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  OI Technical Staff   12/15/20,  11:47:05 PM

Click here for bonus info: Link

 
 
  Jeff Bailey   12/15/20,  7:10:35 PM
Disk Drive Index (DDX.X) 121.14 +1.78% ... NTAP Link looks to have some bears in a bind.

 
 
  Jeff Bailey   12/15/20,  5:16:32 PM
Sector Bell Curve at this Link

11/10 rate hike to yesterday's rate hike. I added my 10-day NH/NL bullish %.

 
 
  Jeff Bailey   12/15/20,  4:31:59 PM
Current OPEN MM Profiles at this Link

Today's activity .....

Day trade short the Semiconductor HOLDRs (SMH) at $33.20, stop $33.40, target $32.85. Carried this one overnight. (see 03:46:47, 03:56:24 and 04:04:23)

 
 
  Jim Brown   12/15/20,  4:26:32 PM
GOOG started with a "neutral" at Bank of America. Initial price target $158 !!!!!!!!

 
 
  Jeff Bailey   12/15/20,  4:19:28 PM
Pulte Home (PHM) $64.99 +8.35% ... Good Gravy!

Research in Motion (RIMM) $82.60 -3.32% ... Lumpy Gravy! Going to need one of those incredible option expiration moves to salvage that one by Friday.

 
 
  Jeff Bailey   12/15/20,  4:04:23 PM
Semiconductor HOLDRs (SMH) $33.34 -0.02% .... I'm going to show current December OI in a second. Market makers might try and go after some Dec. $32.50 call OI and gains.

SMH Option Chain, December open interest observation, but also the Jan. $37.50 call (SMH-AU) action at $0.17. Option chain at this Link

While I interpret today's action as the market maker maybe trying to get an SMH lower, to take out some of the heavier Dec. $32.50 call, that Jan. $37.50 call action makes a short a bit jittery.

 
 
  Linda Piazza   12/15/20,  3:59:47 PM
The OEX will close above the broadening formation on its daily chart.

 
 
  Jeff Bailey   12/15/20,  3:56:24 PM
Bearish day trade carryover alert .... let's carry the Semiconductor HOLDRs (SMH) $33.30 -0.14% short overnight.

Gut feel, based on option action and "Max Pain" theory, as well as Intel (INTC) $23.10 -0.6% a little heavy and above its "Max Pain" is that we might see some weakness tomorrow.

 
 
  Linda Piazza   12/15/20,  3:50:14 PM
Perhaps Jim has mentioned this already, but along with other indices, the Russell 2000 has broken out to a new high again.

 
 
  Jeff Bailey   12/15/20,  3:46:47 PM
Semiconductor HOLDRs (SMH $33.38 +0.08% .... what to do... what to do...

Note that the Dec. $35 puts (SMH-XG) are most active December option today, with average O/H/L/C of $1.66.

Taking $35 - $1.66, I come up with $33.34.

Doesn't make sense to be buying those in the money puts today. Has to be expiration related.

 
 
  Linda Piazza   12/15/20,  3:42:14 PM
Both the Dow and the OEX are breaking above the top trendlines of their broadening formations.

 
 
  Linda Piazza   12/15/20,  3:32:39 PM
Remember the OEX 575.75 upside target from the larger inverse H&S confirmed earlier this week. Protect profits in that area, if the OEX should move that high.

 
 
  Linda Piazza   12/15/20,  3:31:37 PM
After a brief bull flag pullback to retest the top trendline or neckline, the OEX climbs again.

 
 
  Jonathan Levinson   12/15/20,  3:28:41 PM
Updated QQQQ chart at this Link.

 
 
  Jeff Bailey   12/15/20,  3:14:28 PM
03:00 Internals at this Link

 
 
  Linda Piazza   12/15/20,  3:13:56 PM
The OEX is testing the upper trendline for the symmetrical triangle/inverse H&S as I type.

 
 
  Jonathan Levinson   12/15/20,  3:11:42 PM
QQQQ is bouncing from a higher low at 40.18, a bullish development on its own. The 7200-tick SMA resistance line is at 40.32 currently, above which the 30 min channel will flatten. Channel resistance is currently 40.40.

 
 
  Linda Piazza   12/15/20,  3:09:30 PM
The OEX hit the five-minute 100-ema (now at 571.88) and bounced. If you're a bull, you still believe that the OEX might be forming a continuation-form inverse H&S, but you know how little trust I put in those meeting their upside targets. Still, the OEX is bouncing right where it should to form a right shoulder. There's some ambiguity as to the exact neckline, but it looks as if it might be at about 573.35. Note: there was no bullish divergence as the head was formed.

What I believe may be happening is that formation may be resolving into a symmetrical triangle at the top of the OEX's climb (if you cut off a five-minute candle shadow from this morning). Upside boundary is that same 573.35. Downside boundary is currently at about 572.20, but I'd certainly wait until the OEX was through the five-minute 100/130-ema's at 571.90 and 571.57, respectively, before I believed too fully in a downside breakout.

 
 
  Jeff Bailey   12/15/20,  3:04:36 PM
03:00 Market Watch at this Link

 
 
  Jeff Bailey   12/15/20,  2:54:57 PM
Intel (INTC) $23.05 -0.77% ... slips to low of the session. December "Max Pain" theory is $22.50 ($2.50 increments)

 
 
  Linda Piazza   12/15/20,  2:54:51 PM
Two days in a row, the OEX has pierced the upper boundary of its broadening formation, only to pull back and leave only a candle shadow behind. Of course, the OEX could zoom up into the close, but that's what's happened so far. If bulls can't break it out above that formation, they'll eventually bail and let the OEX retrace to a safer place from which to buy.

 
 
  Jeff Bailey   12/15/20,  2:49:49 PM
January Heating Oil (ho05f)
 
 
  Jonathan Levinson   12/15/20,  2:43:25 PM
The 30 minute cycle oscillators still point south for QQQQ, which explains the lower high at 40.45 and suggest that 40.10-.15 will be retested and stands a good chance of breaking. If it does not, that should result in an early abort to the ongoing 30 minute cycle, and would be a very bullish development. The battle at 40.10-.15 will be an important one for bulls and bears alike.

 
 
  Linda Piazza   12/15/20,  2:42:00 PM
Bears did get something going to the downside on the OEX, breaking the OEX below the ascending trendline it was building today and following through on the bearish divergence seen on the Keltner charts.

 
 
  Jeff Bailey   12/15/20,  2:37:45 PM
Day trade short alert ... for the Semiconcutor HOLDRs (SMH) $33.20 here, stop $33.40, target $32.85.

Looks to me like oil and heating oil might close at their highs of the day. I'm not certain that it matters at this point, but just in case it does...

 
 
  Linda Piazza   12/15/20,  2:29:18 PM
I'm seeing Keltner-style bearish divergence on the OEX's 3- and 7-minute charts, but instead of turning down when the MACD rolled down, the OEX traded sideways, so I'm getting mixed messages from those charts. The MACD down-cycle isn't taking the OEX with it. Despite those Keltner-style divergences (having to do with the proximity of certain Keltner lines to each other at swing highs), the OEX might very well bounce if bears don't get the ball rolling to the downside soon.

 
 
  Jonathan Levinson   12/15/20,  2:27:52 PM
This most recent leg down below 40.35 has rolled over the 30 minute cycle channel, support down to 40.19.

 
 
  Jonathan Levinson   12/15/20,  2:25:06 PM
QQQQ is retesting 40.25 support. A drop below will have minor support at 40.22, followed by a retest of 40.15... from a lower prior intraday high.

 
 
  Linda Piazza   12/15/20,  2:25:05 PM
Another pressure on the dollar today was the information on net capital inflows released this morning. October's Net Capital Inflows, announced near 9:00, showed capital flows $48.1 billion, down from September's $67.5 billion. Foreign purchases of net domestic securities fell while foreign purchases of U.S. Treasury notes climbed. Private purchases of U.S. financial assets declined.

 
 
  Jeff Bailey   12/15/20,  2:11:19 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   12/15/20,  2:03:14 PM
02:00 Market Watch at this Link

 
 
  Linda Piazza   12/15/20,  2:02:38 PM
If you're bearish, you see the OEX's pause here as a pause beneath the day's high and at the presumed resistance offered by the former rising trendline off the 12/09 high. You see potential Keltner-style bearish divergence setting up on the seven-minute chart. If you're bullish, you see a potential continuation-form inverse H&S at the top of the climb, with a right shoulder yet to be formed. A break below the day's low confirms a double-top-ish formation on the 15-minute chart and of course negates the potential inverse H&S. I'm not seeing strong support for either belief in the breadth indicators, so youse takes your chances when you take a stance this afternoon. Sure thought we'd get a better directional move than this today.

 
 
  Jonathan Levinson   12/15/20,  2:01:09 PM
QQQQ is breaking lower expanding wedge support now: Link

 
 
  Linda Piazza   12/15/20,  1:39:29 PM
Here's what I see so far on the OEX's chart. I'm a bit distrustful of that strong zoom up a few minutes ago. Link

 
 
  Jonathan Levinson   12/15/20,  1:35:37 PM
QQQQ is finding support at 40.35, former support and a higher low, even within the rising expanding wedge. Bears need to beware if that low holds. Above 40.45, next resistance is 40.50, being the 30 min channel top and the rising resistance line in the chart I posted a few minutes ago. OK, gotta hop.

 
 
  James Brown   12/15/20,  1:30:55 PM
Potential Exit alert! OI call play MDC is up 3.6% following last night's announcement for a 30% stock split (or 13-for-10).

Our short-term target was the $85 region and shares are at $86.45. In our initial play description we suggested that MDC might make it to $90.

 
 
  Jonathan Levinson   12/15/20,  1:29:34 PM
Stepping away for 30 minutes here.

 
 
  James Brown   12/15/20,  1:25:24 PM
Potential exit point alert! OI call play ARLP is up another 1.18% and nearing the $70.00 level. Our initial target was a move into the $70-72.50 range.

 
 
  Jonathan Levinson   12/15/20,  1:25:18 PM
Make that 6.1% for crude oil here, up to a new session high of 44.375.

 
 
  James Brown   12/15/20,  1:23:42 PM
Zebra Technology (ZBRA) is up 2.6% as it breaks out over resistance at its 50-dma and the $55.00 level. The stock has also broken its two-month trend of lower highs. This could be an entry point for a run towards $60.

 
 
  Linda Piazza   12/15/20,  1:23:18 PM
The SOX is still below its 200-sma. There's a potential H&S on the SOX's daily chart with a right shoulder level approximately at/just above the 200-ema. That may be slowing down advances, even if the SOX were to go ahead and negate the formation at some time. This is also near the midline of the ascending regression channel in which it's been climbing, so that's adding its resistance, too. Watch for a potential rollover into a right shoulder or for a push up through the upper half of that rising regression channel.

 
 
  Jonathan Levinson   12/15/20,  1:22:43 PM
QQQQ chart update at this Link.

 
 
  Jeff Bailey   12/15/20,  1:19:11 PM
Exxon/Mobil (XOM $50.65 -0.01% ... challenges session high.

 
 
  Jonathan Levinson   12/15/20,  1:18:42 PM
The bounce ran into resistance at the upper rising bullhorn trendline for QQQQ, but the drop is taking its sweet time. A fall from here will target lower support at 40.30.

 
 
  Linda Piazza   12/15/20,  1:16:39 PM
I knew I didn't trust that rounding-over shape on the OEX. (See my 12:55 post.) The OEX just zoomed up to retest the rising trendline off the 12/09 low, this time from the underside, with the advdec line indicating a buy program doing the pushing. TRIN rose at the same time, but not to a new day's high. Let's see if equities hold their gains after that buy program, perhaps suspect because it came near the stop-running time of day.

 
 
  Jeff Bailey   12/15/20,  1:15:46 PM
Disk Drives (DDX.X) 121.09 +1.72% ... new session high.

 
 
  Jonathan Levinson   12/15/20,  1:12:13 PM
QQQQ is reaching for upper rising expanding wedge resistance at 40.44.

 
 
  Jeff Bailey   12/15/20,  1:11:33 PM
Bear says "gulp"

01:00 Internals at this Link

 
 
  Jeff Bailey   12/15/20,  1:10:58 PM
Buy Program Premium .... SPX 1,203.27 , QQQQ $40.38

 
 
  Linda Piazza   12/15/20,  1:05:22 PM
For those of you not reading both sides of the Monitor, futures writers conduct a great discussion on the pros and cons of various charting platforms.

 
 
  Jeff Bailey   12/15/20,  1:03:54 PM
01:00 Market Watch at this Link

 
 
  Jonathan Levinson   12/15/20,  1:01:30 PM
Session high for Nymex crude here at 44.05, +5.32%.

 
 
  Linda Piazza   12/15/20,  1:00:14 PM
The TRAN still has difficulty with the five-minute 21-ema, an average from which it had been bouncing the last couple of days. That average is near 3750, with the TRAN rising to challenge it again.

 
 
  Jonathan Levinson   12/15/20,  12:57:01 PM
QQQQ updated chart at this Link.

 
 
  Linda Piazza   12/15/20,  12:55:18 PM
The OEX appears to be gently rolling over, taking on a curvy aspect, but there's something about the curve that I don't trust just yet. Perhaps it's the fact that the OEX is finding support at its five-minute 100/130-ema as it curves over. It may yet try for that 572.40-ish upside target. The bottom of the rising regression channel has now risen higher than that, just a little above 573.

 
 
  Jonathan Levinson   12/15/20,  12:54:12 PM
That higher high is making the current flag look more like an expanding wedge. The 30 min cycle oscillators are still declining for QQQQ, and this pattern should break to the downside- a move below 40.25 should kick off the breakdown, while a break above 40.45 would invalidate the bearish interpretation.

 
 
  Jeff Bailey   12/15/20,  12:50:59 PM
Abgenix (ABGX) $9.89 -8% ... gets whacked after yesterday's announcement that it plans to sell about $150 million of convertible notes through a private placement. Will be due in 2011 with the offering to include an option for initial purchasers to buy up to another $26 million principal amount of the debt offering.

 
 
  Jonathan Levinson   12/15/20,  12:46:48 PM
QQQQ failed below 40.40 after breaking 40.35, and is now testing rising short cycle channel support at 40.30. The USD Index broke the rising wedge support on the daily chart discussed in last night's Futures Wrap, with gold, bonds and oil still strong.

 
 
  Jonathan Levinson   12/15/20,  12:32:39 PM
QQQQ 40.25 was defended on the last dip with one of those 1.2M QQQQ share buy programs. 40.35 is cracking now as I type.

 
 
  Linda Piazza   12/15/20,  12:30:20 PM
The TRAN did bounce from its five-minute 100/130-ema's, but now finds resistance at the 21-ema on that chart, an average from which the TRAN had been bouncing since Monday morning.

 
 
  Jonathan Levinson   12/15/20,  12:16:45 PM
QQQQ chart updated at this Link.

 
 
  Linda Piazza   12/15/20,  12:14:28 PM
The OEX is moving up toward the test of the ascending regression channel that it broke out of this morning, with the bottom of that channel now near 572.40. The climb has been more measured than the decline was, suggesting the possibility that the declines might not yet be finished and that the OEX might roll down again, before or near 572.40. I'm still afraid that the OEX might churn for a while now between new resistance and new support until it decides on direction, and the churn in the volatility indices and lack of movement in the TRIN kind of reinforce that worry.

 
 
  Jonathan Levinson   12/15/20,  12:13:08 PM
Nymex crude is down to 43.75 from its 43.975 high, currently up 4.60%. Gold is trading 442.60, off its 443 high with HUI +2.47% at 221.31 here. Bonds remain strong as well, TNX -4.7 bps at 4.085%, -1.14% for the day.

 
 
  Jeff Bailey   12/15/20,  12:11:13 PM
12:00 Internals at this Link

Yesterday's internals at this Link

12/06/04 Internals at this Link

 
 
  Jonathan Levinson   12/15/20,  12:03:02 PM
QQQQ held at a low 40.15 and has cleared 40.25 with price currently trapped between 40.25-40.35 currently. 7200-tick SMA resistance is down to 40.35 currently, within the steep 30 min cycle downphase. A move above that level will stall the downphase, but it will take approx. 15 minutes above it to turn the channel back up. Current 30 min resistance is at 40.40.

 
 
  Jeff Bailey   12/15/20,  12:02:08 PM
12:00 Market Watch at this Link

 
 
  Linda Piazza   12/15/20,  12:02:03 PM
A scan of the OEX's one-minute chart shows that the OEX may just have been reforming a deeper right shoulder, with the OEX once again confirming the formation as I typed.

 
 
  Linda Piazza   12/15/20,  11:56:03 AM
The OEX has just confirmed an inverse H&S on its one-minute chart, upside target about 572.43. If it meets that upside target, that would bring the OEX right back up to retest the bottom support of the ascending trendline in which it had been climbing since 12/09. If the OEX is particularly weak, it will not fulfill that upside target but will rollover again ahead of it. (Note: As I typed, the OEX came right back below the neckline, showing some weakness.)

There are multiple likely support levels below the OEX. If a downturn is not a strong one, the OEX might then just churn for a while, trying to decide on direction. If that happens, don't get chopped up. I'd certainly like to see the TRIN higher if we're going to believe in continued strong declines and push away worries about choppiness.

 
 
  Jonathan Levinson   12/15/20,  11:54:39 AM
Trapped on a call- back shortly.

 
 
  Linda Piazza   12/15/20,  11:46:37 AM
The OEX did bounce from the mid-channel Keltner level, as expected, and now again tests the five-minute 100/130-ema's, this time from the underside. It's moved into the S/R zone in which the OEX traded most of yesterday pre-FOMC, as if the post-FOMC pop and post crude-inventories drop never happened.

 
 
  Linda Piazza   12/15/20,  11:35:07 AM
The SOX falls toward its converging 30-sma and 200-ema, with those averages at 428.41 and 426.56. The SOX is at 431.26 as I type, with the daily candle a doji that nearly spans the entire distance from 200-sma down to 200-ema.

 
 
  Linda Piazza   12/15/20,  11:32:02 AM
The OEX is now at 7-minute mid-channel Keltner support (bouncing as I type), but as I said last night, attention needed to be paid to the shape of the OEX's decline as well as to the level to which it declined. This 570 level has bounce potential, too, for another reason. OEX 570 is the 50% retracement of the OEX's climb above the neckline of its inverse H&S. That wasn't any bull flag retreat to test that retracement level, however. Now I'd be looking at the possibility that the OEX would roll over after any bounce and would feel less inclined to suggest pullback-and-bounce entries. We could see the OEX zoom right back up again. I'm seeing some zooming around in the currency markets, certainly, but I just have to repeat that this was not a measured accumulation form such as a bull flag and that makes me withdraw any suggestions to buy on pullbacks.

 
 
  Jonathan Levinson   12/15/20,  11:25:54 AM
Nymex crude has extended its gain, now up at a new high +5.08% at 43.95. Gold is up 5.50 to 442.80, challenging yesterday's high, with HUI +2.3% at 220.94. QQQQ is back to the low at 40.16, now testing 40.10-.15 confluence.

 
 
  Linda Piazza   12/15/20,  11:25:26 AM
After only a brief hesitation at the five-minute 100/130-ema's, the OEX plunged through their support, without ever bouncing. Not a good sign.

 
 
  Jonathan Levinson   12/15/20,  11:24:18 AM
40.25 has just held on the retest from below, and yesterday's low has now been broken by the sharp drop.

 
 
  Jonathan Levinson   12/15/20,  11:23:14 AM
I suspect that it was a bad tick, but there's a doji spike to 40.16, with price now testing 40.25 QQQQ from below.

 
 
  Linda Piazza   12/15/20,  11:22:22 AM
VXO has begun climbing again.

 
 
  Linda Piazza   12/15/20,  11:21:54 AM
The OEX now tests its five-minute 100/130-ema's, with those averages at 571.39 and 570.93, respectively. Unless the OEX is in a plummet-all-day mode, there should be at least temporary support here. The OEX has now broken below the supporting trendline of its rising regression channel, the one pictured in last night's post. It's confirmed a double-top on intraday charts. The plummet in the advdec line, continuing as I type, makes me question the wisdom of looking for a buy-the-dip place to go long. The action in breadth-related indicators is confusing and conflicting, because the TRIN and VXO's trend don't support a bearish entry, either, I don't believe. I defer to Jane on that.

 
 
  Jonathan Levinson   12/15/20,  11:21:22 AM
QQQQ 40.25 being tested here.

 
 
  Jeff Bailey   12/15/20,  11:15:22 AM
11:00 Internals at this Link

 
 
  Linda Piazza   12/15/20,  11:14:42 AM
The SOX has dropped back from its test of its 200-sma.

 
 
  Linda Piazza   12/15/20,  11:13:41 AM
On the Futures side of the Monitor, Jane has noted (11:10 post) some trends in the TRIN, VIX, and advdec line that should be followed.

 
 
  Jonathan Levinson   12/15/20,  11:13:07 AM
Session high for Nymex crude here, up 4.48% at 43.75.

 
 
  Jonathan Levinson   12/15/20,  11:10:23 AM
Rollover for 30 and 60 min cycles channels here on a sharp QQQQ drop. This drop should at least stall now based on the 30 min Keltner channel violation, failing which we're in the bearish divergent 30 minute cycle plunge to which I referred earlier this morning. 40.25 is next major support, below which 40.10-.15 is the key line for bulls, below which the daily cycle upphase should fail.

 
 
  Jeff Bailey   12/15/20,  11:08:01 AM
11:00 Market Watch at this Link

 
 
  Jonathan Levinson   12/15/20,  11:04:35 AM
Session low on a break below 40.47, currently 40.43 QQQQ, testing lower 30 and 60 min channel support. If QQQQ doesn't bounce back above 40.47 in the next five minutes, the 30 minute cycle downphase will commence.

 
 
  Jeff Bailey   12/15/20,  11:02:26 AM
January Heating Oil (ho05f) $1.33 +2.14% (30-min delayed) ....

 
 
  Jonathan Levinson   12/15/20,  11:00:41 AM
Here's the retest now on a sharp drop from 40.56.

 
 
  Linda Piazza   12/15/20,  11:00:38 AM
The TRIN coils. The advdec line retreats from its high. The VXO coils. I see some signs to watch (advdec line, for example) but nothing definitive yet.

 
 
  Jonathan Levinson   12/15/20,  10:57:43 AM
The current bounce has a flaggish feel to it, but it's still a bounce, lined up from 40.47, the site of the previous bounce. A move back above 40.60 could trigger an intraday double bottom buybot attack, while a failure at or below 40.60 would like see a more aggressive test of 40.47 from the lower high.

 
 
  Linda Piazza   12/15/20,  10:57:18 AM
The TRAN attemped another bounce from the 21-ema on its three and five-minute charts, but now threatens to roll down again.

 
 
  Linda Piazza   12/15/20,  10:47:18 AM
You know, on second consideration, I think we can consider the OEX's formation a double-right-shouldered H&S after all. The neckline slants strongly enough that the second right shoulder could be legitimately at the same level as the head. Whatever we consider it, and whether we're just looking at the neckline as a supporting trendline, the OEX has violated it. The sets up a potential downside in the 570 range, but the important five-minute 100/130-ema's will intercede and may provide support that's strong enough to keep the OEX from reaching that downside target. If the retreat is corrective in nature, the support will likely hold, while a precipitous drop could drill right through several potential support levels.

 
 
  Tab Gilles   12/15/20,  10:40:18 AM
It appears that the GHA stalled at 320 as it did back in October at 260. The GSO popped with the Oracle/PeopleSoft news. But, I like the action on the SMH. Link This sector is still underperforming in the techs. The $SOX has support at 420. Link

On the $NASI it has been trending down until yesterday, where at 500 it ticked up. Is this a change in trend? Have to watch this carefully. Link

Now on the VIX on a daily chart I'm looking for a bullish divergence. But, we may see still a lower VIX as I've got 1250 on the SPX as a monthly 61.8% retracement target. Link Link

Last...MUR, Murphy Oil in which I called as a decent long candidate back on 12/8/04. Link

 
 
  Jonathan Levinson   12/15/20,  10:38:07 AM
QQQQ continues lower after a brief pause at 40.60. The rising trend off the morning lows is now in play, and will be broken by a print below 40.50.

 
 
  Linda Piazza   12/15/20,  10:33:36 AM
The TRAN tips over slightly after the inventories number, but so far maintains its three-minute 21-ema, an average from which it's been bouncing for a couple of days. That average is at 3764.35, with the TRAN fast approaching it again, at 3765.80 as I type.

 
 
  Jonathan Levinson   12/15/20,  10:32:45 AM
Here are the headlines from the Energy Dept. referencing Jim's 10:30:30:

10:31am U.S. CRUDE STKS DOWN 100,000 BRLS LAST WK: ENERGY DEPT

10:31am U.S. DISTILLATE STK FLAT AT 119.3 MLN BRLS: ENERGY DEPT

10:31am U.S. GASOLINE STKS UP 1.5 MLN BRLS: ENERGY DEPT

 
 
  Jim Brown   12/15/20,  10:30:30 AM
EIA Oil and Gas Inventories
Crude -100,000 bbls
Distillate unch
Gas +1.5MB

API numbers
Crude +2.4 MB
Distillate -2.2 MB
Gas -1.3 MB

 
 
  Jonathan Levinson   12/15/20,  10:29:51 AM
QQQQ is down to 40.62, failing below the upper channel resistance. 40.60, prior resistance, should now provide support.

 
 
  Jeff Bailey   12/15/20,  10:23:13 AM
Current OPEN MM Profiles at this Link

 
 
  Linda Piazza   12/15/20,  10:22:15 AM
The OEX has now climbed high enough to negate the H&S, of course, reaching a minimal new high, but oscillators give mixed evidence here. There's bearish price/RSI divergence at the equal tops. MACD has turned higher from above signal, but now attempts to flatten again. This is on a three-minute chart.

The advdec line continues higher, so bulls should perhaps not be too worried about the potential for a double-top. Do keep the possibility in mind.

 
 
  Jeff Bailey   12/15/20,  10:16:56 AM
Bidder up ... Pacholder High Yield (PHF) $10.00 +0.10%

This "has to be" strong economy, very stimulative monetary, no inflation. (considering action in Treasury market)

Chart with thoughts at this Link

 
 
  Jeff Bailey   12/15/20,  10:15:50 AM
10:00 Internals at this Link

 
 
  Jonathan Levinson   12/15/20,  10:15:31 AM
QQQQ is up against rising 30 and 60 min channel resistance right here. This would be the spot for a pause or pullback, failing which we'll be looking at a trending move/meltup. If no pullback within the next 5 minutes, that latter, less likely scenario will be in play.

 
 
  Linda Piazza   12/15/20,  10:11:04 AM
The OEX averted a confirmation of the H&S on its five-minute chart. Now market bulls want to see a new high today above yesterday's. Until then, this last bounce could be forming a second right shoulder.

 
 
  Linda Piazza   12/15/20,  10:08:51 AM
The SOX is now about a point above its 200-sma.

 
 
  Linda Piazza   12/15/20,  10:07:02 AM
TRIN may be climbing, but the advdec line generally does, too, and the advdec line has generally been helpful lately. Bulls want to see strength in the absolute number and in the trend of the advdec line.

 
 
  Jeff Bailey   12/15/20,  10:06:54 AM
VIX.X 12.68 -0.39% .... DAILY Pivot Levels ... 12.03, 12.24, Piv= 12.41, 12.62, 12.79.

 
 
  Jonathan Levinson   12/15/20,  10:06:38 AM
A 5B overnight repo from the Fed's open market desk is a net add with no expiries today.

 
 
  Linda Piazza   12/15/20,  10:02:28 AM
I almost hear the brakes squealing as the OEX averts confirming that H&S neckline after closely approaching it.

 
 
  Jeff Bailey   12/15/20,  10:01:59 AM
10:00 Market Watch at this Link

 
 
  Linda Piazza   12/15/20,  10:01:37 AM
As Jane has already noted on the Futures side of the Monitor, the TRIN is in neutral terrority, at 1.01 as I type, but above yesterday's high. In fact, it's above Monday's, too. I point out this information for the benefit of those who may not be following both sides of the Monitor. As Jane puts it, this may be "less bullish" for equities.

 
 
  Linda Piazza   12/15/20,  9:57:06 AM
The OEX is rolling down toward the 572-ish neckline of that H&S on its three- and five-minute charts.

 
 
  Jonathan Levinson   12/15/20,  9:50:27 AM
QQQQ whipsawed back above the 7200-SMA and turned the 30 min channel back up along with it. 30 and 60 min resistance are between 40.66 and 40.69 currently, with support up to 40.37. If the bulls can clear and hold north of 40.60, the short cycle should strengthen as well.

 
 
  Linda Piazza   12/15/20,  9:49:01 AM
The TRAN is at another new high. The TRAN may be impacted by this morning's crude inventories number.

 
 
  Linda Piazza   12/15/20,  9:48:02 AM
The SOX tests its 200-sma again this morning, with the SOX at 434.86 and that average at 434.55.

 
 
  Jeff Bailey   12/15/20,  9:47:13 AM
Dow Jones Home Construction (DJUSHB) 788.56 +3% Link ...

 
 
  Linda Piazza   12/15/20,  9:45:47 AM
The OEX hesitates at the appropriate right-shoulder level for a H&S visible on its 3- and 5-minute charts. A zoom much higher will negate the formation.

 
 
  Linda Piazza   12/15/20,  9:44:54 AM
The GHA has closed this morning's gap, moving higher. It hasn't yet quite met the downside target of its confirmed H&S on its five-minute chart, however, and so might yet turn lower again.

 
 
  Jeff Bailey   12/15/20,  9:43:37 AM
Russell 2000 Growth iShares (AMEX:IWO) $66.88 +0.48% .... a new 52-weeker

 
 
  Linda Piazza   12/15/20,  9:42:40 AM
The OEX sits right at the top trendline of the broadening formation. It did retreat to 571.50-572 support before beginning to climb again this morning, but hasn't retreated to the bottom of its ascending regression channel. I'm watching a potential H&S on the three-minute chart. While that may never play out or meet its downside target if confirmed, watching it can help us gauge whether bulls or bears have primacy over the very short term. A climb above yesterday's high negates the formation, of course.

For those already in bullish plays, continue to follow the OEX higher with your stops and keep an eye on that formation. A drop below 572 now should confirm it and set up a downside target near 570.

 
 
  Jeff Bailey   12/15/20,  9:39:43 AM
Pulte Home (PHM) $61.04 +1.75% Link ... Fitted/conventional retracement I have on stock has big break of overlapping resistance ($60.48) today. Should trade higher to zone of resistance from $64.07-$65.08.

 
 
  Jeff Bailey   12/15/20,  9:37:16 AM
Per Jonathan's (09:30:38) .... Makes the 13-week ($IRX.X) at 2.168% to the 30-year ($TYX.X) at 4.728% seem like "high yield" bonds doesn't it?

 
 
  Linda Piazza   12/15/20,  9:35:39 AM
Must be a lot of volume this morning. QCharts is slow.

 
 
  Linda Piazza   12/15/20,  9:33:36 AM
The GHA turns down this morning, but remains above 316-ish support.

 
 
  Jonathan Levinson   12/15/20,  9:33:25 AM
QQQQ has broken 7200-tick SMA support, and 40.47 should now act as resistance. The 30 min cycle channel is now stalled. A break through 40.25 would likely kick off a bearish divergent 30 min cycle downphase, but the price has to get down there first.

 
 
  Jeff Bailey   12/15/20,  9:33:06 AM
Lennar (LEN) $53.41 +5.07% Link .... after the homebuilder reported quarterly EPS of $2.29, which was above consensus estimates for $2.19. Revenues jumped 20.9% versus a year ago.

 
 
  Jeff Bailey   12/15/20,  9:31:33 AM
Research in Motion (RIMM) $82.11 -3.85% Link ....

 
 
  Linda Piazza   12/15/20,  9:31:25 AM
The OEX opened and retreated, but hasn't hit the bottom of the ascending regression channel.

 
 
  Jeff Bailey   12/15/20,  9:28:34 AM
Best Buy (BBY) $56.04 Link ... higher at $57.95 after reporting a 22% increase in net income to $148 million, or $0.45 per share, which was a penny better than consensus. Revenue in Q3 ending Nov. 27 rose 20% to $6.65 billion. Same store sales were up 3.2%.

For Q4, BBY anticipates EPS of $1.56-$1.66 versus $1.42 last year. Current consensus is for BBY to earn $1.62 in Q4.

 
 
  Jonathan Levinson   12/15/20,  9:20:38 AM
TOKYO, Dec 15 (Reuters) - Japan's Finance Ministry raised 5 trillion yen ($47.5 billion) at an interest rate of zero when it auctioned three-month finance bills (FBs) on Wednesday, highlighting the excess liquidity flooding the banking system.

Even in a country that has become accustomed to razor-thin interest rates due to a sluggish economy, it was the first time the ministry was able to sell all of the discount bills at a price of 100.00, or a yield of exactly zero, at an auction.

Link

Who needs interest rates anyway?

 
 
  Jonathan Levinson   12/15/20,  9:14:25 AM
QQQQ continues to drift lower off its earlier highs, now up a nickel at 40.53. 30 min channel resistance is at 40.62 currently, support 40.30, with 60 min support 2 pennies lower. A move below 40.47 should stall the 30 minute cycle upphase, but once again, the benefit of the doubt goes to the bulls above 40.25.

 
 
  Linda Piazza   12/15/20,  9:08:31 AM
Futures indicate a flattish open this morning. If the OEX retreats, I'll be watching the OEX's ascending regression channel, pictured in the chart linked to my 19:57 post last night, for signs that the OEX might either bounce from the bottom support or drop through it. If it drops, we'll be watching those retracement levels I mentioned in that post for possible bounce points. Despite my optimism last night, I'll want to pay particular attention to any signs of a potential reversal, however. Overnight, the dollar reverted to its former weakness after spending some time in a technical or oversold bounce. It's been making some big moves to the downside overnight. With crude rising, too, that might skew the 2003-type inverse relationship we were used to seeing with dollars and equities or it might send equities bounding if that 2003-type relationship persists, but I defer to Jonathan for a more experienced outlook. I do note that equity futures lost some ground after Snow spoke on CNBC, but I'm not sure if there was a direct correlation there. One of the high-flying sectors, the GSTI Hardware Index, $GHA, produced a potential reversal signal yesterday although it did so within a consolidation zone and it did narrowly avert producing a key reversal day.

 
 
  Jeff Bailey   12/15/20,  8:44:07 AM
Lehman Bros. (LEH) $85.65 ... higher at $86.80 after reporting quarterly EPS of $1.96 vs. consensus of $1.69.

 
 
  Jonathan Levinson   12/15/20,  8:36:33 AM
Bonds have advanced, TNX -3.1 bps at 4.101%, with QQQQ down slightly to a 9 cent gain at 40.57. Gold is up 3.80 at 441.10, with euros up .64% at 1.340.

 
 
  Jonathan Levinson   12/15/20,  8:30:47 AM
Headlines:

8:30am U.S. DEC EMPIRE STATE EMPLOYMENT INDEX 21.9 VS 10.6 NOV

8:30am U.S. DEC. EMPIRE STATE INDEX ABOVE CONSENSUS 19.6

8:30am U.S. DEC EMPIRE STATE INDEX 29.9 VS REVISED 18.9 IN NOV

 
 
  Jonathan Levinson   12/15/20,  8:09:22 AM
Thank you for the excellent summary, Linda.

 
 
  Linda Piazza   12/15/20,  8:05:27 AM
Perhaps some of you caught U.S. Treasury Snow's interview on CNBC a few minutes ago. For those who did not, here's a summary, some of which you'll see again in tonight's newsletter. A disclaimer here: I am merely reporting what was said and not reporting my own views of either Snow or President Bush. The interview could impact the performance of both the dollar and bonds today, and so deserves coverage irrespective of whether some might consider it political commentary.

Snow was questioned about the budget deficit, with the CNBC commentator interjecting "How can you say that?" and "It's hard to have any confidence" to Snow's comments about President's Bush's "strong, tight budget that controls spending" and "fiscal discipline." A CNBC commentator expressed skepticism that the predicted reduction in the budget deficit would occur. Snow answered that the commentator and others must "wait and see" and that "the numbers are going to play out," adding that rising government receipts coupled with fiscal discipline would produce those better numbers.

Those watching the dollar drop precipitously against other currencies overnight must have been particularly interested in what Snow would say about the dollar. A guest commentator posed the question all awaited. "The administration talks about a strong dollar, but I don't see any actions to support that," the commentator said. Snow's reply was that he never talks about a specific dollar level and that "our" policy was well known. He said that a strong American economy was key. Whether he meant that that strong American economy was key to supporting the dollar, or whether he'd be willing to sacrifice dollar strength to produce a stronger economy was unclear, and the commentator did not follow up with other questions that might have clarified his answer. Snow mentioned such things as reducing the burden of lawsuits as administration efforts made to support the dollar, among others. The dollar had been climbing off its overnight low against the yen before the interview, but then dropped to a new overnight low. It attempts to steady again as I type.

Snow also addressed the issue of Social Security reform, affirming that he had approached the bond market for help financing the transition into personal accounts. He expressed confidence that if a "real fix" could be found, financing could be found for that transition. When questioned about whether 30-year bonds would be issued, as had been rumored, or whether a figure up to $1.5 trillion in bonds was accurate, Snow was cagey with answers, essentially giving another "wait and see" answer.

 
 
  Jonathan Levinson   12/15/20,  7:50:53 AM
Green across my screen, with ES trading 1207, NQ 1642.5, YM 10693 and QQQQ +.153 at 40.63. Gold is up 3.90 to a session high of 441.20, silver +.085 to 6.84, ten year notes up .17 to a session high of 112.75 and crude oil up .25 to 42.075.

We await the 8:30 release of the Empire State Index, est. 20.

 
 
  Linda Piazza   12/15/20,  6:20:44 AM
Good morning. Last night, the Bank of Japan released a mostly in-line-with-expectations Tankan survey of business confidence among large manufacturers. The survey saw a decrease, but did not fall to feared whisper-number levels. The Nikkei gained in overnight trading although it was knocked back after twice failing to claim 11,000. Other Asian markets gained, and most European markets currently trade in positive territory, too. European gains may be tempered by the euro's rise against the dollar and by crude's rise. Yukos Oil Company announced that it had filed for bankruptcy protection in the U.S. The company seeks an injunction that would stop the auction of a core asset. As of 6:11 EST, gold was up $2.10 and crude, up $0.40. The dollar weakened considerably overnight against both the euro and the yen. Our futures drifted slightly lower through the night. More detail about Asian and European markets follows in succeeding paragraphs.

Wednesday, the Bank of Japan released the much-awaited Tankan survey of business confidence among large manufacturers, with results in line with expectations and perhaps better than whisper numbers. Manufacturers' confidence slipped to 22 from the previous quarter's 26 points, the first slowdown since March 2003. A bigger decline is expected in the next quarter. Plans for capital spending increased 23.4 percent this quarter, a higher-than-expected number. The Tankan revealed that manufacturers believe exports will rise more than had been expected this fiscal year, with exports a source of concern.

The yen rose as the number was released, but then retreated against the dollar again, before a further strengthening. The Nikkei showed the results of the volatility, demonstrating some of its own in the morning session. Despite that further strengthening in the yen against the dollar, the Nikkei climbed through the early afternoon session, helped by exporters. Techs gained after Intel's gains yesterday. Twice the Nikkei tested 11,000. When it couldn't break above it, the Nikkei dropped in the last few minutes of trading, still closing higher by 40.88 points or 0.37%, at 10,956.46.

Other Asian markets turned in gains, too. The Taiwan Weighted gained 1.57%, and South Korea's Kospi climbed 2.29%. Singapore's Straits Times gained 0.86%, and Hong Kong's Hang Seng, 0.25%. China's Shanghai Composite climbed 0.42%.

Most European markets post gains, but gains are tempered, perhaps by the euro's rise against the dollar and crude's rise as Yukos files for bankruptcy in the U.S. Some problems arose with the Euronext exchange, too, halting trading on that exchange. Stocks appeared to be reacting to specific news or developments. In the U.K., banks mostly traded higher. Building products group Hanson affirmed expectations and traded higher, but British home improvement retailer Kingfisher, a FTSE 100 component, dove after reporting earnings.

As of 6:11 EST, the FTSE 100 had climbed 19.30 points or 0.41%, to 4,742.10. The CAC 40 had climbed 5.90 points or 0.15%, to 3,820.29. The DAX had risen 2.41 points or 0.06%, to 4,233.71.

 
 
  Jeff Bailey   12/14/20,  11:27:26 PM
January Heating Oil (ho05f) daily interval bar chart with conventional (blue) and fitted 38.2% (pink) at this Link

Heating Oil bear says ... "shouldn't find a daily settlement two levels above $1.2302, at $1.3730. If it does, then suggest some type of resumption of strength."

An equity trader (broader market) can test against the major averages.

 
 
  Jeff Bailey   12/14/20,  10:50:10 PM
January Heating Oil (ho05f) ... 30-minute intervals with WEEKLY Pivot levels at this Link Note: inflection benchmarks, pivot levels of trade at benchmarks.

January Crude Oil (cl05f) ... 30-minute intervals with WEEKLY Pivot levels at this Link

Heating Oil ... $1.32. Hmmmm.... look back at Nov. 11/15 low and the then WEEKLY S2. Then last week's WEEKLY Pivot.

 
 
  Jeff Bailey   12/14/20,  10:31:31 PM
January Crude Oil futures (cl05f) ... with inventory data due out tomorrow (Wednesday), wanted to quickly post updated bar chart with conventional (blue) and fitted 38.2% (pink) at this Link

BEARISH pattern of trade at levels is noted. Once below, NEVER two above.

$0.25 box size of $wtic Link

$0.50 box size of $wtic Link

$1.00 box size of $wtic Link

 
 
  Linda Piazza   12/14/20,  7:57:50 PM
After breaching the year's high by a few cents, the OEX ended the day about a point below that previous high. The OEX left only a candle shadow above the upper trendline of its broadening formation. The OEX may have touched a new high for the year, but it did not achieve a new closing high. Other indices did.

Bulls would have preferred that the OEX had achieved a new closing high. However, if that broadening formation had fulfilled all its traditional bearishness, the OEX never would have touched that upper trendline a third time, so that argues against any concern about the OEX's failure to achieve a new closing high. For now, the OEX still climbs through this rising regression channel: Link

Buying bounces from the bottom support appears to be the best tactic as long as the channel is maintained. Be sure you're seeing a bounce. That rising channel is steep enough that it's questionable whether the OEX can maintain it without falling into a more gently sloping and healthier climb. I've snapped a Fib bracket on the OEX's chart (not shown), from the time of its breakout yesterday above the neckline of its inverse H&S up to today's high. A 38.2% retracement of that rise occurs at about 570.75, near historical S/R. A 50% retracement occurs at just under 570. A retracement to and bounce from either of those levels should not be disturbing to bulls, depending on how breadth indicators are aligned and the shape of the decline. A straight-down drop would be more disturbing than a measured bull flag decline, for example. However, if the OEX were to drop out of that channel and below the 569 level, something more bearish might be going on.

What about new bearish entries? Today's test of the previous year's high might have been an ideal bearish entry, but that remains to be proven. There's that pesky tendency of markets to reverse FOMC-day patterns of trading on the day afterward and the sometimes tendency of Wednesday's to be reversal days anyway. Let's see what happens tomorrow and how breadth indicators set up, but until proven otherwise, the markets are in buy-the-dip modes, for as long as this rally lasts.

 
 
  OI Technical Staff   12/14/20,  6:08:33 PM
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