The SPX printed its highs for the year last week, fueled by Chairman Bernanke's 'accomodation' words last Monday which pumped the commodities and equities markets while beating the dollar. By mid-week, however, copper and commodities soured on lower growth projections for China, taking the steam out of the rally. Friday's action closed out the quarter with buoyant markets due to window dressing. The 1419.15 is an important line in the sand where bulls will throw confetti if it is overtaken; a move to fill the gap at 1425 would then be on tap. Bears will try with all their might to prevent the SPX from moving towards the 1416.51 and 1419.15 numbers.
The 1410 level served as strong S/R on Friday. Price was spanked back from 1410 after the opening bell but around 2 PM made a run up thru, only to fall back by late day. For Monday, starting at 1408.47, the market bulls need to touch the 1411 handle, less than three points higher, if so, the upside will accelerate and the SPX should move thru 1413 and 1414 R and challenge the 1416.51 closing high for the year thus far.
The market bears need to push under 1401 support to ignite accelerated selling. If the SPX moves lower and loses the 1406 level, and the 10-day MA, at a minimum a test of the 1401.00-1401.50 support should occur. Copper, commodities and utilities sectors are driving the broad indexes currently.
· 1440 (5/19/08 Intraday HOD for 2008: 1440.24)
· 1427 (5/19/08 Closing High for 2008: 1426.63)
· 1425 (Gap Fill from 2008)
· 1424
· 1422
· 1419 (3/27/12 Intraday HOD for 2012: 1419.15)
· 1417
· (3/26/12 Closing High for 2012: 1416.51)
· 1414
· 1413
· Friday HOD 1410.89
· 1410
· Friday Close 1408.47
· 1408
· 1406 (5/29/08 HOD)
· 10-day MA 1405.44
· 1403
· Friday LOD 1401.42
· 1401
· 1399
· 1394
· 1391
· 20-day MA 1390.98
· 1389
· 1386
· 1378
· 1372
· 1371
· 1370 (5/2/11 Intraday HOD for 2011: 1370.58)
· 1368
· 1366
· 1364 (4/29/11 Closing High for 2011: 1363.61)
· 1363
· 50-day MA 1362.91
· 1361
· 1358
· 1356
KS, China's reported CPI at 12 month high
ReplyDeletesource: http://money.cnn.com/2012/03/31/news/international/china-pmi/
It's therefore logical to expect an up day on monday... but then again... ain't the market there to screw us all??? LOL
Thanks Keystone. I am the one using you as a contrarian indicator. You short , I long and visa versa. Chinese MSI UP news just came out. Soooooo market futures will be way up by Sun evening. Will continue watching you like a hawk. Thanks again. Told you keybot forgot to put Obama,Bernake,ECB,and the Chinese head cook in the calculation. These heads wants the market up. So don't fight it. Didn't you notice that everytime at the moment the market is about to go further down, one of these heads would come out and say something to boost the market?
ReplyDeleteshould be PMI not MSI. Anyways its up. Its all good. AND if the U.S. manufacturing index come out good at 10 am Monday then the markets fly.
DeleteHSBC PMI down at 48.3. So if one report is up the other is down and it's very hard to predict
ReplyDeletemike
Hello Arnie, Anon's and Mike, yes, the China PMI was up, printing a 53 handle, five month up trend, fourth month above 50 indicating expansion in the Chinese economy. The data is highly suspect since it is more fudged than the U.S. data.
ReplyDeleteThe HSBC number does carry more clout, and that one printed the 48.3 as mentioned, showing a donwtrend the complete opposite of the China PMI.
As of Sunday night, U.S. futures are up, gold up, platinum up, oil up, so the move is towards a slightly weaker dollar which in turn lifts commodities and equities. Interestingly, other data in the Asian region is not showing inflation which further reinforces the thoughts of disinflation moving forward.
Even traders that thought the dollar would weaken against the Aussie are paring back those thoughts now. So the bulls are running with the ball initially but there are many hours before the open and copper, commodities, and utilities, are important.
The dollar can be called flat now instead of down. This type of small move in the dollar will not be enough for bulls to move the CRB above 312, but again, take it hour to hour. CRB 312, JJC 48.83 and UTIL 463 will tell the story and are more important than the price action on the SPX.
The bulls are probably enjoying a little bit of buoyancy since hte headline China PMI was up, so that is bullish, and the HSBC is viewed as providing an impetus for the Chinese to forge ahead with triple R cuts (quantitative easing). The problem is that China authorities the last couple days say they are in favor of more of a prudent steady as she goes course of action.
The first minutes of trading Monday are extremely important.