Wednesday, May 15, 2013

Keystone's Midday Market Action 5/15/13

Big spike higher over last fifteen minutes with SPX printing new all-time high at 1653.39. GOOG is over 900. Gold loses 1400. VIX came up to kiss 13.20 today, the exact bull-bear line, and fell on its sword repeating yesterday's performance.  The VIX is 12.87 providing the push higher for equities. The bear killer is the low TRIN now at 0.72. The bulls can keep markets elevated all day long with this low TRIN. Copper, oil, commodities all lower but traders do not care since the central bankers are printing money. Empire State and Industrial Production data is weak but markets ignore the bad news. Dollar/yen 102.36 after falling under 102 briefly. Euro 1.2870. The 10-year yield is 1.95%. The bulls keep running. SPX hourly and minute charts want to see price move lower but the low VIX and low TRIN have different plans.

Note Added 11:18 AM:  The move through SPX 1651 creates the acceleration to a new all-time high at 1654.55. VIX 12.87. TRIN 0.74. Same dealio as yesterday. The thrust hits the top rail of the channel on the 30-minute chart again and breathes extended life into the hourly and minute charts. Sellers are missing in action now. AAPL down to 432 off eleven bucks today. Apple may set up with an inverted H&S on the daily chart.


Note Added 12:40 PM:  Another new all-time high at printing now at SPX 1661.27.  VIX is 13.17. Three days in a row where VIX and SPX are both up. Typically, this may occur one day now and then, only about 10% of the time overall. This behavior is very special. VIX is pennies from the 13.20 bull-bear line testing 13.20 for the fourth time in two days. Strange markets. TRIN 0.62 keeps the bulls heading higher. The string of continuous low TRIN readings continue. Add another one to the list of things that need to revert.

Note Added 2:36 PM:  The markets provide more drama than a Bruce Willis movie. Volatility moves wildly higher and the VIX pokes up through 13.20, after the last message was posted, ushering in market weakness, however, volatility falls on its sword once again and drops under 13; VIX now printing 12.91. TRIN is 0.62 so the bulls are cruising along with the wind remaining at their backs. The SPX new all-time high is 1661.49 printed at 12:50 PM. The 8 MA remains above the 34 MA on the SPX 30-minute chart so the bulls continue to receive the nod. The SPX, however, is under the 8 MA (1656) so that will serve to curl the 8 MA downwards towards the 34 MA, as long as the SPX stays under 1656 and heads lower. The low TRIN makes today a struggle for bears. Watch VIX 13.20.

Note Added 2:57 PM: Keybot the Quant was in position to trigger to the short side today when the VIX moved above 13.20 but the SPX was no where near the 1634 level identified for today, so the bears got nothing. Despite the highs and bullishness right now, it will not take much for Keybot to flip short.The market behavior is strange, however, and everyone, bulls and bears, are just making it up as they go along now. Asset relationships, currencies, volatility, economic data, earnings with weak top lines, political scandals, mix it all up in a bag and pour it out, this is what you get. Flip a coin. Nasdaq is negative on the day but Dow and SPX are positive. RUT barely holding positive. VIX 13.05. TRIN 0.62, the bulls must be sitting on the TRIN smoking cigars and sipping brandy. The 10-year yield is flat at 1.95%. Dollar/yen 102.33.

Note Added 3:34 PM:  VIX 13.00. TRIN 0.62. SPX 1656.39. Volume is below average.

Note Added 3:39 PM:  VIX 12.90. TRIN 0.61. SPX 1657.32. Easy to see the relationship. Lower volatility and lower TRIN creates higher equities. Higher volatility and higher TRIN creates lower equities.

Note Added 3:49 PM:  VIX 12.85. TRIN 0.60. SPX 1658.17.

36 comments:

  1. @ Arnie:
    Hi Arnie.
    What's your opinion?
    At what extension/price level could this wave 5 of 5 of Int 3 could get ?
    Thank you,

    V.

    ReplyDelete
  2. ok...hm... I was wrong with the "spinning top" idea for today ...

    this trend is simply ... I can't even find the words....
    pure euphoria....

    V.

    ReplyDelete
  3. It's not euphoria, it's central banker insanity.

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  4. I believe and based on my work, this market will stop climbing somewhere between SPX 1662 - 1668 but price is ahead of time. I was expecting to reach this level somewhere between May 21 -23. It's almost there. Let's see what happens. If it breaks 1670, then 1725 will be next but I seriously doubt it. Please keep up the good work Mr KS. I greatly appreciate for your blogs and enjoy reading multiple times in a day.

    ReplyDelete
    Replies
    1. Hi Anon.
      you didn't counted the shorts that will cover...now in the market on futures there are 6.15 shorts to 1 long!
      What does this tell you?
      Now we're seeing "short" raids....
      The market will be an interesting place without shorts ...and a very, very dangerous place!
      V.

      Delete
    2. Hello Mr. V,

      I totally agree with you. I only wrote but I think based on my work. This is the market and anything can happen. Market can even close in negative territory since it reached the lower side of the target and it's way ahead of time. Let's see.

      Good Luck to all the traders!

      Delete
    3. I'm not saying you're not right.
      I'm watching it closely , I'm all in cash.
      Yesterday I've closed my last longs(15%), not entering shorts until I see confirmation of a trend change.
      I prefer losing 25% of the possible shorting gains but to be sure that I'm not whipsawed.
      V.

      Delete
    4. @ Anon:
      why 21-23 May?
      why not June?
      or December?

      V.

      Delete
  5. Yep, the markets are in uncharted territory with odd behavior in the commodities and equities. Volatility up another day with up markets as well, what a special sight it is. The low TRIN keeps the bulls in the drivers seat. SPX prints new highs, bulls are uber happy and bears miserable. No one knows how this will end. Charts and data say down but Fed and BOJ say up. VIX keeps teasing 13.20.

    ReplyDelete
    Replies
    1. something special will follow these strange days ...

      V.

      Delete
  6. Only time will tell but I am very confident about my work. I think market can even close negative today since price met the lower side of the target and it's way ahead of time. I know most of the people will laugh at it.

    ReplyDelete
    Replies
    1. hi, we are at ur lvls and what do you think the correction if any will lead us to?

      Delete
    2. Once correction starts there will be some resistances at various level. Mr. KS really does a great job with all that. My first target will be SPX 1558 and if it breaks then way lower. I think we may have to wait another week or less before it starts. But this market is a controlled by the central bank so anything is possible.

      Delete
    3. :)
      I dont't believe you :D
      this market spx will rise to 2000 or more!
      based on what you have reached those levels and projections?
      :D
      Using Elliot wave the next wave interm. 4 cannot get lower than 4-5% ,maybe 7% maximum - but with those central bankers interventions , I doubt we will see -7%.

      So, what kind of research has led you to those results?

      thanks,
      V.

      Delete
    4. I am not trying to convince anyone. This is the very first time I ever put my comments out there. I am not a day trader. I am long term investor. I do my own research and based on that I put my comment out there. Maybe you are right and you should do what make you feel comfortable. I am not planning to explain my work here. Maybe one day when I feel more comfortable. But I really enjoy reading Mr. KS blogs and appreciate his work. Good Luck to you!

      Delete
    5. Ok, thank you, good luck to you too!
      p.s. Sorry, but I can't take as granted what I can't understand. You didn't convinced me.
      Cheers,
      V.

      Delete
  7. @ Anon:

    Ok, feels like "the twilight zone" series ... from the moment you wrote all the messages up-here the market started to correct.

    Based on what have you determined those targets, if you can please tell us?

    V.

    ReplyDelete
  8. KS, do you think Russell 2000 will reach 1000? Today's high is 991.55

    ReplyDelete
    Replies
    1. Boy-oh-boy, everything is melting up. The 80/20 rule says 980 would want to lead to 1020. And 988 would want to lead to 992, the high for today so that was achieved. The door is open so you cannot say it will not go higher, and over 1K, but the markets need to take a rest.

      Delete
  9. Au and Ag got beaten down today, how far down do you think it will go? Thanks!

    ReplyDelete
    Replies
    1. They took a wild ride lower. You have to decide everything for yourself Anon. The daily and weekly charts are positively diverged or setting up that way. It appears that anywhere here or lower, and for the most part with many miners, may be a good entry for all these plays. It is speculative bottom-calling.

      Delete
  10. Hello Mr. V,

    I don't think market has start correcting yet. I hope it will stay between those targets until May 21 - 23 and it won't cross SPX 1670. If it does, then your targets are very possible. If I feel comfortable, I will share my work with you.

    Have a good day!

    Thanks

    ReplyDelete
    Replies
    1. Thank you, Mr. Anonymous.

      V.

      Delete
  11. S&P climbed 13 points in under 2 hours today. I think the bulls scared even themselves today. KS, BBs on the daily chart have been widening. Is that not a sign of more volatility and wider price swings?

    ReplyDelete
    Replies
    1. Price is running up the upper band, it probably does not tell a whole lot, only that the touches of the upper extremes continue to want to lead to a price move to the 20-day MA at 1602, and rising, at a minimum. So, the 1602-1610 area. Negative divergence should spank things down but bulls keep finding a way.

      Delete
  12. Interesting comments by all. Markets are taking a stair-step path lower but the low TRIN is a bear-killer. Bears need VIX back up over 13.20 again and at the same time pull that TRIN back up to one and higher. Otherwise, the bulls will be able to keep things elevated into the closing bell.

    ReplyDelete
    Replies
    1. I'm still all shaked-up :) ...exactly from the moment when out friend Anon started to post those comments the market curbed , pointing down. Graphically, today it's something like that /\ .

      Pure Twilight zone :)

      V.

      Delete
  13. KS, I have a dumb question..I know the Central Bankers control the market, but can they really control VIX, volatility? Thanks!

    ReplyDelete
  14. You can see what's happening with the volumes.
    You see this huge spike every day near the close, where the big players come into the market and decide the direction. It's almost as if what happens between 10:00 and 3:30 is irrelevant.

    ReplyDelete
  15. Huge spike at the closing as usual. Bulls are going very strong.

    ReplyDelete
  16. Yes, I do think it will sell off unless it breaches SPX 1670. If it does, then we will see above 1700. If it stays below 1670 until May 21 - 23rd at least, my target is SPX 1558. I wasn't expecting any big correction today but was thinking it will close in negative territory. It went down at one point but as usual there was a huge spike near the closing. I think next 4 -5 trading days are crucial. Happy trading to all!

    ReplyDelete
    Replies
    1. Hi, your target is spx 1558, today's close is 1658.78, so basically about ~100 points correction, that's only 6%, you don't think we will get at least a 10% correction during this Summer? I am expecting most investors will sell and go away, be on Summer vacation. May be not this Summer then...

      I've been really deep underwater with shorts, not sure whether I should stop loss or wait for that correction. If no correction, my holdings will eventually disappear over time. I see the market getting very close to correction but every time it gets close, it just shoot higher, I feel so dreadful with all these going on in the market and yet couldn't get out with such a big loss. I will be very thankful to someone who can give me a tiny piece of advice or a small hint or even just 5% of what you know about to come. Thank you all.

      Delete
    2. @ underwater Anon:
      The up-movement from November 2012 (3rd wave after the 2009 correction) developed 5 waves according to Elliot waves theory.
      We are now in the 5th up wave.
      Itself was divided in another 5 subwaves. I consider we are now in the 5th subwave, but there are traders that consider that now we are in the 3rd subwave of the 5th wave of the 3rd November '12 wave.
      There are different final targets for 5th wave (and the up movement from Nov'12):
      - the fibo resistence cluster area 1658-1675
      - the 1680 pivot (1673-1687 area).

      The Nov'12 grand up wave was only the 3rd. So when this up-movement from Nov'12 will finish (target areas written above) a 4th down wave will follow, having only 3 internal sub-waves due to it's corrective nature. Target minimum: 1550 / maximum target: 1480. If it's getting lower than ~ (aprox.) 1480 it will tresspass one Elliot wave rule that doesn't allow the 4th wave to get lower than the peak area of wave 1.

      In that case (of trespassing) all the notations of the waves should be made once again and everything might be possible at that moment (including a target of 545-600 on spx in the worst case or 1210-1266 as a fibo retracement of previous structures- best case). But the chances for this are very, very thin.

      After the 4th wave down, we will get a final 5th wave up (with 5 internal waves) with a target of minimum 1780 and maximum 2100 on spx.

      OK, I will not give you any advice, you have the numbers and the road-map. It's your money and you are responsible for it.

      take care, I know how's like to be underwater, been there, done that!

      V.

      Delete
    3. @ underwater Anon:

      one more thing: respect the trend, the trend really is your friend.
      If you don't respect it, how should it respect your holdings?

      V.

      Delete
    4. Thank you V, appreciate your thoughtfulness.

      Delete
  17. Simply keep an eye on Keybot. If VIX moves above 13.20 and the SPX drops under 1647 (for Thursday session), that will likely flip Keybot to the short side and indicate market selling ahead.

    ReplyDelete

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