Wednesday, July 31, 2013

Keystone's Morning Wake-Up and Midday Market Action 7/31/13; EOM; GDP; FOMC Announcement

ADP Jobs Report is 200K so this will cause the Friday Monthly Jobs Report estimates to bump up with traders looking for 200K or more. FB hits its 38 IPO price jumping 46% in four days from 26 to 38. FB and AAPL pumped the Nasdaq higher yesterday. Dollar/yen dropped to 97.69 a short time ago but is very jumpy now leaping back above 98. The 10-year yield just popped. The recent range held the 2.63%-2.64% as the resistance ceiling and yield was teasing this level all morning long, now popping above on the jobs number. Yield should now move to 2.72% resistance perhaps higher. Futures are flat ahead of the GDP number minutes away. Today is the EOM and the bulls will log an up month for July. The monthly charts will receive a new print today at 4 PM. 

Watch the usual suspects of the last few days; SOX 471.20, VIX 14.26 and GTX 4785.  All three are causing market bullishness and keeping the indexes elevated. Bears need at least one to move to the bear camp to begin market selling. For the SPX today starting at 1686, the bulls need to push above 1693 and it is all blue skies to 1700. The bears need to push under 1682.50 to accelerate the downside. A move through 1683-1692 is sideways action today. The GDP and the FOMC Announcement at 2 PM this afternoon are the two main events.


Note Added 8:31 AM:  GDP is 1.7% at the upper part of the consensus range of 0.7%-2.0% better than expected. The 10-year yield is now 2.69%. Futures are flat and non-reactive. The Fed changed the way the GDP is calculated revising all the data so it is all simply a pile of mashed potato's now.

Note Added 8:33 AM:  S&P's drop 3 handles on news that the first quarter revision is 1.1% down large from the 1.8% original number. This would have been expected to be higher with the new way of calculating data. It is all a mess. So first quarter is 1.1% and second quarter is 1.7%, a sick 1.5% economy. After all the QE and money-printing, this is shameful.

Note Added 8:41 AM:  Dollar/yen now up to 98.40; this should help maintain equity buoyancy. Futures remain flat. Dollar is higher dampening gold and silver. Copper is strong all morning long. China says it wants to maintain the 7%+ growth rate so that is probably providing the copper lift. Markets remain frozen like deer in the headlights. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets ahead, however, SOX, VIX and GTX, as described above, remain bullish. Hence, a standoff. Looks like the deer will leap in one direction or the other either this afternoon or tomorrow morning. IBM down -1% pre-market. MA earnings beat and jumps over +3% pre-market. Markets are typically bullish from the last day of the month through the fourth day of the new month, thus, if markets do sell off today or tomorrow, that may set up an opportunity for a scalp long that can be exited next Tuesday.

Note Added 9:33 AM:  SOX explodes higher towards 478 well above 471.20 danger level. VIX up a tiny hair to 13.48 the day starting out like yesterday. Look at that, GTX exactly at the 4785 danger line, so it looks like commodities want to dance today. TRIN 0.86, bullish, helping maintain market buoyancy. SPX moving up to attack the 1692-1693 resistance for today as bulls try to create a positive 8/34 cross on the 30-minute chart. Bulls are off to a strong start sans GTX, and volatility is a touch positive.

Note Added 10:11 AM:  GTX recovers back above 4785 returning to the bull camp. Markets will float higher if GTX stays above 4785 but a lid on the upside will occur if GTX fails and stays under 4785. SOX 477. VIX 13.59 moving up today with up SPX so one of them is wrong. TRIN 0.76 strongly bullish for markets today. Thus, bulls are favored. Markets will likely stagger along until the FOMC Announcement at 2 PM.

Note Added 10:16 AM:  Big up in GTX now 4798.

Note Added 10:51 AM:  GTX comes down to back test 4785 and bounces. SPX prints HOD 1696.75 eyeing the 1699 level. VIX flat lining at 13.42. TRIN 0.76 creates upside. Dollar/yen 98.25.  10-year yield 2.68%. SPX may tease 1700 moving into the 2 PM announcement.

Note Added 11:20 AM:  The 8 MA is above the 34 MA on the 30-minute chart signaling bullish markets ahead. HOD remains at 1696.75, a 4-handle gain after the 1693 was breached. GTX is 4820 with a big up after the threatened weakness a short time ago.

Note Added 1:53 PM:  FOMC Announcement a few minutes away. The HOD at 1696.75 still holds. SPX is now at 1689.68 well off the highs.  GTX 4839.  VIX 13.69.  SOX 478.37. TRIN 0.83.  Copper up big; JJC 38.18.  Gold and silver are down. Oil is up.  Dow 15532 after printing an intraday all-time high at 15634.32.  10-year yield 2.66%. Please take your seats and focus your attention on the center ring. The jugglers are finishing up; here comes the clowns.

Note Added 2:02 PM:  No change to purchases; 85 billion. Fed to remain accomodative. Economic activity expanded modestly (old word moderately) but unemployment rate remains elevated. Downside risk to economy has diminished. Fed's George dissented since she is more concerned about inflation. Sounds like same-o, same-o. Equities are floating higher on the news. SPX 1694. Dow 15570. VIX is flat to negative at 13.36. 10-year yield is 2.64%.

Note Added 2:09 PM:  SPX 1691. VIX 13.45. 10-year yield 2.66%. Jumpy tape has changed direction five times in last ten minutes.

Note Added 2:13 PM:  SPX 1692.  VIX 13.40. 10-year 2.65%. Settling in the middle of the two extremes since the news.

Note Added 2:30 PM:  SPX 1693.  VIX at low of day at 13.26 helping bulls. TRIN 0.79. 10-year 2.62%.  Dollar/yen 98.00. Markets are erratic and need some time to line out.

Note Added 2:48 PM:  SPX 1696 printing a new HOD at 1697.17 which is a feather in the bulls cap. Dollar dropping so that sends dollar/yen lower to 97.85.  Silver turns positive on weaker dollar so traders are believing in the more QE philosophy. Thus, equities float higher since the Fed spigots remain on indefinitely. Euro is up to 1.3326 moving opposite the dollar. Up euro in concert with up equities. VIX 13.04 sends the SPX higher.

37 comments:

  1. Hello everyone, boys and girls,

    Nice numbers today :). They are not gonna impress FED to oblige them to taper way to soon in my somewhat humble opinion. :)

    Ok, because I'm sick with this game of hide and seek about minor 5 target, I'll tell you: 1715 - 1734.

    This is where a good, normal, not truncated minor 5 should end.

    So, boys and girls, prepare for The Big Non-Event :) ...

    GS guy

    ReplyDelete
    Replies
    1. should I mention that most of the rise above 1700-1705 will be executed due to short covering? :D

      I've mentioned here several times not to short, it's not the time yet! :)

      GS guy

      Delete
  2. KS, what do you think about buying CORN and JO at these levels. If market declines, do you think they will be hit also. Also, if dollar gets stronger, how will it effect them. thanx

    ReplyDelete
    Replies
    1. Corn is a wild weekly chart from 35 to 53 back to 36 in one year. Looks too hairy still yet to fool with. JO shows nice positive divergence on weekly and daily charts, it drops today continuing to try and place a base after the long beating. This could very well be the lows in coffee for weeks to come but it is a speculative knife-catch so anything can happen. JO should hold up in a market down trend and should at least be a good place to hold money moving forward.

      Delete
  3. What a joke this is becoming. Surely the market isn't going to swallow that GDP number?
    If the number isn't to your liking, just make it up. God Almighty!

    ReplyDelete
  4. GS Guy. I have been gifted within the past week to have subscribed to a $10 "near perfect" 2013 market forecast report, which outlines major cycle turning points for world market indexes, within the realm of AstroPhysics! Without standing accused of plagriasm, there are two significant high energy points during 2013, culminating at the end of July and in the 1st week of August! I do not wish to create a conflict of interest, but if in agreement, I will place the URL on your website for the benefit of those who may wish to subscribe. I am making these comments at arms length.

    ReplyDelete
    Replies
    1. Don't have a web-site. Don't intend to have one. Weird, isn't it? I contact my client face to face or telephonically. Not on the internet.

      GS guy

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  5. GS guy. I can post the Url on this blog, if in agreement!

    ReplyDelete
    Replies
    1. ???? Man!
      It's KS's site not mine!
      He is deciding! Speak with him!
      I'm just a guest here!

      GS guy

      Delete
  6. ''Note Added 10:16 AM: Big up in GTX now 4798. ''

    with a little help from friends :)

    GS guy

    ReplyDelete
    Replies
    1. Every time a hole appears it is plugged, like SOX failure the other day, now up, volatility was moving higher but it keeps getting axed back down, today GTX fails but now it is saved. 'They' know the key sectors that are affecting market direction and act accordingly. GTX 4785 may provide further drama today. Now at 4795.

      Delete
  7. the moment of short covering is coming ... be prepared :)

    GS guy

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    Replies
    1. spx 500 broke in minute 3, minor 5
      minor 4 is confirmed as terminated at ~ 1676

      GS guy

      Delete
  8. http://stockcharts.com/h-sc/ui?s=$SUPHLP&p=D&yr=1&mn=6&dy=0&id=p62336650489&listNum=4&a=309249836

    ReplyDelete
    Replies
    1. Interesting chart, so the peaks on the SUPHLP identify the market tops, give or take one week or so of time, and the signal may be right or left translated. And it is just curling over to the downside now at 7/26 and 7/29. So incorporate the one week time and we know the signal is not late since the SPX did not sell off yet, so according to your chart, the SPX should top anytime over the next say six trading days, say by middle of next week.

      Delete
    2. yes - my time target is between the 7th and the 19th and todays action is suggesting the 7th! lol

      Delete
  9. I know this runs counter to consensus, but IMO Bernanke has to taper from Aug.-Dec. just to give the next Fed chairperson some maneuvering room. Bernanke needs to cap the stock market bubble as well. Tapering a bit is simply politically wise at this point, and markets reacting poorly to that is the lesser of two evils.

    It's interesting that the a.m. ramp failed to catch fire. Any 'disappointment' in today's Fedspeak could trigger a reversal here.

    ReplyDelete
    Replies
    1. I'm with the counter culture. Part of the Fed's job is to clear the "froth" from time to time.We only seem to able to clear the froth when everyone is expecting dovish talk but get a hawk in the eye instead.

      Delete
    2. the job of the fed is to feed your carcass to the debt machine, to transfer your assets to their children and to enslave your kids...

      the fed creates the froth to expand Money through the only means it can (profitably for them and the cartel)- debt. No money can exist without a surety on the debt. That surety is YOU and to expand the money supply you become both the PUBLIC surety and the PRIVATE holder of debt (mortgage, car loan, student loan). Oh, and so you dont only pay interest on debt money you call into existence with your signature, you PAY TAX on the use of that debt since it originated in the lighter than air computers at the FED...

      This is the dirty secret of the housing "crises" and the S&L "crises" - when there is no one to loan to any more, because all those qualified as sureties have already taken on their prudent share, THEN you have to find new ways to expand debt so as to issue new "money".

      Think CDO's or derivatives, or ARM's,Interest only loans etc that blew up.

      This is why the stock market is monetized DIRECTLY BY THE FED - think wealth effect!

      When will americans get this game?

      Read http://mises.org/books/historyofmoney.pdf

      chapter 2 on the formation of the FED and the engineered banking "crises" that convinced people to accept this ridiculous debt system.

      monetary system my eye.

      Delete
  10. http://www.youtube.com/watch?v=pjU-XVcbX_A

    minutes until a breakthru :)
    which way? :D?

    V.

    ReplyDelete
    Replies
    1. UP young man , UP!
      from FOMC minutes:
      ''Fed says economy growing at "modest" pace
      Fed notes recent rise in mortgage rates
      Fed says persistent low inflation a risk
      Fed slightly downgrades outlook''

      Would you taper in a disinflationary environment?
      No?
      Me neither.
      Prepare for short covering at over 1700 levels. It will be horrible.

      GS guy

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    2. Hmmm... Let's stay calm and see how this thing develops.

      GS guy

      Delete
  11. the document:

    http://www.federalreserve.gov/newsevents/press/monetary/20130731a.htm

    GS guy

    ReplyDelete
  12. The Fed news may be in the non-event department. Markets are a touch higher than before the announcement, no great shakes, yet. 10-year dropping now 2.62%. Bulls continue to have the upper hand. VIX dropping will create upside fuel. Perhaps now everyone waits for BOE and ECB only 17 hours away.

    ReplyDelete
  13. Here we go with the usual post-Fed gyrations. For whatever reason, the usual ramp feels heavy. It would be nice of SPX just shot up to GS's target above 1700 and got it over with....

    ReplyDelete
    Replies
    1. Those are not my personal targets, Mr. Fibonacci whispered in my ears those targets :)

      GS guy

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    2. Understood--should have said "targets posted by GS"....

      Delete
    3. In my personal inbox just arrived a newsletter from Barclay's that states: "Dovish FOMC notes does not preclude taper in September"

      After that I verified what is their position in the market... Unexpectedly... they are bearish! Lol! they have been caught up there :)))))))))

      GS guy

      Delete
    4. just imagine what means Barclay's being run into their stops :) ... huge run up ! :)

      GS guy

      Delete
  14. The expanding triangle pattern I mentioned a few days ago targets 1670. I thought the ramp felt heavy... SPX closes for a slight loss.

    ReplyDelete
  15. ok, plans have changed.
    minor 5 looks like an ending diagonale now.
    closed at it's support.

    talk more tomorrow,
    cross your fingers and say a pray for start of the month buying,

    GS guy

    ReplyDelete
    Replies
    1. GS guy,

      If you think minor 5th looks like it's ending diagonale, is it safe to say it won't punch through 1700? What percentage would you put on it breaking 1700 compared to ending diagonale? Looks like the FED announcement was a non event so I'd assume the bears will push lower to try and gain some steam but they will run out at the 1660-1670 level which would set up nicely for the end of Major 3rd and the beginning of Major 4th which I believe would run into the mid 1700's.
      Disclaimer, I hold no position other than cash right now and I'm not looking to day trade. I'm looking for the small swing down the BIG swing up and then the MONSTER swing down... :)

      Delete
    2. Sorry for the repost, I screwed up my numbers.
      "but they will run out at the 1660-1670 level which would set up nicely for the FINAL WAVE UP TO end Major 3rd (which I believe would run into the mid 1700's) and the beginning of Major 4th which I believe would run DOWN into the mid 1500's.

      My Bad :)

      Delete
    3. according to your description we are in minor 4 still.
      GS guy says we are in minor 5 now.

      how could a ending diagonale (or a ending rising triangle formation) be part of minor 4? :)?

      I think your count is wrong.

      V.

      Delete
  16. Where did you look up Barcalys' position?

    FeS2

    ReplyDelete
    Replies
    1. I speaked with a friend.
      but it was a small position - a few millions.
      maybe a hedging one or a short still under construction.


      GS guy

      Delete

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