Tuesday, March 27, 2012

Keystone's Midday Market Action 3/27/12

Markets receive a next-day follow-thru bounce. IBM new highs.  LEN report beats which increases housing sector optimism after a one week stretch of all bad news. Copper, JJC, is lower today at 49.81 but remaining well above the danger level at 49 so this encourages the bulls. The dollar is flat to slightly positive causing the copper weakness. CRB, however, is up today.  VIX is flat to up, interesting considering markets are buoyant. The volatilty should be down.

Nasdaq is up 0.03% and SPX up 0.07%, call it flat with a slight bear advantage since tech is not leading the upside.  AAPL is up a couple bucks but the negative divergence now showing on the daily chart will spank her down which should give the Nasdaq some downward bias. Keystone sold the SSO long SPX overnight trade, added more SSG (short semi's), also bot PSQ (short technology, same as TYP or QID).  Consumer Confidence is very important in fifteen minutes, markets will pivot.

Note Added 3/27/12 at 10:09 AM:  The 10 AM pivot occurs with the broad markets pivoting downwards off the intraday highs. AAPL is being goosed now to bring the Nasdaq up into a leadership position in relation to the broad market to keep the bull party going.  Keystone is now shorting AAPL stock.

Note Added 3/27/12 at 1:53 PM:  The dollar is flat, the markets are flat.  The dollar is the catalyst that sends commodities, copper, gold and oil, and thus the markets, in one direction or the other. Today is a sideways rest from yesterday's pop.  The NYAD has moved down on today's flat to buoyant markets, helping relieve the uber bullishness from yesterday.  The TRIN is at 1.28 which favors sellers today also recovering from the uber bullish 0.49 yesterday, 1.0 is neutral, above one favors sellers and below one favors buyers.  JJC is at 48.9 with a LOD at 49.50 remaining above the critical bearish level at 49. The flat dollar is keeping things calm today. VIX is up toay and all signs point to higher volatilty moving forward but these markets keep you guessing.  UTIL is up again now with a 459 handle, remember, the 463 level is critical come the Friday close so the bulls are trying to boost it as the week motors along. AAPL now testing highs from 10:30 AM, now we see what it's got.  For the SPX the 8 MA remains above the 34 MA for the 30-minute chart but the 8 MA may be rolling over right now.

Note Added 3/27/12 at 3:25 PM:  AAPL spank down; 616 to 612 in four minutes, now a bounce. Watch for any affects in the tech sector if Apple weakens.

Note Added 3/27/12 at 3:35 PM: Apple stumbling sideways keeping the Nasdaq on the green side.  AAPL is the markets; when it stumbled minutes ago the affects across all broad indexes is obvious.  With the dollar flatish, the markets will move into the close whichever way AAPL moves.

6 comments:

  1. What will you watch for before you add any index shorts? We're liable to drift upwards until Bernanke, and he's not liable to disappoint. And we're probably going to remain above 90 for the SPXA150R at the end of the day. Will you add index shorts later in the afternoon since it's probably not wise to go long again until there's a bit of a pullback? Waiting on TRIN or NYAD?

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  2. Hello Weaver, Keystone is adding to shorts now, on ongoing basis. Watch a SPX 30-minute chart to see if the 8 MA crosses down thru the 34 MA--that will tell you selling is at hand.

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  3. KS, when is a good time to enter TVIX? or it should be avoided
    thanks,
    Brian

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  4. Hello Brian, TVIX can redeem itself and move higher as it has, as it should if volatilty moves higher, but, Credit Suisse tipped their hand with this one and due to them being hesitant with creation of shares, then coming forth with a half-measure, this one should be avoided. It seems all the volatilty products are now under scrutiny, UVXY and VXX are other choices. Keystone is in VXX and will likely take a loss from it in the days ahead and would prefer to exit, but, with a market that should be topping and rolling over, Keystone is letting the VXX ride a bit longer. There's plenty of other good plays out there and the volatility stuff is probably best avoided in general.

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  5. Spec, simply put, all "normal" indicators have failed with the manipulation of the FED and other central banks. And not only have they failed, they have failed at extreme readings that normally produce corrections that are both severe and spot on. And with market corrections normally taking the form of 1-failure 2-massive buying by "bargain" hunters 3- retesting of previous highs 4- failure again, this time to new lows, this "imminent correction" could take another 2 months before it can even be quantified as a correction, wouldn't you say? Except for the dj-20, none of the major averages have even formed anything close to this type of a topping pattern. Do you believe it is simply the FED that is spoiling the normally spot-on indicators, or is there something more behind this? Any thoughs on what else it might be?? thanks for your thoughts.

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  6. Hello Anon, tops are events and need time to roll over, but nothing has changed. Chairman Bernanke's news has less oomph behind it. He wil probably have to come out with an actual new plan to give the markets a real boost. Watch Keybot for the flip back to the short side, watch the SPXA150R turning back under 90, tonights print is 90.60, and watch the SPX 30-minute chart in real-time to see if the 8 MA crosses down thru the 34 ma, and that should provide your answer.

    Sit back and enjoy the ride, think of today's high prints on the indexes and many other charts as potential heads of H&S patterns forming. The broad indexes, SPX, Dow Industrials, Nasdaq, and the leaders such as AAPL, are all negatively diverged on the daily charts. Keystone thinks its time to have another piece of pie now that dinner has settled.

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