More of the same today as the markets continue to throw off odd signals and create cross currents. Futures were weaker this morning but recovered on the better than expected economic data and sentiment. The 10 AM pivot occurred and the SPX sold off, but the Energizer Bunny recovered, and the SPX floats sideways. The SPX is attempting to poke through the 1523-1524 resistance to light the way higher but cannot find the juice, yet. Interestingly, the intraday HOD at 1524.24 falls a few pennies shy of the current 2013 intraday high at 1524.69, but, the day is young. The high sets up negative divergence as discussed with the 2-hour chart this morning.
UTIL moved higher at the opening bell so bearish hopes vanish into the winter haze and the bulls find it easy to keep the markets elevated. However, note the drop in crude oil, falling through the 95.50 support discussed in this morning's charts, now sitting at the 95.50 deciding what to do. As oil goes, so goes the markets. The euro is moving higher but may be running out of gas, now at 1.3350. Use the 1.3330 as an equity bull versus bear line in the sand. Copper stayed positive until the regular trading hours began when it immediately turned negative, JJC is flirting with the 47 level so far today. The 10-year yield pops to 2.03% so the equity bulls place a feather in their caps. TRIN is 1.26 so the bears smile a sly smile and place a feather in their caps. WMT drops 2% which weighs on the RTH.
The sideways shuffle continues. Markets have to make a Julius Caesar decision, thumbs up or thumbs down. Here are the inflection points that will dictate market direction today; SPX 1523-1524, SPX 1514-1515, UTIL 469.78, UTIL 468.05, JJC 46.50, euro 1.3330, crude oil 95.00-95.50 and the 10-year yield 2.00% level, and, of course the TRIN. TRIN above 1.00 makes for happy bears, TRIN below 1.00 is happy bulls.
Note Added 2/15/13 at 11:49 AM: UTIL has a 471 handle. Bears need weaker utes and copper. TRIN likes the bear camp today. Well bears, what do you got today? The SPX is receiving the negative divergence spanking discussed with the 2-hour chart this morning. Go back to review that chart to see how the action has proceeded to now. The 8 MA is starting to curl over to the downside so see if that stabs through the 34 MA on the SPX 30-minute chart today, or not. SPX is 1520. Crude 95.51.
Note Added 2/15/13 at 1:22 PM: Oil is 95.71. UTIL 471.89. Copper is back to the flat line with JJC at 47.15. The euro is 1.3358. The 10-year is 2.03%. The bulls are not worried and are trying to foster a pre-holiday happy vibe in the markets today. The TRIN is 1.38 so the bears smile. The 8 MA is only 87 cents away from the 34 MA on the 30-minute chart so that will tell a lot over the next hour. Gold is moving down towards 1600 (it dipped below 1600 today), perhaps setting up a big fight next week at 1575-1600.
Note Added 2/15/13 at 2:31 PM: The 8 MA stabbed down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead. UTIL 471.61. JJC 47.08. So utes and copper both remain in the bull camp. The 10-year yield remains at 2.02%. Euro 1.3356. TRIN 1.52. VIX 12.74 turning positive on the day. WMT tanks now down 3% on news that its sales are very weak. Perhaps the high gasoline costs are cutting into the pocketbook. The RTH is puking on the news down over one percent. Financials (XLF) are down 0.6%. Here's the test of the critical 1514-1515 support discussed this morning.
Note Added 2/15/13 at 3:35 PM: Status quo. Utes and copper remain elevated helping bulls. TRIN is elevated helping bears. The SPX bounced off the 1514-1515 support. Looks like the pre-holiday buoyancy may want to push markets out sideways from here into the weekend.
http://www.marketwatch.com/story/feds-pianalto-says-qe-could-stop-before-year-end-2013-02-15?link=MW_home_latest_news
ReplyDeleteOh my! ...
What do you think?
might this explain the moves in oil, gold and a little bit in copper?
Today finally I felt this market is alive, not a dead weasel in a hole ...
For a few minutes I was almost sure that Keybot the Quant will have the conditions to change it's status from long to short.
Anyway, the day is young :) ... there are a few more hours left :)
V.
Fed's Pianalto playing the piano, just like playing the imaginary violin or harp, as the Fed members spin yarns daily. Dollar is up so copper and commodity weakness would be expected. Euro is flat, however. The equity bears need to see the euro fall, equity bulls want the euro to stay buoyant and move higher. Euro is 1.3364 right now. Crude is 95.44 now a hair under the 95.50 support. The soap opera continues. Keybot needs to see the weaker utilities, UTIL now at 471.92 still two points above danger.
Deletecareful out there longs; starting to look impulsive to the downside. IMHO the downside risk is larger than the upside risk... 1514 is key. If that breaks than 1507 is next..
ReplyDeleteKS, one pretty little question about the effectiveness of Ben's QE's :) - i guess that starting today i'll call him Qen Qernanke :D - ....
ReplyDeleteHow come the PM's are falling like falling stars in one summer's night and stocks are also weak ...? ... in the most monetised market ever known?
Check-out the POMO program ... until next Thursday no big purchase ! Now everybody should take a close look at the markets - it's their real face, suffering of withdrawal syndrome ...
V.
WMT reporting bad situation in february. To early to say, if this is it (the first impulse to the downside). http://www.bloomberg.com/news/2013-02-15/wal-mart-executives-sweat-slow-february-start-in-e-mails.html?cmpid=yhoo
ReplyDeleteScof
Thank you for taking note of my first post, your blogs are very much appreciated.
DeleteLooking over to Europe, the DAX looks weaker than the SPX at the moment. Interesting to see, how the DAX is going to behave on monday.
Arnie, agree, but if 1514-1515 is lost, target is 1505 adn 1503, so we are in the same ball park.
ReplyDeleteV, lots of traders discussing the gold quandry. The thinking is that too much of it is traded as paper now (in instruments and derivatives such as GLD, etc...) instead of holding actual fizzy (physical gold) so as Soros, Julian Robertson and other enthusiastic gold bulls liquidate positions, selling GLD and other paper products, gold is simply behaving more and more like any other paper product we all trade daily.
Scof, that news really hit retail hard about WMT. Perhaps in December, everyone sold stock to take gains at lower tax rates, and enjoyed a wild spending orgy for the holidays, now no one has any dough left and a recoil effect will occur since the Jan and Feb sales were pulled forward into December and early January. The malls may be a ghost town for a couple months and folks seeing gasoline jump over a quarter in the last few days will pile on to the negativity.
With the three day holiday, more drama is piled on since traders have to figure out what they want to hold for four days, and figure it out within the next hour.
Thanks,
DeleteV.
Jerry Murray's profile on Linked-in calls him "energetic and proven". As yet there's no mention of how his leaked e-mail cost Wal-Mart millions in capitalization and perhaps helped begin the long-awaited market correction. (Try explaining all that to your boss.)
ReplyDeleteKS,
ReplyDeleteHow do you feel about this bearish opex's contribution to the downward momentum in the coming weeks?
No effects Jan. Other stuff is far more important.
Deletewow what a drop...
ReplyDeleteUTIL and JJC holding up so the bulls are not concerned. The 1513-1514 support held as well, at least on the first try. TRIN remains bear friendly. The 8/34 MA cross is important and a huge win for bears--if it holds. The bears need the SPX to stay under 1519 to keep things moving lower. Fifteen minutes remaining to cast all positions in concrete until Tuesday. G20 is this weekend with currency wars on tap. Also Cyprus.
ReplyDeleteyes that WMT news was pretty rough. The correspondence of their exec's leaves absolutely no 2nd guessing... WMT can be considered a serious canary in a coal mine. With over 8,500 stores world wide (which would take a person 23 years if he/she were to visit 1 store a day...!!!); the saying "so WMT goes, so goes the world" has to be taken seriously!!!
ReplyDeleteEven my TGT shares took a hit, but recovered well; shows how jittery everybody is and if their's no FED money buying, everybody is selling. What a circus.
The pay roll tax hike is taking a serious toll on the american consumer. Hell, even my pay-check was cut by 3% , and that's a lot of money not in my pocket that I otherwise would spend (not a WMT, but at TGT... ;-) ) The american economy simply can't afford that, it needs every little bit of consumer spending it can get. But leave it up to our self-elected no-guts leaders to ensure prices go up and paychecks go down... No money printing in the world can safe us from that.
enough ranting, enjoy the 3 day weekend! Next week all this is forgotten and we're dealing with a fresh slate!
VIX down again today, still no fear in the markets. Think we have more upside going into March, even though it may be limited.
ReplyDeleteYep, markets are very shaky. The bears had a window during the week but could not step through. The bears need a stronger dollar (weaker euro) and the bulls need a weaker dollar (stronger euro) since this outcome will dictate copper and commodities. UTIL 50-week MA will be key next week.
ReplyDeleteThe WMT news is interesting since it seems to reflect that people finally noticed a few dollars less in the paycheck. At the same time, gasoline price is jumping. A deadly combo if you are trying to sell cashmere sweaters.
Interesting times, the charts continue to say down, but Chairman Bernanke is working overtime in the basement of the Eccles Building, keeping the printing presses going. The days ahead could prove dramatic.