High drama in the markets today. SNDK and AAPL contributing to Nasdaq weakness that is leading the SPX down providing the down move street cred. Semiconductors, SOX, failed at 10 AM and now has a 420 handle after spending time yesterday well above 430. This ushered in market weakness along with CRB staying under 312 and UTIL staying under 463 (keep an eye on UTIL since money is moving into utes to seek defense and safety). Copper, JJC, is teasing the 49 level, if that fails, 48.83 will likely give way and that will add to further market weakness.
The SPX 20-day MA failed a few minutes ago at 1399.50-ish. Watch to see if price remains under, if so, price will travel much lower. Big pop in volaitilty today, over 12%, the VIX now testing its 50-day MA at 17.34. See if VIX closes above here today. Keystone's SPX:VIX Indicator is 79 inching down towards 68 where the real trouble begins. The dollar is strong slapping all the commodities. WTIC oil now under 102, should head to 98 based on Keystone's 80/20 rule.
GE and IBM was downgraded today. Mickey D's (MCD) was taken off GS's conviction buy list, so that is three heavy hitters that were slapped in the face today. Here you go, JJC coming down now printing 48.90........a few more pennies and this day will get a lot uglier. Tech is leading the broad markets lower and this is very bearish, watch COMPQ and SPX pecentages today.
Note Added 4/4/12 at 10:56 AM: JJC failure at 48.87. Now printing 48.85. If this failure (watch 48.87 as the key level) stays for seven to ten minutes, the markets will take another large leg down. SOX now with a 418 handle, tech profits are taken before they disappear.
Note Added 4/4/12 at 11:16 AM: All sectors were bullish, as measured byKeystone's algorithm, Keybot the Quant, a week ago, but in the last 4 1/2 days there are now four sectors that are bearish; commodities, utes, copper and semiconductors. Markets should flush lower. Watch SPX LOD at 1394.33, if this fails that will open up the flood gates lower. Nasdaq easily leads the SPX on the downside so the bears got game today. Support below is 1394, 1391 and very strong S at 1389.
Note Added 4/4/12 at 11:24 AM: Bulls pushed JJC back above 48.87. Now printing 48.90 allowing the broad indexes to float sideways. JJC 48.91 is the 200-day MA, critical S/R.
Note Added 4/4/12 at 12:00 Noon: JJC back under 48.87, for a couple of minutes so far, see if this holds about ten minutes, if so, markets will flush lower. CRB printing a 306 handle well below 312 and firmly leading the bear charge. UTIL at 461 remaining under 463 although the 462 handle was printing a short time ago. SOX at 420. Bears are cruising, if JJC stays under 48.87, the bears will start pushing harder to the downside. JJC now printing 48.75 slipping away.
Note Added 4/4/12 at 1:15 PM: SPX coming down to take a look at that LOD at 1394.33 now. See if it holds, or not. Failure and price moves to test 1391 then 1389. UTIL, CRB, JJC and SOX all in the bear camp and causing the market selling.
Note Added 4/4/12 at 1:45 PM: Bears came down to punch out a new LOD today at 1394.09, and then the bulls bounced it. 1394 S is holding, the bulls are putting up a fight but with the four sectors above remaining weak another test of 1394 is likely. Keystone's shorts are green and the SVU and natty longs are green, all is right with the world, at least for now. SVU was beat up yesterday but is green on an upgrade today.
Note Added 4/4/12 at 2:50 PM: Bulls pushing the SPX higher to test the 20-day MA at 1399.56, price is now printing 1399.59. CRB, UTIL, JJC and SOX are status quo for bears so it is surprising to see the SPX come back up. Also tech is handily leading the broad market lower. See if price can regain the 20-day MA, or not. The four sectors say no.
I hate the "told ya so" comment, but this is in response to "anonymous" who wondered why I sold yesterday and didn't wait for the possible pop.
ReplyDeleteWell, look at the markets today and you can see why. The 2pm wave yesterday down was pure impulse. I was already out at 1415 earlier yesterday due to very tight stops I'd put in place the day before. Why? Thanks to KS' great studies he posts and my own DD. The negative divergence is just one big U G L Y MTF... hang in their, buying opportunities will come soon enough again.
Hello Arnie, give yourself all the credit for things, you are in charge of the mouse, you know what you are doing. With UTIL under 463, CRB under 312, JJC under 48.87 and SOX under 423.50, the broad indexes look very ugly. One of those four has to recover if the bulls simply want to stop the downside. If the bulls cannot regain one of those levels, the broad markets continue down. Tech is leading the downside, it's all nasty, great for bears. Probalby wild straight spike up will occur, from 1340-1390 ?, to 1425 gap fill?, then spike back down for extended down. Althernative is that we simply keep heading down from here. At some point, QE3 will occur when CRB hits 270-290. April will be wild.
ReplyDeleteAre not NYAD and TRIN calling for short-term bounces already? (I'm riding index shorts with trailing stops close behind.) At what point should we add some longs? You're not going to wait all the way down to 1340-1350, are you?
ReplyDeleteHello Weaver, yes, the NYAD is at -2000 so that would need a snap back to relieve pressure, but selling can remain today into tomorrow before that happens. TRIN is 1.33 now that is orderly selling nothing drastic, the high was 1.7 so not uber selling. The question on shorts and longs cannot be answered since there are different time lines for trades.
ReplyDeleteTech sellling off like it is today is a big deal, it carried the whole rally since December. It gives the market sell off the flavor of somthing substantial but all you can do is take it day to day. The four sectors and levels mentioned above watch them, if bulls cannot regain one of those markets will remain weak. Also watch the 8 MA and 34 MA cross on a 30-minute SPX chart. The 8 MA is under the 34 MA now, bearish, see if the 8 MA wants to curl upwards which is an early indication that the markets are recovering, then the cross will confirm it. Those items should be able to steer you where you want to go.
thans KS, I actually trade mostly through my mobile device these days ;-) And yes, we are all in charge of our own trades, but the "could pop" (or not) is something one can't be profitable on. Trade the price action and that's it. Opinions don't matter.
ReplyDeleteBack to TA: 1397.44 is 20d-SMA and mid-Bollinger band level, often good level for a (short term) bounce IMHO. But, again, doesn't have to be that way.
Given that it's so wild now, gives me more confidence I went out at the right time yesterday and will stay all cash; I'll let this one play out (by the big boys) as there will be plenty of better opportunities to come (soon).
Not shorting or "putting" either. Lill tired of BTFD and need to re-focus. Trading some small individual tickers instead.
Close below 1393 would really give the bear case some credit. Bulls are hanging in their by their last threat.
Hi KS,
ReplyDeleteIm thinking about getting into Boil. Right now, build in iventory is going up while gas drilling rig number is also going up. With the mild weather, few are using heat or ac. So I think boil will go further down. TA wise, Boil is heading down towards the lower rail of a paralell down trend channel in the 30min chart. It should reach the lower rail at about 7.00 Would that be a good price to enter?
Hello Anon, you will have to decide all that yourself but it sounds like you are on the right track. The positive divergence bounced price to start April. The charts show that natty remains attractive for the upside from these current levels. There is a gap fill needed at 7.48-ish, perhaps that is the last low entry that will be available.
DeleteGreat call Arnie. You got my respect. I really thought the ADP numbers would bounce the markets as it had for the past couple months. Did that number not meet expectations?
ReplyDeleteCheck your site several times a day, it's always informative and entertining.Sold all my put options Thursday ,They would have melted away 12% or so and never sure what Monday would hold. Looking for ideas to best take advantage of new bearish feeling .Thinking of GE puts and FAZ calls after the gap down somewhat recovers. Ideas ?
ReplyDelete