VIX drops under the September-October lows that identified that market top. The bulls are trying to punch up thru 1462 to send the broad indexes higher. The euro is at 1.3040. The 10-year yield is 1.86%. Oil is flat. UTIl drops to 456. GTX is at 4922 twenty-eight points away from the bull-bear line at 4950. So UTIL and GTX remain bearish. RTH, JJC and of course the low VIX remain in the bull camp. Thus, sideways markets. The Oil Inventories at 10:30 AM are key. Higher inventories means a weak global environment and equities will sell off with oil trailing lower. Lower inventories means a healthier economy in need of oil and equities will rally with oil price heading higher. The 10-Year Note Auction is 1 PM. Keystone took profits on the BAC short trade exiting the position. Credit Suisse downgraded BAC today which was great timing. It is always better to be lucky than good. The short trade remains in play for BAC moving forward, will look to reenter short.
Note Added 1/9/13 at 9:59 AM: The SPX punches thru 1462. See if this holds, if so, price will want to move to 1468. Keystone took profits on the PANW long exiting that trade, quite a pop in that one, will look to reenter. Keystone bot SPXL to play the long side since the minute charts may want to run higher and the 8 MA will likely cross up thru the 34 MA on the 30-minute chart.
Note Added 1/9/13 at 10:47 AM: Oil and gasoline inventories were up but it looks like much of it was priced in. Oil is drifting lower and that takes a couple points off the SPX. The 8 MA is one single hair away from crossing up thru the 34 MA on the 30-minute chart--but not yet. If the market bears can flush the SPX strongly lower immediately, the bears may be able to stop the cross from occurring. The SPX is back kissing the 1462 now deciding if it truly wants to go higher to 1468, or, if it wants to collapse. Bounce or die.
Note Added 1/9/13 at 11:06 AM: The SPX is still deciding to bounce or die. The 8 MA just pierced up thru the 34 MA on the 30-minute chart signaling bullish markets for the hours and days ahead. It would not be surprising to see this reverse today but for now, the bulls get the nod.
Note Added 1/9/13 at 12:23 PM: The SPX is flat at 1462 unwilling to commit to a direction. Oil drifts lower and copper is well off earlier highs. GTX dropped under 4900. Looks like continued sideways action until Draghi makes his appearance tomorrow.
Note Added 1/9/13 at 1:36 PM: Copper turned negative. SPX remains flat. The 8 MA is curling over to the downside on the 30-minute chart so the drama continues. Draghi's head swells larger and larger as the day progresses since he knows he controls the fate of the markets with his words tomorrow. The euro is in a sideways move thru 1.30-1.31 for the last couple days. The mid point of that range is 1.3050 which it favors today. Thus, the 1.3050 level can be used as a gauge for markets. If the euro moves above 1.3050 and heads towards 1.31 the equity markets will move higher. If the euro drops under 1.3050 and heads lower towards 1.30 the equity markets will move lower. The euro is now printing 1.3056. No great shakes on the 10-year yield now at 1.86%.
Note Added 1/9/13 at 3:17 PM: Flat markets waiting on the ECB. The euro is 1.3062. The strong 1460-1461 S/R continues to see lots of action this week.
Note Added 1/9/13 at 3:42 PM: Note how the 8 MA is coming down to stab thru the 34 MA on the 30-minute chart, isn't that something? The cross may not occur by the closing bell so this sets the stage for the Draghi decision which likely sends the SPX sharply up, or sharply down, at tomorrow's opening bell. Traders must place their bets over the next fifteen minutes since at 9:30 AM tomorrow, the story will already be written. Whoa, big jump higher now. Perhaps some positive imbalances exist into the close. The one and five-minute charts are long and strong so perhaps some upward buoyancy into the close.
Note Added 1/9/13 at 4:02 PM: Markets have idled sideways thru 1450-1465 for six days, directly beginning after the big upside spike occurred on the first trading day of the year. The broad indexes are focused on the ECB as the catalyst, now only about 15 hours away.
Great call on PANW. Followed you after seeing the ridiculously strong support at 47. Good profits but sold too early on hopes of revisting that support today.
ReplyDeleteAlso Keybot continues to nail the turns. Last two flips have been terrific timing. I'm looking for a pullback starting Friday or Monday and am hoping you can keep us updated should Keybot near a bearish flip.
Key, UNG have been down a few days now, looks very attractive @ 17.60, do you think natty continue to drop?
ReplyDeleteThx!
On Keybot, the quant is idling along with little action this week, the five parameters, UTIL, GTX, RTH, JJC, VIX, will dictate market direction.
ReplyDeleteUNG is likely one to avoid for a while, it will be 60 F (16C) here in the northeast over the next couple days, we will have the windows open. Lots of natty supply so this keeps pressure on price. Daily UNG chart is setting up with possie d so a bounce should occur, weekly chart is weak, however. So that trade would be all about timing. Look at the big gap at 17.34-ish, that may be an interesting area for the bounce to start, quick pop a day or few and then likely start down again. Maybe look at natty in the spring well ahead of when the a/c season will be in full swing in July and August.
Agree on UNG. Continued warm here in New Mexico where many gas producers remain idled due to low prices. Any significant pop in price will get these guys back in business which in turn puts the pressure back on price. The story is excess US supply until new pipelines and port terminals enable exports.
DeleteAlso UNG is a lousy nat gas vehicle, best for shorting.
KS,
ReplyDeleteThanks for all your updates! What do you think about FB. What are the support and resistance levels?
Thanks.
FB is a surprise since the negative divergence on the daily wants to see a pull back. The stock seems to have a lot of folks getting all bulled up so that helps maintain an underlying bid. A bull flag is in play now, first leg 19 to 28, is 9 difference, so from 25 bottom would target 34 for this leg two. It does not seem too thrilling now to chase it for the last two or three bucks. Is there some type of announcement next week, maybe folks getting bulled up on that, but, if its a dud, then it may become Faceplant again. 33 is strong resistance, where a breakout would occur but seems more likely that 33-34 would serve as a near term top, call it 32-34.
DeleteI know lot of guys that are just holding it refusing to sell their initial stake its just walking up the bands I'm hoping for a big gap up opening one day and at that point I'll sell out of that position.
DeleteKS, here is your FB media event Jan 15 http://www.businessinsider.com/facebooks-mysterious-jan-15-event-2013-1
DeleteI will be looking for MCAP's gap up that day for a short opportunity, perhaps 35.
Yes, the negative divergence in the MACD, RSI (14) and FSTO on the daily chart is now starting to become "nasty" on FB. However, price is still climbing the upper BBs and therefor showing strength.
DeleteNote that a few days ago I already mentioned that FB was a much better play than AAPL. And look where both are now... IMHO, FB is sucking $$$s away from AAPL, but for how long???
Using EWT, I projected already in mid-Nov a wave 3 target/top at ~$29; back then it was trading at $19... (it hit $28.88), then I predicted a retrace to $24.5-$25.5 for a wave 4 (it hit $25.15), and now the 200% extension of wave 1 up, which is often the target for a 5th wave, is at $30.90, with a target area of $29.55-$30.90. Not shabby, and EWT and Fib levels do work!
Looking at the charts, the R2 level on the daily is at $30.61, and on the weekly chart, the pivot is at $31.00. Seems like that area is thus a logical target and has many layers of resistance for price to get through, especially with the negative divergence now starting to move against it...
I sold all my shares at $30.25 this morning for an >$4/share gain. I've traded FB since September last year several times, thanks to KS bringing it to our attention! He's got a nose for stocks that are in the gutter, and thus great buys. HPQ is another one of those, as well as AMD!
KS,
ReplyDeleteWhat do you think about YGE, currently $3.08.
And, that is down from $40 in 2007, up from $1.25 a few weeks ago.
thanks!
arb
YGE, that's green energy, interesting, look at the direct drop off when the president was reelected in early November, but then big turn around and explosion higher. A rally like that you do not want to chase since that typically results in bag holding. Huge gap at 3.5, price may not make it thru there. The story was already written on that one.
Delete12:45:00 Stock SPXL BOT 100 93.80 ARCA false 1.00
ReplyDelete12:48:19 Stock SPXL SLD 100 93.93 ARCA false 1.00
this is a good "bounce or die" zone nickels holding up dollars should go back to 94.00
Markets are dancing the two-step into the ECB tomorrow. GTX and copper weakened today which is bearish. If the 8 MA can roll over and move back down thru the 34 MA on the 30-minute chart, that would be very bearish considering the cross above occurred this morning.
ReplyDeleteKS, both VIX and S&P up. You know what that means.
ReplyDeleteBeen trading Gold on long scalp bias a lot this week I like this chart it has some interesting indicator settings on it.
ReplyDeletehttp://www.traderplanet.com/images/KiraBrecht/ThrasherJan72013.png
Commodity Channel is very popular with traders. In 2008, the two red circles show the positive divergence with CCI as price printed a lower low. But in early 2012, that did not bounce due to positive divergence, CCI was weak and bleak wanting to see lower lows and wanting to see a breakdown of the descending triangle. But gold rallied anyways, it got sucked into the overall equity rally when Draghi saved the day in July-August 2012. CCI is back down now, and look how price remains elevated compared to the springtime last year. Looks like sideways with a sideways down bias moving forward until the CCI positive divergence can develop. So the one thing needed is a lower low so that would be sub 1550.
DeleteBAC looks a little over done in hear...
ReplyDelete20MA at 11.37. Getting close.
DeleteThere is a raid on HLF now
ReplyDeleteThe SEC announced an investigation of HLF has begun. What a circus that is.
ReplyDeleteBAC filled that gap underneath, this morning it looked like it wanted to recover before coming down to do that. 2-hour chart remains weak and bleak so maybe a near term bottom for BAC tomorrow morning, maybe 11.20-11.40.
having to much fun on HLF to trade BAC but I liked that 9.40 number too let me go look again.
DeleteBAC 1/07 ugly daily bar if we get a sell program I should get filled at 9.35 otherwise forget it... its a good fill there to get go at 9.50 lets see...
ReplyDeleteget it tommorow nice 30MIN candle
ReplyDelete