Wednesday, October 2, 2013

Keystone's Morning Wake-Up and Midday Market Action 10/2/13; Shutdown Continues; Bernanke Today

The government shutdown drama and political theatre lingers on with the blame game in high gear. Remember what dear ole Mom told you as a youngster that when you point a finger at someone else there are three fingers pointing back at you. Fed's Rosengren speaks at noon and Chairman Bernanke is on a web cast at 3:30 PM, it may be 3 PM, at any rate, during the last hour of trading today. The ADP Jobs Report was 166K lower than the expected 180K jobs showing a continuing sick economy and if the Monthly Jobs Report is cancelled for Friday morning due to the shutdown, the ADP Report sets the tone forward. Oil Inventories are 10:30 AM. The bulls appear to have a lock on the upside with the big rally yesterday, the 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets ahead, and price is above both the 20-day MA at 1689.93 and 50-day MA at 1679.96. The SPX is also above the 200 EMA on the 60-minute chart at 1685.33 signaling bullish markets for the hours and days ahead, however, there may be a battle at this level today. Market bears got nothing unless they create a negative 8/34 MA cross on the 30-minute and/or a drop under the 200 EMA at 1685.33.

Watch UTIL 483.53, JJC 40.13 and XLF 20.01. All three are bullish, especially after a late-day orgy that spiked prices during the last minute of trading yesterday. Keybot the Quant is short but wants to go long. All it needs to see is SPX 1696+ (keeping it simple) and a flip to the long side should occur for the algo. The S&P futures, however, are weak pointing to a -10 or more handle drop at the opening bell. This may save the bears today. Despite any drop in the broad indexes, the market bears must attain at least one of the three parameters mentioned, if not, markets will reverse to the upside and start the trek to SPX 1700. The degree of market weakness today is identified by if one, two or all three of the parameters turn bearish, or not. CPCE put/call ratio drops to 0.53 continuing to signal a rampant complacency among traders that believe the Fed will always be there to pat everyone's behinds, so there is no reason to worry about anything. As Alfred E. Neuman quips, "What, me worry?" Watch the range created by the 20 and 50-day MA's at 1680-1690. Bulls win above 1690. Bears win below 1680. A bull-bear fight continues through 1680-1690. Copper is all over the map in early trading. UTIL 483.53, JJC 40.13 and XLF 20.01 dictate market direction today.

Note Added 10:24 AM:  XLF drops under 20.01. UTIL drops under 483.53. Bears pull a handkerchief from their pockets to dab off the beads of forehead sweat and relax for a few minutes; bears may have dodged a bullet today. SPX is fighting in the center range 1680-1690 described above. Bulls remain in the game keeping copper elevated with JJC above 40.13. Oil Inventories are on tap in a few minutes then Rosengren will either ruin the bears, or bulls, lunch, then Bernanke late-day. The 8 MA is curling downwards for a potential negative 8/34 MA cross on the 30-minute. The SPX drops under the 200 EMA on the 60-minute chart at 1685.29 signaling bearish markets for the hours and days ahead. Watch these two indicators closely today. The band plays on.

Note Added 1:57 PM:  Nasdaq trying to turn positive. Bears ran out of gas today. XLF moves above 20.01. UTIL is above 483.53. Both create bull fuel and the market recovery today. Bulls are also pumping commodities. Watch GTX 4889, now at 4880, since more bull fuel will be added to the broad indexes above 4889. Keybot the Quant is short but wants to go long again. If the SPX moves above 1696.50 before today's closing bell, and stays above, Keybot will likely flip long. Bears have to move XLF under 20.01 or UTIL under 453.53 to stop the market recovery. TRIN is 0.55 obscenely low pumping equities higher. The 8 MA came down to touch the 34 MA on the 30-minute chart but cannot punch down through as yet so the bulls remain in control for the hours ahead. Ditto the SPX now above the 200 EMA on the 60-minute at 1685.52. Use XLF 20.01, UTIL 483.53 and GTX 4889 to gauge the market strength, or weakness, ahead. Looks like the close will be important and Bernanke should offer up some words in the final hour as well. SPX is 1692.25.

Note Added 2:13 PM:  Whoopsies. XLF 20.00. XLF drops from 20.06 to 20.00 over the last hour taking the wind out of the bull sails as the pendulum swings back the other way. Markets are erratic and indecisive. UTIL has a 483 handle; see if comes down for a look at 483.53.

13 comments:

  1. trin ... not too bearish , KS.
    odd day.

    V.

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    1. Times like these are difficult, because so much is tethered to the imbeciles in D.C. The last time this went around I was sitting on a trading desk, saying "surely, our politicians won't play games with the nations economic and financial well-being. Who'd want to go over the cliff?" I was wrong. We saw the first downgrade of U.S. debt as a result. In truth, the debt deserves to be downgraded again and for the same reasons. It's not just financial insolvency, but a lack of faith in elected officials to do what is right for their constituents. The U.S. government has been a failure for quite some time, but its people are too blinded by rhetoric to realize the noise game for what it is. The current system is working for anyone, yet it is failing for everyone. From my vantage, so many of the problems we now and those we soon will face are entirely self-fabricated.

      mark

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    2. Yep TRIN at 0.55, definitely pumping equities and creating the mid-day lift. Usually the Fed is crushing the VIX as well as the TRIN to create a double-whammy of equity upside but today the VIX remains positive and is holding its own above 16.

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  2. WE not THEY are playing with our OWN economic lives by creating an oligarchic non-creative structure of debt driven transfer payments...

    Americans have decided to just become members of special interest groups or find shelter as comfortable mercenaries.

    If the Federal Government is the largest "employer" then there is no "healthy" economy.

    The failure is in the people - the abomination of the debt money empire the tool of the oligarchy but oiled with the people's compliance, greed and fear.





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  3. Wow, if that came from anyone else, I think it was plagiarized!

    Nicely said!

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  4. scott, are you still bullish?

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  5. Until this Friday the target to this up move is minimum 1706-1710.
    the maximum can be in the 1750-1760's if the current wedge (on daily chart) modifies it's rising angle.
    The minimum target of lower point of the daily wedge has been reached at 1673.60 (on 30 september).

    V.

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    1. it's more than 1750-1760 in the cards, V!
      take a look here!
      http://4.bp.blogspot.com/-uEjyba4hN2o/UkxW7PEA1eI/AAAAAAAARNo/XcP1xRY256o/s1600/spx10022013a.png

      Frank

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    2. why do you think that almost nobody wants to sell/short?

      take a look at trin, tick, nyad and other indicators!

      on a short term basis it's a bottom here!

      Frank

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    3. Lots of mixed signals Frank. TRIN and TICK are VST indicators, the CPC put/call is back down to 0.77 verifying the complacency. VIX is above 200-day MA so this is bearish. If VIX drops under the 200-day MA the bull case will be in business.

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  6. I have one message for all here.
    The bears keep pounding the table that the current situation on weekly charts is like the one in 2011.
    It's not!
    Please compare on daily and weekly charts the behaviour (bullish/bearish crosses) of 20 dma/wma, 50dma/wma, 100 dma/wma and 200 dma/wma.

    In 2011, all those MA's were creating bearish crosses that announced that something is preparing!
    Now , there's no such thing!

    Please, check yourself the charts with an unbiased eye and compare 2011 with the present!
    Don't let your money for shorting feed the end-of-year rally!
    What do you think will happen when the us gov. shut-down and the debt ceilling will be resolved ???
    (cause they always are - if US would enter in technical default that would have very profound implications world-wide placing USA in inferiority to Russia and China - Mr. Obama and Mr. Boehner will not allow that to happen, BELIEVE ME ! It would be the end of the world - financial, at least- as we know it if USA would enter in technical default! It won't! I know it! That's why the sellers don't have shorting power! Cause everybody knows that everything will be resolved, that's why!)

    Cheers,
    V.

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  7. Yes, bullllish!!

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