Thursday, December 19, 2013

Keystone's Evening Nightcap 12/19/13; GDP

The dollar/yen remains above 104 all day long so equities remain buoyant. The broad indexes are lower today except for the Dow printing new all-time highs. The BOJ may have a stimulus announcement that would directly impact the yen, dollar/yen and Nikkei and U.S. stocks overnight. Market bulls are fine if dollar/yen stays above 104. Bears will be happy if the dollar/yen starts dropping lower. The following 4 parameters are creating the bull juice; VIX 14.20, JJC 39.82, GTX 4807 and UTIL 477. The bears need at least one parameter to turn bearish to initiate the market downside. Keybot the Quant is long. If 2 of the 4 parameters turn bearish, and the SPX loses 1801, and stays under, Keybot will likely flip short.

For the SPX starting at 1810, the bulls only need one point, to touch the 1811 handle and the upside will accelerate slicing through the 1814 all-time high like a hot knife through butter and moving to 1820. The bears need to push under 1801 to accelerate the downside which will test the 20-day MA at 1796.48. A move through 1802-1810 is sideways. Quadruple Witching OpEx is on tap and a S&P and Nasdaq rebalancing so the volume will be strong with a potentially wild market day ahead. Watch the December starting number at 1805.81 since it determines if the month is up, or down. The SPX is above the 200 EMA on the 60-minute at 1784.88 and the 8 MA is above the 34 MA on the SPX 30-minute both signalling bullish markets for the hours ahead.

GDP is released at 8:30 AM. Kansas City Fed Mfg Index is 11 AM. Since the VIX is so close to the 14.20 bull-bear line in the sand, pay attention to volatility in the opening minutes. If VIX jumps above 14.20 and heads higher, the market bears will have a good day into the weekend. If VIX stays under 14.20, the bears got nothing and will limp into the weekend wounded. Watch the 4 parameters above, the dollar/yen 104 level, and SPX 1811 and 1801 to determine market direction.

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