Monday, July 22, 2013

Keystone's Midday Market Action 7/22/13; NFLX

Copper jumps strongly higher today and JJC moved above 39.21, the bull-bear line in the sand, supplying bull fuel, but, a short time ago, JJC falls back below 39.21, taking the steam out of the market upside. VIX moved above 13 to provide hope for market bears, moving towards the 14.19 bull-bear line in the sand, but volatility reversed and now continues to tumble lower to help the bull case. Volatility and copper are the two main drivers of market direction today. Watch JJC 39.21 (now at 39.06 causing market bearishness) and VIX 14.19 (now 12.69 causing market bullishness). The give and take of these two parameters will move the markets. TRIN is 0.71, bullish. With the Fed maintaining lower volatility and low TRIN, the upside market party continues.

The SPX prints a new all-time high today at 1697.61. Watch to see if the bulls can print a new all-time closing high today above 1692.09, or not. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. The bulls are cruising these days receiving upside energy from Chairman Bernanke's Congressional Testimony last week. The full moon hits in an hour and even this esoteric market indicator hints at buoyant markets through today. Everything is going the bull's way these days. However, as shown with the CPC and CPCE put/call ratio charts, the SPXA150R, and NYMO, as well as the overall look of the SPX series of charts just posted, a market top is likely very near, either any day forward or perhaps within two weeks time. Utilities are weak today and this is a sector the bulls need to march equities to the lofty target numbers that analysts are touting.  Watch JJC 39.21 closely. Bulls will be unable to move equities higher unless JJC moves above 39.21 and higher. NFLX reports after the closing bell and will set the tone for tech tomorrow.

Note Added 1:26 PM:  Oil just took a dive. Keystone took profits on SCO exiting the trade. Will look to reenter, SCO should have plenty more upside ahead (oil lower).

Note Added 1:28 PM:  SPX is at 1694 so this will start to curl the 8 MA on the 30-minute chart lower as discussed above and perhaps the negative divergence highlighted on the charts is starting to have an affect. JJC 39.05.  VIX 12.70.  TRIN 0.74.

Note Added 7/23/13 at 7:07 AM:  JJC stays under 39.21 so that marked the top in the SPX yesterday just before lunch near 1698. Bulls keep the markets buoyant by continuing to beat volatility lower. VIX is crushed to 12.29. TRIN ends at an uber bullish 0.73 now closing under one for eight consecutive days. TRIN needs to snap back and print above one to relieve all this uber bullish euphoria. The TRIN also printed many days of sub-one numbers in the first half of May which led to higher TRIN numbers above one in late May and June, in concert with the markets selling off.  The SPX closes at a new all-time high at 1695.53 and new all-time intraday high at 1697.61

11 comments:

  1. Assessing the end of wave 3 of int v of major 3 has according to my system 2 levels:
    a) affirmation - if price does not jump back up if 1687 is reached
    b) confirmation - if the lower level of 1680 pivot (1673) is lost to the downside.

    Final target for wave 3 of int v of major 3 would be: 1700-1706 (maybe 1708).

    Target for wave 4 of int v of major 3 = 1662-1670.

    GL all!

    GS guy

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    1. Interesting. The 1700-1706 target would be in concert with the blue bull flag on the 30-minute chart.

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    2. Yes, I've seen that. Thanks. Intraday I work more with 1min, 5 min and 10 min charts. Thanks for pointing that out on 30 min charts!

      In about 1 hour-1 h , 15 min's, we will have a full moon - maxing out into the topping pattern until the end of today's session.

      Don't be sure and complacent but be prepared for a termination of wave 3 of int v of major 3 today (at the latest - early tomorrow).
      But I think today will happen during the 'smart money' hour (last hour).

      GS guy

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    3. I agree with GS guy. Please see my recent NYSE EW count here: http://soulsurferusa.wordpress.com/category/weekly-nyse-updates/

      GL!

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    4. Arnie, the negative divergence on the histogram may create the pull back to the '4' then the long and strong near term momo in the MACD line may create the move up to'5' then the histo and the MACD line should both be lined up with neg. div. for a roll over. Time frame appears to be over the next one to three week window. Other tools are pointing towards a couple week window for the bears ahead; bears need to growl as July finishes and we head in to early August or their chances may diminish.

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  2. KS,
    Since more upside from SCO, why you dont want to hold it 'til end of week?

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    Replies
    1. Markets are very unstable and erratic and not to be trusted overall. There is concern that an overnight event may occur and surprise everyone. On oil, the risk there is that an event would occur, such as ship traffic slowing or stopping in the Suez, that would immediately launch oil ten bucks or more. So it is simply a matter of staying nimble, taking profits. The trading employed is more of an arbitrage-type trading simply trying to take advantage of positive and negative divergence set-ups on weekly and daily charts which result in quick percentage moves. Simply take the money on the bounce, or collapse, and quickly move on.

      Staying nimble on the long side of equities is likely very important now. If the markets reverse, these highs may not be seen again for years. Thus, everyone needs to review their portfolio's and ask a simple question. Am I willing to own this long and stick with it, if it drops a lot, and will not come back up to current levels for 2 or 3 years from now? If the answer is yes and you like the long, and will hold it multiple years, perhaps for a divvy, while you wait for it to recover, then the decision is to not be concerned about this stock and simply hold it. If the answer is no, and the long play was always considered to be more of a short term play and the company is not a fave to own for a couple years or more, then the play for this stock is to likely sell it and exit any of these long holdings as markets are probably topping right now. The only areas of interest on the long side to Keystone these days are miners, perhaps PM's, shipping stocks, coffee, and select biotech and tech growth stocks that have a niche. The broader market is not attractive from a long perspective and positioning shorts appears more prudent moving forward.

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    2. '' If the markets reverse, these highs may not be seen again for years.''

      My projection for the current bull market is 1955-2040 points on S%P 500 sometimes during November 2013 and March to April 2014.
      After that we will experience a bear-market for 12-18 months and with a retracement of 50-61% of total gains (March 2009-April 2014).

      After that a strong bull market starting 2016-2017 until 2022-2025 with DOW targeting 32525-a maximum of 33450.
      After 2016-2017 the USD will melt down fast-forward mode and will partially lose it's status of global reserve currency (having equal status with the chinese yuan and the russian ruble as global reserve currency). The US debt will deflate as base value, but will inflate as nominal value.

      Enjoy the current purchasing power ! After 2020 into 2025 it will be a beautiful ...memory!

      GS guy

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    3. That is interesting and jives somewhat with the 18-year cycle, the most reliable stock cycle. The secular bear began in 2000 so 2018-ish would be anticipated to be the start of the secular bull, give or take a year or two, which should run from 2018 to 2036. Keystone will be pushing up daisies then but this is the period where the Dow 20 or 30,000 should come and S&P 2 and 3 thousand and higher, and perhaps wild hyperinflation. That leaves this 2013-2016 period as a question mark, or more broadly the 2013-2018 period. Since the markets have been up in recent years, the secular bear should resurface at anytime, and weak markets would be expected, say, about 2 of the next three years and perhaps 3 or 4 of the next 5 years. It will be interesting. Markets are difficult due to all the central banker intervention masking price discovery. No one really knows what anything is truly worth, but we will in the future at some point.

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  3. http://blogs.marketwatch.com/thetell/2013/07/22/mcdonalds-microsoft-and-intel-oversold-bespoke/?mod=MW_home_latest_news

    the usual press call for inducing a ramp to 1700-1706.

    GS guy

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    Replies
    1. China news overnight is important, they want to defend the 7% growth number, so that means they will likely stimulate their economy like the Fed, ECB, BOE, BOJ and everyone else, so the China hint of future easy money creates lift in the S&P's.

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