The bulls are partying like it is 1999. The utilities are moving higher providing bull fuel. UTIL is above 480.38, the bull-bear line in the sand, so the broad indexes move higher. With the SPX higher today, the VIX has been higher as well, so one of them is wrong. The VIX now slips to the negative side as the SPX moves above 1641. The VIX 200-day MA is 15.06 and the VIX is at 14.75; watch this closely. Bulls want the VIX to collapse while bears want to see the VIX hold the 200-day as support and head higher.
Semiconductors are weak today on the INTC downgrade so many chip stocks are selling off such as QCOM and MU. Keybot the Quant remains long and the bulls are cruising now that they have the utilities back in their camp. The algo identifies SOX 462.50 as the danger line (SOX now printing 466.99). If the bears can push the semi's about 4 or 5 points lower they can make some noise. But, if utes and semi's stay elevated, the bears got nothing.
SPX resistance above is 1647 then very strong resistance at 1649-1650. The SPX is above the 200 EMA on the 60-minute chart at 1620.32 and the 8 MA is above the 34 MA on the 30-minute chart (reference the previous chart posted) so the bulls are in charge for the hours and days ahead. The hourly and minute charts hint at topping with negative divergence developing so the SPX may place a high into the close today or tomorrow morning. TRIN is 0.66 so the bulls rule the roost today. Keystone took profits on CLF today exiting this long trade and will look to reenter. As this morning's chart shows, CLF has attractive positive divergence and should move sideways to sideways up for the weeks ahead.
Note Added 2:40 PM: UTIL is 483.69 above the 480.38 danger line. SOX is 466.26 above its 462.50 danger line. VIX is 14.80 above the 14.27 bull-bear line. TRIN 0.64 is providing the bull juice. SPX 1641. Nasdaq is negative on weak chips. Bears need weaker utilities and/or chips. Bulls need to push volatility lower. Volume is light and not impressive today, only running at about 60% of a days average expected volume. It must have been one heck of a July 4th party with drunken traders laying on the beach having forgotten their name and how to return home.
Note Added 2:54 PM: There's a pop, SPX now moving up into this morning's highs above 1642. The low TRIN provides the bull oomph. Price does not appear to have a lot of upside juice but the TRIN provides enough to push price sideways. HOD is 1644.68. Keystone added SPXU to this ongoing long trade which is short the S&P 500.
Note Added 3:35 PM: The broad indexes remain buoyant into the close. TRIN is 0.73 remaining low but off the lows. VIX is 14.78 causing market bearishness but leaking lower and under the 200-day MA at 15.06. UTIL 482.20. SOX 465.51.
Note Added 4:07 PM: No great shakes into the close. SPX 1640.48. VIX ends at 14.81 now two days under the 200-day MA, a feather in the bull's cap. AA beats by a penny on EPS but top line revenue is only in line. So the top line revenue flatness scenario continues for companies as Q2 earnings season begins.
KS,
ReplyDeleteDo you think that at those levels there is enough energy embedded in the trend (on weekly/monthly levels) for a visit to or below 200 MA?
Or do we need one last run up to 1700's before falling?
V.
Monthly chart is content with heading lower from here forward. Weekly chart experiences the bounce that started with a dead-cat bounce but receives more oomph purely due to the central banker pumping that came in force with China first, then Fed happy talk, then BOE and ECB bounces on the holiday. So weekly may print an M top pattern. So that would bring the SPX up to the 1650-1687 zone then roll over. There are no gap fills required above on the daily chart so price would not have to go back up to the previous all-time highs. So, overall, it would not be surprising to see the SPX roll over from any price point forward.
DeleteThank you KS, I really appreciate.
DeleteV.
I needed the puke bag for WLT today Ks, jeez. In the end made a few porks chops. I don't think their secured financing is signaling party time for Coal sector, next few days should be interesting.
ReplyDeleteThe WLT news seemed like a non-event (perhaps a mine shutdown coming to reduce costs) but it is likely so beaten down, and shorted, that any hint of good news creates a mini short panic and a higher thrust. Overnight China coal deal so M&A may be coming to the coal sector as a whole. With the oppressive high humidity heat in the Northern States, the a/c units are going full tilt, natty gas prices are moving higher, so the bump in coal may be due to traders seeing elevated natty prices into September. UNG gapped up 3%. WLT is a real tiger by the tail, it can go either way. A buyout at 15-20 would be nice to see.
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