A new trading week is beginning. Bulls need copper to cooperate to move higher. Watch JJC 44 today. More importantly for the broad indexes in the very short term, this morning, is the SPX 1391 and 1394 levels. The overnight futures tease three points higher which would place the SPX at 1394 to start the day, the HOD Friday is 1394.16. The 1394 is a big battleground and will tell a lot moving forward. If the bulls punch up thru 1394, and it holds a few minutes, the SPX is likely headed to 1403, then 1406, and likely 1425, in the days ahead. The bears must hold 1394 resistance with all their might to stop the upside move. Spain's coming request for a bailout is encouraging equity markets so keep an ear open for any Spain news today. The bulls are very confident, complacent, and expecting the markets to continue upwards without worry (think of this from a contrarian perspective). VIX is 15.64 positioning itself for a large potential spike upwards which would be in concert with markets moving lower. Volatility typically bottoms in August. SPX levels of greatest importance are 1424, 1419, 1413, 1406, 1403, 1391, 1370, 1369 and 1366.
Note Added 8/6/12 at 10:42 AM: SPX punches thru 1394 and accelerates to 1399.54 so far, a hair short of the psychological 1400. Utes are flat; if they roll over that will be troublesome for markets moving forward. JJC, copper, is 42.81, far under the 44 needed to signal and verify that a strong upside rally is in place. Thus, more sideways slop for markets with an upward bias. A back kiss of the 1394 level wold be in order today. SPX S/R is 1406, 1403, 1399, 1394 and 1391. Market bulls are entirely convinced that a Spain bailout and ECB easing is guaranteed moving forward, a done deal with no downside possible. VIX is over 16 so with an up market, volatility is moving up as well, which would not be expected. One of them, the VIX, or the SPX, is wrong. It is a lazy hazy day of summer.
Note Added 8/6/12 at 10:55 AM: Keystone bot UVXY (long volatility) opening up a new long position, it should be basing here and shows attractive positive divergence on the daily and weekly charts.
Note Added 8/6/12 at 2:55 PM: SPX is moving thru 1397-1400 since the bounce higher in the opening minutes. VIX sits at 16. JJC is 42.95, receiving a near one percent pop today but remaining well under the 44 the bulls need to launch sustainable upside. The final hour of trading will be interesting to see if the bulls can punch up thru 1400. Tech is leading the broad market move higher so the indexes remain buoyant. Keystone bot more UVXY.
Note Added 8/6/12 at 3:47 PM: Utilities, UTIL, are red today. NYAD is at +1000 and higher, including the Friday +2200 spike, for two days now, so it will need to pull back down for a rest. Likewise, the TRIN printing 0.8 and lower numbers which are uber bullish, so this would like to see the markets weaken so the TRIN can recover back towards one. AAPL is up over a percent today but the charts do not verify the joy; Apple is much more attractive from the short side as price increases.
Note Added 8/6/12 at 4:03 PM: The trading week starts with more last minute shenanigans. VIX spikes up and down in the final couple minutes, playing around at 16, still settling out. SPX moves down for the back kiss of the important 1394 level. Thus, the drama is set for tomorrow at 1394 once again. Since the day ended when the back test was occurring, at the opening bell tomorrow, the SPX will either collapse thru the 1394, then move directly to 1391 and lower, or, the 1394 back kiss is successful, and support holds, and the SPX will move back up and this time, over 1400. The market has turned into a real drama queen this year, jagged whipsaw action while stumbling sideways overall.
long a lot of UVXY that may start writing calls on if the retracement doesn't appear as per NYAD
ReplyDeleteKeystone just bot some UVXY, MCAP, positive divergence appears attractive.
ReplyDeleteI sold some Aug 7 calls against my position lets see what happens she is good for nickels all day long on scalps
ReplyDeleteits annoying I want to invest already I have over loaded with data and good equity plays but when you have something like QE staring you in the face fundamentals and technical can lead you down a road you don't want to be on at least not with any sizable position.
ReplyDeleteI sold all the UVXY when the gets to 5 or 4.75 I'm backing up the truck on it I sold the call I shorted to it just moves to much percentage wise to play games with. I will make love to it at $5
ReplyDeleteUVXY daily, weekly and minute charts are all positively diverged, it looks ready to run higher at anytime, perhaps even before the close today.
ReplyDeleteApple is getting close to that shorting level (630) that you mentioned on July 11th. And getting close to matching its 2012 top. Will that lock in negative divergence and could that be a catalyst soon for a downward move and a spike in volatility?
ReplyDeleteYep, Keystone was just looking at Apple and commenting. Negative divergence does not exist unless a price high occurs, so that would be 640 plus, but by the looks of the daily and weekly charts, AAPL can likely be scaled in for a short from here, 622, and higher now. Probably Apple is not as big a deal as a catalyst, as it was a couple months or more ago, but it may be. Europe drives the ship, especially Spain now, so the 2-10 year yield spread in Spain is probably a very important variable. There's the closing bell. Looks like VIX sneaks above 16 and the SPX plays around at the critical 1394. The dance continues.
ReplyDelete