Wednesday, July 24, 2013

Keystone's Morning Wake-Up 7/24/13; BA; LLY; PEP; F; CAT; FB; V

Today is another earnings lollapalooza. Many blue chips are beating the lowered estimates helping to keep the S&P futures elevated at +5. AAPL earnings were in line last evening due to better than expected iPhone sales, however, the lower margin phones are in more demand rather than the expensive phones. Consumers in general are gravitating to the lower priced phones. iPad sales disappointed far short of estimates and guidance is lowered moving forward but traders take comfort in the iPhone sales and reward the stock with a +4% move. LLY, BA, PEP and F are up on earnings.  PNRA, BRCM, CAT, T and NSC are down on earnings.  CAT weakness is due to the weak mining sector. The weak data on rails will likely hurt coals today. T may create a negative vibe in the telecom sector. China's PMI is weaker than expected overnight which hit the banks and commodities but the Germany and Euro zone PMI's are a shade above 50, indicating expansion, so the tone changed to happiness, with the euro jumping higher to 1.3238, dollar lower, copper higher and S&P futures higher. Traders also realize that China will likely stimulate their economy with easy money moving forward so the bulls see a silver lining in good and bad data. Good news is good and bad news is good. Dollar/yen has recovered back to the 100 level so the move up is in concert with the S&P's moving up which would be expected.

Copper is strong again today and this is the focus of bulls trying to push equities higher. Watch JJC 39.21, the bull-bear line in the sand. The bulls pushed up through yesterday and today the loftiness will be maintained which is a feather in the bull's cap. Ditto the volatility which remains low. Bears need to push the VIX above 14.18 and/or JJC under 39.21 or they got nothing. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling bullishness for the hours ahead, however, the bears keep trying to create a negative 8/34 cross (see this morning's chart). Bears got nothing unless the push the 8 MA under the 34 MA on the 30-minute chart.  For the SPX today starting at 1692, the bulls need to touch the 1699 handle, and hold it for 7 to 10 minutes to lock it in, and the mid 1700's are on tap in quick order.  The bears need to push under 1691 to gain downside mojo. A move through 1692-1698 is sideways action. SPXA150R and NYMO charts continue to signal a market top in place with a roll over to the downside anticipated at any time moving forward. SPX hourly and minute charts started to receive a negative divergence spank down yesterday afternoon.

Mortgage Applications are down for another week extending a couple month trend of weaker housing numbers but traders do not care looking through rose-colored glasses and realizing that bad news is great news with more Fed easy money. New Home Sales are 10 AM where a market pivot point is likely to occur.  Thus, however markets are moving in the first half hour of trading may reverse at 10 AM. Oil Inventories are 10:30 AM and very important these days as oil continues to edge higher on Middle East unrest. The 5-Year Note Auction is 1 PM. FB and V earnings are after the closing bell today. Watch JJC 39.21 and SPX 1699 as key market direction indicators to begin the day.

Note Added 9:21 AM: Bulls are set with a happy open. S&P's +5. Dow +30. Nasdaq +30. Oil dropping. Copper popping. Dollar/yen 100.24 which provides lift to equities. The 10-year note yield is 2.58% which may place pressure on utilities.

Note Added 9:35 AM:  VIX is up aand SPX is up so one of them is wrong. SPX HOD 1698.38 just shy of the 1699.  VIX 12.78.  JJC 39.47. TRIN 0.89 bullish as usual day after day. TRIN will recoil above one at some point. UTIL 504.45 dropping under the 505-509 area showing weakness due to the up in yields. Telecom, REIT's and other interest-rate sensitive stocks may weaken on the higher yeilds. Coals are hit because of NSC.

Note Added 10:03 AM:  New Home Sales are a blow-out to the upside with house prices rising rapidly as speculators chase property reminiscent of the housing bubble. The SPX was already drifting lower after the initial pop to 1698.38 and bounced on the data but as this is typed the SPX is falling on its sword. VIX is over 13 so it looks like volatility was correct so far today sending equities lower.  JJC 39.41. VIX climibing to 13.25. The VIX 14.18 bull-bear line in the sand may come into play today now less than a buck away. TRIN stays low at 0.78 so this is the ace in the hole for bulls. SPX is 1689.84 losing the neck line on the 10-minute chart.

Note Added 10:16 AM:  The negative divergence on the hourly and minute charts highlighted this morning, along with the weak and bleak profile of indicators, is creating the weakness in the SPX. The 8 MA is very near crossing down through the 34 MA on the 30-minute chart, but, not yet. Perhaps the negative 8/34 cross will occur when the new one-half hour candlestick prints in about ten minutes time.

Note Added 10:28 AM:  There's the negative 8/34 cross on the 30-minute now signaling bearish markets for the hours and days ahead. See if it holds today, or not. The 30-minute chart this morning shows the bear frustration with the pink boxes so perhaps this time may be the real deal for several days, or not. Copper remains elevated above the bull-bear line in the sand at JJC 39.21; price is now at 39.46. Bulls are hanging their hat on the low TRIN at 0.71. Bears need to push the TRIN above 1.00 to firmly chart the course south. VIX 13.33 near the highs for today but remaining in bull territory under 14.18. UTIL has a 502 handle.

Note Added 10:56 AM:  Here's the recovery move in equities due to the low TRIN and higher copper. The SPX is back testing the neckline on the H&S on the 10-minute chart at 1690-1691.  Bears need to hold this resistance while bulls need to punch up through. Chairman Bernanke ran into the basement of the Eccles Building and is running a printing press himself to keep the easy money flowing and try to save the day.

Note Added 11:20 AM:  Note copper pulling back with JJC now at 39.33 only 12 pennies above the bull-bear danger line at 39.21. If price drops under 39.21, that will help confirm the negative 8/34 cross and the market downside will accelerate for the bears. Bulls will try to keep the TRIN low today to provide upside strength while also keeping JJC above 39.21.

Note Added 11:51 AM:  Tight range today for SPX through 1688-1691. Bulls receive more juice above 1691, bears under 1688. JJC 39.35. VIX 13.03. TRIN 0.75 giving the bulls lift. UTIL 500.65 perhaps losing the five hundo level today.

Note Added 12:10 PM:  Well, look at that JJC 39.21.  It's sitting there for you bears, grab the brass ring. Markets should either bounce, or die, from here. TRIN is 0.76 remaining in the bull camp.

Note Added 12:17 PM:  The SPX has a 1685 handle which moves into the target area of the H&S pattern highlighted on the 10-minute chart this morning. JJC is frozen at 39.21 like a deer in the headlights. Whichever way copper goes from here, the broad indexes will follow.

Note Added 1:55 PM:  SPX 1683.54. JJC 39.06. VIX 13.44 now 74 cents away from the bull-bear line at 14.18.  Keybot the Quant remains long but if the VIX moves above 14.18, the algo may flip short.  TRIN is 0.77 remaining low so that will provide the bulls with some juice to make a run this afternoon. If JJC stays under 39.21, there is likely no further upside in the SPX past the highs printed over the last few days. President Obama is speaking in front of a friendly crowd but the Nasdaq has gone negative, markets remain weak and copper is dropping as he talks.

Note Added 2:21 PM:  As soon as the president stopped talking the markets float higher. Nasdaq is positive. The low TRIN today helps create the market buoyancy.   JJC is 39.07 which makes the market bears smile, especially considering the drastic reversal in copper today. Bulls need JJC above 39.21 if they want to see SPX 1700+.

Note Added 3:18 PM:  SPX 1683.91.  JJC 39.08.  VIX 13.45. TRIN 0.83. Nasdaq negative.

Note Added 4:10 PM:  SPX ends at 1685.94. VIX is 13.30 dropping slightly into the close providing the market lift in the final minutes.  TRIN recovers to 0.92. JJC 39.10 remaining bearish. QCOM earnings beat but guidance is lowered; the stock pops +4%.  FB beats and the stock takes a big +16% pop to print above 30. FB holders are happy campers.

Note Added 4:17 PM:  V beats and it pops higher so there is a trifecta of positive earnings this evening which helps the bull case. JJC (copper) 39.21 is the most important parameter effecting market direction right now. Watch copper overnight.

56 comments:

  1. Today we will see values on SPX over 1700 points.... At the right time I'll be here.

    GS guy

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    Replies
    1. Bulls will need to touch the 1699 handle and the move through 1700 would be quick. The 10 AM pivot may play a role.

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    2. yes KS, true!
      watch 10.00 EST - 12.45 EST period for special funny stuff in the markets! might be or might not.
      I guess there wil be some funny stuff!

      GS guy

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    3. what a f*cked up market !
      it will reach over 1700's today/tomorrow!
      Damn - it's behaving like a virgin girl first time in front of a d**k !
      What a joke! Don't short here, it's a trap!

      GS guy

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    4. how do you know it's a trap ?!?
      based on what?

      V.

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    5. sorry 'bout language! Just my nerves exploded!

      V, check RSI (14) on 60 min versus lower levels of markets yesterday at 10/11.00 est and now (10/11.00 est)... compare the RSI's versus market's levels!

      that , on 60 min, is a positive divergence that's screaming in my face : BEAR TRAP!

      GS guy

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  2. The 8 MA is about to stab down through the 34 MA on the 30-minute, that would change the game to the bear side. It may be a bear trap but it may take a day or two to sort that out. GS, refrain from the descriptive language since young folks are reading the site and we do not want to contribute to their delinquency; everything else does enough the way it is these days.

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    1. sorry KS, will watch my language!

      GS guy

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  3. Gotta say the market is feeling heavy here. AAPL beats and the market is blah... I expected a bullish pop over 1700. This feels toppy. A pop over 1700 as per GS's expectations would be nice--do I hear a bell being rung?

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    1. The 1685 and 1672 levels appear as important support and downside targets so perhaps a bounce from one of these levels back to the 1700-1720 then roll over? Or, simply down from here.

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  4. the market is eating alive bears and bulls altogether.
    if day-trader don't short until 1706 or 1713 is reached (any of it). That would be the normal peak of wave minor 3 of int v of major 3.
    Without those targets reached, getting long here you risk to buy at the peak of a wave 3 and getting short here you risk to be grated by successively being hit your stop loss.
    So:
    until those target(s) hit, no longs, no shorts!
    That is discipline!

    GS guy

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  5. Thank you GS guy. I have great respect for your trading counsel, and will follow your directives!

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  6. Agree with GS. I'll remain in cash until there is confirmation. Preserve your bankroll. There are always opportunities to make money, there are rarely opportunities to mitigate a defeated account.

    Good risk advisory, GS.

    FeS2

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    1. thank you, after all, I've worked for over 20 years in GS ... it would have be a shame to make bad calls now, wouldn't it?

      for minor 4 =
      attention level = 1685 in cash
      confirmation level = below 1682.95 in cash (level lost and not recovered).
      target minor 4 = 23-25 points below peak (1699).

      don't know it it deserves the effort of shorting considering that major 4 is looming in about 2 weeks.
      for hot-hands traders bottom of minor 4 might be a level to grab some longs is somebody feels the urge for some adrenaline, but I don't recommend it!

      targets for minor 3 = still 1706 (w1=w5) and/or 1713 (1.618*w1=w5)


      GS guy

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    2. Please do observe the market's behaviour yesterday and today - futures pumped up to 1698/1699, US session starts than ....baaang! down.
      That is called 'hard distribution' and it's a toping behaviour.
      Just wanted to pinpoint that - somebody might learn from this kind of thoughts.

      GS guy

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    3. That doesn't mean that we will not see levels over 1700! We will see. But during a move just like the one from May 22 2013 ... hard up than hard down - study charts on different time levels on May 22 please!

      Now strong hands are distributing to weak hands! If poor weak hands will not get rid of those buyings between 1700 and , let's say 1740 they will cry out loud , believe me! :)

      GS guy

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    4. Any chance we drop to 1595-1605 area in < 2 weeks time...then rally to 1745 area?

      Seems like the in-between move...that is bears want to see a crash, bulls are thinking small dip then higher, but the less obvious is the drop to 1600 area, then we go up...This fools both bulls and bears alike.

      Let's see how this develops.

      Delete
    5. @ Bark Me:
      If we see a drop to lower than 1650/1658 that move it's already part of major 4.
      100 % you will not see such a deep drop. Don't know who told you that but doesn't have a clue about TA.

      GS guy

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    6. I'm wondering and wondering why there's no continuation to the drop considering the edgy level where we are now?!? :)?
      A few more fractions of point and minor 4 is confirmed!
      Why the bears don't show us their mighty force and strenght right now? :)?

      Maybe because the market will pop up like a champagne cork in a few moments?
      :)?
      I want to see strong bears! :)
      Where are they? Hiding ? :D?

      GS guy

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    7. GS,
      Are you still long from 1572?

      Delete
    8. I agree GS guy, I've been waiting in the shadows for the drop. I'm wondering if the market does an about face and floats up to close in the green, then they ramp futures to coincide with tomorrows POMO (It's the 2nd biggest of the month). This will push the momo buyers through 1700 where it'll die on the vine at that 1710 level.

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    9. @ Anon:
      Yes Anon.
      I'm still long and strong, green and clean :D.
      Not being shaked by some lost bears :)

      GS guy

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  7. JJC at 39.21, this is bounce or die time. Bulls need to hold the line at 39.21 or they will lose their grip on the markets.

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  8. KS-

    I got robbed last night, been trying to work through all the police reports and evidence papers this morning.

    Keystone's 2013 prediction was correct, weak economic conditions are increasing crime rates. I live in one of the nicest neighborhoods in the State. Economics shape so many facets of society.

    FeS2

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    Replies
    1. Sorry to hear that.

      V.

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    2. Sorry to hear that Fe. That is always a lousy experience. It will straighten out over time. Keystone has had homes and rental property broken into three times over the years and has had two cars stolen. It's no picnic. A big pain in the keister.

      Delete
  9. KS

    I've had WLT on my radar since you first mentioned it a few weeks ago. I missed the ride up for a quick 40% (great call) but I'm sure as hell am not missing this ride down. :) The amended covenant should provide breathing room for the company moving into q2 of '14. I'm thinking an entry point around the same time the market pulls back to the 1675 level. I would think this sets up the WLT chart with a potential double bottom. Then SPX will take off for the final leg up /wave 5 and as they say " a rising tide lifts all boats".

    Any thoughts on WLT?

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    Replies
    1. It's a crazy psycho stock. It is getting hammered hard on the divvy cut. Looks like many folks that were willing to hold on to it held on to the divvy as one reason for justifying the trade. If not in it, it is probably best to avoid and look at other fish in the sea. It's a wild trade since insiders want the stock, and it may be a takeover target at any time, but the news continues to be bad, with met coal prices dropping and steel demand down and such. Maybe China stimulus would be a catalyst to pump it. It is like a few of the long inverse ETF's that have been held for a while; may simply let them run and use it as a loss if it does not work out.

      The drop is strong so it will likely need a few days to sort it out. May even want to come down to 10.80. Daily chart shows 20 MA at 11.75 and price is at 11.80 so this is a major support test. It needs to hold this 11.75, if so, that will be very positive, if not, more pain for a few days. Keystone will likely continue to hold it. The weekly chart is very constructive but the stock is susceptible to the news events that happen and then the stock moves wildly up or in today's case, down.

      Delete
  10. I've tried to short too many times this year under these conditions. NYMO shows market top, all charts negatively diverged, RSI and CPC put call ratio indicating top, and then bam; here come the bulls and drive it up again. I am calling near trap on this one. It's not worth shorting here, this has been happening all year. Topping behavior followed by an upward surge.

    The only times this year the market pulled back as expected was during The Cyprus disaster in march, may 22 pullback which was fueled by taper talk from fed head, and the day of the Boston bomber. The alpine highs today don't mean the market won't go higher. Ben is still printing money and there is no reason we can't see 1706+ here. I'll remain in cash.

    FeS2

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    1. oh nooooo, the bears have run to the hills right in my confirmation area for minor 4????

      nooooo :)))))))
      weak hands! :P!

      GS guy

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  11. GS guy,
    Is minor 3 ended at spx 1698.78?
    Are we confirmed that 1682.57 = minor 4?
    Do you think we will reach minor 5 (target 1770-1780) with the next fomc?

    Thank you.

    ReplyDelete
  12. TRIN at 0.77 is a big help to bulls today. JJC is 39.05 and this is far more important. Bulls need to move copper higher or the market upside is limited. SPX 1700+ is all clear signal with JJC 39.21+ but probably not likely if JJC stays under 39.21.

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  13. first: 1770-1780 it's a maximum potential target - last wave (minor 5 of wave 5 of int v of major 3) is very prone to truncation. So if you want to be sure of something, be sure it won't go above 1780. Probably it will get really muddy in the 1740-1750 area. We'll see at that moment.

    Second: yes, the market entered into my minor 4 confirmation, but suprise! it was rejected to the upside! Some paparazzi journalists caught on photo the last bears running to the hills right when I was preparing to mark the start of minor 4.

    quote from a previous message :"confirmation level = below 1682.95 in cash (level lost and not recovered).''

    So: level lost and not recovered !
    It was (until now) a false alarm. Just a stops hunting as it is called. But I'm a hard baller sweet bears! My stops are break-even (1572) so you have to try REAL hard to prove something! Lol! :)

    We are still in minor 3 !

    GS guy


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  14. Thank you to both Professor KS and Professor GS guy!

    ReplyDelete
  15. Thanks KS and V. Feeling violated. Some big earnings going forward might alleviate my suffering. Lol.

    ReplyDelete
    Replies
    1. watch your risk reward ratio - take profits step by step as we approach the peaks, don't wait a certain level to dump all.
      Present market levels (1650-1750) call for an equilibrated ratio between cash and longs/stocks. As we approach the peaks start dipping into shorts. Now it's not an ok level for shorts. A real ok level to load shorts would be 1700 - 1750 - in that area.

      GS guy

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  16. So are we buying this dip? Is this the backtest of the 1680 pivot?

    FeS2

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  17. I meant 1689. FeS2

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    1. pivots are: 1680 and 1699.
      dear Sir,
      in int v, near/at the end of minor 3 your are asking if you are buying the dip?
      No, you don't buy here anything (or you will buy shorts as we approach the 1700-1750 area), others buy from you , you sell here and into peaks!
      What are you doing? Accumulating in int v , at minor 3 end ??????????????????????? While other are in distribution mode? :)
      NO.

      GS guy

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    2. I guess we can look at it this way also, you buy this dip and ride it to 1700s, get out and start shorts. Small profit but enough to buy you one hot dog and two hamburgers! :)

      Delete
  18. Sorry, I had trouble understanding some of the things you posted. I got lost a little in all the rapid commentary.

    I know we sell at 1750, projected target for August 1 - 12, but are you implying that this market is still going to make it up to 1706 and then backtest 1673? We are running out of time, if we still anticipate a rise to 1750 in August. I realize you cant forecast the future, I just want to gauge where we are right now. I have no intention of shorting right now, I've been burned too many times this year with these bear traps and the QE happy talk taking market tops to unprecedented higher highs.

    FeS2

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    Replies
    1. 1699 might have been peak of minor 3, but I continue to have my doubts.
      A minor 3 , truncated also at 0.62% of minor1, doesn't terminate by a slow fade like that. I smell a little trap here but I can't prove it.

      Ok let's assume wave 3 finished truncated.

      target for wave minor 4 = 1665-1672 / the lowest level it can reach is the gap closing 1656-1658.

      If this is minor 4, this first wave is already done as lenght (wave 'a') , and tomorrow we will see wave up 'b'.
      Don't think shorting it - you take shorts only in the second half of last 5th wave , not now.

      GS guy

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  19. those who are short whatch it out tomorrow - it's a big POMO day.

    GS guy

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  20. OK, that makes sense. I figured the same thing. Assuming minor 3 truncated at 1699, we saw a back kiss at 1673 with a 10% chance of 1656-1658, we would buy the dip on that one and hold longs until 1750, where we would then begin loading shorts.

    I also am leary of a bear trap here. I think a return to 1706 is entirely possible and then a quick dip to 1670 before the end of the month, I have no evidence, but the move would not surprise me.

    I am an inexperienced retailer, so I defer to KS and GS guy on these more intricate issues. Thus my original comment.

    Thanks for clarification.

    FeS2

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    Replies
    1. if minor 4 started , wave 'b' might not get over 1692.50-1693 .

      Forget any numeric value and load shorts during last fifth minor wave up (after minor 4).

      Also: sell the majority of / all longs/stocks during the next upwaves ('b' of minor 4 and wave minor 5). Forget about targets (i.e. 1750). If minor 3 met a truncation in one of it's waves this is not a very bullish sign - last wave up (minor 5) might be seriously truncated.

      You'll buy the same stocks in the low 1500's or high 1400's after major 4 ends. It's not ok to risk earned money for some projected target.

      Sell into 'b' wave of minor 4 tomorrow and during wave minor 5 (loading also shorts).

      GS guy

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  21. Watch copper overnight, if it moves up, then the SPX 1700+ may be on the table. If copper is red, and JJC stays under 39.21 tomorrow, the market top may be in. Watch VIX 14.18, if that prints, the markets will be in serious trouble. If volatility stays under 14.18, the bulls remain in the game. The 8 MA is under the 34 MA on the 30-minute; this is important and bearish. If the cross should reverse that would be another hint for 1700+, otherwise, lower.

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  22. VIX 14.18 is a formiddable, but not impossible task for the bears tomorrow, as Keybot the Quant would put it. Lol.

    FeS2

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  23. Gs guy are you the same person as V??!!

    ReplyDelete
    Replies
    1. Than that would mean that sometimes I speak with myself not founding my Valium and Prozac pills ? :))))))))))))))))))))

      No, we are different persons.
      And how this question appeared?

      GS guy

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    2. Thnak you for your kind words. :D
      I (still) don't have this person's information and TA abilities to determine targets and stops so precise and to track the market behaviour down to 1 min charts.
      But thank you, I really apreciate your kind thoughts.

      V.

      Delete
    3. Look,
      I'll use one of my gmails to log here, on this site.
      I think this is a good idea.

      GS guy

      Delete
    4. This comment has been removed by the author.

      Delete
  24. Watch copper overnight; whichever way copper goes, so goes the markets. The next couple days will be interesting since JJC 39.21 will likely tell the tale. If JJC stays under 39.21 here forward, the market top may be in.

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  25. Today is the 2nd biggest QE of this month.
    I feel that somewhat we might see a new high today. I've seen this movie previously when the bears come fully loaded and they are kicked to the bone after that. Everybody has bearish views lately, the market might just prepare a surprise.
    On the majority (if not all) of sites that I follow all are heavy bearish.
    This Thursday might come with a surprise just to truly shake all the shorters.

    V.

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    Replies
    1. ... just my 2 cents opinion... too much are loaded too early in the bearish train! Mostly retailers!

      V.

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    2. or not. :)
      Futures crumbled.

      V.

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