Another wild market day. AAPL is off 10% to 463 but the markets are yawning. The SPX just touched 1500 for the first time in five years. The utilities popped over UTIL 466.75 after the open and is supplying bull fuel, however, this fight is ongoing today. The next level that will supply bull fuel to push the SPX into the 1520's is UTIL 475.48. But, first thing is first, it will be interesting to see if UTIL 466.75 holds today, or not. The move in the 10-year yield is remarkable, from 1.81% overnight to 1.87% now, a big jump. Higher yields means higher equity markets and money is flowing out of bonds and into stocks to buoy the SPX and INDU (Dow). WTIC oil jumps higher over 96, higher oil means higher markets. The euro remains elevated. Higher euro means higher markets.
The SPX punched thru the strong 1496 resistance so 1505 would be targeted with 1499 and 1500 offering some intermediate resistance before then. Today's HOD is 1501.33. The broad indexes will remain elevated if UTIL stays above 466.75. The bullish thrust continues with the SPX now up seven days in a row. NFLX is running higher no doubt an epic short squeeze. The move in the small caps this month is due to money chasing into the lesser names and launching short squeezes. The shorts continue to be squeezed out of the market creating some air underneath as prices move higher. These squeezes are helping to create the upside frenzy. Remember the other day Keystone wanted to bring on RTH shorts but none were available? The wild upside in RTH now is not due to fundamentals or hopeful future sales, instead it is due to short sellers running for their lives. The buyers remain but air develops underneath. TRIN is 0.96 favoring the buyers by a hair. UTIL minute chart is in a perfect sideways symmetrical triangle right now, it should break hard either up or down. The VIX is positive in agreement with the negative Nasdaq, however, the Dow Industrials and SPX are positive. Either the VIX is wrong, or the SPX is wrong.
Note Added 1/24/13 at 11:02 AM: UTIL leaps higher now over 468. SPX is over 1500. The 10-year yield is 1.87%. It is all going the bulls way today. Oil remains elevated after inventory data so this will help keep the broad indexes elevated. Copper reversed its negativity earlier today. The VIX remains positive and is the only item the bears can hold onto right now. A test of the strong 1505 resistance is likely since 1500 gave way. Price is coming up now to test the HOD at 1501.33.
Note Added 1/24/13 at 12:49 PM: The SPX placed a higher HOD at 1502.27. Copper turned negative reversing course again. The 10-year is 1.86% remaining elevated for today. WTIC oil is 96.11 off the highs but above 96 continuing to provide broad market buoyancy. UTIL is 467.15 creating market bullishness. Market bears got nothing unless they push UTIL back under 466.79. The market action is reminiscent of the first few days of October 2007. This is appropriate since we are at these similar highs. In the ongoing VIX versus SPX fight today, both continue along positive although the VIX is climbing towards 13 and the SPX is dropping. The SPX is now back kissing the strong 1496 support, thus, it is bounce or die time for the SPX.
Note Added 1/24/13 at 1:09 PM: It died. SPX has a 1494 handle now but it should come back up to test the 1496 resistance now to see if it wants to stay under 1496, or not. UTIL is 467.08 above 466.79 so bulls would be favored. TRIN is 0.89 which helps the bulls today.
Note Added 1/24/13 at 1:32 PM: UTIL loses 466.79. The bears are fighting back. What is good for the goose is good for the gander. UTIL under 466.79 will usher in market negativity but the fight should continue thru today. Look at the TRIN coming up now at 0.92, moving up is market bearish. SPX 1496 resistance is holding for now. VIX moves above 13. Watch to see if UTIL stays under 466.79 for seven to ten minutes to lock the negativity in. Price is under now for about four minutes so far...
Note Added 1/24/13 at 1:56 PM: Look at the wild gyrations in UTIL; it has more moves than Lady GaGa. UTIL dropped under 466.79 one-half hour ago and despite a wild thrust higher minutes ago, the utilities are struggling to regain the upside which created the market rally earlier today. UTIL 466.79 will tell you what you need to know today, currently creating market negativity. VIX is 13.28. Keystone wipes his eyes to take a closer look since volatility has not moved higher all year long. TRIN is 0.91 continuing to favor bulls, the bears need to move the TRIN above 1.00 asap or they will run out of gas and the bulls will take over again. WTIC oil loses 96 now at 95.92. JJC (copper) is printing the lows of the day.
Note Added 1/24/13 at 2:13 PM: The bulls are pushing back, UTIL is back up to 466.70 within pennies of turning the day bullish again. TRIN is 0.87 providing the bull fuel.
Note Added 1/24/13 at 3:07 PM: UTIL is back above 466.79 so the market buoyancy returns. TRIN is 0.89 continuing to help the bulls. VIX trying to hold 13. The bulls are not yet able to push the SPX back above the strong 1496 resistance so this is something to watch into the close.
Note Added 1/24/13 at 3:37 PM: UTIL jumping towards 468 now so the SPX is over 1496 resistance to 1498.
@ Arnie, KS:
ReplyDeleteI guess my view might be correct - it's about the discussion had a few posts ago with Arnie.
I guess wave 3 will finish in the 1510-1520 area, w.4 will target a pullback to 1480/1470 area and w.5 will outstandingly aim to 1570-1580 area.
I observed on 1 hour, 5 hours and daily charts on spx 500 that the charts are overbought , over 70 .
Who cares when Pumpin' Ben is working hard?!? (sound like a hardcore porn... financially it is!)...
Those are the most manipulated environments ever seen ... the more money there is in play the bigger the manipulation is ....
All my hopes are linked to that monthly wedge developed on spx 500 ... but... who am I to take short, offensive postures, on this market and on pumpin' Ben ? He's great at pumping ! Almost doing politicians' work! (one more thing: it is the dumbest thing to prevent lack of jobs with money printing!
The job creation is the Government's responsability- by laws and fiscal approach-, not the central bank responsability-by monetary approach- !!!.... The heads of USA got it all wrong and in a few years everybody will observe and acknowledge that) ....
Even BIS' head voiced out that QE starts to become counter-productive....
see: http://www.fxstreet.com/news/forex-news/article.aspx?storyid=f0dc5d44-960f-4ad7-9113-6074010c4f20
Doesn't matter....
... the Johnny Walker style (this market anyway is uber-happy, drunk sailors style) ..."Keep pumpin' , Ben, keep pumpin' "
V.
''I observed on 1 hour, 5 hours and daily charts on spx 500 that the charts are overbought , over 70 .''
Deleteon RSI i mean...
V.
Well what you geniuses think? Does the SPX want to roll over? well I guess maybe now. As goes AAPL goes the market as you can all see. Apple down 53 and market up. Take up baking pies.
ReplyDeleteAs one of the resident geniuses, I'd just like to point out that Keybot has been long since SPX 1419 on December 31st. That's quite a return. The robot take the rest of the year off and still equal or beat most hedge funds. (On another matter, MCAP, is it possible to send you a private e-mail?)
DeleteAnon, I disagree with that old saying "as goes AAPL, goes the market". The past 3 months have been total opposites: AAPL down, markets up. AAPL was leader of the 2011-2012 bull run, but has now passed the torch on to... (small caps???). IMHO, don't look at AAPL anymore to cage the market. Just look at the market's price action. Everything else is secondary!!!
DeleteAnon, Keystone can offer you a slice of pie, freshly baked. You are correct, the 'as AAPL goes so goes the markets' is not playing out that way. It did last year but more correctly now is that 'as Apple goes, so goes the Nasdaq'. AAPL makes up about 18% of the Nasdaq but now is only about 3% of the SPX. So all of yunz are correct and Apple only reflects the tech sector. However, we are at an inflection with uber optimism, so give it a few more days or weeks since a dramatic turn over may occur if the majority of long traders all of a sudden realize that without tech leading, we should not be going much higher. XLF is flat today so the bank leadership may be waning as well.
DeleteHi Keystone,
ReplyDeleteWhat are the evidences of short squeeze when market is up? When market is up due to short squeeze Is VIX at the same time somehow elevated?
Hey all. SPX now back testing 1496 so it will either bounce or die. The market mixed signals continue. The move up is remarkable to watch, obviously terrible for the ongoing short positions, and reminiscent of October 2007. Serenay, short interest is readily available via googling so you can monitor stocks with high short positions. When you see the vertical spikes that is a sure sign the shorts are running for their lives. VIX may simply be trying to find its bottom after the recent beating.
ReplyDeleteWelllll that certainly looked like a reversal up there, didn't it? Even Mr. UVXY is awake. Got very close to the top of my wave count as well.
ReplyDeleteWouldn't take much to get the ball rolling downhill, even SPX 1485 might do it. Let's see if Ben is reading the same charts.
KS,
ReplyDeleteMy indicators flashed a short entry on the SPX at 1495, and I am short.
What would it take for your Keybot the flip to the short side?
arb
YOu want to see UTIL stay under 466.79 and next you want JJC to move under 45.90, that would take care of you and Keybot would likely be very close to flipping short. A spike in the VIX thru 16 would also put you in clover. Until then, it continues to be a crap shoot.
Deletethanks, KS!
DeleteTop of wave 3 of 3 is now in. Sold my longs (SSO) at exactly 1500, long since open of Jan 2. Nice 7% gain.
ReplyDeleteSold NFLX for 145, long since Jan 2 from 95
Sold RIMM for 18.10, long since Jan 2 from 12.10
Sold AAPL for 460, long since Jan 14 from 505
3 MAJOR gains (NFLX, RIMM 50%!!!) AAPL 9% loss, luckily the gainers are multiple of the looser. Such is trading!
I am now looking for a pull back to 1480-1485 for a 4th wave. May even go to 1475, and will reload than for a 5th wave of higher degree 3rd wave up to 1520-30s. That will be a great area to sell again, as that will finish the 3rd wave (3rd waves are where the easy money will be made). I then expect a large degree 4th wave, with lots of whipsawing around probably back to 1500s again. Then the final 5th wave of this bull cycle to 1550, maybe 1600+. That be Q4 by then...
So let's not get ahead of ourselves and look for 1480 area first. One day/step at the time, but today was a classic rounded top. Beautiful!!!
Good on you Arnie, you are riding the wave, that is where you want to be.
Deletethanks KS, January has been a bulls paradise; same script everyday... few points pullback in the morning, then FED opened her bank account at 10:3-ish (Ben Bernanke apparently likes to sleep in) and the melt up continued. Can't get any easier. I think this easy money is soon over... market never stays friendly for long; and it's time to slap bulls and bears alike again; especially at these lofty levels.
Deleteps: still no close above 1500...
Are you going to flip because it's looking like a key reversal - you must be getting close to flipping...
ReplyDeleteKeybot reamins long MCAP. The fight is at UTIL 466.79 right now. Bears need UTIL under 466.79 and would need lower copper as well to see Keybot flip to the short side, or a VIX over 16. For now, the Kabuki dance continues.
Deletethe Kabuki dance was delightful today I look up over at thumbnail I have up of the ViX and it was going parabolic and did you see UVXY today - insane I saw the candle going red on the daily ES and I said this could be it.... It's over but no another stick stick save as you say... Tick just hit 1000 what rip roaring day.
DeleteActually, it's a good thing that "as Apple goes, so goes the market" isn't playing out. It means Apple is no longer correlated, and why the hell should it be? It means that investors can longer be lazy. They have to do their homework and quit looking for the low-hanging fruit. I don't know how many times I've heard the talking heads say "well, investors are looking at Apple as a proxy on the market." Yes, Apple's a big stock, but it's only a stock---with its own unique set of challenges and problems. I look to see $400 before $500.
ReplyDeleteAlso on Keybot the Quant, remember that it is designed to take the smoothest trading path thru the year and it is not designed to pick exact tops or bottoms. Thus, Keybot will give up a few SPX handles on the top side, trying to make sure that the turn lower is locked on course first, before it clicks in bearish. Note how UTIL keeps coming up to try and break back thru 466.79 but it is having difficulty. This will tell you a lot today depending on which side wins into the closing bell.
ReplyDelete