Tuesday, September 24, 2013

Keystone's Morning Wake-Up and Midday Market Action 9/24/13; Consumer Confidence

Volatility, copper and financials hold the key to broad market direction today; VIX 14.67, JJC 39.97 and XLF 20.00, respectively. All three are creating bullishness so any move to the bear camp will create equity selling. The degree of selling would increase if more than one parameter flips. If all three remain bullish, equities will float higher. If the GTX moves above 4888, the bulls will receive additional bull fuel. GTX is 4854 creating bearishness in markets. VIX 14.67 is very important today as well as the 200-day MA at 14.48 described in this morning's chart. Copper is down about -1.1% in early trading which will send the JJC to about 40.10 or 40.20 nearing the 39.97 bull-bear danger line after the opening bell.

For the SPX starting at 1702, bears need five points lower, to push under 1697 and a flush move will occur in short order taking price to a test of the strong 1691 support. The previous week's low is 1691.70 which would signal trouble for markets if it fails. Bulls need to push above 1711 to regain upside mojo and accelerate the broad indexes higher. A move through 1698-1710 is sideways action today. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead, however, the 8 MA is curling upwards. Bears will need to push the SPX lower and under 1697 today to sustain the downside by keeping the 8 under the 34.

Housing numbers are on tap this morning. Fed's Pianalto speaks at 8:30 AM and George (she is the uber hawk) speaks at 12:30 PM so more Fed spin is on tap today to keep everyone dizzy. The CR deadline drama, for funding the U.S. government, is heating up with six days remaining. Senate Leader Reid says the House bill, that approves 99.9% of government funding, but defunds Obamacare, is dead on arrival. The political clown games intensify each day. Consumer Confidence, a key monthly indicator, is released at 10 AM and will create a market pivot point. So the way the indexes move during the first one-half hour of trading may or may not continue from the 10 AM pivot forward. The 2-Year Note Auction is 1 PM and this is important in relation to the 2-10 spread. KBH and LEN earnings are imminent which will also move the housing sector along with the economic data. VIX 14.67, JJC 39.97, XLF 20.00 and SPX 1711 and 1697 dictate market direction today. Use the VIX chart in the prior post to verify which side is winning.

Note Added 3:12 PM:  Market bears had the brass ring in their sights this morning but slipped on a banana peel falling short. Copper collapsed at the open with JJC dropping under 39.99 and VIX popped towards 14.67 and XLF down to 20.00. Very little effort was needed to push it all over the hill and begin the downside in force, but, alas, VIX collapsed under 14, XLF moved up and away from 20.00, and JJC is above 39.99. The bears could not get the job done. That is why even though the SPX ruptured the 1697 level, price did not have a lot of downside juice due to lower volatility. TRIN 1.08 a hair negative. Big-time drama right now with the 8/34 MA cross on the SPX 30-minute chart. The 8 remains under the 34 favoring bears but is about to cross up through favoring bulls. The bears must drive the SPX lower in quick order, before the closing bell, down hard, to maintain downside control. If not, the bulls are going to start running markets higher. Watch JJC 39.99, VIX 14.67 and XLF 20.00. Current prints are JJC 40.09, VIX 13.90 and XLF 20.12 all three causing bullishness.

Note Added 3:40 PM:  JJC 40.04. VIX 14.07. XLF 20.05. The bears fell asleep this morning but are waking up into the close. SPX is dropping this will keep the 8 MA under the 34 MA and keep the markets weak for the hours ahead. SPX is at 1699.86. Bears will receive downside fuel if they turn one of the three parameters negative. Bulls will hang on fine if they keep all three bullish.

Note Added 3:47 PM:  The tension mounts. Bears are given a second try today. JJC 40.02. VIX 14.10. XLF 20.03. Copper and financials only a couple pennies from causing market mayhem. Can the bears do it on their second chance today?

Note Added 4:05 PM: JJC parks at 40-ish and XLF at 20-ish as identified by good ole Keybot ahead of time. With both of these key metrics sitting on their inflection points at JJC 39.99 and XLF 20.00, a critical up or down market decision will occur at tomorrow's open. VIX is 14.10 near its 14.67 line in the sand as well. To pile on more drama, the 8 MA is under the 34 MA on the 30-minute chart signaling bearish markets for the hours ahead, however, a gap up open tomorrow would place the bulls in the driver's seat, so this indicator is at an inflection as well. Rest up. Tomorrow's open is important and the broad indexes should make a commitment after the bell that will have a bit of staying power. Copper trading overnight will provide the answer. CY is bludgeoned -15% AH's. This is key since it tells you semiconductors are sick, a key component of the global economy.


  1. don't know why but I have a strong, strong feeling that until the end of September we will see new highs in SPX 500... maybe it's just because of the oversold aspect and because of the positive div. on RSI 60 min? :)?


    1. RSI never reached oversold levels on the 60-minute, the intrahour low about 5 hours ago created a cheesy possie-d bottom for price. Watch the RSI 50% level. If SPX moves back up to 1706-1707 the indicators can be checked to see if negativity is developing, or not.

    2. I dont see indexes moving any higher until either next FOMC meeting or astoundingly good data; and when I say good, I dont mean bad, I mean good. Market needs to know that data is improving if the FED heads keep touting this taper nonsense. Why would the market reach new highs here? There is no reason for price to go up.


  2. Hi KS

    Do you ever look at the Baltic Dry Index and if so what is your take on its recent move?

    Thanks Jimmy

    1. Yep, the chart is posted time to time. Remember a couple months ago shippers were touted as a nice positive divergence story for upside after their long beating. Shipping stocks jumped quick so they are not attractive now, probably lots of sideways ahead. FRO is a laggard to the party so it may want to continue up with a bull flag so that one is worth watching.

  3. JJC 39.99 and XLF 20.00 will indicate the first signs of market weakness. if prices stay above both levels, both only pennies above right now, the bulls remain on easy street. Bears have to push at least one of them under to increase the market selling.

  4. Hi KS,

    When is the next earning season begins?

    1. Double A, Alcoa, AA, is the ticker everyone considers to kick off earnings season. So you can always go to Yahoo Finance and plug in AA to find out its earnings date. It is October 8. So Q3 earnings season will kick off on Tuesday, 10/8/13, banks are towards the front so the financial earnings are only about 3 weeks away. The banks will be big drama since they have to move higher to take equities higher. In recent days they are stumbling.

  5. Scott,

    I noticed that the t-theory volume oscillator is now bearish.


    are you bearish now?

    1. Hi Scott,
      I was wondering where you were all day today...
      Anyway, good to hear from ya!

      How low do you see spx will go?
      I am aiming at 1660-ish.

      I recalled you mentioned something about 9/26, that this Thursday. May be the jobless claim will tell.

    2. Interesting. When the price crossed the 0 line for the oscillator that marked the May 22nd top, then the early August top, and now the current top. A few days are likely needed to play out to see if it continues lower or recovers back above the zero line today or tomorrow.


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