Monday, July 15, 2013

Keystone's Midday Market Action 7/15/13

C sets a happy tone for markets and the weak Retail Sales means more Fed crack cocaine (bad news is good news).  The 10 AM pivot results in an upside move and the SPX is now at 1681.00 with a HOD at 1681.99. The bulls only needed a smidge of green at the open to keep the party going but so far are unable to hold the 1680+. VIX HOD is 14.11 nearing the 14.23 bull-bear danger line (use this number instead of 14.27 previously mentioned) but fell on its sword, now printing 13.93 continuing to make the bulls happy.  Lots of sideways action to begin the new week. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. Watch VIX 14.23. Keystone took profits on PBR exiting this long position. Will look to reenter since PBR should continue higher and print above 14 in the days and weeks ahead. Also bot HDGE, a bear ETF, opening a new long position.  Also bot SDS, the double X ETF that shorts the S&P, opening a new long position.

Note Added 10:31 AM:  The SPX 1-minute chart shows a sideways symmetrical triangle since the opening bell with price at the apex now, so bounce or die should occur from 1680, perhaps about a 5-handle move.  SPX is 1680.17. VIX 13.90. TRIN 0.89 which gives the bulls the edge. Time to enjoy some blackberries freshly picked from the fields bordering the woods.

Note Added 11:54 AM:  VIX 13.82.  TRIN 0.85. Say no more, the bulls are favored. The 1-minute triangle broke to the upside for three handles to a new HOD at 1682.68 so pay attention to that number today. Same ole story with the hourly and minute charts over the last day. Blow on them and they should tumble over like a feather. SPX is 1682.10 near the highs. Chairman Bernanke is supervising the installation of five new printing presses in the basement of the Eccles Building.

Note Added 12:05 PM: New HOD 1682.92. This should get interesting. The SPX 1, 5, 10, 15, 30-minute, and 1 and 2-hour charts are all now overbot with negative divergence across all indicators. If there was a time for the SPX to peak and roll over, now would be it. VIX 13.83. TRIN 0.83. The lower volatility and lower TRIN keeps the bulls happy.

Note Added 1:50 PM: VIX 13.74. TRIN 0.81. Say no more; the VIX and TRIN are slightly more bullish since two hours ago. SPX is 1682.55 with HOD at 1682.94 so price came up and punched out another intraday high two pennies above the prior high. Hourly and minute charts remain negatively diverged. The SPX is hanging on the side of the hill holding onto a branch. If bearish, you need to kick away the branch. Bears need higher volatility, higher TRIN, and the 8 MA to move under the 34 MA on the 30-minute chart, or, they got nothing. The 8 MA is 1681.74 so price would need to be under 1682 to start to curl the 8 MA to the downside. The bulls keep pushing higher. Watch VIX and TRIN for clues forward. Keystone took profits on NAT, only enough to buy a Happy Meal, exiting this long trade. Will look to reenter since NAT should have plenty more upside for the days and weeks ahead. The shippers remain an interesting place to look for potential longs.

Note Added 2:04 PM:  VIX 13.70 printing a LOD, sending markets higher. TRIN 0.80. The bull position improves by a hair. Now just a doggone minute; the SPX prints another new HOD at 1682.96 two pennies above the prior high once again. It will be a long way to 1700 two pennies at a time. The 1683 level now establishes itself as important resistance.

Note Added 2:18 PM:  VIX drops to 13.63 so SPX pops above 1683 R. TRIN 0.74.  The bulls are not taking any prisoners today. New HOD 1683.68 so 1683 becomes support. Interesting markets. This action should pull in some bulls on the fence at the same time shorts giving up adding upside short-covering fuel. Volume is light only at a run rate of about 60% of a day's average expected volume. Keystone added more MZZ, an ongoing long trade (which is short the markets).

Note Added 2:28 PM:  Look at the VIX tumble to 13.55. TRIN 0.76. SPX HOD 1684.01.

Note Added 3:20 PM:  VIX 13.53 and TRIN 0.77, both trying to turn up. SPX HOD 1684.51. SPX moves sideways through 1681-1684, a 3-point range, since 11 AM, and through a tight 1683-1684, one-point range, for the last hour and one-half.

Note Added 3:39 PM:  SPX testing 1683 support, bounce or die. VIX 13.63 and TRIN 0.85 both rising a touch so the SPX drops a touch.

Note Added 7/16/13 at 7:09 AM:  The SPX prints another new all-time closing high at 1682.50 but not a new all-time intraday high (1687). Market bears got nothing unless they push volatility, VIX, above 14.20.


  1. Interesting. Why would Bernanke move up the release of his Wednesday Congressional comments to 8:30 (Eastern) instead of within market hours at 10?

    1. That may be a release of his opening comments ahead of time (in written form) and then he repeats them at 10 AM or they just commit them to the Minutes and then at 10 AM begins a question and answer period??

    2. Yep, just like you said Weaver, so it was an original 10 AM release. It is funny where they say it is a heads up for the committee, it is more like a heads up for markets.

  2. Looks like they are going to start a selloff soon... and trap more bears when ben testimoney is released before trading starts on wed with a gap up...

    1. Look, I'm a good guy, I'll tell you the targets:
      - 1695-1705, than 1680's, than 1770's (more or less 10 points).

      GS guy

    2. You sure bout that GS Guy? 1695-1705 I agree with, but after that is the cliff if you know what I mean.


    3. No, after that it's a little cliff for bears between wave 4 and final wave 5 if you know what I mean.

      It's a matter of pivots right now. If this wave 3 (now rolling) reach the 1699 pivot (1695-1705 area) a pullback of 25-35 points will excite all bears still alive that will put their farm on shorting bets.

      But surprise!
      A fast and furious (as time) climb to 1779 pivot (1772-1785) might appear. If last wave truncates it still will reach 1740-1750's.
      Never short unconfirmed downtrends! It's basic this thing! ...or I'll take it from you and you will bark at me :) ...

      Another possibility is a potential head 'n' shoulders now having under construction the head. But I wouldn't bet my money on that - too obvious.

      Until the pivots at 1680 and 1699 show us the way, everything is possible.
      Tomorrow or the day after tomorrow when Ben will speak, extending the up move beyond the 1680 maximum limit (1687 in cash) and entering in 1699 pivot area (1692-1706 area) to end this wave 3 allows after a shallow pullback (25-35 points) a violent move to 1770's in 10-15 days.

      Until mid-August (10-15?) the cascade will begin. Watching the trine Jupiter-Uranus-Pluto (7-21 August 2013)... last time when it appeared Lehman Brothers crumbled.

      Keep you powder dry, you'll thank me in a few weeks!

      GS guy

  3. Thanks, GS Guy. In the meantime, today's action is like watching paint dry... the old kind that dried slowly.

  4. That is funny, yep, like watching porch and floor enamel dry. LOL That would take a couple days. Markets are at an interesting juncture, the expectation is for a pull back but the VIX and TRIN will not move higher. It may be an interesting finish today. Early in the week, right now, is the best chance for bears this week since the OpEx lift and congressional testimony bullishness should help the bulls. You never know what is coming at you in these markets.


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