The broad markets start off sideways on a sleepy Friday, void of economic data or earnings from any significant companies. Sometimes these sleepy days have a way of waking everyone up. The VIX is up, but that is not saying much, with a 17 handle in today's markets, this is bull-friendly. Bears need to venture up thru 18 again and move towards 23 to ignite strong negativity. The SPX targets for today are the 1376 handle for the bulls and 1366 for the bears. If 1376 is achieved, markets will launch higher. SPX 1377-1378 R is very important above. If the 1366 is lost and 1365 prints start to come across the ticker, the broad markets will accelerate the downside action. The SPX is now printing 1371.90, in the middle of the 1376 launch number and 1366 failure number.
Taking a look at AAPL to follow along from the charts posted, Apple is now printing 543.10, tucked perfectly back into the sideways symmetrical triangle. She should make a decision now on which side to exit. The bears would be favored but time will tell. The broad markets will move the way AAPL moves. The SPX is down -0.22% now while the Nasdaq is down -0.08%, thus, without tech leading, the bears got nothing today. AAPL is the key, if it moves lower now, it would likely accelerate the Nasdaq percentage lower relative to the SPX.
Note Added 3/2/12 at 12:25 PM: The euro drops below 1.32. The SPX moves sideways today, still waiting for a bull, 1376, or bear, 1366, decision. SPX now printing the lows of the day sub 1368, but the bears still need two more points if they want to enjoy some negativity in front of the weekend. The Nasdaq is down -0.48% while the SPX is down -0.43%, which now has tech leading the downside providing the bears some street cred for today, albeit only a slight lead downwards. AAPL continues to move sideways thru its channels shown on the 10-minute chart. The sideways triangle pattern petered out with price moving sideways straight out the apex, then popping briefly. AAPL price is now moving thru a descending triangle, which is bearish, with baseline at 544.50-ish, thus, if this level is lost, AAPL should fall at least three bucks. AAPL determines the broad market direction.
Note Added 3/2/12 at 1:24 PM: AAPL is losing the base line of a descending triangle at 544.50 currently (see one minute chart). AAPL now printing 544.12 so the back kiss after the base line failure was successful for bears. Note the weakness in the broad markets as AAPL slightly weakens. Friday may become exciting after all. Watch SPX 1366 as discussed earlier. The bears are trying to make a run at it, the SPX now printing 1367. Watch to see if AAPL remains under 544.50 which will usher in lower prices. Likewise, watch to see if the bears got the juice to move the SPX sub 1366, or not. VIX is perking up but still under 18 helping the bulls maintain market control. SPX losing 1366 will change the tone of the markets very quickly if it occurs.
look at the russell 2000
ReplyDeleteHello Anon, yes, that pull back is adding 90 cents to TZA today.
ReplyDeleteKS, are you still long on TZA? What is your price target? Why isn't the RUT dragging down the other indices? Take care. I'm still long on TZA.
ReplyDeleteSteve
DJI shows similar pattern, less pronounced decline (yet) though. Note DJI is now almost 30points below its 10d-SMA. Its 20d-SMA is at 12913, which is ~20points below current levels.
ReplyDeleteBB's on a daily basis are contracting, often indicating a new move; which way will it be? Up or down? Place your bets ;-)
wow what a come back of the DJI, from below 12930 and now printing 12985, whereas SPX, COMP are still lacking? why the turn around???
ReplyDeleteHello Steve, the interesting aspect is that actually the major indexes, tech, Nasdaq, Dow Industrials and SPX all have printed multi-year highs, but the small cap RUT has not. The small caps should be running stronger if the world economy is in a growth mode, obviously, there are problems under the surface. Thus, simply give things time, trading has a lot to do with patience. TZA performed a gap fill at 20 yesterday coming back to the numbers in early February. Bring up a daily chart, using three month duration, and you see strong S/R at 20.8-ish. You can study the open and closes from late January to zero in on a more exact level. Then 21.5-ish, 21.8-ish, 22.1-ish and 22.5 all serve as upsdie targets. Keystone will probably exit on the next pop higher. Study the charts using candlesticks and look for levels where numerous price activity points occur; this will help you identify S/R. Then also monitor the moving averages which are constantly adjusting; TZA price moved above the 20-day MA at 18.81 which is a very bullish indication. Look for a back kiss of this MA, then watch the 50-day MA at 21.78 moving downwards, so this would form a confluence at, say, the 21.5 and 21.8 targets mentioned above, providing these levels additional street cred.
ReplyDeleteHello Arnie, good eye, the 20-day MA's are always critical, if you look back for the Dow, not the tests that successfully occured for bulls with bounces off the 20-day MA in December, January, mid-February, thus, if/when price fails the 20-day MA (at 12915-ish like you mentioned), that would be a big win for market bears and a big slap in the face to bulls. Bulls will try to defend it with all their might.
For traders not familiar with Bollinger Bands (BB), use the function on Stockcharts to check your positions. The BB's bracket the price movement with the 20-day MA serving as a centerline. If price pokes thru the outer band, price will at a minimum typically travel back to the center line and usually towards the opposite BB. When BB's come in real tight, as Arnie mentioned, a dramatic price move occurs, but, you never know if it will be up or down, only that the move will be dramatic. Looks like the action early next week will be key.
The indexes moved about the same, wild action during the last hour with a couple spikes higher, then lower. Probably most reflective of the low volume action.