NYA is 7604 and we are watching the 40-week MA at 7647. HOD is 7615. So the bulls are in the neighborhood where they can launch a new leg higher, but, for now remain short of the goal. RTH is 41.45 well above 41.00 and allowing bulls to easily keep markets elevated. SPX launched at the open moving above the 150-day MA at 1319.95 and 20-day MA at 1316.80 which are very bullish indications. Keystone bot more SDP (very thinly traded). Strong SPX S/R is 1337, 1333, 1331, 1329, 1326, 1318, 1316 and 1314. SPX spiked to the 1329 ceiling and is now moving thru 1326-1329. Chairman Bernanke is minutes away.
Note Added 6/7/12 at 9:59 PM: Keystone took profits on EGLE. The commodities are launched today on the China rate cut and you need ships to move these bulk materials.
Note Added 6/7/12 at 10:16 PM: The markets pivoted exactly at 10 AM on the release of Chairman Bernanke's speech notes. The broad indexes are moving lower ever since. Bernanke is currently reading the speech notes during his presentation. The more important aspect this morning is the Q&A coming up in a few minutes. Market bulls are already frantically searching for the long metal hook so they can pull the Chairman off the stage as soon as possible since the indexes keep drifting lower.
Note Added 6/7/12 at 10:57 AM: Bernanke does his best but traders are not impressed with his tap dancing. From the wings, the bears are telling Bernanke to say out there and keep talking since the indexes continue to drift lower with each sentence the Chairman speaks. He promised a pony but so far the markets only see a jack*ss. Bernanke will reach into his pocket for Plan B, smoke and mirrors, maybe that will do the trick. The SPX has now slipped under the 150-day MA at 1319.89. The 20-day MA is 1316.34, see if it holds as support.
Note Added 6/7/12 at 11:08 AM: Keystone bot BBG opening up a new long position. Also shorted DIS opening up a new short position.
Note Added 6/7/12 at 1:10 PM: NYA is at 7560 well under the 7645 that the bulls need to push markets higher and the RTH is at 41.32 above the 41.00 level that the bears need to push markets lower. Thus, the SPX moves sideways favoring a range thru 1320-1323 for the last couple hours. SPX is above the 150-day MA at 1319.91. Tech is not leading the broader market to the upside so the rally after the open fizzled. The 5-minute chart shows a sideways symmetrical triangle now that should resolve up or down with a move of about 5 or 6 points. SPX is starting to sneak out to the upside from 1323 which would potentially be a move to 1328 or 1329 retesting the high after the open.
Note Added 6/7/12 at 2:03 PM: Keystone bot JRCC, opening up a new long position, a highly dangerous coal stock. This trade is a knife-catch, the positive divergence is attractive. ANR has the same set-up.
Note Added 6/7/12 at 2:34 PM: Keystone bot ANR, opening up a new long position, a highly dangerous coal stock. This trade is a knife-catch, the positive divergence is attractive.
Note Added 6/7/12 at 3:03 PM: SPX continues in a tight sideways range thru 1318-1324 since the 10 AM pivot, a move that is flatter than the notes from Keystone's saxophone. The 5-minute chart shows the sideways symmetrical triangle pattern continuing along today working towards a resolution, now at the apex so it must decide up or down. The close today should become interesting.
Note Added 6/7/12 at 3:23 PM: SPX collapses lower, intial bounce occurs off 1318.50 but it should print another lower low which may allow an opportuinity to exit the TZA trade from yesterday.
Note Added 6/7/12 at 3:36 PM: Keystone exited and took profits on the TZA trade. Also bot more ANR. Also bot TNA opening up a new long position (long small caps).
Note Added 6/7/12 at 3:52 PM: SPX now printing a 1313 handle. Keystone added more BBG and TNA.
Note Added 6/7/12 at 4:00 PM: The closing minutes is like the bumper cars at the amusement park, lots of people running to and fro, bumping into each other, but no one is making any progress. SPX closes at 1314.99. The 20-day MA is 1316.16 so the close is perceived as bear-friendly for the day and week time frame. The 8 MA is above the 34 MA on the 30-minute chart so that is bull-friendly for the hours and day or two ahead, but, the 8 MA is curling down now allowing tomorrow's action to remain a mystery for now. The very short term time frame is news dependent, reacting to tape bombs as they hit the wires. The RTH closes at 41.20, above the critical 41.00 level, so the bulls can cling to this as a major market buoyancy producer moving forward--unless it loses 41, then the bears will cheer. Keep riding the waves created by high volatility. Lots more large up and down moves ahead. Hang ten.
you got the gold right. me too. currently riding GC down from 1630. brilliant. its was setting up too pretty - to be true (QE3 easing and all that being priced in). love your insights.
ReplyDeleteKS, is today's $USD low of 81.91 close enough to 81.50 to call it a successful back kiss of the neck line? Especially now that Bernanke has taken the helium out of the balloon?
ReplyDeleteHello Rich and Weaver, sounds like yunz are rocking and rolling today. Weaver, Keystone had to refresh his memory about the dollar, that was the inverted H&S on the weeekly chart about ten messages back. The neck line is drawn at 81 but a new right shoulder can be called out for 2012 which would also place a neckline at 82 that would target 91. To answer your question the daiily chart shows lots of support and congestion thru 81.0-81.5. It is logical that price needs to explore and test this area so the gut reaction would be that a little more downside is needed.
ReplyDeleteIf you want to develop a trade in the dollar, or any ticker or index, simply scale in. That takes the guess work away. Split the position in three's or four's and enter one part now, one part tomorrow, see how it goes and enter with the remainder, or, if the trade goes your way, sit tight and then exit taking your money. It always sounds easy, huh? But this is the best answer. Brokerage fees are so cheap nowadays, 10 to enter, 10 to exit so there is no difference in making multiple entries and exits, 20 in commmissions compared to 50 is no biggie, and this additional trade cost provides you a higher degree of risk management. Watch the 20-day MA for the dollar around 81.7. Rupturing this will likely send it down to test 81.
Quant, Since April you've had 5 whipsaws out of 8 trades. Losing 1-2% per whipsaw does add up. Luckily the market has had 2 mini trends and you've been able to make those loses up. You have to take all the signals because you don't know ahead of time which ones will work. Incorporating information theory using signal processing and entropy you can eliminate 4 of those 5 false signals. That would leave you with a much higher return on the year.
ReplyDeleteHello Anon, information theory, schmery, instead of focusing on the actual computational and statistical side, focus on the trading side. That is the heart of the algo. Your suggestions are more suited for far more complex and data-heavy applications. The secret sauce in Keybot is its actual make-up and methodology as it relates to stock market experience, indicators and behavior. In trading, whipsaws are as constant and guaranteed as the wind. It is simly a matter of what whipsaw's to tolerate, and after many years, the algo is set up in a nice spot. Remember also, the markets are spending a lot of time this year moving sideways which obviously increases the probability of whipsaws. In fact, a whipsaw may occur today or tomorrow. It's all good.
DeleteYou've been kind enough to offer this service for free. I don't want to drag you into the dark side of probabilities, entropy and signal processing. But I can assure you whipsaws are not a constant guarantee unless you resolve your self to believe that
ReplyDeleteAnon, feel free to drag away, and it is not such a dark side. If you truly feel that you can consistently call exact tops and exact bottoms in markets in any time frame then you will be the first trader in history to perform such an epic feat. Keystone definitely encourages you to study the markets more intimately. If, however, you can call exact tops and bottoms in markets as you suggest, Keystone says that you must immediately abandon the college experience. Forget about any goals of wearing a corduroy jacket with elbow patches. Forgot about walking the college corriders sporting a beard with a non-lit pipe hanging from your lip. Say good-bye to academia and join Wall Street since you will be an instant celebrity trader, in the highest demand, turning down television appearances since there are simply too many request. You would be the greatest trader that ever walked across Wall and Broad. Plain and simple, whipsaws are a part of trading. (just having fun with you this evening, danke for being a good sport).
ReplyDelete