The new week is off and stumbling. Markets are flatish. The market bulls only need a smidge of green in the futures to accelerate an upside move today and push up thru the important SPX 1419, 1422 and 1425 levels. The S&P's are up a couple points as this is written about three hours in front of the open. If the bulls can move the SPX above 1419 and hold it a few minutes, an upside market acceleration will occur. The market bears need to prevent 1419 with all their might and at the same time push the SPX under 1415 to accelerate a downside move. The SPX will likely decide one way or the other today, rather than sideways, so bulls want 1419 and bears want under 1415.
Watch to see which direction that tech (COMPQ) is leading the broad markets (SPX) today since the broad indexes will move in that direction. The futures show the S&P's and Nasdaq in lockstep right now, up a smidge at +0.1%. Neither side is favored so far today, the markets want to keep you in supsense.
The key item to watch is copper and it is weak in early trading due to China hesitation on stimulus. The bulls cannot take the markets higher without copper cooperating and it is the only major sector that has not joined the rally. Dr. Copper, however, is the leader for markets so this hesitation is important. That drama will play out today. Watch JJC 43.65 as it starts the day in the bear camp at 43.39. The markets will have limited upside and likely experience negative forces to create a roll over if JJC stays under 43.65. If the bulls move JJC over 43.65, it is off to the races higher for bulls since the rally will finally receive copper's stamp of approval. Watch UTIL 472 all this week; it starts about seven handles higher. The recent utility weakness, dropping over 4% in the last 14 days, is a red flag signal for markets. Watch to see if the weakness in the utes continues, or not. If UTIL 472 fails, that signals that the markets are slipping into major trouble. The bulls must keep UTIL above 472.
The CPC put/call printed another 0.7 number and, along with the low volatility, indicate complete compolacency and committal by long traders that Draghi and Bernanke will support the markets no matter what. Traders see no reason to buy downside protection since the central bankers will support them for the weeks and months ahead. Many pundits are waxing worry these days but their actions do not show them to be worried; they are buying the markets since the Bernake/Draghi put is in play. The VIX and CPC should be viewed as contrarian signals so they indicate that the markets are placing a major top right now.
We are dealing with power outage issues here today; power was off for six hours overnight. Keystone will target an update at some point but regardless, the path ahead is very simple. Watch JJC 43.65 and SPX 1419 and 1415, which will determine broad market direction today.
Isnt fun when power goes out and your salping we had few outages last monh incliuding the house being hit with lightening thanks for the update.
ReplyDeleteWe must go back down to hit a support level before we can continue up. The question is: which one? 10 day at 1407ish spx, 20 day at 1389ish spx.
ReplyDeleteYep, lots going on to start the week. Fortunately, Keystone has triple back-up so it turns out to be more of a pain in the kiester. One cable box died but that was it.
ReplyDeleteI agree Zig, this mornings charts identify some potential downside support targets; 1413, 1410, 1406 and 1403 are the most likely. The stochastics are at the ceiling. Markets are simply trading off the Euro tape bombs, so whatever news the crew across the pond releases, so goes the markets.