EOM today so the monthly charts will receive a new final print at 4 PM. CRUS earnings beat last evening so this will create buoyancy in AAPL (parts are used in Apple products) and the tech sector. Copper did not move up yesterday so the market bulls were held in check. The Dow Industrials log nine down Monday's in a row. Continue using JJC 44.20 as the trigger for a strong sustainable upside market move, otherwise, the upside is limited. Watch SOX 376.00, now at 380.61. Bulls need to stay above 376 while bears need to push under 376. Watch VIX 18.80, now at 18.03. Bulls need to stay below 18.80 while bears need to push above 18.80. Watch XLF 14.45, now at 14.73. Bulls need to stay above 14.45 while bears need to push below 14.45. Watch Keystone's SPX:VIX Ratio Indicator, now at 76.83; 68 is the key level that will signal strong bearishness, above 68 and bulls are fine. The CPC put/call chart posted last evening highlights the complacency in the markets. Despite any traders waxing worry on television or in other media, traders are not worried, they are in fact worry-free and complacent, fully expecting the central bankers to pat their behinds forever forward. Remain cautious and attentive in these markets.
Case-Shiller data is released at 9 AM EST; this will impact the housing sector trades including Keystone's SRS trade. Chicago PMI at 9:15 AM provides insight into manufacturing strength, or lack thereof, as well as a hint concerning employment for later in the week. One of Keystone's most important monthly indicators, due to its tangible correlation to markets, is Consumer Confidence at 10 AM. Expect a market pivot point. The trading session should settle in after this trio of economic data occurs this morning since traders will await Chairman Bernanke's delivery of promises on Wednesday at 2:15 PM.
For the SPX today starting at 1385, the bulls need to touch 1392 and the bears need to push under 1381 to create acceleration moves in their respective directions. A move thru 1382-1391 is sideways action today. China hints at further easing policies, especially to spur the domestic economy, but the futures markets are not bouncing on that happy talk. Tech led the downside yesterday. Note that last week tech led the upside bolstering the rally move. As this missive is written at 6:15 AM EST, the Nasdaq futures are up 0.37% and the S&P's are up 0.24%, hence tech is leading the upside today thus far, so market bulls are smiling. Watch this relationship into the open. In a nutshell, SPX 1392 and 1381, JJC 44.20, SOX 376, VIX 18.80 and XLF 14.45 will dictate broad market direction today.
KS, has the recent rally voided the megaphone chart? And can you please update an SPX daily chart sometime mid-week so that we can see potential targets if central banks surprise or disappoint. This has become like betting on the horses.
ReplyDeleteLol, betting on horses it is these days indeed. Sad actually. Very sad. Maybe because the trading machines these days use nonlogical computing!?
DeleteKS, I disagree with that tech led the market last week. IMHO it was the DOW, tech is still lagging.
ReplyDeleteOnly using the tech (COMPQ) versus broad markets (SPX) percentage comparison for the minute to minute and hour to hour trading. Some days it may not work but typically if the Nasdaq leads the SPX upwards, the markets are having a bulilsh day, and visa versa. Today as this is typed at 11:33 AM, COMPQ is up 0.3% and SPX flat, so the bulls have an edge. This can change quickly, if it does, it tells you the downside has strength. If the markets sell off but tech does not lead lower intraday, then the markets will probably bounce and recover. It's a helpful tool for day trading.
DeleteKS, thanks for the info; this is good stuff to know. I was actually referring to new highs on a daily basis where the COMPQ and NDX peaked in early July and haven't been able to best that, whereas the INDU and SPX even bested their last week's high (already). Seems like tech is now in a down ward channel, while the DOW and SPX are still in upward... hence my "tech is lagging" notion
DeleteYep, lots of differnet angles to study, Dow and SPX overtook July highs but Nas and RUT have not, so watch small caps as well. Keep an eye on those bear flags for the broad indexes, May tops, then June bottoms, sideways consolildation, see if the second leg down begins now, or not.
DeleteYep, megaphone pattern is still in play, price will always overshoot or undershoot trend lines. The key to trend lines is choosing them based on the maximum amount of touches to the candles. So the top trend line that makes up the top of the megaphone was overshot, the megapone trend line is at about 1375-1380-ish. As long as the SPX reverses and comes back down right now and below the 1375-ish the megaphone will be back on track. Breaking up thru 1400 will likely nullify the megaphone pattern.
ReplyDeleteFor the previous megaphone chart/s discussed, type 'SPX Megaphone' in the search box above and the chart/s should come up.
The 8MA crossed under the 34MA on the 30 min SPX.
ReplyDelete