The Spain elections go Rajoy's way, his homeland of Galacia provides him a reason to smile today. The Catalonia elections, the largest GDP region making up Spain, are on 11/25/12. Rajoy appears in no rush to request a bailout. Considering the run in notes and bonds, driving yields lower, trader's are starting to think about the other side of the trade. Watch Portugal (now at 7.57% for the 10-year) and Spain (now at 5.42% for the 10-year) yields moving forward. As Rajoy continually delays a bailout request, trader's may now start to short the Portugal and Spain bonds (lower prices=yields moving up).
Global market reaction is muted in reference to the Friday selloff in the States. Futures are up a few points indicating a flat to higher open. The semiconductors, copper, utilities and volatilty all jumped into the bear camp. Trannies never confirmed the up move in the Dow Industrials as per Dow Theory so this indicator remained steadfastly negative. The UPS earnings are key tomorrow; keep an eye on Keystone's UPS 20 and 50-Week MA Cross Indicator (on the Cyclical Turn page). Watch UTIL 485.67 all week long, especially at today's open; below and the market bears rule, above and the market bulls rule. If markets bounce at the open but you see UTIL not moving above 485.67, the bulls got nothing and markets wil reverse and head lower. If the market pops at the open and UTIL moves above 485.67, that indicates the recovery rally for the broad indexes is in play. The high TRIN and low NYAD hints that a snap-back rally move is needed to relieve the uber bearish pressure that occurred on Friday.
Typically, for the Monday after OpEx Friday, markets move in the opposite direction they did on Friday. Friday was down hill all the way so this hints that there should be some buoyancy today. The trend for Monday's is down, although last week Monday was up, but that was more due to the expected OpEx Monday buoyancy. Perhaps the bounce move may occur early today and then fade as the day moves along but it is far too early to prognosticate. The markets are in a window now for Keystone's Eclipse Indicator which says the period now thru early November has potential for an extremely large market sell off. The indicator had the same set up for late April this year.
Watch copper, JJC 46.33, bears need to stay below, bulls need to move back above. A couple hours ago copper was down but has since recovered to the positive side. Watch the VIX 16.30 level, above and bears are happy, below and bulls are happy. The 8 MA is under the 34 MA on the 30-minute chart which indicates bearishness ahead, likewise, the SPX is under the 200 EMA on the 60-minute chart. Watch for any of the metrics listed here to move back to the bull side since that will verify a recovery move for the broad indexes. If the metrics listed here all stay bearish, markets will continiue drifting lower.
In a nutshell, watch UTIL 485.67, JJC 46.33 and VIX 16.30 to determine market direction today. Use the SPX 50-day MA at 1433.48 as a bull-bear guide as well. CAT earnings will set the tone in the minutes ahead. It is a bellwether stock that indicates the strength, or weakness, of the China and Asian economies as well as the global economic health in general. Any building, road or construction endeavor starts with excavation. Since it is Halloween season, will a black CAT cross traders' paths today, or not?
Note Added 10/22/12 at 7:40 AM: The sale on hari-kari knives continues. CAT stepped up to the window and opted for the new blue steel model, then promptly walked out onto the floor of the NYSE and collapsed for all to see. CAT earnings beat on the bottom line but missed on the top line and they are lowering guidance, hence, the stock is down and the S&P futures pull back a point or two. The CAT news deflates the market mood. The euro is at 1.3069 remaining handily above the 1.30 level. Copper just turned a smidge red reflecting the current global malaise.
Note Added 10/22/12 at 8:41 AM: The euro is 1.3058 leaking a bit lower in concert with the broad indexes. Markets are now pointing towards a flat open. Copper remains red.
AMD is halted...
ReplyDeleteAMD is still trading premarket? What do you think KS?
DeleteIt is trading, it is a thin market, now at 2.22. Will have to let the turmoil play out today and tomorrow to see what happens.
DeleteWhy does AMD have the *H symbol? Was it halted Fri?
DeleteAMD was halted last week for earnings. That happens a lot when companies have surprising news or something unexpected happens, like GOOG last week, or if the drop, or rise, hits the circuit breakers. AMD got hit with a lot last week. The seling volume was 4x normal volume, this actually hints at a capitulatory move, everyone and his bro simply said 'get me out at any price, I don't care!' So this week we see where it wants to settle. There is lots of talk that 80 to 85% or its business is related to the PC makret so considering the 10 dollar high a few months back, traders pole-axed the stock that amount, hence 2. AMD hit 1.80 during the 2008 crash. 2.20 would typically lead to 1.80 so today's close is important, seeif it can muster up a close above 2.20, or not.
ReplyDeleteYou have to consider if you believe the full fledged narrative that the PC is dead and mobile has taken over, iPads and Smartphones. Keysotne thinks much of htis is overrated and blames more of the slump on the global economy. If we had a true recovery now like past recoveries, you would see nothing but deask top and laptop computer boxes in office hallways as new employees are hired and the PC market is humming. But companies are worried about taxes, health costs, the economy, and just getting by with the people they got, hence no need for PC's. It will be interesting to see how this plays out in the months ahead. There is a lot Keystone can write about for AMD and hoped to on the weekend, with charts, but perhaps tonight. It is only a matter of how much fuel is in Keystone's tank.
KS, Thank you for the explanation. I refreshed my AMD chart and the *H is gone now. I sold at a 10% loss back at $2.98, because that was all the loss I could tolerate. Looking forward to your next post/chart re AMD. I do not believe the PC is dead at all, especially for business use. AMD is also positioned to make smaller, faster, less power consuming chips, so that would fit right in with what the tablets are lacking...speed.
ReplyDelete