The Spain violence has traders in a tizzy. Firing rubber bullets into a crowd is not a good thing. Catalonia wants to separate from Spain adding fuel to the fire. Today, Greece is on strike, taking to the streets, tear gas wafts thru the air. Markets gave up waiting on Rajoy to decide about the Spain bailout. The Spain 10-year yield went over 6% this morning verifying the increased tension. The SPX may want to explore the lower support levels at 1441, 1440, 1438, 1435 and 1433. Watch euro 128.30 today, above and market bulls are happy, below and market bears are happy. The euro is now 1.2853 with the opening bell only two minutes away.
Note Added 9/26/12 at 10:16 PM: Euro is maintaining elevation above the important 128.30-128.50 zone. Tech is leading the broad markets lower but the bears need to see the euro cooperate to the downside. The SPX is testing the 20-day MA at 1437.84 so watch that closely. Price is now 1436.42 which is failure. 1435 is strong support. VIX is 16.32.
Note Added 9/26/12 at 10:48 AM: The TICK printed -1000 at 10:38 AM which identified the bottom in the minute time frame. Tech is leading the markets lower. COMPQ is down over one percent now. VIX at 17. XEU, euro, is at 128.43, holding above 128.30 and helping the bulls hang on. Keystone's SPX 60-Minute Chart with 200-EMA Price Cross is in play today. The 200-EMA is 1431.76. Note how price respected it on this move down. So lots of drama on tap around here today.
Note Added 9/26/12 at 11:25 AM: SPX S/R is 1446, 1444, 1441, 1440, 1438, 1435, 1433, 1431.78 (Keystone's 200-EMA on the 60-Minute Chart), 1431, 1429, 1427 (closing high for 2008 on 5/19/08; 1426.63), 1424, 1422 and 1419. SPX 1403-1419 is a very strong gauntlet of support. The TICK printed a touch over +800 a few minutes ago which identfied the top in the minute time frame. Price is back kissing the 1435-ish level now. If price moves up thru watch to see if 1438 maintains a resistance ceiling. The euro is staying above the 128.30-128.50 danger zone now printing 128.56. The day is young. The European close is on tap in a couple minutes.
Note Added 9/26/12 at 1:37 PM: The bulls push the SPX back up to back kiss the 20-day MA at 1437.92. The SPX is now printing 1437.99 so this test is important. Resistance is 1438 and very strong R at 1440. The SPX 30-minute, 60-minute and 2-hour charts remain unattractive open to seeing a retest of today's lows, perhaps by the close today or, considering the 2-hour candles, tomorrow. Euro is 128.59 refusing to collapse thru 128.30-128.50 so the bulls are encouraged. Tech is leading the broad markets lower which is a bearish indication. TRIN collapses to 0.77 which could be considered an adequate response to the 3.08 close yesterday, remember 1.0 is the bull-bear line, 3.08 is uber bearish, and 0.7 or lower is uber bullish. The high 3.08 wanted to see a market bounce to relieve the strong bearish pressure, and that is now fulfilled. There were two +1000 TICK's over the last hour as the SPX prints in the 1437-1439 zone. This zone was very important in the first half-hour of trading today so supply and demand is being explored; bulls win above 1439, bears win below 1437.
Note Added 9/26/12 at 2:11 PM: TICK prints +800, the TICK machine is active today. The bulls are trying to elevate markets with all their might, stabbing higher with +800 and +1000 TICK's, but, the SPX remains under the 20-day MA.
Note Added 9/26/12 at 3:14 PM: SPX leaks lower as the day moves along. Keystone took profits on TWM, continuing to like the short side but best to lock in some profits.
Note Added 9/26/12 at 3:41 PM: Keystone bot AMD opening a new long position and also added more CEP, this is a thinly-traded stock. Both show attractive positive divergence. Long positions will help balance the account better as it is heavily weighted short, and remains so, since Keybot the Quant remains short.
Note Added 9/26/12 at 3:51 PM: The SPX 200-EMA on the one-hour chart is 1431.93. Keystone's SPX:VIX ratio is 85, the lowest it has been since the September rally started on Labor Day, but above the 68 danger level. Likewise, the VIX is at levels not seen since Labor Day, now at 16.76. A VIX over 17 will increase the selling pressure further, over 17.75 and the markets will be selling off dramatically more. Bulls will try to prevent 17 from printing. Keystone bot more AMD.
I'm thinking ES 1420ish is around the bottom of this move in the next few days.
ReplyDeleteKommander Keystone, do we have a time for some sort of Spain announcement on Thursday?
Have not seen one but the European drama typically occurs early morning east coast time since they are 5 or 6 hours ahead so the positions held at the close today will probably have to ride thru that storm.
DeleteI have a related TA question: if XEU holds 128.30, then it looks to me like SPX bounces around here 1437 at the 20-day MA. Any thoughts on that KS? You mentioned a dead cat bounce...
ReplyDeleteSounds reasonable although 1435 is very strong support that may be a better place to touch and bounce. TRIN is 1.3 representing orderly selling today. No great shakes on NYAD. SPX 1, 5, 10 minute charts positively diverged now, 15-minute wants to see lower lows. ditto 30, ditto one-hour, ditto two-hour, ditto daily. thus, perhaps some buoyancy in the minutes ahead, a great time for cup of tea or coffee, then weakness should reappear as the day wears on.
DeleteThanks KS. It looks like 1433-35 is in play here. The trend is definitely bearish but I notice NYMO looks a tad oversold here and a little bounce off the 20-day MA would be standard even in a downtrend. Thanks also for the XEU line in the sand--
DeleteNYMO is getting down there at -36, RSI and stocastics look like they can live with a lower low though. The strongest support is 1446, 1440, 1435, 1424. So a loss of the 1431 on the one-hour chart 200-ema should lead to 1424.
ReplyDeleteWhat days my friends! The complacency over the past 2 weeks due to the prospects of QE-adinfinitum surely paid off well for the bears. SPX now trading below the key pre-QE3 announcement level of 1437, that's rather significant imho; since now all that bought into that hipe are underwater.
ReplyDeleteNotice that AAPL ha now put in a island reversal pattern, which is very bearish. 705 maybe all it ever wrote...
nice that will kill the QQQ's
DeleteSpeaking of the devil at 666...
ReplyDeleteLOL, just like the 2009 low. Remember, AAPL is the market...
DeleteI have a gut feeling there's going to be another phony "Spain is saved" rumor today or tomorrow that will send the SPX back to 1459 to end the quarter on a positive note. That won't change the down trend, and I could be wrong about this, but TPTB are probably not going to let this waterfall just yet. If KS's XEU line in the sand holds, that may support a dead-cat bounce here.
ReplyDeleteCharles I agree keeping a close eye on oil looks like a false break stick save here running stops anything over 89.60 will keep things sideways up I'd like another go at the SP short.
ReplyDeleteSPX came up to explore the 1437-1439 from the first half hour or trading today. This is also the 20-day MA, now leaking back down. Under the 20-day MA is very bearish. The Spain budget news may be a non-event but perhaps some type of bailout news may occur Friday. It feels like the lows today have to be tested again either into the close or during tomorrow's session, if 1431 fails then the 1424 may be the short term floor. But, can only take things minute to minute. 1.2859 euro, it is stubborn, bears need to see the euro start falling.
ReplyDeleteWTIC oil daily chart still weak and bleak, 20-week MA is 90.20 so that will be an important test. 80/20 rule says the rupture of 92 should lead to 88. failure of 91.20 leads to 90.80. 90.20 leads to 89.80. Right now, oil is 89.60. So 89.20 would lead to 88.80. May be best to wait and see if oil comes down to 87.70-88.20.
ReplyDeletethis pop has dead cat bounce written all over it I then oil goes in the 88 range as you say which is why I'm holding the ERY still. Oil futures are incredibly volatile for sure.
Delete13:40:59 NOV12 Futures CL BOT 3 89.63 NYMEX false 6.96
13:43:24 NOV12 Futures CL BOT 3 89.73 NYMEX false 6.96
+ 14:02:59 NOV12 Futures CL SLD 3 89.803 NYMEX false 6.96
+ 14:02:59 NOV12 Futures CL SLD 3 89.803 NYMEX false 6.96
seems like a nice 4th wave played out as expected today. 4th waves retrace often ~30% of the prior move. The prior move was 32.71 points. the 4th wave was 8.75 points (if completed) which is 27%... 5th wave can now bring it down to... you guessed it 1425ish...
ReplyDeleteThe Boys are trying hard to stick save it here at ES 1427...
ReplyDeleteAll they need tomorrow is another bogus rumor about Spain being saved to jack this up. I would like to see SPX back to 1460 because it will set up a very clean short....
ReplyDeleteThe 200 EMA on the SPX 60-minute chart is very important, price held above at the close by a point or two. That would be a strong bear signal if it fails tomorrow. Likewise a strong recovery move signal if it holds.
ReplyDeleteon the other hand, a close below 1435, a close below pre-QE3 announcement level (1437ish) and a close below the 20d SMA. I think 1425-1427 will be the next target, and a good level to close some shorts maybe.
DeleteKS, as you said back when QE3 was announced: the better time to go long maybe end of September and so far that seems to be the case.
All QE-pavloved traders that went long are now waaaay under water. The market decided this time to screw the bulls. Watch out below though, because if the market goes down more everybody and their toddler will be shorting the market. Thus all bulls have sold their QE3-longs, and all shorts will be crushed when the market decided to go up again. MAX pain to them all. So stay nimble y'all and take it day by day.
Save Espana and we are off to 1580.
ReplyDeleteIt is tough for Spain to give up! It's one of the big countries in Europe.
ReplyDeleteMarkets may float up as Q3 ends on Friday. A full moon is Saturday so markets tend to be buoyant in front of that. The Spain budget tomorrow is a wild card. They had leaked much of those terms today already so that may not be too big a deal. There may be some type of announcement on Friday. Markets may have made their decision already and even the announcement of the Spain bailout may not do much now.
ReplyDeleteThe 200 EMA on the 60-minute is very important. So a bounce may occur from 1429-1432 tomorrow, or, collapse, which would lead the way to the low 1400's, 1403 and 1406 is strong support down there.