Using the metrics laid out this morning, the utilities, UTIL, jumped higher and at 457 is very bullish for markets. C earnings positively affected the financials since the XLF moved up all day and remains above the 15.09 so it is bull friendly. The VIX dropped at the open which was yet another feather in the bull cap but mid-morning the VIX moved higher and is now printing 19.64 well above the current level of interest at 19.00, so the bears have high volatility on their side.
The 10-year is dropping to the mid 1.96% now which is an indication of disinflation on the way. Perhaps Keystone can update his Inflation-Deflation Indicator this evening. Keystone's SPX:VIX Ratio Indicator teased 68 a couple times today which leads to a huge down day for markets, but, could only stay under a few minutes before popping back above now printing 69.82. Bulls are happy above 68, if 68 is lost, the markets will sell off large and the Dow Industrials will drop triple digits so watch this ratio closely today and tomorrow.
The SPX dropped under 1370 about ten minutes after the opening bells so this ushered in the move down to test 1366 as explained in this mornings missive. The SPX 1366 support has held thus far today. The SPX recovered but did not mount an attack over the 50-day MA at 1376.65 (price had punched up thru at the opening bell but failed a few minutes later). The SPX 30-minute chart shows the 8 MA remaining under the 34 MA which is bearish for markets, continue to monitor this 8 and 34 MA cross. AAPL continues to puke from the negative divergence so in an odd tape, the Dow Industrials are up triple digits while the Nasdaq is red. Tech is not leading the upside so this keeps the broad market (SPX) in check today but the Dow is running higher since it is less impacted by Apple. AAPL is the markets. Keystone's algorithm, Keybot the Quant, remains long. Keystone took profits in XCO, a one day trade, and will look to reenter again today or tomorrow. Also bot more PAAS. Also bot more MNKD.
Apple is the markets is way of an overstatement. Obviously today it was not the markets at all.
ReplyDeleteHello Anon, are you looking at the same markets? Perhaps a visit to WMT for a new set of glasses may prove helpful? Monday's action solidified the point that 'Apple is the markets'. AAPL puked and dragged down the Nasdaq (which is weighted with Apple), and kept the SPX flat (AAPL impacts the SPX), but at the same time the Dow Industrials were up triple digits (which is an unaffected index by AAPL). As AAPL moves lower it will continue to drag the broad market lower just as it lifted the broad markets from mid-January on.
DeleteThere will be fits and starts, so AAPL will recover, then drift lower again, look for a price recovery where AAPL forms a right shoulder of a potentially developing H&S pattern on the daily chart.
In fairness, GOOG tumbled as well which will impact the Nasdaq, but overall, a good rule of thumb, is that 'Apple is the markets'.
Many traders, obviously long players, celebrated the move up, but understandibly will be disappointed on the move back down, especially those buying AAPL above 620 when the media hypers sucked in Ma and Pa, distributing shares to the bag-holding sucka's.
KS, I know that Keybot holds the core position but for your other positions (5 short and 6 long), can you divulge the percentage of your portfolio in those positions? Thanks.
ReplyDeleteSteve
Hello Steve, Keystone said he can add that in future updates, as of Monday the short term trades were weighted about 55% long and 45% short but keep in mind this may change drastically quickly. For the early April selloff a wek ago the breakdown was about 75% to 25% with the weighting net short.
DeleteKeep in mind that the long trades are typically speculative and based on positive divergence so that is a bit mis-leading if you try to use the net weightings as a guide.
The bounce should occur for these long positions somewhat independent of broad market movement. Since they are typically beat down stocks already (trying to catch falling knives), if the broad markets tumble, much of the downside is built into these positively-diverged long plays so the downside should be limited for them as compared to other individual stocks or the broad market.