Monday, March 24, 2014

Keystone's Midday Market Action 3/24/14

The March Seasonality article at the beginning of the month highlighted that last week is up 85% of the time and that played out as the seasonality dictated. Some backing and filling is occurring at the 1850-1880 level. The SPX printed a new all-time intraday high at 1883.97 on Friday but has not printed a new closing high in a couple weeks.

A Bradley turn date occurred on Saturday 3/22/14 so markets are in a window for a trend change or huge acceleration move. Considering the new all-time high print on Friday and now the reversal, the Bradley turn may result in a new trend lower for equities. Bradley turns do not forecast direction; only that a key inflection point will occur for markets within a few days plus or minus of the date.

The key S/R levels are highlighted this morning. Key S/R levels are 1884, 1878, 1874, 1868, 1859, 1855, 1848-1852, 1845-1846, 1843, 1838-1841, 1826-1832, 1808-1815, 1803, 1800 and 1796. Price is now fighting at the 1848-1852 support gauntlet. Bulls win above 1852. Bears win below 1848. Watch the 1859 level where March began. There are less than six trading days remaining in the month.

The 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets ahead. The SPX is above the 200 EMA on the 60-minute chart at 1852.30 signaling bullish markets for the hours ahead but price has dipped below this morning and is fighting along this key level as the day proceeds. Volatility is higher. The VIX is well above the 200-day MA which is a bearish market signal

Keybot the Quant remains short as markets remain a coin-flip. Bulls need lower volatility (VIX)Bears need lower retail (RTH) and commodities (GTX). The Keybot algorithm is now treating the retail sector as a top priority concerning market direction. Watch RTH 59.60 as a key bull-bear line in the sand. Very interesting. Whoopsies daisies. As this is typed, RTH slips under 59.60. See if this negativity holds. If it does, equities are going to take another leg lower. Equities will recover if RTH moves above 59.60 and heads higher. Biotech and pharma stocks are getting beaten from -4% to -8%. Looks like the bears are stretching their muscles to begin the week. Watch the SPX 1848-1852 support gauntlet, the 200 EMA cross on the SPX 60-minute chart at 1852.30 and RTH 59.60 to determine market direction.

Note Added 11:50 AM:  SPX 1852.30 testing the 200 EMA. You know what that means. Yes. Bounce, or die. RTH 59.45 should usher in more weakness.

Note Added 12:16 PM: Bounce. SPX bounced but now leaks lower for another test of 1852.30. Bounce or die. What will it be bulls and bears? Who wants it? RTH 59.56 with bulls pushing it higher only four pennies from the 59.60 bull-bear line in the sand. Bulls got nothing unless they can push RTH above 59.60.

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