The FOMC Minutes are at 2 PM EST and Chairman Bernanke speaks after the closing bell at 4:10 PM. Volatility is the most important market driver today. VIX 14.27 is the bull-bear line in the sand. VIX is 14.59 so the bears are holding on. The SPX is leaking a bit lower from the negative divergence on the daily and hourly charts. The action may be slow until the Minutes are released which will create a market pivot point. The 10-Year Note Auction is at 1 PM and will receive a lot of attention. The yield is now printing 2.65%. TRIN is 1.01 only willing to endorse the bears by one penny today although the TRIN has been above one the whole morning thus far. SPX is 1648.68.
Note Added 2:36 PM: The FOMC Minutes sound like more of the same. The notes are more of the 'on the one hand, but then on the other hand'. Give me a one-handed economist! VIX drops under 14.27 which gives the go signal for bulls to send equities higher. VIX moves to 14.28 as this is typed so looks like there will be a dance across the 14.27 bull-bear line in the sand the remainder of the day. Above VIX 14.27 and bears win, below 14.27 and bulls win. TRIN 1.30 and moving higher favoring bears. SPX 1654.
Note Added 2:40 PM: VIX 14.32. TRIN 1.30. SPX 1652.33 dead flat on the day. The 8 MA remains above the 34 MA on the SPX 30-minute chart so the bulls remain in charge for the hours ahead, however, the 8 MA and 34 MA are converging for a potential negative 8/34 cross.
Note Added 3:01 PM: VIX 14.40. TRIN 1.40. SPX 1649. The 10-year yield is heading higher to 2.68%.
Note Added 3:30 PM: VIX 14.26 now testing the 14.27 bull-bear line again, so markets receive a lift. TRIN 1.45. SPX 1652.35.
Note Added 3:37 PM: Jumpy markets. VIX bounces off the line in the sand now at 14.36 so SPX drifts a couple points lower again to 1650. TRIN 1.50.
Note Added 3:49 PM: VIX 14.27 exactly on the bull-bear line trying to decide what to do.
Note Added 4:01 PM: All that drama and the SPX ends where it began, at the strong 1652-1653 S/R. VIX 14.29 two pennies on the bear side but prices are still settling out. VIX 14.27 will decide the winner in the morning. Chairman Bernanke prepares to speak, scraping the tartar sauce off his neck tie and moving towards the podium.
I think that the market is preparing for a visit to 1631-1637 area today or tomorrow.
ReplyDeleteThere's some negative divergence on RSI on 60 min and MACD is preparing a negative cycle that should appear in the second part of today session and tomorrow (with an extension maybe on Friday in the first hours). After that... more upside. :)
V.
well...guess that micro-down cycle is starting ...targeting more like 1637-1640 than 1631.
DeleteV.
Man! Have you seen the overnight futures? My little short position was 'Bernanke-fied', burnt and fried like hell... Thank God it was just a little position and the rest of my account (50%) is in longs....
DeleteV.
Yep, a Bernanke rally is on tap.
DeleteThe market seems to be slowing down, feeling "frothy".
ReplyDeleteKS, you mentioned MYL as a possible shorting candidate.
I'm seeing negative divergence on multiple charts but the daily is showing a nice ascending triangle with lower vol. which usually indicates continuation.
Care to take another look at the chart?
Let's see. Keystone had one short trade in and out. Daily chart shows price peak with negative divergence at mid-June at 32.00. Ever since is roll over to the down side now with sideways action. Ditto the weekly which peaked three weeks ago. That was a juicy top when weekly and daily charts agree with negative divergence across all indicators in both time frames. Now its on the back side stumbling sideways. It should continue to be a short candidate moving forward but since there are so many fish in the sea, for MYL may be best to see if prints 32+ and then enter a potential short there and higher.
Delete