CRB remains under 312, SOX remains under 423.50, and UTIL remains under 463 so this continues to create broad market negativity. Copper, JJC, is now printing 49.02, above the critical 48.87 (identified by Keystone's algorithm), making the move back to the bull camp about five minutes ago, see if it holds, or not. JJC 48.88 is the 200-day MA so failure here will send the broad markets much lower. This small move up in copper has helped the equities markets recover after the initial drop at the opening bell. The VIX is up today favoring bears. The slight market buoyancy helps alleviate the negative pressure displayed by the NYAD at -2125 yesterday. The TRIN is 0.95 a smidge on the bull side under the one level.
SPX price is moving sideway thus far today, remaining under the critical 20-day MA at 1401.10. The 50-day MA is 1370.04 and both moving averages are rising so these numbers will creep upwards. SPX S/R is 1399, 1394, 1391 and 1389. The SPX punched under 1394 after the opening bell which should usher in accelerated selling, but four minutes later price recovered back above 1394. Price needs to hold under 1394 for seven to ten minutes to lock in the negativity. Look for another test of 1394 with possible failure.
JJC above 48.87 will maintain sideways markets all day long, but if JJC drops under 48.87 in the time ahead, the broad market selling will noticeably accelerate. Tech is not leading the downside today so the move lower is muted. Watch the COMPQ and SPX pecentages, if the COMPQ accelerates to the downside ahead of the SPX that is a signal that markets will sell off strongly. AAPL is flat but providing enough buoyancy to lessen the move lower in the Nasdaq versus the SPX. As this is typed, tech is starting to gain some speed lower. The market bulls are hanging their hat on JJC thus far in today's session.
The 76th Masters is underway at Augusta, Tiger tees off in one-half hour.
Note Added 4/5/12 at 10:43 AM: JJC sitting on top of 48.87-48.88, bulls and bears are fighting it out, the move from here for JJC will determine broad market direction. SOX, CRB and UTIL remain bearish. Natty Inventories see another build so higher supply means lower price, UNG and BOIL are hit but recovering now.
Note Added 4/5/12 at 11:03 AM: The bulls are attempting to regain market control by focusing on JJC 48.87 and SOX 423.50. HOD for SOX is 423.40 a dime away from providing bull strength to markets. JJC is 48.98 eleven pennies above danger. SOX now printing 423.44. JJC and SOX are telling the story today.
Note Added 4/5/12 at 11:47 AM: Interesting action today as SOX punches up thru 423.50, bulls throw confetti, but only two minutes later price drops back below, so the confetti is quickly gathered up and saved for later. Then a couple minutes later, back above, then about four minutes later, below. A couple minutes ago the bulls ran SOX back up again to try to punch thru 423.50, but, fell again. Here it is testing again, high drama. JJC is maintaining its few penny advantage over 48.87 which keeps the markets buoyant today. SPX came up to test the 20-day MA at 1401.26-ish but could only hold on about five minutes before receiving a spank down. Whoa, whoopsies daisies, JJC slipping, SOX slipping.....
Note Added 4/5/12 at 12:30 PM: The bears wrestled back copper as JJC drops back under 48.87, but, at the same time, the bulls are now pumping SOX, moving it above 423.50 and using that to buoy the broad indexes instead of copper. SOX now moving back down. The bull-bear fight is now centered at the SOX 423.50 line in the sand. Bulls must keep one of the failed sectors, CRB, UTIL, JJC or SOX, above their target levels, otherwise the bears win and the market selling will increase. UTIL is tumbling to the low 458's now. JJC 48.87 and SOX 423.50 provides the answer today.
Note Added 4/5/12 at 12:40 PM: SOX failure two minutes ago at 423.50.......now printing 423.08. See if it holds underneath for seven to ten minutes, or not. JJC remains under 48.87. UTIL remains under 463. CRB is at 306 well under 312. All four sectors are lined up for the bears again which should result in broad market selling. Bulls are losing their gusto. AAPL is printing the highs of the day now up ten points over 634; Apple is the markets.
Note Added 4/5/12 at 12:55 PM: CRB, UTIL, JJC and SOX are all bearish so the broad indexes should experience selling. AAPL keeps the Nasdaq elevated so the bears are having difficulty accelerating the downside without tech leading down. The bears have the upper hand now with the exception of tech not leading down, let's see what they got.
Next Added 4/5/12 at 2:54 PM: The bulls and bears keep fighting over SOX 423.50. The bulls can keep the markets elevated and at least moving sideways with the SOX over 423.50 and of course AAPL, at eight dollars higher, prevents the Nasdaq from leading downwards. Thus, markets stumble sideways towards the holiday weekend.
KS, you crack me up: "bulls throw confetti, but only two minutes later price drops back below, so the confetti is quickly gathered up and saved for later." LMAO dude, that's hilarious.
ReplyDeleteOtherwise, typical flat day as expected and as you pointed out as well. Not much upside though, that's good.
To continue "ANONs" reply from yeaterday "Great 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?"
Reply: Thanks dude. That was a judgement call, and that's what tight(er) stops are for. The market -as KS has pointed out several times- has been highly unstable over the past 2 weeks, with "big" swings. Hell, the fact that KBTQ has flipped long-short several times shows that clearly too.
The time to be heavily invested in longs is -for now- not the right time IMHO. I don't know if your black or red right now, but please never trade on expectations. Especially not this market. Just because it did so for the past X-times, is NO guarantee it will do that again, Remember that the market tries to screw those that screw others. Very screwy indeed! ;-) It's better to get out, count you profit and re-enter when things look more stable and promising. 10% profit is of course not as good as the possible 20%, but still better than a 10% loss!
Close below 1394 today would give the bears street cred!
Hello Arnie, Keystone inserts humor just to see if anyone is paying attention. When you think about it, laughter is more important than money.
DeleteThanks KS & Erni for sharing your knowledge
ReplyDeleteAlex
It's arnie ;-)
ReplyDeleteKS, why is SVU in free fall? RSI is around 25 now. Crazy! Are you still holding it? Is there anything going on with the company that the public is not privvy to? The strong dollar is limiting the upside for stocks. Hope the dollar continues to strengthen since I am short the market. Take care and have a nice weekend.
ReplyDeleteSteve
Hello Steve, that is what speculative stocks do. SVU received an upgrade but as fate would have it, the analyst upgraded but slightly lowered the price target (which is higher than current levels), so the news that should be good did not have legs. Traders are positioning now ahead of Tuesday earnings. Charts remain favorable although money flow has dropped slightly lower. The 4.80-5.15 area is targeted for the final base. Tuesday will be a wild day, either pole-axed or launch. Remember the concept behind this trade, it does not get anymore dangerous and speculative (as are nearly all the trades mentioned here on the K.S. site). Not only is it a knife-catch, but it is Advanced Knife-Catching 401, since the idea of the trade is for the positive divergence to bounce price, then when the massive amount of shorts cover, that will provide stronger bull fuel. With the broad markets weakening, however, all stocks and small caps will be hit hard. Also, with the high number of shorts in this stock, they obviously are pressing into the earnings next week, and the longs are giving up. So, lots of excitement on tap for next week, Keystone still likes it and will probably add after the earnings. Today was also a new 52-week low which is not a good thing to see but all part of the basing process.
DeleteKS, you short aapl and long boil. why? aapl will continue to go up while boil will go to 6 by the time it reached the bottom rail of the falling channel in the 30min chart. Mild weather with no one using heat ro air conditioning is bad for boil. The build will keep going up as the number on nat gas drilling rig on last cout was still increasing. Washington is oil friendly so they try to push nat gas down by ignoring it in their easing fund.and programs. What the...
ReplyDeleteHello Anon, you will have to do your homework on AAPL again (Keystone has no current position). Now that price bounced for AAPL again, more negative divergence is in place so it is shortable from these levels right now 633-635. BOIL remains extremely attractive, the charts remain very constructive for upside moving forward. The bottoms are always difficult to call and never an exact science, hence, the term speculation. It would not be unreasonable to see natty start to recover and make its move higher beginning next week. You mention great macro fundamental reasons but each of those has a counter argument. The charts are more reliable especially for the shorter term. Oversold conditions, falling wedges and positive divergences, on weekly and daily charts, for NATGAS, UNG and BOIL, are a beautiful setup for long natty plays, although it is like Waiting for Godot for the base to be placed over the last month. Keystone continues to add UNG and BOIL.
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