Thursday, October 3, 2013

Keystone's Morning Wake-Up and Midday Market Action 10/3/13; Shutdown Continues

The political baby talk continues with the president, Senate and House all talking past each other with no one listening. The CR continuing resolution debate, resulting in the current government shutdown, will likely flow into the debt ceiling limit talks where both are handled in one package. Therefore, this daily theatre may continue for a couple weeks. S&P futures are below fair value all night long but are recovering into the opening bell. Keybot the Quant is short but wants to flip long and if the SPX prints above 1694 and higher, and stays above today, the algo will likely flip to the long side. The broad market direction is most influenced by XLF 20.01, JJC 20.13, UTIL 483.53 and GTX 4889 currently. Financials, copper and utes are creating market bullishness while commodities are creating bearishness, respectively. Thus, the bears need to attain either XLF 20.01, JJC 40.13 and/or UTIL 483.53 to stop the upside, if not, they will fold like a cheap suit and the bulls will start running the SPX over 1700. GTX 4889 would supply more bull fuel.

SPX begins at 1693.87. The 20-day MA is 1691.97. The 200 EMA on the 60-minute is 1685.59 and the SPX is above signaling bullish markets for the hours ahead. The 50-day MA is 1679.99. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. VIX is 16.60 and remains above the 200-day MA at 14.45 which is a very market bearish signal. CPC put/call ratio drops to 0.77 verifying the ongoing rampant trader complacency. ISM Non-Mfg Index and Factory Orders hit at 10 AM which will create a market pivot point. Natty Gas Inventories are 10:30 AM. Fed's Fisher, a hawk, speaks at 12:30 PM and Fed's Powell speaks at 12:45 PM. Markets are typically bullish from the last day of the month through the first four days of the new month. Markets are typically bearish through the new moon which occurs tomorrow. Markets are in a Bradley turn window where a major market directional move should occur over the coming days. Keystone's Eclipse Indicator continues to point to this time period as having potential for a large market sell off.

Equities remain a coin-flip. Watch XLF 20.01, JJC 40.13, UTIL 483.53, GTX 4889, SPX 1694, and the 200 EMA and 8/34 MA cross, as described above, to determine market direction today.

Note Added 9:58 AM:  Flip-flop day. XLF drops under 20.01 now helping bears. Ditto UTIL collapsing under 483.53. But the bulls flex muscles and take GTX above 4889. What a circus. Markets are erratic and unstable unable to choose a firm direction. JJC remains above 40.13 helping bulls.

Note Added 10:01 AM:  Factory Orders data is cancelled due to the government shutdown. The ISM Non-Mfg (Services) data is weaker than expected. Stocks drift a touch lower. Use XLF 20.01, JJC 40.13 and GTX 4889 as the equity directional guides for today. Equities will weaken significantly if JJC loses 40.13. If XLF moves above 20.01 and the SPX above 1694, Keybot the Quant will likely flip long, but the SPX is currently printing 1683 and financials are weak. TRIN is 0.93 favoring bulls today. The SPX drops under the 200 EMA on the 60-minute at 1685.56 signaling bearish markets for the hours and days ahead. Perhaps the SPX 1671-1674 gap will come into play today? Watch the 50-day MA at 1679.92.

Note Added 10:33 AM:  The 8 MA stabs under the 34 MA on the SPX 30-minute chart signlaing bearish markets for the hours ahead. The SPX loses the 50-day MA. XLF is 19.84. JJC is 40.07 and lost the 40.13 bull-bear danger line. UTIL 478 and serious market downside will occur if UTIL loses the 472-ish level. GTX is 4871 losing the 4889. The bears are pushing hard with the bulls off balance and starting to fall down the steps. The 50-day MA is at 1679.86 and is likely the major battle zone for today. Bad things will happen to equities under 1680. The 1671-1674 gap is in play. The SPX is currently printing 1679.44. TRIN 0.59.

16 comments:

  1. http://www.flickr.com/photos/75188609@N07/10071628193/

    break of trendline will be a leap from a tall building -

    I favor it holds and the set up here is likely to be bullish to 1705 and then we'll see. A failure on the coming bounce would be VERY BEARISH in the intermediate term

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    Replies
    1. if we get another claw back day it is very unlikely that the 87 scenario I've been seeing floated will occur

      another uber bullish candle is going to wind the resolution spring so tight that the short squeeze will look like a bottle rocket! lol

      hold on to your shorts (pun intended) we are in for Mr Toads Wild Ride to 1700

      Delete
    2. Thank you Scott.

      V.

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    3. that IS a bottle rocket in my pants AND I am sure happy to see ya! LOL

      what a criminal enterprise this world has become

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    4. this all about scaring people outta positions so the next wash rinse cycle can start

      Delete
  2. http://stockcharts.com/c-sc/sc?s=%24SPX&p=D&yr=0&mn=9&dy=0&id=p46533588084&a=234727006&r=562

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    1. Scott,

      Do you think we hold now, or go down to 1660's? Some pro trader's say we go down, but it will take a few days...any thoughts?

      Delete
  3. 1665 is possible and still be bullish along the lines of Carl's chart
    http://www.financialsense.com/sites/default/files/users/u169/images/2013/1002/02.jpg

    that also fits a diagonal price target...my charts are saying this is pretty much the half cycle bottom and it should bounce. Obviously there is a huge emo factor in play so???

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  4. http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=5&dy=11&i=p97519477447&a=168141005&r=1380835799793

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  5. pretty important chart for anyone long GDX...

    http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=7&dy=3&id=p32010859914&a=295558965&listNum=59

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  6. KS,
    What is your take on ISRG?
    They got bump down due to last quarter's earning and trade at 52-wk low.

    ReplyDelete
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    1. You need to say what you think first. It appears to be basing but weekly chart wants to see a little basing to occur still yet. Note the gap at 357 from 2011. It would be a speculative trade. A scale-in approach for a long may be viable with an entry at 357 then 347 then 337. It may bounce from the 357 gap. There are better stocks to play on the long and short side than this one. ISRG will probably take a VST bounce but then drop down again probably to fill the gap maybe a bit lower then it may have a more substantive bounce to 380-ish.

      Delete
  7. The US political class should get together and strike a deal until the end of Friday.
    On SPX charts the market is at an important support - if that is lost next week will be true financial mayhem that was not seen for a veeeeeeeeeeeeeeeeeeery long time! (not months, but years!).
    So: are Obama and Boehner intelligent enough to not disrupt the US economy ?
    The rulers should be chosen to make a country rise, not crumble!
    The US gov. shut-down must end on Friday!
    If this doesn't happen, not even FED and it's mother, sister and brother won't save the situation, not locally in US but globally.

    So those motherf*er US politicians should get to their senses and do the right thing: negociate. That's what true politicians are: negociators!
    If we get to the next week without a deal it won't be ok for nobody, dems or republicans!
    The US citizens will be very pissed off!

    V.

    ReplyDelete
    Replies
    1. It's going to be okay V.
      We have shutdown for 3 weeks in the 1990s.
      No worries, just don't get emotional and live with it:)

      Delete
  8. I have an idea.
    If by chance a US politician reads this blog, I have an idea.
    Modify the US Constitution and ELIMINATE THE DEBT CEILING CONCEPT!
    Eliminate it as nominal level (i.e. $16.7 B) and modify it into US gov. debt/GDP % ratio.
    Otherwise this circus will continue infinitely! Every 1-3 years we will get a new circus portion!
    If US really is in an industrial revolution and in an energetic revolution the gov.debt/GDP ratio will get down, thus allowing higher levels of debt, thus being created a virtuous cycle, not a vicious cycle!

    Heeellooooooo!
    Is there anybody there?
    Modify the debt ceilling concept! Modify it into a % ratio gov.debt/GDP or eliminate it totally!

    V.

    ReplyDelete
    Replies
    1. All that is what gets everyone in trouble V. It would be like running your credit card to the limit, then it is raised, so you run it to the limit again, then it is raised again, and so on. There is no incentive to stop spending and partying, until, of course, it all ends in collapse. They need to stop raising the debt ceiling but this is not the way to do it at the 11th hour. They could raise it, then after that figure a way to make it permanent and force Congress to limit spending, but, this will not happen, it will be raised, and create more spending and we keep going until, collapse.

      Delete

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