Monday, July 29, 2013

Keystone's Morning Wake-Up and Midday Market Action 7/29/13

The markets pick up where they left off on Friday. Pending Home Sales are on tap at 10 AM.  The dollar/yen falls through the 98 level so the stronger yen beat the Nikkei Index -3.3% overnight. The week may be off to a calm start but the kitchen will be hot from here on through Friday. Bulls need higher copper and utilities. Bears need lower semiconductors, lower utiliities and higher volatility. Copper is negative today and utilities are flat, so the bulls are challenged.  SOX is 473.58, three-points above the SOX 470.70 line in the sand and VIX is 13.47 remaining under the VIX 14.26 line in the sand.

Bulls only needed a tiny smidge of green in the futures overnight to launch the move towards SPX 1700 but red was the color instead.  If bulls can push above SPX 1692 today, and hold it a few minutes, that will create an upside acceleration. Bears need to push under 1676 to regain downside mojo. A move through 1677-1691 is sideways action today, the move thus far. The 8 is above the 34 MA on the 30-minute chart signaling bullish markets for the hours ahead. The bears need to push the SPX under 1687 to create market negativity, otherwise, they got nothing. With JJC staying under 39.20 and UTIL under 523, the bulls cannot gather upside momo. With SOX above 370.70, VIX below 14.26 and UTIL above 481, the bears cannot gather downside momo. Everything is sideways market noise until one of these parameters makes a decision and the markets will follow in that direction.


Some interesting ETF plays under potential consideration this week are long DBA, TLL, HDGE, SJB, JO, ERY, SKF. Interesting individual stock longs of interest are MUX, OSUR, TRQ and SD. Some shorts of interest are KKD, MYL, RTH, XRT, DIS, TSLA, DPZ and BA. DBA is long commodities. TLL is short telecom but it is thinly-traded. HDGE is a bear fund. SJB is short high-yield. JO is long coffee. ERY is short energy. SKF is short financials. MUX and TRQ are miners. OSUR is a biotech. SD has had high short interest so it may be prone for a large pop. KKD is short donuts. MYL is short pharma and the PFE and MRK results tomorrow will dictate the action in this sector. RTH and XRT are short retail plays. The Mouse House looks weak with a negative divergence top, ditto electric cars, pizza and airplanes, respectively.

Note Added 10:02 AM:  Pending Home Sales are weak which was expected. SOX is 472.34 teasing lower so it may create drama and theatrics today like Friday as it is in the 470.70 neighborhood. If SOX 470.70 fails, the stock market should head south in force. Bulls are not concerned with semiconductors remaining elevated. VIX 13.56 only 70 cents from VIX 14.26. TRIN is 0.90 bullish as usual. The bulls laugh each day as they maintain a low TRIN. SPX 1688.25. Dollar/yen 98.09. 10-year yield 2.59%. Crude and copper lower, gold and silver higher.

Note Added 10:09 AM:  SOX 471.71 now only one thin point from causing market mayhem.

Note Added 10:17 AM:  SOX 470.88. Use SOX 471.15 as the line in the sand rather than 470.70 (these numbers are constantly recalculated by Keybot). This is failure right now but bears will need to hold it a few minutes. If so, markets should sell off strongly. Whoa, there's a bounce to SOX 471.25 stopping the negativity. Watch SOX 371.15 since it rules the show today.  Under SOX 371.15 is thumbs down for the stock market. Above SOX 471.15 and bulls are fine today. The theatrics begin.

Note Added 10:23 AM:  SOX 472.05, big bounce. Nothing to see here, move along, move along. VIX 13.55. TRIN 0.88. SPX 1687.62.

Note Added 2:40 PM:  SOX failed at 471.15 at 11:06 AM. The weak semi's sent equities lower today. Keybot the Quant remains long but if SOX stays under 471.15 and the SPX drops under 1676, the algo will likely flip to the short side. SOX is oscillating above and below 471.15 for the last 45 minutes trying to make a decision. If SOX moves higher, equities will move higher into the closing bell. If SOX stays under 471.15 and lower, equities will sell off into the bell.  VIX is 13.40 at the lows for the day so the crushing of volatility during the session once again creates market lift. TRIN 0.81 on the bull side today. SPX 1688.36. The 8 MA stabbed down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead but the 8/34 cross can go either way due to the current market indecision. Bears can smile if they keep SOX sub 471.15.

Note Added 3:20 PM:  SOX 470.49 so the bears are happy. VIX 13.47. TRIN 0.83. SPX 1686.12. Dollar/yen 97.86 so the lower dollar/yen pair is in sync with lower equity markets. Copper is now positive. The 10-year is 2.59% flat all day. The 8 MA just moved up through the 34 MA on the 30-minute chart signaling bullish markets ahead. This 8/34 cross behavior verifies the erratic, unstable and indecisive markets right now, like a deer in the headlights ready to leap but does not know which way.

Note Added 3:59 PM:  SOX 469 handle.

46 comments:

  1. Hi KS,

    Regarding $ nymo what do you think ?
    The next 2-3 weeks a second peak (lower high as per the previous high at ~70) might appear or it will just fall now through 0 level?

    What is your opinion?

    Thank you,

    V.

    ReplyDelete
    Replies
    1. Indicators look weak and bleak for NYMO on daily chart so some lower lows would be anticipated. If SOX loses 470.70, the NYMO will likely be slicing down thorugh zero. SPX 30-minute chart shows bulls still in charge with 8/34 cross and it remains agreeable to perhaps a move back up to test 1692-1693 today. Markets are idling and need utilities, semi's or volatility to make a decision. Whoa, SOX 470.99, this is very close and may be close enough for government work. Markets may start to weaken more substantively.

      Delete
    2. Thank you KS.
      Can you revise please the note added at 10.17 am?
      There are some values at the end of the note related to SOX and I think it's 471.15 not 371.15.

      Thank you KS.

      GS is saying that now we are at the end of minor 4 and start of minor 5.
      Shouldn't NYMO make a lower high to sustain the potential rise the next 1-2-3 weeks? (that's why I've had this question).

      Thank you,

      V.

      Delete
    3. Hello sonny ,

      How are you?
      Was the week-end ok? Running after girls? Hitting the burners? Ha? :)?
      AAaaaahhhh! Those young hot boys :)!
      Hey sonny don't use only NYMO - each indicator has to be understood being in correlation with others!
      What will you do if NYMO is above 60 and NYSI is in the -100 - 0 area?
      You know?
      When using technicals be like a doctor! Use all kinds of necessary instruments do determine the state of the patient, not only just one instrument.

      For the moment the market will chop up and down until FOMC minutes.

      GS guy

      Delete
    4. :)))))))))
      I'm 31 years and married ...not quite a sonny and not quite running after girls :)))))))
      But maybe, considering your age (50? 60?) you can call me "sonny".

      Thank you for technical advices.

      V.

      Delete
    5. V, typo was fixed, yep, it is SOX 471.15 that is key. Lots of drama over last 45 minutes. SOX now at 470.84 very bear friendly. It is probably difficult to jive the NYMO, SPXA150R, CPC, CPCE type signals with the e-waves since the e-waves are much more technical and the listed indicators are more of a thumb in the air thing where the turn can come any day or say a week or two.

      SOX 471.15 is the key market metric right now and dictates market direction. If SOX stays under 471.15 and VIX would move above 14.26 the bears win big and markets will run lower in force. But if SOX moves back above 471.15 and bulls keep volatility low, bears got nothing. Markets are very indecisive likely waiting for the Fed nad other data. Consumer Confidence is important tomorrow morning as well as pharma earnings.

      Delete
  2. KS,

    What do you think about the mortgage REITs like NLY, AGNC, or HTS? Have they been beaten down enough?

    thanks,

    TW

    ReplyDelete
    Replies
    1. That is very observant, it shows you are looking in the right places. Keystone was going to list NLY as a potential long play but did not as yet. The NLY daily chart already popped due to positive divergence but weekly chart may want to come back down for another look. It is also tricky since 12 may want to lead to 8 (80/20 rule). NLY may be worth a try long under 11.5. Same dealio AGNC, early July was a nice time to buy before the positive divergence launch, but 22 may wnat to lead to 18. It looks interesting under 21. HTS took the pipe. That needs time to base after that whipping. VNO is receiving a negative divergence spank down. NLY and AGNC are worth having on a watch list but likely best to wait and see if they receive another further beating. Besides, there are other plays that are much better right now.

      Delete
  3. For the moment, SPX 500 stays at 38.02-38.29% retracement of Friday's move and it's playing with ups and downs there.
    That should tell us (if market doesn't falls from here to a lower Fibonacci retracement level) that what we are seeing now it's something like minute 2 of minor 5.

    But this is just a pure speculation, we have to see the market's move along the day today and tomorrow.

    The real key is 1675- 1676. If that area is lost it's not minor 5 it's still minor 4 with a more complex evolution than a simple a-b-c. But chances to be still minor 4 are below 20% now and lowering as hours pass.

    GS guy

    ReplyDelete
    Replies
    1. Yep GS, Friday's low at that 1676 is key today. LOD on cash is 1681.86 so still five points away.

      Delete
  4. http://stockcharts.com/h-sc/ui?s=$MID&p=D&yr=0&mn=8&dy=0&id=p55775287187&a=279010633&listNum=6

    am I crazy or does this look like a bullish cup and handle?

    my cycles are all pointing down but price patterns are not that bearish...decisions, decisions!

    ReplyDelete
    Replies
    1. http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:cup_with_handle_cont

      you're crazy :)

      Delete
    2. ok - I'll take my meds then! lol

      Delete
    3. Nope Scott, sideways range through 1100-1250 for 5 1/2 months with price now testing the top end.

      Delete
  5. Inverted Head and Shoulders on 60 min chart on SPX 500 ?
    Yes ! :)

    V.

    ReplyDelete
    Replies
    1. V,
      What does IHS on 60 min tells us?
      Thanks!

      Delete
    2. Yep, that one is there let's call it neck line at 1650 and head at 1560, so that is 90 points, that would be 1740 target, but it is not the best pattern. Keystone is not a fan of using inverted H&S's after long rallies, although they can and do work out. The inverted H&S's are much more reliable at the bottoms after a stock is sold off for a while and bases.

      Delete
    3. Yep, that one is there let's call it neck line at 1650 and head at 1560, so that is 90 points, that would be 1740 target, but it is not the best pattern. Keystone is not a fan of using inverted H&S's after long rallies, although they can and do work out. The inverted H&S's are much more reliable at the bottoms after a stock is sold off for a while and bases.

      Delete
    4. my meds dont seem to be working so I'll have to start drinking again...

      http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=0&dy=17&id=p68656716428&a=303364745&listNum=4

      http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p90278630901&a=306373811&listNum=4

      http://stockcharts.com/h-sc/ui?s=$NYUD&p=D&yr=0&mn=8&dy=0&id=p41772607561&a=279375340

      Delete
  6. Looks like an expanding triangle to me.

    ReplyDelete
    Replies
    1. That's funny, charts are like art, everyone sees something different in them. LOL Keystone would describe the last three months on the SPX as an M top, or double top, that needs the final down leg.

      Delete
    2. not until the above VO tanks below zero...?

      Delete
  7. http://www.marketwatch.com/story/10-ways-wall-street-played-you-for-a-chump-2013-07-29

    quote:
    ''2.You’re a chump if you’ve been fooled into believing that your financial success depends upon finding a smart money manager or guru who knows what lies ahead in the capital markets. Don’t be suckered into mistaking predictions for insight. Wall Street’s fortunetellers have exchanged their crystal balls for charts and graphs and call themselves economic analysts. It’s easy for them to proclaim certainty in an uncertain world when they have no skin in the game. The future is unpredictable. Anyone who makes predictions is a fool and anyone who listens to them is a sucker."

    A fool and a sucker... Hm! What's up boys? The "muppets" (as you call them) stopped reacting at your "push and pull" strategies? And now you're coming with this kind of trash ?
    You motherf**** (sorry KS!)!

    GS guy

    ReplyDelete
    Replies
    1. During the day I've observed from several sources multiple articles that were designed to induce fear and panic.
      They call that "mixing". They paint a state of fear and panic in retailers' minds, the retailers panic, their logic blocks and start to sell randomly. But market never tanks. And 2-3 days pass, one week pass...and nothing!
      After that the retailers get real complacent and and start frenzy buying - and that's when the market freaks out and tanks.

      This is called "mixing".
      In today's media I've observed several so-called panic sources that prepare retailers for ...nothing. And retailers when they really calm down thinking that nothing will happen than the bomb explodes.
      Now they are in the first stage of this applied method.

      That's why I've posted the previous message - that article really freaked my nerves...

      GS guy

      Delete
    2. The YHOO message boards are good for that. There has been instances over the years where paid bashers, or pumpers, post multiple messages all day long for a given stock to affect the sentiment and especially make retail traders panic and sell or worry they are missing something and buy, when the money that is paying the people to write those messages is doing the opposite.

      Delete
  8. It looks like every one is calling for 1800-1900 in s&p, nobody is expecting correction

    ReplyDelete
    Replies
    1. That is a lofty target but you never know. The 18-year cycle is the most reliable cycle. 1982 to 2000 was the secular bull and we are in the secular bear now from 2000 to 2018. Doesn't feel like it with a 4 1/2 year cyclical bull rally. The anticipation is that markets should be weak say at least 3 or so years out of the next 5. The secular bull is back 2018-2036, and that is when the Dow 20K and higher is on tap, SPX 2 or 3K, and all that fun stuff. Probably as we explode into inflation and hyper inflation, perhaps gold to 3, 4 and 5K as the move to 2020 and on occurs. But, in these markets, analysis has to be adjusted daily. SPX should top right now but the central bankers are powerful.

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

    ReplyDelete
  10. GS Guy. I am not sure whether you had the opportunity of viewing my posting from earlier on in the session.
    "Thank you GS guy. I have no fear of trembling with such expert counsel, suffice to say, that I work with the fabulous Meta 4 trader platform! Of course, I am aware that you are not crazy about giving a 100% exit call during the last points!! I just don't understand why there are not more traders in this inspiring forum than there appear to be! As an aside, I concur with your recent comment, who wants to be a day trader with all the related stress, when we can await your signal, load two batches of shorts and sitback, against a backdrop that in a further 6-8 weeks we shall be able to go long, with a virtually risk-free set-up! It is a trading gift from the Gods.

    ReplyDelete
    Replies
    1. Isn't it more ok for a simple guy , for a retailer, to catch the nig waves without banging his head full of emotions being day-trader?

      Of course it's more ok!
      It's not about my signal, it's about learning to ride the big waves without emotions, only being technical.

      No, it is a trading gift from a common man to common people. And I hope I'll do my best. Leaving a common retailer in front of complex algo's HFT world and versatile bankers and traders it's plain theft! So this idea of mine appeared. Wouldn't it be fun a totally common retailer to sell on strenght in the face of 'market painters' ? :)? Of course it would be fun! :))))

      GS guy

      Delete
  11. http://planetforecaster.blogspot.com/ , KS this site is saying dow: 16500 by august 20, 2013

    ReplyDelete
    Replies
    1. 16.000 on dow is where very long term lines of R and S are meeting in the same point.
      16.500 would be a tresspassing of several important lines (among I recall the ones from 1987, 1929, 1967 and others).
      Don't play with that, I wouldn't put my money on what they are saying, have followed them and registered several faults regarding the markets path!

      V.

      Delete
  12. no, I don't want to be long anything right now, this market went up on very low volume, I don't trust it

    ReplyDelete
  13. the time projection matches my MF projection spx target - price on the other hand looks to be calculated similarly too how I calculated my top target here.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=8&mn=0&dy=0&id=p67296656642&a=308399180&listNum=6

    ReplyDelete
  14. Somebody mentioned here today that they are surprised that there are not more serious traders on this site. For my two cents, I am on here every single day of the week and I read every post/comment. I may not post or ask questions a lot but I am here to learn and benefit from everything I can. I think I speak for a silent majority who follow this blog everyday. I think that there are alot more of us than any one realizes. From all of us, Thank You KS, GS Guy, V and many more for your insight and guidance. It truelly is appreciated.
    :)
    C.

    ReplyDelete
    Replies
    1. :)
      once KS said that on a daily basis there are about 3000-3500 visitors (so not page hits, unique visitors!) !

      V.

      Delete
  15. V., why don't you post your price targets? I want to see how they compare to GS guy?

    ReplyDelete
    Replies
    1. well, it's simple why I refrain from posting any target yet.
      I think that minor 4 still develops as a flat or expanded flat. That means that we might (! only might) revisit 1676 as the low of the 'c' wave probably previous to FOMC minutes release. I don't see levels lower than 1676 (being assumed a flat evolution to minor 4).
      I can determine minor 5 targets after FOMC minutes (because minor 5 has or can have fibo relations to minor 1 and/or minor 3, but without having a confirmed bottom of minor 4 I can't clearly make a calculated projection to the potential peak of minor 5). It will sure be above 1700, but I can't determine where : low 1700's, mid or high 1700's.
      As soon I can determine something, I'll post here.
      That if minor 5 doesn't truncate only to a meager little rise and than major 4 starts. But my opinion is that (as GS said) start of a new month
      combined with neutral to slightly bullish FOMC minutes could create the final upthrust of minor 5 for the first 5-10 days of August. Anyway, minor 4 and minor 5 combined are creating the topping area.

      V.

      Delete
    2. One more thing to add: looking on SPX 500 on 4H chart, the most bearish case in the present situation could be a big head and shoulders with left shoulder already built (peak LS at 1699, neckline at 1680, and the head being under construction now, with a future right shoulder to be built).
      So, only speculating and projecting without any TA behind this case, I would say that the head of H&S would target 1720's - 1730's (so that might be the peak of minor 5). This is the most bearish case possible now under TA rules. The most bullish case can seriously advance into mid to high 1700's.
      Of course , market can do whatever it wants, this is only a projection.

      V.

      Delete
    3. The 80/20 rule says 1680 should lead to 1720's. 1698 should lead to 1702. 1708 would lead to 1712. 1718 would lead to 1722. Markets are deciding right now and SOX 471.15 is a key pivot. If SOX stays under, markets move lower. If SOX recovers above 471.15 today, then the bulls are back in business.

      Delete
  16. http://www.telegraph.co.uk/finance/china-business/10211049/PBoC-cash-injection-soothes-China-bank-crisis-fears.html

    am I the only one that hears the money slosh ? :D?

    V.

    ReplyDelete
    Replies
    1. Yep V, China pumped 3 billion into the money markets to create liquidity. This last happened in February and the SSEC weakened after the move. China is like everywhere else, trying to keep a sick economy afloat and putting off the inevitable. The Fed may not be the big story this week. The BOE and ECB pumped the markets on the July 4th holiday and the BOE pump was the nudge, nudge, wink, wink, we will do something in August. So BOE will have to announce something since the markets priced in further upside. Draghi as well. So Thursday morning may be the big inflection this week.

      Delete
    2. Very valuable vision, thank you KS for your opinion!

      V.

      Delete
  17. Hey KS!
    Very interesting this thing!
    ''KEYSTONE'S CURRENT PORTFOLIO WEIGHTING:"

    Thank you. :)
    It's only the money managed by you , or Keybot +you ?

    V.

    ReplyDelete
    Replies
    1. It's the total weighting of the portfolio including Keybot and all the ongoing trades here; Keybot makes up 65% of the port (Keybot is curently long), Keystone's trading is 35% (net bearish looking for a market top at any time).

      Delete
    2. thank you KS

      V.

      Delete

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