The broad indexes jump higher at the open as the futures dictate. The Factory Orders number was a shade better than forecast so that gave the SPX the push to touch 1471. The SPX then jumps to 1573; the all-time closing high is 1576.09. The SPX has now touched the upper BB on the daily chart as highlighted this morning. The 8 MA moves above the 34 MA on the 30-minute chart handing the baton to the bulls again. Each time the bears try to get something going with the 8/34 MA cross, the dip-buyers, encouraged by the Fed's easy money, jump in and buy. Consumer staples and defensive stocks such as KMB and CLX continue to print new highs day after day, creating new asset bubbles as a result of the Fed money pump (and influx of money fleeing Europe). HPQ, DELL and TXN (chips) all receive downgrades today. SOX is 429 remaining above the 425 bull-bear danger line. VIX is 12.83 remaining low and bull-friendly. GTX drops to 4888. Thus, status quo with the three main market influences right now, so the markets float sideways to sideways up.
The GM pick-up truck numbers show trucks lingering on the lot a lot longer as compared to a couple months ago. This is not a ringing endorsement of a strong economy. Looks like contractors are content with keeping the old truck on the road for a while longer and wait and see how the economy goes. TRIN remains above one today, now at 1.09, but continues to leak lower as the bulls pound the upside. Watch the 8/34 cross, SOX 425 and VIX 14.55. Copper remains weak.
Note Added 4/2/13 at 2:12 PM: SOX stumbles lower printing LOD at 425.21, now at 425.55, remaining above the SOX 425 danger line. TRIN remains above one today at 1.09 but the bulls keep the indexes elevated with the low volatility. VIX remains under 13. The SPX is trading trough a tight 1571-1573 sideways range for the last three hours and a very tight 1571.75-1572.25, a measly 50 cent range for the last hour. The 8 MA on the 30-minute chart is starting to curl over to the downside as long as the SPX prints at 1572 or lower. TRAN is down 0.4% today. Copper battled back today but remains lackluster overall. Keybot the Quant will likely flip short if SOX fails 425 and the SPX drops under 1558.47.
Note Added 4/2/13 at 2:35 PM: Look at the collapse in the socks. SOX dropping through 425, then through 424 in a heartbeat. This action in the semi's should pull markets lower. The SPX is at 1569. The 10-year yield is 1.86%. TRIN is 1.03 moving lower to help the bulls. VIX is now up over 13 at 13.04. Things are getting interesting. SOX now at 423.60... 423.50 ... Keybot the Quant likely needs to see SPX 1558.47 today otherwise will probably stay long.
SOX continuing to collapse towards Keybot's target of 425, and towards the 50MA (425.30). Back in December, it bounced from the 50MA and never looked back - till now. Will Keybot go short if and when 425 is lost (after the required waiting period)?
ReplyDeleteYep, if SOX fails 425 Keybot will want to go short, but Keybot has other rules to satisfy, one of the keys would be printing under the lows over the last day as well, in the SPX.
Deletevery quiet here today... I am sure everybody is very tired of this never-ending bull run. Ha that's how all bull runs go. Can't seem to stop them.
ReplyDeleteMy prefered target is 1579-1581. Seems like the SPX is in an ending diagonal (ED) where each wave consists of 3 waves (instead of the regular 5-3-5 etc pattern). Wave 3 peaked y'day and 4 bottomed y'day as well, so now it's in wave 5 (of 5 of 5 of 3) and in ED's 5th waves are shorter than 3rd waves, so a trade above 1583 would invalidate this. But looking at the charts and neg. div. on many times scales (from weeks to hours), I am not sure if the SPX will make 1580s...
1556-1579 may be a target. If SOX fails 425, however, it should be all down.
Deleteyes, I agree (assuming you meant 1576), note that for example BKX, RUT, TRAN are all starting to break down (no new highs) whereas SPX, INDU and COMP are still up... Fractured markets are a sign of a topping process...
Deleteps: I sold my SDS' yday for a 50c/share gain and went long (SSOs), which I sold again today for a $1/share gain. Now looking for a next short entry level in the project target area. But, it may well not get there since final waves tend to not make it to their targets....
ReplyDeleteRide the Wave Arnie, ride the wave.
Deletearnie, are you adding/reloading shorts today?
ReplyDeletethinking about it actually. Though if this is an ending diagonal, then this wave 5 is an ABC pattern where A just topped at the HOD, B is probably now underway, and the C wave will take it to 1579-1581. Trade below y'days LOD will indicate this pattern has finished and a larger correct to 1530 first (A wave), bounce (B wave) and then to ~1500 (C wave) has started.
DeleteSOX fails 425.
ReplyDeletenice break below the 50d sma, another index not following along with the 3 biggies... omnious signs for sure.
DeleteI went short at SPX 1572; SDS (44.75). Trading strategy: hold till SPX 1530ish. Sell, then short the bounce down to 1500ish. Stoploss at 1583.
ReplyDeleteNOT TRADING ADVICE, just and FYI
i know it's not trading advice but arnie has been dead on with his wave counts. i thought the dude was bold for shorting a bull market. heck, even keybot has been underwater this year on the short side. keybot's gains has been on the long side. question for you arnie: if spx breaks 1583, is 1600 and beyond the next stop?
ReplyDeleteThat is an interesting way to look at it and it is correct that Keybot lost much of its profits on the short side moves that turned into whipsaws. But it is probably not fair to place that on the short side behavior. It is more due to the nature of the markets this year. The markets began to roll over one month ago but the Fed money, and likely an equally important item, the European money fleeing their continent, helped to pump the indexes higher. It is likely more due to markets that want to sell off but are pumped higher by the Fed, a very interesting circumstance. When she breaks it may be a very sharp and hard break south but the indexes will likely recover again. Tomorrow is a key day. The bulls win with SOX 425 and the bears win with VIX 14.50. The markets will be in store for extended down side once the VIX moves above 14.50. Until then, the bulls are fine.
Deletethanks anon! appreciate your feedback! keybot has remained wise staying long most of the time! shorting this 4+ month bull run was and is not for the faint of heart and required being very nimble, with very tight stops and realistic profit targets. few scalps left and right. keybot, as KS explains, always takes the smoothest path, and long is what it was 9 out of 10 times. i agree that this wave has been extended to a point where even now perma-bears have become FED believers. I thought it be done first by 1550s, then 1560s and now we're talking 1570s... shows how far all this FED liquidity has gotten it. That bernanke says there's no asset bubble being created is of course a lie! they said the same in 2006/2007. but government is here to instill faith and believe, to take away any thoughts of panic. by all means necessary will they do that: incl. lying, stealing, killing etc. don't fool yourself.
Deleteok enough ranting...
i get my counts from myself, and other sources (pretzel, tony, avi and sometimes dan), which i combine into the most logical and most likely. EW is all about likelihood as several wave counts are always possible and the market reserves it's right to make me wrong. i am always wrong, the market is always right. if i am right then it's because the market is. not the other way around.
i am very, very impressed with keybot. i have not seen any model/trading system alike and so darn accurate. i often check keybots status against my count to see if it's short or long vs EW suggesting more up or long.
long story short; yes if 1583 breaks than 1595-1605 is on the table, pure and simple based on FIB extensions of each 1st wave. However, as i said earlier; with all this neg. div., fracturing markets etc i dont see the spx getting there. I think it wants to see 1500 +/- 15 first before it sees 1600... but i've been wrong before, though EW and TA suggest a top is (very) near...
arnie, can you give the links to tony and avi's web blog? pretzel is pretty good with his wave counts. thanks.
DeleteKS,
ReplyDeleteEach year you show the Keybot Turn signals on an SPX chart from jan 01 - Dec 31- I can not find them using search. What should I be searching for to find those charts for 2011 and 2012....it is usually the first few days of the new year you put the chart up...thx for ALL you do!
The end of year charts should simply be at or around the first day of the year. That chart is usually posted when the algo flips sides. It varies sometimes six months back is posted, sometimes only three months back. Simply type 'SPX Chart' into the search box on Keybot's site and it will bring up the list of all the charts, then simply check them out to find what interests you.
Delete