JPM beat earnings although the top line was only a hair better than expected. Typically, higher revenue would be expected. GS blew the cover off the ball, beating big on top and bottom lines. JPM drops pre-market while GS jumps over 2 %. BA has more 787 Dreamliner headaches and this will cause a 25 point or more drop in the Dow Industrials today. Note to BA; the cable news outlets running video of the pilots sliding down the 787 emergency chute is not a good thing. CMG is sick this morning; must be a bad burrito. Futures show the S&P's down 3, Nas up 3 and Dow down 50. So JPM and GS provide mixed signals just like many other indicators in the markets right now. The CPI data was in line and did not move markets either way. European car sales take a large drop, even Germany's flagship VW is weakening now. The World Bank and German Economic Minister both reduce 2013 growth forecasts. Maybe Draghi should rethink his no rate cut policy.
The data continues today with the TIC at 9 AM which provides a gauge on foreign investment, then Industrial Production at 9:15 AM to work everyone into a tizzy before the opening bell. The Housing Index hits at 10 AM so a stutter step may occur for markets although typically this is not a big market mover. Oil Inventories at 10:30 AM are key especially as we have tracked here in recent days; up oil is up markets and down oil is down markets. The Fed heads are out talking today again in force so a tidbit may come across the wires. The Beige Book is 2 PM and a market pivot point will occur on that release.
The euro fell thru 1.33, use this is a bull-bear line today. Equity bulls are happy over 1.33, bears are happy under 1.33. The key today is commodities and copper. The bulls need to push the GTX up to 4935 and higher and it is smooth sailing for higher markets ahead. The bears need to push the JJC under 45.68 and the markets will start selling off at an increasing pace. Copper is down this morning and it appears the latter is on tap. Watch the 8 and 34 MA cross on the SPX 30-minute chart that currently shows the bulls in control for the hours and days ahead, although it continues to be an ongong knock-down drag-out fight. One side or the other will start to run with the ball. For the SPX starting at the strong 1472 S/R, the bulls need to move above 1473, only one point higher, and an upside acceleration will occur. The bears need to push lower thru 1464 to accelerate the downside. A move thru 1465-1472 is sideways action.
Note Added 1/16/13 at 10:08 AM: The SPX holds the 1468 support and stumbles sideways. The 8 MA remains above the 34 MA on the 30-minute chart so the bulls are happy. GTX is under 4935 and JJC is under 45.68 both creating market negativity. Keystone's algorithm, Keybot the Quant, is on the bull-bear line and ready to flip short, but not yet. The VIX is drifting lower helping bulls. Markets cannot drop with the VIX sellers active in the market. The 10-year yield is 1.82%. A drop thru 1.80% would signal bearish equity markets. WTIC oil is buoyant at 93.45 which helps the bulls. The euro is under 1.33 at 1.3289 which helps the bears. The TRIN is 1.15 which favors the sellers today. The markets have bottomed each day between 10 AM and 11 AM so watch to see if the bulls start marching things higher.
Note Added 1/16/13 at 12:48 PM: The soap opera continues. GTX is fickle today oscillating on each side of the critical 4935 but for now settling on the bear side at 4930. JJC is 45.48 creating market negativity. VIX remains underwater, perhaps this volatility beach ball will bounce soon. The markets are moving stone-cold flat these days, and this year thus far, due to the low volatility. The 8 is above the 34 MA on the 30-minute but note the 8 MA starting to curl over. The euro is 1.3282 so this is more bear friendly. The 10-year is 1.81%. Tech is positive with AAPL higher but small caps are weak. WTIC oil is 94.16. This level for oil is uber important, bulls are going to take markets higher if oil moves higher, bears win if oil moves lower. TRIN remains above 1.00 at 1.13 favoring bears today. Keybot the Quant wants to go short right now but likely needs to see SPX 1464 to commit to the bear side today.
Note Added 1/16/13 at 2:14 PM: The Beige Book pivot at 2 PM results in a slight drop lower for the SPX off the 1473.51 HOD. The sideways malaise continues. GTX and JJC remain bearish. VIX remains in the basement at 13.29. TRIN is 1.08, favoring bears but only by a small amount above the 1.00 neutral level. Keystone bot SKF, an inverse ETF for the financials, opening a new long position.
Note Added 1/16/13 at 3:16 PM: GTX is back above 4935 and the broad indexes receive a lift.
3.59 appears to be at least a ST support target on copper; that's immediately below on a 5-hour chart.
ReplyDeleteAny expectation on bounce/congestion in this area?
Thanks for all you put out there
Steve, type JJC into the search box and adapt that chart to $COPPER. The weekly chart is back kissing the upper trend line at 3.59 as you said. The daily chart indicators are weak and bleak, watch the 20-day MA at 3.64, uber important. Ditto the 50-day MA at the 3.59. Then 200-day at 3.56. Daily chart hints at down for the days forward and weekly chart hints at continued sideways action.
ReplyDeleteI should and pay more attention to copper Gold trading is winding out today grinding sideways and would anticipate a trading down to the 1670 - 1665 zone again in the days ahead. Cooper would lead the way I suppose. The snow was a nice touch this morning here in New York. Happy trading all. And whats up MLNX (alarm went off)...
ReplyDeleteOne other noteable on the daily chart of Gold GCFEB13 NYMEX the bollinger bands are tightening up pretty good.
ReplyDeleteHey MCAP, looks like MLNX is receiving the positive divergence bounce from the daily chart, looks good for a few days but the weekly chart wants to see lower lows after the bounce move. It pierced below 52 so 80/20 rule says 48 now in play, and it actually ventured down there already so that was satisfied. So it should continue basing and recovering. That would have been anice entry at 48 with the positive divergence and oversold conditions.
ReplyDeleteI kept watching it from the time I mentioned it before didn't trade it... Had a lot of hardware problem this afternoon.
DeleteGold daily chart is interesting big move coming, not convinced its up, daily chart indicators are long and strong but that may only be for the touch of the upper BB at 1690-1700 then failure. The 1680 would want to lead to 1720. 50-day MA is a ceiling. It seems to have a sideways vibe overall, gold is not easy to trade, commodities in general are tricky.
ReplyDeleteKS
ReplyDeleteQuick question, you mentioned that Keybot wants to go short provided SPX falls below 1466. With the recent resilience in the market, don't you think 20-30 point rise is more likely then a drop at this point? Perhaps the market is just burning off the overbought conditions until a spike higher occurs. Also do you think SPX/VIX ratio is of any consequence here.
Thanks and keep up the great work.
Anon.
Keybot is mathematical so it simply motors along doing its thing only seeing 0's and 1's. That is one of the nice things about an algo, it takes out the human emotion factor. Sure, the markets may take a thrust higher. SPX 1485 is likely key, if that gives way the door would be open to 1520's. So perhaps it is more of a 10 to 12 handle upside may be possible, if markets move higher then they will likely move much higher. For Thursday, Keybot now only needs to see SPX 1468 for the bear side to kick in but it all depends on GTX 4935 and JJC 45.68. These three parameters will dictate Thursday's action. Yes, SPX:VIX is always relevant, at 110, these are obscene levels identifying market tops (due to volatility selling). Problem is, for bears at least, the markets have not yet decided it is a top.
DeleteSo let me guess KS, you saw the divergence and the bounce of appL? where was that 4 percent play on TA?
ReplyDeleteLet's not be a ball breaker, Anon. KS's last word on AAPL was that there wasn't a compelling reason to be long or short AAPL. Even some of Perma Bull's are talking about a 400 handle on AAPL. There's more to market than any single stock and frankly the Apple trade is a bit tired at this point. Everyone in the world wanted to buy AAPL because gushy analyst kept throwing out numbers like $1,000. Then, the market woke up to earnings compression. Apple is still a good company, but they're not alone in their own little bubble anymore. Their competitors are taking market share and it matters.
ReplyDelete@ KS:
ReplyDeleteyour opinion: " The markets have bottomed each day between 10 AM and 11 AM so watch to see if the bulls start marching things higher."
i've seen that too.
look at a different opinion :
http://inter-market-analysis.com/profiles/blogs/analysis-action-gives-signals-to-where-market-top-will-be
from this post :
"First, understand that the volume is key. The volume in this market has been insanely light for any month, especially January. Early morning dips are the result of increased volume from institutions on the sell side. After the first hour, the volume is too light for them to sell without hurting the market significantly. Therefore, they stop. The remainder of the day is retail investor buying. Last week saw the largest inflows of retail money into mutual funds since 2002.
The fact that institutions are selling and retail investors are buying should be a warning sign. Average investors always buy the tops on the market and institutions rarely get caught still in full positions at those same tops.''
KS, one question now for you:
was this kind of behaviour observed also previously at the tops (i.e. 2007 top on spx ?)
Thanx,
V.
On AAPL, reference the chart using AAPL in the search box but it is probably best to avoid currently long or short. The rising wedge played out with the bounce from the 480's. The interesting aspect to that was Tom DeMark calling the bottom the evening before, otherwise, Apple probably would have opened weaker and dropped a few more handles before launching. It may have 520 in it now but likely a drop back to the 480's should occur, those type of drops need to sort themselves out for a couple or few days and Tom's call created the spike off the bottom instead. The falling wedge remains in place so the first trading opportunity is likely not to short it but perhaps a long from 460-490 in the coming days depending on the price action. Do not get caught up in one single call, in trading you make many decisions daily, plenty of them are wrong all the time, that is called trading.
ReplyDeleteV, yep, the bagholders are running into the market with their Christmas money, like lambs going to slaughter. The big boys will sell volatility and keep it in the basement while they distribute stock to Joe Sixpack, then once they unloaded their shares to the sucka's, the volatility beach ball will be let loose, VIX will launch higher, markets will drop, Joe is screwed, and the big boys will be on the short side lighting cigars and laughing.