The VIX is 13.36, say no more, under the 14.15 bull-bear line so the bulls stage a big party today with the Fed and BOJ supplying the booze. But, hold the horses, there is an outage at the CBOE affecting the VIX and other options. They are working to fix the problem. The SPX touched the 1583 handle so the upside acceleration occurs, and the SPX comes up to fill that little one penny gap from 4/12 and 4/13 at 1588-1589. Last week's high is 1588.84 and that is a big win for bulls punching through. Pay attention to 1588.84 today to see if price closes above, or below. The 1588-1589 is strong horizontal resistance and price continues to more across this level right now. If the bulls can keep things elevated, the next resistance is the all-time closing high at 1593.37 and then the all-time high at 1597.35.
The 8 MA remains above the 34 MA on the SPX 30-minute chart so the bulls are driving the bus. Crude oil is at 92. The 10-year yield is at the top of the recent sideways range at 1.72%. Euro is stuck at 1.30 waiting for Draghi next week. The dollar/yen was buoyant at 99.50-ish but is now leaking lower to 99.37. TRIN is 0.70 providing smooth trading for the bulls today. This is two days in a row of uber low TRIN's so the markets will likely need to sell off in the hours or day or so ahead so the TRIN can recover to print back above one. The semiconductors are straight vertical now with SOX over 442, moving from 410 to almost 443 in less than five days, +8%. The SOX is moving up at a rate of almost +1.5% per day. Things are getting out of control. On the earnings front, the top line misses continue along but traders are only focusing on the positive news. Companies squeeze out profits on the backs of the remaining workers. UPS is up 2% today, a big win for bulls. Watch SPX 1588.84 and 1593.37 as described above.
Note Added 11:45 AM: The outage at the CBOE continues. The 'technical glitch' reason is given. Between flash crashes, exchange outages, potential cyber attacks to the technical infrastructure, and markets running higher on companies printing lower top line sales, the markets should be viewed as erratic and unstable, and caution is required moving forward.
Note Added 2:17 PM: The SPX is testing the 1593.37 all-time closing high with a HOD at 1592.64 thus far. The CBOE is trading again. The technical glitch will fade into the background like all the other recent shenanigans. TRIN is 0.74 so the bulls are motoring along today without a care in the world, worry-free. The CPC put/call ratio print will be interesting tonight to see if it prints under 0.79 indicating increased complacency (see this morning's chart).
Note Added 2:39 PM: The lift in the broad indexes today likely has lots to do with the news that central bankers are buying stocks in record amounts. This is very scary and concerning. In the very short term, equities run higher, however, the boat is all loaded on the buy side due to the ongoing money-printing orgy. The SPX keeps fighting through the 1588-1593 range for the last four hours.
Note Added 3:11 PM: SPX drops through the 1588-1593 range. The negative divergence mentioned on the hourly and minute charts creating the seven-handle spanking over the last hour. S/R is 1593, 1588-1589, 1586, 1580 and 1575-1576. Price is now at 1584.86 so a move back up to back kiss the 1586 or 1588 would be in order. TRIN is 0.80 so bulls remain in firm control today. Look at the VIX go, now at 13.80, the highs for the day, only 35 cents from the 14.15 bull-bear line in the sand, however, with all the shenanigans today, the volatility pricing may need a day to settle.
Note Added 3:42 PM: SPX recovers from 1583, moving back up to 1586 resistance, and punching up through, so price may want to test 1588 again as well, if 1586 holds. VIX 13.71. TRIN 0.76, firmly bullish.
Note Added 3:58 PM: TRIN popping now 0.93 turning neutral. VIX 13.83 climbing again. SPX at 1584.
Note Added 4:03 PM: AMZN beats on EPS but misses on top line revenue, same-o story with companies coming up short on sales. The stock is all over the map after hours, up big, down big, now up, flat, bouncing like a ping pong ball. AMZN at 276-282 so the bulls are winning the day in a jumpy tape. So tech receives another feather for its cap. SBUX meets EPS and misses on top line; it sells off on the knee-jerk reaction, slipping on a spilled latte.
Is the 5/19 Debt Ceiling essentially a done deal or is the complacency for a can kick off the charts?
ReplyDeletePolitico has a political/financial briefing every market morning. http://www.politico.com/morningmoney/ Normally they love stuff like the debt ceiling, but there has not been even the slightest mention in recent weeks. We're accustomed to the complancency re these financial "deadlines" but there is usually lots of coverage of the impending deadline along with the complancency. Here we have complancency and no coverage.
Done deal of uber complacency?
The debt limit stuff should heat up. The mid-May target is an estimate since it all depends how they want to structure payments and such, the Treasury can do things to extend the window, like Secretary Geithner did. So when the U.S. crosses the debt ceiling would be say sometime between 5/13/13 and June. So things should heat up, especially as May hits in only four trading days. The 5/19 date was used as a place holder.
DeleteShould be "Done deal or uber complacency?"
ReplyDeleteKS, CLF is up almost 20% today with earning beats!
ReplyDeleteYep, too bad it wasn't held, but as always with earnings reports, it can be the opposite direction as well. CLF charts look good, just like VALE, but they may move sideways a bit then sideways to sideways up.
DeleteDid find this article http://www.reuters.com/article/2013/04/24/usa-fiscal-debt-idUSL2N0DB1V420130424 which says US has enough cash to last till late July. With $300 billion in treasuries settling from today through 5/2, it seems we may be borrowing even more than the usual excessiveness so to stock up for a debt ceiling fight. No reason for Republicans to roll over before 5/19, so we could hit the 5/19 debt ceiling but continue on our merry bullish ways.
ReplyDeleteThat is interesting, so two additional months are now going to occur before the deadline, maybe the sequester stuff helped. That will have to be updated in the weekend analysis, so the politicians will create drama during the month of July, just like 2011. Thanks for that Marlowe.
DeleteIf anybody is still wondering what the effects of QE are? Today is a great example: Last night $36B was transferred from the FED tot the banks (primary dealers); and look what we have here... Regardless of (very) soft earnings for most companies. But, such it is; like it or not. As a citizen I am concerned, as a trader I shouldn't care; just trading the price action. Can’t do much about...
ReplyDeleteWhere is the $36B figure from? Only 1.5 in Pomo yesterday, while 0 in Mbs settlements as they all settle in mid-month.
DeleteIn the past I have used the diamonds (DIA) to get under the .dji. I've recently come to the conclusion that I simply don't like DIA. Is anyone using anything else that they like. I've looked at UDOW, but I don't think I like that one either.
ReplyDeleteThe central bankers are the key to it all, they keep the markets elevated. The SPX is teasing the 1593 all-time closing high. The hour and minute charts are actually more agreeable to seeing price flatten and roll over. Most of the ETF's are similar, look at the volume numbers, that is why trading in DIA, SSO, SPY, SDS, all the more liquid ones, is better since you can get in and out at your price, watch out for the thinly-traded ETF's that trade at low volume.
ReplyDeletearnie, are u adding to your short positions today? Pretzel thinks an ending diagonal is in play here.
ReplyDeletestill having my original shorts from 1580. stoploss at 1587. not adding anything
Delete1597 I meant.
Delete@ Arnie:
Deletewatch out Arnie cause there are 50-50 % chances that a 5th wave has begun.
If the tomorrow retracement (if it will be something like that) doesn't go lower than 1555-1565 IT'S THE FIFTH WAVE (of the larger 3rd), MY MAN :D ! It's target it's projected somewhere between 1614-1647.
I repeat: if the retracement doesn't go lower than 1565 on spx cash (down to 1536 and maybe lower) be prepared to take action with those shorts!
The move it's too impulsive (and has internal 5 waves structure) for a B of 4th wave!
V.
A lot of today may have to do with the news this morning about central bankers buying stocks. This stuff is out of control now. If everyone is on the buy side it does not take Einstein to figure out how it ends. http://www.businessweek.com/news/2013-04-24/central-banks-load-up-on-equities-as-low-rates-kill-bond-yields
ReplyDeleteI just read it too. That's really, really, crazy. The CBers are playing a very dangerous game as they are not instituted (originally) to be buyer of such assets but of LT government debts and short low-risk assets... If (now) EVERYBODY is buying, from your mother's nephew to the government there's only one final end-result: down, and hard. And when it goes, it will take our CBers with it (the market has no mercy; only winners and losers...). Our governments' balance sheets -already loaded with trillions of debt- will be "wiped clean" very quickly as they are not able to unwind their shares as quickly... sad, sad , very sad. Until then.. enjoy the koolaid punchbowl!
DeleteI suspect that the central bankers don't know much more economy than the average Joe on the street ... if they officialy decided to directly buy stocks ....
Deletewhat stops me to buy a very performant printer and to make my own money $ and buy stocks? :)?
V.
Doesn't this re-enforce a supply/demand problem? I think there's at least a perception that there's nowhere else to put money. Therefore, we're seeing record investment in equities. What surprises me is that we haven't seen more from real estate.
ReplyDeleteKS, from a chart perspective, how significant would it be if the next decline begins from a point just shy of the previous highs?
ReplyDeleteNo greater, or no less, significant than a move lower from any price point. The prior high is simply resistance, so in that respect, the reversal identifies the top resistance level that held, for instance, if the 1593 holds as a near term top now, then price did reverse from just shy of the prior high but its not that big of a deal. What is, however, is when price drops, then comes back up, and this may be a few years later, like we saw play out recently, the 1593 would be uber important in that context. The bears need to hold the 1593 resistance, if not, they would be offered one more chance at 1597, but after that probably 1620's is next. Broad indexes are drifting lower into the close, will be interesting if this marks a top.
DeleteFull moon at 2:57 pm Eastern. Anyone know if the eclipse happened at same time? Market high (so far)shortly after 2pm with a half point ES drop in the 30 minutes surrounding 2:57.
ReplyDeleteInteresting stuff.
DeleteRe: today's partial lunar eclipse (from nationalgeographic.com):
DeleteThe most readily visible part of the eclipse will begin at 3:54 p.m. ET, just as the moon is straight overhead for observers in the Indian Ocean.
The deepest and most interesting part of the eclipse—during which Earth's shadow will fall on less than 2 percent of the tiny sliver of the moon's disk—occurs at 4:07 p.m. ET and leaves the umbra at 4:21 p.m.
Thanks. Gonna watch 1st 30 minutes after close for anything unusual.
DeleteSo the timing right now is experiencing all the wild metaphysical stuff. Interesting.
Deletewoah, SPX looking ugly here, vix popping up. Is this a head-fake or a reversal? Failure at 1593...
ReplyDeletePrice fell through 1586, so next support 1580 then 1575-1576. Price came up to back kiss the 1586, then collapse lower so it may want to tap 1580.
ReplyDeleteThere should be a final 15 min. ramp job. If that fails to push SPX well above 1586, that suggests some exhaustion. Any disappointment in tomorrow's GDP could be a trigger...
ReplyDeletesold SBUX when it hit $57 a few weeks ago. haven't touched it since... it's had an amazing run up since Sept 2010 (I was late to the party and bought early december last yr at ~$52). My EW-count and FIB extension calculations suggested SBUX to hit $60-$62MAX. It traded today @ $60.64, so all targets met. Time for a big fat decline IMHO, down to ~$45 IMHO
ReplyDeleteIf you do not have the real knowledge of the market then it would be very difficult for you to get the right income. Thanx for sharing this good info,you always provide good information and tips, We also provides trading tips,mcx tips,ncdex tips, Commodity market updates, free commodity calls , MCX tips,we have 10 days free trial offer also.
ReplyDeleteRegards,
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