Thursday, July 18, 2013

Keystone's Morning Wake-Up and Midday Market Action 7/18/13; Chairman Bernanke Senate Testimony; AMD; CY; GOOG; MSFT

The markets jump higher to begin the day. Company earnings were on the positive side this morning, sans the top line revenue numbers that continue to be challenged so this creates the happy bullishness along with knowing that rich Uncle Bernanke is coming to town today to hand out more money. Chairman Bernanke takes Q&A from the Senate at 10:30 AM. Perhaps the Senate will ask more challenging questions than the House, but, probably not. VIX drops to 13.55 in concert with the SPX moving higher testing the prior all-time high at 1687.18.  The Dow punches through its all-time high this morning with a new all-time high and HOD at 15552.70. Watch VIX 14.19; bears got nothing unless they push volatility higher.  TRIN is 1.12 oddly favoring bears, not bulls, for today's action. Tech earnings are important after the bell.

Keystone took profits on JO on this morning's bounce and will look to reenter. As mentioned several times, coffee is likely making a multi-month and multi-year low, similar to natty gas one year ago, and plenty of upside is expected for coffee for weeks and months ahead. Keystone does not like many areas for the LTBH (long-term buy and hold) approach to investing but coffee, miners, shippers, perhaps PM's, and maybe a few select tech and biotech stocks, are the few areas of interest from a longer term long perspective. Also shorted MYL opening a new short position. Also bot SCO opening a new long position which is the double X inverse ETF that shorts crude oil. Good luck to all the golfers at The Open Championship now underway. Lots of birdies so far which should set up for an exciting finish Sunday evening.


Note Added 10:12 AM:  There's a new all-time intraday high for the SPX at 1688.47 taking out the May high and now in uncharted territory. VIX 13.43. TRIN 1.11. Chips (SOX and SMH) are weak today in sympathy to INTC earnings. Equities print new all-time highs as the chips, which go into virtually every product manufactured these days, drop.

Note Added 10:37 AM:  SPX HOD and new all-time high 1691.97 so pay attention to this number moving forward. VIX 13.21 now one-point under the bull-bear line in the sand at VIX 14.19. TRIN 0.95 now bullish. The Congressional testimony bullishness is playing out this week. Bernanke will try and thread the needle again today not ruffling any feathers.

Note Added 11:02 AM:  SPX HOD and new all-time high 1693.12 so pay attention to this number moving forward. VIX 13.34. TRIN 0.86. The 15 and 30-minute SPX charts show an ascending triangle that now formed over the last six days with a break out base line at 1683. Keystone can post a chart after the action settles. Everything is going the bulls way; the Tuesday to Wednesday OpEx buoyancy, the Congressional testimony bullishness, the lower VIX falling under 14.19, the 80/20 rule that would hint at SPX 1720's since price has closed above 1680 and even the full moon coming on Monday. However, exercise caution since these are not your Grandfather's markets. An expectation of a market reversal remains at any time and short exposure should be maintained especially to guard against any overnight negative news events that may rattle markets out of the blue. For now the bulls are cruising. Copper and utilities must move higher to provide further bull fuel for markets but both remain somewhat challenged. Chairman Bernanke begins the Q&A in front of the Senate Banking Committee.

Note Added 12:19 PM:  SPX new all-time high at 1693.12 holds in place. SPX is printing 1690.80. VIX 13.48. TRIN 0.76 very bullish. Bernanke testimony continues without anyone making waves so the bulls cruise along. The ascending triangle on the 30-minute chart targets a potential move to 1696 but a back kiss to the triangle break-out line at 1683 would be prudent.

Note Added 3:17 PM:  SPX 1689.10. VIX is 13.71 at the base line of an ascending triangle on the 5-minute chart that would target the 14.19 bull-bear line in the sand if the VIX stays above 13.70. TRIN 0.92 but moving towards neutral 1.00. The SPX moves through 1687-1693 all day long. The new all-time high and HOD at 1693.12 holds since 11 AM. The 8 MA on the 30-minute chart is 1689.49 so the current print for SPX will cause the 8 MA to curl downwards towards the 34 MA for a potential negative 8/34 MA cross tomorrow. Bull continue along on easy street as long as the VIX stays under 14.19 and the 8 MA remains above the 34 MA on the 30-minute chart.

Note Added 3:29 PM:  SPX 1689.33. VIX 13.70. TRIN 0.86.  Tech earnings after the bell are two big ones GOOG and MSFT, also AMD and CY.  CY will greatly impact the chip sector (SOX, SMH, SSG). GOOG weekly and daily charts are negatively diverged across all indicators so even if earnings are great, that action would only create a nice shorting opportunity. Same-o with MSFT although Mr. Softy may squibble out sideways on the daily chart for a short time; weekly chart is negatively diverged so its luck will run out moving forward. AMD is a healthy chart still yet so it can likely squeeze out a bit more upside. CY charts also look encouraging for sideways action through 11-14 for the weeks ahead.

Note Added 3:40 PM:  A descending triangle is forming on the 5 and 10-minute SPX charts with base line at 1688 so the bulls have to hold the line here at 1688, or, a downside target of 1683 would be in play and interestingly enough, that is where the break out occurred from the ascending triangle this morning that has yet to be back kissed.

Note Added 3:42 PM:  SPX 1688.16.  VIX 13.68.  TRIN 0.86.

Note Added 3:45 PM:  SPX 1688.05 deciding to bounce or die.

Note Added 3:50 PM:  SPX 1689.28 up a touch since VIX is 13.65 down a touch and TRIN is 0.83 down a touch. Will be interesting to see if the descending triangle remains in play, or not.

Note Added 4:14 PM:  GOOG and MSFT miss on earnings so they pull the stove away from the wall, sever the gas line, and start sucking hard in the AH's, takin' the pipe.  GOOG drops over -5.0% while Mr. Softy melts away -3.6%.  This may set a negative tone for trading tomorrow, especially in the tech sector and Nasdaq. Interestingly, a weak tech sector by default means a weak financial sector since financials are such a big user of tech, however, traders trip over each other to buy banks long worried they are missing out.

34 comments:

  1. 1686.10 taken ;) ... more to go.
    I'm here with you :).

    GS guy

    ReplyDelete
    Replies
    1. Awaiting ur get the f... out call!

      Delete
    2. not yet...too early.
      has some more to go.

      GS guy

      Delete
    3. I don't know if today we are reaching that area - it's over 1700.
      May be tomorrow during OPEX.
      I'll be here anyway - today and tomorrow.

      GS guy

      Delete
  2. Brilliant GS-Tks

    ReplyDelete
    Replies
    1. I have one request to all here that might earn some money due to my calls.
      10% of earnings please give them to a beggar, to a poor family or a poor kid.
      ok?
      that's my payment.

      GS guy

      Delete
    2. Thank you GS! :)
      10 % will be the payment to one that needs the money :).
      I like your style :D ...

      V.

      Delete
  3. KS,
    If you recall, I asked a few days ago about shorting MYL. THANK YOU for the advise. I held off and now I'm right there with you, I'll be looking enter the position soon.

    What do you think of MZZ down here?

    ReplyDelete
    Replies
    1. That's interesting, yep, MYL came back up for 32+ so perhaps the negative divergence will roll it over again. All the inverse ETF's remain attractive. No doubt this week was stacked for bulls, and Keybot remains long, but it is prudent to remain very skeptical of these markets. Considering the uber bullish sentiment, low VIX, low CPCE, high NYMO, markets may take a quick pull back.

      Delete
  4. now there's either a bull flag under construction (15 minutes chart) or a back-kiss of pivot 1680's higher limit (1687) and after that another push-up (maybe tomorrow).

    there are more than 80% chances to see the target tomorrow and 20% on Monday - almost 0% chances to see the target today - thought to tell you that.

    GS guy

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    Replies
    1. Yep, the bull flag on the 15-minute played out, first leg 11 points from 1673 to 1684, then the consolidation flag, then from 1678 targets 1689 which price tagged.

      Delete
  5. don't take shorts here (1691-1689) - it's just a technical correction executed by machines due to overbought conditions.
    in about 45-75 minutes the trend will be up again.

    GS guy

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    Replies
    1. in the projected timeframe 13.25-13.35 pm price reached and checked 1680's upper pivotal limit (that's 1687).
      a small IHS being built (maybe) on 1 min chart - so we will see one more try to break 1687 - a failed one :)
      after that up trend projected.

      GS guy

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    2. anyway ..taking shorts before OPEX doesn't makes sense anyway...just my opinion.

      GS guy

      Delete
  6. there are a lot of chances that today the market will close in the 1691.64 - 1692.13 right below/or at the lower limit of the next pivot at 1699.
    if we are lucky we close above 1692.13 in the pivot area.

    KS, sorry my multiple comments - I want people to see that I'm not an idiot that called himself 'gs guy' and all this technical follow-thru in real-time proves my >20 years as professional trader.

    GS guy

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  7. Keep it coming GS guy. Thanks for all your comments. Obviously same goes to all the other great contributors and the master, KS.

    BK

    ReplyDelete
    Replies
    1. Thank you, but my presence here will be only in tops and bottoms areas.
      I have my own business to run, you know? :)?
      What I do is a gift.
      And when you receive a gift be ready to donate 10% of the earnings to those that really need that.

      GS guy

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    2. I will gladly pay your gift forward.

      BK

      Delete
  8. Yes, taking shorts before OPEX is a horrible idea. I did it this week and last OPEX. Lol. It was a remarkable shalacking.

    I am paying attention now. Looking to short at 1700.

    ReplyDelete
    Replies
    1. don't think like a retailer! learn TA (technical analysis)!
      forget about 'round numbers' they don't mean nothing!

      GS guy

      Delete
  9. I see Nasdaq lagging.
    That won't be a problem after GOOG results afterhours - that's a rumor received on twitter - take it as it is.

    GS guy

    ReplyDelete
  10. Yep, markets likely idling waiting for the lollapalooza of tech earnings after the bell. AMD, GOOG, MSFT, CY.

    ReplyDelete
    Replies
    1. Oh, my bad. :)
      Forgot about MSFT and the others. Being at a certain age I developed myopia. Market capitalization myopia. Lol! :)
      Sorry for flooding your site today, I promise to be more brief.

      GS guy

      Delete
    2. Your posts are interesting and intelligent GS so you can do what you want.

      Delete
    3. Thank you, I appreciate.
      Anyway, when you called me at the beggining 'idiot' and deleted some of my comments I got a little mad on you, but after that I figured it out that I was back then an a**hole. Sorry for that. I'm a polite gentleman. well....most of the time :).

      GS guy

      Delete
    4. GS Guy,

      Since you said you will only be around here at tops and bottoms...are you calling for one more push up and a top tomorrow? Thanks. Wow GOOG just tanked AH.

      Delete
    5. Rich R,

      There will be at least one more push tomorrow or on Monday or in any day of the next week. Even truncated on SPX, projected target is above 1700.

      GOOG, MSFT = ugly results.
      There will be some chopiness for about 1-2 weeks at the top. As everyone knows tops are built and bottoms are marked (in a 'V' shape due to sharp short-coverage at the bottom).

      Ignore the AH action in SPX futures - it's due to AH published results.

      KS got his 1683 (cash equivalent) recheck.
      Asia and Europe will rebuilt the situation until tomorrow.

      GS guy

      Delete
    6. Interesting, thanks GS. Got the 10%+ already working it.

      That upgrade to U.S. by Moody's may balance out GOOG & Softy? Tricky times.

      Delete
    7. Rich R,

      Yes.
      Anyway, I wouldn't short into OPEX tomorrow. Have you even thought that the puzzle pieces (type of news and events) are arranged in time to create more smoke and mirrors?

      The big guys (bigger than me) want fresh shorting blood tomorrow.
      Stay calm and take a deep breath.
      Big downs never spring without a harrasment of shorting retailers.
      And that might just happen tomorrow. Big down and after 1/2 to 45 min-1 hour big up. Out of nowhere. :) And nobody knows what the hell happened. :)

      Just stay calm. If I observe that the area targeted above 1700 is imposible to be reached I'll post here in seconds/minutes.

      Now it's still possible. Until tomorrow it's still Asia and Europe. Stay calm!

      GS guy

      Delete
  11. I like that

    from marketwatch.com

    BREAKING

    Moody's - U.S. rating outlook to stable


    V.

    ReplyDelete
    Replies
    1. and more:
      4:26pBREAKING

      Moody's affirms U.S.'s triple-A sovereign rating

      V.

      Delete
  12. PART 1:

    I hate myself when I take responsabilities for others. Now I can't sleep :).

    Because I guess a lot are stressed by what happened after-hours I will develop my potential market counts here:
    - I have at least 2 scenarios (to understand where we are now): all values are market cash, not futures:
    A. starting from 1560 we have 5 minor wave:
    i- 1560-1627
    ii-1627-1605
    iii-1605-1685
    iv-1685-1672
    v-1672-1693 (so far)

    under this count the target is at 1708-1714. But it could have been truncated. I repeat :IT COULD! Because all the trouble was after-hours registered in futures, not in cash market! Remember this aspect! It's important!
    If tomorrow's EOD (end of day) and EOW (end of week) close below 1671.76 - 1671.84 in cash market, not futures, it's game over! Major 4 started!

    From the perspective of scenario A, scenario B is much more interesting. Pay attention to it:

    Scenario B (market cash, not futures):
    i-1560-1627
    ii-1627-1605
    iii-(has subdivided, under EW theory instead of 5 waves we have 9 waves; a 7 waves subdivided up waves can't exist - it's 5 or 9)
    1. 1605-1636
    2. 1636-1614
    3. 1614-1654
    4. 1654-1647
    5. 1647-1685
    6. 1685-1671
    7. 1671-1693
    8. ?
    9. ?

    iv. corrective a-b-c to 1660-1672 area (maybe a little lower to 1658 for gap closing)
    v. up to 1736-1748 area / may truncate or extend.

    Under EW, multiple subdivided waves in the same trend are VERY rare but certainly not impossible.

    Under scenario B, in the wave. iii if during assumed wave iii.8. pullback ONLY IN CASH MARKET, (forget about futures now!) we go below wave iii.7. minimum point (and that's 1671.76 - 1671.84 area) the scenario B with subdivided wave iii crumbles.
    Please observe also that in scenario B we have the same line in the sand as in case of scenario A: 1671.76 - 1671.84 area (during the day and/or EOD in cash market only).

    GS guy

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    Replies
    1. PART 2:

      The situation is quite complex.
      If people got emotional at the end of Thursday and shorted, under scenario B, they might have shorted in the wave iii (which is not cool). On Friday we have OPEX and a big help from "our uncle" Ben (as KS gratefully notes) :).
      Under scenario B we have 2 big lines in the sand, very important lines in the sand:
      - the area 1679.98/1680.16 - 1684.86 (where we have the support line of the trend that started at 1560 low)
      - the small area 1671.76-1671.84; if this small area is reached , below 1672.86 (that's the lower limit of 1680 pivot) that might just mean that the uptrend from 1560 was truncated. Descending below 1660 would only confirm it.

      If 1680 area(+/- 1 point) is held I have good news: in August (first 10-15 days) we will see values in the mid-1700 area.

      My call of getting out will be provided in 2 cases:
      - obvious truncation.
      - safe exit NOT on the peak of the uptrending wave (3 of V of major 3 or 5 of V of major 5). So my call will allow some extra up points to be left on the table. If we're still uptrending a few more points after my call you are kindly advised to not be a pig getting long at that level, and prove well-balanced thinking.

      For tomorrow (for Friday) the risks are more (65% to 35%) to the bears than to the bulls considering the 'Friday-factor' (closing of shorts over the week-end), the OPEX factor, and the primary dealers helped by 'uncle Ben' factor.

      This message is not a call to exit it's a clarification of my thoughts. You don't have to expect my calls or depend on it. It's according to your risk level.

      According to the basics of TA breaking in SPX an all-times-high (considering that R2K and other leaders made strong new highs and SPX is a follower of them) calls for more highs.

      If you are a bear think well your position for Friday. My advice for bears would be: if you're a bear, be a true bear, not a pig. That means: prove discipline and short in confirmed downtrends, not against an up market, before a Friday, before OPEX, ok? If the true boys have set a trap yesterday at the close some retailers that are shorting might fall in it.

      According to my models, the possibilities of truncation of the uptrend at price closing levels of cash market were at only 17%. The danger appears at over 60-65%. My exit-call target will be activated at above 50%.

      Trade well tomorrow and keep it cool, no stormy emotions,
      There will be some huge ups and downs for bulls and for bears. Stay calm.

      GS guy

      Delete
  13. BREAKING NEWS WARNING: 13 minutes ago:

    PBoC removes bank lending rate floor & controls on discount rates.
    this is STRONGLY RISK ON!

    But pay attention! Today is a day filled with volatility!
    Market might open in the 1689-1692 area.
    If you can't digest a further swing to 1676 or 1672 or even 1658 sell into strenght in the 1689-1692 area.

    THIS IS NOT AN EXIT CALL!
    This is a warning for those that feel somewhat weaker in their long positioning!
    next week (or even in the second part of this Friday) we will see SPX over 1700.
    But if you don't feel ok with your current long position you have a chance to exit at the beggining of US market. You can use that or not - it depends on your own risk management.

    So, according to scenario B already exposed: first a trip to 1689-1692 than some sharp weakness (1-3 hours) than late Friday or next week (after visiting 1658-1676 area) over 1700 levels.
    chances of getting to 1658 = 10%
    chances of getting to 1672 = 35%
    chances of getting to 1678 = 55%

    Decide for yourself, you have the roadmap!

    I will make an exit call at the end of 3'rd wave (due to risks of truncation of last 5th wave) and a second lethal-longs exit call at the end of 5th wave (the second call probably next week or in August).

    GS guy


    ReplyDelete

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