Friday, August 30, 2013

Keystone's Morning Wake-Up 8/30/13; EOM; Consumer Sentiment

EOM today. August started at 1686 so a down month should be logged at 4 PM EST when all the monthly charts receive new prints. It took the whole day but JJC (copper) finally gave it up in the final minute of trading falling to 39.96. It is amazing how Keybot the Quant algo can identify these important levels before they occur. Watch JJC  39.97 since it is now a key pivot. Equity markets move higher if JJC moves above 39.97 and equities will move lower if JJC moves lower. Copper is down in early morning trading.

SPX is 1638.17. The 100-day MA is 1638.96. The 20-week MA is 1642.83, a sturdy ceiling. Last week's low 1639.43. The bulls need to touch 1646.50 to create an upside acceleration  The bears need to push under 1631 to accelerate the downside. A move through 1632-1645 is sideways action to end the week. The 8 MA is under the 34 MA on the 30-minute chart signaling bullish markets ahead, however, the 8 MA is curling downwards and a negative 8/34 cross may occur today. BPSPX is now a market sell signal.  Markets receive a couple-day pop from the high TRIN and uber low NYAD discussed earlier this week. It is surprising to not see equities far lower and weaker. Perhaps the weak copper will kick in further downside today.

Traders believe strongly in the Fed and worship at Chairman Bernanke's feet; the junkies need the drug-pusher. CPC and CPCE put/calls continue to show complacency. VIX is climbing towards 17 but still not near 20 so overall, traders continue to lack fear. There are dip-buyers in the market more worried about missing the next big run-up in stocks rather than worrying about the markets selling off in any substantive way. Copper is key. S&P futures are flat to positive. If copper is weak (JJC sub 39.97), markets should be weak. Chicago PMI is on tap at 9:45 AM and Consumer Sentiment will create a 10 AM market pivot.

Note Added 9:34 AM:  JJC 39.68. SPX 1638.35 with the dance around the moving averages and last week's low continuing (pink numbers above). TRIN is 0.87 after dropping to 0.64 at the first minute, trying to help the bulls. Markets should weaken if copper remains weak. WTIC crude is under 108, Brent is under 115, and gold is under 1400, since the U.K. does not want to strike Syria and all the war rhetoric is easing. KKD is slipping on a stale donut laying on the dirty tile floor.

Note Added 10:20 AM:  Markets pivot lower at 9:55 AM on the release of Consumer Sentiment. The copper weakness today is causing the market weakness. VIX is 17.11, so each day, begrudgingly, another bull becomes a touch bearish, but overall, traders remain complacent and are not worried.  Most traders are likely more concerned over the pending picnic's and barbeque's on tap this 3-day holiday weekend than trading. The bears need to break down through 1631 to create a downside acceleration. SPX is printing 1635.81. LOD 1633.91 so watch this number. TRIN is 0.88 which keeps the bulls in the game today. Markets are typically bullish in front of a holiday weekend, typically bullish on a Friday afternoon, and typically bullish from the last day of the month through the first four days of the new month, however, the Syria situation, emerging market currency crises and numerous other macro headaches give traders pause.

Note Added 11:01 AM:  The 8 MA stabs down through the 34 MA on the 30-minute chart signaling bearish markets for the hours and days ahead. See if it holds. SPX 1632.67.  LOD 1631.84 so watch this number. The first test of 1631 support holds.

Note Added 11:44 AM: SPX testing the critical 1631 support now. Bounce or die. LOD 1630.85 so watch this number.

Note Added 1:08 PM:  Secretary Kerry takes the podium to speak about Syria and chemcial weapons. The SPX loses 1631, then 1630......, then 1629 ......

Note Added 1:12 PM:  VIX is 17.80 printing the HOD.  A few more traders are becoming concerned, seeking protection by buying volatility, with each word Kerry speaks. SPX 1629.20. The 1627 is the strong support that should send prices far lower if ruptured. The 10-year yield is 2.75%.

Note Added 1:15 PM: Kerry becomes squishy after all the talk of bravado. VIX jammed lower. SPX big bounce to 1634. Thus, a round trip of drama, from 1634 to 1628 to 1634 in twenty minutes time.

Note Added 1:20 PM:  Markets are jumpy like a deer in the headlights not knowing which way to leap. Kerry says the U.S. does not have to wait for the U.N. inspection report so it looks like the U.S. may strike Syria at any time before Tuesday. The SPX 1633-1634 appears to be a pivot level today, bulls win above, bears win below.

Note Added 2:21 PM: Equities are leaking lower with the SPX testing the 1631 support again, and bouncing again.  President Obama was to speak at 2:15 PM but the Whitehouse is typically late, like now, but he should take the podium any minute. Perhaps a few more Tomahawk's needed loaded on the war ships before he starts talking. Oil and gold remain steady, SPX is slightly under the 1633-1634 pivot. Markets await the news from the president.

Note Added 2:40 PM:  SPX is drifting higher now above the 1633-1644 pivot. VIX leaking lower. The president is no where to be seen. Send out a search party. He may not want to speak before 4 PM since equities are starting to float higher.

Note Added 2:51 PM:  The president's remarks are taped comments and the president repeats a lot of Kerry's squishy talk. Sounds like a strike on Syria is a 'definite maybe'. The Syria picture appears cloudier than ever but the markets view it as less aggressive so the SPX floats sideways with upward buoyancy at 1634.47. Traders are ready for the holiday weekend. There goes one sneaking out the back door. He is easy to spot wearing a straw hat, sandals and a Hawaiian-shirt.

38 comments:

  1. KS ,

    If US launch a strike on Syria on Sunday how would stocks open on Tuesday ? How about VIX? Is there a chance to see it above 20?

    thank you,

    V.

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    1. from BBC tweets:
      ''BBC New York and UN correspondent Nick Bryant tweets: On reports that weapons inspectors are leaving Damascus, #UN says whole team pull-out will be complete by Saturday morning.''

      US can attack Syria without any UN approval starting tomorrow.
      WATCH OUT WHAT YOU ARE DOING WITH THOSE LONGS!

      V.

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    2. Volatility is likely the one thing that will go up since the tension over many issues is rising. The UN will have their chemical report results probably Tuesday and forward so nothing will probably happen until then, and that is when the new moon is approaching as well which is ideal time for military strike if you are the one with superior night-vision capability. It's a tough call since it is not the start of a boots on the ground war. The markets may simply tumble along sideways with a downward bias.

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    3. http://www.marketwatch.com/story/9-stock-market-reactions-to-major-airstrikes-2013-08-29?dist=countdown

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    4. always bullish, you and marketwatch :)

      Considering that Syria has a russian military base there and considering the perspectives of an extended World War between strong forces... that would be not so bulish as you and other might think!

      This is not the Gulf war or Iraq.... it's morphing in something else that in history will appear as WW III.

      I hope mr. Obama REALLY knows what he's doing as as what he will be remembered in world's history! As the starter of WW III!

      In case of WW that would affect the entire world and would block commercial world cycle, believe me .... WW III will be faaaaaaaar from bullish for stocks! For US economy might generate as a matter of fact an economical depression for the next 3 years!

      V.

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    5. I'm not always bullish V - again you love generalities!

      and emotion

      and hyperbole

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    6. Scott,

      You can't comprehend what's starting now and what will be effectively start on 4-5 September!
      It's bigger than your life and will be a chapter of world's history books!

      V.

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    7. oh and anyone who thinks "history" is bigger than a SINGLE HUMAN LIFE is not living direct experience but some conditioned myth...

      peace -

      Delete
  2. a somewhat positive chart for TLT - a better short term play than the miners I think...

    http://stockcharts.com/h-sc/ui?s=TLT&p=D&b=5&g=0&id=p97377186656&a=311040646&listNum=6

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  3. Key target for me 1584

    BB

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    Replies
    1. why that level?

      V.

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    2. Probably the long term lower trend line channel line on weekly chart? The 50-week MA is 1540. 200-day MA is 1562 and rising. Prior June low 1558. June close low 1573-ish. So a cluster of support is in that area, say 1540-1584.

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    3. the 40 and 20 day cycles are right translating is all here I think and the rally will get legs soon.

      http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=1&mn=11&dy=0&id=p16496090163&listNum=4&a=304881690

      http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=2&mn=0&dy=0&id=p76358804108&a=302637899&listNum=4

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    4. Thank you KS!

      V.

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  4. V - I am older if not wiser than you, having lived Vietnam, South America, the cold war, etc.

    telling me what I can and cant comprehend is arrogant, self-important, childish, immature, unbalanced, and many other synonyms, epithets and adjectives...

    take a breath and ease off the glue sniffing. lol

    ReplyDelete
    Replies
    1. ok, you're right.
      anyway participating in wars certainly does not gives you superior analytics abilities.
      but I respect your experience - it is to be respected.

      V.

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    2. who said I PARTICIPATED IN WARS

      you really are not psychologically CLEAR my man.

      you have a crap load of involuntary programming driving you and it prompts me, in lieu of being more frank, to tell you to keep your tongue to yourself until you get some perspective on how conditioned your thoughts, identity and EGO are...

      sile et philosophus esto my friend

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    3. http://donlehmanjr.com/Articles/article1.htm

      Your life is shaped, controlled by the society which you have created. You have created the wars, the leaders; you have created the organized religions of which you are now slaves. So your life is predetermined. And to be free, you must first be aware that your life is predetermined, that it is conditioned, that all your responses are more or less the same as those of everybody else throughout the world. Superficially your responses may be different; you may respond one way here, another way in India or in China, and so on, but fundamentally you are held in the framework of your particular conditioning, and you are never an individual. Therefore it is absurd to talk about freedom and self-determination. You can choose between blue cloth and red cloth, and that is about all; your freedom is on that level. If you go into it very deeply, you will find that you are not an individual at all.

      But in going into it very deeply, you will also find that you can be free from all this conditioning -as a German, as a Catholic, as a Hindu, as a believer or a nonbeliever. You can be free from it all. Then you will know what it is to have an innocent mind, and it is only such a mind that can find out what is truth.

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    4. my dialogue with you finishes here as your ideas and arguments are targeting not some ideas but a person.
      moreover, some of your comments are not market-targeted, nor proxy-market targeted, thus your comments not targeting market issues will be ignored.

      V.

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    5. re-read your message to me and tell me who target whom buddy!

      telling me "You can't comprehend"; "It's bigger than your life"; "participating in wars certainly does not gives you superior analytics abilities"...

      like so many who identify with their thoughts, you seem deaf to your own words...

      peace

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  5. http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=0&mn=5&dy=0&id=p60266221363&a=310937947

    http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=1&mn=0&dy=0&id=p60237471170&listNum=4&a=302626314

    http://stockcharts.com/h-sc/ui?s=$INDU&p=W&yr=5&mn=0&dy=0&id=p48192453113&a=297459295&listNum=4

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  6. KS, please comments below, is this the normal pattern you've seen from your past experience during Middle East turmoil?

    Thank you.

    "Tension builds up ahead of conflicts and prices rise sharply. When war actually begins, however, oil prices have tended to collapse."

    http://blogs.barrons.com/focusonfunds/2013/08/29/150-oil-no-thats-scaremongering-says-commerzbank/?mod=yahoobarrons

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    1. For the Iraq War in March 2003, equities sold off until the bombs started dropping and that started the 4 1/2 year stock market rally into the October 2007 top. For oil, that makes sense, oil is basically rising on the worrisome news, and moving lower as the fears abate. This situation is different since it is really not the start of a war, it is a strike action for now. There are also a lot of other plates spinning in the air. If an India currency crisis, or Brazil, or Indonesia, or others, hits, Syria will not matter. Syria may not be that big of a deal for markets, unfortunately, everyone starts to become numb to this type of stuff. The U.S. is now an exporter of energy when years ago we were not. North America is rich in oil and gas now and not as reliant on the Middle East. And Syria is not critical to the oil industry. Oil traders are more worried about spill over affects to the important areas like Iraq, Suez Canal, Turkey pipeline, and so forth. All you can do is roll along the rapids, keep your hands inside the raft and hold on.

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  7. President Barack Obama will deliver prepared remarks on Syria at approximately 2:15 p.m. ET,

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    1. sideways market until then it looks like. what will the great one say??? something very intelligent I bet haha!!!

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    2. It's 2:40 PM now, they better send out a search party to find out where he is at, he got lost on the way to the podium.

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    3. just leave him he will be fine im sure Joe can handle it from here.

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  8. My read is that there is no major military conflict. A few strategic missile strikes, but that's it. The bully simply needs to deliver a few wedgies so that all the kids on the playground still know that he has the stones to do it. Obama's mission at this point is to save face, so that he doesn't look like a sh**-talker to people who cook their lunch on goat sh**.
    Mark

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  9. The SP500 tends to fall on rumors of war and rise once the missiles begin to fly ...

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

    The Fed POMO schedule for next month is out and unchanged with fat days to kick off the month ...

    http://www.newyorkfed.org/markets/tot_operation_schedule.html

    Mr. Obama is telegraphing that the Syria attack is on. It'll kick off this weekend if for no other reason that our Congress is on "summer vacation" and out of town. They return next week. The last thing O wants is for Congress to muck things up like the Brit reps did this week that torpedo'd their involvement.

    200 Tomahawks launched into Syria at $1.5 million each is $300 million. So, if nothing else, go long Raytheon. LOL.

    The next big news is the debt ceiling up for October which should trigger the usual October waterfall.

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  10. That's about it for the bears in this time period. Watch for the bulls to slowly wake up during September - 2 steps forward and 1 step back but slowly and surely the markets will grind higher

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  11. Such a great post. I have really enjoyed reading this great and informative article. This has really been very cool and knowledgeable to me.
    Stock Tips

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  12. First of all, the US do not have clear evidence on the use of chemical weapons by Syria. How can they prove it...from what source?

    Second, why does US always like to invade other countries just to improve their economy? If you think deeper, you'll know what I mean and look back in history...
    SPX tends to be higher or gain after the strike.

    Third, base of "War of Arts", if US make the first move to strike Syria, then they are STUPID!!!
    The U.K. back off and French says "attack on Syria strike could come by Wednesday".

    The French very smart, they just speak, US makes the move because US wants to be the leader...that's dumb!

    Finally, who's winning? The French of course!

    This Syria military strike can get the Russian involve, then potential WW III may begin...

    Going to war will increase our debt ceiling even more higher than ever.

    It costs lives and money!

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    Replies
    1. I agree with most of what you're saying. The one thing that I'd revise and extend is the part about Russia. The U.S.A. and most of its Western allies has been living in Utopia for the past decade or so. The west speaks of the cold war in historical terms, as something that was then, not now. There was a brief period beginning with Gorbachev where the Cold War appeared to thaw. Naively, Americans thought it was over. The truth is that the 'Soviets' had been 'Soviets' for so long that they didn't exactly know how to make anything else work. Putin and his cronies are old-style Kremlin in their thinking. They're not exactly chummy with the west and have been gradually going through re-freeze over the past decade. The U.S.A. wants to naively pretend that Russia is a friend, but there is no such thing. Notice how Russia backs any country that presents itself as unfriendly to the U.S., be it Libya, Syria, Iran, or even North Korea. The day is coming when one of these "little" countries is going to take a crack shot at the U.S.A. And we're all going to be wondering how they did it. Russia that's how! The point that I'm trying to make is simply that there's a much larger game at stake. Don't get me wrong. I think an attack on Syria is STUPID BEYOND belief. But it's NOT the U.S. vs. Syria. It's the U.S. vs. Syria-Russia. It's the emergence of a very old conflict. All the while Russia is quietly gaining power/influence. At the same time, the U.S. is gradually waning, thanks to flawed thinking, corrupted banksters, and miserable leadership. Set aside for a minute anything else about Obama. Just look at this single issue: Syria. He painted himself into a corner and now he's made himself appear like the weakest most indecisive leader possible. I'm not the Obama-hater. I actually like a lot of the stuff that he's tried to do, but on this he's weak. He's Commander and Chief. A good leader doesn't need to ask for permission. Grant it, I think he's dead wrong. But right now, he's not leading, he's dissenting. And in era of waning influence, he emboldens our allies.
      Mark

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  13. hello KS!

    Happy extended Labor Day week-end I wish to you!
    One little and fast question for you! (sorry for disturbing!)
    :)
    On the weekly on SPX 500 the last candlestick (for the week that ended on Friday) qualifies for a bearish engulfing or am I reading it wrong on the weekly chart?

    Thank you,

    V.

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    1. Yep, across a few of the biggies like SPX, RUT, Nasdaq, Trannies. Not the Dow. They are key reversals as well since the highs were above the previous week and then closed below. President Obama decides to wait on Syria so oil may drop and equities may experience a small relief rally. When Kerry was talking on Friday scaring everyone, oil was moving up and equities down, so the VST move may favor oil bears and equity bulls.

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    2. Thank you KS.
      having in mind the possibility of a very small term rally, above what spx 500 market level the validity of the weekly bearish engulfing signal would be cancelled?


      V.

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  14. v

    start thinking for yourself.

    ReplyDelete

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