Keystone's algo, Keybot the Quant, is tracking four key parameters which are most greatly impacting the broad indexes; JJC 43.61, UTIL 464, SOX 389 and NYA 7808. Copper is buoyant lately on stimulus talk from China, the Fed and ECB so JJC remains buoyant. We watched the drama in the utilities sector last week, the huge move down in UTIL over the last month is very ominous for the intermediate term market picture but to start the week, UTIL should be able to stay above 464 helping the bulls. Tech remains elevated and has allowed the market rally to continue along each day so semiconductors remain in the bull camp. The NYA Index remains above 8000. The SPX 30-minute chart shows the 8 MA crossing above the 34 MA on Friday, more bullish news.
The vapor for volume clearly says the market rally is in question. Lower volumes are expected in the summer. After Labor Day, the volume will pick back up so mid-September will help identify how the low volume has, and will, impact markets moving forward. VIX has a 15 handle showing continued market complacency thru this 13-16 range. Markets have rallied with the goal of arriving at the finish line this Friday when Chairman Bernanke provides the market answer, and then Draghi on Saturday. Since this is Monday and the news is only four days away, one would think the markets may prefer to move sideways from here. A bias to the downside may form early week into mid-week since the markets may have rallied as far as they are willing to ahead of the Fed. On Thurday and Friday, the pre-holiday market buoyancy is anticipated, and also, markets tend to be buoyant in front of a full moon, which is Friday evening, so late week markets may prefer an upward move into the big news.
For the SPX today, bulls need 1413.50 to launch the upside, bears need 1398 to accelerate the downside, 1399-1412 is sideways action. Watch the 30-minute chart as described this morning. JJC 43.61, UTIL 464, SOX 389 and NYA 7808 will dictate market direction. All four are bullish which will allow markets to continue along sideways to sideways up. If one of the four fail, markets will be selling off. If two of the four fail, the markets will be tumbling lower, the SPX headed for the low 1390's, and Keybot the Quant will likely flip to the short side. If the four parameters remain bullish, however, the bulls have not a care in the world, they will be sitting back enjoying the ride into the Bernanke speech. Markets may start the week slow but upon release of the ConCon number at 10 AM tomorrow, the action will ramp up into the Bernanke and Draghi circus.
does the SP Energy Sector (Bullish Percent Index) work the same as the SP Bullish Percent Index? Thanks KS
ReplyDeleteHello MCAP, in general, yes, but the bullish percents for various indexes are dependent on the number of stocks in the index. Such as BPINDU, the Dow, that only has the dirty thirty so its BP will movemuch more wildly, to the extremes, 0% and 100% so keep that in mind. But, in general, as the BP's move above 50% that is bullish, above 70% is bullish but be aware that the market can reverse any time, a six percentage point reversal and that verifies the down signal, falling thru 70% is more bearish. Same on the low end, if falling under 50% tha tis bearish, under 30% and that is bearish but be aware that a reversal is coming, a reversal of six percentage points will verify that the bulls are running again, above 30% and that is more bullish. Use 'stockcharts chart school bullish percents' for more study in this area. They have a great list of the BP's available as well such as BPINDU, BPSPX that Keystone follows, BPCOMPQ, BPNYA, and many more such as the BPENER you reference. BPENER is for the oil companies, XOM's of the world, and energy companies, let's see, at 84.44 now, top is 86.36, yunz can look on your own to verify the numbers. So the move thus far, off the top, is two points. If you see BPENER drop under 80.36, that signals the bears are gaining lots of downside steam, then as the energy sector crumbles, and the BPENER falls under 70%, Katy bar the door, energy is in lots bigger trouble. The positive divergence and attractiveness of ERY as a trade moving forward gels with the outlook with the BPENER.
ReplyDeleteBoy, you nailed that call - again. The SPX got to 1414 and then started selling off. I take it we should think about adding longs if and when we get back down to the 1398-1406 level - depending on what the indicators say. There should be some buoyancy later in the week.
ReplyDeleteThe day is young Weaver and the market will always throw curve balls. Can only take these markets one step at a time. SPX appears to be honoring the Fib retracements. The 30-minute chart is important, see if the 8 MA starts to curl over and head down, or not. Also if the negative divergence forms across all the indicators over Friday and today's action. So, we probably need a couple hors to play out to start the day.
ReplyDeleteBack down to ES 139something, methinks. Spikes upwards are looking ugly. Don't think this is the big rollover yet...but if it isn't they'll try to make make it seem like it is lol.
ReplyDeleteThank you KS I have been trading a lot of oil futures lately and was looking for some indicatorsmthat could keep me focused on the forest and not the trees...
ReplyDeleteWTIC
ReplyDeletehttp://scharts.co/U2tKbH
BPENER
http://scharts.co/PJXycH