The conspiracy theorists are out in full force responding to the 7.8% unemployment rate today. Former GE chairman Jack Walsh jumps on the conspiracy bandwagon tweeting, "Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers." Avoiding the politics and sticking to the markets and the technicals, the futures are now up seven.
The bulls need to punch thru and hold SPX 1463 to ignite the move to test the strong resistance at 1468; then the next strong R is 1472. Bears need to spank price down from 1463. When the month starts with all up days, a couple down days would be expected now. Also of interest is that the SPX market top occurred on 10/11/07 at 1576 and the market closing top occurred on 10/9/07 at 1565. These five-year anniversaries occur next week. Bulls will bounce markets at the open. See if they have oomph by watching the COMPQ versus SPX relationship. Remember, watch UTIL 481.36 today.
In all the excitment this morning, Keystone forgot to mention the Nifty Index (India) was halted for 15 minutes after it plummeted 16% in a heartbeat in a mini Flash Crash overnight. Considering the KFT trading problems this week, these flash crash incidents are now occurring globally and with frequency. Watch your wallet.
Note Added 10/5/12 at 9:38 AM: SPX immediately tags 1468-1469 fulfilling the ascending triangle pattern discussed late day yesterday. VIX is under 14. UTIL is 481.87. The SPX and COMPQ are up the same percentage so tech is not driving the upside, but it is not significantly lagging either. AAPL is down a couple bucks. SPX 1472 is the next strong resistance above. SPX S/R in this area is 1476, 1474.51 (intraday HOD for 2012), 1472, 1468, 1465.77 (closing high for 2012), and 1465. The bulls are off and running today. Note that the SPX will print a new closing high today if it stays above 1465.77. Look for some action around this number today. TRIN is 0.45-0.66 today, uber low which will want to see a snap back market selling move either today or Monday to relieve this uber positivity.
Note Added 10/5/12 at 9:56 AM: VIX 14.02. TWM is looking attractive, now at 26. There are two +800 TICK's so far but no uber +1000's or higher. Perhaps an entry into TWM at 25.78 may prove attractive when/if the SPX would test 1472 and the TICK machine would print +1000. Keystone will let a limit order sit in place at TWM 25.78 while the carpet of oak leaves receive Fall clean-up attention.
Note Added 10/5/12 at 11:31 AM: The euro is 1.3048 well above 1.30, bullish. UTIL is 482.25. VIX is 14.33. SPX HOD is 1470.96 not yet testing the strong R at 1472 but price remains above the closing high for the year. SPX continues to play around at the strong 1468 support/resistance level. Oil printing near lows; WTIC 89.62 and Brent 111.23. TRIN coming up to 0.9 working up towards the neutral 1.0 as a few more sellers come into the markets. Tech is lagging the broad markets on this upside move so that hints that the move does not have oomph. The market maker came down to snag Keystone's TWM 25.78 so now there is a new long position open with TWM which is a short small caps ETF. The TICK machine printed a high at +941 at 10:20 AM-ish, which was not suprisingly, the high in the SPX today at 1471. The bulls are continuing to dance on the table tops. UTIL is above 481.36 so this is a large feather in the bulls cap but there is lots of trading remaining today.
Note Added 10/5/12 at 11:51 AM: SPX comes down to back test the closing high for the year at 1465.77. Price bounces so this support held on the first test. AAPL is down 11 bucks.
Note Added 10/5/12 at 2:11 PM: The oak leaves are winning the battle today. Just as the birds fly overhead of a washed car, the wind always increases when the Autumn leaf-blowing is attempted. Nothing that a pumpkin pie recharge can't cure. UTIL is negative now printing 480.58. This is under the important 481.36 that will become applicable for all next week. Bears salivate at the development in this utilities sector since it will cause market bearishness but there is still lots of trading time remaining in today's session. The SPX fell thru the 1465.77 and 1465 support. The next support is 1461 and then back to the very strong support at 1460. The Nasdaq turns negative. VIX 14.24. TICK just printed a -800 so Keystone exited the ZSL trade taking profits, also exited the TWM trade that was entered today taking profits using it as a day trade. Will look to reenter both by the close.
Note Added 10/5/12 at 3:00 PM: Note the -1200 TICK. Keystone bot TNA opening up a new long trade, this is a leveraged long small caps ETF. Perhaps the low TICK may identify a bottom in the very short term minute time frame. TRIN is at 1.29 favoring the sellers and bouncing back from the uber low reading late day yesterday and early today. The SPX is fighting for the strong 1460 S/R. UTIL is 480.10.
Note Added 10/5/12 at 3:12 PM: Note the -1200 TICK spike lower. Keystone bot more TNA at that that spike. This is a countertrend trade trying to take advantage of the -1200 TICK's (-1200 signals an uber bearish sentiment). The trade also helps balance against all the ongoing short trades.
Note Added 10/5/12 at 3:35 PM: A -1000 TICK occurs a few minutes ago. TICK is printing -900 as this is typed. The bears are pushing hard late day. UTIL is 479 now setting up very bear market favorable action come Monday.
Note Added 10/5/12 at 3:59 PM: Keystone took the smidge of profits on the TNA exiting and using it as a day trade (on the +1000 TICK a couple minutes ago). Also bot TWM reopening that long trade. Also bot DNDN opening a new long trade. UTIL finishes under 480 which is very bearish for markets come Monday.
Note Added 10/6/12 at 6:43 AM: The SPX punched thru the closing high at 1465.77 intraday but could not close above. The bulls ran out of gas. The ascending triangle on the 5-minute chart worked out in textbook fashion tagging the 1468-1469 level as highlighted Thursday evening. The weakness in the utilities sector is very important. If you recall last Friday, the opposite occurred. Markets were weak all week long since UTIL was under its level of interest at 483 but at the close last Friday UTIL closed above 472, which was the number of interest, identified by Keystone's algo, for this past week. The bulls were in clover from Monday on since UTIL remained above 472. For the new week ahead, UTIL 481.36 is the number to watch all week long. Write it on a sticky note and place it next to the computer. As the utes faded Friday, the market bears are happy to see UTIL close under 481.36. The market bears will be in the driver's seat come Monday morning, as long as UTIL stays under 481.36. If the bulls move UTIL above 481.36 after the opening bell on Monday, the fix is in, and the market bulls will remain firmly in charge. If UTIL stays under 481.36 and the SPX drops under 1457, only three points lower, Keybot the Quant, Keystone's algo, will likely flip to the short side.
Friday, October 5, 2012
Keystone's Morning Wake-Up 10/5/12; Monthly Jobs Report
The SPX is up for the first four days of October. Typically, the first days of the month are buoyant, especially the start of the quarters (now in Q4), as new money comes into the markets. Interestingly, when markets are up the first three days in a row, the next two days are down days. This seasonality factor is already violated but perhaps it will rhyme instead and project down markets from now into early next week. This past Monday was up which is against the trend of down Monday's for the last three months. This is of interest since down Monday's signal a disinterest in the stock market and typically lead to extended bearishness. As yet, this has not happened, the broad indexes remain elevated near the highs for the year.
The Jobs Report is the main event today and it will immediately impact markets. The estimates are all over the map from 100K to 160K with an average of about 115,000 expected and an umployment rate of 8.2%. Last month the rate had dropped from 8.3% to 8.1%. Since the Fed announced QE3 and its support of the job situation, as well as the presidential election now only one month away, this jobs number is the most important economic data release of the entire year. Both Romney and the President will find the positive spin and run to the microphones. The jobs report is only one hour away. Something fun to watch from a consipracy theory angle, is the unemployment rate in relation to the coming presidential election. If the unemployment rate drops to 8.0 or 8.1%, this sets up the final number, only four days before the election next month, to perhaps print 7.9%. Of course a 7.9% rate just before the election would bolster the President's chances for reelection dramatically. Thus, if the numbers today are 150K or higher and a rate at 8.0%, the republicans will be screaming foul fully aware of what is on tap next month. However, if the numbers are, say, 100K or lower today and the rate rises a tick to 8.2% or higher, the conspiracy theories will have to be tabled.
Watch UTIL 481.36 today. This number is important for all next week as per Keystone's algorithm. The bulls will drive markets higher all thru next week if UTIL is above 481.36. If UTIL is under 481.36, the bears will be pushing the broad indexes lower. This is important since the 4 PM EST print today will provide the answer for the start of next week. Just as last week we saw the utes set up the markets positively for this week (which turned out to be the case with Keybot the Quant flipping long on Monday and the markets are up the last four days), perhaps the bears may play the same game this week. If UTIL finishes under 481.36 today, Monday will be very bear favorable.
For the SPX today, starting at 1461, the bulls need only two points, to push up thru 1463 and an upside acceleration will occur. The 5-minute chart shows an ascending triangle that will launch price to the strong 1468 R. If that gives way the strong 1472 resistance is next. The bears need to push under 1451 to accelerate the downside. Thus, the bears need a bad jobs report, which will send the SPX down into the 1450's and a test of the 1451 support. A move thru 1452-1462 is sideways action today. Spain says they do not need a bailout (which was met by laughter) which is being misinterpreted to some extent. Spain appears agreeable to a watered-down version of a bailout but not the full-fledged bailout. There are most definitely talks occurring behind the scenes. Rajoy's popularity is dropping and with the regional elections occurring over the next couple weeks, Spain will likely not request the bailout until later this month. Markets are surprisingly flat on this news which should create market negativity. The jobs report is obviously in focus and will decide the fate of the markets today. Strike up the caliope, the circus is back in town. Take your seats, the main event under the Big Top is about to begin.
Note Added 10/5/12 at 8:13 AM: Note that the ETF splits are occurring this morning. So if you see wild numbers in your brokerage account, you likely own one of the ETF's affected. The numbers will rectify as soon as the opening bell rings. The trapeze artists are performing now. Chairman Bernanke is in a clown suit juggling bowling pins. Geithner is on the tight rope walkling a fine line. Fed members are walking around handing out money. The Jobs number is now only about fifteen minutes away. The circus atmosphere fills the air.
Note Added 10/5/12 at 8:35 AM: The Jobs Report is 114,000 jobs with a 7.8% unemployment rate. The U-6 remains unchanged at 14.7%. The average hourly earnings are up. The report is better than expected. The rate number at 7.8% is the big shocker. The conspiracy theorists will have a field day today as per the discussion above. Keystone thought the number fudges would at least have the decency to wait until next month, but a 7.8% rate is in your face today. The President's poll rating should move substantially higher now that the rate is sub 8% and should easily reverse the poor debate performance. The markets are flat on the news, frozen in place, the S&P's are a point or so higher. PM's are lower. Oil is lower. The euro is a smidge lower and the dollar a smidge higher. Call it all flat with a slight upward bias for equities. AAPL is 666. The circus attendees run to the ticket booth demanding a refund since markets have not moved substantially on the news. Take it away conspiracy theorists, you have the data today to back up your case.
The Jobs Report is the main event today and it will immediately impact markets. The estimates are all over the map from 100K to 160K with an average of about 115,000 expected and an umployment rate of 8.2%. Last month the rate had dropped from 8.3% to 8.1%. Since the Fed announced QE3 and its support of the job situation, as well as the presidential election now only one month away, this jobs number is the most important economic data release of the entire year. Both Romney and the President will find the positive spin and run to the microphones. The jobs report is only one hour away. Something fun to watch from a consipracy theory angle, is the unemployment rate in relation to the coming presidential election. If the unemployment rate drops to 8.0 or 8.1%, this sets up the final number, only four days before the election next month, to perhaps print 7.9%. Of course a 7.9% rate just before the election would bolster the President's chances for reelection dramatically. Thus, if the numbers today are 150K or higher and a rate at 8.0%, the republicans will be screaming foul fully aware of what is on tap next month. However, if the numbers are, say, 100K or lower today and the rate rises a tick to 8.2% or higher, the conspiracy theories will have to be tabled.
Watch UTIL 481.36 today. This number is important for all next week as per Keystone's algorithm. The bulls will drive markets higher all thru next week if UTIL is above 481.36. If UTIL is under 481.36, the bears will be pushing the broad indexes lower. This is important since the 4 PM EST print today will provide the answer for the start of next week. Just as last week we saw the utes set up the markets positively for this week (which turned out to be the case with Keybot the Quant flipping long on Monday and the markets are up the last four days), perhaps the bears may play the same game this week. If UTIL finishes under 481.36 today, Monday will be very bear favorable.
For the SPX today, starting at 1461, the bulls need only two points, to push up thru 1463 and an upside acceleration will occur. The 5-minute chart shows an ascending triangle that will launch price to the strong 1468 R. If that gives way the strong 1472 resistance is next. The bears need to push under 1451 to accelerate the downside. Thus, the bears need a bad jobs report, which will send the SPX down into the 1450's and a test of the 1451 support. A move thru 1452-1462 is sideways action today. Spain says they do not need a bailout (which was met by laughter) which is being misinterpreted to some extent. Spain appears agreeable to a watered-down version of a bailout but not the full-fledged bailout. There are most definitely talks occurring behind the scenes. Rajoy's popularity is dropping and with the regional elections occurring over the next couple weeks, Spain will likely not request the bailout until later this month. Markets are surprisingly flat on this news which should create market negativity. The jobs report is obviously in focus and will decide the fate of the markets today. Strike up the caliope, the circus is back in town. Take your seats, the main event under the Big Top is about to begin.
Note Added 10/5/12 at 8:13 AM: Note that the ETF splits are occurring this morning. So if you see wild numbers in your brokerage account, you likely own one of the ETF's affected. The numbers will rectify as soon as the opening bell rings. The trapeze artists are performing now. Chairman Bernanke is in a clown suit juggling bowling pins. Geithner is on the tight rope walkling a fine line. Fed members are walking around handing out money. The Jobs number is now only about fifteen minutes away. The circus atmosphere fills the air.
Note Added 10/5/12 at 8:35 AM: The Jobs Report is 114,000 jobs with a 7.8% unemployment rate. The U-6 remains unchanged at 14.7%. The average hourly earnings are up. The report is better than expected. The rate number at 7.8% is the big shocker. The conspiracy theorists will have a field day today as per the discussion above. Keystone thought the number fudges would at least have the decency to wait until next month, but a 7.8% rate is in your face today. The President's poll rating should move substantially higher now that the rate is sub 8% and should easily reverse the poor debate performance. The markets are flat on the news, frozen in place, the S&P's are a point or so higher. PM's are lower. Oil is lower. The euro is a smidge lower and the dollar a smidge higher. Call it all flat with a slight upward bias for equities. AAPL is 666. The circus attendees run to the ticket booth demanding a refund since markets have not moved substantially on the news. Take it away conspiracy theorists, you have the data today to back up your case.
Thursday, October 4, 2012
SPX 5-Minute Chart Textbook Ascending Triangle
At the same time, a red rising wedge has entered the picture. Ascending triangles are bullish patterns pointing to higher prices should they play out. Rising wedges, however, are bearish patterns pointing to a collapse in price. Thus, if the jobs report is happy, the blue triangle pattern will proceed with the 1468-ish target ahead. If the jobs report disappoints, the red rising wedge will play out with this evenings close serving as a back kiss of the lower red trend line of the wedge, and price will collapse into the 1450's. For the price action over the last two hours of trading, the indicators are all weak and bleak (red lines) wanting to see lower lows print for price. The jobs report, however, will dictate the market move in the morning. If the SPX moves over 1462 the bulls are looking good but bears have one last hope for price to print in the apex of the red rising wedge at 1462.5-ish to allow for a reversal. If price is printing 1463 and higher, the bulls will not look back, the markets will explode higher into a wild upside orgy into the weekend. 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 10/6/12 at 6:39 AM: The Jobs Report created bullishness so the ascending triangle finished in textbook fashion. The 1462 breakout occurred and price tagged the 1468-1469 target.
Keystone's Midday Market Action 10/4/12; Romney Wins Debate; ECB Leaves Rate Unchanged
S&P futures are up about seven points this morning after the ECB announces no change to the benchmark interest rate at 0.75%. Draghi's press conferrence is ongoing as this missive is typed. He says that Europe growth remains weak. A weaker euro will help growth but he did not cut. Therefore, he likely wanted to avoid drama ahead of the U.S. presidential election and chose to take a pass. The next ECB meeting is only two days after the election on 11/6/12 so a rate cut may occur then. Just like last time, the euro pops higher on the news. Higher euro means higher commodities, gold and equities.
The presidential debate last evening results in a landslide victory for Romney. Keystone does not have a dog in this hunt but it is obvious that Romney got the better of the President, cleaning the President's clock. The elderly woman moderating the debate did not perform well. The President came unprepared; the couple day vacation at the resort must have been more filled with massages and manicures instead of debate prep. The President was the student trying to cover up the fact that he did not do his homework. A pair of tap shoes would have helped. Romney maintained eye contact and exuded confidence. The President looked like he wanted to be anywhere except there, looking down and avoiding eye contact. Romney's command of business and finance is impressive, you can easily see why he made a lot of dough in his career, at times it looked like Romney was teaching the President with the pres taking notes, a clinic on business. The media is the largest winner since now they have a horse race that can sell newspapers, or, more correctly in these times, sell ad space on the Internet. The Intrade link is in the lower right margin with the President maintaining the better chance of being elected but Romney greatly improving his chances after last evenings performance. What effect does all this have on markets? The futures are up strongly but that is more attributable to the timing with the ECB rate decision today with a much higher euro bringing the markets and commodities higher.
Yesterday's KFT trading shenanigans were swept under the rug but are very important. The 'erroneous' trades occurred across eight different exchanges, a game-changer since one exchange cannot be singled out as the culprit. All exchanges are stuck in the HFT (high frequency trading) soup now. The chances for a flash crash took a tiny uptick yesterday. HPQ's terrible guidance roiled the tech sector but AAPL buoyancy saved the day. CEO Whitman is likely resetting the clock to the lowest point possible so the progress in future quarters will be rosie. Unfortunately, if long this sector, all associated tickers such as DELL, AMD, INTC and others dropped in sympathy. AMD will be interesting today to see if a bottom holds or if the HPQ doom and gloom takes it a bit lower. All four of these tickers show very attractive charts from a basing and positive divergence perspective which actually hints at a nice bounce coming across the board. Perhaps the HPQ news will serve as a downside flush to place the firm base in place for these tickers.
For the broad markets, watch UTIL 472 and VIX 17.25 which have remained bullish all week since Keystone's algo, Keybot the Quant, went long on Monday. As long as UTIL remains above 472 and the VIX below 17.25, the bulls are smokin' big cigars and ordering drinks. For the SPX today, starting at 1451, the bulls need to punch up thru 1454 and an upside acceleration will occur. The futures are pointing this way. If 1454 holds for about ten minutes or more, the 1460 resistance will be tested in short order. The bears need to push under 1442 to accelerate the downside so watch this as the day progresses. A move thru 1443-1453 is sideways action. The bulls are enjoying a positive start to the day courtesy of the ECB and strong euro. The 8 MA is above the 34 MA on the SPX 30-minute chart which is bullish for the hours and days ahead. Watch the 20-day MA at 1447.89, also the 10-day MA now at 1448.13 but will move upwards as the price moves up.
Stay alert in these markets. This week shows many cross currents with typical intramarket relationships skewing in different directions such as up volatility when markets are up, or Treasury rates dropping as stocks move up, and even the mixed closes in the broad indexes as well. The SPX daily chart this morning shows that the coming days will likely have a profound impact on price, sending the SPX up to 1485 or down to 1418. Factory Orders hit this morning but should not affect markets greatly. The FOMC Minutes will create a market pivot point at 2 PM EST. After 10 AM, markets may travel flat all day long until the mid afternoon pivot. The euro is printing at recent highs at 129.90 continuing to bounce off the ECB news. The following asset relationships are ongoing; Up euro = down dollar = up commodities = up gold = up copper = up equities. Down euro = up dollar = down commodities = down gold = down copper = down equities. AAPL is a touch negative pre-market. Watch the COMPQ versus SPX percentage this morning to determine the extent of the upside oomph.
Note Added 10/4/12 at 9:45 AM: Draghi creates today's rally with a nod to Romney. KOL is up 1.4% feeling some Romney love since the President dislikes coal. UTIL has tagged 481. This is important since Keystone's algorithm will be tracking UTIL 481 next week. This hints that the market bulls are already setting things up to maintain market buoyancy thru next week. The SPX jumps over 1454 but the move is not entirely convincing as yet. Usually if the level holds from seven to ten minutes it is golden. SPX S/R in this area is 1465, 1461, 1460, 1457 and 1453. Price is now moving thru 1453-1457. A move thru 1457 will lead to the 1460's. Volatilty is flat not knowing which way to turn. AAPL is down a buck. Note that the Nasdaq is flat with the SPX up +0.3% so tech is not leading the move higher so the bullish move to start the day does not have a lot of oomph. Gold is at 1790, watch to see if it can finally close in the 1780's today, which should lead to the 1820's, or not. Oil is at 89. The market bulls are driving the bus although they are driving along the side of the road rather than on the pavement.
Note Added 10/4/12 at 9:51 AM: The SPX is testing the 1457 resistance so this will tell a lot. Factory Orders hit in a few minutes, followed by Natty Gas Inventories at 10:30 AM, markets should settle in until the mid afternoon pivot.
Note Added 10/4/12 at 10:11 AM: The one-minute chart shows an ascending triangle pattern with the 1457 base line serving as resistance. Price just punched up thru 1457, that sets up the test of the strong R at 1460 and price has now punched up thru there as this sentence is typed. There should be a struggle here due to the strength of this 1460 S/R level. The ascending triangle targets 1460 so that very short term trading pattern already played out and gave price the 1460 print. The SPX will next attempt a run at 1461 and 1465 R. Tech is not leading the upside so the strength of the move remains questionable. AAPL is up a cople bucks which directly aids the market bulls. Note how price has poked up thru the upper trend line on the daily chart posted this morning. A back kiss to the 1553-ish would be prudent for price to prove that the break out above the sideways triangle is preferred. The SPX is now moving thru 1461-1465. HPQ is receiving a further 4% beating but this stock is actually an attractive buy in this area, say, 13.70-14.50. Keystone is not in HPQ since there is exposure to this area already with AMD. If AMD works out and provides profit, however, a rotation from AMD to HPQ may be attractive in the days or couple weeks ahead.
Note Added 10/4/12 at 1:29 PM: Gold maintains its move today on central banker soothing words. The strong euro due to Draghi not cutting rates moves the dollar lower and gold higher. Gold will target the 1820's now. The euro moves above 130. The SPX has honored the strong 1460 level today testing each side, above and below, ahead of the FOMC Minutes. Price is favoring the 1457, 1460, 1461 and 1465 S/R levels. UTIL remains elevated and firmly in the bull camp as traders that go long the markets, while holding their noses, are grabbing at the divvy or perceived safer stocks such as utes or staples, call them reluctant buyers. The VIX remains above 15. Tech continues to not lead the upside which causes the lack of oomph with the SPX. The Halloween season is coming and AAPL is 666. Interestingly, 666 marked the SPX low in March 2009. The SPX closing high this year is 1465.77. This afternoon should prove entertaining. FOMC Minutes is 2 PM, expect a market pivot point.
Note Added 10/4/12 at 2:03 PM: The FOMC Minutes shows all members in favor of QE3 except Lacker. The minutes contain all the wishy washy comments playing both sides of the street. Please give me a one armed Fed member! That way he cannot say on one hand..., but on the other hand.... The minutes do not seem to shed a lot of light on the Fed's actions. The markets yawn. Traders look around at each other asking, 'now what?' SPX continues its tease of the strong 1460 S/R. Check out the 5-minute chart. Remember the ascending triangle on the 1-minute chart this morning where price broke thru 1457 to then grab 1460? The 5-minute chart has an ascending triangle now with baseline at 1462, the vertical side is seven handles tall. Thus, if price breaks up thru 1462, the SPX should run to 1469 and perhaps close with a new high for the year. Watch the strong 1460 S/R and most importantly 1462 R as the session plays out. Bears need to prevent 1462 with all their might. Bulls want to move up over 1462 and the day will finish with a big upside orgy party. Note how price was at 1462 when the FOMC Minutes hit at 2 PM and the markets pivoted lower, dropping the SPX from 1462 to 1459 in only three minutes, receiving a rejection from the 1462 level and preventing the ascending triangle pattern from playing out, so far. The euro is 1.3019, it drives the bus as per the bullish asset relationship described in the fifth paragraph above.
Note Added 10/4/12 at 3:43 PM: The ascending triangle on the SPX 5-minute chart is in place but price is not yet able to break out up thru 1462 to put the pattern in play with a 1469 target. The fight for the 1462 breakout continues into the closing bell today, ahead of the most important economic data point of the entire trading year tomorrow, the Monthly Jobs Report. VIX is 15.02. UTIL is 481.08, dropping under the critical 481.36 number that will play an important role next week. UTIL above 481 is bullish for markets. Below 481 late day tomorrow and all next week is very bearish for markets moving forward.
Note Added 10/4/12 at 4:00 PM: The SPX could not punch up thru 1462. The Jobs Report will decide the outcome. The TRIN is an uber low 0.63 that will want to see a snap back market selling move. Two +900 TICK's occur at the close. UTIL is 481.48--above the critical 481.36. VIX is driven low in the final minute down to 14.79. The table is set fo rthe jobs circus.
The presidential debate last evening results in a landslide victory for Romney. Keystone does not have a dog in this hunt but it is obvious that Romney got the better of the President, cleaning the President's clock. The elderly woman moderating the debate did not perform well. The President came unprepared; the couple day vacation at the resort must have been more filled with massages and manicures instead of debate prep. The President was the student trying to cover up the fact that he did not do his homework. A pair of tap shoes would have helped. Romney maintained eye contact and exuded confidence. The President looked like he wanted to be anywhere except there, looking down and avoiding eye contact. Romney's command of business and finance is impressive, you can easily see why he made a lot of dough in his career, at times it looked like Romney was teaching the President with the pres taking notes, a clinic on business. The media is the largest winner since now they have a horse race that can sell newspapers, or, more correctly in these times, sell ad space on the Internet. The Intrade link is in the lower right margin with the President maintaining the better chance of being elected but Romney greatly improving his chances after last evenings performance. What effect does all this have on markets? The futures are up strongly but that is more attributable to the timing with the ECB rate decision today with a much higher euro bringing the markets and commodities higher.
Yesterday's KFT trading shenanigans were swept under the rug but are very important. The 'erroneous' trades occurred across eight different exchanges, a game-changer since one exchange cannot be singled out as the culprit. All exchanges are stuck in the HFT (high frequency trading) soup now. The chances for a flash crash took a tiny uptick yesterday. HPQ's terrible guidance roiled the tech sector but AAPL buoyancy saved the day. CEO Whitman is likely resetting the clock to the lowest point possible so the progress in future quarters will be rosie. Unfortunately, if long this sector, all associated tickers such as DELL, AMD, INTC and others dropped in sympathy. AMD will be interesting today to see if a bottom holds or if the HPQ doom and gloom takes it a bit lower. All four of these tickers show very attractive charts from a basing and positive divergence perspective which actually hints at a nice bounce coming across the board. Perhaps the HPQ news will serve as a downside flush to place the firm base in place for these tickers.
For the broad markets, watch UTIL 472 and VIX 17.25 which have remained bullish all week since Keystone's algo, Keybot the Quant, went long on Monday. As long as UTIL remains above 472 and the VIX below 17.25, the bulls are smokin' big cigars and ordering drinks. For the SPX today, starting at 1451, the bulls need to punch up thru 1454 and an upside acceleration will occur. The futures are pointing this way. If 1454 holds for about ten minutes or more, the 1460 resistance will be tested in short order. The bears need to push under 1442 to accelerate the downside so watch this as the day progresses. A move thru 1443-1453 is sideways action. The bulls are enjoying a positive start to the day courtesy of the ECB and strong euro. The 8 MA is above the 34 MA on the SPX 30-minute chart which is bullish for the hours and days ahead. Watch the 20-day MA at 1447.89, also the 10-day MA now at 1448.13 but will move upwards as the price moves up.
Stay alert in these markets. This week shows many cross currents with typical intramarket relationships skewing in different directions such as up volatility when markets are up, or Treasury rates dropping as stocks move up, and even the mixed closes in the broad indexes as well. The SPX daily chart this morning shows that the coming days will likely have a profound impact on price, sending the SPX up to 1485 or down to 1418. Factory Orders hit this morning but should not affect markets greatly. The FOMC Minutes will create a market pivot point at 2 PM EST. After 10 AM, markets may travel flat all day long until the mid afternoon pivot. The euro is printing at recent highs at 129.90 continuing to bounce off the ECB news. The following asset relationships are ongoing; Up euro = down dollar = up commodities = up gold = up copper = up equities. Down euro = up dollar = down commodities = down gold = down copper = down equities. AAPL is a touch negative pre-market. Watch the COMPQ versus SPX percentage this morning to determine the extent of the upside oomph.
Note Added 10/4/12 at 9:45 AM: Draghi creates today's rally with a nod to Romney. KOL is up 1.4% feeling some Romney love since the President dislikes coal. UTIL has tagged 481. This is important since Keystone's algorithm will be tracking UTIL 481 next week. This hints that the market bulls are already setting things up to maintain market buoyancy thru next week. The SPX jumps over 1454 but the move is not entirely convincing as yet. Usually if the level holds from seven to ten minutes it is golden. SPX S/R in this area is 1465, 1461, 1460, 1457 and 1453. Price is now moving thru 1453-1457. A move thru 1457 will lead to the 1460's. Volatilty is flat not knowing which way to turn. AAPL is down a buck. Note that the Nasdaq is flat with the SPX up +0.3% so tech is not leading the move higher so the bullish move to start the day does not have a lot of oomph. Gold is at 1790, watch to see if it can finally close in the 1780's today, which should lead to the 1820's, or not. Oil is at 89. The market bulls are driving the bus although they are driving along the side of the road rather than on the pavement.
Note Added 10/4/12 at 9:51 AM: The SPX is testing the 1457 resistance so this will tell a lot. Factory Orders hit in a few minutes, followed by Natty Gas Inventories at 10:30 AM, markets should settle in until the mid afternoon pivot.
Note Added 10/4/12 at 10:11 AM: The one-minute chart shows an ascending triangle pattern with the 1457 base line serving as resistance. Price just punched up thru 1457, that sets up the test of the strong R at 1460 and price has now punched up thru there as this sentence is typed. There should be a struggle here due to the strength of this 1460 S/R level. The ascending triangle targets 1460 so that very short term trading pattern already played out and gave price the 1460 print. The SPX will next attempt a run at 1461 and 1465 R. Tech is not leading the upside so the strength of the move remains questionable. AAPL is up a cople bucks which directly aids the market bulls. Note how price has poked up thru the upper trend line on the daily chart posted this morning. A back kiss to the 1553-ish would be prudent for price to prove that the break out above the sideways triangle is preferred. The SPX is now moving thru 1461-1465. HPQ is receiving a further 4% beating but this stock is actually an attractive buy in this area, say, 13.70-14.50. Keystone is not in HPQ since there is exposure to this area already with AMD. If AMD works out and provides profit, however, a rotation from AMD to HPQ may be attractive in the days or couple weeks ahead.
Note Added 10/4/12 at 1:29 PM: Gold maintains its move today on central banker soothing words. The strong euro due to Draghi not cutting rates moves the dollar lower and gold higher. Gold will target the 1820's now. The euro moves above 130. The SPX has honored the strong 1460 level today testing each side, above and below, ahead of the FOMC Minutes. Price is favoring the 1457, 1460, 1461 and 1465 S/R levels. UTIL remains elevated and firmly in the bull camp as traders that go long the markets, while holding their noses, are grabbing at the divvy or perceived safer stocks such as utes or staples, call them reluctant buyers. The VIX remains above 15. Tech continues to not lead the upside which causes the lack of oomph with the SPX. The Halloween season is coming and AAPL is 666. Interestingly, 666 marked the SPX low in March 2009. The SPX closing high this year is 1465.77. This afternoon should prove entertaining. FOMC Minutes is 2 PM, expect a market pivot point.
Note Added 10/4/12 at 2:03 PM: The FOMC Minutes shows all members in favor of QE3 except Lacker. The minutes contain all the wishy washy comments playing both sides of the street. Please give me a one armed Fed member! That way he cannot say on one hand..., but on the other hand.... The minutes do not seem to shed a lot of light on the Fed's actions. The markets yawn. Traders look around at each other asking, 'now what?' SPX continues its tease of the strong 1460 S/R. Check out the 5-minute chart. Remember the ascending triangle on the 1-minute chart this morning where price broke thru 1457 to then grab 1460? The 5-minute chart has an ascending triangle now with baseline at 1462, the vertical side is seven handles tall. Thus, if price breaks up thru 1462, the SPX should run to 1469 and perhaps close with a new high for the year. Watch the strong 1460 S/R and most importantly 1462 R as the session plays out. Bears need to prevent 1462 with all their might. Bulls want to move up over 1462 and the day will finish with a big upside orgy party. Note how price was at 1462 when the FOMC Minutes hit at 2 PM and the markets pivoted lower, dropping the SPX from 1462 to 1459 in only three minutes, receiving a rejection from the 1462 level and preventing the ascending triangle pattern from playing out, so far. The euro is 1.3019, it drives the bus as per the bullish asset relationship described in the fifth paragraph above.
Note Added 10/4/12 at 3:43 PM: The ascending triangle on the SPX 5-minute chart is in place but price is not yet able to break out up thru 1462 to put the pattern in play with a 1469 target. The fight for the 1462 breakout continues into the closing bell today, ahead of the most important economic data point of the entire trading year tomorrow, the Monthly Jobs Report. VIX is 15.02. UTIL is 481.08, dropping under the critical 481.36 number that will play an important role next week. UTIL above 481 is bullish for markets. Below 481 late day tomorrow and all next week is very bearish for markets moving forward.
Note Added 10/4/12 at 4:00 PM: The SPX could not punch up thru 1462. The Jobs Report will decide the outcome. The TRIN is an uber low 0.63 that will want to see a snap back market selling move. Two +900 TICK's occur at the close. UTIL is 481.48--above the critical 481.36. VIX is driven low in the final minute down to 14.79. The table is set fo rthe jobs circus.
SPX Daily Chart Sideways Symmetrical Triangle Bollinger Bands Squeezing In
At the same time, note the Bollinger Bands (BB) that are starting to squeeze in again since the action is sideways over the last couple weeks. Interestingly, the apex of the triangle corresponds to the projection of where the BB's will be at the tightest area which will squeeze out a very strong price move either up, or down, and likely moving the 35 handles mentioned above. The upside target would be 1452+35 = 1487-ish (1485 is very strong resistance). The downside target would be 1447-35 = 1412 (the 50-day MA is 1418-ish). Thus, a major market directional decision should occur over the coming days, say, now thru next Wednesday, 10/10/12, more likely sooner. The indicators are a mixed bag reinforcing the sideways price movement theme. Volume is steady. The 10 and 20-day MA's are on top of each other so the 1447-1448 level is very strong support. Bulls are happy above 1448 while bears will be happy under 1447.
The above chart says the relative recent calm sideways action in the broad indexes will give way to a wild market move. Perhaps the Monthly Jobs Report will provide that catalyst. There are many other possibilities. Look at the Flash Crash potential now in the markets considering the KFT trading action yesterday. The Middle East is in conflict. Turkey is now firing into Syria. The HPQ news should create a drag on the tech sector. The debates result in a horse race for president now which increases market tensions as well. And, of course, the ongoing European drama especially the hourly rumor that a Spain bailout is imminent. Sometimes the sideways triangles may stretch and morph themselves out further sideways so into next week we will see if that occurs, or not. There are key Euro meetings occurring in the coming days which may serve as focal points. A stretching out of the sideways triangle does not change anything, only that the strong move may occur middle to late next week rather than anytime now thru early next week.
A news item or economic release should occur anytime from now into early next week that will act as a catalyst sending markets up towards the 1480's, or down to the 1410's. SPX major S/R is shown by the blue lines; 1496, 1485, 1476, 1472, 1468, 1460, 1447, 1440, 1424, 1419, 1416, 1413, 1409, 1406, 1404, 1403, 1394 and 1391. 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.
Wednesday, October 3, 2012
Keystone's Midday Market Action 10/3/12; Presidential Debates 9 PM EST
UTIL jumps to 477. Watch the 50-day MA at 477.30, this will decide if the utilities sector wants to head higher, or not. VIX is lower to start the day which makes the bulls happy. Thus, bears got nothing without either the UTIL 472 or VIX 17.25 bull-bear lines cooperating. Tech is leading the broad markets on the upside so this creates market buoyancy. AAPL is up a couple bucks. The euro is 1.2895 breaking under 1.29 over the last half hour. The 8 MA is under the 34 MA on the SPX 30-minute chart, bearish. The 20-day MA is 1447.61. Markets are in their status quo mode to start the day. Keystone took profits on INVE exiting the trade. INVE remains attractive moving forward, will look to reenter at some point.
Note Added 10/3/12 at 10:10 AM: VIX is positive. SPX is moving thru 1444 and 1447 S/R. Keystone added more AMD; price is at a tricky juncture now at 3.20. Any lower and it will want to move to 2.75-2.85. So AMD should bounce from here, or, if not, it will have to wait and bounce from the lower range.
Note Added 10/3/12 at 10:20 AM: VIX is negative. This is one of those dog's chasing their tails kind of day already, round and round and you end up where you started from. SPX S/R is 1460, 1457, 1453, 1447.91 (10-day MA), 1447.78 (20-day MA), 1447, 1444, 1441 and 1440. Price is poking up thru the 1447-1447.91 gauntlet so it will have its sights on 1453. Tech is leading the broad indexes higher today, that is creating the market buoyancy. UTIL is moving towards 478. Bulls have the slight edge as the day gets underway. A sideways malaise.
Note Added 10/3/12 at 11:55 AM: Bulls keep floating the indexes higher. The SPX moved thru the 1447.00-1447.91 gauntlet to now test 1453. The 1457 R would be next if the bulls push thru 1453. Keystone took profits on UWM which only amount to a hotdog and a coke, and perhaps a tip for the hatcheck girl. The TIC machine just tagged +1000 so that was a good time to exit the UWM long play and further ponder these fickle markets.
Note Added 10/3/12 at 12:57 PM: SPX punched thru 1453 so 1457 is the next target. Note that 1453 is where Keybot the Quant flipped to the long side the other day and a whipsaw has not occurred. Tech continues to lead higher although AAPL is flatish. The 8 MA moved up thru the 34 MA on the 30-minute chart so the bulls are in control for the hours and days ahead. UTIL is above 472 and VIX below 17.25 so the bulls rule today. The odd market behavior continues. The erroneous KFT trades in the markets this morning are of concern since the bad trades occurred in eight different exchanges. Markets are idling ahead of the ECB, FOMC Minutes and Jobs Report that all occur over the next 44 hours. Keystone bot more ZSL. Tickers of interest right now that all look very attractive for potential trades include AMD, ZSL, UVXY and VXX, which Keystone is in all four of those, and also HPQ (it is receiving a beating today), CRR and MCP which Keystone is not in right now. As always, all are very dangerous speculative trades.
Note Added 10/3/12 at 2:29 PM: Oil has an 88 handle receiving a four-buck slap down today. Markets are drifting lower but AAPL is positive and tech continues to lead the upside. VIX has recovered to the flat line today but far from 17.25. UTIL is at 478 far above 472. So the bulls continue to control these two elements. The Dow Industrials turn negative. Note the -1200 TICK at 1:40 PM EST that marked the SPX 1448.50 low, and over the last few minutes, a new lower low at 1448.00, but the TICK came down to only -950 this time. The SPX is moving thru 1440-1455 for the last four days, a sideways malaise.
Note Added 10/3/12 at 3:02 PM: The SPX 20-day MA is at 1447.75. Price is now printing 1447.89. The melodrama continues.
Note Added 10/3/12 at 10:10 AM: VIX is positive. SPX is moving thru 1444 and 1447 S/R. Keystone added more AMD; price is at a tricky juncture now at 3.20. Any lower and it will want to move to 2.75-2.85. So AMD should bounce from here, or, if not, it will have to wait and bounce from the lower range.
Note Added 10/3/12 at 10:20 AM: VIX is negative. This is one of those dog's chasing their tails kind of day already, round and round and you end up where you started from. SPX S/R is 1460, 1457, 1453, 1447.91 (10-day MA), 1447.78 (20-day MA), 1447, 1444, 1441 and 1440. Price is poking up thru the 1447-1447.91 gauntlet so it will have its sights on 1453. Tech is leading the broad indexes higher today, that is creating the market buoyancy. UTIL is moving towards 478. Bulls have the slight edge as the day gets underway. A sideways malaise.
Note Added 10/3/12 at 11:55 AM: Bulls keep floating the indexes higher. The SPX moved thru the 1447.00-1447.91 gauntlet to now test 1453. The 1457 R would be next if the bulls push thru 1453. Keystone took profits on UWM which only amount to a hotdog and a coke, and perhaps a tip for the hatcheck girl. The TIC machine just tagged +1000 so that was a good time to exit the UWM long play and further ponder these fickle markets.
Note Added 10/3/12 at 12:57 PM: SPX punched thru 1453 so 1457 is the next target. Note that 1453 is where Keybot the Quant flipped to the long side the other day and a whipsaw has not occurred. Tech continues to lead higher although AAPL is flatish. The 8 MA moved up thru the 34 MA on the 30-minute chart so the bulls are in control for the hours and days ahead. UTIL is above 472 and VIX below 17.25 so the bulls rule today. The odd market behavior continues. The erroneous KFT trades in the markets this morning are of concern since the bad trades occurred in eight different exchanges. Markets are idling ahead of the ECB, FOMC Minutes and Jobs Report that all occur over the next 44 hours. Keystone bot more ZSL. Tickers of interest right now that all look very attractive for potential trades include AMD, ZSL, UVXY and VXX, which Keystone is in all four of those, and also HPQ (it is receiving a beating today), CRR and MCP which Keystone is not in right now. As always, all are very dangerous speculative trades.
Note Added 10/3/12 at 2:29 PM: Oil has an 88 handle receiving a four-buck slap down today. Markets are drifting lower but AAPL is positive and tech continues to lead the upside. VIX has recovered to the flat line today but far from 17.25. UTIL is at 478 far above 472. So the bulls continue to control these two elements. The Dow Industrials turn negative. Note the -1200 TICK at 1:40 PM EST that marked the SPX 1448.50 low, and over the last few minutes, a new lower low at 1448.00, but the TICK came down to only -950 this time. The SPX is moving thru 1440-1455 for the last four days, a sideways malaise.
Note Added 10/3/12 at 3:02 PM: The SPX 20-day MA is at 1447.75. Price is now printing 1447.89. The melodrama continues.
Keystone's Morning Wake-Up 10/3/12; Rajoy Says No Bailout; Presidential Debates This Evening
The big market mover over the last 24 hours is the ongoing Spain bailout drama. One minute yes, one minute no, kind of like the Hokey Pokey, a fave wedding dance in America, ....you put your bailout in, you put your bailout out, and you shake it all about.... Markets have truly become a circus. Recapping, a rumor was in the market overnight the night before about a Spain bailout imminent. This bounced futures higher. Yesterday morning the story changed to a Spain bailout coming by the weekend so the futures remained elevated. Then, as Keystone mentioned here yesterday morning, Spain said all the talk is nonsense and Spain is not requesting a bailout right now. Keystone waited to see the futures deflate expecting a four or five quickie point drop in the spu's, but, instead, the S&P's remained up eight as yesterday's opening bell rang. After the U.S. markets were closed yesterday and thru the overnight, Spain's Rajoy unequivocally says that a Spain bailout is not imminent. Overnight futures were negative on that news, until 4 AM when the Nasdaq went positive; futures recovered and are currently flatter than Lady GaGa's abs.
Europe is a mess. German and France manufacturing data is weak. U.K. retail and services data is weak exposing an economy far weaker than analysts realize. Spain's drama continues with a bailout one day then no bailout the next day. Rest assurred that Spain has ongoing meetings behind the scenes with the ECB sorting out the details. The dramatics are simple posturing where Spain is trying to cut the best deal. Spain does not want to request the bailout and be left with no clothes, only sporting a barrel to cover themselves. They hope to maybe lose their shirt but perhaps keep their pants. Moody's will provide a sovereign review of Spain this month and the news will probably not be good. Moody's will likely use the information to justify their move with a Spain debt downgrade, to catch up with Egan-Jones' more timely Spain downgrades that are already occurring.
The competitive debasement for all countries continues with the RBA the latest to debase their currency. Keystone has asked for months, will the quantitative easing effects really matter when everyone and his bro are all racing to the bottom at the same time? QE works when one, maybe two, major countries are implementing the concept, not when all countries are debasing. As with currencies, it is always about the relativeness of the moves, country to country, that matters. If you decide to build a brand new large boat to out fish all the other fisherman, but, upon completion, look around and everyone else built a new large boat as well, you got nothing.
Sticking to technicals, something that makes far more sense than the macro machinations, watch the following short term indicators to determine market direction for the minutes, hours and days ahead. First, the COMPQ versus SPX percentage move today. Tech led to the upside yesterday but when the COMPQ faded and tech and broad indexes were moving at the same percentage, the markets weakened. The bears, however, could not get tech to lead lower, and in fact, AAPL bounced late day, the COMPQ took off to the upside, and the markets rallied into the close. Second, watch the euro, now over 129 and allowing markets to remain buoyant. Watch the 128.75 and 128.30 levels which will create strong broad market selling. Third, watch the SPX 30-minute chart, the 8 and 34 MA cross, which is now bearish, as highlighted with this morning's chart. Most importantly, watch UTIL 472.06 and VIX 17.25. As long as UTIL stays above 472.06 and the VIX stays under 17.25, the market bears got nothing. If either of these two turn bearish the market selling will increase substantially. If one of the two turn bearish and the SPX moves under 1439 and lower, Keybot the Quant, Keystone's algo, will likely flip short.
For the days and weeks ahead, watch the BPSPX as highlighted in last evenings chart, the 73.4 level, bulls win above and bears below. Bears win big if the 70% level gives way int he days ahead. Also, watch the slope of the SPX 150-day MA line. If the slope flattens and turns negative, that will signal a cyclical bear market starting. Likewise, watch the UPS 20-week MA and 50-week MA cross. If the 20 MA crosses down thru the 50 MA, that will signal a cyclical bear market ahead for equities. Both of these signals are tracked on the Cyclical Signal page on this site. For any chart of interest, such as BPSPX, if reading this missive as a result of a GOOG search or a link from other trading sites, simply type the ticker in the search box above and the chart will come right up.
FDO and MON are important earnings reports today. FDO just reported in line with estimates. The ADP Jobs Report is about an hour away and this provides a hint at what the Friday morning jobs circus will bring to town. Oil Inventories are at 10:30 AM. The end of the trading week will now show a quickening pace with the Presidential Debates tonight at 9 PM EST, the ECB Rate Decision in the morning, the FOMC Minutes tomorrow afternoon, and then the main event, the Jobs circus Friday morning 8:30 AM EST.
For the SPX today, starting at 1446, the bulls need to push above 1451.50 to accelerate the upside. The bears need to push under 1439 to accelerate the downside. A move thru 1440-1450 is sideways action. In a nutshell, to boil down all this hot air, UTIL 472.06 and VIX 17.25 tells you everything you need to know concerning broad market direction today. Watch the SPX 20-day MA at 1445.51.
Note Added 10/3/12 at 8:29 AM: FDO is moving up pre-market. MON, an important ag barometer, missed on earnings and is receiving a beating pre-market. ADP report shows a boost in jobs so futures remain slightly on the positive side. ProShares announces ETF share splits so pay attention to that if affected. Keystone holds the thinly-traded SZK that will reverse split 1:4. Other ETF's affected include BIB, SVXY, TBT, SDS, GLL, SDOW, SMN, UBR, RXD and BIS. So you will notice the number of shares, and the price, changing if holding any of these tickers. The changes are occurring now, over the next couple days. This link provides further information;
http://finance.yahoo.com/news/proshares-announces-etf-share-splits-123000132.html
Europe is a mess. German and France manufacturing data is weak. U.K. retail and services data is weak exposing an economy far weaker than analysts realize. Spain's drama continues with a bailout one day then no bailout the next day. Rest assurred that Spain has ongoing meetings behind the scenes with the ECB sorting out the details. The dramatics are simple posturing where Spain is trying to cut the best deal. Spain does not want to request the bailout and be left with no clothes, only sporting a barrel to cover themselves. They hope to maybe lose their shirt but perhaps keep their pants. Moody's will provide a sovereign review of Spain this month and the news will probably not be good. Moody's will likely use the information to justify their move with a Spain debt downgrade, to catch up with Egan-Jones' more timely Spain downgrades that are already occurring.
The competitive debasement for all countries continues with the RBA the latest to debase their currency. Keystone has asked for months, will the quantitative easing effects really matter when everyone and his bro are all racing to the bottom at the same time? QE works when one, maybe two, major countries are implementing the concept, not when all countries are debasing. As with currencies, it is always about the relativeness of the moves, country to country, that matters. If you decide to build a brand new large boat to out fish all the other fisherman, but, upon completion, look around and everyone else built a new large boat as well, you got nothing.
Sticking to technicals, something that makes far more sense than the macro machinations, watch the following short term indicators to determine market direction for the minutes, hours and days ahead. First, the COMPQ versus SPX percentage move today. Tech led to the upside yesterday but when the COMPQ faded and tech and broad indexes were moving at the same percentage, the markets weakened. The bears, however, could not get tech to lead lower, and in fact, AAPL bounced late day, the COMPQ took off to the upside, and the markets rallied into the close. Second, watch the euro, now over 129 and allowing markets to remain buoyant. Watch the 128.75 and 128.30 levels which will create strong broad market selling. Third, watch the SPX 30-minute chart, the 8 and 34 MA cross, which is now bearish, as highlighted with this morning's chart. Most importantly, watch UTIL 472.06 and VIX 17.25. As long as UTIL stays above 472.06 and the VIX stays under 17.25, the market bears got nothing. If either of these two turn bearish the market selling will increase substantially. If one of the two turn bearish and the SPX moves under 1439 and lower, Keybot the Quant, Keystone's algo, will likely flip short.
For the days and weeks ahead, watch the BPSPX as highlighted in last evenings chart, the 73.4 level, bulls win above and bears below. Bears win big if the 70% level gives way int he days ahead. Also, watch the slope of the SPX 150-day MA line. If the slope flattens and turns negative, that will signal a cyclical bear market starting. Likewise, watch the UPS 20-week MA and 50-week MA cross. If the 20 MA crosses down thru the 50 MA, that will signal a cyclical bear market ahead for equities. Both of these signals are tracked on the Cyclical Signal page on this site. For any chart of interest, such as BPSPX, if reading this missive as a result of a GOOG search or a link from other trading sites, simply type the ticker in the search box above and the chart will come right up.
FDO and MON are important earnings reports today. FDO just reported in line with estimates. The ADP Jobs Report is about an hour away and this provides a hint at what the Friday morning jobs circus will bring to town. Oil Inventories are at 10:30 AM. The end of the trading week will now show a quickening pace with the Presidential Debates tonight at 9 PM EST, the ECB Rate Decision in the morning, the FOMC Minutes tomorrow afternoon, and then the main event, the Jobs circus Friday morning 8:30 AM EST.
For the SPX today, starting at 1446, the bulls need to push above 1451.50 to accelerate the upside. The bears need to push under 1439 to accelerate the downside. A move thru 1440-1450 is sideways action. In a nutshell, to boil down all this hot air, UTIL 472.06 and VIX 17.25 tells you everything you need to know concerning broad market direction today. Watch the SPX 20-day MA at 1445.51.
Note Added 10/3/12 at 8:29 AM: FDO is moving up pre-market. MON, an important ag barometer, missed on earnings and is receiving a beating pre-market. ADP report shows a boost in jobs so futures remain slightly on the positive side. ProShares announces ETF share splits so pay attention to that if affected. Keystone holds the thinly-traded SZK that will reverse split 1:4. Other ETF's affected include BIB, SVXY, TBT, SDS, GLL, SDOW, SMN, UBR, RXD and BIS. So you will notice the number of shares, and the price, changing if holding any of these tickers. The changes are occurring now, over the next couple days. This link provides further information;
http://finance.yahoo.com/news/proshares-announces-etf-share-splits-123000132.html
SPX 30-Minute Chart 8 MA and 34 MA Cross
The SPX major S/R levels are 1460, 1447, 1440 and 1424. Watch the 1447 resistance level in early trading today. Also watch the important 20-day MA at 1445.51 to see who is winning today's game. As always, the 8 and 34 MA cross is most important for this chart and it will tell you who is steering the ship in the hours and days 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.
Tuesday, October 2, 2012
BPSPX Bullish Percent Index Daily Chart
The top is 79.4 so subtract six and you have 73.4. Thus, when the BPSPX drops under 73.4, that will be a bearish confirmation signal for markets. Then, the 70% level would indicate lots more market selling ahead. Of course, if the BPSPX stays above 73.4, the bulls rule and the bears got nothing. 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.
AMD Advanced Micro Devices Weekly and Daily Charts Oversold Falling Wedges Positive Divergence
The downward-sloping channels are wicked. The only item to knit-pick is the last few days with the MACD line and money flow. There is the tiniest bit of desire to see another matching low to today's numbers, say, 3.17-3.25, printing inside the apex of that falling wedge, and that should seal the deal for the bull launch. As always in trading, the best looking trades have a way of blowing up in your face so Keystone's carcass may end up strewn about in the parking lot. Calling bottoms is a dangerous game that Keystone plays. AMD will be fun to watch. Projection is a launch move higher at any time, perhaps targeting the gaps above (green circles). If a close under 3.2 occurs, the trade will likely have to wait and reload with more shares in the 2.7-2.9 area, but, considering the firm possie d, she looks good to go right now. Keystone is long AMD, bot more at the lows today. 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.
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