Tuesday, August 20, 2013

Keystone's Morning Wake-Up 8/20/13; HD; BBY; DKS

India continues to try and stabilize the rupee as the dollar/rupee currency pair moves above 64. Indonesia and Thailand currencies are selling off. The Indonesia Jakarta Index is crashing -10% in the last two days. Fear grows over a currency crisis in India or Brazil. The Sensex loses another one percent. The India contagion is spreading across emerging markets with Asian indexes down from 1 to 2% or more overnight. Traders are exiting copper, commodities and basic materials. BHP loses -3.2%.  Glencore drops -4.0%. In Egypt, the Muslim Brotherhood leader, Mohamed Badie, is arrested for insighting violence. The Army continues to crackdown on the Mursi-supporters.   The 10-year yield drops to 2.81% losing almost 10 bips in the last few hours (2.90% yesterday). HD earnings beat but S&P futures are flat to down. BBY earnings beat on top and bottom lines. JCP earnings are a miss but the stock pops +5% anyways. Hedge funder Kyle Bass goes long JCP so traders are looking for a bottom.

Watch UTIL 483, VIX 14.21, XLF 20.13 and RTH 54.00 as highlighted in recent days. All four remain bearish and are creating market negativity. If any one turns bullish, that will signal a recovery rally on tap. For the SPX starting at 1646, the bears only need a smidge of red in the S&P futures to accelerate the downside. Bulls need to push 13 points higher to 1659 to regain their upside mojo. A move through 1647-1658 is sideways action today. Chicago Fed Activity Index is 8:30 AM. The full moon is 9:45 PM this evening and markets tend to be bullish moving through the full moon (reference the Other Market Signals page). Pay attention to the VIX 200-day MA at 14.68.  Bulls are toast moving forward if the VIX stays above 14.68. Bulls will recover today if they can push the VIX under 14.68, and will signal a recovery rally in progress if VIX loses 14.21Keystone has a gas leak on the property, and the crews are now arriving to make the pipeline repairs, so updates may be sparse today.

Note Added 7:48 AM:  S&P futures are bouncing to +4 signaling a bounce for the opening bell two hours away. The HD and BBY earnings are in line or better which helps improve the market tone.

Note Added 8:33 AM:  S&P's +3.5.  Dow +27.  Nasdaq +9. DKS earnings lay an egg showing that the regular consumer is delaying purchases of new tennis shoes and sporting equipment, instead opting to eat a dinner of franks and beans. No one is buying books with BKS receiving a -10% beating. Both DKS and BKS should create further pressure on the retail sector offsetting the HD and BBY joy. The triple X SPXS ETF is under a 5:1 reverse stock split so that price will flip five times higher today (and any shares owned will decrease by five times) at the opening bell.

Note Added 10:29 AM:  SPX 1651.02.  The 1652 R is holding, for now. SPX S/R is 1685, 1675.24 (200 EMA on the 60-minute), 1675, 1669, 1666, 1661, 1659, 1657.62 (50-day MA), 1655-1656, 1652, 1649, 1647, 1639-1640, 1639.76 (20-week MA), 1636, 1633.03 (100-day MA), 1632 and strong support at 1627. Boiling these S/R numbers down to identify the important clusters are 1685, 1675, 1669, 1666, 1657, 1652, 1649, 1639-1640, 1633 and 1627. Thus, if the bulls can push up through 1652, a test of the 50-day MA should be on tap. Look at the big jump in UTIL now at 484.51 closing the trap-door at 483. XLF, VIX and RTH remain bearish but UTIL will allow a recovery rally. VIX is now fighting at the 200-day MA at 14.68. Bulls will receive more upside market fuel if volatility falls under the 200-day MA. Keystone took profits on SCO exiting this short oil ETF trade. Will consider reentering although Egypt is quite the unpredictable hot spot lately with social unrest occurring in the vicinity of the Suez Canal.

Note Added 10:39 AM:  VIX drops to 14.60 under the 200-day MA at 14.68 helping bulls but remains bearish overall for markets above Keybot's 14.21 level.

Note Added 10:59 AM:  UTIL 484.40. Watch the RTH 53.94 bull-bear line in the sand (use 53.94 instead of 54.00), now at 53.92 knocking on the door. Equities will continue higher if RTH moves above 53.94, if not, then sideways action should continue. TRIN 1.29, bearish for today.

Note Added 11:25 AM:  RTH is at 53.91 struggling to move higher. UTIL is 483.75 slipping a bit.  Equities continue higher if RTH exceeds 53.97, 54, and higher. Markets drift sideways if RTH stays under 53.97 and UTIL above 483. Markets will begin selling off in force again if the UTIL 483 trap-door reopens. VIX keeps fighting at the 200-day MA at 14.67. SPX HOD 1654.79 so watch this number closely.

Note Added 11:33 AM:  UTIL is 482.86 so the 483 trap-door reopens; see if the bears can hold UTIL under, or not. If so, markets should weaken. Bulls need to regain 483. SPX prints a new HOD at 1655.77. The 50-day MA is 1657.72.

Note Added 11:47 AM:  UTIL fails but the RTH is goosed over 54 and VIX is pushed under the 200-day MA. SPX runs higher to a HOD at 1657.46. The 50-day MA is 1657.75 only 29 pennies away, a critical back test.  Equity markets will now either bounce (SPX overtakes the 50-day), or die.

Note Added 6:19 AM on 8/21/13: It died. The SPX kept fighting at the 1658-1659 yesterday and then ran out of gas, collapsing to 1652 into the closing bell. The price action satisfies a back test for the 50-day and since price could not move above, it is a bearish indication. UTIL, RTH, XLF and VIX all remain in the bear camp causing market negativity and these four parameters will continue playing a key role this week.

56 comments:

  1. Sounds like there's a parallel between your property and these combustible markets. Don't light a match within their vicinity. (Best of luck.)

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    1. That is funny. The leak tester that found the natty gas leak was sitting in his van yesterday smoking a ciggy. At least it would be an easy way to detect a gas leak although a trip to the emergency room would likely be required. LOL

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  2. For today, E-waves wise, I see a rally could unfold to 1665-1670 (as Minor B of Int.A) and today into tomorrow, or tomorrow a fast drop to the area 1635-1640 or lower at the 1628 pivot (1621-1635) could appear.

    If today the market sustains prices above 1670 and closes that way - this up wave could qualify for Int.B (targeting 1680-1687). If 1664/1665-1670 are real strong R levels, this is just Minor B of Int.A, with a minor C of Int.A to follow.

    V.

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    1. Okay V, support is the 20-week MA at 1639.49 and 100-day MA at 1632.21. Resistance levels above are the 50-day MA at 1657.45 and the 200 EMA on the 60-minute at 1675.76. Price support below is 1639-1640, 1636, 1632 and 1627. Price resistance above is 1649, 1652, 1655-1656, 1659, 1661, 1666, 1669, 1675 and 1685.

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    2. Thank you KS :).

      V.

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  3. Let's talk about that 1628. It almost seems like this market needs to see the
    1628.
    Mark

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    1. 1628 pivot (1621-1635) will mark the end of wave Int. A of major 4.
      It can be today or tomorrow or on Thursday.
      That does not exclude an up wave today or tomorrow .
      A relief rally is preparing.

      V.

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  4. ''The triple X SPXS ETF is under a 5:1 reverse stock split so that price will flip at the opening bell.''

    What means that?
    spxs is 3x short sox 500, isn't it so?

    V.

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    1. Yep, price for SPXS went out yesterday at 10 bucks and should open today at 49-50, with one-fifth the shares, so the dollar amount of the position does not change, only the price and number of shares, if you are holding it.

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    2. Thank you KS!
      V.

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  5. how do I read the NYMO again? its approaching 100 with rsi in oversold

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    1. Oops nevermind, I just scrolled down 2 blog entries. KS was on the ball as usual.

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  6. This market looks really weak.
    I said that we will rally to 1665-1670 and after that we go down to 1628 pivot , ....but now a direct trip to 1628 pivot (1621-1635) looks more likely for today until the end of trading day.

    Still, there's not enough pushing force...

    V.

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    1. V, I posted this under yesterday's comments, not sure you saw it, so here it is once again. thought you might find it interesting.

      http://lunatictrader.com/?Download

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  7. Take a look at this, https://www.tradingview.com/v/Xr5b1dG1/?utm_source=notification_email&utm_medium=email&utm_campaign=notification_publish

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    1. That is interesting, the ole rounded top formation, which is typically hand in hand with an H&S pattern.

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  8. SPX 1652 R gives way so price likely wants to back kiss the 50-day MA at 1657.67.

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  9. if bulls can't make it over 1667 today (and hold it) they are in deep, deep trouble.
    Why?
    Because this up wave could change the count of the trend from a corrective a-b-c down to an impulsive 1-2-3-4-5 down.
    So what I'm saying here is: if bulls can't make it over 1667 this would be a bullish corrective wave 4 and wave 5 would appear to 1621-1635 levels (1628 pivot) tomorrow!
    And that would be a bad and nasty confirmation of a bearish impulsive decline from 1709 maximum level! 5 waves patterns are impulsive, 3 waves pattens are corrective.

    What should it be?
    Above or below 1667? :)?

    V.

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    1. One more thing: today DOW confirmed the bearish decline with a lower low.
      To keep in mind that!

      V.

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    2. I know a few bulls trapped above 1680's gap that would pay to escape! :)

      V.

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  10. http://stockcharts.com/c-sc/sc?s=%24SPX&p=D&b=5&g=0&id=p94733973974&a=231132339&r=756

    watch CPC for bottom - we arent there yet (dont mistake this for anything but Short Term bearish)

    http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=2&dy=0&id=p07440194159&a=312297654

    the gap on the 60min is operating as resistance - watch for a breakout or failure

    MF cycles are suggesting possible weakness until next wednesday but there are competing forces here and a break above 1670 would create a run to the gap at 1680 and would mean the EW everyone is hung up on would change dramatically...

    http://stockcharts.com/h-sc/ui?s=JNK&p=D&yr=0&mn=4&dy=0&id=p85283152947&a=310937947

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    1. nascent bull porn lol
      http://stockcharts.com/h-sc/ui?s=$NAHL&p=D&yr=0&mn=3&dy=0&id=p68598948971&a=313071820

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  11. this is the 40 day cycle bottom right on cue - have some hurst cycles action showing strength until Mid Septemeber

    I use UST to project important bottoms and there are two, one right about here and another at the end of the year or the beginning of next.

    http://stockcharts.com/h-sc/ui?s=$UST30Y&p=D&yr=2&mn=5&dy=0&id=p94221150686&a=310948672

    I have to remind myself that none of my indicators are showing an important TOP yet...though a few are flashing yellow to be sure

    http://stockcharts.com/h-sc/ui?s=$UST:$SPX&p=W&yr=13&mn=8&dy=0&id=p63063325053&a=304892430&listNum=4

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  12. that's a market with bad brea(D)th :D!

    http://www.marketwatch.com/story/a-market-with-bad-breadth-2013-08-20?link=MW_home_latest_news

    and from this article, for S&P:
    http://i.mktw.net/_newsimages/pdf/motm082013-sp.pdf

    :)

    V.

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    1. bad brea(D)th due to ageing issues for this bull market of course :D ...call the dentist, Dr. Bearrrrr :D

      V.

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    2. look closely before you gargle...lol

      http://stockcharts.com/h-sc/ui?s=$NAHL:$NATOT&p=D&yr=0&mn=7&dy=0&id=p77027596024&a=303358015&listNum=4

      mild divergence at best - certainly not like 2000 or 07 - watch the MA'x on the $NAHL:$NATOT

      they pinch all the time but only cross at TOPS

      and you wont get a top until some of the other charts I've been posting confirm...

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    3. http://stockcharts.com/h-sc/ui?s=$NAHL:$NATOT&p=D&st=2006-07-03&en=2009-08-03&id=p34249580869&a=303358015&listNum=4

      historical 07 and actual divergence...

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  13. http://stockcharts.com/h-sc/ui?s=$SPXADP&p=D&st=2013-04-01&en=(today)&id=p42468573779&a=312266387&listNum=6

    http://stockcharts.com/h-sc/ui?s=$SUPHLP&p=D&yr=0&mn=10&dy=0&id=p66210622943&a=309249836&listNum=4

    the way to look at this chart is that breadth is
    bullish but the macd is showing a secondary bearish trend - that is short term

    until SOX breaks the zone an heads lower to confirm a top then this is still looking like a partial decline within the pattern, which is bullish

    http://stockcharts.com/h-sc/ui?s=$SOX&p=D&yr=0&mn=10&dy=0&id=p37941865607&a=309132841&listNum=4

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  14. use the TSI in this chart to confirm EW (wave 3 with a 4 bounce)

    when combined with the other charts here, it looks better than 50/50 that this recent correction was a secondary pullback within a new bullish trend...1661 then watch the middle of the BB's

    http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=7&dy=0&id=p43284970310&a=301685104&listNum=4

    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=11&dy=0&id=p90113721775&a=312666429&listNum=4

    http://stockcharts.com/h-sc/ui?s=$NYUD&p=D&yr=1&mn=0&dy=0&id=p69898155331&a=312380581&listNum=4

    http://stockcharts.com/h-sc/ui?s=$NYDEC:$NYADV&p=D&yr=2&mn=0&dy=0&id=p47179050791&a=306695234

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  15. http://4.bp.blogspot.com/-8NuFu4H5Nyw/UhKpavsC_GI/AAAAAAAAJmM/QDEAI4_A_PY/s1600/BIG.png

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  16. Keystone "the market will either go up or die" Are you serious? LOL

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    1. what else is there is a ridiculous zero sum gamed duality of illusion and speculation?

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    2. love Keystone - but I chuckled too when I read that :)

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    3. Yunz miss the meaning of the statement. The 50-day MA at 1658 is a key back test. Thus, bounce or die. The automatic inference is that the decision at this level follows through with a further move in that direction (it is not saying that markets will either go up, or they may go down. It is saying the directional decision is very important right now.

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  17. Scott,

    My work shows a sixty five week cycle that has been in play since 2009.

    We are on the cusp. When my Hurst DPO aligns with a perfect sinewave, as it is now, the predictive value is excellent.

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    1. Billy - share the knowledge - post a chart???

      I assure you if you are a perfecter of sine waves hit me with one! I be in need of perfection somewhere in my life!

      thanks

      Delete
  18. http://screencast.com/t/w64sLHCd

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  19. Hi Scott,

    Hope that took. It was run on the 3rd so it is dated but still working....

    I am not actively trading right now. I have a long term 'Insurance PUT' in place on tech but that is to hedge my employment if you will.

    Being in the tech biz.

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    1. thanks Billy - I dont disagree with your chart especially when you consider that the average 80 day cycle runs about 68 days

      even your chart indicates the possibility of a rally high before a decline so I just think it prudent to trade the shorter term signals like the ones I've been posting....

      I also think given the breakout of the very long term meridian and the lack of any topping indicators here to be flexible and open to a very ridiculous and surreal intermediate bullish eventually...lol

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    2. I just noticed a bit of RED that showed up yesterday on this indicator - it is NOT a leading indicator by any means BUT the macd and the CCI are weak so file this into the ambiguous mix.

      http://stockcharts.com/h-sc/ui?s=$NYSI&p=D&yr=1&mn=3&dy=0&id=p03109347748&a=278181225&listNum=1

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  20. man the recent selling volume spikes in ief look like capitulation to me

    if rates do top here a monster bond rally to or exceeding the may high might ensue???

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  21. should I say here that I reopened a small long position or the market will drop? :)?
    stop loss at 1628

    GS guy

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    1. OK, no rollover? We are civil today, Mr. Market?
      Ok, just doubled my long exposure. stop loss for second load 1630

      GS guy

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  22. i predict blast off in T-1 min lol

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    1. houston, we are leaking fuel! switching to reserve...federal reserve!

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    2. 1630 is were it will pop like a crack monkey if it fails to jump into the close

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    3. Under no circumstances it will go to 1630.
      That's why I put my stop there.
      The chances to break a bottoming formation after it was done are pretty thin.

      GS guy

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    4. GS,
      If spx goes to 1630 which is what everyone assumes, then it will bounce, why do you place a stop loss there? Shouldn't you wait for the bounce to take profit?

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    5. Guess he looks at a little line of support in the 1635-1636 area.

      V.

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  23. test of 1638 ES marking bottom before rally into fed and blast off is the outcome I am most ***hoping*** for.

    reality is my system kept me out today all day as a buy / sell signal was not generated all day. My system wants to go long at 1659.14 and falling.

    If the market falls from here i will be out as my system is still short from 1684 8/14 and it cannot generate two shorts without first going long. The 8/14 system short was excited today.

    I however was long from 8/13 and trapped and did not close on 8/14 instead trying to hold for a bounce before finally selling prior to yesterday's weakness.

    Such is life.

    BB

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  24. Keep watching the 50-day MA. Also the VIX 200-day MA. These tell you a lot about market direction. Also watch the 8/343 MA cross on the SPX 30-minute chart.

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