The markets are off and stumblinig. The retail sector receives a pop due to HD and LOW rising on Hurricane Sandy. RTH is at 44.50 only three pennies above the important 44.47 level but above nonetheless causing market bullishness. If RTH drops under 44.47, the broad indexes will sell off. GTX remains under 4895 maintaining a negative influence on markets. The Nasdaq is negative. AAPL is down 15 bucks. Tech is not leading the upside so that placed a lid on the markets thus far. As Apple goes, so goes the markets. The SPX tested 1417 twice so far but the bulls are struggling to hold 1417. The SPX is now printing 1414.75. Volume is very light so an interesting day is on tap. About 25% of the mutual funds use today as the final day of their fiscal year. That is why it was important to open trading. The action should heat up between noon and the close as the funds alter positions. Chicago PMI was a hair better than expected and provided a quick market pop but that faded.
Note Added 10/31/12 at 10:38 AM: Something for everyone. VIX is up above 18 now. SPX and Dow Industrials are up. Nasdaq down. RTH is sitting at 44.47 making a decision.
Note Added 10/31/12 at 10:48 AM: RTH fails 44.47. SPX turns negative now at 1411 but bears need to see 1403 to be happy. The euro is 1.2973. The 10-year yield is 1.70% (lower yield means higher note prices so traders are moving towards safety instead of risk).
Note Added 10/31/12 at 11:13 AM: RTH 44.33. VIX 18.67, a big move today. SPX 1408.85. Euro 1.2972. The 10-year yield is 1.70%. SPX S/R is 1424, 1422, 1419, 1417.09 (today only), 1416, 1413, 1409, 1406.96 (20-week MA), 1406, 1404, 1403.28 (today only) and 1403. The SPX LOD is 1407.63 testing the 20-week MA support so watch that closely moving forward.
Note Added 10/31/12 at 12:06 PM: On volume, the NYA was at a run rate of 130% of a days regular volume as the day began; there were many orders at the start, but that peters away. The run rate is now down to about 95% of a days average volume. SPX is sitting on 1409 S/R watching the world go by.
Note Added 10/31/12 at 12:40 PM: The 8 MA moved above the 34 MA on the SPX 30-minute chart at the open, bullish, but now is about to stab down thru again, bearish, so watch this drama unfold today to see which side wins. SPX just slipped under the 20-week MA at 1406.82, it is testing this critical support now, time to bounce or die.
Note Added 10/31/12 at 1:30 PM: Bounce. SPX is now printing back at the 1409 S/R. The 8 MA stabbed down thru the 34 MA on the 30-minute chart placing the bears back in the drivers seat. Both of these critical moving averages are at the 1410-1411 area so as long as the SPX price itself stays under this area, the market bears should be in good shape. If you see the SPX moving above 1410-1411, that will bring the MA's back up and perhaps cause the 8 to cross back above the 34. Lots of drama ongoing. The VIX is 18.75. RTH has recovered now printing 44.41. The 44.45 and higher level will create broad market upside so the bulls need to push if they want it. Use the RTH 44.45 number as the bull-bear line instead of the 44.47 highlighted this morning. NYSE volume is now at a run rate of only about 80% of an average days volume reflecting the light trading.
Note Added 10/31/12 at 2:29 PM: The RTH is above 44.45 and note the buoyancy in the broad indexes. The SPX established the 20-week MA as important support. The 8 MA remains under the 34 MA, for now. The volume run rate continues to fall now at only about three-quarters the volume as would be expected on an average day. The TRIN is under 1.0 all day long which favors the bulls and helps buoyancy to appear. Tech is leading the downside which remains bear favorable. SPX is moving thru a sideways 1406-1412 channel for the last four hours; price is now testing the top rail. The 10-year yield is at 1.69% falling thru 1.70% so this is favorable to equity market bears. The euro is 1.2964. Western Union (WU) is down 30% today, quick, wire them some money.
Note Added 10/31/12 at 3:28 PM: The bulls are keeping the RTH elevated above 44.45, now at 44.58, bullish. The 8 MA remains under the 34 MA, bearish, but the bears must push the SPX price lower immediately to prevent the 8 MA from crossing up thru the 34 MA.
Note Added 10/31/12 at 4:40 PM: Volume was strong at the open, and at the close, but light all day in between, ending above a regular day's average volume. RTH finishes in the bull camp. The 8 MA remains under the 34 MA in the bear camp. TRIN works back to the flat line at 1.03 at the close. No great shakes today. The week should become far more interesting with the ADP Jobs Report, Consumer Confidence, ISM and Jobs Report all on deck.
KS, AAPL looks like a buy at 580, per your 20/80 rule!
ReplyDeleteAAPL will remain a floater until January. Buy all you want and wait. TNA is getting very attractive.
ReplyDeleteYep, APL ended down 1.4% which weakened the Nasdaq and kept the bulls in check since tech leads. Note how AAPL came down to tap on the 200-day MA for support at 587. LOD is 587.70 so price did not violate the 200. On daily chart the indicators are positively diverged so it may want to bounce from here. The MACD line, however, points lower, so the bounce would simply be a a short relief bounce for AAPL and likely provides another short entry for price to come back down and probably violate the 200-day MA. This may set up a more sustainable recover rally. Look at the strong support at 570 in June, July. And the 80/20 rule targets the 575-585 as a potential entry for a long, so mix it all together, a bounce perhaps to 610, then back down to 565-580 for another bounce, all in the days ahead, say week or two.
ReplyDeleteOn the weekly chart, a back kiss of the 20-week at 630 may be on tap when AAPL bounces, but the chart wants to see lower numbers as the weeks roll along. The 50-week MA is 555. A test of the important 520 support area would not be unreasonable before the end of the year.