The Deere earnings minutes ago inspired the markets more than the presidents speech last evening. DE beat on the bottom line by 25 cents but only by a smidge on the top line, guidance was encouraging. DE popped 5% then pulled back to up 2%. This is a feather in the bulls cap and the S&P futures jumped a couple handles to +3. Retail Sales are the most important economic data release this week at 8:30 AM. Business Inventories will create a market pivot point at 10 AM. Oil Inventories are 10:30 AM. Fed's Bullard speaks at 11:10 AM. The 10-Year Note Auction is 1 PM. The 10-year yield moves above 2% this morning now at 2.02%. The euro just pushed above 1.35. Oil is flat at 97.88. Brent oil is pushing towards 119. Oil inventories will affect pricing. Copper is up.
There are no sellers in the markets so the bulls push the broad indexes higher on light volume. Utilities and copper are key. Watch UTIL 469.78, UTIL 468 and JJC 46.43. DUK earnings are today so that will affect utilities. Market bears got nothing unless they can touch one of those three levels. For the SPX starting at 1519, the bulls need to push through 1522, if so, the high 1520's are on tap. Remember, the December 2007 high at 1523.57 (12/11/07) is uber important. The SPX intraday high yesterday prints a new high for 2013 at 1522.29. The bears need to push under 1516 to create downside momo that will test 1511 quickly. A move through 1517-1521 is sideways action.
Note Added 2/13/13 at 7:59 AM: Whoopsies daisies. DE now went negative pre-market, down -0.7%. Quick, Harry! Bring that air hose over here and pump some air into these tractor tires, they are leaking fast. CLF is sailing off the cliff after disappointing news last evening including a divvy cut. Lack of interest in iron ore means lack of interest in steel which means lack of a robust global recovery. BWLD is sinking this morning after earnings last evening, perhaps the Superbowl wings did not go down so well. RAX is another one beaten and looking like a dark cloud. S&P's +2.75.
Note Added 2/13/13 at 8:33 AM: Retail Sales in line with estimates, not providing a boost to futures. All that build-up and the retail sales are not providing a push either way, perhaps a hair of an advantage for bears. Business Inventories and Oil Inventories will provide morning excitement after trading begins. The euro is under 1.35 now at 1.3478. S&P's +2.5.
Note Added 2/13/13 at 9:42 AM: SPX punches above 1522, whoa Nellie, look at that four pennies away from the key December 2007 high as mentioned above; HOD is 1523.53, so far. High drama to begin the day.
Note Added 2/13/13 at 10:17 AM: Markets dropped on the Business Inventories news. SPX travels across the critical December 2007 top at 1523.57, now printing 1524.07. The bullish push continues. The 2-hour, 1-hour, 30-minute, 15-minute, etc..., charts are set up with negative divergence with the higher highs today so the markets should become weaker as the day moves along. There is lots of consternation at this 1523.50-1524.00 price level. UTIL is flat at 476.60. JJC is 47.29 up a few pennies. Oil Inventories on tap. TRIN is 1.04, four pennies bear-friendly.
Note Added 2/13/13 at 11:56 AM: Bears trying to make a move today. Note the drop in the euro now at 1.3448 after well over 1.35 a few short hours ago. Craziness. Down euro=down markets although the bears were short-changed on this relationship last Friday. Crude is negative, ditto copper, JJC is at 47.10. Watch to see if JJC loses 47 today, or not. UTIL is 475.71, bears need more ute weakness to gain downside momo. TRIN jumped to 1.50 creating the market move lower. VIX over 13. Watch to see if the 8 MA stabs down through the 34 MA on the SPX 30-minute chart. SPX and Dow Industrials are red but Nasdaq is green. Financials are flat today. The 10-year yield pulled back to 2% now back to 2.01%. The equity bears want to see the 10-year yield drop under 2%.
All looks rosy from here. No reason to believe that the markets are in imminent danger. Revisit the highs and then some.
ReplyDeleteYep Anon, Keybot remains long, utes remain elevated, ditto copper, however, things can change quickly. Pivot points on tap for 10 AM and 10:30 AM. Note how all three of the bellwethers for China; CAT, YUM, DE, are on the disappointing side.
ReplyDeleteIt's mid-February already, what's happening with the Sequester? First of march is pretty close ...
ReplyDeleteEverybody is sooo euphoric!
D*mn it! Just like is a fairytale ...
And Prince Ben Bernanke just keeps pumping ... the band sings...everybody in such a hypnotic happiness ....
Anyway.... who in the world would have thought that US will pay it's debt at fair value when the printing presses of the world's reserve currency are in little Bennie's hands?
LOL
maybe the chinese.... extra-LOL :) ....poor little guys - they work on a few bucks / day and China keeps on pumping excessive reserves in US bonds ... I truly pity them!
V.
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DeleteThe market has entered a zone that I refer to as "giddy glee" when there's not a care in the world, or "euphoric" as you refer to it. In my own experience, whenever I'm driving along in willful oblivion is usually when the rug gets pulled out from under me. Bernanke can't save us from the Sequester and Congress is highly unlikely to do anything about it. The sequester can cost the economy as much as 1 million jobs, so say the fatheads on CNBC.
Delete@ Shane:
DeleteDear Shane, i want to tell you something.
We will see a brand new all time high in markets. I trust this idea 100%.
Why?
After the markets were pumped the style they were since 2009 lowest level , believe me... they (FED, top 10 banks) cannot afford to let them crack now ....
It's not a matter of elliot waves or something else now ... they are counterfeiting the markets in order to produce a shift from "safe" instruments (bonds, gold, others) to riskier instruments (stocks). It's Bennie's style of "helycoptering" money - that's why I'm saying that those markets stopped being free since 2009/2010 ...
Oh, there is a great risk of further cracks in the markets (5-10%) cause big banks also have to earn something sacrificing retail investors ... but the situation is way too advanced to let the markets act in a free way.
Ask yourself what will happen when the big top 10 banks will decide that they don't need the State anymore and they will strangle it using the bonds/notes interest mechanism? Theoretically, the state is the guarantor of the individuals rights and obligations as stated (for you, in US) by your Constitution. But when the State is getting so fragile by having a bigger and a bigger interest to be paid for the bonds/notes issued... the individuals rights can suffer. Considering the amount of US debt and considering that the bonds/notes interest kept lowering during the last 20-30 years ... what do you expect in the next 10 years as per the bonds interest level? Do you understand my point?
So, what's else to be said?
Keeeeep pumping, Bennie!!! And never ask yourself why in God's name at some point US stopped to be no.1 in the world?
Keep pumping, little guy, keep pumping! :):D
V.
I agree with you whole heartily on the printing money to oblivion and no more free markets. However, price does still move according to EW rules, and TA -neg. div., OB, rising wedge, etc- all as Keystone provides is still valid, so are trendlines, etc etc. Price will respond to that, regardless how much money is pumped in the market, simply because price can't move up for ever. Hence, corrections are needed.
DeleteYes Arnie, I agree with you - I didn't negated the technical analysis power, all I have said is that now markets are strongly manipulated now.
DeleteThat 85 bln/month new printed money, not sterilized, can have quit a weight on the markets.
''Price will respond to that, regardless how much money is pumped in the market, simply because price can't move up for ever. Hence, corrections are needed.''
I don't know about that... When a speculative bubble is gonflated (like now , in stocks) sometimes irrationality is stronger than rational aproaches.
In Japan the officials I've heard now that they are targeting a limit to be reached in March for Nikkei 225 - 13000 or 14000 points. Since when on official can declare: "we want the price of a ''free'' market to go there or there" ?
Arnie, the world is now in an invisible war - a real currency war that also reflects in stocks. Maybe that's something fractal to commercial wars before WW2...but I hope I'm not right.
I still want to trust technical analysis , not some weird parabolic move under action of irrational forces...and I hope market will make me think it's mechanisms are still working correctly.
V.
correct, they are strongly manipulated...UNFORTUNATELY... Currency will win over stocks any time, simply because the currency market is at least 10x bigger in $$$-volume if not more. All countries are indeed trying as hard as they can to inflate their currencies as much as possible; making their products "cheaper" for foreign countries, hence hoping to increase export and hopefully increase domestic production, thus creating jobs.... Well, one can only go so far... till your currency is worth 0... Germany went through hyper inflation in the 1920s, which in fact eventually created the seed for the Nazi party... and thus WWII...
DeleteIf you look at the SPX from the Nov low at 1346 till now, you can see it's a straight shot up, except for the late Dec drop, but price catapulted itself right back on that line within 2 days... Your FED $$$s right at work. But also classic EW: 1343-1448 wave 1. 1448-1398 wave 2. 1398-1520s (?) wave 3. Classic. Note the question mark since it is uncertain if all of wave 3 is finished or if their is one final erratic move higher...
The market doesn't care where the money comes from. You, me, the bank, hedge funds, private investors, the FED... etc Money=money in the markets eyes and more money simply means more buying. Till everything has been bought and then nothing else can be bought and then prices will drop. That principle will always work.
Note that corrections are 5-10% not, 30+% The latter are more crashes. Corrections are healthy, and a natural part of the market's cycle regardless how much money the FED prints. Has happened over the past 2 yrs, and will continue to happen!
http://www.valuewalk.com/2013/02/apple-inc-aapl-drops-prices-of-retina-macbook-pro/
ReplyDeleteWe're starting to see Apple lower its prices, which was inevitable. It'll be interesting to see how this effects margins.
TRIN ran up to 1.5 to create selling but now back down to 1.12, but still bear-friendly. Copper and utilities are most important. Watching for the 8/34 MA cross onthe 30-minute.
ReplyDeleteKS, if I count back 15 weeks, are not the $UTIL numbers for the next couple of weeks going to be under 450? And won't that help to limit any pullbacks?
ReplyDeleteVery astute Weaver, you are right that the comparison numbers will get easier, so in general, yes, that provides some wind to the bulls back, but, if a downdraft kicks in the lower numbers can be taken out easier than thought. Also, the utes are only important right now since the algorithm has identified them, what may happen in the days ahead is Keybot may turn attention to copper, retail sector and volatility, utes will remain important, but not as much as this minute, so as always, always a lot of moving parts at once.
DeleteThis market reminds me of a tree with a rotted trunk. It looks fine until a slight wind arises. After the tree snaps in half and crashes to the ground, everyone will gather round to marvel at the "unexpected" destruction....
ReplyDeleteThat's funny. Then no one wants to own the tree so they sell at the bottom and run away, but the chainsaw guy comes along and buys hte tree for fuel or sells it for cord wood. LOL
DeleteAny pullback that we see, isn't likely to look like a traditional pullback. We won't see a 5% or 10% haircut. Instead, we'll see this sideways stutter-step like we saw today. As the rule goes, the old resistance is the new support. It'll take a hell of a lot to bust below the 1518. Look for sideways action between 1520 and 1525.
ReplyDeleteI agree. we'll probably see 3% MAX for a pullback; likely only 20-30 points (1-2%), typical for a 4th wave. It would suggest a retest of 1500, which is key. The market may need to see one final time if it likes being at 1500+ before it can take off again....
DeleteIt seems that the most general consensus right now is that the markets will have a 5% or less pull back, some say much less, then buy, buy, buy for new highs. That may occur but it is always interesting to see where the majority sits. If contrarian, then this leads to one of two outcomes, either a straight vertical move immediately, or a collapse right now, falling through a 3, 4 and 5% correction like a hot knife through butter. It is very hard to gauge. The Fed's money pump is strong. Copper, utes, retail and volatility should light the way.
ReplyDeleteSo true Keystone. I sold all my longs yesterday (up from 1500) when it hit 1520. Now waiting for the market to show it's real hand. By being in cash I can more easily decide what the right side of the trade will be, while enjoying my profit; albeit small. Patience is fortune in trading I have learned over the years.
DeleteKS, you are right about the consensus--there is no one who expects anything other than a brief breather and then a new high. That complacency plus low volume (i.e. everyone's already all in) sets up a situation where the only surprise left is to the downside.
ReplyDeleteToday traced out a nice little H&S pattern...