Copper tanks today, JJC is under 46, and the equity markets move higher. Figure that one out. The Fed pumping keeps floating markets higher. UTIL exploded to the upside helping the bulls today, now at 476-ish well above 468. The 8 MA moved above the 34 MA on the SPX 30-minute chart so that put the bulls back in the drivers seat. GOOG hits 800 but the weekly chart has a nasty negative divergence setup similar to when the AAPL 705 top occurred.
The SPX punched through 1524.69 creating a new high so an upside acceleration occurred to test 1528 resistance and potentially move to test 1531. A new intraday high occurs at 1528.17. The SPX is fighting the 1528 resistance right now. The 10-year yield sits at 2% not willing to choose a side. The euro is elevated today helping bulls.
Note Added 2/19/13 at 12:26 PM: Copper now drops 9 handles which is down 2.4% today, wowza. But the wine is flowing like water in the equity markets. Perhaps no one realizes that housing and auto's are the two biggest users of copper, the key building blocks of the economy, and about 40 pounds of copper goes into each car? WTIC oil is 95.72 remaining above that critical 95.50 support level. Gasoline prices run higher as well but no one is worried about that either. Don't worry, be happy.
Note Added 2/19/13 at 1:08 PM: JJC 45.99. TRIN is 0.85 so the bears do not have a chance unless the TRIN climbs back towards 1.00 and higher. SPX is testing 1528 R again, and the high for the year at 1528.17.
Note Added 2/19/13 at 2:42 PM: SPX continues to punch out new highs, moving through 1528 R so 1531 is on tap next. SPX is currently printing 1530.21. TRIN is 0.91 continuing to favor bulls. VIX is down one percent to 12.30 continuing to place its base. The VIX did not turn negative today until forty-five minutes ago which occurred in concert with the SPX spiking higher. At market tops, the VIX not moving down substantially for such a strong up market day is a bearish indication, however, the bulls rectified the situation for now, watch this into the closing bell. JJC is 46, bearish. UTIL is 476, bullish. The latest intraday high for 2013 is today's HOD at 1530.51 at 2:40 PM.
Note Added 2/19/13 at 3:31 PM: TRIN is 0.94 with the bears trying to push it higher but the clock is running out today. The SPX is at 1529. See if 1528 support holds through the close. VIX is 12.30. Oil is 96.66 helping the bulls today. Brent is flat. The 10-year yield is 2.03% favorable for the equity bulls today.
Note Added 2/19/13 at 4:01 PM: SPX has a new intraday and closing high for 2013 at the 1531 resistance. UTIL 467. JJC at 46. Volume is lackluster and should come under a days average volume expected; some folks remain on vacation. VIX closes at 12.30. The bulls continue to run higher. DELL and HLF earnings on tap. Lots of interesting things to look at tonight.
KS, CRB down to 298-something last I looked. And the ratio of TIP:IEF seems to be rolling over. Early indications of disinflation? How long can stocks ignore these (although they're ignoring everything else)?
ReplyDeleteYep, it is a mystery. JJC is under 46 now. Dr. Copper is in sick bay. CRB and GTX moving down. CRB under 300 does hint at disinflation; the Inflation-Deflation Indicator will have to be posted. VIX is flat and UTIL is at 476 well above 468 so this encourages the bulls. The copper and commodities should win, perhaps the day will become more interesting as it plays out.
ReplyDeleteHave you guys kept up with copper quantities per home? It used to be that large amounts of copper plumbing went into new homes, but now days a lot of PEX plastic tubing is used, it's cheap, installs faster, and lasts longer. Can't change the wiring, or HVAC coolant lines, so that is still there but the tubing would account seem to account for as much as 50% in my opinion. Not doubting JJC as an indicator by any means, just curious if that was ever re-factored or addressed historically.
ReplyDeleteThat's a good question BB. The plastic craze was big in the 1980's into the 1990's but the plastic pipes has its own challenges. It is limp, not stiff like copper pipe so you have to support it better and it is very unkind for any type of cooler locations, since the pipe may break. Plastic continues to be used, modular homes likely a main user, but in general, building a new house, it will be equipped with copper, far better, professional, and lasting application. Not aware of any data on the housing side but copper use probable remained relatively the same throughout the years for construction applications.
ReplyDeleteIt's similar to where aluminum is supposed to take some copper applications away but it never seemed to make a dent. Of more interest, is the existence of any copper hoarding, if it exists, the last few years there have been rumors that there are huge stock piles of copper in China, a stealth supply if you will, that would kill price if it was ever verified. Some China construction and other loans have used their copper hoards as collateral, that should end interestingly if copper falls.
1550 is next stop before any pullback. get LONG now!!!
ReplyDeleteThat may be the case. The 1531 is resistance, then 1540, then stronger R at 1548 and 1553 (1552.76 is the 10/3/07 top and a key resistance level). Charts say down but Fed pumping says up. Housing Starts are the most important number for the week at 8:30 AM, this will move the futures and dictate the market direction tomorrow.
ReplyDelete