HPQ is hugging the porcelain goddess today, puking up over 7% on the aftermath of last evenings earnings. DELL started the PC stink the day before. SOX (semi's) has a 396 handle edging down towards the important 389 level, identified by Keystone's algo, which would signal marke trouble. For now, however, the bulls are keeping the SOX above 389 and JJC is well over 44 and running strong, so the market bulls have no worries. Except one. Utilities. UTIL is weak again today extending the already over 5% down move in the last three weeks. UTIL 472 signals big-time market trouble ahead and the current print is 473.48, only a buck and one-half away. While the bulls grabbed onto copper, they let utes slip out of their hands.
The SPX is moving thru the 1406-1413 range so whichever side it exits that side receives street cred. The bulls need to punch up thru 1416 to launch a move back to 1419 and 1422. Bears need to drop under 1407, if so, the 1406 will give way, as well as 1403 and the SPX will move to the sub 1400 numbers first using 1399 as support. A move thru 1408-1415 is sideways action today. Housing data is ten minutes away. VIX is moving higher watch to see if it crosses above 16 today, or not. Gold is printing 1667, the gold bulls mean business, the precious metals (PM's) market requires watching into the weekend (reference the gold charts posted this morning). SPX just lost 1407.......it must hold for a few minutes to lock it in........
Note Added 8/23/12 at 10:02 AM: SPX fails at 1407, now testing 1406. Remember, 1406 and 1403 are extremely strong support levels, price should fall thru but it may recquire a bit of work. UTIL is printing 472.72 with a LOD of 472.17, seventeen cents away from extreme market danger. This is very serious now. If UTIL 472 fails today, the markets will feel strong pain moving forward and this forecasts continued market trouble ahead. It is always a game of pennies. UTIL now at 472.50.....
Note Added 8/23/12 at 10:27 AM: UTIL 472 ruptured with a low print thus far at 471.89. This is an amazingly bearish print the likes of which have not been seen for many months. Price must remain below 472 for seven to ten minutes to lock it in, if so, the broad indexes should weaken dramatically. UTIL is now printing 472.03. This is high drama. The market bulls know that it all slips away if they lose UTIL 472. Gold is printing 1671.
Note Added 8/23/12 at 10:40 AM: Move along, move along, nothing to see here folks, move along. The bulls dodged a cannonball, not a bullet, keeping UTIL above 472, for now. A slight calm returns to the indexes. Keep watcing UTIL 472 thru tomorrow's close. This level and the action this morning is much too important to not sustain another test. The next two hours of trading will be important. Tech is leading the broad markets lower so this encourages the bearish action. TRIN is 1.32 reflecting steady-eddy selling today. VIX is 15.78 and did punch out a print over 16 today. For the bears to gather downside steam, they need either UTIL 472, JJC 43.61 or SOX 389 to fail. If none of the three fail, the market bears got nothing. UTIL is printing 472.11......
Note Added 8/23/12 at 10:58 AM: UTIL failure at 472 again at 10:52 AM EST which is about six minutes time thus far. This is serious if it holds a couple more minutes.......
Note Added 8/23/12 at 11:36 AM: UTIL had slipped under 471 now printing 471.09. It is surprising to not see market weakness upon the 472 failure but keep watching. Copper, JJC, is over 44 keeping bulls happy. SOX is at 397 so no sign of break down in semiconductors as yet. Another parameter to watch is Keystone's NYA 40-Week MA Cross again. Watch NYA 7808, now over 8000. The markets will be in the progress of moving far lower and in a sustainable fashion should 7808 fail. The utilities sector is comical. After all of Keystone's wild embellishment about utilities today, the reader's here wonder, "where's the beef?" This is interesting market action today. UTIL under 472 should usher in significant market weakness, perhaps some time needs to play out. Gold is 1675. Keystone needs to tend the garden anyway.
Note Added 8/23/12 at 1:13 PM: UTIL remains under 472 and some market weakness does filter in over the last couple hours. SPX is playing around with 1403 support, failure would lead to 1399, and hand-wringing by pundits about how the psychological 1400 level was breached. Copper remains elevated. SOX is at 397. NYA remains over 8000. The bears need one of these three to help out but all three like the bull camp. Keystone took profits on UVXY since minute charts are hinting at negative divergence, will look to reenter.
Note Added 8/23/12 at 1:33 PM: Tech is not leading the broad markets lower. Keystone took profits on ERY, will look to reenter.
Note Added 8/23/12 at 2:01 PM: Keystone bot MCP, a dangerous rare-earth play, opening up a new long position.
Note Added 8/23/12 at 2:10 PM: Keystone added more RIMM, doubling the long position. Keystone bot CDXS, a dangerous and speculative enzyme/biofuel stock, opening up a new long position. HPQ may be an attractive long at 17.20-17.50.
Note Added 8/23/12 at 2:30 PM: UTIL is printing 470.29, under 472, ushering in the negative market vibe today. JJC is 44.05, coming down to tease the 44 level, but remains bullish well above the important 43.61. SOX is frozen sideways thru 395-397. SPX back tested the 1403 over the last hour and may roll over to test the 1400.50 LOD so far today, then fall thru the psychological 1400 to 1399 support. The SPX is -0.8% but the COMPQ is -0.7% so tech is not leading the downside so the move lower may run out of gas. TRIN is 1.60 representing steady orderly selling all day, no type of panic move at all, thus, this hints at continued selling ahead. Watch to see if the NYA stays above or below 8000 at the close today, now printing 8009. VIX is printing near the highs at 16.32 up 8% today.
Note Added 8/23/12 at 3:36 PM: UTIL is at 470, watch to see if the sub 472 print occurs today. The part two for the utes has not been highlighted as yet. If UTIL 472 holds (part one), next watch the 50-week MA at 459.24 (part two). This level represents a trap door for the equities markets and it is only ten points lower. If UTIL 459.24 fails, the equity markets will likely go into free fall. But, no point in getting ahead of the game, simply be aware of what is coming should markets choose to continue lower. There are likely some fits and starts before that would happen. JJC, SOX and NYA remain in the bull camp so the bears cannot develop any serious downside momo.
Note Added 8/23/12 at 4:02 PM: Gold 1672. VIX 16. SOX 397. JJC 44. NYA 8000+. UTIL 470, under 472, logging the first time that price prints under its level from 15 weeks prior, a bearish market signal. Watch UTIL 459.24 which signals that markets are at the point of no return. Watch the RBA (Aussie's) tonight at 7:30 PM which may cause copper to move which in turn will dictate broad market movement.
WHAT? What happened to cooper at 44? isnt tah bull
ReplyDeleteCopper is solidly bullish, JJC is printing 44.31 well above the danger level at 43.61. Keystone's algorithm continually identifies the most important sectors or other economic items that are affecting the broad index price movements at any given time. Coppre remains important, it was the central focus for almost two weeks, but now that it is solidly supporting the bull side, other sectors have stepped up in importance, namely utes and semi's. Continue watching 43.61 but of more import now is UTIL 472 (which is now being tested as this is typed) and SOX 389. SOX is now printing 396.42. Tomorrow, the algo may be interested in something different again, but for now, and likely the remainder of the week, watch UTIL 472, JJC 43.61 and SOX 389. Copper is bullish and will support the bulls, but UTIL losing 472 will cause market negativity.
ReplyDeleteLooking at the daily and weekly charts and MAs, silver sure looks ripe for a short anytime it approaches 30.53-30.94. How dangerous a bet would that be leading up to Jackson Hole? Better to wait till next week sometime?
ReplyDeleteUTIL's are gruesome...yet if you put your bull goggles on, they haven't been this oversold since February.
ReplyDeleteWeaver, it is interesting that gold is a descending triangle but silver has more of a falling wedge vibe. This is why Keystone is staying away from trading them (except for an ongoing PAAS position). They should move together so time will tell. The silver daily chart is very constructive, needs a pull back but after that it should come up for a matching high at these current levels again. Lots better plays out there these days. Whenever playing commodities or PM's, gold, silver, etc..., always buy an extra shirt since it is easy to lose the shirt you are wearing. These plays can be psycho, more than other stocks.
ReplyDeleteYep Zig and UTIL has a falling wedge vibe on the daily chart, but they keep falling. Perhaps a market melt down on tap. Take it minute to minute. UTIL minute charts are positively diverging which also points to bounce. if the markets want to give up the ghost, this would be the time to do it, otherwise, the bulls will probably jump in. An inflection point now at UTIL 472 that has serious market ramifications.
ReplyDeleteUTIL 471.70 Uh oh.
ReplyDeletePete
It must cost the Fed an arm and a leg to stick save the UTIL's, the futures must be cheaper lol...I think they just let everyone sit here on the edge of death for the rest of the day.
ReplyDeleteYep, all. Utes are high drama today. Very odd to not see market weakness due to UTIL sub 472. Perhaps it needs some time to soak in. The markets are a daily soap opera.
ReplyDeleteHi KS, I recalled sometimes last week you mentioned that SOX will go to ~430 before it roll over. Is that still the case? Today we're only down a few handles. Thanks for your insight.
ReplyDeleteYou will have to read to come up to speed. But now hte level of interest is SOX 389, if that fails, the markets are in trouble, above and the semi's will cointinue to add positivity to the broad indexes.
DeleteHey all, here some EWT perspective. We've clearly experienced a 3 wave structure so far. Tuesday was a wave down, yesterday after 2pm a wave up and today is a wave down. Question now is; is this a 5 wave down (starting of a serious decline) or merely an ABC correction? If the latter than the move from say 1427 to 1407 was A (20 points), B was a perfect 9 point retrace (remember I predicted it to go to 1415-1420 with an ideal target of 1417 and it got to 1416.18.... Not shabby. That's why I like EWT) thus C is then either 0.5, 1, or 1.618xA, which would target 1406, 1396 or 1384, respectively. Given they SPX already tagged 1404, 1396 seems most likely.
ReplyDeleteWhat happens next? Could be this is a higher degree wave 4, and a wave 5 commences next week, or indeed it's going off the cliffs from here targeting 1100s (as KS pointed out in his weekly SPX chart of today)
This is what also don't like about EWT: which higher or lower degree is the market in. Hence that's why I follow KS because that's where sound classic TA aids and helps. KS rules!!!
SPX 1389 is very important, it is the 200 EMA on the 60-minute chart so keep that in mind as targets come into play.
DeleteInteresting, also since mid 1380s is the lower trend line of the upward sloping channel the market has been in since the June low. Maybe for once all signals point in the right direction? Wouldn't that be nice!?
DeleteKS, why is copper up? China PMI data was at a 9 month low...
ReplyDeleteHi Arnie, may be Dr.Copper is telling us that market is not ready to roll over yet. I believed we'll be bullish over the long weekend next week. Thanks for your input on EWT.
DeleteMarkets only care about stimulus (quantitative easing) to move higher. With the very weak China PMI data last night, that is actually viewed as a big reason for China to further plans for QE moving forward. Hence, long copper traders run into the markets, commodities run higher, and equities higher. As the Fed talks about stimulus, the dollar weakens which also bounces copper, commmodes, and equities. So its all about the Fed, ECB and China crack in this casino called the stock market. Copper is the doctor because housing and auto's consume huge amounts, this tells you the economy is booming. When copper is weak, that says there is no oomph in the housing market or in the auto industry. There is about 50 pounds of copper in the average car.
DeleteThanks for explaining. A normal market would have copper drop in such dismal data in other words, but now that the market has been conditioned by our "great" CBs, it's reaction is total opposite... Right!? Scary and can only end one way: junkie ODs...
Delete50lbs of copper per car... Holy smokes!
Yep, that is exactly right, in the regular market days, the China slowdown would mean lower copper and commodities, supply and demand, demand is slackening so price should fall, common sense economics. It is a shame what the Fed, beginning with Chairman Greenspan did to this country. Yep, Uncle Sam is a junkie now, the Fed was the supplier, and rehab only occurs after the junkie hits rock bottom. There is an interesting couple years ahead.
DeleteKS I've taken the opposite of your signals and I'm up 21% right now keep up the good work
ReplyDeleteSorry chief, no acoloades around here for vague statements. Ask your high school buddies for direction and advice. Identify the exact signal, when, etc.., and we can analyze it and find out if it was correct or not, and if not, figure out why it failed. If unwilling to do that, which you are encouraged to do here, so you can learn, then, just go back to band practice.
DeleteKS, I agree with anon 44.085 JJC means nothing. If it did we wouldnt be down 114 points, 11, and 21.39. Sorry it is a ghost number.
ReplyDeleteYou are not paying attention Anon, or perhaps Keystone is not explaining things clear enough. Keystone has an algorithm, Keybot the Quant. One of the great things about the algo is that it will continually identify the most important influence/s on the stock market as time moves along. This can change daily, or a sector may be in focus for several weeks. Copper, using JJC as a proxy, has been important for the last few weeks. Copper did not verify the upside rally, it was lagging, and any typically rally should have Dr. Copper leading. The algo not only identifies which sector or economic item is of most import, but also the levels or numbers associated with that item. Keybot only sees 1's and 0's. The level for copper is JJC 43.61 right now. Above and this means the markets are receiving positive buoyancy. If JJC falls below 43.61, you will see marked selling in the broad indexes. The 44 level was simply referenced since whole numbers are psychological levels for traders, such as SPX 1400 today. Thus, you want to watch JJC 43.61, since price is well above, yes, it is bullish for markets. As explained this morning, the quant moved on to now track UTIL, SOX, and NYA, along with JJC. So now you have four items to watch. Hopefully, this helps you understand what is going on a bit better.
DeleteJJC is holding this market up. Along with AAPL and SLV/USO.All are due for a rest. If no one else grabs the baton, out from the shadows comes K wave to scare the hell out of everyone including the market handlers.....Lovin the drama!
DeleteSorry, Cognitive dissonance, again keystone. How can you explain a JJC way above 43.61, (44 and above all day), a number you have insisted on in many many posts, as being associated with the the markets turning negative or positive? From Copper today the markets should have been way up, slightly up to give any credit to the number, or maybe down a smudge. Still how do you explain a bear day all day, market down over hundred points, 10 points, 20 points, and still use the JJC 43.61 as the pivot point?? It's like saying your not speeding in your car and have not broken the speed limit even though your going 100 in a 45 MPH speed zone. Doesn't fly. If your past the speed zone you should in reality be speeding, not hinting at not really speeding but just hanging over the speed limit zone until you go down below it again.
ReplyDeleteJJC was above 43.61 to start the day, that was yesterdays news. You have not done your homework, go back and reread the site, you probably never did the first time. Read Keybot's site over the last week to the present as well and try to understand that so you can come up to speed. Ask if you have a specific question.
DeleteOh yeah and politics is holding the markets up not copper numbers. Sorry. Look up the word cognitive dissonance.
ReplyDeleteWhen is KS going to re-enter UVXY?
ReplyDeleteDaily chart is long and strong so it will make higher highs from here. A gap fill at 5.37-ish may be an attractive reentry point.
DeleteAnon, as you should know, the bull-bear fight is being fought out on many fronts; some more important than others. Copper is one of them, just like util, etc. Hence, some fronts are lost, others won. In this case the copper win by the bulls in an overall lost day for them prevented any further downside. That's how you have to look at it. The market in other terms is made up of many smaller markets. It's not that jjc is THE market etc.
ReplyDeleteYou should know better. On the other hand, as soon as there are a few down days "trolls" and "critics" come crawling out of the woods not adding anything constructive to the market analyses. I wonder why...
Personally I am a little surprised to see the quand still long, I'd sold my longs already. But hey what do I know (and I didn't sell since I wasn't long as I never believed in the past rally sofar)
Btw, nice trade on the uvxy KS, I am still holding; waiting for the August 6 gap fill at a minimum.
That is a good UVXY target, consider the 5.37 gap underneath now that was left behind as well. Overall, UVXY is long and strong so higher highs will be expected.
DeleteArnie, I am not a troll because I doubt or question the JCC and coppe as an indicator that the markets will go one way or another. And when it does, and the markets done, all of a sudden other barometers are set into play. It's like saying a team is going to lose or win based on the star player, and then when they win you say "see" and when they lose you say "See"! You cannot point to JCC and when it fails bring in other things that basically make a mixed bag of maybes until the market swings completely one way and they all swing that way. Make sense!?
ReplyDeleteHow copper "prevented" any further downside is just ridiculous. It can easily be argued that there was a downside to the market because copper doesn't matter.
I am not trying to make inflammatory remarks or cause a troll problem. I am simply questioning what went wrong. To put down anyone who does that as a troll shows that something may be wrong and you don't want to deal with it.
My opinion is that the markets are completely manipulated by politics and hedge fund managers and robots especially. TA is a thing of the past, especially indexes that push through and then pull back or stay through and don't stay through.
Don't spend time writing comments that are unapplicable. You have to do your homework to understand what is going on, no one is going to spoon feed it to you. These items are continually explained in detail, they are very simple to understand, but it is obvious you are not up to speed with what occurs on the Keystone/Keybot sites.
DeleteAs far as copper not impacting the market, add basic stock trading to your reading list, read about 'all houses built with a copper roof', as Jessee Livermore would say. These are some of the most basic concepts in trading. If you want to learn to trade, and actually become good at it, start reading and educating yourself, ask intelligent questions.