The new all-time highs in the SPX keep printing with the HOD today at 1588.85. Tech is jumping today with the SOX at 437.39 up 2.2% today. VIX is at 12.53 down, as would be expected, but currently holding the 12.30-ish support over the last month. JJC (copper) is 42.81 down -0.6% today. GTX, commodities, are down as well. The markets are purely focused on Fed and BOJ easy money and the money fleeing Europe. The European indexes are lagging; the Dow Industrials and SPX indexes are the two main indexes receiving the benefit of the central bankers.
The TRIN is at 1.02, flat neutral, not favoring bulls or bears today. For this euphoric rally, the TRIN should be under 0.70. The volume is below average as it has been all week long, currently at a run rate of about 75% of a day's average expected volume. Watch to see if volume picks up into the close, or not. On sell days, the volume runs over a day's average expected volume. The 10-year yield is at 1.78% not budging much today, teasing 1.80% then pulling back down in yield (up in price) showing that many folks continue to prefer bonds still yet and do not trust the markets. Many bellwethers and economic data show weakness in the global economy but it does not matter with the Fed and BOJ running printing presses non-stop to goose the equity markets as high as possible.
If the SPX closes above 1580, Keystone's 80/20 rule says 1580 would lead to 1620. It is very surprising to see the markets punch this much higher, which was not expected, but the easy money is a powerful force. The flat yields in bonds, flat TRIN, relatively tame VIX and sub-par volume are all head scratchers. For this type of euphoric day, the 10-year yield should be on its way to 1.90% (showing that money is moving from bonds to stocks), the TRIN should be under 0.70, the VIX should be under 12 and volume should be above average with money flowing into stocks like there is no tomorrow, but, alas, this is not the case. Price matters, however, and the SPX is currently printing 1588.14. The new all-time high and HOD at 1588.85 is the number to watch as the afternoon progresses.
Note Added 3:31 PM: The 10-year yield moves up to 1.81% showing money is moving out of bonds, to a small extent, as the day progresses. VIX is 12.63. Volume remains below average at the same run rate. TRIN is 1.10 on the bear side despite the strong up day for equities. The SPX is at 1587.17 with the HOD and all-time high remaining at 1588.85.
it's okay arnie. i still have great faith in you. got stopped out today as well.
ReplyDeleteI was also puzzled by the action today - TRIN even at the open seemed to be acting strange as the market gapped higher but TRIN opened at 1.43. TRIN stayed above 1 for most of the morning, and stubbornly dipped below 1 near the end of the day. I kept thinking TRIN was telling me the rally was weak, but it didn't turn out that way. TICK made lower lows at 3:30 though - the only signal of weakness I could see across the internals I follow
ReplyDeleteYep, the TRIN and other factors did not agree with the rally yesterday, that hints that perhaps all is not as it seems. The volume and volatility is particularly important. VIX is on support at 12.30-ish so watch that closely today (Thurs.). Volume remains lackluster and hints that the retail investor is running into the market chasing all the euphoric headlines. Also of interest is that the money pushing the markets higher is money from money market funds and of course the central banker money, and not from the bond market. The fixed income arena remains strong and money is not flowing from bonds to stocks as would be expected. With these high prints in the SPX, and considering recent price levels of the U.S. 10-year Treasury yield, the yield remains low at 1.80%-ish, but should be well over 2% considering the equity market push higher. The market action these days is unchartered territory since the central banker intervention is distorting all price and asset relationships.
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