Checking the key parameters, SOX, JJC and GTX remain bearish. XLF and VIX remain bullish. Status quo. For the SPX, the bears have stopped further upside but are not making any dramatic move lower. The uber strong 1403 S/R is playing a key role today; this is also where Draghi announced the OMT Bond-Buying program. The Greece decision continues to hang in the balance, the positivity from a resolution is likely priced into markets already. The 50% Fibonacci retracement resistance level highlighted on the weekend held at 1409, at least so far today. The 200 EMA on the 60-minute chart is 1402.34 and if the market bears cannot get under this level, they got nothing. The 100-day MA is 1407.28. Tech is not leading the broad markets lower today so this hints that the bears do not have much oomph. If VIX continues higher another 20 or 30 cents to the 15.90's the bears will growl strongly today.
Note Added 11/26/12 at 11:11 AM: The five parameters on watch today remain status quo although VIX and XLF are starting to tease towards the bear camp. The SPX fell under the psychological 1400, a key victory for bears. More importantly, the bears pushed the SPX under the 200 EMA on the 60-minute chart which signals bearishness for the hours, days, perhaps a week or three ahead. Watch this closely since the bears will need a close under the 200 EMA today. If VIX or XLF turns bearish, both are only pennies away from flipping sides, this would supply street cred for the down move and guarantee a test of the strong support at SPX 1391.
Note Added 11/26/12 at 1:58 PM: The status is quo, neither SOX, JJC, GTX, VIX or XLF want to make a move to the other side. The bears are trying to bring the VIX up higher with all their might. Similarly, the bulls are trying to bring the JJC higher, and, are succeeding in some respects, since copper is up causing the market bouyancy over the last two hours. The Nasdaq had gone positive today but is now in the red again. Tech leads and since it did not lead lower today that hints the bears do not have oomph to the downside. Most importantly, however, is the 200 EMA on the 60-minute today, now at 1402.29. The SPX is printing 1401.60 so the bears are favored by a single hair. The SPX 30-minute chart shows the 8 MA remaining above the 34 MA but the two moving averages are converging. HPQ is feeling some love today, three white soldier candles are marching up off the bottom on the daily chart. The trading day is lazy and uneventful so far, traders are sleepy from the excessive eating over the weekend. The office lunchroom smells like turkey casserole as employees line up to use the microwave.
Note Added 11/26/12 at 2:59 PM: The SPX jumps higher but the five parameters remain status quo. The bulls and bears are fighting over that critical 200 EMA on the 60-minute chart. Tech is bull friendly all day and it leads. AAPL is up 3% today now printing 589. Apple pushes the Nasdaq into positive territory again. See if AAPL closes above 580 as highlighted in this morning's chart, or not, if so, the door is open to 620, and shorts could be increased, if the short side is being played, at 610 and up. Would not be surprising to see Apple roll over at any time. As Apple goes, so goes the markets.
Note Added 11/26/12 at 3:15 PM: The SPX is back above the 200 EMA on the 60-minute chart so the bulls are in control for the hours, days and few weeks ahead. Bears are fighting back and need to close the SPX under the 1402.34 level, otherwise, the SPX will likely move back to 1409 and onward to 1412-1413. The SPX is printing 1403.36. The minute charts, 30-minute, 1-hour, 2-hour, all hint at sideways action ahead with a sideways down bias, reinforcing the continuing theme thru 1391-1413, or more specifically today 1398-1409.
Note Added 11/26/12 at 3:33 PM: AAPL dumps three bucks in five minutes so the markets drop as well. The SPX is dancing along the 200 EMA, one side will be happy in less than one-half hour the other side will not. The 200 EMA is 1402.33, price is now at 1403.39, twenty-five mintues remaining on the clock. The five parameters of import today are status quo not choosing a side. The 200 EMA must serve as the arbiter and decision maker today.
Note Added 11/26/12 at 4:24 PM: No great shakes today, things ended just as they started, no change in the five parameters of interest, and the SPX remains above the 200 EMA. Tech kept the markets buoyant and Apple kept tech buoyant. The action tomorrow will pick up at the same place with the Egypt and Greece drama's intensifying the mood. Consumer Confidence at 10 AM will create a market pivot point. The 200 EMA is uber important tomorrow, bears will have to move the SPX below 1402.33, otherwise, the bulls will begin marching markets higher again. The SPX closed at the very strong 1406 support/resistance.
Note Added 11/26/12 at 7:31 AM: The pro-Morsi demonstration for tomorrow is now postphoned as Morsi and the key Egyptian judges reach an agreement. The only problem is that the anti-Morsi demonstrations will continue in force and all these folks with pent up aggression will now need to seek a new target to release their frustration. The anti-Morsi protestors have already started a new revolution and can no longer trust Morsi. The euro moves above 1.30.
I hope everybody had a great thanksgiving holdiday.
ReplyDeleteBesides EWT (we're in a wave 1 or wave 4 are my 2 best counts for the moment) I am watching the Zweig Breath Thrust indicator. It got to 59 on Friday, from a low of 35 last Monday or Friday (don't recall). The theory is that a move from <40 to >61.5 within 10 or less trading days gives a bull market signal and 20-25% gains off the lows (1343 in this case) can be expected within ~ 1 yr. It has only triggered 15 times since 1945, last was Oct' 11. When ever it triggers, the gains are certain. But when it fails to trigger, the markets will find a new low first. The ZBT has till Friday to trigger or fail...
Still looks like it wants one more wave v up to satisfy the indicators and finish off creating divergences which would also get the 8 and 34 very close for an easy stab down as it falls post-divergence. My count hasn't change from what I posted last week. The significant form divergence between NQ and ES from last night's open to now is strange, likely from AAPL's strength today, but ES looks very 4th wave like, so combined with the indicators I expect one last stab to finish it off, then I expect a hard selloff, but we'll see what strength the decline has at that point to evaluate whether it will keep going as I will continue expecting until I see evidence otherwise.
ReplyDeleteHello Arnie, that indicator is interesting but at one year out lots can happen, the markets can crash and recover and print the 25% all in one year. It will be interesting to see how it plays out this week. The Hindenberg Omen triggered about a month ago, that forecasts a market crash ahead and it has forecasted nearly all the major crashes over the last few decades. Lots of countercurrents these days. The markets are very flighty these days, the whole year for that matter, many crossed and mixed signals. The SPX 1391-1413 is likely an inflection point, either up to 1433+ if 1413 gives way, or, down to 1375 and lower if 1391 gives way. Otherwise, we move sideways thru 1391-1413 until a wild catalyst occurs thrusting us one way or the other.
ReplyDeleteKS, I totally agree!! I didn't mean it would be a straight shot to the moon, there will be MANY ups and downs in between for sure. ALWAYS watch you wallet. because complacency will make one a bagholder.
DeleteHey Trader, markets likely waiting for a catalyst, either the fiscal cliff drama, or, probably more likely, Greece and Egypt. Both of the latter appear to favor bears. Greece is probably priced in so if a deal fails, markets go down, if a deal is announced, markets may fade on the news. Egypt is a huge wild card for tomorrow morning and the drama coincides exactly with trading after the open from 9:30 to 10:30 AM EST. With tens of thousands of protestors on the streets of Cairo, both those favoring Mursi and those rejecting his power grab, it could get very ugly. Trading is psychological so if the tv screens are showing turmoil and mayhem, that will favor the bears. Bears need VIX in the 15.90's and the markets will drop. Bulls need the JJC in the 44.90's and the bulls markets will pop. The beat goes on.
ReplyDeleteDid I completely miss Apple? I was betting on more downside. Then, it shot from $520 to $580 like a rocket. Long-term I like it. Short-term, I don't trust the rally.
ReplyDeleteAAPL looks weak both ST and LT despite the 3% rally today. A short anywhere here from 590-630 should be fine, scaling in, probably 440's in a few weeks time.
ReplyDeleteKS, I agree. I am looking for 620 (according to your 80/20 rule; it's now at 589, so 620ish should be coming). I am long since 525. I also agree that lower lows are up next..., but maybe not 440s, I am thinking 475ish. Time will tell. Here's an interesting read on AAPL and stocks' 4-stage advance (and how they'll ALL end) in general: http://etfdailynews.com/2012/11/26/apple-inc-nasdaqaapl-the-4-stage-collapse-of-apple-shares/
DeleteWow... I could see it around $500, upper $400s. 440?
ReplyDeleteIt's going all the way back then.
Hi KS please could you let me know where i can find the latest CPC Put/Call Ratio Chart or price?
ReplyDeleteThe CPC total put/call ratio is Keystone's fave to watch for fear versus complacency, also the VIX. Simply type $CPC into the Symbol Box at www.stockcharts.com. Usually, it takes a couple hours after the close for their computers to catch up and print the closing EOD (end-of-day) number.
ReplyDeleteWow - look at that $CPC print. 0.63. Could that be right? That would be the lowest level since January of 2011. Where do we go from here?
ReplyDeleteYep, low CPC is complete and utter complacency, traders are 100% sure that markets will always go up and never go down ever again. They buy any stock since all stocks will go up from here forward (in their minds). In all this turmoil, traders do not have a care in the world, whistlin' past the graveyard. This CPC set-up does not end pretty. Hang on to your hat. Choppy waters ahead, capsize may occur.
ReplyDelete