Time for an update of the put/call. Traders are wringing their hands these days, yanking handkerchiefs from pockets and dabbing beads of sweat off the forehead, while waxing fear and worry over the stock markets. Don't believe it. The CPC drops down into the low 0.7's again showing the uber complacency remains in place. In other words, traders, analysts and other media pundits are saying they are worried but as soon as they wipe away the crocodile tears, they are long and strong to beat the band. The chart shows the late April top due to complacency. Then the fear ran rampant with the CPC jumping over 1.20 which identified the market bottom. At that time, with the high CPC, the traders and analysts were waxing worry and they truly were worried, and should have been worried. The high CPC shows that a few chaps may have even jumped out windows as the fear exploded higher.
Ever since the Draghi announcement late July pledging unlimited support for the euro, the markets have been in this central banker rally mode. Mid-August identified a market top, then mid-September identified a significant market top, which occurred, and it identified the 1475 high for the year thus far, then a market selloff. However, as the CPC moved up, and markets moved down, as would be expected, the bears ran out of gas and with the 'don't fight the Fed' mantra echoing in traders ears, the downside stalls and here we are today with another uber low complacency print. This 0.74 signals that the markets are placing a significant market top right now. Hang on to your hat.
Note the steady eddy move higher over the last few days. The markets could have continued an orderly selloff and printed a CPC over 1.20 which would identify a market bottom, but instead, the uber bulls are back in the game and the boat is fully loaded on the long side once again. The markets are not worth entering for longer term long positions until the CPC prints above 1.20.
Perform your soul-searching for any long positions since once the markets roll over you may not see these levels for a long time. Keystone mentioned for you to do your soul-searching a couple weeks ago at the previous low CPC prints, rarely do you get a second chance. Look at late April, that never gave you a second chance. Projection is for very limited market upside remaining and a significant market selloff to begin in earnest at anytime. Once the markets turn down, Keybot the Quant flipping short will lock in the move lower. 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.
The Spain bailout rumor supplies a strong pump to the markets. The euro pushes higher, now at 129.47, taking commodities and equities along for the ride. UTIL is over 475. VIX is under 16. The COMPQ is leading the broad market higher, bullish. Oil turns green now at 92.68. The SPX is testing that upper trend line highlighted on the 30-minute chart this morning at 1451-1452. The 8 MA remains above the 34 MA on the 30-minute chart, bullish. INVE is feeling some love today.
Note Added 10/2/12 at 9:42 AM: COMPQ is up +0.31% and SPX is up +0.28%, now moving up at about the same rate. COMPQ will dictate if the upside has any oomph, or, if it is a repeat of yesterday where tech starts to lag which will act as a weight on the markets. AAPL is up slightly. If COMPQ leads higher the bulls will be happy today. The 20-day MA is 1445.66. The SPX was rejected on its first attempt at the 1451-1452 trend line resistance printing a HOD thus far at 1451.52. Gold continues its fight for the 1780's.
Note Added 10/2/12 at 11:21 AM: The SPX is printing 1445.40 and the 20-day MA is 1445.50 so you can easily keep track of who is winning simply using this metric. COMPQ is leading strongly to the upside as compared to s SPX so this is a feather in the bulls cap today and should help to elevate markets. Likewise, the 8 MA remains above the 34 MA on the 30-minute chart, bullish.
Note Added 10/2/12 at 11:50 AM: UTIL is at 473.76 dropping perilously close to the 472.06 which will accelerate broad market selling. The VIX is at 16.38, the highs for the day, nearing the 17.25 level that will accelerate market selling. The SPX is dropping under the important 1441 level for today which shouild accelerate the downside. Bulls will be in big trouble if UTIL or VIX fail with the SPX under 1441, that may cause Keybot the Quant to flip short. The tension mounts. The 8 MA is about to stab down thru the 34 MA on the 30-minute chart. Tech is not leading the downside so this hints that the downside would not have a lot of oomph.
Note Added 10/2/12 at 12:06 PM: The 8 MA stabbed down thru the 34 MA on the SPX 30-minute chart indicating market bearishness for the hours and days ahead. The euro is holding up today at 129.42. Tech does not lead lower so the markets may travel in a sideways malaise from here.
Note Added 10/2/12 at 1:57 PM: Status quo. Whoa, what was that. The SPX just dropped from 1443 to 1440 and back up to 1442 in only four quick minutes. Market shenanigans. Watch your wallet. Keystone took profits on the RIMM trade exiting the trade completely. RIMM price is at resistance where it may jump the gap for an island reversal on the daily chart, but, no use in passsing up profits. The trade can always be reentered. RIMM is expected to continue moving up. Keystone added move AMD.
Note Added 10/2/12 at 2:08 PM: Note the low -1200 and -1000 TICK's at 11:30 AM and 2 PM, respectively, identifying exactly the two intraday bottoms so far for the broad markets. The SPX has a descending triangle vibe on the 5-minute chart with the baselline at 1441. See if 1441 holds, or not.
Note Added 10/2/12 at 2:35 PM: Note the -1000 TICK a few minutes ago. Keystone added more UWM. UTIL and VIX remain in the bull camp all day. Look at the COMPQ and SPX now both down the same amount at -0.29%, this is a big change today since tech was leading the broad markets to the upside--until now. If COMPQ starts to lead lower you will notice the markets deteriorating. For now, the bulls are hanging on. The 8 MA remains under the 34 MA on the 30-minute chart, bearish. Price is dropping under the 1441 baseline of the descending triangle on the 5-minute chart. If the bears want to push it over the hill, now is the time.
Note Added 10/2/12 at 3:40 PM: The 8 MA remains under the 34 MA, bearish, but UTIL 472.06 and VIX 17.25 held today in the bull camp, and tech never led the downside today (AAPL is up), thus, a standoff, with the SPX sideways thru 1440-1444 for the last four hours. The 20-day MA is 1445.39, use that as a gauge as to who takes home the flag today, bulls or bears. The current print is 1443.36 so the bears are holding the flag with fifteen minutes remaining. Trannies remain weak. The euro held up today now printing 129.18 no where near the 128.75 and 128.30 danger levels so this was another factor hinting that the downside would not have oomph.
Note Added 10/2/12 at 4:05 PM: Markets close off the lows. The SPX closes at 1445.75, twenty-four pennies above the 20-day MA so the bulls receive a late day feather for their caps. The metrics mentioned in the previous paragraph remained in place thru the close. UTIL 472.06 and VIX 17.25 are running the show. Keystone added more CEP at the close (thinly traded dangerous speculative stock).
The RBA (Aussies) cut rates by a quarter point so the commodities and equities markets are happy. Rumors of a Spain bailout imminent is also pumping the futures higher. The S&P's are up about eight. The European news is mixed, however, since Rajoy himself said minutes ago to not expect a bailout request right away, but, the markets remain elevated. MOS, a key bellwether for the ag sector, misses earnings. Watch the COMPQ and SPX percentages today to see if tech is leading the upside, or not. Yesterday's bounce at the open occurred without the COMPQ leading so the move higher was suspect and sure enough, the markets ran out of gas and drifted lower. AAPL action is important moving forward since it greatly impacts the SPX and especially the Nasdaq, and that over 90% of the funds own Apple, what happens if they want to exit the burning theatre, or more correctly, genius bar, all at the same time? Watch to see if tech leads higher today, if so, the 1460's are on the way, if the COMPQ lags again, like yesterday, markets will leak lower all day long.
The utilities sector and volatility are the two key market drivers right now. Watch UTIL 472.06 and VIX 17.25, both are contributing bullishly to markets now. If UTIL drops under 472.06, or if the VIX pops above 17.25, the broad market selling will increase. In addition, if one of these two turn bearish, and the SPX falls under 1441, Keybot the Quant, Keystone's algo, will likely whipsaw back to the short side. If UTIL remains above 472.06 and VIX below 17.25, the bulls will be on easy street today, sipping Bernanke's booze all day long. For the SPX today, the bulls need to punch up thru 1457 to accelerate the upside which will penetrate the 1460's in quick order. The bears need to push under 1441 to accelerate the downside. A move thru 1442-1456 is sideways action. SPX S/R is 1476, 1474.51, 1472, 1468, 1465.77, 1465, 1461, 1460, 1457, 1453, 1450.49 (10-day MA), 1447, 1444, 1443.47 (20-day MA), 1441, 1440.24, 1440, 1438, 1435, 1434.36 (200 EMA on 60-minute chart), 1433, 1431, 1429, 1427, 1426.63, 1424.
Watch the 8 MA and 34 MA cross on the SPX 30-minute chart, now bullish, to see how that plays out this morning. There are no economic data releases today except for the motor vehicle sales numbers that will hit in dribs and drabs. Watch the euro, now over 129. Over 128.75 and the market bulls are happy. Under 128.30 and the market bears will be happy. UTIL 472.06 and VIX 17.25 will dictate market direction today.
The blue sideways triangle was in focus yesterday and the breakout move turned out to be up with price jumping over 1457 before pulling back down. The red triangle is very symmetrical and it would project a 20 handle move which targets 1442 + 20 = 1462. The chart shows a tweezer top (small circle) after the opening bell with negative divergence that helped create the downside although the MACD line would be agreeable to another thrust upwards, and the futures are up seven at this writing. The chart is weak and bleak as shown by the red lines so the chart is actually wanting to see further downside. As usual, the 8 MA and 34 MA cross will lead the way; the 8 is above the 34 so the bulls are in charge. An opening pop will help to slow that downward stab the 8 MA is now exhibiting, watch to see if the 8 crosses down thru the 34 MA today to place the bears back in charge, or not.
The black lines show the major S/R levels at 1468, 1460, 1447, 1440 and 1424. Note the upper trend line over the last week which may serve as an upside target this morning for price to test 1452. Also watch the 10-day MA at 1450.49 and the 20-day MA at 1443.47. Projection is sideways to sideways lower prices moving forward. 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.
The Bradley turn dates are highlighted over the last year. Note the market inflection points that typically occur on these dates. The remaining Bradley turn dates for 2012 are 9/30/12, 10/9/12, 11/1/12, 11/14/12, 12/22/12 and 1/20/13. The bold date is a major Bradley turn date. The Bradley turns do not predict direction, only that a market inflection point may occur. Sometimes the moves result in an acceleration move either up or down such as the major turn on 12/28/11 which resulted in a continued upside acceleration move for markets.
The major turn date on 3/16/12 calls the market top during springtime this year. The major turn on 6/12/12 identified the market bottom as rumors of central banker stimulus started to circulate. Saturday, 7/28/12, was also a major Bradley turn which further identified the summer market bottom as Draghi promised to support the euro by all means necessary on 7/26/12, which accelerated the rally.
The next turns were 8/14/12 and 8/25/12, and only a day ago on 9/30/12. Note the market top for the 8/14 date, bottom for 8/25 date, and now we are in the 9/30/12 window, which may result in a bottom with a move upwards for a day or few. Interestingly, however, is that today we move into a double window since the 10/9 date now overlaps. Thus, hang on to your hat. The market pop now may occur as a top and the 10/9 window affects a move back down. The Bradley turns are simply another tool to follow when trading. The blue squares show how markets obey the dates more often than not.
A wild end to the trading year may be on tap due to five turn dates occurring in the remaining three months time. Thus, expect choppy markets moving forward especially if volatility increases. Watch the action this week to see how this current 9/30 Bradley turn resolves itself. Then stay alert thru 10/16 to see how the 10/9/12 turn resolves. For more information, reference the Bradley Siderograph, Donald Bradley, Peter Eliades and Arch Crawford web sites. 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.
In 2010 into 2011 as the QE2 money pump drove markets higher, the green dots show higher highs in the Trannies confirmed by higher highs in the Dow Industrials, and visa versa, the upside rally was real and running strong. In late April 2011, the Dow printed a rising wedge, negative divergence and overbot conditions, that created the expected spank down. The trannies, however, ran higher into July 2011. The Dow had already rolled over, thus a Dow Theory non-confirmation occurs, and, the result was the waterfall crash in August 2011. Chairman Bernanke then saved the markets with Operation Twist while the ECB's Draghi got into the money printing business as well with LTRO1 and 2 during late summer and Fall 2011.
The upside party started again due to the stimulus pump, and higher highs were printing once again. The blue square is where the trouble began. Note how the Dow prints higher highs with exceeding the highs from a year earlier as well. The Trannies, however, peaked in February 2011 and has yet to see those highs again. This created another non-confirmation since Trannies would not confirm the Dow rally. Hence, markets rolled over and crumbled lower this year. Then, another stick save as usual, with the stimulus rumors starting early in the summer, and Draghi promising to do whatever it takes in July, the markets bounced again with the power of the printing press. The Dow continues along to print higher highs over the last few weeks, however, the Trannies continue moving lower. Looks like its time again for a roll over and the weak and bleak indicators for the Trannies do want lower lows, as well as the Dow indicators exhibiting negative divergence wanting to see price roll over. Projection is lower prices moving forward. 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.
Current signal remains valid until a change occurs.
10/1/12: Keybot the Quant flipped to the long side at 10:00 AM EST at SPX 1453; for the year thus far, SPX Benchmark is up 15.5%; Keybot is up 15.3%; Keybot actual trading is up 8.9%. Stay alert for a whipsaw.
9/17/12: Keybot the Quant flipped to the short side at 2:11 PM EST at SPX 1460; for the year thus far, SPX Benchmark is up 16.1%; Keybot is up 14.7%; Keybot actual trading is up 7.7%.
9/4/12: Keybot the Quant flipped to the long side at 2:13 PM EST at SPX 1402; for the year thus far SPX Benchmark is up 11.5%; Keybot is up 10.6%; Keybot actual trading is up 3.5%.
9/4/12: Keybot the Quant flipped to the short side at 10:34 AM EST at SPX 1399; for the year thus far SPX Benchmark is up 11.2%; Keybot is up 10.8%; Keybot actual trading is up 3.8%.
8/3/12: Keybot the Quant flipped to the long side at 9:30 AM EST at SPX 1377; for the year thus far SPX Benchmark is up 9.5%; Keybot algo is up 9.2%; Keybot actual trading is up 2.5%.
8/2/12: Keybot the Quant flipped to the short side at 11:42 AM EST at SPX 1360; for th eyear thus far SPX Benchmark is up 8.1%; Keybot algo is up 10.4%; Keybot actual trading is up 5.8%.
7/26/12: Keybot the Quant flipped to the long side at 9:30 AM EST at SPX 1349; for the year thus far SPX Benchmark is up 7.2%; Keybot algo is up 9.6%; Keybot actual trading is up 5.4%.
7/23/12: Keybot the Quant flipped to the short side at 9:30 AM EST at SPX 1348; for the year thus far SPX Benchmark is up 7.2%; Keybot algo is up 9.7%; Keybot actual trading is up 8.8%.
7/13/12: Keybot the Quant flipped to the long side at 9:38 AM EST at SPX 1342; for the year thus far SPX Benchmark is up 6.7%; Keybot algo is up 9.2%; Keybot actual trading is up 8.8%.
7/6/12: Keybot the Quant flipped to the short side at 9:57 AM EST at SPX 1354; for the year thus far SPX Benchmark is up 7.6%; Keybot algo is up 8.3%; Keybot actual trading is up 6.9%.
Keystone's proprietary algorithm, Keybot the Quant, continuously posted in the left margin, flipped back to the long side at 10 AM at SPX 1453. The markets are very erratic and unstable currently. Stay alert for a whipsaw in the hours and couple days ahead. More information is found on Keybot's site:
http://www.keybotthequant.blogspot.com
Watch the utilities. If UTIL stays above 472.06 and the SPX moves above 1447, Keystone's algo, Keybot the Quant, continually posted at the left margin, will likely flip long. If UTIL is over 472.06 but the SPX cannot move above 1447, the markets move sideways and Keybot will likely remain short. If UTIL drops under 472.06, the broad market selling will accelerate. Watch the euro, below 128.30 is bear friendly, above 128.75 is bull friendly. The euro is now at 129.24 after printing near 128 overnight. The futures point towards a test of 1447 after the opening bell. As the markets pop, note if the COMPQ leads the SPX higher, or not, to determine if the bulls have oomph. Markets may idle for the first half-hour since the ISM hits at 10 AM and this will immediately push the markets one way or the other and set the tone for today. Chairman Bernanke speaks at lunch time. If Moody's downgrades Spain, the euro and markets will drop. If the news on a Greece bailout is encouraging, or if Spain asks for a bailout, the euro and markets will pop.
Note Added 10/1/12 at 10:38 AM: Lots of excitement this morning as was anticipated due to the buoyancy in the utilities sector as described in the final minutes of trading on Friday. UTIL is well over 472, now printing 477 so it was all systems go for bulls. The SPX took out 1447 but that was not convincing enough. Once 1450 gave way the bulls took over control. Keystone's algorithm flipped to the bull side at SPX 1453, but remain cautious moving forward. The move is very shaky since the underlying markets portray a much greater negative picture. It would not be surprising to see the algo flip back to the bear side this week. The euro is over 129 which beats the dollar lower and allows commodities and equities to move higher. The 8 MA remains above the 34 MA on the SPX 30-minute chart, and price also broke up and out of the sideways triangle as charted this weekend, so that continues to favor bulls for the hours and days ahead. A test of SPX 1460-ish appears likely today or tomorrow. Note the serious lag of the COMPQ versus the SPX indicating that the bullish rally move today does not have a lot of gas, tech is not leading the upside. The bulls are driving the bus but the move today is not yet all that convincing. SPX resistance above is 1453, 1457, 1460, 1461, 1465, 1465.77 and 1468. SPX 1460 and 1468 are very strong R. Keystone bot UWM opening up a new long position.
Note Added 10/1/12 at 11:43 AM: VIX is flat. Tech is not leading the market upside today. PM's are coming back down after printing at or near highs for the year. Gold continues the fight at the critical 1780 which would light the way to 1820's. Oil is weakening. NYSE volume is a a run rate of about only 84% of a day's average volume expected. These metrics are not what would be expected with such a huge up day. Note the +1200 TICK that occurred at the 10 AM on the better than expected ISM. TRIN is 0.73 with a low at 0.58 so the buying is enthusiastic today, probably more due to the shorts covering than anything. NYAD spiked to +2000 which is also an uber bullish move. The TICK, TRIN and NYAD would be agreeable to a pull back move for markets in the day or two ahead to relieve the uber bullish numbers today. SPX is moving thru the 1453 and 1457 support/resistance zone. Chairman Bernanke is wiping the jelly donut stains from his necktie as he prepares to speak within the hour. Bernanke will likely either send the SPX to 1457 and 1460, or, down thru 1453 and 1450.
Note Added 10/1/12 at 11:58 AM: VIX turns positive. Euro trying to hold 129. SPX drops under 1453 support. Support below is 1451.28 (10-day MA), 1447, 1444.
Note Added 10/1/12 at 1:46 PM: Look at the VIX go, now at 16.31, printing highs for the day. The markets and the VIX only move in the same direction about 10% or less of the time, therefore, one of them is wrong today. The VIX 17.25 level is a bull-bear line in the sand, if VIX moves above 17.25 the broad indexes will sell off substantially. UTIL has a 475 handle remaining above the important 472 level for this week. RUT (Russell Small Caps), COMPQ (Nasdaq), AAPL and TRAN (Trannies) are all negative.
Note Added 10/1/12 at 3:33 PM: Markets keep leaking lower, further support below is 1444, 1443.41 (20-day MA), 1441, 1440.24, 1440, 1438 and 1435. VIX is printing 16.35 with the 17.25 level identifying significant market trouble. The euro is 1.2883 nearing Keystone's danger range of 128.30-128.75 discussed this morning. Utilities have a 473 handle nearing the UTIL 472.06 that will trigger significant market trouble. If the bulls can keep UTIL above 472.06 and VIX below 17.25, they can float markets higher. The 8 MA is nearing a cross of the 34 MA on the SPX 30-minute chart to signal bearishness ahead but the cross may not occur until tomorrow morning, if it occurs.
Note Added 10/1/12 at 4:05 PM: UTIL closes at 474 only two points from danger which will reinitiate the market downside, ditto VIX 17.25. The SPX closes on top of the 1444 S/R level, below the strong 1447 level. Very odd market behavior today; it had that feel from the get-go. Lots of cross currents and instability. As VIX moves higher note the larger point swings intraday. Stay very alert this week. Watch your wallet.
The euro requires attention since up euro means the broad indexes move up, down euro means the broad indexes move down. This is due to the dollar moving opposite the euro so a weak dollar boosts commodities, copper, gold and equities and a strong dollar slaps the commodity gang. The red inverted H&S pattern remains in place with head at 120.5, neck line at 127, 6.5 difference, thus, 127+6.5 = 133.5 target. The blue inverted H&S would target 136-137. These inverted H&S's are suspect, however, considering the chart as a whole. The short red lines show how weak the indicators are wanting to see lower lows in price. The ADX shows how the strong upward trend petered out and is rolling over.
Strong support/resistance exists at 128.30. This also forms a confluence with the 200-day MA at 128.33. This is a very important line in the sand for bulls and bears. If bullish, you want the euro to stay above 128.30, move back above 129 and fulfill the red inverted H&S pattern. If bearish on the markets, you want to see the euro collapse thru the 128.30 level and head lower, this will take commodities and equity markets with it. Last evening, the euro dropped down to the low 128's but recovered a few hours ago.
The upper BB was violated and price already came back to the 20-day MA, which is the middle BB that serves as an intial target, at 128.73, so now price must decide if it continues along to touch the lower BB, or, if it bounces off this 128.73 level, so watch this as another important indication. In a nutshell, the market bulls win if the euro moves above 128.75 and higher, the bears win at 128.30 and lower, with no mans land in between. The black dots show how price prefers to move from the upper BB to the lower and back again. The lower BB has not been touched in two months which hints that a touch is long overdue. An island reversal would occur if price comes down to 127 then falls thru the gap to print at 126.5 and lower. Projection is for a lower euro in the days ahead, perhaps on news of a Moody's downgrade of Spanish debt, to fulfill the chart negativity, but price should then bounce again, perhaps on news of a Spain bailout, then move sideways to sideways lower for the weeks and months ahead. 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.
