Keystone's Midday Market Action 2/8/13

The SPX is punching higher now testing 1517, new highs.  The 1513 handle was touched which set off the further jump higher.  This bounce will serve to negate the H&S pattern over the last few days but sets up the current print at 1517+ as a potential head for a new H&S pattern with the neck line remaining at 1495.  The 8 MA is about to pierce up thru the 34 MA to signal bullish markets for the days ahead. The bears would need a sharp drop in the broad indexes right now to stop this from happening. UTIL is at 473.42. Bulls  need to see 475.49 today to launch an extended market move higher. The key UTIL number next week is 469.78 so watch this closely into the close. If UTIL closes above 469.78 today, that sets up a bullish start for Monday trading. TRIN is 1.00 dead flat so neither bulls or bears are favored today despite the jump higher. The euro is 1.3390, surprisingly, the broad indexes remain elevated even though the euro has lost ground over the last day. One of them are wrong. VIX just dropped a hair under 13.

Note Added 2/8/13 at 11:58 AM:  The SPX moves flat across 1517.  UTIL is 472.93. TRIN is 1.23; if this remains the case, the broad indexes should drift lower as the day moves along. If TRIN moves down, the broad indexes will maintain these levels. The euro is 1.3365. On the SPX hour and minute charts, the higher high in price is coming with overbot conditions and negative divergence set-ups again.  The new head and shoulders pattern has a very flat head from today's action, perhaps a Frankenstein head.  The 8 MA pierced up through the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours and days ahead, however, the chart is set up with overbot conditions and negative divergence.

Note Added 2/8/13 at 2:17 PM:  Look at that, crude just lost 95.50. Now 95.49....95.45....  Very interesting. Reference this mornings oil chart.  Brent is 118.71. A 23.26 spread! The euro is 1.3359.   The markets remain elevated. UTIL is 473.52 which is under the 475.49 but this number expires in less than two hours and 469.78 is the UTIL number for all of next week, thus, the bulls are deriving power from the utilities sector. TRIN is 1.24 so market weakness would be expected moving into the close if 1.24 or higher occurs. Markets tend to float upwards on Friday afternoons. However, the new moon is Sunday so weakness would be anticipated now thru the Monday close. Apple is 478; Einhorn was worried about losing money so his pumping is providing a lift to AAPL. In the time it took to type this, crude oil has recovered to 95.67.  The 95.50 WTIC level is critical since it likely paves the way to 93, and would be dropping in concert with equities markets. Euro drifts lower and the broad indexes drift higher. One of them remains wrong.

Note Added 2/8/13 at 2:42 PM:  The move up in the SPX hourly and minute charts is weak with negative divergence which points to a weak close ahead. However, look at the TRIN now losing altitude at 1.15. A lower TRIN into the close will assure that the broad indexes remain elevated. Bears need to push the TRIN higher. UTIL 474.  Crude 95.67. Brent 118.81.  Euro 1.3361. The 10-year yield 1.96% (yield has sat here today so money is obviously not leaving the bond market). VIX 13. Gold 1669. NYSE volume is shameful only at a run rate of 55%, a paltry volume day, as many traders are sneaking out the back door, into the snow storm, trying to get home.

Note Added 2/8/13 at 3:00 PM:  TRIN is 1.18, bears hanging in there.

Note Added 2/8/13 at 4:16 PM:  The SPX printed a new closing high for 2013 at 1517.92 and new intraday high for 2013 at 1518.31. The markets finished erratically but that is no surprise with the vapor volume. TRIN dropped to 1.12 then back up to 1.38 then back down to close at 1.11, all in the last half-hour. UTIL closed near the high of the day at 474.46 which has the bulls firmly in the driver's seat come Monday, unless, of course, something happens perhaps globally over the weekend. It's all going the bulls way. The SPX prints a hanging man candlestick on the weekly chart, with the rising wedge, overbot conditions and negative divergence also in place. Peter Eliades, a noted cycle follower, appeared on CNBC before the close, commenting that today, February 8th, marks a significant market cycle top. If like October 2007, price would roll over moving forward and only in hindsight from a few weeks or couple months ahead will the top be obvious looking back. Peter was asked what he would call the current market rally, if he had to give it a name, he paused for a second, and then comically said, "the bitter end." LOL The Nasdaq is now at a twelve-year high going back to late 2000. The 10-year yield is 1.95% (with the equities markets sneaking higher today, money was actually flowing into notes and bonds at the same time). The low volume today helped the bulls. Things are really getting interesting now.