AAPL tags the 600 level after the opening bell. Perhaps Apple will fall on its sword today, feeling a stabbing pain, not unlike Caesar, when he utterd, "Et tu, Brute," on this Ides of March. The Demandware, DWRE, IPO opens today and this creates even more buzz and bullish euphoria in the tech sector. The Nasdaq lags the SPX to the downside now, as markets have reversed and are trailing lower after the open, which mutes the downside move for markets, however. Watch to see if tech starts to lead down and that will occur if AAPL decides to give up the ghost. If Apple stays buoyant the broad markets stay buoyant.
Utilities popped at the open, but UTIL then collapsed on its sword, but remaining with a 454 handle ten points above signaling broad market danger at 444. Copper remains elevated so this helps the bulls today. Commodities ventured down to a 314 handle, now back to 315, bears need to see 313 and the entire complexion of the markets change. The dollar is down today so the market bears need to see strength in the dollar to provide the oomph to take the CRB lower which in turn will sour the broad indexes. Otherwise, status quo, and the bulls rule.
The SPX is traveling sideways thus far today. The bulls will win if 1400 is touched, the bears will win if they push under the 1390 handle. Current print is 1393. Philly Fed data in ten minutes, this provides a gauge on manufacturing strength. Natty Inventories are at 10:30 AM so ETF's such as UNG and BOIL will react violently. UTIL now has a 453 handle.
Note Added 3/15/12 at 11:51 AM: AAPL pulling back off the 600 number. VIX flat at 15.3, watch that, a spike to 16 will tell you that the bears are pushing back. Watch CRB 313 since this is the likely area where the market will crack. The slightly weaker dollar today is providing bullish support to CRB so watch the dollar to see if it can strengthen which would be market bearish. Bulls will be happy if the dollar stays weak. The SPX HOD is 1398.76, still a point shy of 1400, the level the bulls desperately need to touch to create upside acceleration. Thus, the bulls win if the dollar stays red today, VIX at 15.3 or lower and/or SPX over 1400. Bears win if the dollar strengthens back above 80.40 and higher, VIX moves up and heads over 16 and higher and/or SPX dropping under 1390. Otherwise, if none of these occur, markets stumble sideways.
Note Added 3/15/12 at 3:27 PM: SPX touched 1400 but only managed a move up to a HOD at 1402.35. The Nasdaq is not leading the upside (due to slight AAPL weakness) so the broad market move higher is muted. For today, the dollar stays red, VIX is at 15.19 now and SPX is over 1400, bulls are winning today. SPX S/R is 1413, 1409, 1407, 1404, 1399, 1391, 1389, 1386.
Note Added 3/15/12 at 3:45 PM: Dollar is down, euro is up, commodities up, gold up, copper up, equities up; this is the expected asset relationship. Market bulls want the weaker dollar and market bears want the stronger dollar. The SPX is in the third session of exploring the upper Bollinger Band, price would be expected to come back to the 1370's simply based on the BB's.
KS, the SPX just cracked through 1400! Can you give us an update on your short positions? Are still holding/adding TZA, ERY, etc.? Take care now. Tough to fight the central banks these days.
ReplyDeleteSteve
Hello Steve, ERY took profits days ago, that was the second round trip on that one but not in it now. It is still attractive, though. All other shorts in place and adding; currently shorting the indexes, short real estate, short retail, long volatility. Remember, Keybot the Quant algorithm has the steady as she goes core position long the markets, the shorts are for hedging and top calling as it appears the markets should roll over now, but, as you said above 1400+ now, it is like waiting for Godot, but, no changes, continuing to add shorts. Continuing to expect a sharp pullback in the very short term (VST).
ReplyDeleteKS, read that the transports soared today. That can't be a good thing for us shorts since transports had been the laggards during this rally. What do you think?
ReplyDeleteSteve
One last question KS. Has FAZ reached positive divergence given the latest run-up of the financials?
ReplyDeleteSteve
Hello Steve, mid-day the rumor or fact, Keystone remains unsure which, about the U.S. and U.K. performing some type of joing SPR (Strategic Petroleum Reserve) release, sent oil lower, which recovered by days end, but the minute oil goes down, airlines launch and other transportation stocks since oil is such a key element for this sector.
ReplyDeleteTrannies did come up to previous highs so that will encourage the bulls but Dow Theory is only one tool. The divergences on the daily charts remain agreeable to a market pull back. Coals also bounced today and coal and railroads are joined at the hip, so this helped the transports. Give it a few days to see if the SPR news is true and what effect on oil will it have.
On FAZ daily chart shows lower RSI. Best to let that psycho alone. FAZ is a 3X dangerous ETF play, SKF is the 2x, but the chart is the same to no surprise. XLF says a pull back needed but financials should come back up. Probably best to stay away form financial sector especially if the markets try to transition from riding the tech bull to riding a financial bull.
Tech sector will probably provide better short opportuinities sicn ehte slow summer months are coming and the money was made Q4-Q1, traders will be locking in profits, especially if markets fall now. XLK is overextended, negative divergence across the board.
KS,
ReplyDeleteI am going to go buy a share of AAPL, because sure as I do, she'll go down, down, down into the burning fire.
Thank you for what you do every day. Wow. I am an attentive student.
Ande
Hello Ande, you are channeling the Ring of Fire tune, a Keystone fave, popularized by the man in black, Johnny Cash, and more recently, Social Distortion.
ReplyDelete