The euro fell thru 1.31 three minutes before the opening bell, now printing 1.3086. Markets are flat. The bears are preventing SPX 1462 so far so the markets idle along sideways. UTIL was up above the critical 485.67 which is important thru next Friday, but as this typing began, the 485.67 gave way with price now reversing again to 486.06. Oil is down a buck just under 91 and copper is down today, so the China GDP hype did not take hold. VIX is 15.13 up a touch. Watch the SPX 30-minute chart which shows the 8 MA traveling down towards a potential cross of the 34 MA which would encourage the bears. Copper is down but JJC remains elevated at 47.32. SOX is down three points as chip news continues to disappoint, now printing 376.62 ten points away from the 386 the bulls need to pave the way to SPX 1500. Markets have stalled if UTIL stays below 485.67. If price moves above UTIL 485.67 buoyancy will appear in the broad indexes. The Dow Industrials just turned positive. Tech is leading the downside today which is bear friendly. TRIN is 0.74 which is bull friendly. The 10 AM pivot today identified the market bottom so far. UTIL just dipped under 486.
Note Added 10/18/12 at 11:43 AM: Keystone is watching UTIL 485.67. UTIL is now at 486.43 almost a point above and this helps create the market lift. The SPX is now making a run at 1462 mentioned in this morning's set up. Up and over 1462 will lead to a test of the closing high this year at 1465.77, as well as testing the triple top, and testing the upper rail of the sideways channel thru 1440-1465. The 27 Euro leaders arrive for the EU Summit and all are eyeing the buffet table right now, elbowing each other out of the way as each wants that last piece of chocolate cake. The leaders will likely spend more time receiving massages and resting on the finest linens than solving the debt crisis. Merkel is saying that the banking union is not a major focus of the meetings. This is very surprising but the markets do not seem to care. Europe is taking a more lax attitude these days with the yields down. Copper is flat. Nasdaq remains negative. AAPL is negative. The euro is 1.3103 back above this psychological 1.31 bull-bear line helping the bullish buoyancy over the last half hour. VIX drops under 15 which helps the bulls. The low TRIN, now at 0.69 was bull friendly, so it is helping to pull the broad indexes higher today as well.
Note Added 10/18/12 at 12:04 PM: SPX S/R is 1472, 1468, 1465.77, 1465, 1461 and 1460. Bells, whistles and sirens will sound if the SPX closes above 1465.77. The SPX 2-hour, 1-hour and 30-mintue charts are negatively diverged hinting that the SPX should top out in this 1464-1468 zone in the hours ahead. The minute charts for the coming hour or so would like to see the SPX price remain buoyant. Thus, perhaps the late day finish today will be entertaining. SOX is 379 well under the important 386 level. UTIL is printing at the highs for today at 486.80 well above the important 485.67 level. AAPL is down six bucks. The bulls have their feet up on the desk today, with CPC in the 0.7's, there is no fear or worry, traders are completely relaxed and complacent thinking the markets will always go up. Will they be correct?
Note Added 10/18/12 at 1:15 PM: Keystone continues to lose progress in the leaf collection area due to the market requiring attention but it sure is a beautiful day in the scenic Laurel Highlands of Pennsylvania. The hills are afire in color. Looks like GOOG stepped up to the trading floor and committed hari-kari for all to see. GOOG shares are halted. The Nasdaq drops. VIX is back above 15. The 8 MA is heading down towards the 34 MA on the SPX 30-minute chart but has not yet crossed. Watch this into the close. The lively utilities continue to remain elevated with UTIL at 486.53. SOX is 377.14. No word on when GOOG reopens, the earnings numbers were a premature release causing the excitement, and, considering the weak numbers, some downside drama is likely ahead once GOOG does reopen. GOOG is showing 687.30, a 9% drop before the stock was frozen. Price took a cliff dive from 755 to 675, 80 points, in only eight minutes, a 11% drop! Big time. Watch the low print at 676 once it resumes trading. The euro is at 1.3091. Goofy TRIN remains low at 0.68 which is strongly bullish for the markets today. Lots of mixed signals in the markets these days.
Note Added 10/18/12 at 1:36 PM: Markets are idling flat waiting for GOOG to reopen. Usually the unknown would cause markets to leak lower but traders are willing to wait and see how GOOG takes the hit. AAPL is down ten bucks to 634. Financials, XLF, are helping lead the rally this week. Usually tech and financials move hand and hand since the financial services companies use lots of tech, but the XLK is flat to weak, and GOOG will not help.
Note Added 10/18/12 at 1:42 PM: The euro is at 1.3086. GOOG will provide earnings at 4:30 PM (the early releases was not the official release) and the stock exchange says they expect GOOG to resume trading before the close. This ought to be interesting. The broad indexes are leaking a bit now. VIX is 15.11.
Note Added 10/18/12 at 2:35 PM: VIX inches up now printing 15.29. UTIL is at 486.57 with the bulls clenching it tightly not allowing it to drop. SOX is down at 376.32 now. The euro is 1.3061. The 8 MA is very near crossing down thru the 34 MA on the SPX 30-minute chart; watch it closely. To stop the bearish cross the bulls need to send the SPX price higher immediately, otherwise, the bulls will start to lose their footing. Everyone is on a witch hunt for whoever hit the send button for GOOG's premature earnings release. It was likely Sally Ann since she wanted to get up to the mall before the nail salon closed, the pesky earnings release task was holding her back.
Note Added 10/18/12 at 3:29 PM: GOOG resumes trading at 3:20 PM and is moving sideways thru 690-ish. The SPX is fighting along the 1457 support/resistance. The 8 MA stabbed down thru the 34 MA on the SPX 30-minute chart which forecasts bearish markets for the hours and days ahead. See if this holds thru the close, or not. UTIL is over 487 now. The euro is 1.3061.
Note Added 10/18/12 at 3:54 PM: The 8 MA remains under the 34 MA by a hair in the final minutes, both of these moving averages as well as SPX price itself, are all at the 1457 S/R level.
Note Added 10/18/12 at 4:56 PM: Folks were running to the perceived safety in utilities so UTIL closes at a lofty 487.36. Market bears will have to focus on volatility and copper if they want to take markets lower. The 8 MA remains under the 34 MA so this sets up a dramatic open for tomorrow morning. The only way the bulls can nullify this bearish move is to launch the SPX price skyward as soon as trading begins, and the earnings tonight are unispiring. CMG grabs the pipe to one of their ovens and takes it in the after hours, dropping over 12%. Perhaps folks are pinching pennies and not dining out much anymore? Mr. Softy numbers were in line but it is selling off a buck. AMD is hanging in there flat after their release. BBT bank misses and its head is chopped clean off now down over 7% after hours. The earnings releases do not instill much confidence in the broad markets. GOOG conference call occurs and price hangs around 699-700. Gold loses 11 today.
Note Added 10/18/12 at 5:39 PM: There must have been a sale on hari-kari knives today since MRVL is the next company to fall on its sword. MRVL is dropping over 10% after hours, this tends to happen when your CEO leaves. MRVL is of intrest for a long side play so it was a good thing it was not played; calling bottoms is a dangerous game. There was no other interest to own anything in this tech and semiconductor area since the AMD trade is ongoing. So score one for diversification. If AMD bases here and recovers it could serve as a model for MRVL moving forward. The tech weakness tonight will keep SOX down which should serve to keep a lid on the upside for the broad indexes. The open tomorrow should be a circus, mix in some EU Summit news for good measure, and it will be another wild ride.
KS I need some of your heart pills. SPX keeps flirting with 1460 while it should roll over and die--at least to fill the gap in SPY at 144. The utes are keeping this pig aloft....
ReplyDeleteYep, important price levels are listed in previous comments in previous post. SPX 1460-1461 is causing a couple days of drama. UTIL 485.67 will likely provide the bias for the markets. So, now at 486.30, a hair above, creates the buoyancy right now in the broad indexes. So UTIL is worth watching and the 8 and 34 MA potential cross perhaps this afternoon on the 30-minute chart. Keystone is stocking up on heart pills since they may be needed over the next month.
ReplyDeleteGOOG: biggest fat red candle I've seen in a loooong time. Sign of things to come? Sold my longs (SSO) for $2.5 gain per share! Just in case. Profit is profit. Starting too look overbot up here too. Rotating into SDS for a quick scalp down. NOT TRADING ADVICE.
ReplyDeleteNever a dull moment. Watch the GOOG low print at 676 once it comes on line again. This should keep SOX weak so that would tend to keep a lid on the market upside. However, UTIL is over 486 and a strong character. Copper can take over the bear flag as well as VIX so there are several spinning plates in the air. Plus the SPX was near the closing high for the year completing the drama. These are heart pill markets.
ReplyDeleteCould someone please put the market out of its misery? Thanking you in advance--
ReplyDeletegoogle may have! lol - so since the early release wasn’t official what differences will there be in the two fillings? What a great window into the soullessness of modern commerce!
DeleteMaarketWatch has been running a series of headlines implying a 1987 crash is likely - this is their newest one:
Deletehttp://www.marketwatch.com/story/get-set-to-buy-stocks-after-a-market-crash-2012-10-18
very interesting...
now marketwatch is calling it "an earnings mix-up"!!!! You know they are massaging the numbers on the quick!
DeleteNever mind Sally Ann, the markets are in need of Salvation.
ReplyDeleteThat was an interesting article, it mainly addresses the longer term. Like the old saying goes, buy when there is blood in the streets, March 2009 was like that then the Fed saved the day with QE1. For a more intermediate term style of trading, the CPC put/call is a nice tool to keep an eye on, buying the market long when the CPC goes above 1.20, and then selling the market when CPC drops under 0.80, and then patiently letting this trade ride thru the multi month time frame.
ReplyDeleteSPX 30-minute chart is showing the 8 MA is about to stab thru the 34 MA, the bulls can stop it if they spike the SPX price vertically right away, otherwise, the bearish cross should occur.
http://stockcharts.com/h-sc/ui?s=$CPC&p=D&yr=3&mn=0&dy=0&id=p03171095762&a=278877391&listNum=1
Deleteyes I use that -
KS, do you have any ideas why TNX is jumping all over the place - it's completely fickle and moody!
Keystone,
ReplyDeleteLately I've been watching TBT a lot.
Today, when the market sold off, TBT showed strength.
It seems to be a leading indicator.
I would appreciate your thoughts - thanks!
TNX daily chart shows price moved above the 200-day MA but not convincingly, this is a key area 1.81%-1.83%. It's likely petering out to the upside. If the yield flattens and rolls over back into the 1,7%'s and lower, that would be in concert with the equity markets selling off and some of that money moving back into Treasuries. In other words, or rather IOW, as the hip young people say, playing TLT long with the positive divergence setting up is a more attractive trade than TBT which appears to be topping and ready for a move lower. So the idea would be a rotation from TBT into TLT.
ReplyDeleteI bought some tlt at the test of the 50ma and then it broke it hard yesterday! lol (as the hipsters say!. I have some cycles work that shows TLT strong until the end of Nov but that is why I asked about the frog jumping tnx...Thanks!
DeleteThe Utes look like a blow-off move, similar to late July. Makes me wonder if this isn't driven by managers moving money out of risk-on stocks and into UTIL as a "safe haven".... quite a sharp move, and it's rare to see anything blow above the BBs for long. GOOG blowing up might give traders pause tomorrow.
ReplyDeleteYep, the safe haven idea definitely in play. The utilities are and will remain important since they peaked 2 1/2 months ago and have led the broad market lower, this is typically an ominous long term market indicator. So that remains in place, at least for now.
ReplyDeleteWe have been watching UTIL since Keystone's algorithm highlighted that as a sector most influencing the broad market movement. Semi's and utes have been the two key sectors for the lat two weeks. With the big move by UTIL, it is wanting to stay with the bulls now, so what will likely occur is a fixation now on copper and volatility moving forward. SOX 386 remains very critical. So will UTIL 485.67 thru next week but for now, the bulls look like they want to keep it elevated.
The long and short of it is that the bears will need say JJC 46.45-ish area or VIX 16.50-ish to win the game. The bullsneed SOX 386 to win the game. UTIL 485.67 may take a breather and sit on the bench for a while, the bullish bench.
Housing data disappoints, more tech trouble, no spain bailout. Major down day time?
ReplyDeleteBagholder, credit is due for the humourous tag name. Since the bulls launched utilities this week, keep an eye on volatility and copper. Copper is dropping today (early Friday morning).
ReplyDeleteIf bearish, you want the VIX to jump higher and copper lower; if bullish, you want the VIX to drop into 14 and lower, and you want copper to move higher. Cpper and commodities respond to the euro and dollar movement. Thus, keep an eye on the standard asset relationships listed below that remain in place.
For happy bulls; euro keeps moving up, staying above 1.31 and higher, dollar moves lower, so copper, commodities, gold, silver, and of course equities all move higher.
For happy bears; euro starts dropping like a stone, under 1.31 then under 1.30 and lower, dollar moves higher, so copper, commmodities, gold, silver, and of course equities all move lower.