Wednesday, December 4, 2013

Keystone's Midday Market Action 12/4/13

Lots of drama in the markets today. UTIL came down to test the trap-door again (reference this morning's chart) but the hinges must be rusty since the trap-door will not open. UTIL bounces off 483 again and moves higher. VIX moved above 15 but has fallen under again.  VIX fell under the critical 200-day MA at 14.38 (scroll backwards to reference the last VIX chart) making for happy bulls and the broad indexes recovered off the early session lows. Volatility recovered and VIX moved back above the 200-day MA.  The SPX is dancing around the 20-day MA at  1788.17. Current price print is 1788.98. Price is dancing among the key S/R levels at 1798-1799, 1796, 1791, 1788, and 1782. The LOD is 1779.02 so this takes on importance and would be the last stop before 1775.

The 8 MA remains under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead. The 200 EMA on the SPX 60-minute chart at 1777.06 is a useful market signal; so keep this in mind moving forward. For now, the SPX is above the 200 EMA signaling bullish markets for the hours ahead. Either the 8/34 cross will turn bullish, or the 200 EMA cross will turn bearish, bringing the 2 signals into agreement, and sending markets in the same respective direction. Market bulls got nothing unless they receive a positive 8/34 MA cross on the 30-minute and bears got nothing until they receive the negative cross with the 200 EMA on the 60-minute at 1777.

Copper has a big up day and the market bulls will be very happy if they push JJC above 39.67 since it will push equities higher. JJC is 39.49 causing market bearishness. Watch JJC 39.67, GTX 4809, UTIL 483, UTIL 491 and XLF 20.90. If any of these levels are crossed, equities will move in the same respective direction. If status quo remains, markets will float along sideways. Bulls need higher copper and utilities. Bears need lower commodities, utiliites and financials. The closing print for SPX in relation to the 20-day MA at 1788.17 will identify the winner and preferred direction forward.

Note Added 3:37 PM:  TRIN plummets to 0.57 adding bull fuel. VIX leaking lower at 14.54 but continues to cause bearishness. UTIL 489 nearing 491 which would help the bull case. JJC 39.46. SPX is at 1795 heading higher towards 1796 R. The ECB rate decision and press conference is before tomorrow's open so this is the last chance for traders to adjust positions. The euro, yen and dollar, and the stock market will move on the news. Draghi will likely announce another LTRO at some point forward (stimulus). The euro needs to drop to help Europe's manufacturing and export industries recover. If the euro drops, the dollar and yen will move higher which should affect stocks negatively. Markets remain a crap-shoot; the central bankers have destroyed price discovery. Next 2 days may be very wild trading. GDP is tomorrow morning and the Monthly Jobs Report and Consumer Sentiment on Friday morning.

Note Added 3:46 PM:  Here's the test of 1796 R. Bounce, or die.

Note Added 4:11 PM:  Price decides to close between 1796 R and 1791 S, at 1792.81, above the 20-day MA at 1788.36, so the bulls receive a feather for their caps and the fight will continue tomorrow, with ECB's Draghi weighing in before the opening bell.

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