Tuesday is off and stumbling. Commodities as measured by the CRB are fighting for the 312 level but bears are winning, for now. UTIL is at 460 under the 463 that the bulls need. JJC is flatish at 50.34 receiving support from traders that believe in the global recovery, more QE and FOMC Minutes today that say money will be dropped from helicopters indefinitely. SOX is at 436 ten points above creating market trouble at 426. AAPL is up ten bucks (as traders trip over each other to announce $1000 price targets) keeping tech buoyant and the Nasdaq above the SPX so the downside move remains muted. Apple is the markets. VIX is up. CRB 312 and UTIL 463 tells you everything you need to know about broad market direction today. UTIL now with a 459 handle.
Note Added 4/3/12 at 10:26 AM: Considering seasonality factors that should hint at buoyant markets in front of the weekend, one potential outcome is for markets to sell off today into tomorrow morning and then experience buoyancy as the Friday holiday draws near. Apple supports the markets, however, and the bulls would be content with a sideways move from now into Good Friday. Obviously, the FOMC MInutes at 2 PM and resulting pivot point will have to play out this afternoon. See if the CRB will drop under 311 and/or if UTIL drops under 459.
KS, in studying the chart of IWM (since I'm shorting it with TZA), there seems to be a gap fill at 75 and then at 70 and 68 levels. Does that mean that IWM will sell down to those levels sometime in the future? Still learning about chart reading and your website has been an invaluable resource so I really appreciate that. Take care now.
ReplyDeleteSteve
Yep Steve, you know what you are doing. Think of gaps as magnets, eventually price will want to gravitate toward the gaps to fill them, sometimes it occurs days or weeks after the gap is created, sometimes years, like the SPX 1425 gap fill from 2008 we continue to watch. The 200-day moves right thru that 75 gap as well providing that number additional street cred. You may want to use the $RUT to gauge the small cap action instead of IWM. It shows the same gap and 200-day MA at 756. RUT may be producing an H&S now, it will need a right shoulder, but head at 850, and neck line at 790 is 60 difference, so target would be 730 if neck line fails.
Deleteslaughter fest; all out of my longs!
ReplyDeleteArnie, why did you close out your longs? I think there could be a pop tomorrow with the ADP numbers.
ReplyDeletebecause I am protecting my profits! This was a clear impulse wave down at 2pm ET. Given all the over extensions, over-bought, negative divergences in TAs etc, I am not so sure the upside is that much more rewarding than the downside. Hence, the risk/reward is increasing rapidly as we speak (more risk, less reward): SPX printing new lows.
ReplyDeleteNo offense, but tomorrow could also be another down day, and I don't trade "could", "should", "would" ideas. Neither should anybody, but hey who am I...???
Hello Arnie, that was a quick change from 1440 to jump ship. Keystone is only kidding around, especially since he has been looking for the top here for over a month, closer to two months actually. The Fed's QE makes trading difficult since any mention, or no mention, of further stimulus immediately impacts markets, true market forces do not matter, all that matter is if Chairman Bernanke is passing out crack, or not. Today was no mention so markets dropped. CRB and UTIL are important, and for tomorrow, traders will turn to the Job Reports.
DeleteJUST as I said yesterday - A POP then FLOP- Lets see what happens going forward - maybe the Keybot is right this time
ReplyDeleteHello Anon, remember that Keybot the Quant is striving to move thru the trading year with the smoothest path possible, the algorithm is not interested in calling tops and bottoms, the model simply oscillates from bullish to bearish and back again. CRB under 312 and UTIL under 463 is creating the market weakness so watch these tomorrow and you will have a leg up on other traders.
DeleteOf all weak stocks like rimm etc., KS decided to short aapl a few days ago. So far KS long boil long tvix(@15), short aapl. What was KS thinking of!!!!!!!!
ReplyDeleteHello Anon, you must do your homework better. There is a lot of information on this site. The Positions and Picks page updates as the days move along, Keystone had already taken the profits in the AAPL short a couple days ago and does not hold a position now. Now that price came back up to create negative divergence again, it is now an attractive short again. Keysotne remains long UNG and BOIL and continues to add and like them both. Perhaps the heat will kick start the air conditioning season. For TVIX, that trade was exited a while back with profits. The TVIX turmoil occurred after that trade. Keystone remains in VXX, however, and is getting beat up with that, but, if markets sell off, volatility will jump. So do some homework so you can come up to speed.
DeleteBecause there in value in Natural Gas, and less and less value in Apple, however the momentum in Apple is bullish and the momentum in Natural Gas is bearish. What one has to figure out is to get momentum + value in their favor and make lots of money. It is a struggle and takes discipline.
ReplyDeleteMomentum for the S&P 500 is up by the way, even though I know this market is way overbought. Such is life.
Cannot stand in the way of the fed or money printing and /or collusion.
Truth / reality never wins out.
Yes Rimm should be shorted.
Boil is going to be a favorite in 2013.
That is all true Anon, what you can use is watch the higher highs and higher lows that identify an uptrend, when you see a lower low print, you will know that stock or index is in trouble. Give RIMM a few days and it will likely set up as an attractive long, it got slapped today but this 12.20-13.00 area is interesting. Natty will probably recover as the summer a/c season is underway, the play will probably be the move up off the bottom and then it will probably be sideways by 2013, but who knows?
DeleteWhy should RIMM be shorted? It's trading near a 52-week low and is priced well below book value. P/E is around 5. Can someone enlighten me on this?
ReplyDeleteHello Anon, Keystone is in your camp, but give it a few days to settle down. RIMM owns valuable patents and it will be sold, or pieces sold, at any rate, it is likely worth lots more than this area, perhaps a double by the 4th of July? The problem is that tech profits will probably be booked moving forward so the whole sector may fall into a malaise. But, yes, RIMM is attractive. The other thing that occurred over the last couple days is that many traders were pumping RIMM, most savvy traders know there is attractive value there, so that was a sure tell not to jump into it yet, and today you see the effect. Weak hands that moved in long jumped ship today, these folks may play again and then give up as price may drift lower, at that time it will be good to go.
Delete