The ECB Rate Decision and Press Conference are at 7:45 AM EST and 8:30 AM EST, respectively, tomorrow morning. Therefore, even though the markets are trending bearish now and the S&P's are down five, the markets may idle sideways until Draghi receives the tablets down from on high and proclaims euro up or down which will send all global markets reacting. Watch the 8 and 34 MA cross on the SPX 30-minute chart, the bulls are winning currently. Utilities remain key today. The bulls must go through UTIL 475.49 to take markets higher this week. The bears must push UTIL down through 467.67 to take the markets lower. In between is more sideways slop. For the SPX, starting at 1511, the bulls need to touch 1415 to ignite an upside acceleration. The bears need to punch down through 1495-1496 and the markets will fall like a stone. A move through 1497-1514 is sideways action today. Oil Inventories are important at 10:30 AM. USG guidance is important today since it will indicate the strength, or lack therof, of the housing recovery. RL beat on earnings with strong guidance and jumps 5% which may push RTH and XRT a shade higher as discussed in this morning's charts. AAPL is 456, under the 460 level which created the island that price continues to inhabit. Apple downside is open as long as price is under 460. The 420-440 spike low may occur at any time in the days ahead which would indicate a better base and sustainable upside ahead.
Note Added 2/6/13 at 11:33 AM: No great shakes today so far. The Oil Inventories provided a lift to oil which helps buoy the markets. Watch the key metrics; euro 1.3530 and 1.3500, WTIC oil 96, and 95, Brent 116, the 10-year yield 2% level, and of course, the most important parameter right now UTIL 467.72. UTIL is printing 470.41 a couple points away from the bull-bear danger line. Markets likely want to move flat until Draghi in the morning but if UTIL loses 467.62, the SPX will drop from five to fifteen handles. The 8 MA is trying to curl over on the SPX 30-minute chart to head down to the 34 MA but the SPX will need to be sub 1511 to pull the 8 MA lower. The SPX is now printing 1510. European markets sold off today.
Note Added 2/6/13 at 11:33 AM: No great shakes today so far. The Oil Inventories provided a lift to oil which helps buoy the markets. Watch the key metrics; euro 1.3530 and 1.3500, WTIC oil 96, and 95, Brent 116, the 10-year yield 2% level, and of course, the most important parameter right now UTIL 467.72. UTIL is printing 470.41 a couple points away from the bull-bear danger line. Markets likely want to move flat until Draghi in the morning but if UTIL loses 467.62, the SPX will drop from five to fifteen handles. The 8 MA is trying to curl over on the SPX 30-minute chart to head down to the 34 MA but the SPX will need to be sub 1511 to pull the 8 MA lower. The SPX is now printing 1510. European markets sold off today.
These markets are just laughable! :))
ReplyDeleteSkittish on Draghi ! :D!
Ok, i've searched into my cristal ball and figured it out that tomorrow Draghi will express the fact that he's not concerned about the FX level of euro, this is a sign of fundamental trust of markets in the euro and the rates will not be changed.
:)
And this will fuel a mini-rally to the interim top (1520-1527 until mid -february)....why i call this interim top? Because after some 2-3 weeks of weakness in february starting March until mid/end May we will see again this market growing and growing just like a pie with too much baking powder :) .... with a little bit of luck we will get to 1600+. And The Real Top will be built in May-June at 1600 (+/-25 points).
After that ...you now the routine .... :D ...the last 15 years routine.
V.
maybe, maybe not. I am not liking the negative divergence in the RSI(5) on the daily and hourly charts, which is pretty heavy I must say; with the daily FSTO (and MACD) as it is, let's see if benny's new dollars can nullify all that!?
DeleteThe way I see is as follows; either
1) monday was a wave a down, y'day a wave b up and now we're in the starting gates of a c down, targeting mid 1480s. Then it will run to 1520-1550.
2) monday was a minute 4 down, with a minute 5 (targeting 1520-1530 area) now underway. Yesterday was wave 1 up of that minute 5th; the opening was wave 2 down, and now it's working on 1 of 3 of 5 up, with 2 down of 3 of 5 to come. Then the rest will follow (e.g. Draghi may fuel the 3 of 3 of 5 wave).
@ Arnie:
DeleteI don't know Arnie, those markets are slick. I give up on 2 market countings already. What i've wrote upthere was the uber-bullish one.
But I have to say that the opposite one (uber-bearish) conceives from maximum 1528 a drop down to 1266, 1107 and then 575.
So those are the extreme models.
Anyway I wait a down wave starting from 11-15 feb (so let's generally say mid-Feb) as a 90 days complete up movement from 15 nov '12. But if I count on the 26 weeks cycles another position might be end of march-start of april .... so , a lot of counts in my head right now.
On another blog a guy said there that the maximum point to be reached, considering the inverted H&S from Nov '12 is 1555-1560 area (target = distance head-neckline x 2 counted as from the peak of the head at 1345 or so)
Those markets already were shifty, with an interventionist factor added (FED's faked money) the situation is even more difficult to analyse. I started to wonder if TA is still valid when FED is just pumping money in the market , you now? ...
V.
Is this a head and shoulders that I see forming on the SPX? Looking at the 15 minute chart
ReplyDeleteYep that is interesting, over the last day, so head at 1514-1515, neck line at 1507-ish, so 8 difference would target 1498-1499 if the 1507 fails, which in essence would take price down to test the neck line at 1495-1496 for the 30-minute chart (if yesterday is the right shoulder), which would target the high 1470's if 1495 fails.
DeleteThe 8 ma is curling over on the 30-minute but the SPX needs to stay sub 1511.28 to pull the 8 ma down. So that provides a hint on the action, bears must keep SPX under 1511, bulls will be content moving into Draghi tomorrow keeping the SPX above 1511.
ReplyDeleteAAPL moved into the gap, possible island reversal pop...are you buying here KS?
ReplyDeleteThat sure is something, AAPL at 463 handle, nope, probably will still stay away. When it gapped down note the intraday high on that gap-down day was at this level, call it 466.70, today HOD at 466.50, this is a heck of a tease, a critical juncture. It may simply fill the gap, or jump the gap for the island reversal, or collapse. Just watching for now, hourly and minute charts not particularly enthusiastic, some indicators overbot and negative divergence. The guess would be it drifts lower again.
ReplyDeleteThank you for the detailed insight. I bought it at $553, will put a tighter watch on it.
Deletedid you mean $453??? or did you really buy at $553? That'd mean you're almost $100 down per share... that's a almost 25% loss... ouch... hate to say it, but that's poor risk management IMHO...
DeleteYep Arnie, thanks...I meant $453.40 to be exact. Nice to be green!
Deletepffffff, glad you didn't buy and hold at $553... Otherwise, I don't know what to tell you on AAPL, The charts IMHO are pretty messed-up. I am waiting for this one to show a nice clean and clear signal so I am on the right side of the trade, rather than at the exact bottom.
DeleteArnie, What would it take to show you a "nice clean and clear signal"...pls share. Thanks, Rich
DeleteMACD, FSTO, RSI all aligned upwards, decently certain impulse count up (5 waves), price moving along upper Bollinger Bands etc. Right now it's all too messy imho. Price is not really showing strength.
DeleteWith AAPL, we need to see it move sideways for at least a couple of weeks, maybe a month or more, to make sure everything is settled out. This isn't a good "jumping in" spot. As popular as it is, Apple needs a bit of a break.
DeleteThank you Arnie and Anon, appreciate your input and helpful advices. That one week old DB may be too young to play with. The spike in the RSI was nice today... Just learning over here, thanks again.
DeleteNice call on the RSI Arnie. It does look funky. Why is that everyone's so certain what Draghi's going to say tomorrow?
ReplyDeleteThat pop in AAPL was a result of a rumor that quickly faded. Messed up the chart a little, but that is all it did :)
ReplyDeleteYep, AAPL rumor about potential dividend so everyone got all excited. Apple is interesting, it is deciding.
ReplyDeleteMarkets are idling today. Draghi news will be big. Anon, no one is certain about what Draghi will say, that is why the markets are stumbling today not willing to commit either way. Markets want to know the answer to the euro since that immediately dictates the markets, and SPX, and either sends it to new highs, or not.
Some folks think the recent higher euro is a sign that things are getting better across the pond. However, simply look at the mess in Spain, auto sales off a cliff, and so forth, and that is not correct. Even VW sales were weak, and that is the shining star on the continent and Germany's gem. The U.S. and Japan are devaluing their currencies so their exports are more attractive, which will spur manufacturing and put people back to work. Draghi, however, has not cut rates to weaken the euro, that is why you see the blowout in euro/yen, also watch dollar/yen, and euro/dollar, a trio of fun. But the Japan and U.S. debasement will put the final nails in the European coffin. Therefore, Draghi has to cut rates or at least jawbone an easing step coming, which will weaken the euro to make European manufacturers and exporters happier and help growth where it is needed the most in the world.
That is the back drop for tomorrow morning. And the euro and SPX move in lock-step as this mornings chart shows. So if Draghi places his fingers in this ears and yells 'la, la, la' tone-deaf to all around him, the euro will remain buoyant and so will equity markets. If Draghi so much as sneezes and it sounds like 'rate cut' the euro will plummet and so will equity markets. So, tune in at 7:45 AM EST to find the answer, futures markets will immediately react, currency markets will react violently. Only 16 hours away.