The financials, XLF, moved above 15.10 shortly after the open providing bull fuel. The RTH came down to tease the 41.00 level but bounced strongly staying in favor of the market bulls. The VIX is dropping down and continues to test the 18.50 level highlighted this morning. VIX below 18.50 should enable the bulls to punch up thru the SPX 1379-1380 gauntlet and start an upside party. If the bears can hold the VIX support at 18.50 and keep volatility above, the bears can maintain control of the markets. SPX:VIX ratio is at 73.68 well above 68 remaining bull-friendly. The 10 AM pivot point resulted in a move down for markets. The bulls and bears are fighting it out right now, watch the VIX 18.50 which will dictate the broad market direction. VIX is now printing 18.61.....
Note Added 4/24/12 at 1:58 PM: VIX did drop under 18.50 and remains under since 11 AM. This lower volatility helps the bulls. XLF remains above 15.10 helping the bulls. RTH remains above 41.00 helping bulls although it is teasing the 41 level today. For the bulls to rejoice they need to touch the SPX 1379 handle. Price came within three points today but petered out. Perhaps the markets will simply wait for the AAPL drama to play out after the close. The weakness on Apple today is weighing on the Nasdapple and preventing the bulls from gaining upside, so markets stumble along sideways. If SPX 1379 is touched, up is the market direction; if any of the three sectors above turn bearish, down is the direction.
Note Added 4/24/12 at 2:04 PM: Hello. RTH 40.96.......... this will help bears if it stays here or lower. VIX 18.64 jumping back into the bear camp. These markets sure are fickle. The bears have two feathers in their caps now. XLF is 15.20 ten cents above danger. The SPX is weakening by a handle of two. Bulls and bears are duking it out and will likely move things out sideways into the close and let AAPL decide everyone's fate. One stock holds the power.
Note Added 4/24/12 at 2:22 PM: SPX now printing a 1368 handle. The XLF 15.10 (now bullish), VIX 18.50 (now bearish) and RTH 41.00 (now bearish) levels of interest are steering the broad indexes currently.
Note Added 4/24/12 at 3:59 PM: XLF, VIX and RTH are in the bull camp but all three continue to oscillate across their bull-bear lines. Markets are awaiting AAPL earnings, since Apple is the markets. Here's the metrics for Apple and the broad indexes will react depending on if these targets are attained and/or exceeded, or missed; $11.80 EPS; 41 B revenue; iPhones 35 M; iPads 13 M; Mac 4 M.
Note Added 4/24/12 at 7:41 PM: AAPL is up large after hours, receiving the 7% projected move which turned out to be upwards. Results show $12.30 EPS; 39.2 B revenue; iPhones 35 M; iPads 11.8 M; Mac 4 M. Thus, earnings per share blew out the estimates. Revenue is short. Note that the numbers Keystone is watching are the most optimistic consensus numbers--that Apple typically has no trouble beating. Look at that, iPhones exactly at 35 million. iPads are light. Mac's were dead-on. Thus, EPS beat but top line revenue and iPads are light. Traders are happy over high growth in Asia and China. To beat on the bottom line with a lighter than expected top line perhaps hints that each store will have one less Apple geek working (if your revenue is not quite as high as you project, fire a few folks since the lower expenses go directly to the bottom line providing a higher EPS with lower top line). Most of the after hours boost must be on the higher growth in Asia since the results were not as great as Apple typically provides. The blow out EPS number carries a lot of clout and their margins were looking good as well. AAPL should come up to 600+ again to fill the gap and back kiss the 20-day MA and likely set up for a short play. XLF 15.10, RTH 40.96 and VIX 18.50 are all in the bull camp. If the SPX hits 1376 tomorrow Keystone's algorithm, Keybot the Quant, will likely flip back to the long side. Perhaps an Apple-induced rally may occur for a few days but with Europe turmoil ongoing, the markets can change in a heartbeat. The market bulls are in good shape if they can keep the S&P futures about four points or more on the green side overnight.
Do yourself and your readers a favor, watch the input into ETF's, like TNA FAS, TZA, they tell the story. When they hold higher and index lowers, rocket ship for direction is told. Just a hint.
ReplyDeleteAl
Hello Big Al, why don't you do all of us here a favor and supply your market calls with a time stamp, use Eastern time to keep it in sync with Keystone's messages, and then everyone can follow along iwth your calls and benefit from you wisdom.
Deletehey KS, have been on travel lately, but just checking in to say hi. i think the bears will win this. Seems like a wave iv correction over the past few days is playing out with v to come (of only wave 1 down at a higher degree...)
ReplyDeleteQE3 will be launched sometime IMHO, probably when SPX hits low 1300s and giving fuel to wave 2 up (which as you said will -due to diminishing return- only give a measly ~100 handles; translating into SPX ~1400), and after that final load of crack has been given to the addict and ODed, it's all over with ferocious wave 3 down to come.
Hello Arnie, it's dicey these days, the bulls and bears are battling, Chairman Bernnke's 'Desk' Conference tomorrow will help markets to commit one way or the other.
ReplyDeleteWatch CRB for the QE3 trigger, it is defaltion that worries Bernanke, and a gauge of falling into deflation is the CRB commodities index falling under 290, under 280, under 270, as it drops all the crack cocaine simulus plays can be brought on like long gold, long small caps, short dollar, etc..., so CRB is key. Right now we are only falling into disinflation so we ae on the way but still have a ways to go.
AAPL going through the roof after market; now at $600 (UP $40... insane) aapl beat all expectations. 'nuff said
ReplyDeleteOn my iPad litterally as my finger was hitting the button the news on Apples earnings came out i went to market at 16:30:25 and bought 1 ES at 1372.25 and with a little concern in the first few seconds everything shookout and let it go at 1374 five minutes latter on 16:35:43... Look to buy weakness tonight.
ReplyDeleteHello Keystone, thanks for your reply in another posting. You mentioned the 7% up/down move on AAPL based on earnings. This is pretty much spot on in after-hour trading. Just curious, how do Keystone know this in advance?
ReplyDeleteCheers, AJ
Because he is Keystone:) !
ReplyDeleteHello AJ, that is what the options markets were showing. Remember, the move could have been up or down, that is why it is typically best to stay away and let the smoke clear for a couple days. There was a gap up above 600 that needed filled and also a back kiss of the 20-day MA was needed so perhaps AAPL will now set up for another short trade.
ReplyDeleteYou can google any ticker symbol or company name with 'earnings' and 'options' in the search block and typically a site such as Optionmonster, will come up and provide some of those numbers so you do not have to spend time to study the option chains. So a day or two ahead of time for any ticker, simply use google search and one of the options guys should have a shoutout with the projected move expected.
Thanks for sharing this info.
DeleteCheers, AJ