Option Investor
Archive
HAVING TROUBLE PRINTING?
Printer friendly version
  Linda Piazza   10/26/20,  9:12:28 PM
After a day that sees strong gains, it's common to see either a choppy or tight-range day the next day, producing a doji, whether long-legged or short-legged, or other candle typical of indecision. That may be particularly true tomorrow, with both bulls and bears thoroughly confused. The OEX retraced 38.2% of the decline from the October high to the October low, with that number at about 531.75. A 38.2-50% retracement is to be expected, but not quite so quickly or spectacularly. There was nothing bear-flaggish looking about that climb, and it instead completed an approximation of a morning-star reversal pattern: Link

Tomorrow may be a good day to sit out trading while we let bulls and bears battle it out. We'll look for signs of what happens next as the day progresses.

 
 
  Jeff Bailey   10/26/20,  5:43:54 PM
Pivot Matrix for tomorrow at this Link

 
 
  Jim Brown   10/26/20,  4:47:29 PM
MSTR up +7 after earnings

 
 
  Jeff Bailey   10/26/20,  4:30:06 PM
Closing Internals at this Link

 
 
  Jeff Bailey   10/26/20,  4:10:15 PM
Current OPEN MM Profiles at this Link

Today's Activity ....

Day trade short DAL at $4.73, closed at target of $4.50 ($0.23, or +4.86%)

Day trade short TZOO at $71.50, stopped at $72.25 ($-0.75, or -1.05%)

Day trade short TZOO at $70.49, closed at $70.20 ($0.29, or +0.41%)

 
 
  Linda Piazza   10/26/20,  4:06:08 PM
In my hurry to get something posted before the market close, I made a mistake on the annotations on the chart in my 15:50 post. They were to have read "approximation of a morning-star pattern," not "approximation of a double-top formation." That wasn't approximation: it was the real thing, whether or not the downside target is ever met.

 
 
  Jonathan Levinson   10/26/20,  4:00:44 PM
QQQ's finally made it back to the session high at 35.80, lagging seriously behind its peers.

 
 
  James Brown   10/26/20,  3:59:54 PM
Breakdown! Pixar (PIXR) is finally seeing some real profit taking. The stock is down three days in a row after Friday's failed rally at the $82 level. There may be round-number support at $75 but the next level of real support is the $71-72 region.

 
 
  Jeff Bailey   10/26/20,  3:59:48 PM
Bearish day trade close out alert for TZOO $70.20.

Thought this bugger would follow GOOG back lower, more than it did.

 
 
  James Brown   10/26/20,  3:57:23 PM
Bulls may want to give CDWC another look. This looks like an early entry point for a potential move higher. Shares are just now breaking out over its simple 100-dma and the exponential 200-dma as well as the $61.00 level.

 
 
  James Brown   10/26/20,  3:52:54 PM
Those in the APOL put play can thank Piper Jaffray for the downgrade this morning. The firm lowered their price target from $90 to $65. Shares of APOL are down 5.9% to $66.77 hitting a new low for the year.

 
 
  Linda Piazza   10/26/20,  3:50:56 PM
Checking in a last time, I wanted to note the possibility for a choppy trading day, potentially a doji or spinning-top day as the OEX digests the strong gains today and figures out what to do about the strong resistance just overhead. Here's a chart: Link Although I don't have it noted on this chart, the OEX was also facing the midline resistance of its descending regression channel. Note: In my hurry to get something posted before the market close, I made a mistake on the annotations on this chart. They were to have read "approximation of a morning-star pattern," not "approximation of a double-top formation." That wasn't approximation: it was the real thing, whether or not the downside target is ever met.

 
 
  James Brown   10/26/20,  3:46:08 PM
It's interesting to see DELL produce some follow through on yesterday's breakdown under the simple 200-dma.

 
 
  Jeff Bailey   10/26/20,  3:43:08 PM
Google (GOOG) 182.80 -2.4% ... loses morning/session low.

 
 
  Jeff Bailey   10/26/20,  3:42:31 PM
Day trade short alert .... Travelzoo (TZOO) $70.49 here, stop $70.80, target $67.00

 
 
  Jonathan Levinson   10/26/20,  3:41:01 PM
Pretty impressive divergence between the Naz and its peers today. The Nasdaq looks considerably less bullish for a change.

 
 
  Jeff Bailey   10/26/20,  3:40:46 PM
Travelzoo (TZOO) $70.51 +8.35% ... off its afternoon low of $68.67. The bid just evaported from $72.00.

 
 
  Jonathan Levinson   10/26/20,  3:27:40 PM
No pullback below 35.80 for QQQ, which is causing the 30 and 60 min channels to drift higher. Both channels have resistance at 35.90 currently, with support at 35.50 and 35.40 for the 30 and 60 min cycles respectively.

 
 
  Jeff Bailey   10/26/20,  3:11:59 PM
03:00 Internals at this Link

 
 
  Jonathan Levinson   10/26/20,  3:08:27 PM
I'm not feeling particularly bullish on QQQ because of the listless 30/60 min cycle upphase since yesterday, but the pattern of higher lows below 35.80 could constitute a rising triangle this afternoon. Once again, it's just noise below 35.80, but there's a potentially bullish patter shaping up if bulls can return to 35.80 or stay above 35.66.

 
 
  James Brown   10/26/20,  3:07:30 PM
Rick Santelli on CNBC is talking about copper prices. You can see that PD is moving higher again after bouncing from the $80 level. Shares are about to break into the gap from two weeks ago.

 
 
  Jeff Bailey   10/26/20,  3:04:18 PM
Bearish day trade stop alert .... TZOO $72.25

 
 
  Jeff Bailey   10/26/20,  3:03:36 PM
03:00 Market Watch at this Link

 
 
  Jeff Bailey   10/26/20,  2:56:28 PM
Bearish day trade lower stop alert .... for Travelzoo (TZOO) $71.62 +9.99% ....

Lower bearish stop to $72.25.

 
 
  Linda Piazza   10/26/20,  2:54:59 PM
I'm checking in for a few minutes before signing off again. Pretty impressive "V" recovery, isn't that? When I was last posting, I noted that the formation under the 15-minute 100/130-ema's could be a "p" accumulation pattern, and that certainly appears to be what it was. As I examine the intraday charts, I notice a pattern for the climb: a pause under the 5-minute 100/130-ema's, then a spurt higher, a pause under the 15-minute 100/130-ema's, then a spurt higher. Now the OEX pauses at the 30-minute 100/130-ema's at 529.67 and 530.75, respectively.

In addition, the OEX is at an important level for another reason. It's right back at the confirmation level for its double-top formation, with that level at 529.86, and with the OEX currently at 529.99. It's also right back at the midline of its descending regression channel. So was this spectacular gain today just a retest of this confirmation level? It's possible--in July, the OEX halted its descent through the lower half of its descending regression channel and climbed up to the midline again, looking as if it was putting in a higher low. At the midline, it turned back again, however, and fell all the way to the bottom of the channel. However, with today's candle--if prices hold at the current level--producing a good approximation of a morning-star pattern on the daily chart (which it did in July, too, by the way), I would wait for some confirmation before I assumed that a rollover would come soon. We didn't see signs of rollovers at those lower levels passed through today, such as 526.50-528, and now we have to watch carefully for signs of such a rollover. With the OEX only at the midline of the descending regression channel, only retesting broken support, I'm far from certain of the bullish case, either, as spectacular as this climb has been. Trade carefully, and congratulations to all who ignored my concerns about countertrend plays and plunged into long positions today. Have those profit-protecting plans in place!

 
 
  Jonathan Levinson   10/26/20,  2:53:06 PM
A bounce from a higher wavelet low here should be a good springboard for yet another assault on 35.80 QQQ.

 
 
  Jonathan Levinson   10/26/20,  2:46:58 PM
Back and surprised to see the price unchanged from when I stepped away. Another failure at 35.80, with a weak short cycle downphase in progress. 30 min channel support has risen to 35.50, and the 30 min cycle downphase that kicked off this morning has whipsawed to the upside.

 
 
  Jeff Bailey   10/26/20,  2:25:13 PM
I'm locked up on my charts. Have to shut down and reboot. Back in a few minutes.

 
 
  Jeff Bailey   10/26/20,  2:13:10 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   10/26/20,  2:03:11 PM
Travelzoo (TZOO) $71.50 here.

 
 
  Jim Brown   10/26/20,  2:03:01 PM
HLIT just broke out to a five month high. They have been moving up since earnings last week.

 
 
  Jim Brown   10/26/20,  2:00:59 PM
The Nasdaq just can't get above 1920 with the SOX continuing to drop. Oil is holding over 55.00 and the A/D is drifting back down at 934.

 
 
  Jeff Bailey   10/26/20,  1:59:56 PM
Bearish day trade setup alert .... for Travelzoo (TZOO) $70.72 +8.55% ....

Go short on a pop back to $71.50, stop $72.50, target $67.00.

 
 
  James Brown   10/26/20,  1:26:57 PM
There are no options available on First Marblehead (FMD) yet but traders may want to keep an eye on it. The long-term up trend is still very much intact but the action during the last two sessions does not look very bullish as the early morning rallies keep failing.

 
 
  James Brown   10/26/20,  1:24:01 PM
Rent-A-Center (RCII) is turning in a strong day. The company reported earnings this morning that were in-line with estimates. The stock initially traded lower to $22.00 but has since rebounded sharply higher and is now painting a huge bullish engulfing candlestick. These patterns are typically one-day reversal signals. Coincidentally the low today was near its simple 200-week moving average.

 
 
  James Brown   10/26/20,  1:15:29 PM
QCOM is starting to mend its losses here only down 4.5% to $39.28.

 
 
  James Brown   10/26/20,  1:12:30 PM
Level 3 Communications (LVLT) has gapped above its simple 200-dma but is still struggling with resistance at the $4.00 level. LVLT is expected to report earnings tomorrow morning. Estimates are for a loss of 28 cents per share.

 
 
  James Brown   10/26/20,  1:09:18 PM
IBM is ticking higher and nearing resistance at its simple 200-dma (89.70) and round-number resistance at $90.

 
 
  James Brown   10/26/20,  1:08:29 PM
Halliburton (HAL) is up 3.2% to $35.45 after reporting earnings this morning and beating estimates by 6 cents.

 
 
  Jeff Bailey   10/26/20,  1:08:07 PM
01:00 Internals at this Link

 
 
  Jim Brown   10/26/20,  1:08:02 PM
ALERT - IBM announces a $4 billion share buyback along with a new dividend

 
 
  James Brown   10/26/20,  1:05:49 PM
Uh-oh! Has the CME momentum train finally run out of gas? The rally higher has stalled and shares have traded sideways between $162.50 and $175.00 for the last three weeks. Now shares are slipping 4% to $162.25.

The company reported earnings this morning and beat estimates by 5 cents per share.

 
 
  James Brown   10/26/20,  1:03:07 PM
Homebuilders continue to soar! KBH is up 3.19% and breaking out over the $80 level. Its MACD is very close to a new buy signal.

RYL is up 1.7% to $93 but still under resistance at the $95 level.

BZH is up 2.85% to $107.96 and approaching resistance at $110. MACD already in a buy signal.

CTX is up 3.24% and breaking out over the $50.00 mark. MACD is in a new buy signal.

 
 
  Jeff Bailey   10/26/20,  1:02:33 PM
12:58 Market Watch at this Link

 
 
  James Brown   10/26/20,  1:00:19 PM
Electronic Data Systems (EDS) is looking bullish here up 2.8% and nearing resistance at the$20.75 region. The stock looks poised to breakout to new 8-month highs. Earnings are Wednesday, Nov. 3rd.

 
 
  Jim Brown   10/26/20,  12:57:56 PM
I saw one of those at the electronics show I went to in Vegas in August. They would be a bottomless memory card for most of us and at $799 each they cost more than their weight in gold.

 
 
  James Brown   10/26/20,  12:56:10 PM
Wow! SanDisk (SNDK) just introduced a 4-Gigabyte memory stick. This doubles the amount of memory previously available. I'd love to have one of those for my digital camera. They can also be used for digital camcorders, mpeg players and more.

 
 
  James Brown   10/26/20,  12:53:40 PM
Deeply oversold Eli Lilly (LLY) is seeing a bounce today with shares up 2.5% to $51.71.

 
 
  James Brown   10/26/20,  12:52:19 PM
Trimble Navigation (TRMB) is down 8% to its simple 200-dma near $26 after reporting earnings today that beat estimates by 4 cents but guides lower going forward.

 
 
  Jeff Bailey   10/26/20,  12:51:32 PM
Day trade bearish target alert for Delta Air (DAL) $4.50

 
 
  James Brown   10/26/20,  12:50:44 PM
Flextronics (FLEX) is having a rough day. Shares are down 9.17% to $11.39 after reporting earnings last night that were in-line. Several analysts downgraded the stock this morning.

 
 
  Jonathan Levinson   10/26/20,  12:49:15 PM
Stepping away for an appointment for the next hour and a half. Look for a directional breakout either above 35.80 QQQ (confirmed with a surge in volume) or below 35.55 targeting the sesssion low of 35.40. The 30 and 60 min cycles want a downphase more than an upphase from here, and a break below 35.40 should get that ball rolling.

 
 
  James Brown   10/26/20,  12:42:56 PM
Shares of Gannett Co Inc (GCI) are up 1.17% to $81.60 as they bounce from the $80 level on news that the company approved an additional $500 million stock buyback.

 
 
  Jeff Bailey   10/26/20,  12:42:30 PM
Bearish day trade lower stop alert .... for Delta (DAL) to $4.77.

DAL $4.65 here.

 
 
  James Brown   10/26/20,  12:39:48 PM
Today's IPO for Shopping.com (SHOP) seems to be doing well. The stock is up 52 percent on its first day. Shares listed at $18 and are trading north of $28 with 6.87 million shares coming to market.

 
 
  James Brown   10/26/20,  12:37:42 PM
For the stock traders out there...check out MTS Systems (MTSC). The stock has rallied strongly in the last week and has now broken above its simple 200-dma. Today the rally continues and shares are pushing through resistance at the $24 mark. This looks like an inverse H&S pattern. MTSC doesn't have options.

 
 
  Jonathan Levinson   10/26/20,  12:36:49 PM
Volume has slowed considerably with QQQ now above 35.71. Looks like the market's having a tough time making up its mind with 35.80 resistance still unchallenged. A short cycle upphase is in progress within the still-sideways 30 and 60 min cycle channels.

 
 
  Jonathan Levinson   10/26/20,  12:30:29 PM
QQQ couldn't hold above 35.71 support, but the drop is so far weaker than the rise that preceded it, with volume falling off. Look for next support at the 35.65 former-resistance level.

 
 
  Jeff Bailey   10/26/20,  12:29:56 PM
Delta (DAL) $4.73 here.

 
 
  Jeff Bailey   10/26/20,  12:24:01 PM
Day trade short alert ... for Delta Airlines (DAL) $4.73 +25% here, stop $4.87 to begin, target $4.50.

 
 
  Jonathan Levinson   10/26/20,  12:17:34 PM
Now retesting 35.71 from above.

 
 
  Jonathan Levinson   10/26/20,  12:15:46 PM
QQQ passed the second test, trying now for key resistance at 35.80.

 
 
  Jonathan Levinson   10/26/20,  12:13:29 PM
QQQ chewing at 35.71 resistance here, but so far not on breakout volume.

 
 
  Jeff Bailey   10/26/20,  12:12:19 PM
Buy Program Premium .... SPX 1,102.89 , QQQ $35.67, TNX.X 3.97%

 
 
  Jeff Bailey   10/26/20,  12:09:34 PM
12:00 Internals at this Link

 
 
  Jonathan Levinson   10/26/20,  12:02:57 PM
QQQ has broken 1st declining resistance. The next test is at 35.71.

 
 
  Jeff Bailey   10/26/20,  12:02:26 PM
12:00 Market Watch at this Link

 
 
  Jonathan Levinson   10/26/20,  11:54:57 AM
QQQ is bouncing from rising support off today's lows, and it will take a print below 35.51 to break it. Similarly, declining resistnce is at 35.64, with secondary intraday trendline resistance at 35.71. Above that level, the bulls will have to contend with 35.80, but so far, rising support has held for the third time today.

 
 
  Jim Brown   10/26/20,  11:53:48 AM
Speech by Vice Chairman Roger W. Ferguson, Jr.
Factors Influencing Business Investment Link

 
 
  Jonathan Levinson   10/26/20,  11:34:12 AM
QQQ is coiling here, with a pattern of higher lows and lower highs intraday. Volume is falling off accordingly.

 
 
  Jonathan Levinson   10/26/20,  11:28:20 AM
Session lows for CDN dollar and euro futures here, with gold down 3.40 at 426.40. As discussed last night, the USD Index has been trading more or less in tandem with equities lately, and we're seeing that again today.

 
 
  Linda Piazza   10/26/20,  11:23:59 AM
Checking in for an instant, I notice that there's been no follow-through on the potential reversal signal produced by two fifteen-minute candles in a row. The internals weren't lying, and the "p" accumulation theory (see my last post) appears to be more relevant. The OEX is rising to test the 50% retracement off Thursday's last night (527.20) and the fifteen-minute 100/130-ema's (527.29 and 528.14, respectively). This is another point of possible resistance.

 
 
  Jonathan Levinson   10/26/20,  11:17:06 AM
The lower high at 35.73 and the dip that followed have combined to give both the 30 and 60 minute channels a negative slope for QQQ, suggesting that we're seeing the beginning of a 60 minute downphase. There's no way to predict what kind of price traction that downphase will take, and so I remain skeptical above 35.40. A breakout above 35.80 will restore the picture to potentially bullish.

 
 
  Jeff Bailey   10/26/20,  11:05:00 AM
11:00 Internals at this Link

 
 
  Jonathan Levinson   10/26/20,  10:56:36 AM
The failure at 35.73 QQQ was a lower high below the previous attempt, with 35.80 unbroken since its initial downside violation. The 30 min cycle channel never flipped up, and we're right back to yesterday's range. A break of 35.55 or above 35.75 should be directional, but so far, this looks like the stuttering chop within a 30 and 60 minute cycle top. We'll know for sure on either a break above 35.80 or below the current 35.40 low.

 
 
  Jeff Bailey   10/26/20,  10:54:06 AM
10:50 Market Watch at this Link

 
 
  Linda Piazza   10/26/20,  10:48:48 AM
I've been trying to stay through the initial volatility after the CC's release, but have to take off now. I'll be away most of the day, although I'll try to check in now and then if possible. OEX traders can follow Mark's commentary on the Future's side for guidance.

 
 
  Linda Piazza   10/26/20,  10:47:19 AM
The OEX did not confirm the previous 15-minute period's shooting star with a tall bearish red candle, but it has confirmed the indecision and potential reversal in the making with another shooting star candle below the 50% retracement of the decline off Thursday's last high and the 15-minute 100-ema at 527.33. This isn't a good sign for bulls, but may not yet be a definitive one for bears, either. It's looking like a possibility, but internals don't yet support that thesis. If you don't mind being aggressive and setting a tight stop that will take you out if you're wrong, you can consider a small bearish position here, but there's still only possibility and not confirmation. The OEX instead could be building a "p" accumulation pattern preparatory to another move higher.

 
 
  Linda Piazza   10/26/20,  10:34:09 AM
It looks as if the OEX is about to complete a shooting star candle on its 15-minute chart (just did), with that candle at the top of a climb, and with that candle almost touching the 15-minute 100-ema and the 50% retracement off Thursday's last high. First sign of a rollover? Could be, although no internals (TRIN, volatility indices, advdec) support such a conclusion. Confirmation of a rollover would come on a tall red bearish candle this 15-minute period, but you can also watch for confirmation from the SPX, perhaps on a plunge down through 1100 again. Real OEX confirmation would come on a drop below the bear-flag's support. Anyone entering a bearish play on the basis of that shooting star alone would have to be ready to be quickly whipsawed out of the position, as that remains a possibility.

 
 
  Linda Piazza   10/26/20,  10:29:28 AM
The TRAN's participation in the post-CC rally has been tepid. Its appearance so far on the daily chart is of another doji, with the TRAN right back at (or near) its opening level.

 
 
  Jeff Bailey   10/26/20,  10:24:46 AM
Buy Program Premium .... SPX 1,101.61 , QQQ $35.71 ... $TNX.X up 0.3 bp at 3.975%

 
 
  Linda Piazza   10/26/20,  10:23:15 AM
Now watching the 15-minute 100/130-ema's on the OEX, at 527.35 and 528.24, respectively. Bears shouldn't try to catch the top, I don't think, without some evidence backing their decision, as short-term oversold pressure could propel the indices through all kind of resistance, like flimsy items driven through walls by tornado winds.

 
 
  Jeff Bailey   10/26/20,  10:21:46 AM
Buy Program Premium ... SPX 1,100 , QQQ $35.68

 
 
  Jonathan Levinson   10/26/20,  10:21:29 AM
Session high for QQQ at 35.73 here. The 30 min channel is now flat. Resistance is at 35.83-.86, just above the 35.80 price confluence.

 
 
  Linda Piazza   10/26/20,  10:20:14 AM
We got the new OEX high as confirmation of the other short-term bullish signs we were looking for on the OEX. We're now looking for signs of a rollover for new bearish entries, but aware that the awaited rollover may not come today. The 50% retracement of the decline off Thursday's last high is at about 527.20, so bears would like to see this possible bear flag climb break down before then. The ascending trendline off yesterday's low, the potential bear flag's support, is at about 524.55 currently if I've drawn that trendline correctly. Those hoping for a rollover will also want to see the climb maintain the pattern of a bear flag--tight pattern of higher highs and higher lows, giving some leeway to the post-CC tall white candle.

 
 
  Jeff Bailey   10/26/20,  10:17:24 AM
Current OPEN MM Profiles at this Link

 
 
  Jeff Bailey   10/26/20,  10:12:28 AM
10:00 Internals at this Link

Yesterday's Internals at this Link

 
 
  Jonathan Levinson   10/26/20,  10:12:11 AM
The 30 min channel downphase is still in place Link and QQQ has yet to clear 35.60, much less 35.65. A move above 35.65 for 10-15 minutes should reverse the young 30 min cycle downphase.

 
 
  Linda Piazza   10/26/20,  10:10:23 AM
The OEX is back above the five-minute 100/130-ema's, but hasn't yet produced a higher high.

 
 
  Linda Piazza   10/26/20,  10:05:28 AM
The OEX is attempting to retest the five-minute 100/130-ema's at 524.75 and 525.18. This is also near the 525.94-ish 38.2% retracement of the decline off Thursday's last high. Let's see how this test turns out. It can be dangerous to make an assumption based on the first reaction after an announcement.

 
 
  Jeff Bailey   10/26/20,  10:04:22 AM
VIX.X 16.75 +1.02% ... DAILY Pivot levels as follows ... 15.89, 16.22, Pivot = 16.46 16.79, 17.03.

 
 
  Jeff Bailey   10/26/20,  10:02:06 AM
10:00 Market Watch at this Link

 
 
  Jonathan Levinson   10/26/20,  10:01:06 AM
the 30 min cycle channel has begun to descend in a new downphase from a lower price and oscillator low. It will take a sustained move above 35.65 to reverse it.

 
 
  Jim Brown   10/26/20,  10:00:01 AM
Alert - Consumer Confidence = 92.8, (est 94.0, last 96.8)

 
 
  Linda Piazza   10/26/20,  9:59:29 AM
The OEX fell below the five-minute 100/130-ema's again. Is this the rollover? Not quite. It's maintaining an ascending trendline off yesterday's low. Be careful of the initial reaction to the CC number.

 
 
  Jonathan Levinson   10/26/20,  9:59:23 AM
A 6.75B overnight repo gives us a 2.25B net drain for the day from the Fed.

 
 
  Jeff Bailey   10/26/20,  9:57:38 AM
Hartford Financial (HIG) $57.65 +4.47% .... will look for decline back near $56 to close out current put position. Conditional upon any new developments.

 
 
  Jonathan Levinson   10/26/20,  9:56:14 AM
QQQ is now testing yesterday's low from below.

 
 
  Linda Piazza   10/26/20,  9:55:30 AM
Currency traders appear to be betting on a bad CC number. The USD is weakening against both the euro and the yen.

 
 
  Jonathan Levinson   10/26/20,  9:54:48 AM
QQQ is testing 30 min channel support now. If it's going to bounce, it should do so from these levels- to above 35.42.

 
 
  Jeff Bailey   10/26/20,  9:53:46 AM
Insurance .... Marsh McLennan (MMC) $27.55 +4.25% ... brokers largely positive but not seeing upgrades. General tone is change of CEO removes the possibility that company might have had to close doors. JP Morgan saying that while Wall Street applauds changes at the top, would sell into strength as they believe earnings outlook remains negative. Firm maintains 2004 estimates of $3.05 per share and 2005 EPS of $2.05.

Smith Barney maintains "sell" rating at target of $27.00, questioning how profitable new business model will be.

 
 
  Jonathan Levinson   10/26/20,  9:52:24 AM
It could be, Linda, but it's not low enough for me to make that call. A quick deep spike would be a different story- the kind that accompanies a quick bounce in price. That's not present here, making this look to me more like the prelude to a more sustainable decline. The 30 min cycle channel will tell the story.

 
 
  Linda Piazza   10/26/20,  9:50:51 AM
Jonathan, are you thinking that TRIN level is bearish from a contrarian viewpoint?

 
 
  Jonathan Levinson   10/26/20,  9:50:48 AM
Session high for ZN bond futues at 114.02, with TNX currently -1.3 bps at 3.96%.

 
 
  Jonathan Levinson   10/26/20,  9:49:33 AM
30 min channel support is flat at 35.45. If we get a quick spike to that level, it should hold, at least initially. But if prices stays at or below current levels for another 10-15 minutes, the channel will slope downward and a new 30 min channel downphase will kick off.

 
 
  Linda Piazza   10/26/20,  9:49:24 AM
The OEX has moved above its five-minute 100/130-ema's for the first time since early last Friday morning. After dropping below those averages Friday morning, the OEX rose to test them again and then fell from that test straight through to yesterday's low. Therefore, this climb above them shows me another sign of short-term bullish strength. This is coupled with the confirmation of an inverse H&S on the five-minute chart. The upside target of that inverse H&S is about 527.80, although it's difficult to obtain an exact target on that formation because of the way the head was formed, and the OEX would have some tough resistance to get through to meet that target.

Now we can watch the OEX's behavior with respect to those five-minute 100/130-ema's to gauge whether it's showing continued short-term strength or not. They're currently at 524.75 and 525.21, respectively, and the OEX is coming down to retest them now. I'm not convinced to plunge into a countertrend long play today, and I remain watchful of these developments to see whether we might have a rollover attempt. I'd be cautious ahead of the economic announcements due soon, though.

 
 
  Jonathan Levinson   10/26/20,  9:45:38 AM
Session low for QQQ at 35.60 here.

 
 
  Jonathan Levinson   10/26/20,  9:44:29 AM
Session low for R2K futures as QQQ returns to unchanged.

 
 
  Jonathan Levinson   10/26/20,  9:42:53 AM
The Fed has 9B in overnight repos expiring today. We await the 10AM announcement to determine whether there will be a net add or drain for the day.

 
 
  Linda Piazza   10/26/20,  9:41:12 AM
The OEX holds near that descending trendline that forms one version of a confirmed H&S's neckline. It's jammed underneath important Keltner resistance, too, on the seven-minute chart.

 
 
  Mark Davis   10/26/20,  9:38:41 AM
TRIN is printing an incredible .53 so if this is not "too low", i.e. low enough to be considered a contrarian indicator, then it will be very difficult for the market to decline until that number comes up considerably.

 
 
  Linda Piazza   10/26/20,  9:34:12 AM
The OEX opens and climbs straight to the descending trendline depicted in my 22:36 post. This is also near the 525.94-ish level that's the 38.2% retracement of the decline off Thursday's last five-minute high. This is an area in which we expect some resistance. Watching to see if it holds. It it doesn't, watch the 526-527 level next.

 
 
  Jonathan Levinson   10/26/20,  9:33:52 AM
A wavelet upphase is rolling over early for QQQ here. A break below 35.58 should be good for a retest of 30 min channel support at 35.44.

 
 
  Jonathan Levinson   10/26/20,  9:20:09 AM
The 30 min cycle upphase for NQ continues this morning, but QQQ once again failed below 35.80 QQQ. A short cycle upphase is in progress, but we'll need to see how it fares once real volume comes in following the cash open. 35.65 is confluence support, 35.80 key resistance.

 
 
  Tab Gilles   10/26/20,  8:50:58 AM
Is the Dow ready to bounce? It has broken below its August lows, next would be the OEX then SPX. The tech laden NDX and COMP looks ready to sell off. Link Link I still need to see more "fear" in the volatility indices to get more bullish. One week until E-day and a lot can happen in one week.

 
 
  Linda Piazza   10/26/20,  8:34:18 AM
S&P futures are up slightly as I type, so it's possible that the OEX, too, will continue its bear-flag climb into resistance. (See my 22:36 post for a chart.) Earlier, Jonathan reminded all that we'll be seeing October's Consumer Confidence at 10:00. A typical pattern is to park prices under strong resistance or just above strong support ahead of such reports, ready to send markets either way. Be careful about entering positions ahead of that report, remembering that we could see some volatility after its release. Unfortunately, sometimes the primary movement for the day is already well underway by the time that the number is released and it's too late afterwards to enter a position, but if you're risk-averse, it's better to miss a potential play than to jump in on what turns out to be the wrong side ahead of such an announcement.

 
 
  Jonathan Levinson   10/26/20,  7:56:44 AM
Equities are up, with ES trading 1097.75, NQ 1439 at a session high, YM 9773 and QQQ + 7 cents at 35.69. Gold is down 1.80 to a session low of 428, silver -.065 at 7.316, ten year notes +.015 at 113.906 and Nymex crude -.35 to 54.20.

We await consumer confidence at 10AM, est. 94.

 
 
  Linda Piazza   10/26/20,  7:05:21 AM
Good morning. The Nikkei traded either side of the flat-line level all night. Many European bourses steady but trade somewhat timidly, too. Norway avoided a potential shipping strike. The cost of crude eased, bringing relief to market watchers worried about the effects of a shipping strike in an oil-producing company on crude's price. Pitted against that relief was worry about the dollar's weakness. As of 6:58 EST, crude was down $0.34, and gold was down $1.20. Our futures have steadied, too, balanced between relief and worry, trading as timidly as European bourses. More detail follows in succeeding paragraphs.

The Nikkei opened near the flat-line level and oscillated around that level the rest of the day, ending higher by 13.31 points or 0.12%, at 10,672.46. The broader Topix, an index not frequently followed on this page, fell, however. Easing crude prices helped, but automakers declined during that early part of the session, hurt by the yen's strength against the dollar. At least Honda closed lower, too. Citigroup helped the semi-related stocks, however, by raising ratings on fifteen semi-related stocks across the globe. Advantest and NEC Electronics benefited. With many companies reporting or about to report, some companies went up or down according to their earnings or anticipated earnings.

Other Asian bourses turned in mixed performances, with more gaining than declining. Taiwan Semiconductor reported net profit that rose 84.1% from the year-ago level, but investors were troubled by its outlook. Despite being one of the companies mentioned by Citigroup, the earnings report sent the stock down 2.3%. The Taiwan Weighted lost 1.94%. South Korea's Hynix Computer's earnings' report turned that company's early strong gains into a 2.3% loss. Net profit fell 17% quarter-over-quarter. The Kospi gained 0.69%, however. Singapore's Straits Times gained 0.20, and Hong Kong's Hang Seng climbed 0.27%. China's Shanghai Composite gained 1.04%.

European bourses post modest gains or modest losses this morning, with relief about lower crude price in opposition to worries about the weakening dollar. Individual companies react to earnings reports. In the U.K., BP is lower after its earnings report, but insurers have stopped the bleeding from the previous week.

As of 6:58 EST, the FTSE 100 has gained 8.90 points or 0.19%, to trade at 4,573.40. The CAC 40 has gained 4.77 points or 0.13%, to trade at 3,613.83. The DAX had gained 7.09 points or 0.18%, to trade at 3,861.50.

 
 
  Linda Piazza   10/25/20,  10:36:31 PM
Monday, the OEX dropped to the 522-524 support level. Ahead of the market open, in my 8:56 post, I had suggested that those who wanted to enter a new position should be aware of the risks, but could enter on a break below Friday's low, but should have profit-protecting measures in effect as 522 was tested. It wasn't a trade I recommended because it would require entering at the open, I thought--as turned out to be true--and then could result in a period in which the OEX sat at support while option prices eroded. That did happen, and the OEX then bounced back to the entrance level and then drifted down a little again by the close.

That climb, as tepid as it seemed, produced a candle that sprang up from support. The candle body was balanced on the 80.9% retracement of the rally off the August low. It's possible that we could see some follow-through tomorrow morning, perhaps depending on how the Nikkei, the dollar, and crude prices react overnight. The Nikkei broke to the downside below a symmetrical triangle at the top of its climb, but it may attempt a retest of that formation, perhaps producing some kind of candle indicative of indecision. The dollar has been on a steep decline, and may decline further, but it may be time for a countertrend strengthening against other currencies.

I'm not ready for a countertrend long play yet as I haven't yet seen enough signs that such a play is a safe one, but instead will be watching for the possibility that indices will perhaps bounce up to test broken resistance, and will look for rollover potential. Watch the SPX in particular, if it should rise to test 1100-1104, and the SOX, if it should test 400 or 412 again. Here's an OEX chart that may show us one place to watch for a rollover: Link

 
 
  OI Technical Staff   10/25/20,  9:37:06 PM
The Market Monitor has been archived. You may view it and any previous days here: Link

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

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

 
 

Market Monitor Archives