Tuesday, July 2, 2013

Keystone's Morning Wake-Up and Midday Market Action 7/2/13

Today picks up where yesterday ended. The SPX is fighting at the 1618-1624 resistance gauntlet so watch the 20-day MA at 1616.87, 200 EMA on the 60-minute chart at 1618.90, and 50-day MA at 1624.04. Price is moving through the 20 and 50-day MA bracket between 1616-1624. Bulls need to push utilities higher today. Watch UTIL 480.74. Price jumped above, then failed below, now back above again at UTIL 481.10. Bears need to push either XLF under 19.25 or RTH under 51.60 to gain downside fuel. The 200 EMA cross on the 60-minute and the 8 and 34 MA cross on the 30-minute, two important near-term market signals, are both walking a tightrope right now. Whichever direction they both agree on is the market direction forward.

The dollar/yen is above 100 now at 100.34 so equities are higher. Factory Orders are at 10 AM so a market pivot point may occur. Fed's Dudley speaks at 12:30 PM so after noon time, his speech may be released which will probably bump the SPX a few handles higher as he pumps the QE talk. Keystone started shorting KKD, opening a new position, which is short donuts. Also bot PBR opening a new long position.

Note Added 9:59 AM:  TRIN is 1.00 flat neutral and not wanting to choose a side today. VIX is down again today at 16. Keystone took profits on FRO exiting the long trade, will look to reenter.

Note Added 10:03 AM:  Markets initially pivot to the downside after the data; the SPX loses a couple points. UTIL just came down to tease the critical 480.75 danger line, and bounced. UTIL is 481.15. Watch utilities as a rudder for market direction today. Up utes is up markets, down utes is down markets. Dollar/yen is 100.36.

Note Added 10:51 AM:  UTIL 482.25. TRIN 1.03. VIX 15.99. SPX 1622.23. The beat goes on with the ongoing battle across the 1618-1624 gauntlet. Keybot the Quant remains long since utilities, retail and financials all remain in the bull campKeystone added more SPXU to this ongoing long trade which is short the S&P's.

Note Added 2:30 PM:  Egypt is falling apart. The army says they will oust Mursi and suspend the constitution. There are millions of people in the streets, squaring off on both sides, so the situation could grow ugly and send the country into turmoil. Of course the Suez Canal is important to the oil industry, and WTIC crude moves up towards 100 now at 99.74. Gold is not receiving a safe haven bid. Mursi may be pleading 'mercy' in a few hours. UTIL drops back under the 480.75 danger line so the markets weaken. RTH and XLF remain bullish. The SPX is losing altitude now under 1610. VIX is positive on the day now up to 16.72. TRIN 1.14.  Dollar is 83.47 moving higher. Dollar/yen 100.51, down a little so equities leak lower. The 1618-1624 resistance gauntlet continues to hold favoring bears. The SPX is under the 200 EMA on the 60-minute chart at 1618.90 signaling bearish markets for the hours and days ahead. That pesky 8/34 MA cross on the 30-minute, however, continues to ......... whoopsies, ....  the 30-minute just printed a new candlestick for 2:30 PM and the 8 MA just stabbed down through the 34 MA to signal bearish markets for the hours ahead and this places the 60-minute and 30-minute in agreement giving the overall negative prognostication forward street cred. The next one-half hour is key since the bulls must spike the indexes higher right now to stop the slide and hold the bears at bay, otherwise, the bulls will lose their grip on the markets. Since the Egypt news will likely remain concerning, equities should continue to leak lower.

Note Added 2:39 PM: Dollar/yen 100.47. UTIL 478.57. VIX 16.88. TRIN 1.19. RTH 52.40. XLF 19.45. SPX 1607.95. The 8 MA is holding under the 34 MA on the 30-minute chart, so far, so the bears develop a cautious smile. DNKN is upgraded today so this was unfortunate timing to short donuts, but, KKD should drop anytime forward.

Note Added 3:00 PM:  Another candlestick prints now on the 30-minute chart and the 8 MA is clearly down through the 34 MA signaling bearish markets for the hours ahead, however, another one-half hour is needed to make sure the 8 stays under the 34. The bulls may have a trick up their sleeve. Fed's Powell will pump the markets about one hour after the closing bell today and the pre-holiday buoyancy may enter the markets. If the Egypt situation worsens, however, it trumps all, and markets will head lower.

Note Added 3:54 PM:  UTIL 479.57.  SPX 1613.48 remaining under all the important moving averages highlighted in pink above. Keystone shorted more donuts, KKD, adding to this ongoing short position opened today.

Note Added 3:57 PM:  The 20-day MA is 1616.65. SPX is 1614.35. Volume is lighter today than it was yesterday which says tomorrow will be fumes and vapors with the early close.

Note Added 4:10 PM:  Keystone's two short-term market signals, the 200 EMA cross on the 60-minute, and 8/34 MA cross on the 30-minute, finally agree, after the last few days of mixed signals, and the decision is favoring the downside. You know what this means. The signals are tentatively bearish so the bulls can mount one, last-ditch effort, to reverse the negativity, at the opening bell tomorrow. The bulls must catapult equities higher at the opening bell to send the SPX over 1619 and the 8 MA above the 34 MA on the 30-minute to reverse the market negativity. So bulls need to see the overnight futures at +5 or higher to light the way. Fed's Powell is on deck shortly. Egypt will be watched all evening long into tomorrow since Mursi may end up pleading 'mercy'. UTIL 479.95, below 480.75, causing bearishness.  XLF 19.53, above 19.25, causing bullishness.

20 comments:

  1. http://www.marketwatch.com/story/fed-to-move-forward-with-basel-iii-capital-rules-2013-07-02?link=MW_home_latest_news

    lol!

    Now I understand why yesterday XLF was making that classic shooting star!
    I worked in a bank as senior auditor for many years.
    Do you know what is Basel III about?
    It's about capital regulations and harder capital treatment!
    Lol!
    It's Bye-Bye to party US banksters if FED follows Basel III regulations! :))))))))))))))

    V.

    p.s. guess what happens now might be a pump and dump , a classic one. Let's see... :)

    ReplyDelete
    Replies
    1. Yep, the more dough the banks are forced to keep on reserve, and not allowing them to play games with assets so as to continue to allow high leverage, the harder it is for them to continue making the big bucks. Lehman Brothers was leveraged at 40 to 1 some say maybe 50 to 1, that is why they were wiped out in a heartbeat. It is hard to tell what banks are at now due to all the phoney baloney. A leverage of 8 to 12 or lower would typically be safe for banks but they cannot make the big dough down there.

      Delete
    2. for those who love good music (cafe del mar) and south park cartoons :)) ...gotta listen to it , it's waaaay to good :D!

      http://www.youtube.com/watch?v=4TlPo0yCSa4

      V.

      Delete
    3. more news on that... love that part with " with bank concessions" :)

      http://www.marketwatch.com/story/fed-approves-capital-rules-with-bank-concessions-2013-07-02?link=MW_home_latest_news

      V.

      Delete
  2. Watch UTIL 480.75 today, above is happy bulls that will keep equities buoyant all day long, below and the bears will growl. UTIL is now printing 481.69.

    ReplyDelete
  3. Hi KS. Abour a week ago we talked about FAZ and RUSS. Russia is the 7th largest oil producer in the world and I always assumed a close correlation between Oil and RSX performance. Hence, my question about your thoughts on where oil was headed. FYI, I just realized that RSX has a very high correlation to JJC. Their long term charts are basically mirror images. Just an observation. I am still holding both FAZ and RUSS. Thanks for all your insight and your ability to clear away the smoke and mirrors of these markets. Cheers.

    C.

    ReplyDelete
    Replies
    1. That is interesting about how JJC and RSX are tracking, along with oil. Oil diverges up now because of Egypt and Syria. When the smoke clears over the next couple days, the oil charts can be posted.

      Delete
  4. keep buying, we are selling to you on the top of the day , like yesterday, like previous days ... it's called d-i-s-t-r-i-b-u-t-i-o-n , my friends !

    keep thinking all that you want to think about QE, about FED speakers about all that crap ... no matter what ... a top is still a top !
    Kiss ya! :*! :)

    GS guy

    ReplyDelete
    Replies
    1. I guess you are right GS guy!
      I have taken a look on SPY (the etf that follows S&P500) and the whole rally from 1560 ... well..it's just a series of doji's ... never seen a rally composed of dojys until now !

      that means there is not participation, they pump the spx 500 level and they sell gently all day long!

      KS , is it true what I'm thinking ? Can you please take a look at SPY daily ?

      V.

      Delete
    2. told ya u'r a smart guy! :)

      GS guy

      Delete
    3. Hey, my six sense tells me that we're going to visit spx 1540 within a couple weeks, what do you think buddy?

      Delete
    4. try 1400's until September... unsure, but might get there with the right combination.

      GS guy

      Delete
    5. All those doji's are interesting, they simply illustrate the indecision in the markets now which verify all the cross currents in indicators and asset relationships. The Fed twisted everything into a knot and no one knows what anything is actually worth anymore.

      Delete
  5. I'm new to this and have been following for the past few months. From an Elliot Wave standpoint, for any of you that follow this, since Wave 3 was so powerful and long, what are the odds that we are seeing a truncated wave 5? Wouldn't this lead to a large ABC decline thereafter?

    ReplyDelete
    Replies
    1. the truncation of the future int 5 does not imply a larger ABC than the case of a 'full' (so-to-speak) int.5.

      Next big correction (Major 4) can be calculated as a fibo % proportion of Major 3 (it doesn't matter the distance since the start of int 1 of major 3 .....to the end of int 5 of major 3..irrelevant).

      V.

      Delete
  6. next stop... 1586-1594

    V.

    ReplyDelete
    Replies
    1. yup, seems like 1626 was all she wrote for this wave 1. looks like 5 waves to me. retrace should be between 38.2-61.8%. that would target 1590 +/- 5 IMHO.

      After that wave 3, up. If this is int. med. V, then target should be, assuming 1590 for wave 2 down: 1590 + 2x 66 = 1722 +/- 15 (allowing for 23.8% truncation or extension of the 5th wave)

      Delete
    2. after that wave 3 ?
      truncated wave 3 or wave 3?
      ;)

      GS guy

      Delete
    3. no the 1722 +/- 15 target is for all of int. med. V. only 5th waves truncate

      Delete
  7. Watch the 8/34 cross on the 30-minute. As long as the 8 stays under the 34, it is only by pennies right now, that will point to market downside ahead. Another candlestick should appear on the 30-minute chart in a couple minutes. The bulls are trying to thrust higher right now to reverse the 8/34 cross.

    ReplyDelete

Note: Only a member of this blog may post a comment.