Happy leap day. Lucky folks who have a birthday today only age at one-quarter the rate as the rest of us. The LTRO2 excitment was a bit of a dud. Looks like a lot of the news was built into equities. The SPX moved up and over 1373, so price moved up to test 1377 R. SPX punched up thru, but then sold off, now coming down to likely test the 1373 level to determine if price has a right to move higher.
Same stuff each day. Nasdaq moves up and over 3000 so the new records continue. Watch the VIX, now at 17.97. The bears will need to overtake the 20-day MA at 18.4-ish, if so, they may not look back from there. But every journey begins with the first step and the market bears got nothing unless they first move above 18. Speak of the devil, as this is typed, there is a VIX 18.04 print so watch the 20-day MA next, and, of course, see if the 18 level holds. Chairman Bernanke is speaking now with the feed coming across the business networks.
Note Added 2/29/12 at 11:28 AM: The VIX is now printing 18.50 maintaining the 20-day MA as support. Market bears win above here, market bulls win if they push the VIX lower from here. Markets are significantly weakening, gold and silver pulling back, indexes now printing lows of the day. The Nasdaq was leading the downside for a short while, now the Nasdaq and SPX are moving down at about the same rate. Watch AAPL, it is the only thing holding the broad markets together. Apple showing a shooting star candle on the daily chart so we shall see if this marks the top. Moving forward, watch the SPX 10-day MA at 1362, that is important if lost and should lead to further weakness. If AAPL goes negative, still three bucks positive, that will usher in strong market negativity.
Note Added 2/29/12 at 11:37 AM: The SPX support/resistance is 1386, 1377, 1373, 1370.58, 1370, 1368, 1365, 1363.61, 1363, 1362 (10-day MA), 1361, 1358, 1356, 1352.62 (20-day MA), 1351. SPX now printing 1367 so operating between 1365 and 1368. Apparently the lack of any mention of further future QE from Bernanke or the ECB (LTRO3) is ushering in the market weakness. Markets need more crack cocaine and they were told this morning that the supplier is out.
Note Added 2/29/12 at 8:00 PM: Interesting how the VIX closed at 18.43, one single penny above the 20-day MA at 18.42. How does Keystone know those levels to watch ahead of time? Bears did no serious damage since they could not even break down thru SPX 1365, albeit for a few minutes, and the bears could not hold it below. The SPX 1364 handle is important for tomorrow, lose that handle and start printing in the 1363's, the SPX, and broad markets, should accelerate lower. So bears will want to see red futures. China PMI numbers are very important.
will the 2-month Buy the F-ing Dip (BTFD) continue? SPX bounced right of 1366, printing 1370 as we speak. AAPL still up (what a frikin gap this morning: $10...) markets down, finally a disconnect!?
ReplyDeleteHello Arnie, well, just have to let things play out into noon time tomorrow. SPX 1362 is important since that is hte 10-day MA so watch that level. Yes, we will have to see when the dip buyers come in, and if Keybot moves to the short side, or not. AAPl printing a shooting star candle today, negative divergence on charts remains.
ReplyDeleteKS, your analysis were 100% correct with zsl. I believe someone disagreed with you previously.
ReplyDeletejimmy
Hello Jimmy, well, its only one day of trading and lucky to make back yesterday's loss, so the jury remains out. And the position is still underwater. Note the big spike in the dollar today. The lack of the central bankers to pump the quantitative easing talk has spooked markets. Yesterday, gold and silver traders werer front running the anticiapted rally today, expecting a weaker dollar and more upside.
ReplyDeleteThus, just another day at the office. So, we will see how it goes. Keybot remains long the market for now, so the bears got nothing unless Keybot flips short.
One day does not a trend make, but is there any doubt now that this recent bull market is/was being driven by central bank liquidity?
ReplyDeletehey weaver, of course it is, like all other QE driven bull runs we've seen over the past 2-3 years. Hardly a word about that in the media, but then again, they spin everything the way they think it is disregarding all underlying technical principles that really drive the markets. News is noise. News is always after the fact, except in maybe a few cases.
ReplyDeleteAnyway, QEs always end the same: big crash. The more you give the junkie, the more it needs next time to get the same fix. At some point there is no more and the junkie goes down.
This is the weakest day of the month I've seen with SPX possibly showing an intra-day reversal bar, and possibly almost/even AAPL too. Though I am pretty sure the MM's won't let that happen to keep up appearances.
KS, great call on ZSL! Are you still holding that position? Will the metals continue to tank? Really surprised that the metals dropped so much today given the parabolic activities from the printing presses from the central banks. I was too timid to get ZSL yesterday after it had dropped so much. I was worried about a reverse split coming. I'm still holding TZA. Do you see more upside for TZA and are you still holding that position as well? Thanks again for all your great insights. Take care.
ReplyDeleteSteve
Just in the news! Fed could raise interest rates before 2014, may be in 2012. This could tank the market...
ReplyDeleteBrian
Hello Weaver and Arnie, yes, it looks like the combination of Chairman Bernnake talking dovishly without mentioning QE3, along with the ECB not making any mention about LTRO3 (LTRO2 was priced in as the markets showed today so the markets wanted to already see more stimulus), was enough to act as a catalyst to launch the dollar out of its duldrums, so gold, silver, copper, commmodities for the most part all moved south. China PMI numbers are important since they directly effect the same commodities.
ReplyDeleteHello Steve, a blind squirrel even finds a nut now and then. Yes, Keystone is holding all his index shorts still yet, short silver, housing, small caps, retail, energy. Tomorrow is the ISM number which is always the first of the month, expect a wild reaction in the energy markets.
Hello Brian, yes, it's all the same type stuff, lots of spin, as Chairman Bernanke dances on the head of a pin. The main goal of the Fed is to keep kicking the can down the road long enough so that the economy recovers and becomes self sustaining again so the all clear can be signaled a few years down the road. We all know that the chances of success are minimal.
Watch for the China PMI and China HSBC PMI, the latter should occur a few hours after and is more important. This news will directly effect the dollar and commodites, gold, silver, etc.., and set the tone for tomorrow's trading. Here we go as this is typed. China PMI is a beat 51.0 versus 50.5, this is a feather in the market bulls cap. But, as mentioned, watch for the HSBC number that will probably hit in a couple hours.