Wednesday, June 26, 2013

Keystone's Morning Wake-Up 6/26/13; GDP

GDP is a paltry 1.8% below expectations showing very weak growth. Futures remain elevated with S&P's +8 as ECB's Draghi pumped the QE talk this morning. The bears need to push SOX under 457.20 to gain downside mojo. This does not appear on tap. The bulls need to push the XLF above 19.19 to signal a leg up in the broad indexes and the pre-market shows 19.23. Additional upside fuel will occur with RTH above 51.48 and/or UTIL above 481. The strength of the market upside is determined by how XLF, RTH and UTIL move today.

The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. The SPX begins at 1588. The bulls need to touch the 1594 handle and a jump to test the 1597-1600 resistance zone should follow directly. The 1593 level is strong resistance so if that gives way, then 1594 probably will as well, lighting the path higher. The bears need to push under 1577 to accelerate the selling. A move through 1578-1593 is sideways action today.

Note Added 10:24 AM: Another wild day with the markets blowing up through the above XLF, RTH and UTIL targets like a hot knife through butter. Keybot the Quant flips to the long side at SPX 1601. Watch XLF 19.20, RTH 51.48 and UTIL 480.83. All three are creating market bullishness right now. UTIL is a bit shaky stumbling across its bull-bear line right now teasing the underside of 480.83.

Note Added 11:08 AM:  UTIL gives up the ghost now at 479.64. Pay attention to XLF 19.19-19.20 this will tell a lot about market direction. XLF is 19.23. Bounce or die.

Note Added 12:11 PM:  UTIL 481.46 back in the bull camp but it is a crap shoot. XLF at 19.26 continuing to help the bulls so far today. All the drama centers around XLF 19.20 and UTIL 480.83. SPX HOD is 1603.58. Resistance above is 1609. From this morning's 15-minute chart, the C&H targets 1616 and if price can close above 1600 today, the inverted H&S targets 1640. If XLF, UTIL and RTH continue along in the bull camp, then the broad indexes will float higher.

Note Added 3:10 PM:  Status quo today. Utes, financials and retail send stocks higher. SPX HOD 1606.83 two points shy of testing the 1609 resistance. The SPX 30-minute, 1-hour and 2-hour charts are becoming extended with negative divergence appearing across the indicators hinting at a price roll over coming soon but the 2-hour chart may squeeze out a candlestick or more of juice which would keep markets elevated perhaps into tomorrow morning. SPX should test 1609 R. A close above 1600 is a big feather in the bull's cap. Volume is feather light at a run rate of only about two-thirds of a days average expected volume. AAPL is negative.

Note Added 3:50 PM: Bulls keep pushing. TRIN is 1.11 on the bear side today despite the rally. The HOD remains at 1606.83. Keystone added more GDXJ to this ongoing long trade.


  1. TRIN is at 1.18. EOD selling in order?

    1. It looks that way but chalk a lot of the mixed up market signals to indecision and markets that do not know which way they want to go. TRIN 1.18, however, is not far from 1.00 neutral but does hint that the bears should be favored slightly, which is not the case. The central bankers saved the day, mainly China yesterday morning. Things will change if either XLF, UTIL or RTH turn bearish.

  2. KS, what's your take on WLT? Wow what a roller coaster, and coal in general

    1. Still holding it, it is dangerous. Coals receive a further beating because President Obama slammed the sector the other day. With the China slowdown and global slowdown, traders are fleeing commodities and the frenzy may have reached at least a near term crescendo yesterday since folks were jumping out of buildings. WLT is a met coal company so it needs steel to do well and with a weak global environment its prospects do not look good and this creates the negativity. Weigh this against the price already well down off the high, favorable positively diverging charts, and a potential takeover stock where someone will come and simply buy them. Those are the two cases. It's a coin flip.


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