China GDP is released overnight and reports 7.4%, the seventh quarter in a row of slowing growth, the slowest growth number since the first quarter of 2009, but the markets are happy since it slightly beat the estimate. Go figure. China's Premier Wen Jiabao says the economy is stabilizing. China said at the start of the year that growth would not drop under 7.5%. Traders are ignoring the bad news and drinking the Koolaid. The electricity usage is dead flat which immediately places the GDP number into question. The economy is not growing at that pace if electricity usage is flat. Also, the IP CEO last week said he thinks China's growth is 2 to 3%. The empty cities remain unfilled, a bursting housing bubble is likely, and the change in China leadership also clouds the waters. It is an interesting drama to watch. Copper was each side of the flat line after the news and is now slightly up. It appears the China data may not impact markets either way.
The EU Summit is underway so news concerning Greece, Cyprus, Spain and Italy should be on tap. In addition, news on the forming of the banking union which is key to handling the debt crisis. Jobless Claims are on tap at 8:30 AM. A market pivot point will occur at 10 AM with the Philly Fed and Leading Indicators. Natty Gas Inventories are 10:30 AM. A 30-Year TIPS Auction is 1 PM. Earnings of interest today include AMD, BBT, CPHD, CMG, CY, DHR, DO, GOOG, MS-lots of exposure to Europe, MSFT, NOK, NUE, PM, PPG-chemicals forecast global growth, RVBD, SNDK, LUV, UNP-railroads will impact Trannies, and VZ.
The utilities sector strength was remarkable yesterday and UTIL pushed above the level of interest for next week at 485.67. If UTIL stays above here, the bulls can keep the rally going thru next week so watch this closely today. Semiconductors are the only sector contributing bearishly to markets. If the bulls can push the SOX above 386 this will confirm that the SPX will punch thru the highs this year and move up towards 1500. The bears must prevent the SOX from moving above 386, otherwise, serious pain will result. The bears need to push UTIL under 485.67, and actually 478.43 for this week, to reestablish bearish markets. The bears can also weaken the markets if they push the JJC under 46.30, or RTH under 44.45 or VIX over 16.50. Otherwise, the bulls rule.
For the SPX today starting at the strong 1461 resistance, which was the focus all day yesterday, the bulls only need a single point higher, to push over 1462, and the SPX will immediately accelerate upwards to test the closing high this year at 1465.77. The bears need to push under 1453 which will reinitiate the market downside. A move thru 1454-1461 is sideways action. The euro is off its highs from yesterday due to Moody's not downgrading Spain, and is now printing 1.3116. A drop under 1.31 will encourage the bears.
Note Added 10/18/12 at 7:56 AM: MS beat on the bottom line, stepping over the lowered bar that even Grandma Edna in her orthopoedic shoes has no trouble doing. Remember that any of the earnings beats are due to the lowered earnings forecasts announced during the confessional season. MS dropped on the news but has since recovered to the plus side. The European exposure hurts MS more than any other bank. S&P futures are down three. Nasdaq down seven. Oil is down a smidge. Gold and silver are lower. Copper is now a smidge negative. The Autumn leaves continue to fall.
What's amazing about your sarcasm is that it's so obviously an angry Bear, that it is hard to take your TA seriously. Funny how you have a tendency to disappear from the board when the markets are rallying against your precious TA and nonstop put downs over everything that may go right with the markets. "Traders are not drinking Kool aide" they are responding in a way that's appropriate to the news. Every positive Bull movement is met by skeptical analysis until your TA is proven right. I have been following your site for months. And from your prospective anything less than a complete rollover by the markets, a crash, would give you happy days in your hammock. I am sure you are losing money and that's a shame.
ReplyDeleteHello Anon, having the psychological credentials to make an assessment, you may have described yourself in some manner. Trading is an exploration in pschoanalysis. You appear far too analytical, perhaps an accountant or engineer, if you relax your mind and actually think about what you are reading, it is hard to see how you come up with your conclusions. Most things here must be going over your head. You obviously miss the scarcasm aspect all together, Keystone admittedly has a dry sense of humor, the subtle satire may not come across well in print. The jokes spice up the dull trading days.
ReplyDeleteWhy is there a need to take TA, or anything, seriously? The idea is to have fun and enjoy life, you only realize that when you come close to losing it.
Copper is red today so there is some Koolaid drinking going on. The top left margin displays the ongoing market status which is bullish. If you actually did follow the site you would see that Keybot the Quant, the algorithm that determines the overall market direction (the upper left margin) handles the majority of the portfolio as a long or short position. The position is long the markets.
Keybot is not interested in identifying exact tops and bottoms, it is programmed to seek the smoothest path possible thru the year and it is up 9% on the year thus far. It is less risk so it handles more of the portfolio.
The shorter term trading discussed daily on this site is focused on the highly dangerous, 'speculative' style of trading, which does seek to call tops and bottoms, and many times this is correct, and sometimes it is not, but simply check out the Positions and Picks change, as you probably do since you have followed the site so long, and the results are displayed. The year is in fantastic shape.
Currently markets appear to be topping as per all the metrics recently discussed. You should never think of markets as black and white, always maintain exposure on both sides of the trade so something is always working. If SPX heads up over 1480 and higher, then you will be correct in reference to the index short positions currently held by Keystone. If not, Keybot will flip short and the index shorts will work out fine. Thus, sit back and relax, explore the creative side of your head, stretch a hammock, do not think in terms of either bulls being absolutely right or bears being absolutely right, you have to simply surf the waves as they come along, up and down, and keep your fingers in both pies. Be water, my friend.