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  OI Technical Staff   12/29/20,  7:43:33 PM

Click here for bonus info: Link

 
 
  Linda Piazza   12/29/20,  7:27:19 PM
Sorry, Jeff, I didn't see your 16:12 post earlier, as I was busy researching for the Wrap. I agree about the GSO. I noted in my 9:48 post that the GSO's potential right shoulder was extending too long (in time) and the GSO needed to round down if the H&S was going to retain any validity.

 
 
  Linda Piazza   12/29/20,  7:23:16 PM
A small-bodied candle at resistance: That's what the OEX produced Wednesday, with the daily candle a harami or inside-day candle. Many other indices produced doji, with those indices including the TRAN, SPX, GSO and DJUSHB's, perhaps among others. Some indices showed more strength, with the RLX and SOX being among those indices, but altogether it was a day in which indices chopped between support and resistance. Perhaps it was just to me, but the OEX appeared to be choppier than some others, whipping back and forth across its five-minute 100/130-ema's while others tended to either find support or resistance at those averages. The OEX is mired within its latest congestion zone, however, and perhaps that choppiness was to be expected.

Before committing to a direction tomorrow, traders want to see some congruence between the OEX and other indices--either more bearish as a group or more bullish as a group rather than a mixture. Some congruence in internals might be helpful, too. A break out above 578.25 looks bullish, but you know how poorly breakout plays have performed lately. A breakdown below 573.85 or so looks bearish, but breakdowns might not work any better. Bounces from that support or rollovers from that resistance might make better entries, if offered, but the best bet might be to abstain from trading in a light-volume environment. Let's look tomorrow morning.

 
 
  Mark Davis   12/29/20,  4:56:33 PM
That was me Jeff... just happened to have an extra $8.5 mil laying around the house to throw at the market for a scalp... Link

 
 
  Jeff Bailey   12/29/20,  4:44:02 PM
That's some coin .... 125,000 print of IWO at $67.70 after the close.

 
 
  Jeff Bailey   12/29/20,  4:12:47 PM
Hey Linda .... the GSTI (GSO.X) 173.27 -0.13% Link ... its startng to look a little "hunchbacked" isn't it?

 
 
  Jeff Bailey   12/29/20,  4:10:52 PM
Buy Program Premium ... DIA $108.23 , SPY $121.35

 
 
  Jeff Bailey   12/29/20,  4:09:06 PM
Current OPEN MM Profiles at this Link

Today's activity ....

Played with Drake and his new squeaky duck toy, set several up/downside alerts, fitted some retracements on key stocks, but did not profile any trades.

Typed, then erased a DIA call play for Jan. $109 calls, but figured SBC and MMM were enough at this point.

 
 
  Linda Piazza   12/29/20,  3:58:30 PM
The OEX will end the day with a small-bodied inside-day candle at the top of yesterday's range.

 
 
  Jeff Bailey   12/29/20,  3:47:48 PM
JDS Uniphase (JDSU) alert! $3.14 +3.6% ... tax-bounce in the making?

32 million in last 90-minutes. Moves to #2 on most active

My fondest memory of WorldCom was that call play back in late December of 2000 and the tax-loss bounce that took place the following two weeks. Do you remember? Link

 
 
  Linda Piazza   12/29/20,  3:44:32 PM
Barring a big movement at the end of the day, the TRAN looks as if it could print a doji at the top of its climb. Lately, these do appear to have some significance for the TRAN, suggesting at least another day or two of sideways trading if not a retreat . . . and you know that the TRAN hasn't been retreating far lately. However, neither has it been climbing as far when it breaks out, on a proportional basis. We're often seeing only one strong white candle before a consolidation or slight retreat rather than several days of gains. Is the TRAN finally tiring? That's still to be proven, because I thought it should be down tiring at 3500, but it should be watched.

 
 
  Linda Piazza   12/29/20,  3:35:46 PM
The OEX has moved up to challenge the 15-minute resistance I mentioned in my 3:17 post. That resistance now looks a little lighter than support, but that's a judgment call as it requires weighing the importance of one grouping of Keltner lines against another. Somewhere near 577, depending on which candle shadows are included or not included, the OEX faces a descending trendline off the 11/27 high, so if the OEX continues higher, that level should be watched for a potential breakout or rollover.

 
 
  Jeff Bailey   12/29/20,  3:33:13 PM
Russell 2000 iShare Growth (IWO) $67.83 +0.13% .. bids green, new 52-weeker.

 
 
  Linda Piazza   12/29/20,  3:18:36 PM
The RLX can't be budged from its position on top of the descending trendline off the November high.

 
 
  Linda Piazza   12/29/20,  3:17:04 PM
OEX 575.80 support appears to be at least light resistance, as I mentioned earlier that it might be. The 15-minute Keltner chart does show resistance there and up to 576.35, but it also shows support firming up beneath the OEX's current position. I mentioned earlier that the OEX appeared be sinking toward an equilibrium position on that chart, and it's done that. This predicts a breakout at some period, but it certainly doesn't have to be today. Unfortunately, because in equilibrium the channels line up around a central average, support and resistance are going to look about equally weighted and there's no prediction yet about eventual direction.

 
 
  Jeff Bailey   12/29/20,  3:10:51 PM
03:00 Internals at this Link

 
 
  Jeff Bailey   12/29/20,  3:03:48 PM
03:00 Watch at this Link

 
 
  Linda Piazza   12/29/20,  2:59:34 PM
Doesn't it feel as if the earth should have wobbled on its axis, to have seen so much suffering? Sorry to be melodramatic.

 
 
  Jane Fox   12/29/20,  2:57:23 PM
How many out there are now thinking "The earth may have wobbbled but at least it didn't fall down"?

 
 
  Linda Piazza   12/29/20,  2:57:21 PM
The Dow rises to test its five-minute 100/130-ema's from the underside, with those averages at 10,818.75 and 10,820.35 as I type. The Dow's movements do show that a break above or below (if sustained) these averages means something, so it's been important that the Dow broke below them today. What may be more important is what it does tomorrow. Since the 12/6-12/9 period, the Dow has tended to trade below these averages for only one day before climbing above them again.

 
 
  Jane Fox   12/29/20,  2:54:32 PM
Linda mentioned this in an email a couple of days ago. From the Economist SO MASSIVE was the undersea earthquake that struck near the Indonesian island of Sumatra early on Monday December 26th that the entire planet may have wobbled on its axis, henceforth making each day a fraction of a second shorter than before.

 
 
  Jeff Bailey   12/29/20,  2:47:12 PM
QQQQ $39.98 +0.02% ... uncaring to oil's rise.

 
 
  Linda Piazza   12/29/20,  2:42:33 PM
That advdec line still ambles sideways.

 
 
  Jeff Bailey   12/29/20,  2:38:08 PM
February Crude Oil (cl05g) $43.20 +3.42% ... rings, or rang the bell on my 30-minute delayed at $43.21.

 
 
  Jeff Bailey   12/29/20,  2:35:40 PM
Stanley Works (SWK) $48.98 +0.36% ... ditto James' 01:41:02

 
 
  Linda Piazza   12/29/20,  2:31:38 PM
The SOX sinks. As a reminder, the 200-ema is below at 426.45.

 
 
  Jeff Bailey   12/29/20,  2:30:35 PM
S&P Retail Index (RLX.X) 461.77 +0.44% Link ... a December high today, with recent 52-week high from 11/15/04 just ahead at 465.07.

MACD setup looks very bullish after pullback toward zero.

 
 
  Linda Piazza   12/29/20,  2:28:49 PM
No charts yet. Doncha just love dial-up? The OEX lingers near that 575.80 S/R zone that is the 50% retracement of yesterday's range. (Working from memory here.)

 
 
  Jeff Bailey   12/29/20,  2:24:16 PM
Dow Diamonds (DIA) 107.96 -0.4% ... working on a conventional (blue) and a bullish 38.2% fitted retracement (pink) at this Link

I like the way the fitted 38.2% helps "explain" the recent highs.

Needs a catalyst stock to get higher.

 
 
  Linda Piazza   12/29/20,  2:23:19 PM
My broadband service went down. I'm powering up now on dial-up--takes forever, of course--and will be back as soon as I have charts.

 
 
  Jeff Bailey   12/29/20,  2:12:26 PM
02:00 Internals at this Link

 
 
  Jeff Bailey   12/29/20,  2:03:50 PM
02:00 Market Watch at this Link

 
 
  Linda Piazza   12/29/20,  1:57:44 PM
The OEX still is trading with some respect of the Fib levels snapped off yesterday's range. The last bounce came at the 61.8% retracement. Because of that respect, we can presume that the 50% retracement, up near 575.80, could perhaps now be possible light resistance. We'll soon find out as the OEX is moving up toward that level as I type.

 
 
  Linda Piazza   12/29/20,  1:54:01 PM
The DOW still hovers just a few points above 10,800 today, at 10,804.30 as I type. If the DOW were to end the day at its current level, it will have completed an inside-day candle, a harami.

 
 
  Jane Fox   12/29/20,  1:46:13 PM
Dateline WSJ - NEW YORK -- Actor Jerry Orbach, who played a sardonic, seen-it-all cop on the NBC series "Law & Order" and scored on Broadway as a song-and-dance man, has died of prostate cancer, a representative of the show said Wednesday. He was 69 years old.

 
 
  James Brown   12/29/20,  1:42:36 PM
OI call play JCI is seeing some follow through on yesterday's breakout over $63.00.

 
 
  James Brown   12/29/20,  1:41:02 PM
OI call play BDK is up another 1.2% to a new all-time high at $89.

 
 
  Linda Piazza   12/29/20,  1:40:47 PM
The SOX appears to have two versions of trading days: those in which it's trapped between the 200-ema's support and 200-sma's resistance and those in which it's trapped between the 50-sma's support and the 200-ema's resistance. Those two patterns pretty much describe the SOX's behavior since the middle of November except for that early December period when it popped above the 200-sma for about a week.

 
 
  James Brown   12/29/20,  1:38:13 PM
The consolidation in Kmart Holding (KMRT) has narrowed into a 50-cent range right at the $100 level and its simple 50-dma. This might be a good spot to consider a straddle-type options play. A breakout up or down should be imminent.

 
 
  James Brown   12/29/20,  1:35:04 PM
Biotech stock Genzyme (GENZ) is gapping up to new two-year highs above $58 after announcing an approval for a new leukemia drug.

 
 
  James Brown   12/29/20,  1:33:18 PM
XMSR also continues its sell-off (-2.8%) that began yesterday. The drop under $38.00 has broken technical support at its 21-dma.

 
 
  James Brown   12/29/20,  1:32:17 PM
SIRI is down another 6% to $7.34 following yesterday's pullback.

 
 
  Linda Piazza   12/29/20,  1:13:52 PM
Here's a Dow monthly chart you'll see in tonight's Wrap: Link I found it interesting.

 
 
  Marc Eckelberry   12/29/20,  1:11:43 PM
Yesterday I profiled a QQQQ feb 40 put with a conditional COMP above 2178. If you programmed it, it got triggered at 1.00. Stop is is 50%, i.e .50. I haven't seen any trade like this so I took the liberty to throw it in, since it is on my own account as well. With the VXN this low and approcahing year-end, this play has 100 to 200% potential and I had to point it out. It is still a deal at 1.05 by the way. I will follow it for those who wish. Maybe this post belongs on the regular monitor, so I will cut and paste there.

 
 
  Jeff Bailey   12/29/20,  1:10:43 PM
01:00 Internals at this Link

 
 
  Linda Piazza   12/29/20,  1:04:35 PM
TRIN moving up, but not yet above day's high.

 
 
  Jeff Bailey   12/29/20,  1:03:22 PM
VIX.X 11.77 -1.91% ... SPX most actives have the March 1,025 puts (SPQ-OE) atop the most active at 20,014 with open interest at 48,622.

Second-most active are the Dec.05 850 puts (SPX-XJ) at 9,750 : 52.389.

 
 
  Jeff Bailey   12/29/20,  12:59:22 PM
12:55 Market Watch at this Link

 
 
  Linda Piazza   12/29/20,  12:56:42 PM
The TRAN tests an ascending trendline off yesterday's midday low, with that trendline roughly congruent to the three-minute 100/130-ema's. I've noticed over the last few weeks that some of the higher-flying indices don't even make it back to the five-minute 100/130-ema's but are bouncing off the three-minute versions. They're at 3805.76 and 3803.69 for the TRAN, with that trendline just above that.

 
 
  Linda Piazza   12/29/20,  12:50:29 PM
Was that tepid little swing upward the SOX's right shoulder for its H&S formation on the five-minute chart? Could have been.

 
 
  Linda Piazza   12/29/20,  12:48:27 PM
Jeff, I'm looking at buying a hybrid early next year--just waiting for more models to come available--so I'd be able to rib both of you. (see Jeff's 12:26 post.) Since my 1997 Acura has less than 60,000 miles on it, though, not sure that I really need a hybrid, but Jim's discussions have me spooked.

 
 
  Jeff Bailey   12/29/20,  12:36:28 PM
Russell 2000 Growth iShares (IWO) $67.63 -0.16% ... tight range today Linda. $67.50-$67.78.

Hey! That's a little above the 100% ($67.74) seasonal November-May average gain.

 
 
  Linda Piazza   12/29/20,  12:29:41 PM
The Russell 2000 so far remains below yesterday's high but above 650.

 
 
  Linda Piazza   12/29/20,  12:27:57 PM
The OEX sinks toward an equilibrium position on the 15-minute Keltner charts, not a big surprise on a day when we're seeing such mixed indications of next direction. As I type, support near 574.80-575.80 looks stronger than nearby resistance, suggesting a possible attempt to rise again at some point, but the evidence is not strong or trustworthy. What may be more likely is a period of time when the OEX chops back and forth, perhaps giving a false breakout or breakdown signal along the way.

 
 
  Jeff Bailey   12/29/20,  12:26:23 PM
Various Energy futures out to April at this Link

30-minute delayed, but screen captured at 12:20 PM EST (so 11:50 AM quotes)

As we get into January, I think it will be unleaded gas inventories taking the place of heating oil as the more closely watched derivative for where oil is headed.

I can tell you that I'm getting tired of my dad ribbing me about how much less he's paying for a gallon of unleaded than I'm paying for diesel. Tables look to turn come April.

 
 
  Jeff Bailey   12/29/20,  12:11:31 PM
12:00 Internals at this Link

 
 
  Linda Piazza   12/29/20,  12:09:20 PM
The SOX is now at an appropriate neckline area for a potential H&S. This is a potential bounce point into a right shoulder that would retest the 200-sma. There's always the possibility that semi investors would just give up after the first try and do away with the right shoulder entirely, as well as the possibility that the climb will be high enough to negate the formation, but we have to presume that the most likely result will be a bounce and then a rollover, but a rollover that might not be deep enough to break the SOX back below the 200-ema. Sigh.

 
 
  Linda Piazza   12/29/20,  12:06:35 PM
Jane pointed out some divergences in internal indicators in her 11:53 post. Add that reason to the others I and others have pointed out for potentially choppy trading conditions today.

 
 
  Tab Gilles   12/29/20,  12:04:28 PM
Looking at XLE, along with the Jan '06 $37 LEAP, see attached charts. Link

 
 
  Jeff Bailey   12/29/20,  12:02:35 PM
12:00 Market Watch at this Link

 
 
  Linda Piazza   12/29/20,  11:57:16 AM
And, again, the OEX drops back below the five-minute 100/130-ema's. Depending on the width of stops, that little stop-running move up to the top of this morning's gap probably was enough to stop out some new bears. The outcome of the day isn't yet known, and may depend on what's going on with currencies--consolidating since shortly after our cash open--the SOX, the RLX--broken down out of the rising wedge, but still above this morning's breakout point--and other factors.

 
 
  Linda Piazza   12/29/20,  11:54:11 AM
The SOX did drop back below the 200-sma and now approaches the possible neckline for a H&S, which means that we could see a bounce into a right shoulder or a bounce back above the 200-sma and the day's high to negate the formation.

 
 
  Jeff Bailey   12/29/20,  11:52:42 AM
Current OPEN MM Profiles at this Link

 
 
  Linda Piazza   12/29/20,  11:44:17 AM
Marc's 11:33 post on the Futures side is good advice.

 
 
  Linda Piazza   12/29/20,  11:42:52 AM
The SOX turns back to retest that 200-sma. Watch the test. Bearish divergence on the five-minute chart. I'm wondering if there won't be support near 530-530.50 and another bounce attempt from there, with the result of that bounce attempt being either a right shoulder for a H&S or a zoom higher to negate the formation.

 
 
  Linda Piazza   12/29/20,  11:33:14 AM
I've mentioned my reasons for watching the RLX lately. This morning, it's settled into a rising wedge on its five-minute chart. These are usually bearish, although as Keene mentioned this morning with reference to another such rising wedge, they've broken to upside often enough that we can't be sure the downside break will occur. This is particularly important with the RLX, though, since this morning saw it break above a trendline off the November high. This rising wedge action makes me believe that investors aren't so sure about sending the retailers higher after all, as this formation is usually indicative of distribution. However, prices will tell. Watch this index for more information on the OEX, as OEX traders want to see the two corroborate each other, not diverging from their recent congruence. RLX and OEX bulls don't want to see the RLX break back below the day's low, back below that trendline.

 
 
  Linda Piazza   12/29/20,  11:24:55 AM
Welcome to a light-volume day. The SOX popped a few cents above its 200-sma and the OEX zoomed straight up to the top of the gap from this morning, turning back slightly now. The OEX completed a small inverse H&S, roughly formed, with an upside target at about 577.10, although the exact target is difficult to confirm because the formation was so rough. Watch the SOX as it needs to sustain that breakout. This smacks of stop-running activity, but if the stop-run holds, shorts will rush to cover and the rally continues.

 
 
  Jane Fox   12/29/20,  11:13:28 AM
What were the Nov housing numbers that you mentioned at 0930? Whatever they were, it made TOL jump up ~$1.50 in about two minutes (which I promptly shorted) Robert

Robert here is the story from the WSJ

Sales of existing U.S. homes soared past forecasts to a record annual rate in November, helped by low interest rates, according to a private industry group.

Home resales jumped 2.7% last month to a 6.94 million unit rate, the National Association of Realtors reported Wednesday, from October's 6.76 million annual pace, which was revised slightly higher. November's increase was well above the modest 0.3% rise economists had been expecting, according to a survey by Dow Jones Newswires.

"Mortgage interest rates dropped a quarter of a percentage point in late summer and then stabilized," said David Lereah, NAR's chief economist. "Coupled with a growing labor market and a rising economy, this created optimal conditions for the housing sector."

 
 
  Jeff Bailey   12/29/20,  11:13:24 AM
11:00 Internals at this Link

Linda ... a/d lines might talk to our VIX.X and VXO.X discussion.

 
 
  Linda Piazza   12/29/20,  11:10:24 AM
The OEX again climbs above its five-minute 100/130-ema's, hesitating again below this morning's gap. Those averages are at 576.38 and 576.33, respectively.

 
 
  Jane Fox   12/29/20,  11:09:37 AM
Hi Jane:
Was just listening to President Bush on the tsunami. I've search out other times throughout history where the world population was affected by deadly disasters in the way of plagues and famines. Earthquakes have not always been the most deadly. I makes you realize how lucky we are to live at this time in history.

I enjoy the MM and trading every day. Thanks for your great input! Belinda

Link Link

Thank you Belinda

 
 
  Jeff Bailey   12/29/20,  11:05:39 AM
11:00 Market Watch at this Link

DJUSHB "Net" and "Net%" now correct.

Doesn't look like a bid for heating oil as the peak demand season draws to a close.

 
 
  Linda Piazza   12/29/20,  11:04:14 AM
Thanks, Tab, for your 11:00 input. I of course understood that the two were based on different indices and was focusing mainly on that difference and attributing any differences to something going on with the big caps. Your comments about the most significant change being the calculation method refocuses things.

 
 
  Jeff Bailey   12/29/20,  11:02:14 AM
Computer Tech Index (XCI.X) 725.87 +0.28% ... has been sitting on 720 the past four sessions, and does so again today. Bugger can't get above that "doji" close of 725.75 from 12/15/04 though.

 
 
  Tab Gilles   12/29/20,  11:00:57 AM
Linda, you brought up a very good point concerning the VXO/VIX divergence today. My reasoning is to ask what are the differences between the 2 volatility indices?

There are two important difference between the old VIX (VXO) SP100 and the new VIX SP500.

The most significant change is a new method of calculation. The new VIX(SP500) estimates expected volatility from the prices of stock index options in a wide range of strike prices, not just at-the-money strikes as in the original VIX(VXO/SP100). Also, the new VIX is not calculated from the Black Scholes option pricing model; the calculation is independent of any model. The new VIX uses a newly developed formula to derive expected volatility by averaging the weighted prices of out-of-the money puts and calls. This simple and powerful derivation is based on theoretical results that have spurred the growth of a new market where risk managers and hedge funds can trade volatility, and market makers can hedge volatility trades with listed options.

The second noteworthy change is that the new VIX calculation uses options on the S&P 500 index rather than the S&P 100. While the two indexes are well correlated, the S&P 500 is the primary U.S. stock market benchmark, and the reference point for the performance of many stock funds, with over $800 billion in indexed assets. In addition, the S&P 500 underlies the most active stock index derivatives, and it is the domestic index tracked by volatility and variance swaps.

New VIX (SP500). The new VIX measures expected volatility as financial theorists, risk managers and volatility traders have come to measure it. As such, the new VIX calculation more closely conforms to industry practice. It is simpler, yet it yields a more robust measure of expected volatility. The new VIX is more robust because it pools the information from option prices over the whole volatility skew, not just from at-the-money options.

The changes also increase the practical appeal of VIX. The new VIX is based on the S&P 500, the core index for U.S. equities, and the new calculation supplies a script for replicating VIX from a static strip of S&P 500 options. This facilitates hedging and arbitrage of VIX derivative products.

 
 
  Jeff Bailey   12/29/20,  10:54:44 AM
SBC Communications (SBC) $25.85 -0.76% Link ... thinking to myself that if we're going to get a nice end of year INDU close at 11,000, then SBC, which traded fractionally lower from its 12/31/03 close ($26.07) is not headed the right way at this point.

Where are those "dividend buyers" and "dow dog strategy" front-runners that should be painting the tape higher into Friday's close?

 
 
  Linda Piazza   12/29/20,  10:54:27 AM
The advdec line has moved sideways since the release of the crude inventories, not giving us many clues as to strength or weakness. It's still negative, but at only -258.

 
 
  Linda Piazza   12/29/20,  10:53:04 AM
The OEX still tests its five-minute 100/130-ema's.

 
 
  Linda Piazza   12/29/20,  10:51:58 AM
The SOX's five-minute chart shows it coiling at the top of its range, into a symmetrical triangle. It's nearing the apex, so should break one direction or the other soon.

 
 
  Jeff Bailey   12/29/20,  10:48:58 AM
3M (MMM) $82.99 (unch) ... session low/high has been $82.73-$82.99

 
 
  Jeff Bailey   12/29/20,  10:47:54 AM
QQQQ $40.10 +0.32% ... "hickup"

 
 
  Linda Piazza   12/29/20,  10:47:24 AM
The TRAN did show a reaction to the crude inventories. It rose. Was this relief that the numbers weren't worse? Inventories were expected to decline. The TRAN now moves up toward a retest of the morning's 3814.56 high, with the TRAN currently at 3811.71.

 
 
  Jeff Bailey   12/29/20,  10:47:21 AM
Feb. Crude Oil (cl05g) ... 30-minute delayed chart with conventional (blue) and fitted bearish 38.2% (pink) at this Link

 
 
  Linda Piazza   12/29/20,  10:44:02 AM
Let's look at what Keltners show us about the OEX's behavior. The 15-minute chart shows likely strong resistance in the 576.30 area. They also show likely strong support from 574.66-575.56, with that support probably working toward converging somewhere in the middle of that 1.10. CCI shows the OEX is in downtrend, so the OEX is likely headed toward that converging support. Beyond that, we can't see too much from the Keltners. The midline of the OEX's rising regression channel is now at about 572.60 or so and still rising, of course.

 
 
  Jeff Bailey   12/29/20,  10:38:35 AM
Feb. Crude Oil (cl05g) $42.55 +1.87% ... up $0.78.

WEEKLY Pivot levels ... $41.90, $43.04, Piv = $44.64, $45.70, $47.39.

 
 
  Linda Piazza   12/29/20,  10:38:33 AM
Ho-hum. Equities don't appear to be reacting yet to the crude inventories numbers or the pop in crude prices. Not even the TRAN reacts.

 
 
  Linda Piazza   12/29/20,  10:35:47 AM
The Energy Department reports U.S. crude inventories down 800,000 barrels, distillates down 800,000 barrels, and gasoline up 900,000 barrels. Crude popped, currently up $0.78.

 
 
  Jeff Bailey   12/29/20,  10:34:57 AM
Linda ... sometimes in a very thin volume market, we'll also see the large caps get more attention due to their "stability" and greater potential for liquidity if a hedge fund needs in/out in a hurry, in a light volume trade.

Especially around holidays, when all market participants aren't at their posts.

 
 
  Linda Piazza   12/29/20,  10:32:42 AM
Crude inventories being released.

 
 
  Linda Piazza   12/29/20,  10:32:21 AM
The OEX remains trapped between the support in that 575.80 area and the resistance of its five-minute 100/130-ema's. No wonder. Other indices show mixed-up behaviors. The SOX charges up to test its 200-sma and the RLX shows strength, but other indices are laggards. As I said earlier, we need to see some of these pull together or we may be doomed to choppy market behavior.

 
 
  Jeff Bailey   12/29/20,  10:31:58 AM
Sell Program Premium SPX 1,211.59 , QQQQ $40.09

 
 
  Jeff Bailey   12/29/20,  10:27:02 AM
SanDisk (SNDK) $25.32 +1.32% ... wouldn't ya know it.

Alternative to selling two (2) of those SNDK calls yesterday, was to look for a "pop" higher (sure looked like it after updating the pivot matrix) for SNDK near $26, then sell three (3) out the money Jan. $27.50 calls.

What's done is done and can't change things, but still have one (1) call. Plenty of time for another SNDK long, and would like to see the SOX.X making some progress above its 200-day SMA.

SMH $33.19 +1.18% ... time running out on the two (2) remaining Jan. $32.50 calls .

 
 
  Jeff Bailey   12/29/20,  10:24:32 AM
Semiconductor Index (SOX.X) 431.03 +1.00% ...

 
 
  Linda Piazza   12/29/20,  10:22:37 AM
Jeff, that big-cap issue was what I'd thought, too, but I wasn't sure I was on the right track. (See Jeff's 10:19 post.)

 
 
  Linda Piazza   12/29/20,  10:21:04 AM
The OEX has rolled down again below the five-minute 100/130-ema's, back down to test that 575.80 level that's the 50% retracement of yesterday's range. The bump back above those averages was short-termed, with not even a single five-minute close back above them, but now this test should be watched. OEX bears don't want to see a SOX push above its 200-sma because of what that might do to change market sentiment.

 
 
  Jeff Bailey   12/29/20,  10:19:41 AM
Linda (10:11:13) ... not sure, but the VXO often times will DIVERGE from both the VIX.X and VXN.X, and one reason some CBOE traders I know don't really rely on it that much.

One thought for today is that there may be some negative bias toward the larger cap names that would comprise the OEX (see BA action today), but the bullish undertone on a broader scale holds with the VIX.X and SPX, which is broader.

 
 
  Linda Piazza   12/29/20,  10:18:49 AM
SOX still testing the converging 30- and 200-sma's.

 
 
  Tab Gilles   12/29/20,  10:16:31 AM
SMH has been range bound since November, support is at 32. Link

 
 
  Jeff Bailey   12/29/20,  10:15:26 AM
QQQQ $40.11 +0.35% ... challenges correlative DAILY R1/WEEKLY R1.

First trade this week at WEEKLY R1.

 
 
  Jeff Bailey   12/29/20,  10:12:50 AM
10:00 Internals at this Link

 
 
  Linda Piazza   12/29/20,  10:11:13 AM
Jeff, what's your take on the VXO gapping higher and the VIX lower this morning?

 
 
  Linda Piazza   12/29/20,  10:09:08 AM
The RLX remains above the descending trendline off the November high. The BIX remains below 380. The SOX, however, has charged right up to the converging 30- and 200-sma's, an important test to watch.

 
 
  Linda Piazza   12/29/20,  10:06:52 AM
The OEX bounced from just above the 575.80 Fib level off yesterday's range, right back up to the five-minute 100/130-ema's and is testing them again . . . climbing above as I typed. As I said pre-market, with currencies doing a bit of zooming around, we can perhaps expect some volatility in the equities, too. For those trying to enter or already in OEX plays, decide how you want to handle stops in an account-appropriate way. Will you keep them tighter and adhere to them to avoid losses that are too big or will you widen them to allow for the volatility, to keep from getting chopped up? There's no one right way, but know which way is appropriate for you. In a light-volume environment, the most appropriate thing to do might be to stay out entirely and use today to test some system you'd like to use.

 
 
  Jeff Bailey   12/29/20,  10:04:18 AM
10:00 Market Watch at this Link

DJUSHB "Net" and "Net%" incorrect.

 
 
  Linda Piazza   12/29/20,  10:02:09 AM
Jonathan is out today and we all hope he's enjoying the day off, doing something fun. I don't watch the NQ or QQQQ's as often as Jonathan does since he covers them so ably, but the futures traders are watching and Jeff, too. Those who usually watch only the options side of the Monitor might turn to the Futures side, too, for lots of extra coverage, especially during those times when Jeff is preparing intraday updates.

 
 
  Linda Piazza   12/29/20,  10:00:03 AM
The TRAN isn't slipping much yet, still holding just above 3800, at 3804.41 as I type.

 
 
  Linda Piazza   12/29/20,  9:57:16 AM
The OEX now approaches the 575.80 level that represents a 50% retracement of yesterday's range, a potential support level that I mentioned earlier.

 
 
  Linda Piazza   12/29/20,  9:56:04 AM
The OEX again appears to be slipping below its five-minute 100/130-ema's. Those who want to risk entries--perhaps particularly dangerous in a light-volume environment--could use these averages as benchmarks, bearish below and bullish above, with stops set an account appropriate distance away from the averages.

 
 
  Jeff Bailey   12/29/20,  9:55:50 AM
Sharp decline in Gold this morning .... not certain, but the commodity getting smacked and looks to be following the recent equity move. Might also be seeing negative reaction to Tsunami impact as it relates to jewelry demand in the region.

 
 
  Jeff Bailey   12/29/20,  9:53:28 AM
VIX.X 11.65 -2.91% ... Daily Pivot levels ... 11.73, 11.86, Piv = 12.13, 12.26, 12.53.

 
 
  Jeff Bailey   12/29/20,  9:51:50 AM
QQQQ $39.99 +0.05% .... bumping against $40.00 last 20-minutes.

 
 
  Linda Piazza   12/29/20,  9:51:33 AM
Strange. The VIX gapped lower; the VXO, higher.

 
 
  Jeff Bailey   12/29/20,  9:50:23 AM
Nortel (NT) $3.49 +1.45% Link ... Janney Montgomery saying Verizon (VZ) is planning to install its fourth local packet switch in the greater Washington DC area in first-half of 2005, replacing an existing Lucent (LU) 5ESS with a Nortel Succession packet switch.

Unlike the first three DMS-100 switch replacements, Janney Montgomery believes this would be the first time Nortel will replace a competitor's circuit switch.

 
 
  Linda Piazza   12/29/20,  9:48:55 AM
Scanning some of the indicator indices I watch, I note that the BIX turns lower through its most recent consolidation zone, slipping back below 380. The TRAN attempted a move higher, but is now easing below the flat-line level, although still above 3800. The GSO eases. That potential right-shoulder level is getting somewhat elongated (timewise), though, and the GSO needs to round down soon if the potential H&S is going to retain any validity at all. Otherwise, it will look like a failed formation and that might encourage bulls.

Perhaps of particular importance, though, and working against some of these negative observations is the fact that the RLX has popped above its descending trendline off the November high. The OEX and RLX have had some intraday trading patterns that closely mimicked each other lately, and RLX strength might help the OEX. BIX weakness might hurt it. Hmmm. Recipe for choppy trading behavior until some of these start pulling the same direction?

 
 
  Jeff Bailey   12/29/20,  9:46:10 AM
Imax Corp. (IMAX)Link ... said its Warner Bros. "Nascar 3D" movie surpasses $20 million in gross receipts.

 
 
  Linda Piazza   12/29/20,  9:43:57 AM
The SOX is about a point above its 200-ema, currently testing yesterday's high. If the SOX can maitain levels above the 200-ema, something it's had difficulty doing over the last seven trading days, it faces the combined 30- and 200-sma's above, both near 531.70.

 
 
  Linda Piazza   12/29/20,  9:41:32 AM
As Jane may have already noted, the advdec line is negative.

 
 
  Jeff Bailey   12/29/20,  9:41:29 AM
Boeing (BA) $52.50 -1.4% Link ... lower after New York Times article saying the Pentagon is planning sharp cuts for its new F/A 22 fighter jet, due to enter service in December 2005, in an effort to offset rising U.S. deficits and growing cost of Iraq war. The U.S. Air Force has estimated the total F/A 22 acquisition program for 277 planes would run about $72 billion, making it the most expensive fighter jet in history.

Boeing (BA) and Lockheed Martin (LMT) $55.80 -1.69% Link are the two builders of the F/A 22.

 
 
  Linda Piazza   12/29/20,  9:39:34 AM
The OEX hovers near the five-minute 100/130-ema's, piercing the supporting trendline from yesterday and then bouncing again.

 
 
  Linda Piazza   12/29/20,  9:33:10 AM
The OEX turns down below the five-minute 100/130-ema's at 576.46 and 576.37, respectively, but so far maintains yesterday afternoon's supporting trendline near 576.20, so could still be considered just testing those averages. . . . rolling deeper now as I type, a sign of weakness for the OEX. Bears should be watchful of potential 575.80 support and then of the midline of the OEX's rising regression channel, near 572.60.

 
 
  Jane Fox   12/29/20,  9:30:48 AM
At 10:00 A.M. today the National Association of Realtors will release its November existing-home sales report. Economists expect existing home sales to rise slightly to 6.80 million units from October's 6.75 million unit rate.

 
 
  Jane Fox   12/29/20,  9:18:59 AM
WSJ is reporting that the Tsunami's death toll is nearing 70,000.

 
 
  Linda Piazza   12/29/20,  9:18:41 AM
We'll be looking closely at internals today as the cash market opens and early volatility settles down. Futures are slightly lower, but not particularly indicative of what might happen as of yet, with the OEX a point or two beneath the top of its ascending regression channel, a potential strong resistance level. Some bullish chart formations argue that the OEX will attempt a move higher, but that ascending regression channel has been in place for two months now and its resistance has held since then. We do have November's Existing Home Sales at 10:00, but probably more attention will be paid to the 10:30-ish crude inventories number. Note that over the last hour, the dollar has been doing a bit of zooming around, rebounding against the euro and yen, but with many market watchers terming such moves oversold bounces in the current climate. It's possible that equities could see some volatility in this climate, too.

 
 
  Linda Piazza   12/29/20,  6:27:29 AM
Good morning. The Nikkei touched 11,500 in overnight trading, but spent most of the session just above 11,450 before selling off sharply in the last few minutes of trading. Other Asian markets turned in mixed performances. Most European markets see modest losses this morning, with the FTSE 100 being one exception. After a several-day holiday, investors in FTSE 100 companies factored in the decrease in crude prices over that several-day period and sent the bourse higher until a few minutes ago, when it sank to the flat-line level. Our futures held steady at slightly higher values until the usual 3:00 am turning period, and then they moved modestly lower. As of 5:58 EST, gold was down $0.60 and crude, up $0.03. More detail about Asian and European markets follows in succeeding paragraphs.

Boosted by the U.S.'s Consumer Confidence number, exporters sent the Nikkei higher at the open Wednesday. Banks moved higher in early trading, too, with major banks UFJ, Mizuho and Sumitomo Mitsui forgiving some debt of struggling retailer Daiei and canceling some preferred shares. Those exporters and banks were to be hit with profit-taking later in the day. Among exporters, Toyota Motor Corp. managed a 0.2% gain. Among the major banks, only Mizuho Financial Group ended higher. The Nikkei skipped along just above 11,450 until the last hour when it first drifted below that level and then sold off sharply into the close. The Nikkei closed down 42.57 points or 0.37%, at 11,381.56. It closed almost 120 points off its 11,500.95 high of the day. The Nikkei will close early tonight and will not be open again until Tuesday.

Other Asian markets turned in mixed performances. The Taiwan Weighted gained 1.47%, and South Korea's Kospi climbed 0.66% as Hynix Semiconductor soared 5.7%. Singapore's Straits Times eased 0.01%, but Hong Kong's Hang Seng gained 0.49%. China's Shanghai Composite declined 0.36%.

Most European markets trade in negative territory, although losses appear to be modest. Open for the first day after a several-day holiday, the FTSE 100 ranked among one of the few bourses posting gains as this report was researched, with those gains attributed to the oil decline since it was last open. On December 24 in the U.K. the Financial Services Authority and eighteen banks, brokers and fund managers resolved a split capital investment trust imbroglio by releasing a 143 million pound compensation offer. Some focus today is on the companies involved, but one, Premier Asset Management, trades flat. U.K. tour operator First Choice Holidays did have up almost 1,200 clients visiting areas affected by the tsunami, but all but six had been accounted for and the company did not expect a material impact on the company's financial performance this year. On continental Europe, focus remains on the insurers, with Munich Re today estimating the tsunami-related costs as being under 100 million euro, saying the company would not need to change its earnings forecast.

As of 6:21 EST, the FTSE 100 was flat, up $0.10 points or 0.00%, at 4,798.20. The CAC 40 had fallen 5.37 points or 0.14%, to 3,819.46. The DAX had fallen 18.17 points or 0.43%, to 4,243.62.

 
 
  Jeff Bailey   12/28/20,  9:02:39 PM
Pivot Matrix for tomorrow at this Link

 
 
  Linda Piazza   12/28/20,  7:47:18 PM
Today, the TRAN broke out to a new multi-year closing high and the Russell 2000 broke out, too, closing near its high of the day. The Nasdaq closed above 2175. The BIX inched above its 12/22 closing high, although not above the 12/22 intraday high. The Dow closed above the 10/22 high, although it, too, could not equal the 12/22 intraday high. The OEX closed at a new relative high, too, although it could not beat yesterday's intraday high, with those failures to reach recent intraday highs sounding a somewhat troubling note amid all this bullish breaking-out activity.

I noted at yesterday's close that the OEX had reached a potential bounce point and it began bouncing from the open this morning. The better-than-expected 10:00 number added fuel to the bounce and the OEX soon climbed toward its high of the day. After retracing a little more than 38.2% of the day's range, the OEX began rounding up into a potential rounded cup-like continuation pattern, one that often forms a handle to go with the cup. If that's going to happen, we should expect a climb up toward that 577.75-577.80-ish lip area, then a shallow pullback before a final push higher.

There are a couple of potential flies in that ointment, however. The OEX's two-months-in-the-forming rising regression channel tops out currently at about 578.75, so a breakout above a cup-and-handle intraday formation would soon face top-of-the-channel resistance. Unless the OEX is going to go parabolic, something always possible in a light-volume holiday week when markets can be more easily manipulated, then gains should be limited from the OEX's current position. In addition, the 60-minute Keltner chart shows potential resistance near the top of that rising regression channel. A bull has to decide ahead of time whether to give more weight to the breakout, if it should occur, or the two-months-in-the-making resistance. I tend to give more credence to a formation that has held for two months than one setting up on a one-day intraday chart. Internals have been a fair guide lately, so watching futures behavior overnight and then internals first thing tomorrow morning at the cash open should give traders some idea as to whether a cup-and-handle breakout play should be considered. I'm leery: breakout plays haven't worked well over the last couple of months as the OEX formed that previous broadening formation.

What about pullback long entries? A pullback to the midline of the rising regression channel or perhaps as low as 570.50 and a bounce from there might make an acceptable new long entry, as long as internals supported such a play. We'd need a look at internals at the time to gauge whether the OEX was more likely to bounce or fall through to the bottom of the channel, currently near 565-566.

What about rollover entries? If internals support a bearish position, they can be attempted on rollovers beneath 577.75-580, but anyone attempting such a play should be aware of the recent underlying bullish sentiment and the possibility the play could turn against the trader. Bearish entries could also be attempted on rollovers beneath the five-minute 100/130-ema's, if internals support such a play. An examination of internals should include a look at some of the indicator indices such as the SOX, RUT, TRAN and RLX, recently.

 
 
  OI Technical Staff   12/28/20,  6:58:35 PM
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