Quadruple witching day. Some volatilty is expected but overall a summer-type slow Friday would be anticipated. Of course, a tape bomb can occur at anytime such as 3 PM yesterday. If the bulls keep the RTH above 41.10, they will cruise into the weekend. For another leg upwards in the markets, the bulls need to push the NYA above the 40-week MA at 7659. The NYA is now 76 points away so watch this after the open. For the SPX beginning at 1329, the bulls only need to touch the 1334 handle and bingo, the markets will accelerate higher, the SPX moving up to test the strong 1337 resistance, which should give way, then onward to 1338 then 1341. The bears need to push the SPX under 1314 to ignite strong market negativity. A rupture of 1314 will lead to another test of the 1307-1308 support in quick order. A move thru 1316-1332 is sideways action today.
The SPX multi-day sideways range of 1307-1326 was violated yesterday so watch to see if price can remain above the channel, above 1326, or not. SPX price is now moving thru a bracket formed by the 50-day MA at 1349.57 above and the 20-day MA at 1311.04 below; watch to see which way price exits this bracket. Watch the gold and silver reaction to the coordinated QE moving forward. The reaction was very muted yesterday so perhaps the PM's (precious metals) will not receive as much of a boost this time around when Chairman Bernanke cranks up the printing presses. Banks are interesting since the pending Moody's downgrades coming will kick them lower, but the pending QE will want to run them higher.
The markets overalll are a mess, simply a gambling casino now where you place daily bets on the European tape bombs. Consumer Sentiment is important this morning, at 9:55 AM, so look for a market pivot point when this hits. By the close, traders must decide how to position in front of the Greece elections. To add to the drama, next week, the week after OpEx in June, is typically a down week 90% of the time. The open is only minutes away.
Note Added 6/15/12 at 9:53 AM: SPX fighting to stay above the 1334 to launch the upside, it keeps slipping, it needs to hold for a solid seven to ten minutes or more. Keystone took profits on JRCC. Also added more TZA. Sentiment on tap.
Note Added 6/15/12 at 9:58 AM: Sentiment data is weak, knee-jerk reaction was a drop then strong pop, the TICK printing over +700 for a high for today. SPX now at 1336. RTH at 41.91 keeps the market bulls smiling. Looks like the test for 1337 is now in progress. Bulls are running.
Note Added 6/15/12 at 10:03 AM: SPX is fighting the 1337 R and having a little bit of trouble poking above. Tech (COMPQ) is not leading the broad market (SPX) higher so this places the up move in question.
Note Added 6/15/12 at 11:13 AM: SPX trying to punch thru 1337 R. Tech sneaks ahead of the broad markets so that is helping inch markets higher now. NYA not yet at 7660 which would launch an upside orgy. The 8 MA is above the 34 MA on the 30-minute chart which is bullish, but, the minute charts are all creating a negative divergence vibe. SPX is 1337.25, see if it can hold this support for the following minutes.
Note Added 6/15/12 at 12:39 PM: Market weakness appears as the negative divergence on the minute charts created a spank down. 1334 is key today and hte SPX is testing this support now. Tech is leading the broad market on the up side and the RTH remains elevated so overall the bulls are feeling pretty good about themselves. The NYA is unable to attain 7660 so the bears have something to hang their hat on as well. This prevents any significant market run higher. In addition, 7639 is the NYA 200-day MA; price came up this morning for a test of this resistance, and received a slap down. It's a lazy hazy day of summer.
Note Added 6/15/12 at 3:16 PM: The SPX punched up thru 1334 today so that led to 1337 resistance, then 1338 resistance, then 1341 resistance, which has held, just as the bull playbook wrote this morning. The minute charts would be agreeable for a leak lower into the close due to negative divergence forming if price can print at 1340.50 or higher to match or exceed the high from 2:45 PM.
Note Added 6/15/12 at 3:27 PM: Here she comes..... 1340.25, ... 1340.41.... this is in the neighborhood to create the negative divergence. Here we go..... 1340.36 ...... 1340.44 ... 1340.48 .... close enough, it may sneak a bit higher but the 60, 30, 15, 10, 5 and 1-minute charts are showing negative divergence so this should create a spank down and weakness into the close.
Note Added 6/15/12 at 3:36 PM: There's the higher print 1340.61 ....let's see if price receives a negative divergence slap down in the minutes remaining.
Note Added 6/15/12 at 3:57 PM: SPX is at 1342 not wanting to come down due to strong buying into the close. Traders looking to see a successful ending to Greece with the stimulus coming so the bullishness ignites a short-covering pop at 3:55 PM.
Note Added 6/15/12 at 4:10 PM: Traders are looking for a bullish week next week, a week that is typically down 90% of the time. Usually the OpEx move today leads to an opposite move come Monday so that would favor the bears to start the week. Markets are typically weak in front of the new moon which is Tuesday evening. SPX closes at the highs of the day at 1343. VIX dropped 2% today. Keystone's SPX:VIX Ratio Indicator is 63 moving upwards towards the 68 that will ignite a large bull move higher. Look at the NYA, closing at 7664, three ticks above the 40-week MA at 7661. Isn't that something? How does Keystone know these numbers to watch ahead of time? The NYA is a very big deal, it is one of Keystone's cyclical indicators and allows the bulls to retake control of the broad markets. The NYA 7661 is critical at Monday's opening bell. Traders are positioned long since they figure markets go up with a happy Greece election outcome, or markets go up with a sad Greece election since the central bankers will institute quantitative easing. Trading tends to never be this easy. The die is cast. Sunday will tell the tale. Time to turn on the new exhaust fan to allow the smoke to clear.
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ReplyDeletechop chop keep dropping the silver bars on my feet... Gold looked poised for a sick breakout this morning then came the velch ...
ReplyDeletetrading anything KS ??? nothing really moving right now... I was hoping for a late day sell off something small for a few points in an effort to balance out the deficit in the account from the silver trading this morning. I'd like to see one more push up and I'll fade it along with a short in oil...
ReplyDeleteIt is a lazy hazy day of summer thus far. Minute charts hint at a drop coming, maybe some weakness ahead then buoyancy as typically occurs on a Friday afternoon for an overall flat move from here. Since 1334 was taken out, more than 1337 should have occurred, but the day is young. Would like to exit some positions to raise cash in front of weekend but letting things simmer now.
ReplyDeleteI have got nothing on but CEP which I won't consider a position the 9 period RSI lines seem to be keeping a lid on things for now VIX can't be trusted moving 10-20% either way every half hour which goes to show this is mortal combat.
ReplyDeleteif Gold or Silver does what corn just did the HFT BOTS are going press this market into all out sell program frenzy.
ReplyDeleteOkay, here's what I think will happen: the Greek election will again be inconclusive. More negotiations required. More uncertainty. Markets won't like that and will sell off. Also because they are often down on the Monday following triple witching, and because we're near the top of recent ranges, and because we are getting above the 4MA that some traders use as a guide. Perhaps the SPX will fall back into the 1320s or further down toward the 20-day on Monday. The rest of the week? We'll see. But I wouldn't sweat any shorts you/I might be left with at the end of today. KS?
ReplyDeleteHello all, next week is a crap shoot. Best to minimize risk, scale back, raise cash, stay hedged, those type of things to ride out the storm thru the Fed on Wednesday. Markets may want to sell off until they are sure that the Sugar Daddy Bernanke is delivering the crack. Lots of cross currents now and markets are difficult. The smart traders are the ones sitting out this circus on the beach saying, "Pass the lotion."
ReplyDeleteKS, why didn't you add more TZA into the close with the last minute gap up? I believe good news is priced into this market. What do you think?
ReplyDeleteSteve
I cant speak for KS But i was fliping blocks of TZA at the close between .41 /.44 and .46 / 48 if you look at June 11th why expose your self to that much risk...
ReplyDeleteHello Steve, sure, adding more TZA would have been fine, the short-covering market pop, however, developed quite fast with minutes remaining so it is easier to coast into the weekend. The TZA helps hedge against Keybot's bullish position. The die is cast now. Net net, as shown on the Positions page, the overall portfolio is about 85% long and 15% short so we will see how that works out. It appears that the boat is loaded on the bullish side, the adage "don't fight the Fed" comes to mind and traders positioned that way ahead of the weekend. Therefore, the bears may actually win on Monday since the markets strive to hurt the maximum amount of traders at any given time. The high volatility ensures more strong up, and strong down days ahead as markets motor along sideways overall, thus, the ebb and flow of markets, large ups, large downs, should continue to provide ample opportunity to move in and out of the markets.
ReplyDelete