-top on the OEX has an ultimate downside target of 512, but nothing guarantees that will be reached, and any further drops will just bring the OEX deeper into potential support. If 524-525 were hit this afternoon--maybe a remote possibility, but one that should be considered--I'd definitely be pulling at least some bearish profits off the table.

 
 
  Jonathan Levinson   10/22/20,  2:43:57 PM
The short cycle oscillators for QQQ are now trending and not to be trusted until price is at least above 36.10. The 30 min and 60 min cycle channels are pointed straight south, with support down to 35.85 for the 30 min channel, and once again 35.80 looks like it should be good for at least a pause in the selling. The outlook is bearish below 36.18 QQQ.

 
 
  Linda Piazza   10/22/20,  2:38:18 PM
The OEX is pausing at the rising trendline off Wednesday's low, testing it from the underside. Times such as these are excruciating, but whether bull or bear, you just have to wait out the test.

 
 
  Mark Davis   10/22/20,  2:36:50 PM
This rally is uninspiring and if the big boys decide to bail it could happen like a guillotine, catching everybody flat-footed. I'm not trying to scare anybody... just pointing out a possibility, even if it is remote.

 
 
  Jonathan Levinson   10/22/20,  2:32:29 PM
QQQ updated chart at this Link.

 
 
  Linda Piazza   10/22/20,  2:31:16 PM
The TRAN is rising up to test 3400. Keltner channels say it might run into first resistance a little below that level, but once the TRAN gets going, it sometimes overruns targets. If instead it gets stuck at next resistance, that tells us something.

 
 
  Jeff Bailey   10/22/20,  2:30:33 PM
Marsh McLennan (MMC) $27.25 +9.7% .... WSJ and FT saying CEO Jeffrey Greenberg steps down.

 
 
  Linda Piazza   10/22/20,  2:28:50 PM
The OEX's descending trendline off yesterday's last five-minute high is at about 529.15.

 
 
  Mark Davis   10/22/20,  2:25:38 PM
Back above 9800 (barely). I'm watching 9800 as the most important number right now and watching for a failure of the Aug 13 low @ 9783.91. SPX is still below the neckline of the daily H&S by about a point. Neckline is 1101.50 and could prove to be resistance to further rally. That's why we have our stop @ 1102.14 (just above). I really do not feel like going long anymore. If stopped out I will probably stay flat and look for another short entry. I may even raise the stop to avoid another exit and entry... stand by.

 
 
  Jeff Bailey   10/22/20,  2:23:36 PM
Dow Diamonds (DIA) $98.21 -0.75% Link .... recent trade in the past 10-minutes at $98.00 is first "sell signal" the DIA has given since giving a bouble-top buy signal back in March 2003 at $81.

This may become a negative, but also a positive as the DIA did exceed its bullish vertical count of $105.

First sign of strength is trade at $106.00.

Here's the very narrow Dow Industrials Bullish % ($BPINDU) chart Link

 
 
  Linda Piazza   10/22/20,  2:22:36 PM
The OEX bounces from Wednesday's low. It's now facing the trendline that it just broke through, however, with first Keltner resistance at that level.

 
 
  Mark Davis   10/22/20,  2:18:09 PM
Dow just dipped very briefly below the August 13 low @ 9783.91... currently printing 9787.75. This has to be scaring all but the bravest of bulls.

 
 
  Jeff Bailey   10/22/20,  2:16:10 PM
Day trade short alert .... for Travelzoo (TZOO) $59.36 -2.64% here, stop $60.10, target $56.05.

 
 
  Linda Piazza   10/22/20,  2:15:29 PM
Will the TRAN have to wait for NYMEX's close before it can bounce? Although it's hit lower Keltner support, that support is turning down, and its possible for the TRAN to just keep sliding lower without even violating that channel and creating a breakout signal. It's still difficult to pinpoint strongest Keltner resistance, but 3395.50, 3399-3400, and 3410-3412 look strongest. A 38.2% retracement of today's slide is at 3407. Why is the TRAN important to watch? Several reasons. It's important in Dow theory, so many watch it and we should, too. It's sensitive to pressures due to fuel costs and also to the economic outlook. It's a fast mover and sometimes gives us a first peek at what might happen with other indices. I use it the same way I would RSI on my OEX charts. Its climb has not looked healthy on a technical basis and many haven't considered it illogical, either, but it's just kept climbing.

 
 
  Mark Davis   10/22/20,  2:13:55 PM
SPX printed a buy signal right @ 1099 and it has not aborted but I can't help but think Dow 9800 may now be support turned resistance. If so the market is in trouble.

 
 
  Jonathan Levinson   10/22/20,  2:12:43 PM
35.80 is strong confluence support for QQQ. While the 30 min cycle is in full swing here, it's going to take serious commitment from the bears to break that level.

 
 
  Mark Davis   10/22/20,  2:11:07 PM
What if they scheduled a Presidential election rally and nobody came??? Keene from the Futures side noted yesterday that an excess of bulls may tip the boat and we are sure close.

 
 
  Jonathan Levinson   10/22/20,  2:08:38 PM
QQQ cracking 36 here, targeting fib support at 35.93 next on the way to h&s implied target of 35.55.

 
 
  Mark Davis   10/22/20,  2:07:12 PM
Readers note the changes I just made to my 14:01 post...

 
 
  Mark Davis   10/22/20,  2:01:22 PM
Short @ 1104.14, raise stop to 1102.14
Cancel long trigger... We still have +2 locked in and potential for a very large gain if critical support fails. IMO risking an extra +2 points of profit is worth it. The worst we can do is +2 and we just might get the brass ring if we hang in there. Your choice... take your +4 and run if you want.

 
 
  Linda Piazza   10/22/20,  2:01:07 PM
Looks as if it might be time for the TRAN to attempt a bounce soon. It's fallen all the way to the bottom of the Keltner channel. (See the chart linked to my 11:37 post. Aren't Keltner channels wonderful?) It's dropped so quickly that we'll have to wait for a while for Keltner lines to converge again to see where strongest resistance might lie. We know 3400 will be resistance from historical patterns, and so will 3412-3415.

 
 
  Mark Davis   10/22/20,  1:57:35 PM
Short @ 1104.14, lower stop to 1100.14
Go long immediately if stopped out

 
 
  Linda Piazza   10/22/20,  1:57:11 PM
Mark, I agree about those "edge of the cliff" plays. I'm a sucker for them, because I like to see confirmation by a trendline break, etc. These days, you have to figure out where you think the inflection point will be, nail it with an entry with only the minimum of confirmation and sometimes not even that, and the have a tight stop set in case you're wrong. I'm not advocating reckless trading--if anything I'm too cautious. Instead, I'm advocating careful study and knowing your plan, perhaps even before the market opens although sometimes we need the information from the open to make a plan.

 
 
  Mark Davis   10/22/20,  1:56:22 PM
Seeing bullish MACD divergence with price over the last half hour...

 
 
  Mark Davis   10/22/20,  1:53:34 PM
The herd is on the verge of a stampede but these "edge of the cliff" plays rarely work so if you wish you can take another +5 and change right now and call it a good day.

 
 
  Linda Piazza   10/22/20,  1:53:22 PM
The TRAN has dropped below 3400 again.

 
 
  Linda Piazza   10/22/20,  1:50:22 PM
The OEX is testing Wednesday's low.

 
 
  Linda Piazza   10/22/20,  1:49:51 PM
Here's the stop-running push I expected to see. Bulls want to see a quick spring higher. Bears don't.

 
 
  Mark Davis   10/22/20,  1:48:59 PM
Short @ 1104.14, raise stop to 1102.14
Cancel long trigger

 
 
  Jonathan Levinson   10/22/20,  1:47:31 PM
QQQ is in the process of failing below 36.10, which becomes new lower resistance below 36.18-.22, 36.28 and 36.35. Below 36, next fib support is also 35.93. If we treat 36.10 as a neckline, which I'm inclined to do, then the head and shoulders target below that would be 35.55.

 
 
  Mark Davis   10/22/20,  1:45:32 PM
There goes 9800...

 
 
  Mark Davis   10/22/20,  1:45:14 PM
There goes 1100...

 
 
  Linda Piazza   10/22/20,  1:44:39 PM
Mark, the OEX is also below the confirmation level of its double-top formation on the daily chart.

 
 
  Mark Davis   10/22/20,  1:42:40 PM
Short @ 1104.14, lower stop to 1101.14
Go long immediately if stopped out

 
 
  Linda Piazza   10/22/20,  1:41:36 PM
Careful. This is the typical stop-running time of day. I would imagine that there would be a quick plunge lower (but I'm often wrong about the direction of the run) to see if Wednesday's lows are going to hold. Immediate dip buying and we'll know one thing about the markets. No dip buying and we'll know something else.

 
 
  Mark Davis   10/22/20,  1:38:33 PM
Something that slipped my attention until just now... we are below the neckline (1101.50) of the SPX daily H&S formation again. Downside target is 1060 but we really need to get below 1100 to get things going... 1095 would really scare the bulls.

 
 
  Jonathan Levinson   10/22/20,  1:32:43 PM
QQQ bounced at declining 30 min channel support at 36.07, but it's just a stall so far, and bulls need to clear 36.22 at minimum. New lows in the futures as I type.

 
 
  Mark Davis   10/22/20,  1:31:41 PM
Conservative traders can take +3 now if they wish. I am going to leave the stop @ 1104.14 just in case we get a break of 1100.

 
 
  Linda Piazza   10/22/20,  1:29:53 PM
Here's the OEX's obligatory bounce attempt from the ascending trendline off Wednesday's low. Will it hold?

 
 
  Linda Piazza   10/22/20,  1:26:15 PM
The OEX approaches the ascending trendline off Wednesday's low. This trendline and Wednesday's low could provide potential bounce points, so have those profit-protecting plans in place if in bearish positions. Some OEX charts show a possibility of a dip to 523-524, but they don't necessarily suggest that will happen today or happen at all. I mention it so that you can tailor your profit-protecting plans, deciding if the risk to your profits is too much to stay in through a bounce from Wednesday's low, if that occurs, or if you want to take automatic profit (full or partial) somewhere through here.

 
 
  Mark Davis   10/22/20,  1:25:24 PM
Short @ 1104.14, lower stop to 1104.14
No long trigger at this point

 
 
  Jonathan Levinson   10/22/20,  1:23:06 PM
Volume is light but rising as price declined, breaking 36.10 support now in a trending short cycle downphase. Support below 36.0 is at 35.93.

 
 
  Linda Piazza   10/22/20,  1:20:09 PM
Nope. The OEX dispensed with that right shoulder and just broke below the neckline level of the small, building H&S on the five-minute chart. However, remember what I said about zigging and zagging within a three-point-wide channel? The OEX is approaching the bottom of that channel, near 528.40, with the ascending trendline off Wednesday's low now crossing at about 527.60. This could be part of the zigging and zagging, so I'm trying not to make too much of any development. Those of you in bearish plays need profit-protecting plans in place, but so far, this certainly isn't bad for your position. Just may not be good for it, either.

 
 
  Mark Davis   10/22/20,  1:17:28 PM
SPX new LOD @ 1102.99

 
 
  Jonathan Levinson   10/22/20,  1:16:12 PM
QQQ losing 36.18 here.

 
 
  Mark Davis   10/22/20,  1:15:33 PM
SPX is 50 cents above LOD... My fear is we make a minor new low before bouncing but who knows? As long as SOX stays below 400 it should keep a lid on rallies.

 
 
  Jeff Bailey   10/22/20,  1:13:08 PM
GOOG $176.71 .... I just took a "fitted" 38.2% retracement from $100 and fit the 38.2% higher at $140. Check it out.

50% $152.50 (Tuesday's high), 61.8% at $165 (today's low $164.08), 80.9% at $185, 100% at $205.

Where did Prudential say their bullish target was? $200.00

 
 
  Mark Davis   10/22/20,  1:13:01 PM
SOX to a new LOD. Do you believe in miracles???

 
 
  Mark Davis   10/22/20,  1:10:54 PM
SOX 400 is shaping up as an important number today and it just refuses to crack. If 400 does give way that could really get things going to the downside but SOX is already down over -9 points today and asking for more downside may be a tall order. TRIN @ .88 continues to bother me from a short perspective, especially with strong support just below @ 1102.50 and 1100.

 
 
  Jim Brown   10/22/20,  1:07:43 PM
Email from reader I mentioned who shorted 20,000 GOOG after earnings last night. (For background he was blown out on the initial bounce and then went back in with the 20K late in the session.)

I did not sleep very well last night. Usually stocks don't keep me up. This one did. I knew that I should not have gone back in and did it anyway. The potential loss was not the problem, it was the fact that I knew better than to go back in and I did anyway. I was telling you that on the phone before I did it.

Anyhoo ... I woke up at about 5:40 and fired up the money machine. My plan was to cover GOOG immediately if there was no overnight correction ... There wasn't. At 6:00am, (that's when the ECNs open for pre market trading here), I started to cover. I got out at an average cost around 163.50 and took a hit for about $107k. It started to move and for some reason I bought 10k shares at 164. It moved up right away and I was in the green really quick. I put a programmed sell order in at 175 and hit the shower.

Guess what ...
P&L for the day is + 2477.12
Lost a Hunny made a Hunny ........ I am done .... Whew!!

 
 
  Jonathan Levinson   10/22/20,  1:07:03 PM
The R2K futures keep printing new lows as QQQ sits stalled at 36.24.

 
 
  Jeff Bailey   10/22/20,  1:06:38 PM
01:00 Internals at this Link

 
 
  Linda Piazza   10/22/20,  1:02:56 PM
A potential H&S forms on the OEX's five-minute chart, a continuation-form one. If that's a valid formation, then the OEX might rise into a right-shoulder-formation from somewhere near the current level, down to the day's low.

 
 
  Mark Davis   10/22/20,  1:00:41 PM
Stopped out of long play @ 1104.14, +0.00
Now short @ 1104.14, stop 1106.14

 
 
  Jeff Bailey   10/22/20,  12:59:48 PM
12:55 Market Watch at this Link

 
 
  Jonathan Levinson   10/22/20,  12:57:38 PM
This could be a weak right shoulder that just capped off below 36.38. A break below 36.18 will set up a test of 36.10, and strong volume coming in on a break of either line should confirm a directional break.

 
 
  Jeff Bailey   10/22/20,  12:51:48 PM
Today feel like the first time I tried driving my dad's truck with a standard 4-speed transmission.

Had my foot too heavy on the gas pedal (oil prices rising) and trying to feather out the clutch (Treasuries see slight selling). If you don't work the two in unison, you aren't going anywhere (equities).

 
 
  Linda Piazza   10/22/20,  12:51:22 PM
A reader asked yesterday about MERQ. It's rising again to test its 200-sma and the top of the gap from July and the 50% retracement off this summer's steep climb and the rising best-fit regression channel. Those who are in or want to be in bullish trades want to see MERQ pop above yesterday's high on strong volume and then maintain the higher level. Those who want bearish plays want to see a rollover from these strong resistance levels. Either way, I'd certainly be prepared for the idea that any break, either direction, could be a stop-running push. If a quick reversal occurs, that's your signal that's just what it might have been.

 
 
  Jonathan Levinson   10/22/20,  12:49:52 PM
GOOG is testing 180 here. Link

 
 
  Jonathan Levinson   10/22/20,  12:48:45 PM
The short cycle is taking hesitant steps upward here, but it's way too early to proclaim a new upphase- 36.38 resistance hasn't been touched yet, and the 30 and 60 min cycle channels remain in their downphases.

 
 
  Jonathan Levinson   10/22/20,  12:44:01 PM
Natural gas is clearing the 8 level, up 25% this week.

 
 
  Linda Piazza   10/22/20,  12:41:35 PM
Just more zigging and zagging on the OEX.

 
 
  Jim Brown   10/22/20,  12:41:28 PM
GOOG +29 at 179.00

 
 
  Mark Davis   10/22/20,  12:39:42 PM
Stepping away for a few minutes...

 
 
  Jeff Bailey   10/22/20,  12:39:38 PM
Current OPEN MM Profiles at this Link

I have combined the 2 SMH Jan. $25 bullish call trades from 10/06/04 and today.

 
 
  Jonathan Levinson   10/22/20,  12:29:07 PM
QQQ is clawing it's way back up to the 36.38 line, but the action feels corrective following the sharp drop that preceded it at 11:15AM.

 
 
  Mark Davis   10/22/20,  12:27:09 PM
Approaching SPX 1106 (cash index)... above that the long play looks pretty safe

 
 
  Mark Davis   10/22/20,  12:24:09 PM
Long @ 1104.14, raise stop to 1104.14
Go short immediately if stopped out
We really need to take out the 11:33 swing high (1105.33) on this next attempt for the "rally" to have any creedence at all

 
 
  Jeff Bailey   10/22/20,  12:23:55 PM
CNBC's James Cramer .... saying based on eBay's Link multiple, GOOG $175 Link is going to $250.

Jeff Bailey thinking TASR $42 Link "looks cheap" and going to $60.

 
 
  Linda Piazza   10/22/20,  12:19:54 PM
The OEX heads up now to test the mid-channel resistance on its 7-minute chart. Here's the deal, though: the Keltner charts look as if they're trying to settle into an equilibrium position. If they do, the OEX might zig a little here and zag a little there, in a one-point range that oscillates within a flattening channel about three points wide (528.40-531.60 as I type). If we absolutely knew for certain that was going to happen, we could scalp points back and forth, but we don't know that's what's going to happen, and a trader employing that tactic would have to be awfully good at picking the top and bottom to eke out any gains on OEX options if the OEX trades in a three-point range. By the time you pay the spreads (or part of them) and commissions, you won't have much left.

That's just what appears possible right now. If that does happen, though, Keltner channels are not going to give reliable signals. Support and resistance lines will concentrate on the outside of the three-point-wide channel and in the middle. What looks like strong support or resistance in the middle won't be, and the OEX will just move easily across it. In other words, trades could be choppy until there's a true breakout.

 
 
  Jonathan Levinson   10/22/20,  12:15:38 PM
In light of the oversold short cycle oscillators, bears need to be attentive for a move above QQQ 36.38 that lasts for 5 minutes or clears 36.44 right away- either of those conditions should be sufficient to kick off a new short cycle upphase.

 
 
  Linda Piazza   10/22/20,  12:12:48 PM
The OEX will likely close this week below both the 200-weekly ema and 200-weekly sma, with those averages at 542.39 and 536.91, respectively. It's up for grabs, however, as to whether it will also close the week below the weekly Keltner channels' mid-channel level, with that at 531.99.

 
 
  Mark Davis   10/22/20,  12:11:44 PM
SOX back above 400, TRIN is .88 and we just took out the last swing high, currently printing 1104.90. It's too early to break out the party hats but things are slowly improving.

 
 
  Jeff Bailey   10/22/20,  12:11:22 PM
Pfizer (PFE) $28.09 -1.23% ....

 
 
  Jeff Bailey   10/22/20,  12:08:44 PM
Taser Intl. (TASR) $42.14 +4.74% .... moves into "zone of resistance" from $42.10-$42.18.

 
 
  Jonathan Levinson   10/22/20,  12:06:57 PM
Bonds have recovered their losses, with TNX now up just .6 bps at 4.001%. Gold is up 50 cents at 416.10, while HUI and XAU are mixed around unchanged. Nymex crude is printing a session high here at 55.425.

 
 
  Mark Davis   10/22/20,  12:06:37 PM
TRIN has dropped to .90. If we can take out the last swing high @ 1104.60 I think the long play has a good chance.

 
 
  James Brown   10/22/20,  12:06:31 PM
Ask Jeeves (ASKJ) is painting a huge bearish engulfing candlestick (a possible one-day reversal) with today's 6.3% decline.

 
 
  James Brown   10/22/20,  12:05:17 PM
Yahoo! (YHOO) hit another new four-year high this morning before slipping back under the $36 level.

 
 
  Linda Piazza   10/22/20,  12:04:12 PM
The TRAN has come back down to test the mid-channel level. (See chart linked to my 11:37 post.)

 
 
  Jeff Bailey   10/22/20,  12:04:05 PM
Overstock.com (OSTK) $54.55 +16.7% .... ugh! just didn't buy enough time. Trades 80.9% of my 38.2% "fitted" retracement here.

 
 
  James Brown   10/22/20,  12:03:52 PM
Ouch! Broadcom (BRCM), which had been poised to breakout over resistance at $31 yesterday is now down 12.2% to $26.75 and falling through the bottom of its recent trading range after last night's warning.

 
 
  James Brown   10/22/20,  12:02:56 PM
Uh-oh MMM appears to be rolling over with a failed rally at new resistance-old support in the $78 region.

 
 
  Jeff Bailey   10/22/20,  12:02:24 PM
United Tech (UTX) $91.00 -0.04% ... Britian-based Kidde, which provides fire and safety products, systems and services for industries related to UTX's aerospace, commercial markets, defense and consumer markets rejected UTX's $2.3 billion takeover offer, saying the bid undervalues the company. UTX currently owns a 2.6% stake in Kidde.

 
 
  James Brown   10/22/20,  12:01:21 PM
American Italian Pasta (PLB) is breaking out over resistance at the $28.00 level and challenging its simple 100-dma as I type this.

 
 
  James Brown   10/22/20,  11:58:44 AM
Amazon.com (AMZN) is down 11.2% to $35.04. This would complete the upward slanted Head & Shoulders pattern built over the last three months.

 
 
  James Brown   10/22/20,  11:57:22 AM
I'm a little bit surprised that Legg Mason (LM) is not seeing any profit taking after yesterday's huge breakout.

 
 
  Mark Davis   10/22/20,  11:57:22 AM
Long @ 1104.14, raise stop to 1103.64
Go short again immediately if stopped out.

 
 
  James Brown   10/22/20,  11:55:51 AM
The TDS put play is moving further into our initial profit target zone. If you've not exited already be prepared to exit.

 
 
  Linda Piazza   10/22/20,  11:50:26 AM
The OEX has been pausing over the last few minutes at the 19.1% retracement of the steep decline off Tuesday's high. These retracement levels have been important in trading behavior since the rise off Wednesday's low.

 
 
  Jonathan Levinson   10/22/20,  11:46:58 AM
QQQ bounced from a low of 36.21, currently retesting 36.28 from below. The short cycles are oversold, which sets up a good argument for 36.18-.22 to hold as support. But the 30 min and now 60 min cycled downphases, launching from their bearish-divergent setups, do not. If that support breaks, then the bears will be in business for a run to test yesterday's 36.10 support level, below which we target 35.93 support.

 
 
  Mark Davis   10/22/20,  11:37:26 AM
Close out short play and go long now...
Short @ 1108.63, exited @ 1104.14, +4.49
Now long @ 1104.14, stop 1103.14

 
 
  Linda Piazza   10/22/20,  11:37:20 AM
The TRAN is at 3417.10, having dropped all the way to mid-channel Keltner support. That support is also near the confirmation level of its double-top formation, with that confirmation level at 3406.69. I would expect a bounce attempt from 3400-3414, with that last being the mid-channel level, but if not, the TRAN may head down toward 3380-3390, with the lowest of those being the downside target from the double-top formation. Link

 
 
  Mark Davis   10/22/20,  11:32:09 AM
Conservative traders can take +5 on the short from 1108.63 if they wish... your decision.

 
 
  Mark Davis   10/22/20,  11:30:25 AM
The only thing that is making me nervous about the short play is the neutral TRIN, which is not supporting a large decline. Next support areas for SPX are 1102.50, then 1100. There is no rule that says the markets can't decline with a neutral TRIN but it makes it less likely IMO. Now if the TRIN suddenly spikes up that is a different story.

 
 
  Linda Piazza   10/22/20,  11:29:47 AM
I guess the OEX decided to get it over with and head on down to test that 528.50 Keltner support. (See my 10:26 post.) Only now, that support has dropped to 528.40. Below that is the rising trendline off Wednesday's low, crossing now at about 527.50. Those already in bearish trades should have profit protecting plans in pace from now down to Wednesday's low. I wish the OEX had given us a new entry point today, but it didn't, and it could stop its descent anywhere near here and just zigzag around the rest of the day, so it hasn't been appropriate to suggest new bearish trades just above important support. Much may depend on the DOW, now again approaching 9800, and the SPX, approaching historical S/R and the 200-ema, with that average at 1101.03.

 
 
  Jonathan Levinson   10/22/20,  11:22:10 AM
QQQ is testing 36.28 support here and breaking it as I type. 36.44 was never regained, and we're 3 cents away from the start of confluence to 36.18. 30 min channel support is descending, currently 36.12.

 
 
  Mark Davis   10/22/20,  11:21:55 AM
Sharp downturn... Nice call from Keene on the futures side

 
 
  Jeff Bailey   10/22/20,  11:18:18 AM
11:00 Internals at this Link

 
 
  Linda Piazza   10/22/20,  11:17:05 AM
The OEX creeps up as slowly as it crept down, doesn't it?

 
 
  Mark Davis   10/22/20,  11:16:55 AM
GOOG new HOD @ 174.17

 
 
  Jeff Bailey   10/22/20,  11:12:25 AM
Marsh McLennan (MMC) $26.25 +5.63% .... some rumors circulating that company is trying to settle with New York Attorney General.

Eliot Spitzer has said in the past the he is not looking to settle, but prosecute.

Time will tell.

 
 
  Linda Piazza   10/22/20,  11:11:54 AM
Keltner resistance appears strongest near 530.50-530.60 on the OEX's chart, but there are other resistance lines gathered between the current OEX level and that one.

 
 
  Jeff Bailey   10/22/20,  11:03:51 AM
11:00 Market Watch at this Link

 
 
  Jeff Bailey   10/22/20,  10:55:30 AM
Weyerhaouser (WY) $62.16 +1.66% Link ... traded as high as $63.58 after reporting quarterly EPS of $1.62, which was 20-cents above consensus.

Intl. Paper (IP) $39.29 +0.56% Link .... quarterly earnings due out on Oct. 26 before the market opens. Consensus is for $0.46 per share.

 
 
  Mark Davis   10/22/20,  10:53:50 AM
Short @ 1108.63, lower stop to 1105.63
Go long immediately if stopped out

 
 
  Linda Piazza   10/22/20,  10:51:10 AM
Daily chart of the TRAN: Link

 
 
  Jonathan Levinson   10/22/20,  10:46:08 AM
QQQ is now testing 36.35 from below, with the short cycle oscillators approaching oversold territory and a bearish-divergent 30 min cycle downphase kicking off. Unless bears can plow back above 36.44 quickly, there's a good likelihood of a break below 36.18-.22 on this run.

 
 
  Jeff Bailey   10/22/20,  10:43:40 AM
Swing trade add to call position alert .... Buy 2 more of the Semiconductor HOLDRs Jan. $32.50 calls (SMH-AZ) at the offer of $1.55.

SMH $31.40 -1.59% here. SOX.X 401.39 -1.85% here. (as benchmarks)

 
 
  Linda Piazza   10/22/20,  10:39:53 AM
Crazy day, isn't it?

If already in an OEX bearish play from a downturn below the 50% retracement off Tuesday's high to Wednesday's low, you're doing okay, but far from out of the woods. The OEX is turning down just where it should turn down. The effort being made to hold up indices is evident in the slow creep down, and VXO keeps getting knocked back when it climbs, too. TRIN just treads water. You know I have a sell-the-rallies outlook right now, but this slow market worries me. You know the truism about dull markets.

 
 
  Jeff Bailey   10/22/20,  10:34:24 AM
Hartford Financial (HIG) $55.22 +1.75% .... Law firm Shepher, Finkelman, Miller & Shah, LLC files Securities Class Action on behalf of stock purchasers alleging company failed to disclose 1) concealed illegal contingent commissions agreements it entered into with other insurance companies, 2) bid rigging.

Class action is for those purchasers of the stock from November 5, 2003 through October 13, 2004.

 
 
  Mark Davis   10/22/20,  10:31:32 AM
Linda you can use the old joke "I just washed my hands and I can't do a THING with them." Meanwhile get well soon.

 
 
  Linda Piazza   10/22/20,  10:28:15 AM
I want to apologize for the typos in my posts over the last few days. I'm working sick, and my fingers just aren't cooperating with what my mind wants to say. Or maybe it's my mind going? Laughing.

 
 
  Linda Piazza   10/22/20,  10:26:12 AM
Based on Keltner evidence, OEX 528.50 looks possible, and 526 may be, too. I don't see the TRIN rising to support that Keltner evidence, however, and the OEX currently tests the 529.60-ish support, so a drop is a far from definite. I wouldn't be surprised to see a bounce from 529.40-529.60 up to retest 530-530.60.

 
 
  Jonathan Levinson   10/22/20,  10:22:17 AM
We have a 3rd test of 36.35 since yesterday afternoon- look for resistance now at 36.44, which, if it holds, will set up a descending triangle this morning. A downside break of 36.35 will be very likely if 36.44 doesn't get broken.

 
 
  Jeff Bailey   10/22/20,  10:19:02 AM
10:00 Internals at this Link

Yesterday's internals at this Link

 
 
  Mark Davis   10/22/20,  10:18:08 AM
SOX new lows...

 
 
  Jeff Bailey   10/22/20,  10:09:59 AM
TRIN 1.27 +9.48% ... Alert .... In last night's Index Trader wrap, I forgot to tell traders that I did not take into account that wild upside tick at 6.58 that took place yesterday morning. I used intra-day highs and lows.

If using that upside reading today's Pivot Levels would be -2.12, -0.48, Pivot =2.59 4.24, 7.32.

 
 
  Mark Davis   10/22/20,  10:07:05 AM
We have a little bullhorn wedge on the SPX 1-min chart since the opening bell which appears about to break to the downside

 
 
  Jonathan Levinson   10/22/20,  10:06:16 AM
Next test is 36.38 QQQ, followed by 36.28 and 36.18-.22.

 
 
  Linda Piazza   10/22/20,  10:05:13 AM
Here's the SOX with respect to its daily 100/130-ema's: Link Perhaps these averages could be used as one benchmark of trading, particularly as the 100-ema has proven itself to be resistance and the 130-ema coincides roughly with that best-fit rising trendline.

 
 
  Jeff Bailey   10/22/20,  10:04:09 AM
10:00 Market Watch at this Link

 
 
  Jonathan Levinson   10/22/20,  10:03:48 AM
Nymex crude +.4 at 54.875 here.

 
 
  Jonathan Levinson   10/22/20,  10:02:05 AM
QQQ chart update at this Link . Note the slight bullish Macd divergence, also on the short cycle TRIX. A break above 36.60 should confirm them and give bulls a short at the premarket high. A failure below 36.60 will target 36.44 support again.

 
 
  Linda Piazza   10/22/20,  10:00:12 AM
Now we'll get the bounce?

 
 
  Mark Davis   10/22/20,  9:58:09 AM
I had to take GOOG out of my trading window... I was watching the individual trades fly by for fun but it was making me dizzy.

 
 
  Linda Piazza   10/22/20,  9:57:02 AM
Careful, OEX bulls and bears. Keltner support may be failing, but this may be a stop-running test to see if dips will be bought.

 
 
  Jonathan Levinson   10/22/20,  9:56:33 AM
The Fed has announced a small weekend repo of 2B against the 8.5B expiring, for a large net drain of 6.5B for the day.

 
 
  Jeff Bailey   10/22/20,  9:56:09 AM
Swing trade bullish call alert .... taking 2 Morgan Stanley April $50 calls (MWD-DJ) at the offer of $3.00. Initial target $56.60.

MWD $49.06 +0.71% here Link

 
 
  Mark Davis   10/22/20,  9:54:58 AM
This is the weirdest open I've seen for quite a while... an immediate fistfight with no clear favorite, although the bear seems to be slowly gaining the advantage. SOX @ LOD

 
 
  Jeff Bailey   10/22/20,  9:54:04 AM
200-day SMA alert ... Broker/Dealer Index (XBD.X) 130.72 +0.5%

 
 
  Linda Piazza   10/22/20,  9:52:26 AM
Okay, so what if you're already in a bearish OEX play, perhaps from a downturn below the 50% retracement off Tuesday's high? What do you do? You keep an account-appropriate stop set above your entry level. Right now, there's little evidence to give direction, even very short-term direction. The OEX clings to Keltner support, but "cling" is the operative word. What if you're already in a bullish play, based perhaps on yesterday's bounce from a higher low? Same thing. I'm not in favor of bullish plays right now for any but adept scalpers because I think there's a possibility of a rollover from below 532.50 or from 533.50-535.

 
 
  Jeff Bailey   10/22/20,  9:52:06 AM
TRIN 1.44 +23.2% ...

 
 
  Jeff Bailey   10/22/20,  9:51:38 AM
VIX.X 14.41 -0.89% .... DAILY Pivot levels as follows .... 13.75, 14.12, Piv= 14.66, 15.04, 15.57.

 
 
  Mark Davis   10/22/20,  9:51:34 AM
TRIN up to 1.30

 
 
  Linda Piazza   10/22/20,  9:49:15 AM
The TRAN finally did climb to a high exactly equal to yesterday's high: 3435.43. It's now a few points below that, with five-minute MACD flat-lined.

 
 
  Mark Davis   10/22/20,  9:43:48 AM
Short @ 1108.63, raise stop to 1108.63
Let's give this a little room

 
 
  Jonathan Levinson   10/22/20,  9:40:49 AM
We have short cycle rollovers here as QQQ bangs out new lows at 36.50. Support is 36.44, followed by 36.38. The 30 min cycle channel is rolling over, and recall the bearish divergent setup discussed on that last night. Bulls don't want to see QQQ dive from here.

 
 
  Linda Piazza   10/22/20,  9:40:29 AM
The OEX had to pull back again to that Keltner support. That support still looks strong enough to produce a bounce, but evidence is unclear as to whether the OEX can then get past 532.50. If it does, the Keltner chart suggests a push to the next resistance zone from 533.50-535. If that Keltner support, now down to 530.25, fails to hold on a seven-minute closing basis, the Keltners suggest a drop down toward 528.50 and maybe even 526.

 
 
  Linda Piazza   10/22/20,  9:37:59 AM
The TRAN can't move above yesterday's double-top level on the five-minute chart. It did drop toward 3420--actually a little below it--but immediately sprang higher again. Bulls and bears in transportation stocks can't decide where they want to take them this morning.

 
 
  Mark Davis   10/22/20,  9:34:14 AM
Short @ 1108.63, lower stop to 1107.50
Go long immediately if stopped out

 
 
  Linda Piazza   10/22/20,  9:33:48 AM
OEX began bouncing as I typed, but it's tepid so far. Watch the 532-532.50 zone.

 
 
  Linda Piazza   10/22/20,  9:33:14 AM
The OEX approaches Keltner support at 530.40 or so. It was this support from which I expected a bounce attempt this morning. I know Jane warns us not to pay undue attention to TRIN at the first five-minute candle, but that's sure higher than I expected it. Maybe it will do a swan dive like yesterday's?

 
 
  Jonathan Levinson   10/22/20,  9:33:02 AM
Gold is back to flat at 425.60, with HUI and XAU in fractional positive territory. Bonds have recovered slightly but are still red.

 
 
  Jonathan Levinson   10/22/20,  9:30:40 AM
QQQ ticks negative at the cash open. The short cycle upturn is still up for grabs.

 
 
  Linda Piazza   10/22/20,  9:30:32 AM
As noted in my 22:47 post last night, I expect a bounce this morning unless the OEX should gap below 530, something that appears unlikely. I'll be watching 532.40 or so, but if the OEX gets past that, then it may bump up toward 534-535. I'm still considering bounces to be countertrend ones.

 
 
  Jonathan Levinson   10/22/20,  9:30:00 AM
IB just reported a stray tick to 154.43 for GOOG, with price returning immediately to the 171 level.

 
 
  Jonathan Levinson   10/22/20,  9:25:02 AM
QQQ failed at yesterday's high but is still holding the lion's share of its gains.

 
 
  Jim Brown   10/22/20,  9:23:47 AM
I know somebody that shorted 20,000 shares of GOOG last night. I can't even imagine the pain.

 
 
  Jonathan Levinson   10/22/20,  9:15:18 AM
It's a cliche: don't short cult stocks. I'm taking a moment of silence for GOOG shorts this morning (+14.46% at 170.98 here). Link

 
 
  Jonathan Levinson   10/22/20,  8:43:32 AM
Session highs across the board, with QQQ now up 12 cents at 36.73. 30 min channel resistance is up to 36.88. If this move holds past the cash open, then we'll have a new, early short cycle upphase kicking off. This will take the first piece out of the 30 minute cycle bearish divergence setup discussed in last night's futures wrap for NQ.

 
 
  Jonathan Levinson   10/22/20,  8:20:42 AM
Ten year notes remain weak at the cash open, TNX +3.2 bps at 4.029%.

 
 
  Jonathan Levinson   10/22/20,  7:59:22 AM
There are no major economic reports scheduled for today.

 
 
  Jonathan Levinson   10/22/20,  7:56:49 AM
Equities are lower, ES 1106.75, NQ 1475, YM 9858 and QQQ -.02 to 36.59. Gold is down 1 to 424.6, silver -.064 to 7.25, ZN bonds -.17 to 113.4062 and Nymex crude +.275 to 54.75.

 
 
  Tab Gilles   10/22/20,  7:25:21 AM
I'm still not sure on which direction the SPX will go. Biased to an upward move as a likely direction. I'd turn bearish on a close under 1100, bullish over 1140. Keep an eye on the tech as a sector (semis specifically) and market leader on a breakout move. Since the bullish divergence on the daily chart(Aug/Sept), the SMH is near a breakpoint. We may get a range bound market and any large move up or down might not occur until post election. But it seems that some bets are being made early perhaps. Link

 
 
  Linda Piazza   10/22/20,  7:10:08 AM
Good morning. With China's long-awaited and feared GDP showing a moderation of growth but not the hard landing some had feared, some Asian and European commodity-related stocks rebounded. Semi-related stocks built on the gains in the SOX yesterday. Asian markets mostly gained, but disappointment in Ericsson's outlook and other factors make trading tentative in Europe. U.S. futures flat-lined. As of 6:58 EST, Nymex crude was up $0.19 to $54.66. More detail about Asian and European markets follows in succeeding paragraphs.

With the SOX posting strong gains in Thursday's U.S. trading, the tech-heavy Japanese bourses climbed in early trading. The Nikkei gapped 60 points higher, also helped by speculation that Advantest's earnings would be better than expected. A newspaper speculated that Hitachi and Toshiba will report improving profits and increasing sales of some products. The bourse has been driven lower lately at least partly by fears that China's GDP number would show a significant slowdown, and perhaps there was also some early short-covering ahead of that number.

When that number was released at 11:00 Japan time, China's GDP had risen 9.1% this quarter, lower than the previous quarter's 9.6%, but slightly higher than the consensus 8.9%. That was termed the slowest growth in a year. Although some market watchers still puzzle over the implications of the number, some deemed it to be good news since it suggested that the government's attempts to produce a soft landing were working, slowing the economy but not crashing it. The GDP rose 9.5% year over year for the first nine months of the year. The CPI was up 4.1% in that same period, year-over-year. China's industrial production increased 17% in the first nine months of the year, the government reported. Car production dropped, however.

After the release of that number, commodity-related stocks rose, especially steelmakers such as Nippon Steel and JFE Holdings. The Nikkei closed the day near its open, up 67.90 points or 0.63%, at 10,857.13. It spent the afternoon trying to climb above 10,900, but not succeeding.

With semi-related issues mostly gaining in the region, most other Asian markets climbed, with a few exceptions. The Taiwan Weighted was one of those exceptions, dropping 0.39%. South Korea's Kospi gained 0.92%, but Singapore's Straits Times, another of those exceptions, declined 0.11%. Hong Kong's Hang Seng gained 0.12%, and China's Shanghai Composite climbed 1.44%.

Currently, many European bourses trade tentatively, a few points either side of the flat-line level. In the U.K., the British Office of National Statistics estimated that Q3's GDP grew 0.4%, below expectations for 0.5% growth. Oil majors and miners gained in the U.K. European markets also eyed that Chinese GDP number, perhaps not completely cheered by the evidence of a slowdown. In addition, Swedish telecom equipment maker Ericsson warned that 2005 would see only moderate underlying mobile network market growth. Its pre-tax profit beat expectations, but orders booked decreased with its book-to-bill at 0.91 for the third quarter. Investors drove the stock lower by about 5%, but Nokia and Alcatel rose. Auto manufacturers were mixed, and German retailers were, too, reacting to company-specific news.

As of 6:58, the FTSE 100 had climbed 11.30 points or 0.24%, to 4,628.70. The CAC 40 had dropped 2.06 points or 0.06%, to 3,685.47. The DAX had climbed 3.29 points or 0.08%, to 3,937.35.

 
 
  Linda Piazza   10/21/20,  10:47:14 PM
Coming into Thursday's trading, I expected the day to produce a candle indicative of indecision. The day's candle was a high-wave doji, about as indicative of indecision as it's possible for a candle to be. What next? The day saw a higher low: point for the bulls. The OEX's advance was stopped at the 50% retracement off Tuesday's high, twice: point for the bears. It doesn't appear that the battle is yet over, and a day characterized by H&S's and inverse H&S's, some confirmed and some not, was visual evidence of that ongoing battle. For now, I'm still in a sell-the-rallies mode.

Unless the OEX gaps below 530 tomorrow morning or a company or economic event delivers a devastating blow to market sentiment, I expect a bounce attempt due to Keltner and other evidence. That first rise will tell us much. If OEX 532.40 fails to hold as resistance this time, then the OEX may make a push toward 534-535, and we'll look for evidence of a rollover at that level. If 532 holds, we'll hope to see a bearish TRIN and other evidence that gives traders courage to plunge into a bearish trade during amateur hour, a difficult decision to make.

 
 
  OI Technical Staff   10/21/20,  10:47:04 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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