Tuesday, May 6, 2014

Keystone's Midday Market Action 5/6/14; DIS

The market theatrics continue. Financials collapse at the opening bell with XLF under the important 21.82 bull-bear line in the sand creating market weakness. Keybot the Quant remains long but wants to go short. Internal programming rules are not yet latched in place to permit the move and the algo likely wants to see the SPX under 1867 to flip short today. The bulls must push XLF back above 21.82 or they got nothing and the equity upside will remain stalled. Bulls can also receive upside juice with RTH 58.83 and/or JJC 37.48. Without stronger financials, retail and/or copper, the bulls got nothing.

The bears need GTX 4940 and VIX 14.60 to gain further downside fuel. The Mouse House (DIS) reports earnings after the bell today. The BPSPX is at 70.20, above 70, which will provide a market buy signal if this remains in place at the close. The 8 MA is under the 34 MA on the SPX 30-minute chart, by a hair, signaling bearish markets for the hours ahead. This fight for the 8/34 cross, however, is ongoing. Watch it closely. Use XLF 21.82 as the rudder steering the market ship today. If the current status quo remains for the three stooges, XLF 21.82, GTX 4940 and VIX 14.60, then markets stagger sideways.

Note Added 10:15 AM:  XLF is at 21.72. GTX is at 4985. VIX is 13.55. The status is quo. SPX 1878. Markets stumble sideways with the SPX down about five or six points. The four major indexes, INDU, SPX, COMPQ and RUT are all negative but TRAN is sneaking positive. XLF 21.82 and the 8/34 cross on the SPX 30-minute tell you everything you need to know today. Bulls are fighting to retake these two important metrics. Note the dollar/yen at 101.58 collapsing from above 102 a couple hours ago. The stock market would be expected to be far lower on the move but the drop is not due to a stronger yen (which would create market selling) but rather due to the weaker dollar which is created from the stronger euro at 1.3933. Euro zone PMI's are better across the board creating buoyancy in the euro.

Note Added 11:04 AM:  Status quo with XLF, GTX and VIX as described above. Dow loses 100 points on the downside with the SPX down over 9 but no further downside is expected unless commodities drop or volatility rises above the targets provided. Keybot the Quant remains long but is champing at the bit to go short. Keybot likely needs the SPX under 1867 today to flip short. SPX is printing at 1876. XLF is puking at 21.70.

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