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  Jeff Bailey   10/25/20,  6:24:29 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jeff Bailey   10/25/20,  5:28:55 PM
Closing Internals at this Link

 
 
  Jeff Bailey   10/25/20,  5:06:25 PM
Marsh McLennan (MMC) $26.50 -1.38% .... jumps to $28.75 on news that New York Attorney General Eliot Spitzer will not pursue criminal charges against the company.

 
 
  Jeff Bailey   10/25/20,  4:21:40 PM
Current OPEN MM Profiles at this Link

Today's activity....

Bought 1 additional TASR Dec. $45 Call (QUR-LI) at the offer of $3.00.

Placed a stop loss order on both (2) of the TASR Dec. $45 Calls (QUR-LI) at $2.00.

Placed an order to SELL 5 PFE Nov. $25 puts (PFE-WE) should they trade the offer of $0.20. (did not get filled)

Still have an open order to sell the 5 SHY Dec. $82 puts (SHY-XD) at $0.60. (going to need a rather quick reversal in oil to get it is my thought)

 
 
  Jeff Bailey   10/25/20,  4:07:04 PM
Taser Intl. (TASR) $43.28 +7.23% ... updated bar chart with our fitted retracement at this Link

Was worth another 1/2 position with a stop as MACD above signal and close above the $42.10-$42.17 zone.

Short interest was at a record 16.8 million on Sept. 15. Days to cover also a record at 2.08 based on average daily volume of 8.1 million shares.

 
 
  Linda Piazza   10/25/20,  3:55:59 PM
I believe the Nikkei broke below this symmetrical triangle last night. Link This charting source won't update the Nikkei's daily chart until our markets close today, too, so today's close wasn't shown, but its 10,659.15 close was below the lower trendline.

 
 
  Jeff Bailey   10/25/20,  3:47:26 PM
Swing trade round to full alert .... Buy 1 more TASR Dec. $45 call (QUR-LI) at the offer of $3.00.

This is it! And will place a stop of $2.00 on both options. Target remains... $60.00.

TASR $42.92 here.

 
 
  Linda Piazza   10/25/20,  3:46:27 PM
I'm still watching currencies and didn't see a strengthening in the dollar against the yen as our equities tried to move higher. In fact, afterwards, a push higher was immediately slapped back to support. Once again, that makes me somewhat leery of push higher in equities, and I see that the OEX has come right back to retest the neckline of that inverse H&S in the chart linked to my 14:14 post. We may see strength trying to build, but until it gets confirmation from several intermarket relationships, it's difficult to believe too strongly in a possible countertrend move.

 
 
  Linda Piazza   10/25/20,  3:41:07 PM
The OEX has finally pushed above the neckline of that inverse H&S pictured in a graph linked to my 14:14 post.

 
 
  Jonathan Levinson   10/25/20,  3:40:21 PM
Another attempt on 35.80 trying build here. It will take a move above that level to get the 30 min cycle channel in gear higher, while the 60 min channel won't move until 36.00 has been cleared. Another failure at 35.80 will have us looking for a low below 35.50.

 
 
  Linda Piazza   10/25/20,  3:36:27 PM
FWIW, the OEX's daily candle body forms at the 80.9% retracement of the rally off the August low, with that value just under 524.40. The OEX has been adhering fairly well to retracement levels snapped off that rally. Of course, usually if more than 2/3 of a rally is retraced, the whole rally will be, but that doesn't mean it will be in a straight-down manner, and no rule is inviolable. If the OEX could manage to close above that level, it will leave a long tail below it, springing up from 522 support, and it's possible that the bulls could mount a small rally. I'm still skeptical about a sustained climb, but still watching for signs that it could be mounted. One factor I'm watching is the 9-period RSI on the daily chart. It's at signal now. If it should dip below signal on a final drop lower and then move above signal, I'd begin feeling less fearful about nibbling on a long position now and then.

 
 
  Jeff Bailey   10/25/20,  3:32:15 PM
Taser Intl. (TASR) $42.41 +5.10% .... gets active.

 
 
  Linda Piazza   10/25/20,  3:25:41 PM
So far today, the TRAN's daily candle is a long-legged doji, between 3343 possible support and 3400 possible resistance.

 
 
  Linda Piazza   10/25/20,  3:14:40 PM
Something must be about to happen. My chart provider quit delivering charts and that always happens just as some big market movement begins and I really need to see those charts! (This is an exaggeration, although not much of one.) That used to happen to me all the time during the mo-mo days. My online broker would freeze, particularly during declines, and there I'd be, not able to place an order to enter a new position. Forget calling it in.

 
 
  Jeff Bailey   10/25/20,  3:10:22 PM
03:00 Internals at this Link

 
 
  Jeff Bailey   10/25/20,  3:04:23 PM
03:00 Market Watch at this Link

 
 
  Linda Piazza   10/25/20,  3:03:24 PM
The OEX risks negating that inverse H&S forming under its five-minute 100/130-ema's. Without a quick bounce, it perhaps has already done so, although I'd give it a little leeway.

 
 
  Jonathan Levinson   10/25/20,  3:02:05 PM
Thre's a higher low under the currenty decline, and while the short cycles are in a new downphase, this setup looks bullsih to me above 35.50 QQQ.

 
 
  Linda Piazza   10/25/20,  2:58:36 PM
The OEX may be attempting to form an inverse H&S underneath its five-minute 100/130-ema's. These are just signs, over and over today, that bulls are trying to dig in their heels. They're not promises that they can prevail in the tug-of-war going on. A move below 523.40 would negate that potential inverse H&S.

 
 
  Jeff Bailey   10/25/20,  2:55:51 PM
Marsh McLennan (MMC) $26.20 -2.5% .... Action in the Jan. 06 $20 puts (YYM-MD) $1.90 (1,555: 15,193) and most active.

Nov. $30 calls (MMC-KF) $0.50 second-most at (1,536 : 10,867)

 
 
  Linda Piazza   10/25/20,  2:55:10 PM
It's a dreary day here in Dallas, and this market action (or inaction) matches.

 
 
  Jeff Bailey   10/25/20,  2:49:34 PM
Marsh McLennan (MMC) $26.50 -1.08% ... probes morning low.

 
 
  Jonathan Levinson   10/25/20,  2:49:13 PM
The 60 min cycle channel has flattened at what appears to be the bottom of its decline, with the 30 min channel upticking slightly for QQQ. This contrasts with a weak 30 min oscillator upphase in progress for most of today. So far, the bounce attempts appear corrective but with the 60 min cycle this bottomy, a bounce above 35.80 and 36.00 could have room to move. So far, there's no indication that the bounce would be anything but corrective, and a failure from here could see some serious selling to follow because of the weak 30 min cycle upphase so far today. A move above 35.80 or below the session low should provide direction into the close.

 
 
  Linda Piazza   10/25/20,  2:44:07 PM
Caught on the telephone.

 
 
  Jeff Bailey   10/25/20,  2:43:56 PM
Harford Financial (HIG) $55.11 +0.14% ....

 
 
  Jeff Bailey   10/25/20,  2:42:25 PM
S&P Insurance Index (IUX.X) 276.16 +1.32% ... holding gains at WEEKLY Pivot 276.39.

WEEKLY Pivot levels .... 261.79, 267.49, Pivot = 267.93, 282.09, 291.00.

 
 
  Jeff Bailey   10/25/20,  2:39:41 PM
Marsh McLennan (MMC) $27.00 +0.82% .... active (600,000 shares in last 5-minutes) as Wall Street Journal reports resignation of CEO.

 
 
  Linda Piazza   10/25/20,  2:39:24 PM
A reminder: The OEX's five-minute 100/130-ema's are at 524.90 and 525.48, respectively. Jim taught us long ago to watch these particular averages, and they still prove important across different time frames.

 
 
  Linda Piazza   10/25/20,  2:37:36 PM
The dollar is attempting a rebound (countertrend, probably, if you listen to European and other commentators in the wee hours of the night on CNBC Europe) against other currencies. If this should be rejected, we might see the dollar plunge again, as we might see equities do, too.

 
 
  Linda Piazza   10/25/20,  2:34:55 PM
The OEX's pattern on its five-minute chart looks like a potential bull flag forming beneath its five-minute 100/130-ema's. "Looks like" is the operative phrase, however. I think this suggests there's measured accumulation as the OEX drifts lower, but as another writer has already suggested, the rug could get jerked from beneath the feet of those measured-accumulation buyers and everything could tank. This is tentative so far. As you know, I'm not one to suggest that OEX options traders plunge into countertrend plays, and, for now, that's what I consider long positions to be. Be careful if you're considering one or already in one.

 
 
  Jeff Bailey   10/25/20,  2:34:14 PM
December Unleaded Gasoline futures (hu04z $1.416 -1.69% .... did give a reversing higher point and figure buy signal on Friday at $1.425 (0.005 box size), and today's 3-box reversal lower would have the bullish vertical count to $1.67 fully developed.

First sign of weakness would be trade at $1.33, a double bottom sell signal.

WEEKLY Pivot levels as follows .... $1.291, $1.365, Piv= $1.406 $1.479, $1.521.

 
 
  Jonathan Levinson   10/25/20,  2:28:32 PM
Short cycle upphase stalled and starting to roll over for QQQ here.

 
 
  Linda Piazza   10/25/20,  2:21:48 PM
The TRAN zoomed higher after rejecting its H&S on its five-minute chart, but couldn't quite manage a retest of 3400. Over the last hour, it's drifted down to retest its five-minute 100/130-ema's, at 3318.23 and 3384.00, respectively. It may be rolling over beneath those averages as I type, however, currently at 3377.95. Be aware, however, that Nymex closes in a few minutes, and that sometimes produces bounces in the TRAN. This could be a stop-running measure ahead of that bounce.

In fact, be wary of everything. I think markets are still in a sorting-out process, and it could go either way for equities.

 
 
  Jonathan Levinson   10/25/20,  2:18:43 PM
The wavelet oscillator is in a downside trending move that's threatening the weak short cycle upphase. A move below 35.60 for longer than 5 minutes should start a new short cycle downphase.

 
 
  Linda Piazza   10/25/20,  2:14:40 PM
The OEX's five-minute consolidation pattern morphs from one pattern into another, but here's an inverse H&S, complete with bullish price/MACD divergence as the head was formed. Link

 
 
  Linda Piazza   10/25/20,  2:04:37 PM
Cup-and-handle formation on the OEX? These are often continuation patterns, but this one is a bottoming one, if it's valid. It would require a move above 525 for confirmation.

 
 
  Jeff Bailey   10/25/20,  2:04:18 PM
02:00 Internals at this Link

 
 
  Linda Piazza   10/25/20,  2:01:53 PM
I'm not saying much because there's not much to be said at this time, and I don't want some micro-managing comment I might make to persuade someone to enter a trade that might not be beneficial, going one direction or the other. I'm watching two markets--equity indices and currencies--and both are showing the same indecision. Until something changes, we're just in suspended animation. Guard your profits, if you have them, and don't leap one direction or the other unless your trading style and account can suffer through whipsaws. Some signs point to a resolution to this stalemate soon, however.

 
 
  Jonathan Levinson   10/25/20,  2:00:21 PM
Session low for 10-yr bonds at 113.875 for the ZN contract. TNX is down 1.4 bps at 3.97%. This is surprising weakness given the Fed's large 9B overnight repo today.

 
 
  Jeff Bailey   10/25/20,  1:57:11 PM
01:55 Market Watch at this Link

 
 
  Jonathan Levinson   10/25/20,  1:52:15 PM
A weak short cycle upphase is in progress, within which a wavelet downphase is just reaching oversold territory as I type. A wavelet bottom here would constitute a much higher low, setting up the bulls nicely for a retest of 35.80. If it launches from here, I would expect to see 35.80 crack for the first time today.

 
 
  Linda Piazza   10/25/20,  1:41:33 PM
The OEX is struggling to hold onto its breakout level above the lip of its saucer or rounding-bottom formation.

 
 
  Jonathan Levinson   10/25/20,  1:38:04 PM
7200-tick SMA support is at 35.63. A bounce from any level north of 35.53 would qualify as a right shoulder on the more complex but still valid reverse head and shoulders hypothesis. 35.80 remains the neckline, but now with an upside implied target of 36.11.

 
 
  Linda Piazza   10/25/20,  1:30:09 PM
Although it's tested the neckline over the last hour, the usd/jpy has still not broken above the neckline of its potential inverse H&S: the dollar hasn't gained enough strength against the yen. This makes me the slightest bit skeptical of the current rise in equities, so be on guard. Currency traders don't quite believe in the sustainability of the bounce, perhaps? I'd like to see confirmation by a break about that neckline.

 
 
  Jonathan Levinson   10/25/20,  1:29:08 PM
QQQ took a fast run at 35.80 and stopped dead on the line. Bears need to see a fall back below 35.65 in a hurry to avoid the 30 min cycle channel's turning up.

 
 
  Linda Piazza   10/25/20,  1:26:25 PM
The TRAN thoroughly rejected the H&S on its five-minute chart.

 
 
  Linda Piazza   10/25/20,  1:25:20 PM
The OEX rises to challenge its five-minute 100/130-ema's at 525.13 and 525.81, respectively. The last time these were tested was about 12:30 Friday afternoon, with that test resulting in the swift falling away to the low that culminated this morning's decline.

 
 
  Linda Piazza   10/25/20,  1:18:19 PM
The OEX has cleared the lip of a rounding bottom or saucer formation on its five-minute chart. The upside target is about 526.45, although it can be difficult to determine the exact location of the lip of these formations, and so the exact upside target. If that breakout level is maintained and if that target is met, that tells us something about the short-term strength of the bulls. If it's not, it tells us something else, but for now, we've had two minor signs that bulls are at least attempting a bounce, this confirmation and the three-minute close above a Keltner line that had been stopping the OEX since about midday Friday.

 
 
  Jonathan Levinson   10/25/20,  1:13:20 PM
QQQ's taking another run at 35.80, with more vigor than any of its previous attempts today.

 
 
  Linda Piazza   10/25/20,  1:08:53 PM
For the first time since midday Friday, the OEX has had a three-minute close above the Keltner line currently at 522.96. I wouldn't take this as a sign that the OEX is going to zoom higher, exactly, but it's a first and minor sign that bulls are trying to mount some kind of bounce attempt.

 
 
  Jeff Bailey   10/25/20,  1:05:36 PM
01:00 Internals at this Link

 
 
  Linda Piazza   10/25/20,  1:02:55 PM
The TRAN has risen off the day's low, but now may be forming a H&S on its five-minute chart. The day's high was 3378.88, so a move above that would negate the potential pattern, although watch out for the five-minute 100/130-ema's at 3380.66 and 3384.29. The neckline is at about 3358.

 
 
  Jeff Bailey   10/25/20,  12:54:05 PM
12:50 Market Watch at this Link

 
 
  Linda Piazza   10/25/20,  12:52:35 PM
The OEX tests the descending trendline that's been topping advances this morning, with that trendline currently at about 522.85. This isn't a big formation at the bottom of the day's decline, so doesn't set a high upside target. Still, we can watch it to let us know when the selling may have abated just a bit, perhaps only while traders go to lunch.

 
 
  Linda Piazza   10/25/20,  12:47:58 PM
The usd/jpy is testing the neckline of its inverse H&S on its 15-minute chart. If the dollar can show some strength here, it's possible that U.S. equities can, too, but if the dollar instead retreats again either into a second right shoulder or in a rejection of the formation, it's possible that U.S. equities will also retreat.

 
 
  Jane Fox   10/25/20,  12:47:01 PM
Dateline WSJ - WASHINGTON -- William H. Rehnquist, a conservative who is the second-oldest man ever to be chief justice of the U.S., has been hospitalized with thyroid cancer.

The 80-year-old Judge Rehnquist spent the weekend in Bethesda Naval Hospital in suburban Maryland, and underwent a tracheotomy on Saturday, the Supreme Court said today in a statement.

The Supreme Court is not meeting this week, and Judge Rehnquist is expected back on the bench when the court returns to work next Monday.

 
 
  Linda Piazza   10/25/20,  12:38:05 PM
Another OEX test of the day's low, another transformation of the potential formation at the bottom of the steep descent: it now looks more like a bearish right triangle than anything else, with a potential downside target of about 520 if the OEX maintains values below 522. It's all conjecture at this point, however. We can see the ongoing struggle in the bunched up candles on the five-minute chart and in the way the formation keeps morphing from one thing to another. We knew going into today that OEX 522 might be difficult support to puncture, so we could be prepared with a plan to handle that support, with that plan varying according to one's entry, pain threshold (both mental and financial), and trading style. For example, as I mentioned as a possibility this morning, if you entered near the open when options prices were inflated, you may be sitting here with the market having headed your direction, but with options prices leaking value. Unless you're the buy-and-hold type, you might need to base decisions not only on the OEX's value but on the value of those options, so that if they lose your targeted amount due to erosion of premium, you would opt out.

 
 
  Jeff Bailey   10/25/20,  12:37:33 PM
December Crude Oil futures (cl04z) $54.95 -0.39% (30-min delayed) .... well off session low of $54.20.

10-year yield ($TNX.X) donw 3.1 bp at 3.953%

SPX.X 1,091.57 -0.38% ....

 
 
  Jeff Bailey   10/25/20,  12:36:01 PM
StemCells Inc. (STEM) $3.77 +39.2% ... can't find any news today to explain stock's rise. Mentioned last week after California Governor Schwarzenegger endorsed a measure that calls for the establishment of a $3 billion bond offering to fund research.

 
 
  Jonathan Levinson   10/25/20,  12:34:00 PM
Nymex crude is ticking green here, up .075 to 55.25.

 
 
  James Brown   10/25/20,  12:26:15 PM
Remember that our initial target in the PGR call play is the $90 level. Shares are currently up another 1.33% to $89.94. If you want to try and let the stock run I suggest tightening your stop loss instead of exiting.

 
 
  Jeff Bailey   10/25/20,  12:25:33 PM
Genentech (DNA) $44.46 -7.02% .... SG Cowen out this morning with its monthly tracking survey of 27 U.S. oncologists, which suggested that Genentech's Avastin is maturing as well as Imclone's (IMCL) $46.69 -5.35% and Bristol Myer's (BMY) $22.95 -1.83% Erbitux

SG Cowen lowered it Avastin sales for 2005-2009 to $1.04b, $1.3b, $1.44b, $1.55b and $1.65b.

Erbitux 2005-2009 sales estimates reduced to $500mm, $610mm, $745mm, $900mm and $1.0b.

 
 
  Jonathan Levinson   10/25/20,  12:24:51 PM
Look for channel support at 35.35-.37 on this break.

 
 
  Jeff Bailey   10/25/20,  12:21:53 PM
Biotechnology Index (BTK.X) 482.66 -1.63% ... sector loser with DNA $44.57 -6.79%, PDLI $17.27 -3.35%, BIIB $55.37 -2.48% and GENZ $49.92 -2.25% pacing decline.
 
 
  Jonathan Levinson   10/25/20,  12:21:31 PM
Amazingly, the 30 min NQ has been in an oscillator upphase all morning that the cycle channels haven't been reflecting. If this is the upphase, then the downphase could be a real doozy. On the other hand, it's more likely that the 60 min downphase has been dominant, in which case we should see some strength begin to assert itself over the next 2 hours. The 600 min stochastic on the 60 min chart is has just reached the bottom of its range. Again, for QQQ, we'll need to see a break above 35.80. A move above 36.00 would confirm a new 60 min cycle upphase.

 
 
  Jeff Bailey   10/25/20,  12:19:29 PM
12:00 Internals at this Link

 
 
  Linda Piazza   10/25/20,  12:17:51 PM
Small inverse H&S trying to build on the OEX's one-minute chart, neckline at the former ascending trendline off this morning's early low. Upside target near the top descending trendline off today's candles.

 
 
  Linda Piazza   10/25/20,  12:11:40 PM
Lower low on the OEX, but only minimally and we're seeing bullish price/MACD divergence on the one-minute chart. Now seeing an immediate test of the former supporting trendline off this morning's first low. Was that move a fake-out move showing a breakdown out of that symmetrical triangle at the bottom of today's decline? We should soon see, because at about 523.20, the OEX will be testing the descending top trendline of that symmetrical triangle.

 
 
  Jonathan Levinson   10/25/20,  12:03:14 PM
We now have triple bottom support for QQQ at 35.51-.53, but with that pattern of lower highs that suggests a declining triangle over the past hour and a half. The 30 min channel has flattened, which is potentially bullish, but the bottom line is that the range hasn't changed- 35.51-35.80.

 
 
  Jeff Bailey   10/25/20,  12:02:28 PM
12:00 Market Watch at this Link

 
 
  Linda Piazza   10/25/20,  12:01:42 PM
I've been meaning to mention all day that those who don't read both sides of the Monitor, but only the Options side, temporarily switch over and read Marc's commentary in his 23:17 post on the Futures side. He mentioned the impact that a decision to stop adding to the Strategic Reserve or even begin releasing crude from that reserve (which perhaps I remember being done recently?) might have on crude prices and thus behavior of the equities, if such a decision should be made.

 
 
  Linda Piazza   10/25/20,  11:58:10 AM
The OEX broke below the ascending trendline off this morning's low, best seen on the three-minute chart. It's broken below right into potential strong Keltner support, however, and it's still trying to hold above that previous low of the day. A real battle going on.

 
 
  Jonathan Levinson   10/25/20,  11:52:10 AM
Session high for GOOG at 181.33 just now, +5.15%.

 
 
  Linda Piazza   10/25/20,  11:47:35 AM
I always presumed that if only we could be standing in the pits trading, we'd have a better feel for how markets were going or likely to go. We'd be able to watch the brokers on the top tiers, seeing how the big girls and boys, the paper, were thinking. Maybe not. I'm reading a book by Cari Lynn, and here's what she had to say about what she learned when studying the different hand signals in preparation for her time in the pits. And then there are the fake-out signals where a trader works out a secret code with his clerk--like, if I rub my chin after a large order, it means this order is bogus, it's just for show, just to throw people. Or if I start scratching my nose before an order, it means to do the opposite--so if I'm saying buy, it really means sell. If all goes according to plan, these teasers can mean that everyone who's following the leader will push the Market exactly the way you want it to go, while you're raking in the profits. Lynn's book focuses on the experiences of women in the pits, so wouldn't be one interesting to all our readers, but it's a fascinating look into how things really work for someone who has never visited the Merc, much less clerked or traded there.

 
 
  Jeff Bailey   10/25/20,  11:47:00 AM
10-year yield ($TNX.X) down 2.7 bp at 3.957% and sitting right on MONTHLY S1.

May take oil below its WEEKLY Pivot to bring any selling to the benchmark bond.

SPX.X 1,093.53 -0.2% ....

 
 
  Jeff Bailey   10/25/20,  11:43:40 AM
December Crude Oil futures (cl04z) $54.42 -1.17% (30-min delayed) ... updated 30-minute interval chart with near-term trend and this week's pivot levels. Link

 
 
  Jonathan Levinson   10/25/20,  11:43:35 AM
A large buy program has strengthened what is now a double bottom for QQQ at the lows of the day. Buy bots love these intraday double bottoms, but bulls need to get above 35.80 resistance before it becomes significant. A short cycle upphase has yet to form, despite short cycle bullish divergences popping up. Again, below 35.80, these divergences only ease the oversold extreme, and could just as easily work in the bears' favor. 35.53-35.80 remains the operative range.

 
 
  Linda Piazza   10/25/20,  11:38:23 AM
If you turn to an OEX 3-minute chart, you can make out a miniature symmetrical triangle now--yet another transformation of the pattern at the bottom of the OEX's decline. This is typical behavior. The three-minute chart shows a possibility that the OEX will break through to the upside, and perhaps rise up to test the 525 level. First, however, the OEX has to produce three-minute closes above the Keltner line currently at 522.65, something it hasn't been able to do since about 12:48 Friday afternoon.

 
 
  Linda Piazza   10/25/20,  11:27:07 AM
No new lower low yet on the OEX as bulls try to mount a bounce. The earlier potential bear flag has now morphed into a possible "b" distribution pattern. As Mark has pointed out amply with regard to the SPX and "b" patterns on the daily chart, these sometimes break to the upside instead of to the downside. We just have to wait out this test and see what happens, painful as that may be. Having a plan in mind before this level is even tested is meant to make this period less painful. You have your plan: you know what you're going to do.

 
 
  Jonathan Levinson   10/25/20,  11:20:53 AM
Nymex crude trading 54.55, -.625 or 1.13%.

 
 
  Linda Piazza   10/25/20,  11:15:44 AM
The OEX valiantly tries to hold above its previous low.

 
 
  Jonathan Levinson   10/25/20,  11:12:33 AM
A bearish engulfing candle is testing the former low at 35.53 here.

 
 
  Linda Piazza   10/25/20,  11:11:45 AM
Will the OEX have to give a double-bottom formation a try on the five-minute chart before it can get that bear flag started? That's a possibility. It's testing the bear-flag support as I type, being pressured between Keltner resistance and the rising trendline off today's low. It's forming a small neutral triangle at the bottom of today's decline, perhaps indicating that the break will be to the downside and that there's at least a double-bottom test in store.

 
 
  Jonathan Levinson   10/25/20,  11:10:32 AM
The reverse h&s below 35.80 QQQ is still play, though the right shoulder is starting to look extended. Look for a directional break either below 35.53 or above 35.80, confirmed with a surge in volume on the break.

 
 
  Jeff Bailey   10/25/20,  11:08:11 AM
11:00 Internals at this Link

 
 
  Jeff Bailey   10/25/20,  11:02:15 AM
10:55 Market Watch at this Link

TXU $60.25 +14.08% higher after upping 2004/2005 outlook, authorizing 50 million share buyback, increasing quarterly dividend to $0.5625 per share.

 
 
  Linda Piazza   10/25/20,  11:01:00 AM
I've been advising that those in bearish plays have profit-protecting plans in place for a test of 522, and we got that test this morning, so you've hopefully already made up your mind as to how you were going to handle a potential bounce from this level. The OEX looks to be attempting a bear flag rise off this morning's 522.01 low. A 38.2% retracement of the steep decline from Thursday's last five- and fifteen-minute high lies at just over 526. Seven-minute mid-Keltner resistance is above that, at 527.91, but it's still cycling lower, and should continue to do so, so that it might be nearer 526 by the time it's tested. It depends on the pattern the OEX takes. We'll take another look at how Keltners line up as that level is approached, but for now, it looks as if we can at least hope for a well-formed bear flag, so that we can watch its behavior for a guideline into market activity. We can watch for a breakdown out of that bear flag, for example, or for a climb above the appropriate 50% retracement of the climb that immediately preceded it, indicating that something else may be going on. For now, it's not quite as well formed as we would like, but keep watching.

 
 
  Linda Piazza   10/25/20,  10:53:24 AM
As expected if the euro/usd is forming a H&S on its 15-minute chart and if the usd/jpy is forming an inverse one, the dollar has temporarily weakened, allowing those right shoulders to form. We should have a steadying now as the shoulders form, and then, perhaps after a number of hours, we should see whether those formations are going to be confirmed (indicating a countertrend bounce in the dollar, allowing perhaps for some relieving of pressure on U.S. equities) or are going to be rejected, showing a further weakening in the dollar.

I'm far from an expert in these matters, and there are times when we want to see a strong dollar and other times when it benefits our exporters for the dollar to be a bit weaker. From what I can inexpertly glean from listening to/reading commentary from global economy watchers, though, those economies whose currencies are rising are better able to deal with the rise in crude costs, so right now, a weak dollar hurts the U.S.

 
 
  Jonathan Levinson   10/25/20,  10:52:38 AM
A move below 35.54 will invalidate the potential reverse h&s pattern.

 
 
  Jonathan Levinson   10/25/20,  10:50:31 AM
Careful, bears: there's a higher low trying to form despite the series of sell programs over the past 20 minutes. A higher low here will make 35.80 QQQ resistance look like a reverse head and shoulders neckline on the intraday, projecting a move to 36.07 on a neckline break.

 
 
  Jonathan Levinson   10/25/20,  10:48:32 AM
Existing home sales surprised to the upside at 6.75M, vs. exp. 6.54M.

 
 
  Jeff Bailey   10/25/20,  10:47:42 AM
Swing trade sell covered put alert .... Will stick an offer out there to sell 5 Pfizer Nov. $25 puts (PFEWE) for $0.20 per contract.

PFE $27.58 here, options are $0.15 x $0.20.

 
 
  Linda Piazza   10/25/20,  10:39:51 AM
I haven't mentioned the TRAN today. It dipped below 3350, but then sprang up again and is at 3366.88 as I type. It has not violated the support of this bearish rising wedge: Link

 
 
  Linda Piazza   10/25/20,  10:29:08 AM
It's difficult to determine the exact neckline of the continuation-form H&S that the OEX formed on the 60-minute chart, as that neckline was rather ragged, but it may be crossing now at just over 526. That level is also the 38.2% retracement of the steep decline off Thursday's last 15-minute high. It might be reasonable then to prepare for a possible retest of that level, but that presumes that the decline is temporarily over and that the OEX will retrace even 38.2% in a potential distribution pattern. If the OEX is weaker, it might not even retrace that much. If you draw a line instead under the 10/14 and 10/20 lows, the trendline crosses much lower, at about 524.75, near 15-minute Keltner resistance. If the OEX remains weak, I'd think it possible it might find resistance at that lower level enough to stop it.

By the way, about 10 minutes ago, the euro/usd broke down out of a neutral triangle it had been forming on the one-minute chart, hinting that over the very short term (emphasis on "very"), the dollar may be attempting to claw its way to a position of more strength against other currencies. The dollar doesn't look strong--I'm merely referring to a brief corrective action but one that might let up some pressure on our equities enough to allow them their own corrective and probably countertrend bounce.

 
 
  Jonathan Levinson   10/25/20,  10:22:10 AM
QQQ testing its previous high from a lower low. Currently having trouble 3 cents below the last wavelet top of 35.78.

 
 
  Jeff Bailey   10/25/20,  10:17:40 AM
Current OPEN MM Profiles at this Link

 
 
  Jonathan Levinson   10/25/20,  10:13:43 AM
Session high for R2K futures here. QQQ is taking another run at 35.80 resistance.

 
 
  Tab Gilles   10/25/20,  10:12:53 AM
On Friday, I stated on the 10/22/2004 7:25:21 am MM post, that I would go bearish if the SPX closed under 1,100. It did and even though we didn't get a H&S pattern as I posted on 10/19/2004 11:45 chart I'm targeting 1090 as the first support level and 1060 as a possible retest of the August lows. Link

On another index the $RUT, back on 10/8/2004 10:08 I posted this chart. Link

 
 
  Jeff Bailey   10/25/20,  10:10:47 AM
10:00 Internals at this Link

Friday's internals at this Link

 
 
  Jonathan Levinson   10/25/20,  10:10:23 AM
The Fed has just replaced 2B expiring with 9B in new overnight repos for a big net add of 7B.

 
 
  Linda Piazza   10/25/20,  10:08:58 AM
The OEX is now at potential 60-minute and daily Keltner support. Either there's going to be a big slide, or else the OEX should attempt to steady between here and the August low. If the OEX were to test that August low, but then spring back above 521.67 on a closing basis today, then it will not have violated that Keltner support on the daily chart.

 
 
  Linda Piazza   10/25/20,  10:06:17 AM
OEX 522, here we come. Have those profit-protecting plans in place if in a bearish positions, although it certainly doesn't feel like a day in which any profit-protecting plan is needed, though, does it? Still, better to have a plan for how you'll deal with a certain level and not need that plan than to be surprised by a sudden bounce, seemingly out of nowhere. I'd structure that plan so that it allows you to participate in further drops, if they occur, so perhaps it might include tightening stops as the OEX moves lower, selling partial positions at certain levels, etc.

 
 
  Jeff Bailey   10/25/20,  10:04:02 AM
Sell Program Premium ... SPX 1,090.44 , QQQ $35.56

 
 
  Jonathan Levinson   10/25/20,  10:03:07 AM
I think the 1093.75 on 30 minute chart in your SUNDAY FUTURES WRAP just became RESISTANCE 5 minutes ago.

Good eye, James. The general rule is that support becomes resistance when violated (and vice versa). A tight range that eventually gets violated becomes a confluence zone, stronger support/resistance. 1087.75 is a major confluence zone, and the bounce at 1088 is the first confirmation on this latest round of tests.

 
 
  Jeff Bailey   10/25/20,  10:01:53 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   10/25/20,  9:55:49 AM
As the OEX creates a breakdown signal on one time-interval's chart, I dial up to the next to establish a potential downside target. The OEX is now testing the 522.67 lower Keltner support on its 30-minute chart. A thirty-minute close beneath that Keltner line would next have me looking at the 521.70 lower Keltner support on the 60-minute chart, a target that looks as if it might be met by the time I finish typing this post, if I don't hurry.

 
 
  Jonathan Levinson   10/25/20,  9:55:46 AM
New lows for QQQ at former channel support of 35.58. The speed of the drop is causing a slight bullish divergence, but below 35.80, it's just noise.

 
 
  Jonathan Levinson   10/25/20,  9:52:22 AM
30 min channel support has declined to 35.52 QQQ. A short cycle upphase nearly kicked off there but failed as price retreated from 35.80 resistance.

 
 
  Tab Gilles   10/25/20,  9:51:44 AM
Large gap up on the VXN Link and on the VIX Link . Fear is creeping in.

 
 
  Jeff Bailey   10/25/20,  9:49:49 AM
VIX.X 16.16 +5.75% .... DAILY Pivot levels as follows .... 13.93, 14.66, Piv = 15.03 , 15.76, 16.13.

 
 
  Jonathan Levinson   10/25/20,  9:46:57 AM
Bonds have eased off a bit, TNX -2.5 bps at 3.959%, while gold is holding its gains, +4.5 at 430.10, HUI +2.86% at 237.15 and XAU +2.58% at 105.

 
 
  Linda Piazza   10/25/20,  9:46:37 AM
We've been accustomed to watching crude costs lately for a judge of how our markets are doing, but perhaps today we should keep a watch on currencies, too. The dollar has been diving against other currencies--quite amazing to watch yesterday afternoon. As our U.S. markets open, the dollar shows signs that it's trying to mount a corrective action, however, whether or not that effort will be successful. For example, the euro/usd pair shows a potential for a H&S on its 15-minute chart. A bearish action in the euro/usd would mean that the usd was strengthening against the euro. The usd/jpy shows the potential for an inverse H&S. A rise in the usd/jpy means that the usd would be gaining strength against the yen. There are two instances, then, when we're shown that the usd may be trying to undergo some short-term strengthening as corrective actions against last night's weakness. Neither of these formations yet has a right shoulder, much less a confirmation, and the consensus is that the U.S.'s deficit means that the usd could continue to weaken, but we should perhaps watch the dollar this morning. If it should strengthen, even in a corrective action, that might give our bourses a bit of an uplift, enough to mount its own countertrend bounce. Just an opinion, and a far from expert one.

 
 
  Jeff Bailey   10/25/20,  9:45:08 AM
Semiconductor Index (SOX.X) 401.41 +1.58% .... Smith Barney upgraded several names in group saying several companies look well positioned for gains as inventory issues abate and that group historically outperforms in periods of stabilization like that invisioned for 2005.

Upgraded to "buy" from "hold" are TXN, ALTR, IDTI, FSL, ADI, FCS, IRF, MCRL and NSM.

Upgraded to "hold" from "sell" are STM, TSMC, UMC, ASE, SPIL and STTS.

 
 
  Jonathan Levinson   10/25/20,  9:40:53 AM
The declining 30 min channel for QQQ is moderating its slope a bit, with support down at 35.58. This is far from a buy signal. It will take a move above 35.80 for longer than 5 minutes to stabilize the channel, and above 35.90 there's a chance of an upphase starting.

 
 
  Linda Piazza   10/25/20,  9:38:36 AM
The OEX now touches 15-minute lower Keltner support. It does sometimes violate this support and create a breakout signal, but as you can imagine, this support is stronger than the five-minute and seven-minute, and less frequently violated. On a bounce, look for first resistance near 524.60, but the OEX may not bounce just yet. Despite hitting that Keltner support, it may just plunge toward 522.

 
 
  Linda Piazza   10/25/20,  9:32:16 AM
The OEX opens and moves below Friday's low. Any current bears or new bears need to have profit-protecting plans in place for a test of 524, and then particularly if 522 should be approached.

 
 
  Mark Davis   10/25/20,  9:25:45 AM
Good morning and goodbye... Link
... actually it is not a goodbye, only a minor change.
It has become increasingly evident that my trading style is better suited to Futures trading than Options trading so effective immediately I will be swithing over to the Futures Monitor. See you on the other side!
Mark

 
 
  Jonathan Levinson   10/25/20,  9:22:40 AM
QQQ tried to bounce but failed at Friday's low. There's now confluence resistance from 35.75-35.80, followed by 35.90-36.02.

 
 
  Linda Piazza   10/25/20,  8:56:27 AM
When preparing my 20:15 post, I failed to list a breakdown entry for a new bearish play. With futures lower as I type, some might wonder what that breakdown entry might be, but I don't see a good breakdown entry without at least a minimal bounce. I don't see good risk versus reward. A move below the last five-minute low at 524.93 would constitute a break below the potential double-bottom formation trying to set up, and some Keltner charts show a potential slide down to 522-523, and historical S/R extends down closer to 520. However, if that slide is going to happen, I think it's possible it will happen or begin happening near the open. You can jump in bearish with a new trade at the open if the OEX opens below 524.93, during amateur hour when options prices are inflated, and if the OEX does plunge quickly to 520-522, you might profit despite those inflated options prices. But if the OEX opens just below 524.93, slides to 524, another potential support level, steadies there, and then begins a shaky climb, your option is going to be leaking premium. Your choice.

I recognize that it's a difficult choice because some targets (double-top on OEX daily chart) are much lower than 520-522. You don't want to miss that slide if it's going to occur today. However the last swing low on the daily chart was August's 518.67, and if there's any hope of this since-January slide lower being halted, then bulls are going to need to vigorously defend that August low. The Dow has already violated its August low but the broader Nasdaq, SPX, and Wilshire 5000 are far from doing so, and bulls may still have hope. They're going to need to stop the other indices from creating a lower low. I'm not so sure they'll ultimately prevail in creating a higher or equal low, but I am fairly sure there will be at least a tepid attempt to defend that level, and that attempt might start anywhere below the current OEX level, and will probably strengthen at 522 if that's touched.

 
 
  Jonathan Levinson   10/25/20,  8:52:39 AM
December gold is up 5.4 to 431 here, off a high of 432.20.

 
 
  Jonathan Levinson   10/25/20,  8:29:46 AM
Closeup 30-min-delayed view of the continued dollar decline: Link

 
 
  Jonathan Levinson   10/25/20,  7:53:03 AM
Equities are lower, with ES trading 1090.75, NQ 1435 and YM 9707. QQQ is down .178 to 35.622. Gold is up 5 to 430.6, silver is up .136 to 7.471, CDN dollars are up 1.09% to .8182, ten year notes are up .328 to 114.0625, and Nymex crude is down .075 to 55.10.

We await the 10AM release of existing home sales, est. 6.54M.

 
 
  Linda Piazza   10/25/20,  7:17:33 AM
Good morning. Asian bourses traded sharply lower in the overnight session, hit by the impact of a falling dollar, rising crude, and a typhoon in the region. Minus the typhoon, European bourses felt the same ill effects, and are declining in early trading. Our futures have been declining, too, during the overnight session, but trying to climb since shortly after 4:00 EST. As of 7:10 EST, gold was up $4.70 and crude was unchanged. More detail about Asian and European markets follows in succeeding paragraphs.

Feeling the after-shocks of another earthquake, a weakening dollar, and Friday's ugly day in the U.S. markets, the Nikkei gapped 140 points lower Monday morning. It sank almost immediately to its day's low, at 10,575.23, and spent the rest of the day grinding higher and moderating its losses. It closed down 197.98 points or 1.82%, at 10,6959.15.

The earthquake was termed the worst since the Kobe earthquake of 1995. Friday's Chinese GDP showed a slowing rate of growth, but not enough of a slowing to slow down crude prices. It was a perfect storm for Japan. Techs tumbled ahead of their earnings reports this week, but losses were termed broad based. Even oil-related issues tumbled along with other stocks.

Other Asian markets were hit, too, one literally. The Taiwan Weighted was closed due to the typhoon. South Korea's Kospi fell 2.42%, and Singapore's Straits Times declined 0.69%. Hong Kong's Hang Seng tumbled 1.51%, and China's Shanghai Composite declined 1.37%.

Currently, European bourses also show the ill effects of the perfect storm hitting Asian markets, minus the typhoon. This occurs despite a German Ifo Index that surprised slightly to the upside due to an improving expectations component. Some commentators still believe the economy stagnant, however, and one noted that the slight upside surprise was within the range of statistical differences. Ericsson gathered downgrades from Morgan Stanley and Lehman Brothers, sending that stock sharply lower in early European trading.

As of 7:10 EST, the FTSE 100 had declined 56.60 points or 1.23%, to 4,558.80. The CAC 40 had declined 70.78 points or 1.92%, to 3,616.39. The DAX had declined 81.30 points or 2.07%, to 3,853.84.

 
 
  Linda Piazza   10/24/20,  8:15:27 PM
The markets had a bad day Friday. I still think markets are in a sell-the-rallies mode until a trend change has been signaled, but I'm certainly still on the lookout for that trend change. Anyone willing to step in with a long position would have to be a brave soul, but there could be some brave souls out there. For the sake of our markets, I hope that there are. Until then, I'm going to pass up long plays as possible countertrend plays and look for rallies to sell. Monday morning, I see a possibility that the OEX could be turned back at 528-529, based in part on this chart, although also on other evidence: Link The trendline is the ascending trendline off Wednesday's low. It now crosses at an area of known historical S/R and just below strong Keltner resistance. The blue line is the 100-ema and the purple one the 130-ema. The chart shows that these have had some relevance to the OEX's trading pattern. Based on this chart, I'm going to look for/hope for a push up to 528-529 and a rollover from there.

If you study the chart carefully, you see that there's a wrinkle to this plan, however. A couple, actually. At the bottom of that chart, you'll see a left shoulder and head for a potential H&S formation. It's a continuation-form H&S, a form I don't trust as much as topping H&S's, but we can't ignore it. If it's valid, then the OEX may never get above 526, the right shoulder level, before rolling down again. The second wrinkle is the inkling of a different formation with a different connotation. An inverse H&S could be building. If the OEX rises to the red trendline and turns down, but then rounds up from 526.40 into a right shoulder, it may be trying to complete that inverse H&S. Anyone who had entered a new bearish position on a rollover from that trendline might have to risk another test of the trendline. If confirmed, the inverse H&S's upside target would be between 531-532, depending on when the trendline was hit. So, that's the second place we'll look for a rollover if the OEX should confirm that inverse H&S. That means anyone who wants to enter a new bearish play on a rollover near that red trendline has to risk being stopped and seeing the OEX travel up to 531-532.

 
 
  OI Technical Staff   10/24/20,  8:15:19 PM
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