Everyone is enthusiastic and happy that Election Day is here. Not because of their stong feelings for either candidate but rather simply because all the noise and distraction will finally end. The negative ads will disappear, the yard signs will give way to holiday decorations, and perhaps the U.S. can get back to business. The polls are open here in the States on the East Coast, may the best man win.
The euro dropped to an 8-week low this morning at 1.2763 then recovers back to the psychological 1.28 level. Greek strikes begin today as the Monday deadline nears for a decision concerning Greece. U.K. and European manufacturing and auto sales data are weak overnight. The Aussie's leave rates on hold which pushes the Aussie dollar higher and encourages the risk-on copper and commodities higher, and the S&P's are up about five at this writing. The 10-year yield is 1.71%.
The drama with the utilities, retail and semiconductor sectors continue today. Keystone's algorithm, Keybot the Quant, not only dictates the ongoing market direction continuously displayed in the left margin but the quant also highlights which sectors have the greatest impact on the broad market movement in real-time. These three sectors, represented by UTIL, RTH and SOX, are most influencing market direction right now. Watch UTIL 466.36 (50-week MA). Price is at 462.43 which is extremely bearish for markets. Watch RTH 44.45, now contributing bullishly to markets at 44.62, and retail allowed the markets to remain buoyant yesterday. Watch SOX 378.60. The semi's created the late day strength in the markets with the SOX jumping above 378.60 but in the final minutes fell back under and will start today at 378.38. Very simply, the bulls win today if the SOX moves above 378.60. The bears win today if the RTH drops under 44.45. If both hold their ground the markets will move sideways as the election day session continues. AAPL news this morning says alternatives to the Intel chip will be explored so this may create weakness for the SOX.
For the SPX today, starting at 1417, the bulls need to touch the 1420 handle to launch an upside acceleration. The futures currently point to this outcome. The test of the sturdy 1424 resistance would occur quickly. The bears need to push under 1408 to reignite the downside momo. A move thru 1409-1419 is sideways action today. UTIL 466.36, RTH 44.45, SOX 378.60, and SPX 1420 and 1408 tell you everything you need to know for Tuesday.
RSI on APPL tells alot on the weekly 1 year chart, turns off the 41 and making move back to 50. If it heads back down i think we may see RSI in 30's but that is asking alot. RSI trip on this chart goes from overbought 70 down to 41 area. Watch it. The turn back to 50 I think tells us where NASDQ and techs are heading.
ReplyDeleteThat is a good explanation, the RSI low at 41 you mention over the last two weeks created a hair of positve divergence which helped bounce the price. The two intraweek lows are at similar low levels to warrant a look at the indicators. The MACD line keeps sloping down so that tells you that price wants to see a lower low again, after a bounce occurs, which now a bit of a bounce is occurring. Ditto stochastics now moving into oversold territory but maintaining a weak and bleak profile. The money flow is in agreement with the RSI providing this bounce. So your scenario about the RSI moving lower is likely in more play than the bounce scenario. The RSI 50% level is the bull-bear line so that tells a lot. The general look of the chart definitely hints at 520 in the cards as the weeks move along. The 50-week MA is 560 so price may move to there and then the MACD and stochastics will be positively diverged to provide another bounce. But overall, Apple will probably keep drifting lower with traders selling the rallies moving forward.
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