The markets are set to bounce at the open. Watch RTH 44.47 to gauge the strength of the move. If RTH moves above 44.47 the move has legs, if not, the rally will fade. Likewise GTX 4895. If GTX moves above 4895 the rally has legs, if not, the move will fade. Watch the 8 and 34 MA cross on the SPX 30-minute chart as posted this morning. The rally has legs if the 8 MA crosses up thru the 34 MA. The BPSPX is on the verge of dropping under 70% which reinforces a strong market sell signal so check that each evening. Watch the slope of the SPX 150-day MA since it is flattening now and may roll over to a negative slope which would be a cyclical bear signal moving forward. Likewise the UPS 20 and 50-week MA cross which is on the verge of crossing to signal a cyclical bear market, but not yet.
Pending Home Sales are at 10 AM, Natty Gas Inventories 10:30 AM and the Kansas City Mfg Index at 11 AM. The 7-Year Note Auction is at 1 PM. AMZN and AAPL report earnings after the bell today. Apple's earnings and conference call is 5 PM EST. A Bradley window opens today for a market turn to occur at anytime over the next ten trading days but the turn would be more expected next week. If markets rally from now into next week that turn may manifest as a down move next week. If today's rally peters out and markets stay flat to lower into next week, the trend change may be to the bullish recovery rally side instead. Keystone will not be around in the afternoon today so use the above metrics to gauge the strength of the market recovery rally. Today, we see what the bulls got. SPX S/R is 1424, 1422, 1419, 1416, 1413, 1409, 1406, 1404, 1403.44 (20-week MA), 1403 and 1399. A move up to 1419 is no biggie for the bears. If the bulls can punch up thru 1419, however, that would encourage further upside. The euro is at 1.2985.
Note Added 10/25/12 at 10:16 AM: RTH ran upwards, and a penny or so thru the 44.47, but then reversed and is now sitting at 44.32. GTX is at 4866 under the 4895 level the bulls need to create happiness. The SPX ran upwards and bumped its head on 1419, now printing 1418. The 1422 and 1424 may be in play today. The 8 MA remains under the 34 MA on the 30-minute chart favoring bears, for now, keep watching it all day long. AAPL is a smidge red. AMZN is flat. The COMPQ is up 0.59% while the SPX is up 0.64% so tech is not leading the broad indexes higher so the bulls probably do not have much oomph today. The VIX is at 17.5, remaining elevated, playing around at the 200-day MA at 17.83. The elevated volatility, here and higher, will start to create wild intraday price swings, and large day to day price swings, so the action may become quite turbulent moving forward. The earnings season is a circus. If the earnings beat, the stock is rewarded by staying flat. If the earnings meet or miss, or if one word is misplaced on a statement, look out, the guillotine falls and the stock's head lands in a basket. Some stocks are getting hit from 5% to 25% after their earnings releases. BBY is the latest culprit this morning although their news is due to restructuring. As a rule, company layoffs are great for a stock price since it means expenses are lowered and the company is moving towards a lean and mean structure, all good. But a shake-up at the top will lose the confidence of traders, the perception is no one is steering the ship, and the stock will sell off. Keystone continues to like his longs; AMD, BBY and DNDN and will continue adding as time moves along. For now they are simmering on the back burner. The euro is 1.2970. If the euro is not enthusiastic, then there is no reason for the markets to be enthusiastic. Reference this morning's euro chart and see that the 1.2925 is the bottom rail of the triangle and would start downside trouble for the euro. Down euro = down markets. Up euro = up markets.
Note Added 10/25/12 at 11:17 AM: Markets bumping along today. The COMPQ is now leading the SPX by a hair. If tech starts to outperform to the upside today it will pull the broad indexes higher. Copper is negative. WTIC oil is negative at 85.57. The euro continues to slowly leak lower now at 1.2956.
Note Added 10/25/12 at 11:29 PM: The Dow Industrials turn negative. Tech is not leading the downside, however, the bears will need that to happen to drive the SPX down for a potential test of the uber important support at 1403. The SPX is fighting the strong 1409 support right now. The euro is 1.2944....
Note Added 10/26/12 at 6:10 AM: AMZN and AAPL disappointed on earnings after the closing bell. The iPad and iPhone sales are weaker than expected. AAPL went under 600 in the AH's trading. Asian markets sell off on the the tech weakness. S&P rating agency downgrades BNP Paribas (France banks). The Libor probe expands with more bank subpoenas on tap. Europe is selling off. The euro is now at 1.2920 testing the bottom rail of the triangle Keystone described yesterday (simply type 'XEU' into the search box above to bring up the euro chart). S&P futures are down 11 printing at the overnight lows. Copper, gold and oil are all lower. The euro is now 1.2916.......
Note Added 10/26/12 at 6:31 AM: The euro is 1.2908..... 1.2905 .....see if it breaks the psychological 1.29 level. S&P's are down 11. GDP is two hours away.
Note Added 10/26/12 at 6:49 AM: The euro lost 1.29 now printing 1.2893. S&P's are off 12.
Aroons are two outta 4 for...not looking good for the bulls lol
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=3&mn=7&dy=0&id=p01195562509&listNum=2&a=281489686
but TNX will not stop it's workout program!
http://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=1&mn=2&dy=0&id=p11040967306&a=275457077
Euro is interesting today, early morning at 1.3000, and leaking ever since, now at 1.2951, it is getting close to the triangle collapse number at 1.2925-ish.
ReplyDeleteSPX ran up to 1419-1420 and note how this occurred with RTH exactly at 44.47, this provides lots of street cred for this relationship. So if markets rally today, the RTH 44.47 will tell you if it is real and has legs, or not. At 44.12 right now, it is saying the bear camp is the place to be. VIX s at 18. The bears are strong, in the days ahead perhaps we get the test of the uber strong 1403, where grand theatre and drama would play out.
EURO is in a wave 3 I think down to below 124 to that big gap from August.
DeleteUSD is rallying so rates???
KS - I am curious about your longs. My count has SPX and equities in a wave one down to below 1360 and then a bounce - the HS pattern on the compqx measures to 2900 - that should be wave 1 on that index...
KS, market should stay buoyant today since nobody wants to be short into AAPL & AMZN
ReplyDeletePerhaps but if SPX 1409 support fails lower numbers are on the way. Also watch the euro to see if it loses 1.2925 since that will lead to lower numbers for the indexes independent of the those two tech bellwethers. The COMPQ is not leading lower so if it does that will also lead to lower prices. If the COMPQ remains elevated, you may be correct and markets will simply idle today until they find out the numbers after the bell tonight.
Deleteyes - and Apple below 600 would create hysteria...!
Deletesoxx is trapped under heavy resistance -
ReplyDeletehttp://www.flickr.com/photos/75188609@N07/8122376276/in/photostream
if it were to break out it would be a warning to the bears?
I think it fails here but we will see.
short term positive divergence on SOX...
Deletehttp://stockcharts.com/h-sc/ui?s=$SOX&p=D&yr=0&mn=10&dy=0&id=p78749195186&a=281497585&listNum=2
Weekly chart has a BIG HS pattern setting up.
http://stockcharts.com/h-sc/ui?s=$SOX&p=W&yr=4&mn=4&dy=0&id=p63315251820&a=281455214&listNum=2
trin? do I have this right
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$TRIN&p=D&yr=0&mn=7&dy=0&id=p40472452473&listNum=1&a=279237522
after hours USD is going wild! Futures all over the place but going down now...HMMM
ReplyDeletePS - part of my love of posting at Keystone is trying to figure out the robot code!
This has become quite a bit more complex. Best I have for now trying to catch up after work. Don't put too much stock in it (not that you should ever trust random people posting on the 'net), but hopefully it helps as a guide.
ReplyDeletehttp://i.imgur.com/6kLgh.png
What kind of upside are you anticipating for AMD?
ReplyDeleteYour posts are fabulous!!!!
LOOK AT CPCI.... 0.62!
ReplyDeleteFriday morning; the S&P futures are now down over 11. Yep, the markets remain treacherous. The SPX 1403 uber strong support is a very important number where price will likely bounce or die. A rupture of 1403 likely paves the way to 1370's and 1380's. AMD took the pipe over the last few days but it should recover to the 3 and 4 level in the not too distant future. Perhaps a sugar-daddy will come in and buy it. The PC slump is likely overrated and as seen by the disappointment in iPad sales, the shift from PC's to tablets is not yet as uber strong as the media says it is. The general economy is in a funk, plain and simple, so when the economy does finally come out of the slump, and hiring does begin, at some point, the PC's should fly off the shelves, that may be one of the final breaths of the PC but those folks touting the tablets as a replacement for PC's are early. Content creators do not use tablets, writers, accountants, engineers, etc..., all need laptops and desktops to generate content. CPCI is really something, that is why Keystone likes to use the CPC, it takes out some of the drama. You can see the bullish long traders were drinking the Koolaid in plentiful supply as markets rallied into the close. At CPC 0.85, traders appeared convinced late yesterday that the worse was over. As one tool to follow moving forward, stocks are really not worth buying long until you see the CPC move above 1.20, that would be the time to nibble and start bringing on long positions. Until then, the bears will likely drive markets lower, the SPX 1380's may have to be tested before a relief bounce of any sustainability occurs. Watch the 1403 support closely during Friday trading.
ReplyDelete