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  OI Technical Staff   11/26/20,  7:15:31 PM

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  Jonathan Levinson   11/26/20,  1:16:09 PM
A downside doji spike printed 39.17 and immediately spiked back to 39.22.

 
 
  Jonathan Levinson   11/26/20,  1:14:27 PM
Session low for QQQ at 39.20 here.

 
 
  Linda Piazza   11/26/20,  12:58:46 PM
H&S confirmed on the OEX's five-minute chart, and about a $0.60 drop since confirmation. If you entered a bearish play this morning near the high on the thought that the OEX might be forming a larger right shoulder for that formation on the 60-minute chart, your position is perhaps profitable after commissions and spreads, but entering later, on the confirmation of the smaller H&S hasn't given enough time to profit on an options play.

What information can we glean, though? The OEX will probably close again below a 50% retracement off the 11/17 high, preserving the possibility that this climb has been a bear-flag climb, but not yet breaking down below the flag. The OEX has failed to confirm a potential inverse H&S (15-minute chart) but did confirm a small one (five-minute chart) and preserve the possibility of rounding over into a right-shoulder for a version on the 60-minute chart. So, today's action leaned toward the bearish without confirming that bearishness just yet.

 
 
  Jonathan Levinson   11/26/20,  12:56:04 PM
QQQ's retesting the 39.30 low, with all of 27.8M shares traded so far. Bonds have sold more aggressively, with TNX up 4.3 bps at 4.238% currently. QQQ needs to break 39.18 to confirm the break of 39.34, but the light volume makes even that a very weak confirmation. Nevertheless, the intraday bias based on the 30 and 60 min cycles remains down.

 
 
  Linda Piazza   11/26/20,  12:49:39 PM
The OEX may still be working on that H&S on its five- and ten-minute charts, perhaps rounding over just on schedule to form a right shoulder--and on the verge of confirming it. Sure isn't going to leave much trading time if this formation confirms. Don't know that I'd jump on an options play in the last few minutes of trading, based on a pattern on a five-minute chart.

 
 
  Linda Piazza   11/26/20,  12:39:59 PM
It won't be surprising today to see a number of small-bodied candles on daily charts of the indices. Barring any big movement in the last few minutes of trading, that's what we'll see on the OEX, SPX, Nasdaq, SOX, GHA, Dow, and even the RLX, the retail index. I'm particularly watching the Nasdaq's action into the close because of the potential for an "almost" double-top formation on that index's daily chart.

 
 
  Jonathan Levinson   11/26/20,  12:38:43 PM
QQQ is pinned to 39.34, and 39.18 looks miles away from here at this rate.

 
 
  Linda Piazza   11/26/20,  12:30:18 PM
The SOX has been retesting the neckline of its confirmed H&S and may now be turning down from that retest. Each move occurs with excruciating slowness, however.

 
 
  Linda Piazza   11/26/20,  12:19:20 PM
Is the OEX now rising into a right shoulder for a H&S formation on its five-minute chart? Perhaps. Bears would want the OEX to find resistance near 564 and roll down again through the neckline, or just roll through it now. Bulls want to see a bounce to a new high to refute the formation. I didn't have much faith coming into the trading day that we'd see action that could be traded (see my 9:18 post), and we haven't seen any so far. That could change if traders decided to follow through on the traditional "sell Friday's close" action that Jim mentioned in an earlier post on the Futures side of the Monitor (12:09 post), but I'm still wary.

 
 
  Linda Piazza   11/26/20,  12:14:32 PM
Once again, the SOX slowed its descent, stopping at first Keltner support. Next Keltner resistance is at 432.21, but stronger resistance is at near 432.60. The SOX has been adhering fairly well to the five-minute Keltner channels I watch. Until a few minutes ago, it was finding support since Wednesday morning at the Keltner level that is now at 432.60, presumably now resistance.

 
 
  Linda Piazza   11/26/20,  12:04:42 PM
The SOX is beginning to move to the downside now. The downside target suggested by the H&S on the five-minute chart is only about 429.56, so not even down to the 200-ema.

 
 
  Jonathan Levinson   11/26/20,  12:03:15 PM
QQQ is just drifting through 39.34 support with a pullback in volume. This move is anything but assertive, and inspires little confidence. A print below 39.18 will confirm it, however.

 
 
  Linda Piazza   11/26/20,  11:57:08 AM
The OEX also now has the potential to form a H&S, but like the SOX's, this one would be at the top of its climb. It probably needs to form some kind of right shoulder, but watch in case the truncated one we have so far is the only one that forms. The neckline is now at about 563.40.

 
 
  Linda Piazza   11/26/20,  11:54:30 AM
The SOX still hasn't gone muc of anywhere after breaking below a couple of short-term formations to the downside, events that should have been bearish.

 
 
  Jonathan Levinson   11/26/20,  11:53:59 AM
Here's the test of 39.34. Once again, volume is very light- just 20M QQQ shares traded with 7 minutes until noon.

 
 
  Jonathan Levinson   11/26/20,  11:52:34 AM
Session low here for QQQ at 39.35, the level of this morning's previous low.

 
 
  Linda Piazza   11/26/20,  11:43:08 AM
Still watching the TRAN. It has turned down below the top of its ascending triangle (five-minute chart) and is now below the midline, too, but it's still trading within that triangle.

 
 
  Linda Piazza   11/26/20,  11:42:10 AM
The SOX has now broken (minimally) below the neckline of the H&S I mentioned earlier this morning, now having broken first below the triangle and now below this formation, too. This should be double confirmation, but the SOX isn't going anywhere yet after dropping below that H&S neckline, and that doesn't feel like strong confirmation of a downside break just yet. Remember to watch the 200-ema if the SOX does decline.

 
 
  Jonathan Levinson   11/26/20,  11:36:59 AM
Stepping away for 10 minutes here.

 
 
  Linda Piazza   11/26/20,  11:36:07 AM
The SOX is breaking below the triangle formation I detailed in my 11:27 post, coming down to test the neckline of an inverse H&S (five-minute chart) that I had mentioned earlier.

 
 
  Jonathan Levinson   11/26/20,  11:31:22 AM
QQQ has short cycle support at 39.38 currently, with a short cycle downphase overdue. Again, the bears need some prints below 39.34 to suggest a 30 min cycle downphase might actually begin.

 
 
  Linda Piazza   11/26/20,  11:29:57 AM
The OEX is turning down again from its test of the (higher) neckline for its inverse H&S, seen on the 15-minute chart. The TRAN also turns down from its test of the top-of-the-channel.

 
 
  Linda Piazza   11/26/20,  11:27:11 AM
The shape of this formation, if it's valid, suggests that the SOX may be driven higher: Link However, the SOX's candles linger longer near the lower, supporting trendline than near the top one, perhaps throwing some doubt on the validity of the expected upside breakout.

If you look closely within that triangle, you can discover the H&S that I mentioned seeing earlier.

 
 
  Linda Piazza   11/26/20,  11:13:03 AM
For those who also like to watch the sometimes-fast-moving TRAN as an indicator of what might happen with other indices, here's a channel I'm watching: Link

 
 
  Linda Piazza   11/26/20,  11:06:16 AM
On a three-minute chart, the OEX just gapped higher, breaking up to the highest of the necklines for its inverse H&S on the 15-minute chart. It's testing it as I type.

 
 
  Jonathan Levinson   11/26/20,  11:05:44 AM
QQQ's just spiked to the upper short cycle channel line at 39.48 on a buy program that almost reached 1M QQQ shares.

 
 
  Linda Piazza   11/26/20,  11:04:43 AM
The SOX turned higher, but has not breached the appropriate right-shoulder level for the potential H&S on its three-minute chart.

 
 
  Linda Piazza   11/26/20,  11:04:03 AM
The TRAN moves higher, too, but at least on the three-minute charts, there's potential for Keltner-style bearish divergence on the TRAN's chart.

 
 
  Linda Piazza   11/26/20,  11:03:27 AM
The GHA is breaking higher again, trying to match the day's high.

 
 
  Linda Piazza   11/26/20,  11:01:07 AM
The SOX now has a nicely formed H&S on its three-minute chart, neckline perhaps at about 432.50. This is a formation that set up within a consolidation zone, however, there was no bearish divergence as the head was formed, and this is a post-Thanksgiving Friday. For all those reasons, I'm not expecting too much from this formation, but watching it anyway as I scan some of the indicator indices to see which of these normally faster-moving indices might break first, and in what direction. A push much above 434 would negate the formation.

 
 
  Linda Piazza   11/26/20,  10:54:28 AM
TRIN tries to trend higher, but isn't making much progress. It's at 0.75 as I type.

 
 
  Linda Piazza   11/26/20,  10:47:01 AM
Nothing much is moving much. The TRAN is about in the middle of its day's range, but I'm watching to see if there's a breakout or breakdown in that index. The OEX is near a confirmation level for a potential inverse H&S but also near the shoulder top for a regular one. The GHA is off its day's high, but still above 300. The SOX, however, is drifting back toward its day's low, and I'm also watching that index to see how it handles the 200-ema at 426.30 if it should continue falling.

 
 
  Jonathan Levinson   11/26/20,  10:41:16 AM
No weakness whatsoever despite the impending 30 min downphase for QQQ. This range could well be the 60 min cycle fighting with the 30, as we've seen so many times in recent weeks, and if so my guess will be for downside starting on Monday when the volume returns. But the bottom line in the meantime is that there's nothing about which to be bearish with QQQ above 39.34.

 
 
  Linda Piazza   11/26/20,  10:28:07 AM
TRIN coils around at the bottom of its range, but off that bottom. The advdec line does the same, but near the top of its range. The VXO is climbing after gapping up this morning. There's no definitive conclusion yet to be determined from this, but I'd certainly keep watching the VXO as a continued climb might not be good for bulls.

 
 
  Linda Piazza   11/26/20,  10:24:29 AM
So far, 15-minute Keltner resistance near 563.90 has held. Strongest support appears to be near 562, but there's other support just below 563.

 
 
  Jonathan Levinson   11/26/20,  10:23:21 AM
It's worth reiterating that volume today is a mere fraction of where we'd normally be by 10:22 AM. QQQ has traded 10.8M shares. My tick chart has finally pumped out the short cycle channels, which have support at 39.34 and resistance at 39.48. A break of either level should be directional.

 
 
  Linda Piazza   11/26/20,  10:12:42 AM
The OEX is now back below both necklines for an inverse H&S, including the "best fit" one.

 
 
  Linda Piazza   11/26/20,  10:11:05 AM
The Nasdaq tried to match its 11/17 igh of 2112.18, but with a day's high of 2108.84, it hasn't done so yet. It's at 2105.40 as I type.

 
 
  Linda Piazza   11/26/20,  10:02:38 AM
The TRAN rose to hit the ascending trendline off the series of higher highs that were produced Wednesday morning. It's pulled back, but not much yet.

 
 
  Linda Piazza   11/26/20,  9:59:57 AM
The OEX is moving between two versions of its neckline for its inverse H&S--above the "best fit" version but below the one that includes all candle tops.

 
 
  Linda Piazza   11/26/20,  9:54:10 AM
The TRIN has been tumbling off its day's high, at 0.76 as I type, having approached Wednesday's 0.61 low before starting to bounce again.

 
 
  Jonathan Levinson   11/26/20,  9:51:37 AM
A 30 min cycle downphase has launched for the NQ futures, and is just on the verge for QQQ. If QQQ gets back below 39.34, that downphase will launch from a bearish divergence- but bears are out of time and cannot tolerate more upside from here without causing the cycle to enter a bullish trending phase.

 
 
  Linda Piazza   11/26/20,  9:50:53 AM
If you ignore the candle shadow from Wednesday's first 15-minute candle when you draw the neckline for the OEX's inverse H&S, drawing a "best fit" neckline instead of one that includes all candle shadows, too, the OEX has pushed just above that neckline. Don't know if it's safe to work with a "best fit" neckline on a light-volume day, however, particularly when the OEX is also at the appropriate right-shoulder level for a regular H&S on the 60-minute chart. On a light-volume day, I just don't think this is the best best on a trade . . . but, of course, the OEX moves higher as I type.

 
 
  Jonathan Levinson   11/26/20,  9:43:24 AM
Volume is light enough to consider this as afterhours trading. QQQ is unchanged from its level 2 hours ago- to the penny. Unfortunately, Quotetracker has erased my Wednesday data, and so it will be approx. 1 hour before I can calculate my tick driven keltner channel levels.

 
 
  Linda Piazza   11/26/20,  9:41:41 AM
There's a potential inverse H&S on the OEX's 15-minute chart, neckline at about 564.33, according to one version, but as Mark said earlier, it's possible to find all kinds of competing bearish or bullish formations, depending on your bias. There's also a larger potential regular H&S on the 60-minute chart with the right-shoulder level just below that 564.33 level, perhaps closer to 563-563.50. Obviously, one or the other will not be completing and meeting the appropriate target. Both have right shoulders that are lengthening so much (time-wise) that they're almost negating the validity of the formations. So, the OEX is perhaps approaching the right shoulder of its larger formation and about to round down into that right shoulder or it's approaching the confirmation level of a smaller inverse H&S and about to head up. Pick your bias and pick your direction.

 
 
  James Brown   11/26/20,  9:40:02 AM
ConocoPhillips (COP) is gapping up above round-number, psychological resistance at the $90.00 level.

 
 
  James Brown   11/26/20,  9:39:25 AM
A Reuters story has more news out on Toys-R-Us' (TOY) plans to sell its toy stores business. The article says there were several buyers interested in just the profitable overseas stores or the 700 U.S. locations, which some said they planned to liquidate in order to reuse the real estate.

TOY is asking that suitors now offer to buy all of its toy stores not just parts.

 
 
  Linda Piazza   11/26/20,  9:37:00 AM
While the TRAN might have bested Wednesday's high, the OEX hasn't. It's dealing with that Keltner resistance I mentioned from 563-563.65, with Wednesday's high of the day at 563.55. The configuration of the Keltner channels doesn't give a strong clue was to whether the OEX can break out to the upside or not.

 
 
  Linda Piazza   11/26/20,  9:34:26 AM
The TRAN is bouncing from its open, climbing toward an ascending trendline that capped each of Wednesday's higher highs. The TRAN produced a lower high, too, about midday on Wednesday, but is now above that level, besting Wednesday's high of the day. That ascending trendline is only about 3 points above the TRAN's current position, so we'll soon see if it holds again.

 
 
  James Brown   11/26/20,  9:33:19 AM
Shares of TASER Intl (TASR) is down 6.3% after a New York Times article quotes a federal study suggesting the stun guns are not that safe.

 
 
  Linda Piazza   11/26/20,  9:32:15 AM
The SOX opens between the 200-ema and the 200-sma, where it's spent the rest of this week.

 
 
  Linda Piazza   11/26/20,  9:31:30 AM
The OEX gaps slightly down and heads toward 562 support. The Keltner channels suggest tht 561.50 could also be support. So far, there's nothing here to warn us of future direction this morning, however.

 
 
  James Brown   11/26/20,  9:30:01 AM
Wow! There is almost zero stock-specific news out this morning. I've never seen the headline volume this low.

 
 
  Linda Piazza   11/26/20,  9:18:51 AM
I'm certain that everyone remembers that we have a shortened trading day today, but for those who have not checked the schedules, the equity markets close at 1:00 EST and bond markets, at 2:00 EST. The bond market might be particularly useful to follow today in light of yesterday's concerns about China's holdings of U.S. Treasuries, concerns since at least partially reputed, detailed in my earlier posts and in those of the other writers, too. Equity traders should pay attention to those of the writers who follow bonds closely. Keep an eye on crude prices, too.

The OEX ended Wednesday about to face Keltner resistance on the seven- and 15-minute charts, with that resistance near 563-563.60, near the 50% retracement of the decline off the 11/17 high. Our expected light volume today can mean that the OEX is nailed down to a certain level all day or that it could chop around in a way that's not particularly amenable to technical analysis, so know what you're risking when you trade today. We'll look at what develops as the market opens, but you can also see my 09:26 post for more input about the OEX.

 
 
  Jonathan Levinson   11/26/20,  8:59:29 AM
Sorry for the delay, Mark- just finishing the premarket update. I don't know which "master of the universe" will step up to the plate to defend the dollar, though like you I expect one to do so soon. All I know is that the enthusiasm of those central bankers to do so has been waning, with the Fed having to monetize increasing amounts of the treasury's debt and the USD's slide against all other currencies now a headline across the globe. I suspect that John Snow's repeated idiocies over the past year and half have something to do with it, as does the displeasure that most people feel at holding a devaluing asset, be they foreign central bankers, foreign business owners or other foreign currency holders.

 
 
  Jonathan Levinson   11/26/20,  8:36:51 AM
The report cited by Jim in his 00:16 has now been repudiated by the source quoted therein, who now claims not to have any knowledge of what the monetary authorities are doing. However, Yu Yongding is a member of the Bank of China's monetary policy committee. In any event, the USD is recovering, with the DX futures back above 82.

 
 
  Jonathan Levinson   11/26/20,  7:54:06 AM
Equities are higher, with ES trading 1182.75, NQ 1587, YM 10527 and QQQ +.08 at 39.41. Gold is down .1 at 449.20, silver flat at 7.615, ten year bonds -.296 at 111.9531. Euros are up .62% to 1.3249, and crude oil is flat at 49.45.

There are no major economic reports scheduled for today.

 
 
  Linda Piazza   11/26/20,  6:52:26 AM
Good morning. It's all about the dollar this morning. Most bourses across the globe weaken along with the dollar, their exporters hurt by the new record weaknesses in the dollar as measured by their currencies. A newspaper reported on a speech given by a member of China's central bank's monetary policy committee, claiming that China had trimmed its holdings of U.S. Treasuries. That report hit the dollar. The official later said his remarks had been misrepresented. China has added to its U.S. Treasury holdings, but those holdings now represent a smaller proportion of all of the central bank's holdings, the member clarified. Our futures have done a lot of zooming around, first climbing, then dropping overnight when other bourses did, and now laboring back into positive territory as this report was prepared. As of 6:40 EST, gold was up $1.40, and crude, up $0.50. More detail about Asian and European markets follows in succeeding paragraphs.

Only our bourses were closed yesterday for Thanksgiving, of course. Thursday, the Nikkei gapped down but climbed through the afternoon, up about 28 points to 10,900.34. Nissan announced that steel shortages would cause it suspend production at several factories for five out of the next fourteen days. Nissan ended lower Thursday, but steel producers climbed. In thin trading, European bourses posted gains Thursday despite a weaker-than-expected Ifo indicator of German business sentiment.

Friday, the Nikkei opened above 10,900, but soon dove below it. It closed down 66.59 points or 0.61%, at 10,833.75. Steel stocks gained again, but exporters dropped due to further weakening Thursday in the dollar against the yen, to record levels not seen in five years, according to one report. Thursday, Nissan had detailed steps it would take to deal with steel shortages, and Toyota Motor followed Friday, noting that it would increase imports from China and South Korea. Carmakers were mixed, and so were banks.

Most other Asian markets declined, with exporters pressured throughout the region by a weakening dollar. The Taiwan Weighted lost 1.31%, and South Korea's Kospi declined 1.65%. Singapore's Straits Times dropped only 0.32%, and Hong Kong's Hang Seng, only 0.23%. China's Shanghai Composite fell 0.12%.

Currently, most European bourses decline, too, hit by the same pressures due to dollar weakness. The dollar's weakness and the supposition that it would continue to show weakness has prompted BMW to decide to build its sports wagon in the U.S., in South Carolina, to minimize the weak dollar's impact on the company's earnings.

As of 6:40 EST, the FTSE 100 was down 23.90 points or 0.50%, to 4,729.50. The CAC 40 had declined 27.16 points or 0.72%, to 3,770.43. The DAX had fallen 17.23 points or 0.41%, to 4,143.12.

 
 
  Linda Piazza   11/25/20,  12:09:26 AM
Wednesday, the OEX climbed, although it never got far from 562.50 and left a small upper shadow. Viewed on a daily chart, the climb off Wednesday's low looks like a possible bear flag climb. So far, when climbing, the OEX has not been able to maintain prices above the 50% retracement of the decline off the 11/17 high into that Wednesday low, with that retracement just under 563.40. So far, then, it still fits the parameters of a potential bear flag. Under normal circumstances, Friday should be make-or-break day concerning that flag, but a post-Thanksgiving Friday will likely be anything but normal. We'll watch for signs Friday morning that the OEX is breaking down below the flag's support, now at about 560, depending on how it's drawn, or for signs that the OEX is breaking out of the flag to the upside.

I'll be in and out on Friday, but will post as frequently as possible

 
 
  OI Technical Staff   11/25/20,  12:09:17 AM
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