Friday, May 24, 2013

Keystone's Morning Wake-Up 5/24/13; Durable Goods; Memorial Day Weekend

Global markets remain jumpy. The yen strengthens overnight, dollar/yen lower to 101.50-ish. The U.S. futures were positive, then went negative at 3:30 AM EST, only to recover to the positive side, then starting at about 5 AM a slow, steady push lower occurs. Durable Goods data hits at 8:30 AM and will set the tone for markets today. Markets are typically positive in front of a three-day holiday weekend and seasoned traders were tripping over themselves yesterday to buy the low after the opening bell. Markets are also typically buoyant through the full moon (today) as well, however, the futures are indicating otherwise at this hour. An eclipse is on tap as well today, the third eclipse over the last month. Keystone's Eclipse Indicator identified the April sell off and a new window opens from now through June for a market sell off to occur.

VIX 13.12 and JJC 41.77 remain the two key parameters, volatility and copper, respectively, that are dictating broad market direction. Both are bearish, with the VIX at 14.07 and JJC 41.08, creating market negativity. Keybot the Quant remains short moving into the Friday session but if the bulls can cause a recovery in volatility or copper to the levels shown, and send the SPX up over 1655, the algo may flip back to the long side.  For the SPX today starting at 1651, the bulls need to move up through 1655.50 and the upside will accelerate. The bears need to push under 1637 to accelerate the downside. A move through 1638-1655 is sideways action today. The 8 MA remains under the 34 MA on the SPX 30-minute chart signalling bearish markets for the hours ahead so watch this cross closely. In a nutshell, if the VIX stays above 13.12 and JJC stays under 41.77, the bears have no worries.

Note Added 7:33 AM:  Dollar/yen 101.28. Euro 1.2961. S&P's -10. Dow -60. Nasdaq -16. Crude oil under 94 at 93.72. Gold, silver and copper all lower. The 10-year yield 2.02%.

Note Added 8:33 AM:  Durable Goods are better than expected. Dollar/yen 101.53. Euro 1.2924. Futures recover. S&P's -5. Dow -18. Nasdaq -9. Oil flat. Gold, silver and copper lower. 10-year 2.02%.

Note Added 10:30 PM:  Dollar/yen loses 101 now printing 100.94. The stronger yen sends equities lower. Euro 1.2938 so lower euro is in concert with lower equities. SPX 1639. 10-year yield 2.02%. VIX 14.63. JJC 40.72. TRIN 1.00 neutral not showing a preference for bulls or bears today. LOD is 1636.88 so note how the 1637 targeted for today held, stopping the bear run lower, for now. Simply watch TRIN, above one bears push markets lower, below one bulls push markets higher.

Note Added 10:51 AM:  The 10-year Treasury yield is 1.99% losing the 2% level. TRIN 1.03. Market bears need to push under SPX 1637 to receive downside oomph.

Note Added 11:13 AM:  TRIN staggers sideways at 1.01; it should make a decision up or down at anytime.

Note Added 12:39 PM:  TRIN moves higher now at 1.44 but oddly enough, the SPX is drifting higher as well. Market bears cannot catch a break even when the TRIN finally decides to move above one. SPX tests 1645-1646 and now leaks lower again to 1643. SPX has established a sideways range through 1638-1646 today so look for a breakout or break down from this range. Markets are meandering sideways as traders sneak out the back door to begin the holiday. There goes one; he is wearing sunglasses, a straw hat and Hawaiian shirt.

Note Added 2:23 PM: Dollar/yen 100.93Volatility and copper remain in the bear camp despite the recovery in the indexes as the day moves along. TRIN at 1.18 does not help the bears. Lighter volume can keep the markets elevated. Chalk the recovery move up to Friday paring of shorts and pre-holiday light volume. The SPX breaks up through today's 1646 resistance. Price then came back to back kiss the 1646 at 2 PM and support held so price jumped higher to 1649. The 8 MA is curled upwards heading for a positive cross with the 34 MA on the 30-minute chart which would place a damper on the bear's party. Bears must take the SPX under 1645 into the close to flatten out the 8 MA and get it to curl lower again or at least run out the clock today to keep the cross negative into next week. Price came down to within 3 points of the 20-day MA at 1633.64 this morning but did not touch as would be expected so the door remains open for the back test of the 20-day MA. Traders surely want to begin the weekend festivities so the time must be going by at a snail's pace. There goes another trader sneaking out the back door. She is wearing sandals and carrying a beach umbrella. 


  1. I don't think anything could happen today ..the market's building a triangle that needs 0.5-1 trading days for being complete before breaking (up or down ? :D? ..that is the question)

    until next week when important data will be released I don't think we will see any important move today. Next week maybe.

    Going out for a walk,
    I'm 100% in cash, don't like to hold positions in front of the week-end when market is triangulating.

    See ya later,aligator :D :)


    1. Yep, likely a slow day on tap. Consumer Confidence will get everyone excited right away after the opening bell on Tuesday.

  2. Anon the quant is bearish NDZ still bullish SPX as of yesterdays close.

    Will post my signals and see how they compare. They are end of day only.

    Dont believe in TRIN
    Dont believe in Divergence
    Just believe in me

    Since you play guitar....

    1. Okay Anon, that will be interesting to see what you got. As long as volatility remains here and higher and copper here and lower, the bears should keep moving things south. Interesting that price came all the way down to within 3 points of the 20-day MA at SPX 1633.67 and decided not to back test. When price is that close it will typically touch to get it over with. There is still another 90 minutes, but, with the holiday on tap, most traders just want the closing bell to ring so they can enjoy the weekend, but, you never know.

    2. @ Anon

      Sounds interesting.
      Can you please take a name to discerne you among other Anons, please?


  3. euro-exit manifesto in Spain!
    google translation of an article of "el confidencial'' - spanish newspaper


  4. KS, do u see keybot going long next week with cpc at 1.26 and nymo at -40?

    1. Keybot is more concerned over volatility, copper, commodities and utilities. The CPC and NYMO are not programmed into the algo. CPC and NYMO both indicate that a bounce may be on tap next week for the indexes. The CPC has not seen this high a level since the May 2012 sell off. The other outcome is that the CPC can spike higher which would be in concert with a May 2012 type sell off. The volume was the lowest since Christmas and New Year's so the Friday action must be viewed in this context.


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