Monday, August 25, 2014


US futures are +9 remaining elevated all night long into the opening bell. Global traders are excited that ECB President Dragi will likely announce new stimulus in the near future. The central bankers are the market.

Trading begins with the SPX leaping higher to 1998 in the opening minutes within two points of the psychological 2K level. Surprisingly, the VIX is up with the SPX up so one of them is wrong. The MIB (Italy) is up -1.5% and European markets are printing at the highs firmly above +1% and higher on Draghi joy.

At 9:47 AM, traders are on pins and needles waiting for the SPX 2000 to print. The vendors have already printed SPX 2000 hats so how could the index deny the party? The new all-time high is 1998.26 printing at 9:33 AM. The SPX takes out the new highs at 9:50 AM with price only one point from 2K. Dollar/yen 104.01. The 1999 handle prints at 9:56 AM. The HOD and new all-time record high is 1999.71. The TRIN is at 0.80 clearly favoring the bulls today. The Dow is up over 100 points at 17105 above 17.1K.

At 10 AM, New Home Sales are down -2.4% well under the +7.4% expectations with 412K sales under the 422K last month. The data conflicts with the housing sector news last week which was universally positive helping create the up move in equity markets. The broad indexes stutter sideways after the data with the SPX now only pennies from 2K. HOD 1999.83.

At 10:10 AM EST, the SPX prints above 2000 for the first time in history. The hat vendors are relieved as the imprinted 2K hats are distributed. The SPX crossed the 1000 price level 16 years ago on 2/2/98. The energy sector is the top performing sector over the 16-year period. The remarks from ECB President Draghi at Jackson Hole hinting at pending stimulus fuels the market upside. The central bankers are throwing one heck of a near six-year party.

The SPX retreats quickly after the 2K print now at a 1998 handle at 10:26 AM. The day is young and it will be interesting to see if follow-through occurs, which would be expected once a psychological threshold is overtaken. Volume is light again just like each day of the rally last week. Last Friday's volume was at the lowest levels of the year. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:17 PM: The SPX 2000 hats were donned at 10:10 AM with the SPX above 2K, however, shortly after noon time today, the hats had to be returned as the SPX fell under 2K and closed below but at a new all-time closing high at 1997.92. The HOD and new all-time record intraday high on the SPX is 2001.95; above 2K for the first time in history. The 2002 is a palindrome just like the prior top about one-week ago at 1991. Interestingly, the March 2009 bottom closing print was 676 another palindrome. The SPX 30-minute, 1-hour and 2-hour charts are set up with or setting up with negative divergence. The daily chart still has long and strong juice as mentioned last week. A price move to 2002 to confirm negative divergence across all indicators for the minute and hour charts should begin a down move. The charts were rolling over Friday but the central banker juice sent equities higher and the news is being absorbed into the charts now. Watch for the negative 8/34 MA cross on the SPX 30-minute. If copper continues higher so will markets.

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