Time for a check on the action. The SPX:VIX ratio soap opera is ongoing today, if 68 is lost a huge down day will result for the broad indexes. SPX:VIX ratio now printing 68.08 with bulls hanging on by a single fingernail. AAPL is stubbornly buoyant, green on the day again and supporting the tech sector which provides bull fuel to keep things afloat. The SPX is down -0.32% and the Nasdaq is down -0.38% so that is a feather in the bears cap and surprising considering the Apple buoyancy. Tech is finally leading the downside which is very bearish. Just think of the weakness that would be in the markets if AAPL was red.
UTIL is remaining below 451.17 so the knock down drag-out fight yesterday is very bearish moving forward for markets. Price has climbed steadily over the last hour from under 447.50 to now over 450. Looks like this soap opera wants some equal time again today. Copper and commodities remain elevated despite the stronger dollar which disagrees with the previous asset relationship mentioned so either the dollar must weaken, or, copper and commodites will weaken. The day continues along with SPX:VIX 68 and UTIL 451.17 deciding the outcome. Last print for SPX:VIX ratio is 68.08 and 450.24 for UTIL, thus, the ratio is a smidge bull-friendly and the utes are bear-friendly, one of them will join the other side and light the way forward for the markets.
Note Added 2/14/12 at 1:22 PM: SPX:VIX ratio failed at 68 at 12:30 PM. Last print 65.86, the market bears won. UTIL at 449.32 is almost two points under the 451.17 level remaining firmly bearish and affecting the broad indexes negatively. Now that the bears are rolling along, the strong support at 1344 giving way. Watch 1343.06, if it fails, this day will get extremely ugly quickly. The SPX:VIX ratio under 68 seals todays fate so a triple digit down Dow day should occur. SPX now printing 1344.07, thus, the current fight this minute continues with the sturdy 1344 support. Tech is leading the downside today which is bearish. All indications point to the 1343 failing, let's see if it happens as the afternoon trading motors along.
Note Added 2/14/12 at 1:55 PM: SPX:VIX ratio is 66.25, bearish. UTIL is 449.05, bearish. Volatility is moving higher, bearish. Commodities and copper are staying elevated and the SPX has tested and held the 1344 support today, bullish. In addition, AAPL continues to run the show since the Apple strength has now stopped the tech sector from leading lower today. Thus, the down move stalled and the 1344 S held. Apple turning negative today would be a very big deal and helpful for bears. Bulls are trying with all their might to keep AAPL elevated. Bears have the bulls on the run but they better push and get the job done today which means failure down thru 1344 and 1343 which opens up much lower numbers. Otherwise, it will show that the bears simply do not have the strength and the bulls will likely step in and take over. Seasonality-wise, for OpEx week, there is typically market buoyancy from Tuesday into Wednesday so this is interesting as well.
Note Added 2/14/12 at 2:26 PM: There you go, SPX failure at 1344, then 1343. Back kiss occurring now to test the underside of 1343, if the back test is successful and price failure occurs, the bears are going to growl strongly now and accelerate the broad markets lower.
Note Added 2/14/12 at 2:29 PM: Failure, the bears are running, SPX now printing 1342.30, expect lower numbers, likely 1337 coming. SPX now printing 1342.17, the bulls have lost the grip, bears are in firm control of markets now. Let's see if the Dow prints triple digits as Keystone forecasted.
Note Added 2/14/12 at 3:39 PM: Keystone's proprietary algorithm, Keybot the Quant, flipped to the short side today at 2:30 PM at SPX 1342. Stay alert for a whipsaw possibilty into the close today or tomorrow. If the bears keep things lower for a day or so they will be cruising.
Note Added 2/14/12 at 3:45 PM: The dip-buyers are not wasting anytime launching the SPX from 1341 to 1346, five handles in ten minutes. Bulls do not want to give up.
Note Added 2/14/12 at 4:06 PM: The markets faded this afternoon on negative Greece talks and uncertainty. The Eurozone finance ministers call off the meeting tomorrow. But, when the market roll over occurred between 2:00 PM and 3:30 PM this afternoon, European news turned positve again when leaders stated that the Greece deal would be fully supported. This caused the pop in the indexes in the final minutes. What a wild whipsaw finish. Keystone's algo is short now from SPX 1342 and will probably stay that way unless the SPX pops above 1355 tomorrow. The SPX closed today at 1350.50. Do you think the markets are trading on news?
i believe this will ONCE AGAIN fail miserably, yielding little on the downside. it seems the markets are either being manipulated here, or are just so strong that EVERY 5 min dip in the market IS a buying opportunity. time to double the longs???
ReplyDeleteNope Anon, you simply have to sit back and relax and let things unfold. The SPX:VIX ratio failing 68 is a big deal. There are two more hours of trading remaining. The SPX has a 1345 handle and will likely test 1344 again today, so we'll see what happens.
ReplyDeleteThe major strenght is a parabolic Apple, it has the tech sector boosted to near dot-com euphoric levels. Just like parabolic commodities, those moves end the same way on the other side.
Thus, see if AAPL turns red today, or not, see if the Nasdaq starts to lead the downside again today, or not. See if SPX can lose the 1344 and especially 1343 level. If SPX loses only a couple points or so and fails at 1343, the bearishness will be locked in and the bears will be coasting.
This market is being manipulated beyond imagination. Any rollover, being either on 1min, 5min, 30min, 1hr, 1 day, 1 week has ferociously been cut-off, ever since Nov 30 when the FED announced it's stealth QE3 which has been further reinforced by ECB's announcement on Dec 20, last year. Ever since Dec 20, every single frikin dip has been bought up. Check the weekly charts and on Nov 28, the market was about to flip over and go into heavy sell mode and not a day late FED announces its plans. This market has been kept propped up on QE1 -printed money- ever since March 2009. Nothing is real anymore. Unfortunately. AAPL's parabolic move now scares me: the most valuable company on earth is being traded like a frikin pennystock. But, all money printing aside, old rules still apply and that is when a parabolic stock goes south, it goes south hard. Given that AAPL has been driving the market the last week or so, as it is such a heavy weight now it's simple: AAPL down hard: market down hard.
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