Flat markets today. VIX at 13.62, positive on the day, same-o mixed market signals with the broad indexes up but ditto volatility. WTIC crude oil dropped through 90 on the higher inventories. Factory Orders were a non-event. The Dow Industrials dropped under yesterday's HOD. The SPX is fighting along the 1540 S/R. Remember the negative divergence on the 30-minute chart yesterday? That remains, and now the 2-hour chart is setting up with its negative divergence. This behavior should lead to a roll over for the SPX this afternoon or tomorrow. Perhaps the Beige Book contains a surprise? TRIN tells it all at 0.61 at today's lows. The broad indexes will move higher today with this low TRIN. So the bears goal is to increase the TRIN and VIX. The bulls are trying to push the SPX above 1544 and hold it since it will point the way to 1548 in quick order. Markets may stumble along sideways until the Beige Book at 2 PM. Fed's Fisher speaks this evening which will likely be a push for the hawk side. Lots of snow removal required all day long today, good ole Pennsylvania was hit hard overnight and this morning.
Note Added 3/6/13 at 2:43 PM: The Beige Book is a yawner. Retail sales are soft but traders do not care. At 2 PM, the broad indexes pivoted down but at 2:15 PM the booze was flowing again and the markets ran higher. VIX is flat today at 13.43. TRIN is 0.55, no wonder the markets are elevated, bears got nothing with a TRIN this low, the bulls will run markets higher into the close unless the TRIN rises. The bulls need to punch through 1544, a repeat of the action as the session began this morning, and hold it, if so, the path to test the strong 1548 resistance will occur quickly. The SPX 30-minute, 1-hour and 2-hour charts are set up with negative divergence now. The 2-hour may want to see SPX 1545-1546 to lock in the negativity but overall, the charts are agreeable to the SPX moving lower now. SPX should begin to drift lower from this 1543-1548 range. Here's the push above 1544 to see if the bulls want 1548, or not. Nice bounces today in mining stocks.
Note Added 3/6/13 at 3:30 PM: Keystone took profits on PBR exiting this position, will consider reentering, it should have continued upside ahead. Also took profits on REE exiting that position, will also consider reentering and it should have further upside ahead. Also shorted LL opening up a new short position.
Note Added 3/6/13 at 3:35 PM: Keystone bot AAPL opening up a new long position. Also added more JO which is the ongoing long coffee position. Also added more SJB which is the ongoing long position that shorts high-yield, this one is a bit thinly-traded but the action is healthy enough.
Note Added 3/6/13 at 3:46 PM: TRIN is 0.56 so the markets would not be expected to drop. However, with two days of low TRIN's especially a number in the 0.5's, TRIN should pop tomorrow which would be in concert with market weakness. VIX is 13.56, not going up but not going down either, holding this 13.3-13.5 support area. Note how the SPX did not have the oomph to move up through 1544 today at the open or a short time ago. The euro is 1.2988 and this action will heat up overnight into the ECB tomorrow morning before the U.S. open.
Note Added 3/6/13 at 3:55 PM: Keystone added more long AAPL.
Note Added 3/6/13 at 4:03 PM: The markets end mixed. SPX and Dow up with Nasdaq down. RUT was up. The tech weakness should be respected. Watch the semiconductors, SOX, the socks, moving forward. The inverse semi ETF, SSG, may prove an interesting long play moving forward, the daily and weekly charts are set up with positive divergence and the SOX weekly chart is negatively diverged. There is likely a few more days of flatness to slight buoyancy and then the semiconductors should roll over. VIX finishes up a few pennies at 13.52 and the mixed signals continue, an up VIX and up markets. One of them is wrong. TRIN recovered to 0.63 but looking back at the last three days, the low TRIN's should lead to a snap-back move tomorrow with a higher TRIN printing (above 1.00) and markets selling off. The upper Bollinger Band violation scenario should be watched as well, where the SPX should be lower on Friday and Monday. SPX prints a new 2013 closing high at 1541.46 and new 2013 intraday high at 1545.25. The Dow Industrials prints a new all-time closing high at 14296.24 and new all-time intraday high at 14320.65. Keystone's 80/20 rule says 8's lead to 2's so 14280 leads to 14320. Perhaps today's tag of 14320 satisfies the rule, or, price may move up to take another look at the 14320's tomorrow. The market drama continues and at 7:45 AM EST the excitement will accelerate starting with Draghi and the ECB decision, and Draghi has been known to surprise markets before so he will be pulling something out of his a...., er, sleeve. The euro is 1.2988. Now, where's that snow shovel? Well, shoveling can wait until a slice of blueberry pie is enjoyed.
New Yorks snow is on the way how did you get yours so quickly...
ReplyDeleteNo snow at all in State College!!!
ReplyDeletehttp://www.marketwatch.com/story/house-approves-stopgap-budget-bill-2013-03-06-1491554?link=MW_home_latest_news
ReplyDeletedoes this eliminates the danger of US goverment shutdown at the end of March?
thanks,
V.
V,
ReplyDeleteThis should come as no surprise to anyone. Everyone knew that the Sequester was nothing more than a rouse. Congress will throw a patch on it like they always do and kick the can a little further down the road.
The snow is bazaar, real heavy spring snow, one foot here, but the day has warmed up nicely and much of it is melting, it will be a mess tonight when the slushy mess freezes. The storm came across Chicago yesterday, Pittsburgh overnight into this morning so it should be out towards the east coast now. Looks like the bulk of it was lower Pennsylvania and south. In Butler, PA, they got about one foot but if you drove north only one-half hour there was nothing. LOL Goofy weather like the goofy markets.
ReplyDeleteV, that is only the first shot across the bow for all the Sequester and Continuing Resolution (CR) which funds the government and is needed by 3/27/13, less than three weeks away now, 20 days. It will be a Kabuki Dance, the Senate will probably laugh at the HOuse's bill, then they will play baby games and then we all wait to see what happens probably on 3/26/13. So the drama is heating up now but it has no effect yet, maybe next week when there are only very limited days remaining. They will kick the can but we will have to see how it unfolds.
The SPX is trying to gain the 1544 so the bulls can run to 1548 before the close. TRIN at 0.54 says upside should be no problem.
Thank you KS for your answer, so there's one more step : the Senate's vote.
DeleteI've got an interesting link http://www.marketwatch.com/story/will-the-real-stimulus-please-stand-up-2013-03-06?link=MW_home_latest_news in which is being advocated the idea that actually the money are drained from the system overpassing the 85 bln $ monthly issuing.
Seems like the first reading of GDP q1/2013 will come with some surprises...I guess it will be released in April :).
I'm very curious what will be the markets reaction considering also the May big dispute that's ahead of us (and of market's stability also).
This year will truly be a Snake's year (in chinese yearly horoscope).
V.
Yes, but there will likely be several incremental steps with plenty of confusion along the way as they try to find common ground before the 3/27 deadline. That article is interesting. More simply, it is the velocity of money that is key. All that liquidity sits at the banks, we see some of it put to use as the markets are pumped higher, but for the most part it sits there stagnating. Few want loans and those that do have to jump through hoops, including a hoop of fire. So the dough sits there. The market upside will peter out and we are left with more debt for the country and a paltry zero GDP. If the velocity of money would increase (more dough in circulation), you would see the 'multiplier' effect where the new business will create jobs for the donut shop, car repairs as folks drive to new jobs, restaurants to supply lunch, etc..., but this is not occurring. On top of this entire mess is that when the economy does turn the money will flood into the system creating hyperinflation a whole new problem, different from the current disinflation and deflation.
DeleteCPC falls 36-percent to 0.71. Tomorrow would not be a good day for Draghi to surprise anyone.
ReplyDeleteThis was a very unusually abrupt reversal in $CPC. The few other times a similarly abrupt reversal happened in the last 3 years, as measured by a spike below the lower Bollinger band (Bollinger %B ~ -0.10 in stockcharts.com) were mostly at or very near major stock market tops. I wonder if we are finally getting capitulation level buying and making the last few bears cover their shorts, especially since there were record inflows to mutual funds in the last 2 months.
DeleteYep Weaver and Paul, the 0.7's and lower signal significant market tops. Exciting days or a week or two is ahead.
DeleteThe Dow utilities ($UTIL) and transports ($TRAN) have really spiked recently, compared to the broader market, but on very low volume levels that continue to trail off. These and other negative divergences would fit with this being some kind of major top.
ReplyDelete1540 - 1590 ... pure lemmings migration run ... I'm totally in cash, no longs, no shorts.
ReplyDeleteAfter 1590 next stop is at 1340-1345, after a waterfall move.
the spx market in totally disconnected as per eur/usd, copper, oil, bonds correlations.
to those who are long... I admire you for your courage, this is not the kind of action suitable for me. it's not like buying at 600's -700's ...
this market is an official speculative bubble considering intermarket action.
take care,
V.
Sounds like you have a good approach V. But there are always opportunities, long and short, for individual tickers, so playing in that arena as the broad indexes decide, is a possibility. Cash is a position and should be treated that way like you do. There is nothing wrong with staying in cash at all and being patient, there is not any money being made but more importantly there is none being lost. Capital preservation is key to trading that is why you diversify, play different time frames, have both long and short positions ongoing, etc...
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