Wednesday, November 20, 2013

Keystone's Morning Wake-Up 11/20/13; CPI; Retail Sales; FOMC Minutes

Chairman Bernanke cheer leads the stock market last evening but the futures are tame overnight sitting along the flat line. Interestingly, future Fed Chair Yellen tried to pump the stock market yesterday afternoon, to no avail; the 10-year yield actually moved up a touch to 2.72%. In addition, Fed's Evans said 'bountiful accommodation' is on the way. Is that what it has really come to? Fed shills out every day now promising bountiful joy with their easy money crack cocaine? Oy vey. The Fed jawboning and cheerleading may be losing its effectiveness. The FOMC Minutes are released at 2 PM today and will create a market pivot point. The minutes are after the September taper-no taper saga and will provide interesting insight. Fed's Dudley will pump the stock market at 10 AM and then Bullard at 12:10 PM. CPI and Retail Sales data are released at 8:30 AM. Retail Sales will set the tone for today--is it a happy holiday season thus far, or is the Grinch creating negativity? Business Inventories and Existing Home Sales are 10 AM where a market pivot point will occur. Oil Inventories are 10:30 AM.

Semiconductors were the big story yesterday but no one noticed. The SOX has dropped over -2% over the last 2 days. Watch SOX 497.09, now only 79 pennies above favoring bulls. If SOX 497.09 fails, the equity markets will sell off. Watch VIX 13.97 now showing signs of life. If VIX moves above 13.97, the equity markets will sell off in force. Watch UTIL 503.04. If UTIL moves back above 503.04, the bulls will be mounting a move higher for equities. Keybot the Quant remains short but if UTIL moves above 503.04 and the SPX moves above 1795.50, and both remain above, Keybot will likely flip long. If UTIL remains under 503.04, and SOX above 497.09 and VIX below 13.97, status quo, markets will stagger sideways.

The SPX could not decide if it wanted to be above or below the 1788 pivot yesterday so it decided to sleep there overnight and figure it out today. For today, starting at 1788, the bulls need to push 7 or 8 points higher, above 1795.50, and an upside acceleration will occur to 1800+ again. The bears need to push under 1785 to accelerate the downside. A move through 1786-1794 is sideways action. 
Key S/R is 1798, 1791-1792, 1782-1783, 1775, 1772, 1762-1763 and 1745.  November began at 1757. The 20-day MA is 1769.14Watch UTIL 503.04, SOX 497.09, VIX 13.97, and SPX 1795.50 and 1785 to determine market direction today.  Keystone bot NUGT yesterday opening a new long position. In general, the gold miners are one of the few attractive areas on the long side moving forward.

Note Added 8:28 PM:  The market antics continue. The FOMC Minutes create the market pivot point which causes stocks to drop, the dollar pops, the 10-year yield jumps to 2.80%, and gold drops over 30 bucks.  SOX failed the 497.12 bull-bear line in the sand this afternoon ushering in market weakness. Ditto UTIL now under 500. However, VIX remains below 13.97 helping bulls. Thus, bulls need either SOX 497.12 or UTIL 503.04 to stop the market downside while the bears will accelerate the market move lower if VIX moves above 13.97. Keystone took profits on DNDN exiting this long trade. Keystone added to the NUGT long trade opened yesterday. Gold and gold miners were beaten today. Miners are attractive moving forward.

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