Markets drop at the open printing an SPX LOD at 1436.30 thus far. Consumer Sentiment was a shade lower than expected. The bears need to drop under 1434 to accelerate the downside. The euro is using the 129 level as support. Gold continues to fight for the 1780 which would lead to 1820's if the gold bulls can push price higher and close over 1780. UTIL is at 473.61 over two points above the important 472.06 level for next week. This indicates that the bulls may try to simply weather the storm today, keep UTIL above 472.06, and mount a bull move early next week.
The Spain stress tests are due at noon time, which should result in a market pivot point, less than a couple hours away. Markets may idle until then unless news leaks out ahead of time. Perhaps markets will settle in for the day after the news. This week is on tap to finish on the down side which would be in line with seasonalilty that indicates this week after OpEx in September is down over 80% of the time. The full moon is tomorow which helps the bulls today. Pay attention to UTIL 472.06 today and also the euro. The euro movement will dictate the markets; up euro = down dollar = up commodities, copper, gold, silver and equities. Down euro = up dollar = down commodities, copper, gold, silver and equities. The Spain stress tests will dictate the euro move. The euro has dropped back under 129, under 128.90, 128.80, 128.70, now printing 128.67. The euro critical bull-bear line in the sand remains at 128.30.
Note Added 9/28/12 at 10:32 AM: The SPX fell thru the LOD printing a new low at 1435.60 so keep an eye on this number. The bears need 1434. Considering the impact of the imminent Spanish stress tests, the SPX may idle in this 1434-1438 range until the news hits. This would provide the area to either launch from, or collapse thru. Of course, if 1434 fails at any time forward, the broad indexes will accelerate lower and likely remain weak into the weekend. UTIL is 473.49. VIX is 15.60 back up and over the 20-day MA, see if it can move back up and over the 50-day MA at 15.94. A VIX 16 handle will be an all clear for market downside. Thus, all eyes and ears are focused on Spain's arena, will the bull live or die today? The euro is 128.55 continuing to leak lower now only 0.25 away from the danger line which will cause market turmoil.
Note Added 9/28/12 at 11:37 AM: The euro is 128.44 now only 0.14 away from danger. The SPX sits above 1434 still holding the 1435.60 LOD. UTIL is at 472.64 a hair above 472.06. VIX at 15.60 between its 20 and 50-day MA's. The 8 MA is on the verge of stabbing down thru the 34 MA on the 30-minute chart. The table is set. Launch, or die. What say you Spain?
Note Added 9/28/12 at 12:22 PM: Spain says seven banks have needs, seven do not, overall the news is in line with the consensus so no great shakes. The euro pops, albeit slightly, now printing 128.77. The SPX moves about three handles higher after the news thus far to 1442. Watch the 20-day MA at 1441.68, this serves as a great bull-bear indication for today. UTIL is 473.67 which would put the bulls in the drivers seat come Monday. Moody's typically announces downgrades after the markets close on Friday's so that serves as a wild card for Spain, and the global markets as the weekend approaches. The bulls are going to set themselves up for buoyancy early next week unless the bears can step in over the next few hours to create negativity. If UTIL moves under 472, that will create negativity, likewise the SPX falling under the 20-day MA. Watch the COMPQ versus SPX, both down -0.45% fight now. If tech starts to lead lower today the bears will rejoice; if the COMPQ starts to outperform the SPX to the upside, then the bulls will send markets steadily higher into the weekend.
Note Added 9/28/12 at 12:54 PM: The SPX is 1441.56 six pennies under the 20-day MA. The COMPQ is down -0.43% while the SPX is down -0.39%, bear friendly. Bingo. The 8 MA just stabbed down thru the 34 MA on the SPX 30-minute chart indicating that the bears will rule for the hours and days ahead. UTIL is at 474 keeping the bulls in business. Tricky markets.
Note Added 9/28/12 at 1:47 PM: The SPX jumps higher, over the 20-day MA, and now the 8 MA has recovered back above the 34 MA on the 30-minute chart, albeit by pennies, placing the bulls in charge again. Tech still leads the broad markets lower keeping the bears in business. Wishy washy, fickle markets, best to let them meander along today. Note how the euro is at 128.55-ish about where it was before the Spain stress test news.
Note Added 9/28/12 at 4:03 PM: Tech led the downside today helping weakness reenter the markets as the day played out. AAPL fell 2%, bearish for markets. The SPX finishes under the 20-day MA, bearish. XLF finished under its 20-day MA, bearish. UTIL will start next week above 472.06, bullish. The 8 MA finishes above the 34 MA on the SPX 30-minute chart, bullish. TRIN is 1.82 verifying the market selling today but not obscenely so, so it would be open to further selling pressure moving forward. VIX closes at 15.61 smack-dab between the 20-day MA and 50-day MA. A mixed bag all the way around. The SPX high print today at 1447.13 is important for Monday. Listen for any potential Moody's downgrades, especially for Spain, if it occurs it will likely hit over the next hour or two. The euro is 128.46 a measley 0.16 above the 128.30 bull-bear danger line that will create strong broad market selling. Gold is very interesting; note how it cannot seem to close in the 1780's, which would lead to the 1820's, price keeps balking at 1780. This can only be viewed as bearish. Watch gold closely moving forward to see if it can close and stay above 1780 since it will also serve as a proxy for other PM's. Q3 ends. Q4 (October-November-December) begins.
Friday, September 28, 2012
SPX 30-Minute Chart 8 MA and 34 MA Cross Fibonacci Retracements
Note Added 9/28/12 at 1:00 PM: The 8 MA (1438.95) just stabbed down thru the 34 MA (1439.68). See if this holds today, if so, the bears rule for the hours and days ahead.
Note Added 9/28/12 at 1:53 PM: The 8 MA comes back up to attempt a cross back above, both moving averages are 1439.87. How do you like that? The drama continues.
Note Added 9/28/12 at 4:15 PM: Lots of market jumpiness today. The session ends with the 8 MA above the 34 MA signaling that the bulls will rule for the hours and days ahead, but, watch the cross after Monday's open. These markets are as fickle as a southern gal at the Autumn Cotillion.
Keystone's Morning Wake-Up 9/28/12; TGIF; EOM; EOQ3; Consumer Sentiment
Today is EOM and EOQ3 so the monthly charts will receive new prints. Yesterday's market action provides plenty of fuel for the conspiracy theorists. The Spain budget information hit the markets in the 10 and 11 AM EST time frame but came and went without fanfare. The information was leaked ahead of time so the release was a yawner. Analysts looking for a reason behind the rally from noon on say the Spain budget news caused the joyousness. Balderdash. The markets were actually rolling over after the news. The euro was most dramatic as we saw here yesterday dropping thru 128.60, 128.50, 128.40, and down towards the critical 128.30 level (type 'XEU' into the search box above to bring up the euro chart from a couple days ago displaying the importance of 128.30). The euro falling out of bed was in concert with the XLF (financials) and RTH (retail sector) tumbling thru their respective 50-day MA's. The Spain yields were elevated, ditto the VIX, it was all systems go for the market bears. As soon as the euro drops under 128.30, the hammer would fall on the markets, but, alas, whammo, and boiinng. The euro explodes higher off the 128.30 line in the sand. The euro leaps to the high 128's and then back up and over 129. The higher euro slaps the dollar silly, since they have a continual inverse relationship, and the weaker dollar results in commodities, copper, gold, silver and equities all catapulting higher. Market stick save. At the least, the action hints that a PPT (Plunge Protection Team) may actually exist.
Sticking to the technicals, the TRIN and TICK charts indicate that a market pull back is needed in the near-term and the futures agree with the S&P's down over 8 as this missive is typed. For the SPX today, starting at 1447, the bulls only need three points, to push up thru 1450, and a market acceleration will occur into the weekend. The bears need to retrace yesterday's move and push below 1434 to accelerate the market downside. The futures do not indicate a drop of this magnitude as yet but the Chicago PMI at 9:45 AM EST and Consumer Sentiment at 9:55 AM are on tap. Expect a market pivot point in this time frame just before 10 AM. Spain's bank stress tests are on tap at about noon time (12 PM EST) and a Moody's downgrade of Spanish debt may occur which would cause serious market trauma and drama. Watch the Spain 10-year yield today. A move thru 1435-1449 is sideways action.
The broad indexes will remain weak as long as the SOX is under 395 and the UTIL is under 483. However, watch utilities closely today since the bears must close UTIL under 472.06. This is the level of interest for UTIL identified by Keystone's algorithm for all of next week. UTIL is at 473.88 already above this level so watch this behavior closely. If UTIL closes above 472 today, that sets up Monday morning for Keybot the Quant to potentially flip to the long side in the markets. If UTIL stays under 472 thru the close, the market bears are cruising. Watch to see if the 8 MA stabs back down thru the 34 MA on the SPX 30-minute chart today, or not.
Sticking to the technicals, the TRIN and TICK charts indicate that a market pull back is needed in the near-term and the futures agree with the S&P's down over 8 as this missive is typed. For the SPX today, starting at 1447, the bulls only need three points, to push up thru 1450, and a market acceleration will occur into the weekend. The bears need to retrace yesterday's move and push below 1434 to accelerate the market downside. The futures do not indicate a drop of this magnitude as yet but the Chicago PMI at 9:45 AM EST and Consumer Sentiment at 9:55 AM are on tap. Expect a market pivot point in this time frame just before 10 AM. Spain's bank stress tests are on tap at about noon time (12 PM EST) and a Moody's downgrade of Spanish debt may occur which would cause serious market trauma and drama. Watch the Spain 10-year yield today. A move thru 1435-1449 is sideways action.
The broad indexes will remain weak as long as the SOX is under 395 and the UTIL is under 483. However, watch utilities closely today since the bears must close UTIL under 472.06. This is the level of interest for UTIL identified by Keystone's algorithm for all of next week. UTIL is at 473.88 already above this level so watch this behavior closely. If UTIL closes above 472 today, that sets up Monday morning for Keybot the Quant to potentially flip to the long side in the markets. If UTIL stays under 472 thru the close, the market bears are cruising. Watch to see if the 8 MA stabs back down thru the 34 MA on the SPX 30-minute chart today, or not.
NYMO McClellan Oscillator Daily Chart Market Direction Tool
Note how the NYMO makes a lower low as compared to late August. The indicators, however, are weak and bleak (red lines). The ROC is positively diverged and created the NYMO bounce and market rally over the last day or so, but, the weak RSI, MACD and stochastics want to see a lower low print for the NYMO. Once the lower low prints the indicators will likely line up with positive divergence across the board that can lead to a several day rally. Projection is for continued market weakness looking for a NYMO print under -50 that will identify a near-term bottom for the broad indexes. 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.
TICK Daily and 5-Minute Charts Market Direction Tool
All technical analysis methods work in all time frames so the red circles identify the market tops and the green circles identify market bottoms. Uber high and uber low readings, over +1000, or under -1000, respectively, identify important near-term market tops and bottoms. Day traders must have the TRIN and TICK running on their screens continuously throughout the trading day. For any trader, entering any position, the TICK is very important since it will help you shave off extra pennies in your favor and every little bit helps in trading. If you want to go long, any ticker or index, it does not matter, since about 80% of the stocks typically move in the same direction as the market on any given day, do not jump into the long position willy-nilly. Instead, watch the TICK. As the TICK moves down, wait for a -600 or lower TICK, preferably -1000, before pulling the trigger and jumping in long. This starts you off from a low point, remember, buy low sell high. Conversely, if you want to short any stock or index, wait for a TICK of +800 or higher, preferably +1000, before jumping in on the short side. This way, you are entering when the markets are at a high point giving you a few pennies better on every one of your trades.
Projection is for a market sell off move so the uber high +1200 TICK's from yesterday can be worked off. 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.
TRIN Arms Index Daily Chart Market Direction Tool
The last three circles show the market top identified by the low 0.25-ish TRIN. The markets sold off this week which resulted in a TRIN above 3. This begs for a market recovery bounce, which occurred over the last day and results in a low 0.66 number yesterday. The last red circle hints that the bullishness was too out of hand yesterday, a low print under 0.5 occurs intraday, so a near-term market sell off is desired by the TRIN. If market bearish, you want to see a steady-eddy TRIN of from 1.0 to 1.5 day after day and the markets will steadily drift lower. If bullish, you want to see a steady-eddy TRIN of 0.8 to 1.0 day after day and the markets will steadily drift higher. 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.
Thursday, September 27, 2012
Keystone's Midday Market Action 9/27/12; GDP
Futures are up overnight on the umpteenth rumor that China will provide more stimulus. This sends copper and commodities, and equities, higher. GDP disappoints but traders do not appear to care. The market bears will remain in the drivers seat if UTIL remains under 483 and SOX under 395, despite any upside market move. Also watch VIX 17.70, RTH 44 and XLF 15.30. All three are contributing bullishly to markets, if any of the three cross the levels shown, it will create market negativity. The VIX is moving higher now so expect more dramatic intraday moves in the markets moving forward.
The 8 MA remains under the 34 MA on the SPX 30-minute charts projecting continued market bearishness for the hours and days ahead. The SPX 60-minute chart posted last evening shows price testing the critical 200 EMA and bouncing. Another test of the 200 EMA at 1431-1432 would be in order but the futures at this writing show that a bounce is on tap. For the SPX today, beginning at 1433, the bears have the easy road, only needing to push under 1430.50 to receive a downside acceleration. But, the futures are going the other way. The bulls need to push above 1441.50 to accelerate the market upside. A move thru 1432-1440 is sideways action today.
SPX S/R in this area is 1453, 1448, 1446, 1444, 1441, 1440 (5/19/08 intraday HOD for 2008 at 1440.24), 1438, 1437.69 (20-day MA), 1435, 1433, 1431.92 (200 EMA on 60-minute chart), 1431, 1429, 1427 (5/19/08 closing high for 2008 at 1426.63) and 1424.
Q3 ends tomorrow so the monthly charts will all receive new data points. Window dressing must be considered as the month and quarter closes out; EOM, EOQ3. The full moon is Saturday and markets tend to be buoyant in front of the new moon. A Bradley turn date is Sunday, 9/30/12, so a window remains open for a trend change in the markets to occur anytime now thru next week, especially now thru next Wednesday. The Spain bailout continues to be a major focus including the riots in both Spain and Greece. Markets are starting to give up on Spain asking for a bailout but news on this front would help to elevate markets even if only for a day or two. Behind the scenes, Spain and the ECB are working on the conditionality aspects of a bailout so news may hit at anytime. Spain plans to announce further monetary news tomorrow so the markets will remain at the mercy of the on again, off again, Spain bailout talk.
Watch the SPX bracket formed by the 20-day MA resistance above, and the 200 EMA support below, as highlighted above. The bulls will push the markets sideways with upward bias if the euro continues to stay above the 128.30-128.50 area. If the euro drops under this range, the broad indexes will sell off strongly.
Note Added 9/27/12 at 9:35 AM: The SPX fights the 20-day MA at 1439.11. Keystone took profits on AMD, will look to reenter on a pullback today, AMD remains very attractive moving forward.
Note Added 9/27/12 at 9:42 AM: Utes are weak. SOX flat. The SPX 20-day MA resistance is holding price down. VIX is flatish at 16.21; see if it maintains above the 50-day MA support at 15.96. The COMPQ is not leading the SPX higher today thus far so tech is not leading the broad markets higher so this hints that the upside is limited and should peter out. Keystone bot AMD reopening a long position.
Note Added 9/27/12 at 10:01 AM: Pending Home Sales are weak. The SPX moves flat across 1438. Watch the RTH, retail sector, testing support at its 20-day MA at 44.84, a failure here could finally lead to a cascade lower for retail, and perhaps Godot shows up to verify the short side for retail afterall. Keystone took profits on AMD, will look to reenter, AMD remains very attractive, the minute charts from 30-minute and lower are agreeable to a rest after this thrust higher to start the day, the hourly charts point to higher highs, so perhaps let things simmer and reenter at some point today.
Note Added 9/27/12 at 10:21 AM: Markets are meandering sideways. Potential longs that Keystone is interested in include AMD 3.3-3.4, MRVL 8.7-8.9, NFLX 54.80, BBY 16.7-17.0, PAY 27.7-27.9, ZSL 39.7-39.9 and CRR 63.20. All of these plays exhibit positive divergence in place or setting up.
Note Added 9/27/12 at 10:27 AM: RTH failure at the 20-day MA. XLF falls thru its 20-day MA as well. UTIL now down two points today. Markets remain weak. The SPX cannot regain its 20-day MA today, so far. TRIN is 0.63, with a low print today at 0.49, uber bullish action, that begs to see some market selling today or tomorrow to relieve this uber bullish euphoria. Interestingly, for such a low TRIN, the SPX should be up 10 or 20 handles, instead, the SPX is up four. The euro is at 128.52 now knocking on the door of the 128.30-128.50 range highlighted in yesterday's euro chart. Markets will noticeably weaken if the euro falls thur 128.50, more so at 128.40 and significantly so at 128.30.
Note Added 9/27/12 at 11:29 AM: Spain releases budget information. Copper turns red. The euro drops to 128.43. The European markets are closing. The U.S. markets remain surprisingly flat; the euro weakness should push the equities markets lower. Euro 128.37....128.36.......the critical test of the 128.30 line in the sand is occuring. Euro 128.40...128.41.. 128.43....... the first test of 128.30 results in a bounce higher.
Note Added 9/27/12 at 12:05 PM: Markets spike higher. The euro spikes to 128.75. Gold is up 25 bucks. The Spain 10-year yield drops. The SPX accelerates higher to test 1444 R, the 1446 is very strong resistance. The bulls must be viewing Europe in a positive light from the ECB's bond-buying perspective since gold is moving higher. Note the two +1200 TICK's over the last fifteen minutes, a wildly strong upward spike.
Note Aded 9/27/12 at 1:14 PM: The euro is 128.88 driving the markets higher. The SPX is bumping up against the strong 1466 R. The VIX fell thru the 50 and 20-day MA's at 15.95 and 15.52, respectively, keep an eye on these levels. After the strong move higher today, tech is now leading the markets higher so this helps the bulls maintain the indexes higher. UTIL is flat on the day. SOX is up 2% today but remains ten points below where the bulls need to be at 395-ish. RTH and XLF regained their 20-day MA's but keep watching them. TRIN remains uber bullish at 0.57 which will need to see some market selling over the next day or two to remedy this uber low number. Three +1200 TICK's occurred today which is not something that typically happens. Interestingly, the last uber high +1200 TICK that occurred was on Thursday 9/13/12, as the markets placed their top for the year, at the opening bell the next morning on Friday, 9/14/12. The SPX 60-minute chart never tested the 200 EMA today so that will have to be placed on the back burner for the days ahead. On the SPX 30-minute chart, the 8 MA is under the 34 MA, bearish, but the 8 MA appears likely to stab up thru the 34 MA today, so watch to see if that occurs.
Note Added 9/27/12 at 2:21 PM: The 8 MA pierced up thru the 34 MA on the SPX 30-minute chart at 1:30 PM so the bulls are driving the bus for the hours and days ahead according to this tool. A +1100 TICK printed at 1:40 PM which exactly marked the top at 1449.91. These +1100 and +1200 TICK's are obscene. Stay alert in these markets. Expect the unexpected. Tech continues to lead th ebroad markets higher which helps the bull case.
Note Added 9/27/12 at 2:31 PM: Keystone added more VXX. This is the highly volatile and dangerous long volatility ETF. The volatilty ETF's and ETN's such as VXX and UVXY, which are long volatility, and Keystone currently holds both of these, or XIV, which is short volatility, are some of the most dangerous and psycho trading vehicles available. Volatility increases as fear increases when market selling increases. Volatilty decreases as complacency increases when markets are rallying.
Note Added 9/27/12 at 3:10 PM: Keystone bot ZSL, a dangerous 2x inverse ETF that moves inverse to silver, opening up a new long position. Quantitative easing catapults commodities, gold, silver and other PM's higher making this a dangerous trade from the 'don't fight the Fed' perspective as well. ZSL has been bludgeoned, falling from 75 to 39, -46%, in only about 12 weeks time, also falling from 65 to 39, -40%, in only the last six weeks alone.
Note Added 9/27/12 at 3:59 PM: Keystone bot AMD reopening a new long position.
Note Added 9/27/12 at 4:15 PM: Tech ran today, AAPL (Apple accounts for about 10% of the SPX and about 20% of the Nasdaq) jumped 16 points, so, as goes AAPL, so goes the markets. The euro move higher today set the wheels in motion for the bulls to take markets higher. The euro came down to touch the danger level at 128.30 and then catapulting skyward like a missile well over 129, now at 129.09. Perhaps some window dressing is occurring, the full moon effects, call it what you will, there was a mini melt-up today. The SPX closes above the strong 1446 resistance, which now becomes support, as well as the 20-day MA at 1439.52. The +1200 TICK's are important today since all TICK's here or higher, over the last few months, results in a pullback in the SPX from 10 to 40 handles within one to a few days time. TRIN closes at 0.66, uber bullish, that will want to see a market sell move ahead. NYSE volume was only about 70% of a day's average expected volume which makes the bullish market move today unenthusiastic. Remember that for this week in September, after OpEx, the markets are down over 80% of the time. The SPX is down 13 points, or -0.9% so far this week, with one day remaining in the week. Utes ended red. The VIX was down today but flat on the week with charts that look very attractive for upside ahead. Gold is at 1780-ish teasing Keystone's 80/20 rule where if it closes in the 1780's, then that will likely lead to a move to the 1820's, thus, this price area for gold is very important. RIMM is up 14% AH's on better than expected earnings so perhaps Keystone will finally be rewarded for holding that one long. NKE is puking AH's, money is better spent on food rather than three hundred dollar shoes.
The 8 MA remains under the 34 MA on the SPX 30-minute charts projecting continued market bearishness for the hours and days ahead. The SPX 60-minute chart posted last evening shows price testing the critical 200 EMA and bouncing. Another test of the 200 EMA at 1431-1432 would be in order but the futures at this writing show that a bounce is on tap. For the SPX today, beginning at 1433, the bears have the easy road, only needing to push under 1430.50 to receive a downside acceleration. But, the futures are going the other way. The bulls need to push above 1441.50 to accelerate the market upside. A move thru 1432-1440 is sideways action today.
SPX S/R in this area is 1453, 1448, 1446, 1444, 1441, 1440 (5/19/08 intraday HOD for 2008 at 1440.24), 1438, 1437.69 (20-day MA), 1435, 1433, 1431.92 (200 EMA on 60-minute chart), 1431, 1429, 1427 (5/19/08 closing high for 2008 at 1426.63) and 1424.
Q3 ends tomorrow so the monthly charts will all receive new data points. Window dressing must be considered as the month and quarter closes out; EOM, EOQ3. The full moon is Saturday and markets tend to be buoyant in front of the new moon. A Bradley turn date is Sunday, 9/30/12, so a window remains open for a trend change in the markets to occur anytime now thru next week, especially now thru next Wednesday. The Spain bailout continues to be a major focus including the riots in both Spain and Greece. Markets are starting to give up on Spain asking for a bailout but news on this front would help to elevate markets even if only for a day or two. Behind the scenes, Spain and the ECB are working on the conditionality aspects of a bailout so news may hit at anytime. Spain plans to announce further monetary news tomorrow so the markets will remain at the mercy of the on again, off again, Spain bailout talk.
Watch the SPX bracket formed by the 20-day MA resistance above, and the 200 EMA support below, as highlighted above. The bulls will push the markets sideways with upward bias if the euro continues to stay above the 128.30-128.50 area. If the euro drops under this range, the broad indexes will sell off strongly.
Note Added 9/27/12 at 9:35 AM: The SPX fights the 20-day MA at 1439.11. Keystone took profits on AMD, will look to reenter on a pullback today, AMD remains very attractive moving forward.
Note Added 9/27/12 at 9:42 AM: Utes are weak. SOX flat. The SPX 20-day MA resistance is holding price down. VIX is flatish at 16.21; see if it maintains above the 50-day MA support at 15.96. The COMPQ is not leading the SPX higher today thus far so tech is not leading the broad markets higher so this hints that the upside is limited and should peter out. Keystone bot AMD reopening a long position.
Note Added 9/27/12 at 10:01 AM: Pending Home Sales are weak. The SPX moves flat across 1438. Watch the RTH, retail sector, testing support at its 20-day MA at 44.84, a failure here could finally lead to a cascade lower for retail, and perhaps Godot shows up to verify the short side for retail afterall. Keystone took profits on AMD, will look to reenter, AMD remains very attractive, the minute charts from 30-minute and lower are agreeable to a rest after this thrust higher to start the day, the hourly charts point to higher highs, so perhaps let things simmer and reenter at some point today.
Note Added 9/27/12 at 10:21 AM: Markets are meandering sideways. Potential longs that Keystone is interested in include AMD 3.3-3.4, MRVL 8.7-8.9, NFLX 54.80, BBY 16.7-17.0, PAY 27.7-27.9, ZSL 39.7-39.9 and CRR 63.20. All of these plays exhibit positive divergence in place or setting up.
Note Added 9/27/12 at 10:27 AM: RTH failure at the 20-day MA. XLF falls thru its 20-day MA as well. UTIL now down two points today. Markets remain weak. The SPX cannot regain its 20-day MA today, so far. TRIN is 0.63, with a low print today at 0.49, uber bullish action, that begs to see some market selling today or tomorrow to relieve this uber bullish euphoria. Interestingly, for such a low TRIN, the SPX should be up 10 or 20 handles, instead, the SPX is up four. The euro is at 128.52 now knocking on the door of the 128.30-128.50 range highlighted in yesterday's euro chart. Markets will noticeably weaken if the euro falls thur 128.50, more so at 128.40 and significantly so at 128.30.
Note Added 9/27/12 at 11:29 AM: Spain releases budget information. Copper turns red. The euro drops to 128.43. The European markets are closing. The U.S. markets remain surprisingly flat; the euro weakness should push the equities markets lower. Euro 128.37....128.36.......the critical test of the 128.30 line in the sand is occuring. Euro 128.40...128.41.. 128.43....... the first test of 128.30 results in a bounce higher.
Note Added 9/27/12 at 12:05 PM: Markets spike higher. The euro spikes to 128.75. Gold is up 25 bucks. The Spain 10-year yield drops. The SPX accelerates higher to test 1444 R, the 1446 is very strong resistance. The bulls must be viewing Europe in a positive light from the ECB's bond-buying perspective since gold is moving higher. Note the two +1200 TICK's over the last fifteen minutes, a wildly strong upward spike.
Note Aded 9/27/12 at 1:14 PM: The euro is 128.88 driving the markets higher. The SPX is bumping up against the strong 1466 R. The VIX fell thru the 50 and 20-day MA's at 15.95 and 15.52, respectively, keep an eye on these levels. After the strong move higher today, tech is now leading the markets higher so this helps the bulls maintain the indexes higher. UTIL is flat on the day. SOX is up 2% today but remains ten points below where the bulls need to be at 395-ish. RTH and XLF regained their 20-day MA's but keep watching them. TRIN remains uber bullish at 0.57 which will need to see some market selling over the next day or two to remedy this uber low number. Three +1200 TICK's occurred today which is not something that typically happens. Interestingly, the last uber high +1200 TICK that occurred was on Thursday 9/13/12, as the markets placed their top for the year, at the opening bell the next morning on Friday, 9/14/12. The SPX 60-minute chart never tested the 200 EMA today so that will have to be placed on the back burner for the days ahead. On the SPX 30-minute chart, the 8 MA is under the 34 MA, bearish, but the 8 MA appears likely to stab up thru the 34 MA today, so watch to see if that occurs.
Note Added 9/27/12 at 2:21 PM: The 8 MA pierced up thru the 34 MA on the SPX 30-minute chart at 1:30 PM so the bulls are driving the bus for the hours and days ahead according to this tool. A +1100 TICK printed at 1:40 PM which exactly marked the top at 1449.91. These +1100 and +1200 TICK's are obscene. Stay alert in these markets. Expect the unexpected. Tech continues to lead th ebroad markets higher which helps the bull case.
Note Added 9/27/12 at 2:31 PM: Keystone added more VXX. This is the highly volatile and dangerous long volatility ETF. The volatilty ETF's and ETN's such as VXX and UVXY, which are long volatility, and Keystone currently holds both of these, or XIV, which is short volatility, are some of the most dangerous and psycho trading vehicles available. Volatility increases as fear increases when market selling increases. Volatilty decreases as complacency increases when markets are rallying.
Note Added 9/27/12 at 3:10 PM: Keystone bot ZSL, a dangerous 2x inverse ETF that moves inverse to silver, opening up a new long position. Quantitative easing catapults commodities, gold, silver and other PM's higher making this a dangerous trade from the 'don't fight the Fed' perspective as well. ZSL has been bludgeoned, falling from 75 to 39, -46%, in only about 12 weeks time, also falling from 65 to 39, -40%, in only the last six weeks alone.
Note Added 9/27/12 at 3:59 PM: Keystone bot AMD reopening a new long position.
Note Added 9/27/12 at 4:15 PM: Tech ran today, AAPL (Apple accounts for about 10% of the SPX and about 20% of the Nasdaq) jumped 16 points, so, as goes AAPL, so goes the markets. The euro move higher today set the wheels in motion for the bulls to take markets higher. The euro came down to touch the danger level at 128.30 and then catapulting skyward like a missile well over 129, now at 129.09. Perhaps some window dressing is occurring, the full moon effects, call it what you will, there was a mini melt-up today. The SPX closes above the strong 1446 resistance, which now becomes support, as well as the 20-day MA at 1439.52. The +1200 TICK's are important today since all TICK's here or higher, over the last few months, results in a pullback in the SPX from 10 to 40 handles within one to a few days time. TRIN closes at 0.66, uber bullish, that will want to see a market sell move ahead. NYSE volume was only about 70% of a day's average expected volume which makes the bullish market move today unenthusiastic. Remember that for this week in September, after OpEx, the markets are down over 80% of the time. The SPX is down 13 points, or -0.9% so far this week, with one day remaining in the week. Utes ended red. The VIX was down today but flat on the week with charts that look very attractive for upside ahead. Gold is at 1780-ish teasing Keystone's 80/20 rule where if it closes in the 1780's, then that will likely lead to a move to the 1820's, thus, this price area for gold is very important. RIMM is up 14% AH's on better than expected earnings so perhaps Keystone will finally be rewarded for holding that one long. NKE is puking AH's, money is better spent on food rather than three hundred dollar shoes.
Wednesday, September 26, 2012
Keystone's SPX 60-Minute Chart with Price Versus 200 EMA Cross
The green lines for the indicators show positive slopes and would be positive divergence if price would have placed a lower low inside the green circle. But, price has not made a lower low so positive divergence cannot exist, yet. This set up alone hints that price needs to test the 200 EMA tomorrow and print inside the green circle. At that time the indicators can be studied to note if the positive divergence remains in place that will serve to bounce price higher from the green circle. The MACD line is weak and bleak so regardless of the lower print in price, the MACD wants to see further lows in price. SPX 1429 support would reestablish the sideways channel shown. Also note the large volume candle from last Friday. That price level at 1460-1465 will need retested in the future but that test can occur a day or two from now, or, two or three weeks from now.
In a nutshell, watch the 200 EMA. If price fails, then the SPX is going to explore lower numbers moving forward; the low 1400's. If the test of the 200 EMA occurs tomorrow and the bulls bounce price, it will likely bounce from the green circle at 1429-1432, but, the bounce will likely be short-lived and price will come back down again for another test of the 200 EMA after that. 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.
Keystone's Midday Market Action 9/26/12; Yom Kippur; Spain Riots; Greece Strike
The Spain violence has traders in a tizzy. Firing rubber bullets into a crowd is not a good thing. Catalonia wants to separate from Spain adding fuel to the fire. Today, Greece is on strike, taking to the streets, tear gas wafts thru the air. Markets gave up waiting on Rajoy to decide about the Spain bailout. The Spain 10-year yield went over 6% this morning verifying the increased tension. The SPX may want to explore the lower support levels at 1441, 1440, 1438, 1435 and 1433. Watch euro 128.30 today, above and market bulls are happy, below and market bears are happy. The euro is now 1.2853 with the opening bell only two minutes away.
Note Added 9/26/12 at 10:16 PM: Euro is maintaining elevation above the important 128.30-128.50 zone. Tech is leading the broad markets lower but the bears need to see the euro cooperate to the downside. The SPX is testing the 20-day MA at 1437.84 so watch that closely. Price is now 1436.42 which is failure. 1435 is strong support. VIX is 16.32.
Note Added 9/26/12 at 10:48 AM: The TICK printed -1000 at 10:38 AM which identified the bottom in the minute time frame. Tech is leading the markets lower. COMPQ is down over one percent now. VIX at 17. XEU, euro, is at 128.43, holding above 128.30 and helping the bulls hang on. Keystone's SPX 60-Minute Chart with 200-EMA Price Cross is in play today. The 200-EMA is 1431.76. Note how price respected it on this move down. So lots of drama on tap around here today.
Note Added 9/26/12 at 11:25 AM: SPX S/R is 1446, 1444, 1441, 1440, 1438, 1435, 1433, 1431.78 (Keystone's 200-EMA on the 60-Minute Chart), 1431, 1429, 1427 (closing high for 2008 on 5/19/08; 1426.63), 1424, 1422 and 1419. SPX 1403-1419 is a very strong gauntlet of support. The TICK printed a touch over +800 a few minutes ago which identfied the top in the minute time frame. Price is back kissing the 1435-ish level now. If price moves up thru watch to see if 1438 maintains a resistance ceiling. The euro is staying above the 128.30-128.50 danger zone now printing 128.56. The day is young. The European close is on tap in a couple minutes.
Note Added 9/26/12 at 1:37 PM: The bulls push the SPX back up to back kiss the 20-day MA at 1437.92. The SPX is now printing 1437.99 so this test is important. Resistance is 1438 and very strong R at 1440. The SPX 30-minute, 60-minute and 2-hour charts remain unattractive open to seeing a retest of today's lows, perhaps by the close today or, considering the 2-hour candles, tomorrow. Euro is 128.59 refusing to collapse thru 128.30-128.50 so the bulls are encouraged. Tech is leading the broad markets lower which is a bearish indication. TRIN collapses to 0.77 which could be considered an adequate response to the 3.08 close yesterday, remember 1.0 is the bull-bear line, 3.08 is uber bearish, and 0.7 or lower is uber bullish. The high 3.08 wanted to see a market bounce to relieve the strong bearish pressure, and that is now fulfilled. There were two +1000 TICK's over the last hour as the SPX prints in the 1437-1439 zone. This zone was very important in the first half-hour of trading today so supply and demand is being explored; bulls win above 1439, bears win below 1437.
Note Added 9/26/12 at 2:11 PM: TICK prints +800, the TICK machine is active today. The bulls are trying to elevate markets with all their might, stabbing higher with +800 and +1000 TICK's, but, the SPX remains under the 20-day MA.
Note Added 9/26/12 at 3:14 PM: SPX leaks lower as the day moves along. Keystone took profits on TWM, continuing to like the short side but best to lock in some profits.
Note Added 9/26/12 at 3:41 PM: Keystone bot AMD opening a new long position and also added more CEP, this is a thinly-traded stock. Both show attractive positive divergence. Long positions will help balance the account better as it is heavily weighted short, and remains so, since Keybot the Quant remains short.
Note Added 9/26/12 at 3:51 PM: The SPX 200-EMA on the one-hour chart is 1431.93. Keystone's SPX:VIX ratio is 85, the lowest it has been since the September rally started on Labor Day, but above the 68 danger level. Likewise, the VIX is at levels not seen since Labor Day, now at 16.76. A VIX over 17 will increase the selling pressure further, over 17.75 and the markets will be selling off dramatically more. Bulls will try to prevent 17 from printing. Keystone bot more AMD.
Note Added 9/26/12 at 10:16 PM: Euro is maintaining elevation above the important 128.30-128.50 zone. Tech is leading the broad markets lower but the bears need to see the euro cooperate to the downside. The SPX is testing the 20-day MA at 1437.84 so watch that closely. Price is now 1436.42 which is failure. 1435 is strong support. VIX is 16.32.
Note Added 9/26/12 at 10:48 AM: The TICK printed -1000 at 10:38 AM which identified the bottom in the minute time frame. Tech is leading the markets lower. COMPQ is down over one percent now. VIX at 17. XEU, euro, is at 128.43, holding above 128.30 and helping the bulls hang on. Keystone's SPX 60-Minute Chart with 200-EMA Price Cross is in play today. The 200-EMA is 1431.76. Note how price respected it on this move down. So lots of drama on tap around here today.
Note Added 9/26/12 at 11:25 AM: SPX S/R is 1446, 1444, 1441, 1440, 1438, 1435, 1433, 1431.78 (Keystone's 200-EMA on the 60-Minute Chart), 1431, 1429, 1427 (closing high for 2008 on 5/19/08; 1426.63), 1424, 1422 and 1419. SPX 1403-1419 is a very strong gauntlet of support. The TICK printed a touch over +800 a few minutes ago which identfied the top in the minute time frame. Price is back kissing the 1435-ish level now. If price moves up thru watch to see if 1438 maintains a resistance ceiling. The euro is staying above the 128.30-128.50 danger zone now printing 128.56. The day is young. The European close is on tap in a couple minutes.
Note Added 9/26/12 at 1:37 PM: The bulls push the SPX back up to back kiss the 20-day MA at 1437.92. The SPX is now printing 1437.99 so this test is important. Resistance is 1438 and very strong R at 1440. The SPX 30-minute, 60-minute and 2-hour charts remain unattractive open to seeing a retest of today's lows, perhaps by the close today or, considering the 2-hour candles, tomorrow. Euro is 128.59 refusing to collapse thru 128.30-128.50 so the bulls are encouraged. Tech is leading the broad markets lower which is a bearish indication. TRIN collapses to 0.77 which could be considered an adequate response to the 3.08 close yesterday, remember 1.0 is the bull-bear line, 3.08 is uber bearish, and 0.7 or lower is uber bullish. The high 3.08 wanted to see a market bounce to relieve the strong bearish pressure, and that is now fulfilled. There were two +1000 TICK's over the last hour as the SPX prints in the 1437-1439 zone. This zone was very important in the first half-hour of trading today so supply and demand is being explored; bulls win above 1439, bears win below 1437.
Note Added 9/26/12 at 2:11 PM: TICK prints +800, the TICK machine is active today. The bulls are trying to elevate markets with all their might, stabbing higher with +800 and +1000 TICK's, but, the SPX remains under the 20-day MA.
Note Added 9/26/12 at 3:14 PM: SPX leaks lower as the day moves along. Keystone took profits on TWM, continuing to like the short side but best to lock in some profits.
Note Added 9/26/12 at 3:41 PM: Keystone bot AMD opening a new long position and also added more CEP, this is a thinly-traded stock. Both show attractive positive divergence. Long positions will help balance the account better as it is heavily weighted short, and remains so, since Keybot the Quant remains short.
Note Added 9/26/12 at 3:51 PM: The SPX 200-EMA on the one-hour chart is 1431.93. Keystone's SPX:VIX ratio is 85, the lowest it has been since the September rally started on Labor Day, but above the 68 danger level. Likewise, the VIX is at levels not seen since Labor Day, now at 16.76. A VIX over 17 will increase the selling pressure further, over 17.75 and the markets will be selling off dramatically more. Bulls will try to prevent 17 from printing. Keystone bot more AMD.
XEU Euro Daily Chart Inverted Head and Shoulder (H&S) Patterns Key Support at 128.30
The black ADX line shows how the trend down was very strong in May moving into June, then the trend petered out to signal the price reversal in July, along with the positive divergence. Draghi said he would support the euro by all means necessary on 7/26/12 marking the exact bottom in the euro. The ADX then shows a strong trend up for the euro in September. The indicators are all weak and bleak (red lines) wanting to see lower lows and that is occurring today. Watch the fight for 128.30 since it will tell you the market direction. Bounce from 128.30 and bulls realize a sigh of relief and quickly grab the booze to start the party again. If the euro collapses thru 128.30, the equity markets will move decisively lower. The euro is now printing 128.53.......... 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 9/26/12 at 4:09 PM: The trading day occurs with the euro keeping its head above water the whole time, staying above the critical 1.2830-1.2850 area. The current euro print is 1.2867.
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