Thursday, May 28, 2015

Keystone's Midday Market Action 5/28/15

The on-again off-again Greece bailout deal drama continues. Greece announced an imminent deal yesterday creating a big rally in European and US stocks but today German finance minister Schaeuble says he is not aware of any deal and he is involved in the deal making. Greece is playing a dangerous game of chicken.  This morning Greece says a deal will be reached by Sunday but the markets did not eat that news bite with stocks subdued in Thursday trading. Chinese stocks are crushed and the action is explained at Keystone the Scribe's site.

Keystone's algorithm, Keybot the Quant is tracking utilities and retail stocks as the key market directional drivers currently. Bulls win with RTH above 76.40. Bears win with UTIL under 584.32 (its 50-week MA a critical broad market signal). UTIL is at 585.84 so the bulls laugh in the bear's face. However, RTH is 76.14 so the bears are laughing at the bulls. One of these two parameters should flinch to indicate market direction forward. If utilities remain bullish, and retail stocks bearish, then equities will float along sideways with a slight upward bias.

The SPX began May at 2086 with tomorrow the EOM and last day of trading. The price action over the coming eleven hours determines if the month finishes positive, or not. The SPX is currently printing 2116. The SPX is above the 200 EMA on the 60-minute chart at 2109 so the bulls are incontrol for the hours and days ahead. Bears got nothing unless they can send the SPX under 2109. The SPX 20-day MA is 2110.59 and 50-day MA is at 2098.87 two key support levels. The RUT (Russell 2000 small caps index) is at 1250 exactly at its 50-day MA support/resistance so this pivot will likely send the broad indexes in the same direction.

In addition to EOM tomorrow, key economic data is on tap including GDP, Chicago PMI and Consumer Sentiment.

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