The SPX dropped under 1345 so the down move accelerated, using the 1339 support as an initial bounce point. The S&P is down -0.87% while the Nasdaq is down -0.88%, so neck and neck. If the bears can continue to weaken technology they can start to do some damage. The CRB is traveling sideways a point or so above the 310.50, so the bulls are fighting back. SPX S/R in this area is 1354, 1349, 1347, 1344, 1341, 1339, 1338 and 1337. AAPL remains strong so this encourages the bulls. Consumer Sentiment hits in ten minutes which is a potential market pivot point. Volatilty, VIX, is back above 20 and UTIL is moving lower, both bear-friendly.
Note Added 2/10/12 at 10:15 AM: SPX is testing 1337 support and it is holding for now. As long as AAPL stays up on the day, as it is now, the market bears will not be able to make much headway lower.
Note Added 2/10/12 at 2:39 PM: AAPL remains positive all day long so that keeps the Nasdaq and tech sector buoyant which in turn keeps the broad markets from falling further. The SPX is leading the Nasdaq to the downside so the oomph is not there for the market bears today. UTIL is sporting a 448 handle now which is very bear friendly and sets up Monday and next week for the bears (under 451.17). Higher volatility favors bears. The CRB remains a point and a half above the critical 310.50 level which is supporting the broad indexes. If CRB would fail, the selling would be strong and stubstantial Thus, with tech remaining strong, indexes float along sideways towards the weekend. A Greece vote is on tap for the weekend so perhaps traders become jumpy in the last hour of trading.
Note Added 2/10/12 at 3:18 PM: Remember yesterday we were waiting for the Dow Industrials to close above the spring 2011 intraday high of the year at 12928. For three days in a row the Dow traded above the coveted 12928, but, all three days closed below, and now lower yet. AAPL turned negative on the day at 3:05 PM. Apple weakness gives the Nasdaq a stronger push lower, if this accelerates, the broad index selling will increase. Wow, VIX now at 22. This is the denominator number in the SPX:VIX ratio that helped to move the ratio under 68 at the open and signal bearishness ahead--as long as the ratio stays under 68.
Note Added 2/10/12 at 6:02 PM: Keystone's SPX:VIX Ratio Indicator is now under 68 so market bears remain in control to start the new week of trading on Monday--as long as the ratio stays under 68. UTIL prints 450.45 at the close, under the critical 451.17 number to watch for next week, also favoring bears for trading moving forward. The SPXA150R just printed for the day at 85.40. A drop under 85 would have favored bears so check the print on Monday night to see if it fell under 85, or not. Staying above 85 keeps the market bulls in the game. The 8 MA dropped under the 34 MA on the 30-minute charts for the SPX which is market bearish. The CRB is at 312.14 now less than two bucks above Keystone's critical 310.50 level. If this would have failed today, the selling would have been relentless and serious, but, the bulls kept the CRB elevated. Watch the dollar and euro closely since dollar up=euro down=stocks down and dollar down=euro up=stocks up. Hark. Keystone is being called now, call him anything, but don't call him late for supper. Lots of charts and analysis on tap for the weekend. Time to put the ole feed bag on. In a nutshell, as next week already takes shape, watch SPX:VIX 68, UTIL 451.17, CRB 310.50, SPXA150R 85, the dollar, the euro, and the SPX S/R levels such as 1354, 1344, 1339, 1337 and 1326 to name a few; piece of cake. Maybe cake is for dessert.
Do you think that the Dow Jones Transportation Average is a leading market indicator? On my charts, some of its overlays and indicators have turned bearish, on an intraday basis.
ReplyDeleteYou've not been mentioning spxa50r recently, that i have seen. Do you believe there is any significance to the fact this has made a HH on the MACD, while a LH on the RSI and STOC? DOes this just show how strong the mkt has been and that it will want to head higher after a small correction?
ReplyDeleteI learn more from your blog than all the rest put together! Thanks for all you do!!!
We are under 68 on the spx:vix and under 449 on the $UTIL. Are you waiting for the CRB and AAPL to signal
ReplyDeletethe markets are going down?
Thanks for all your help.
whats your indicators point for mondays market?
ReplyDeleteThanks KS
Brad
AApl has $97 billion in cash it can take sp will over 1500 I keep laughing at fools who try to short market
ReplyDeleteGreat comments all. Tony, yes about the trannies, they are definitely important as per Dow Theory, and their weakness days ago as the Dow Industrials ran higher was a tell. Look at TRAN price down thru 20-day MA, see INDU not yet, see if trannies lead the Dow.
ReplyDeleteAnon, on SPXA150R, I see you are referenceing the weekly chart by your description. Near 90 shows the markets are uber bullish, over the top bullish, and it is best to think about shorts. Use the 80, 85 and 90 levels. So, once over 85 the bulls continue to run, like now, but if it drops under 85 that will signal bearishness unless it recovers back above 85.
Anon, excellent catch on the SPX:VIX 68. Good ole Keystone has been snoozin' in the easy chair. That signals a triple digit down Dow day, which is in progress. Market bears are now favored moving forward--unless the ratio moves above 68 again. Yep to CRB 310.50 and AAPL weakness.
Brad, Keystone does not know what he will have for dinner yet let alone worry about next week. Watch UTIL as the markets close, under 451.17 and that will be one thing set up nicely for bears. But, seasonality stuff leads to buoyancy next week. Greece bad news will override all and take markets lower.
Anon, you are correct about AAPL, it would be a dangerous short play due to its momentum, best to stay away from these. But also, you would not want to buy it now either. Trading is not about being firmly bullish or firmly bearish as if its a political affiliation. Keystone could not care less if the markets went up or down, all that matters is, since you are a trader, is that you are on the correct side of the trade. It all spends the same whether the profit comes from the long side or the short side. Keep an open mind, you will become a better trader.