A new trading week begins. The month of October and Q4 started off on an up note. Usually when the month begins with three or more up days in a row, a couple-day pull back is in order. The Monday's over the last three months have favored selling action. The futures are down about five S&P's. As illustrated this weekend, the utilities sector is very important. If UTIL is under 481.36, market negativity will result. If UTIL stays under 481.36 and the SPX drops under 1457, it is very likely that Keystone's algo, Keybot the Quant, will flip to the short side. If UTIL moves above 481.36, anytime this week, the bulls will push the broad indexes higher. Thus, the early trading may prove interesting. Watch to see if the 8 MA stabs down thru the 34 MA on the SPX 30-minute chart. Note the weaknes in copper. More and more traders must be buying into the overall global slowdown theme. Spain's bailout theatrics may finally be coming home to roost. Markets are likely sick of dealing with the drama and are now thinking that Spain will not request a bailout until late October or later. UTIL 481.36 and SPX 1457 tell the market story today.
Note Added 10/8/12 at 10:15 AM: UTIL is under 481.36 creating market negativity although it made a run higher over 481 at the bell. The SPX dropped under 1457 but that is not good enough thus far for Keystone's algo, Keybot the Quant to flip short. The algo appears to want to see the SPX print under 1453.51 for five minutes and that will cause the robot to fllip short. Until then, the markets meander sideways. The VIX is over 15. The 8 MA is on the verge of stabbing down thru the 34 MA on the 30-minute chart. Tech (COMPQ) is leading the broad markets (SPX) lower which is bearish action. Keystone took profits on the TWM trade, making it a one-day trade, exiting after the opening bell. Will look to reenter today, perhaps if/when Keybot clicks into the short side.
Note Added 10/8/12 at 12:20 PM: The beat goes on. The SPX came down to test the 1453.51 at 10:30 AM and bounced. Then price came down again at 11:50 AM only to bounce again. The bears need to hold under 1453.51 for five minutes or more and so far they are unable. The 8 MA stabbed down thru the 34 MA as described above indicating bearish markets for the hours and days ahead. Tech continues to lead the broad markets lower, bearish. UTIL is under 481.36, bearish. The bears are receiving all the go signals but they are sluggishly staggering down the trail without any gusto. A break under 1453 would create strong downside gusto. Keystone reentered TWM a few minutes ago at the +1000 TICK, reopening TWM as a long trade. TRIN is 1.13 which indicates steady-eddy selling today.
Note Added 10/8/12 at 2:23 PM: The SPX is in suspended animation, unable to fall under 1453.51 so the bulls hang on as the day progresses. Note that UTIL is steadily inching higher, now at 480.55. The bulls know that UTIL 481.36 will put them back in business. Bulls win with UTIL above 481.36, bears win with the SPX failing at 1453.51 and heading lower.
Note Added 10/8/12 at 2:46 PM: Look at the utes collapsing, stopped just shy of a 479 handle, the bulls may be running out of gas. The latest news on AAPL is that there is a purple haze problem with the camera on the iPhone. And we are not talkin' Jimi Hendrix purple haze. Poor Steve Jobs is turning over in his resting place.
Note Added 10/8/12 at 3:05 PM: Fake out move by the utes, look at the reversal in UTIL, jumping upwards towards 481 now. The TICK prints a +750 spike. SPX moves up to test the 1457 resistance.
Note Added 10/8/12 at 3:14 PM: UTIL is all over the map. Markets are very erratic, unstable and indecisive. The VIX takes a drop over the last fifteen minutes and is trying to hang on to the 15 level. The VIX 20-day MA is 14.99. Keystone needs his heart pills.
Note Added 10/8/12 at 4:02 PM: Market bulls could not achieve UTIL 481.36 and the bears could not push the SPX under 1453.51 for an extended period of time, so both sides agree to a draw and go home for some dinner. Tommorrow will pick up where today leaves off. The SPX could not punch back above the 1457 resistance. If UTIL moves above 481.36, the bulls will rule the markets. If UTIL is under 481.36 and the SPX is over 1453, the markets will continue meandering sideways. If UTIL stays under 481.36 and the SPX drops under 1453, the markets should sell off strongly and Keystone's algo, Keybot the Quant will likely flip to the short side. VIX closed above the 20-day MA which is bullish for volatilty, bearish for markets. Keystone added more DNDN; this is a dangerous and speculative biotech long play.
We did not breakout and it appears we have to diddle around in this 1430-1460 range for perhaps another week or so.
ReplyDelete"My mama told me, you better chop around, oh yeahhh you better chop around..."
The opening will be interesting, UTIL sub 481.36 and SPX sub 1457 places the bears in charge, perhaps instead the tune would be, ..' .....slip-slidin' away...slip-slidin' away now....'. If the SPX drops under 1457 but pops back above five or ten minutes later, that will show the bears have no oomph and markets will meander sideways. AAPL is weak and sub 650 which indicates that tech will lead lower and the bears may get something moving today.
ReplyDeleteLooking at the SPX since its June bottom, what's striking is how downturns have lasted 3-5 days and then the next leg up starts. KS, it looks like the stochastics etc. on your SPX chart are about to bottom. That fits with a 3-day down scenario. Should be interesting to see if there is one more leg up in this market....
ReplyDeleteFWIW, Goldman said they are short on Friday. Whether intentional BS or not, it will chill the mkt for a few days.
ReplyDeleteUTIL is under 481.36 so keep watching that. The SPX looks like it now needs to print under 1453.51 for five or more minutes and that will cut the bears loose and result in strong downward action. But if the bears cannot get sub 1454 the ygot nothing. Tech is leading down, the 8 is about to stab down thru the 34 MA on the 30-minute chart, the bears are pushing hard, we will see what they got over the next hour or two.
ReplyDeleteDon't normally do equities, but took some AAPL under 638. We will see in a week or so.
ReplyDeleteThe bears are in a great position today but they cannot get the job done, they need the sub 1453.51 print for several minutes to accelerate the downside but cannot attain it, yet.
ReplyDeleteZig, you may have to add to the AAPL from a lower number. The daily chart had an H&S breakdown, so neck at 660, head at 705 is 45 difference. That targets 615 which is a perfect level of horizontal support with lots of congestion in July. It is interesting to watch since if Apple starts losing it, so will the Nasdaq since it makes up 10% of that index, and also the broad indexes. It may be an Achilles Heel for the markets. The Foxconn rumors are still he said she said. News overnight said some of the Apple production was halted over the scratched case issue with the new iPhone, but then other news reversed that news saying there was no shutdown of production. So the traders are left to wonder what happened. Looks like they are selling today. If Foxconn news is clarified and it is good for AAPL it can cause a quickie pop but overall it looks like it needs some more downside to 615-ish in the days/weeks ahead.
ReplyDeleteYou could well be right key. I would rebuy one more time at a lower price. Its been a while since I owned any aapl - kind of a buzz. I'm swinging it so I can be patient.
ReplyDeleteI agree with KS. Here's a great analysis of what levels to look for: http://youtu.be/XhnumD9L_-w
ReplyDeleteIn summary, AAPL couldn't hold it's previous high of 644, and yes 638 is still a good level for a rebound imho as it's basing nicely there all day today, But it may well go to 620 -next support level- also since supply is crappy. Oct 25th is Q4 earnings release and that maybe a good buying opportunity since all these negative issues will have been baked in.
Also, SSTO 5 and 14 (with a %D (1) )are nearing buy levels (e.g. both <20), but it's not really there yet. However RSI 5 showing some possitive divergence, but MACD doesn't. So kinda mixed bag, favoring a lill more downside imho.
I am "hungry" for buying AAPL again too. Sold it late last year for a 110+% gain, and never went on the band wagon up to 600+.
The latest news is now a problem with the iPhone's camera, a purple haze appears. This continues the musical theme today, 'Purple Haze'. Apple released that phone too early, it has the Mapgate problem, the skinny screen, the covers are scratching, now the camera. And to add the cherry on top, Samsung is hitting them with those comical commercials, showing all the folks standing in line. Business, and trading, is cuthroat.
ReplyDeleteNot sure how often aapl trades outside the bollinger bands, maybe once every three months?
ReplyDeleteMight hit a little lower, but I'm looking for 720+
Also my wave 4 count for aapl was at 637.
ReplyDeleteFor the broad indexes tomorrow, UTIL 481.36 is important again, and the magic SPX number is 1453 exactly where Keybot went long a week ago. Bulls need UTIL over 481.36. Bears need UTIL under 481.36 and SPX under 1453. The middle ground would be a repeat of today's action.
ReplyDeleteAAPL lost the 50-day on Friday so it will want to back test that at 657.33 so keep an eye on that number. The 20-week MA at 625 is important support if it starts moving lower. 630-ish is storng support, check out that action from mid-August. Perhaps a bounce from 625-638 back up to the 50-day at 657, then it will decide if it wants to regain the 50-day and move higher, or, fail. If it fails it can head down to the 615 H&S target.
I am no fan of Apple and or an enemy trader. There are always problems with any new tech release. We just do not hear of the other companies much because no one care about 9/10ths of other products. iphone is like a top model hot playboy bunny who when she gets a pimple or farts, everyone likes to say how un-hot she is and "Look how disgusting!" But the smart ones know she is still hot and the would take her anyday over any other chick. Apple is just like that. The problems are minor and they, including the late Jobs, price it all in. So let's rip down the king for a few trading days, but don't get too critical. I am hesitating on a buy of APPL and CRUS right now but may kick myself. Also, TNA is growing weak, and TZA not too strong. Which way do we go? My trades and orders are so hesitant.
ReplyDelete