The bell is a few minutes away. The XLF is below 15.18, bearish, and below 15 in fact and considering the JPM news, will be nickel and Dimon-ed some more. VIX is above 18.14 also contributing negatively to the broad markets and should spike higher at the open. Watch Keystone's SPX:VIX Ratio Indicator since another flip-flop likely occurs sending it back under 68 to favor the bears moving forward. Watch RTH 41.35 as a major gauge of the strength of the down side market move. If the RTH stays above 41.35 despite the market selling, the bears got nothing and the bulls will recover today. But, if RTH drops under 41.35 and stays under today, the markets will take another leg lower. The gauntlet of support at 1343-1344 is very important. This level allows the bulls to stay in the game, if lost, the selling will become ugly. Watch support at 1351 and the 100-day MA at 1348.33. A market pivot should occur at 9:55 AM upon release of the Consumer Sentiment data. The action today should occur in the first hour of trading.
Note Added 5/11/12 at 9:37 AM: SPX:VIX droped under 68 so expect a large down day on tap, Dow Industrials should drop by triple digits--unless the ratoi pops back above 68 by the close. And the RTH, now printing 41.41, is not impressed with the market selling. Market bears will need to push the RTH lower, otherwise, the bulls will recover and the SPX:VIX will likely move back above 68 and the day will probably stumble sideways. SPX price used the 1348.33 (100-day MA) as support thus far, also battling at the 1351 S/R. RTH is 41.41 which means the bears do not have much juice. Also, tech is not leading the broad market lower so this also indicates that the bears do not have much gas.
Note Added 5/11/12 at 9:38 AM: There it is, SPX:VIX back over 68 so the bears got nothing. RTH is in the bull camp so it helps prevent any significant downside. Thus, wait for the pivot at 9:55 AM to note the market reaction.
Note Added 5/11/12 at 10:05 AM: All the excitement fizzles, the markets stutter step on the Consumer Sentiment data, the best sentiment number in four years by the way, but travel flat for the most part. XLF and VIX remain bearish but RTH and SPX:VIX remain bullish, thus, a standoff like yesterday, and markets should stumble along sideways today. SPX now testing the 1358 S/R.
Note Added 5/11/12 at 12:10 PM: Status quo, sideways markets. SPX moving thru 1361 and 1366 S/R.
Note Added 5/12/12 at 8:05 AM: Sideways markets Friday with the broad indexes retracing earlier gains to end flat. Much of the recent action shows a lower start to the trading day that ends with the day recovering, or, early gains occur, such as Friday, that peter away by the close. The markets are deciding which way they want to commit and the JPM debacle helps the bear case. None of the four items above (XLF, VIX, RTH, SPX:VIX) changed sides so the markets were flat. Note how Keystone's SPX:VIX Ratio Indicator closed at 68.04, only four pennies away from 68 which would place the bears in firm market control moving forward. The bulls are hanging on by a four cent thread. The drama will pick up again on Monday. Next week is OpEx week with Retail Sales, Housing Starts and FOMC Minutes providing the theatrics.
The SPX looks to be in a wedge that is tightening down to "decision time". That it hasn't broken down despite everything including the kitchen sink being thrown at it suggests a break upside, especially as DXY and VIX are topping near-term. It also looks like a reverse H&S pattern is in place on the hourly... just my 3 cents. What do you think, KS? I also sense sentiment is very bearish, thus bullish for SPX....
ReplyDeleteHey , kitchen sink is about to work:-)
DeleteHello Charlie, daily SPX chart still shows the MACD line sloping down so one more matching or lower low for SPX price should be on tap. That inverted H&S on hourly chart is interesting, it shows on others such as the 30-minute chart. Keystone's fave 8 MA and 34 MA cross on the 30-minute chart shows the 8 above the 34 as Friday's action got underway so the bulls do have a slight edge in the near term, unless the 8 MA crosses back under the 34 MA on Monday.
DeleteRTH is sitting on 20 week MA 14.64, XLF is 10 cent above 20 week MA. Does it mean today, end of the day is critical although it looks like an ordinary sideways boring day?
ReplyDeletesorry I made mistake, RTH 41.64 and it is conversion line not 20 week MA. :-)) sorry
ReplyDeleteI'm assuming that the VIX will pull back to it's 20MA but I'd like to see it in the intern get to 19.60 - 19.85 before my box signal buy SpoOs ...If the VIX gets back the 20MA on the daily chart we should be about 10 handles on the SpoOs higher and then I'll begin to scale into the below noted selling call against what I can until I see good run at the April lows...
ReplyDeleteKS I'm sorry I think a tanked CEP yesterday by offering 100 shares on BATS @ 2.24 I'm joking of course but 3 minutes later the stock went down faster than any crack hoe I know... It's trading extremely heavy today last I looked at noon it was 100 shares in volume.
Next weeks road map (if the SP bounces)
CMD-DailyTiming Modelv2 UltraShortDJ-UBSCommodity2X
COWS-Daily Timing Modelv2 Agribusiness Bear 3x
DUST - Daily Timing Model v2 Gold Miners Bear 3x Shares
ERY - Daily Timing Model v2 Energy Bear 3x Shares
FAZ - Daily Timing Model v2 Financial Bear 3x Shares
QID - Daily Timing Model v2 , ProShares Ultra Short QQQ
SOXS - Daily Timing Model v2 Semiconductor Bear 3x Shares
TYP - Daily Timing Model v2 Technology Bear 3X Shares
TZA - Daily Timing Model v2 Small Cap Bear 3x Shares
RTH is under 20 week conversion line and SPX is under 20 week MA. If closes under those levels would it be significant for next week?
ReplyDeleteHello Anon, the conversion line terminology is something Keystone is not familiar with. Simply refer to them as the moving average lines. The SPX at 1353.39 did close under the 20-week MA at 1354.68 which is a futher bearish market signal. RTH is still above its 20-week moving average, however, but is under its 20-day MA which is 41.83. Also note the 50-day MA is 41.51 and RTH closed at 41.54, hanging on for its life.
DeleteAll the key moving average lines serve as support so any failure is a move towards further bearishness just as any moves above signal further bullishness ahead. The key ones to watch are the 10, 20, 50, 100, 150 and 200-day MA's on the daily chart; the 20, 50, 100 and 200-week MA's on the weekly chart; and the 10 and 12-month MA's on the monthly chart. That should get you on the right path. Pay closer attention to where the moving average line lines up with horizontal price support. There are other tricks and specific MA crosses to watch such as the 8 and 34 MA cross on the SPX 30-minute chart.
On the SPX I have the number written down on the a sticky note here at the time is was 1354.88 and the SPX was about 2 point above it. I'm not surprise to see it only short of the 20MA on the weekly chart which the momo was down and futures are working a doji now the VIX got back up where it needs to be it's all set to go up from here as per my system but my position is short strength at this point but I'm sure I'll counter trend trade it with futures if it makes sense to do so but ultimately I'm looking for breach of the March lows (previously in earlier post said April lows meant March).
ReplyDeleteHello MCAP, the SPX:VIX 68 level will tell a lot on Monday.
DeleteHello all, Keystone's algo is watching XLF 15.18 and VIX 18.14 which remain bear-friendly while RTH 41.35 and SPX:VIX ratio remain above 68 bull-friendly so this fosters the sideways action, up starts end up petering away as the day rolls along or down starts end up recovering by the end of the day. One of those four parameters will flinch, note that SPX:VIX closed at 68.04.
ReplyDelete68.04 its robotic price action at its finest...
ReplyDelete