Wednesday, August 8, 2012

Keystone's Midday Market Action 8/8/12

Watch JJC 43.75 again today although copper is weak and will likely not provide a threat in the early going. Thus, copper wants to stay in the bear camp.  Watch the SPX 30-minute chart with 8 and 34 MA cross. Scroll back a few posts to review the chart. Bulls need for the 8 MA to stay above the 34 MA and the bears need to see the 8 stab down thru the 34 MA. This action will tell you a lot before lunch time. For the SPX, bulls need to touch 1407 to set off an upside firestorm, bears need to move down thru 1394.50 to accelerate the downside.  S&P futures are off about five which does not appear to be a serious downside threat. Tech is not leading the down side in the futures either so the bears do not appear to have a lot of oomph despite the red start on tap.  A move thru SPX 1396-1406 is sideways action today. DIS and MCD should keep the Dow Industrials weak today. Euro is 1.2336.  WTIC oil pushing towards 94. The 10-year yield is 1.627%. A 10-year Note Auction occurs at 1 PM today. Oil Inventories are at 10:30 AM. JJC is targeting 43.50 to start the day well under the critical 43.75 as identified by Keystone's algorithm (which is the level the bulls need to send markets substantially higher).

Note Added 8/8/12 at 9:49 AM: Copper remains weak today so that contains any upside.  The bears did not pierce thru 1394.50 so they got nothing so far today.  Watch the SPX 30-minute chart; the 8 MA continues downward. RIMM feelilng love from Samsung interest. RL is down 4% as per the retail negativity discussed yesterday, scroll back for the RTH chart. Watch the retail sector closely over the next week. Utes are negative. Watch UTIL, now at 482; the 470 level signals big trouble for markets.  Keystone took profits on SRS and will likely reload at 25.5-ish or lower.

Note Added 8/8/12 at 10:04 AM:  The broad indexes stumble sideways. WTIC oil is over 94 and charts appear to favor a quickie pullback. At the same time, SCO, a 2x inverse ETF for oil is showing positive divergence. Keystone bot SCO opening up a new long position.

Note Added 8/8/12 at 10:34 AM: Flat equties markets continue. Oil inventories push oil price higher; WTIC at 94.57. Keystone added more SCO.

Note Added 8/8/12 at 11:26 AM:  Bulls needed to bounce markets to prevent the 8 MA from falling thru the 34 MA on the 30-minute chart, and that is happening now.  VIX is now red. SPX is fighting the strong 1403 resistance level.  Same drill as yesterday, if 1403 gives way then 1406 would be targeted. The bulls need to touch 1407 to launch an acceleration move higher. Bears need to push back now at 1403. JJC is 43.54 uninspiring for bulls and they need the copper strength to move higher. SPX is up 0.14% and Nasdaq is up 0.04% so tech is not leading the upside so the upside move should run out of gas. TRIN is 0.69, uber bullish, for four days in a row now at low numbers; TRIN now screaming for a market snap back move to relieve this uber bullishness.  Europe is finishing lower.  Spain has not asked for a bailout.

Note Added 8/8/12 at 1:26 PM:  The 8 MA (1401.17) is on the verge of stabbing down thru the 34 MA (1401.12) on the SPX 30-minute chart which would be a significantly bearish development. WTIC oil dropping under 94.

Note Added 8/8/12 at 1:52 PM:  The 8 MA and 34 MA drama continues, pennies from each other, the bull or bear winner is being decided. Volatility is receiving a slap today, VIX is now at 15.58. Tech is not leading the broad markets higher today so this keeps a lid on markets.  JJC is dropping today; Dr. Copper, the leader, is very sick. Keystone added more ERY.

Note Added 8/8/12 at 2:01 PM:  WTIC oil now ready to drop under 93. Keystone took profits on the SCO oil short play today exiting this day trade.  SCO remains attractive, will look to reenter.  Also bot UVXY reopening this long volatilty trade.

Note Added 8/8/12 at 3:19 PM:  The beat goes on; the markets linger sideways. SPX is testing 1403 R again. The 8 MA remains above the 34 MA, by a hair, on the SPX 30-minute chart so the bulls continue to hold on.

7 comments:

  1. The overall markets may be steady, but $UTIL fell but bounced from just above the 50-day MA that's been support since mid-April. This is like someone admiring their new livingroom furniture while prowlers ransack the rest of the place.

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  2. thoughts on TZA at this level? Nice cal on SCO KS...right on

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  3. Ok short 1399.25 on the ES hoping for 1372ish later this week. Still think the overall trend is up.

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    1. I don't like this trade much, closing it out for a weeks worth of sandwiches.

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  4. For TZA since it is small caps, use the RUT as a proxy. That has a sideways feel to it moving forward. TZA continues to base. Keystone is holding this one. Cannot rule out a bit lower but 16.7-17.5 is pehaps a good base. Weekly chart very attractive for upside long term from here. The triple X's are not ETF's or ETN's that you want to hold too long but the path ahead appears favorable for TZA.

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  5. KS, Any comments on this volume, or lack of, for the markets over the past week as it goes higher on MUCH lighter volume than avg? Even compared to similar up weeks in the past two summers, very reduced, no?

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  6. All of the parameters are important but right now copper, JJC, is important, the JJC 43.75 level and the final print is 43.34 well under and bearish.

    Also the SPX 30-minute chart with 8 and 34 MA cross. Very surprising that this did not cross today, so give the bulls credit. The 8 MA is only 19 pennies above the 34 MA. So this will tell you the answer tomorrow. The overhead R at 1403 held today. Last minute shenanigans occur again for SPX and VIX in the final minute.

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