Wednesday, August 28, 2013

Keystone's Morning Wake-Up and Midday Market Action 8/28/13

Oil leaps higher overnight, then drops a couple bucks, now up again. WTIC crude oil punched through the 108.70-109.00 resistance area so it ran higher to 112. WTIC is now printing 109.97 and Brent oil is 115.77. S&P futures were up +5 and +6 a few hours ago, now flat. The bears need to push the SPX only one-point lower down through 1629, and the downside will accelerate. The strong 1627 support will fold like a cheap suit opening up a quick test of 1623. The 1617-1625 area is the 62% Fibonacci retracement for the June-July rally. The NYAD and TRIN indicate a near-term VST bottom is likely as well as the positive divergence on the SPX minute and hourly charts. Today may provide an opportunity for a near-term bottom and quickie long play perhaps into next week.

Markets are typically buoyant moving into the 3-day holiday weekend which is tomorrow and Friday. Markets also tend to be bullish from the last day of the month through the first four days of the new month. Mortgage Applications are weak again this week. Pending Home Sales are 10 AM. Oil Inventories are 10:30 AM and very important today considering the Syria turmoil and focus on oil. The 5-Year Note Auction is 1 PM.

Keybot the Quant remains short through the theatrics this week thus far. The algo is tracking UTIL 483.32 and JJC 40.10. UTIL is printing below 483.32 causing market bearishness while JJC is printing above 40.10 causing market bullishness. The bears need to send JJC under 40.10 to create the next strong leg lower that will send the SPX to the low 1600's. Copper is weak in early morning trading pointing to a loss of about 20 or 30 cents in JJC to start the day, perhaps to the 40.50-40.70 area, which would remain in bull territory. The bulls need to push UTIL above 483.32 to signal an end to this round of selling and a recovery rally is beginning. Watch UTIL 483.32, JJC 40.10 and SPX 1629 to determine market direction.

Note Added 10:55 AM:  Bulls are trying to create a near-term bottom today. LOD 1627.47 bouncing directly off the sturdy 1627 support. HOD 1635.77. UTIL is 480.96 moving higher. JJC is 40.73. TRIN is 0.78, uber bullish today relieving the 2.63 uber bearishness yesterday. The 1636 is resistance that held on the first try. If the bulls gain strength, watch last week's low at 1639.43 as an important test. The 100-day MA is 1638.28. The 20-week MA is 1642.74.

Note Added 11:14 AM:  UTIL 482+ now so the bulls are making a run for UTIL 483.32+ which would lock in a recovery rally. SPX pokes up through 1636 resistance so a test of the important 1638-1640 resistance gauntlet is next. A move of UTIL above 483.32 would signal SPX 1640+. If UTIL stalls moving lower, so will the SPX.

Note Added 12:22 PM:  SPX 1638.30. The 100-day MA is 1638.30. How do you like that?  Bounce or die.

Note Added 12:27 PM: Big bounce so the bulls won that contest. SPX is 1639.58 now performing the back kiss of last week's low at 1639.43. This test is important. Time to bounce, or die, once again. UTIL is 482.14 remaining one-point under what the bulls need to lock in an upside market rally.

38 comments:

  1. 1/2 hour ago Iraq declared state of alert over Syria strike possibility.

    V.

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    Replies
    1. Also Russia is evacuating it's citizens from Syria starting yesterday.

      V.

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    2. Pardon me if this doesn't exactly fit here, but can someone explain the logic of this to me: We don't like that Syria's using weapons of mass destruction, therefore we're going to drop weapons of mass destruction on them.... to prove a point?

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    3. The irony is that Owebama - is very likely to start seriously oppressing people on the eve of the anniversary of MLK's Dream speech. Perhaps he has a dream that Bombing is the new liberation.

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    4. The issues run deeper than just usage of WMD I believe.. just as the same as invasion of Iraq etc.. What gives the western countries the right to invade another country??

      Delete
    5. ''What gives the western countries the right to invade another country??''

      It's not about having the such a right. It's about free will.
      But stay calm, even the Roman Empire has fallen....

      V.

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    6. better take a look at the charts :) the 60 min positive MACD cycle is just a sideways :) with a very limited potential upside to go to 1645-1648- right below the gap.

      V.

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    7. ''It's not about having the such a right.''
      Lol @ myself ... killing english language :)

      "it's not about having such a right'.

      V.

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  2. Europe needs US aircraft carriers -

    And they threaten that should we the US not join in then we implicitly agree that we are not the worlds only superpower.

    So give our - dribbling Owebama who on Kenyanomics - prints and commits 75% to living paycheck to paycheck, 15% to Foodstamps, double digit growth in graduate unemployment. Son's like Trayvon and a 7trillion$ increase in Federal debt since bush left office - The benefit of doubt.

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  3. V:

    Whats yr take on TLT?Do u see bond prices movind down as yields increase or vice versa?

    Cheers!BS

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    Replies
    1. As interest we might see the 3% level on 10 Y us bond before seeing lower interest levels.
      Beyond this Syria affair we should remember that we have in front of us the taper, the debt ceiling, and some problem called Summers at FED (not such a QE lover guy :D).

      V.

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  4. Aren't the bulls just lovely? :)?

    the problem is that we still have to verify 4 important support levels clustered in the 1620-1623.85 area! And that today, or tomorrow.

    If 1620-1623.85 area acts as strong support we will go up strongly , maybe closing even the 1680's gap.
    If 1620-1623.85 is broken to the downside and held as R after that ...well, my dear ones.... 1560's support is the next level to be verified! :)

    anyway, the bulls are lovely right now....

    V.

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  5. Bulls are trying to muster up strength to move higher. Last week's low is a big deal, 1639-ish, price may back kiss that, the 100-day MA is 1638-ish as well, so it can kill two birds with one stone, back test, and collapse. UTIL will tell you a lot, see how it is being grinded higher printing more new highs for today now nearing 482, with another point and one-half the bulls will guarantee a recovery rally with UTIL 483.32+.

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  6. Here's the test of the 100-day at 1638.30. Bounce or die time; what say you bulls and bears, who wants to run with the ball?

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  7. I got stopped out of my longs with a small profit. Just as well. This is a sucker's rally.
    Mark

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    Replies
    1. So far, but the 1639.43 resistance and UTIL 483.32 will tell a lot.

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    2. This may prove out to have been a suckers crash, looking back on it why has this latest batch of news been any bigger or any worse than what we have seen and rallied through? pretty convenient to dump the market on a low volume week and create a great short cover going into a long weekend.

      Delete
  8. So threat of a war is bullish? This is just crazy

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  9. I have not seen our highly levered friend around lately. Things that make you go hmmm.

    Last week I spoke of meaningless BBands, RSI etc and money flowing out of tech.

    I have no clue when the bottom will drop. I have learned in my old age to watch the other hand.

    Ever think that there are certain situations on the table where China forgives our debt?

    Its happened before. Read up on what happened at the turn of last century and how a bunch of industrialist poled their money to bail out the govt.

    I am not smart enough to understand why we let Coptic Cristians Die, Rowanda, we never bombed Aushwitz but this violation is different....why?

    I dunno but someone does....

    ReplyDelete
    Replies
    1. smoke and mirrors. this administration is very good at it.

      Delete
    2. Billy,

      Your higly leveraged friend is expecting a certain level to load a certain volume of shorts for the final whoosh! ... down to the mid to low 1500's. ;)!

      Don't scare the pigeons ....errr! ..the bulls! :)
      I prefer posting much much more rarley... due to some trolls that have problems with me.

      GS guy

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    3. just a few more points...come on! you can do it!
      ;) oh, come to Big Daddy! :)

      GS guy

      Delete
  10. The administration knows that it doesn't have the political capital for war. The U.S. will provide strategic support at best, much like we did in Libya, where France actually took the lead. Polls already show that only 25% of Americans support military action in Syria. Go figure. It's not like Obama is standing on high approval ratings otherwise. It's unlike that there will be any boots on the ground, just U.S. weaponry. If Obama's smart ---all politics aside--- he'll let France and U.K. take the lead on this. Funny, they're trying to drag us into war this time. Usually, it's the other way around. I think we're seeing a little bit of a rebound today, because traders are already reading between the lines at "limited response".
    Mark

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    Replies
    1. We shall see how unimportant the threats from China, Russia, Iran, and Syria are. This could be a far greater problem than it would appear. It could also be govt's attempt to drive people back into bonds.

      Delete
  11. http://blogs.marketwatch.com/capitolreport/2013/08/28/feds-stein-sold-off-his-tips-right-on-time-disclosure-shows/?mod=MW_home_latest_news

    ooopsie daisy! :)

    V.

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  12. KS, thinking ahead to the long weekend.... If we're close to a U.S. military strike of Syria, it might happen during the slow news cycle of a holiday weekend. That's the kind of thing they like to do while people are otherwise preoccupied. Do you recall back to the initial attacks on Iraq? Or Kuwait? How did markets react the next trading day?

    ReplyDelete
    Replies
    1. I was wondering the same thing this morning. The permabearish (watching events unfold from their concrete bunkers) ZH Bulgarians just put up a post concerning just that ...

      http://www.zerohedge.com/news/2013-08-28/war-effect

      Looks like war is generally "bullish" for the SP500.

      Taper might be the bigger concern, but who knows.

      Delete
  13. "it might happen during the slow news cycle of a holiday weekend."

    Smarty boy!
    Usually all start first with a biiiiig gap down ;).

    GS guy

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  14. Take a look at the 5 min chart. we're setting up to break through the inverse H&S neckline. On the pullback to retest the neckline, it might be a good entry point to close the gap. :)

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  15. September taper CONFIRMED by FED officials!

    http://www.forexlive.com/blog/2013/08/28/fed-officials-on-the-sidelines-at-jackson-hole-said-a-sept-taper-likely-cnbcs-liesman/

    V.

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    Replies
    1. Damn it, V!
      I said nobody should scare the pigeons!!!!!!!!
      Urghhhhhh!!!

      GS guy

      Delete
  16. $CPCE drops by almost half to 0.34 - as low as it has ever been? Is that important, KS?

    ReplyDelete
    Replies
    1. http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:put_call_ratio

      Delete
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    ReplyDelete
  18. GS guy,

    The market closed the day BELOW THE NOVEMBER 2012 LOW :) - the break happend at the 4th touch of the trend (we all know that generally it takes 4 touches of one trend line before it breaks) ....
    Sorry if I created trouble to you..but that link that confirmed that FED WILL TAPER IN SPETEMBER 2013 was just too juicy to not post it ... :D!

    Look!

    I can post again .... :D!

    http://www.forexlive.com/blog/2013/08/28/fed-officials-on-the-sidelines-at-jackson-hole-said-a-sept-taper-likely-cnbcs-liesman/

    All here should keep a good eye on the US GDP today, a strong GDP figure hints that the FED 'free drink on the house' policy is reaching the end... it means that they will taper!

    p.s. although that GDP on q2 is estimated at 1.3% I heard that it will be in the 3-3.3% range ... I guess we will have a great Thursday and Friday ! :) ...

    V.



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    1. correction: :)

      The market closed BELOW THE NOVEMBER 2012 TRENDLINE ....

      too morning here for me, no coffee yet :D!

      V.

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    2. Actually it would be very cool to make GS guy's target (mid to low 1500's) in just 2 days - Thursday and Friday ...

      nobody should find an entry point to get shorts, the triggers are in place (GDP report, Syria threats, taper) and moreover after the descending move from the last 3-4 weeks everybody is hungry for a fast up move .... but surprise!!!!! :D!

      That would be really cool! Nobody would have time to react and get short! :) Most blogs I'm following are pouding the table for a fast move to the upside to the 1640's-1660's until Friday (tomorrow)... it may be a very fast move... but not to the upside :)!

      V.

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  19. So we found a US citizen that asked Mr. Obama why he thinks at a Syria military intervention without US congressional consultation.

    http://www.marketwatch.com/story/syria-strikes-meet-resistance-in-us-uk-2013-08-29?link=MW_home_latest_news

    Due to my naivity I hoped it will be an Anon US citizen, but Mr. Boehner it's ok, work also ok.

    excerpt from the article: "In the U.S., House Speaker John Boehner (R., Ohio) sent a letter to President Obama demanding a clear explanation of any military action against Syria before it starts, and criticizing the president’s level of consultation with lawmakers. Separately, 116 House lawmakers — 98 Republicans and 18 Democrats — signed a letter to Obama, demanding he seek congressional authorization for a military strike."

    I'm satisfied.

    V.

    ReplyDelete

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