XOM and UPS earnings lay an egg this morning. UPS is an important barometer for global economic health since the shipping industry impacts every level of business. Keystone uses the UPS weekly chart, the 20-week MA and 50-week MA cross as an indicator for secular bull markets versus secular bear markets. The 20 MA is currently above the 50 so the markets are in a secular bull but the lackluster UPS earnings will continue to move the 20 MA lower towards the 50 MA.
Reference the tug-o-war description in last evenings missive to determine broad market direction moving forward. JJC 48.10, CRB 311 and SOX 418 are pulling the rope in the bear direction. RTH 40.96, XLF 15.10 and VIX 18.50 are pulling the rope in the bull direction. Any change in these sectors will influence the broad indexes in the same direction. Remember, these levels continuously change, some more than others, since Keystone's algo is constantly recalculating in real-time. With this said, let's take a look at the early action. There is no change to any of the sectors so the markets should remain in a flat holding pattern and sure enough, the broad indexes stumble sideways as the session begins. Jobless Claims weakened futures before the bell. Pending Home Sales are hitting as this is typed and send the major markets to the green side, albeit slightly. Natty Inventories are at 10:30 AM. Natty is enjoying some buoyancy so the inventory numbers will allow this continue or slap the price back down in one-half hour. Keystone took profits in CTRP, an overnight trade, and will look to reenter.
Note Added 4/26/12 at 10:11 AM: The SPX punched out a point higher moving over 1392 so further upside should be on tap with the SPX targeting 1394 and 1399 next. Note how the bulls are trying to push copper, JJC, up and over the 48.10 level, now printing 48 only a dime away which will ensure further market upside over SPX 1400. Also, SOX is moving towards the 418 victory level, now printing 413. Watch the tug-o-war. Copper is key today. JJC punching thru 48.10 will be very bullish for markets but by the same token, if JJC fails short at this level today and heads lower, Dr. Copper will be telling you that the market bears are not finished.
Note Added 4/26/12 at 1:39 PM: Note that copper, JJC, moved up over 48.10 at 10:30 AM and this is adding bull fuel, the tug-o-war rope moves more on the market bulls side. Watch JJC closely today. The VIX has a 15 handle, becoming more bullish for markets the further it falls. RTH and XLF remain elevated so the bulls are enjoying a market move upwards, SPX moving towards testing strong resistance at 1399, then the psychological 1400 level. Watch SOX 418.25, now printing 413.81, about three points lower. Market bulls will lock in sustainable upside if SOX attains the 418 plus level. Market bears do not want SOX to go up any further and in fact want to push JJC back under 48.10. The bulls are winning the tug-o-war today. Keystone took profits on FSLR, an overnight trade. Also bot more KGC. Also added more BGZ. The uber complacency by traders in these markets is very concerning.
Boy, copper just got juiced at 10:37 eastern time to 48.12 (JJC). We'll see if it holds, but I'm amazed again that you know exactly what the bulls are targeting.
ReplyDeleteHello Weaver, yep, copper higher is a big deal. Traders must sniff out more QE ahead of the GDP tomorrow, dollar is down, commodities and copper, and equities, are higher. Copper gave the early indication today and then the markets followed along a couple hours later.
DeleteYou sell low and buy high after sp 500 goes up 30 points. what is the point?
ReplyDeletethe point is to be patient. You can't catch all the little moves, but when you are on the right side of the trade and a big move comes, it works out. You seem frustrated. Be patient and don't over leverage.
DeleteKS, what happen to BOIl? It was going up and suddenly dropped
ReplyDeleteThanks
Alex
Hello Alex, the move down today occurred after the inventories. Keystone did not see the numbers but typically if the inventories (natty gas in storage) increases more than expected, that shows an increased supply where you do not know where to put the stuff, hence, price drops. If inventories are tight, price goes up. Very nice price action in natty lately, the charts remain positively diverged, perhaps it is finally placing a bottom, but there will be other twists and turns. If you are playing oil you must watch for the inventories every Wednesday at 10:30 AM EST if you are in natty you must watch inventories every Thursday at 10:30 AM since prices will move dramatically at those inflection points.
DeleteKeystone your technical analysis is amusing and steps on it's own feet, but your trading of FSLR really exposes the level of of your compulsive gambling. To rely on keybot and tech analysis is one thing but to trade Solar companies when you already admit they are a house of card, is really shocking. FSLR, LDK, the whole lot is up their with ZAGG, SKullcandy, and all the rest of the short crew. I really enjoy your analysis and try to see what you are seeeing and pointing too, but even a day trade based on FSLR is for nutty junkies. And the crack in the market may have made it's way up your nose. Shocking really. Your readers should know, FSLR and the solars are not just a falling knife or guillotine but a rabid wild crazed dog that will rip your tech analysis and your bot plotting apart, and flush your logic down the toilet. Point is a rational mind will stay away from such a trade.
ReplyDeleteHello Anon, you need to spend a few days reading and studying what occurs here. Keystone pointed out the specific problems with FSLR and why it has tumbled lower to date, you need to go back to study that. At the same time, the technical analysis with the positive divergence is the very reason the trade was placed. Spend some time to come up to speed and study divergence trading in detail. If you want safety and more of a slow steady eddy approach, follow Keybot the Quant, the riskier short term and day trades are presented here on the K.S. blog. FSLR was closed out today for a one day trade for a couple percent as the positive divergence bounced the price as projected. Keystone will look to reenter if the charts set up properly again.
DeleteKeystone has not looked at the other picks such as LDK, ZAGG, Skullcandy and so forth that you are touting, and knows nothing abou tthem, it is doubtful that they have adequate chart set ups so you are probably better off to stay away from them unless you can identify a reason that they are attractive as a long or short.
S&P has downgraded spain!
ReplyDeletedoug
Hello Doug, yep, it looks like it will leave a mark. It is nothing that is unexpected, but these downgrades of sovereigns do have a way of jolting nerves. The S&P's dropped about four handles on the news and is drifting along negative this evening. GDP is key at 8:30 AM then a market pivot point will occur at 9:55 AM when the Consumer Confidence number hits.
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