Note Added 4/9/13 at 4:21 AM: The markets finish up on Monday, 4/8/13, so the streak is now 14 days in a row. For Tuesday, 4/9/13, watch to see if a down day occurs to continue the streak to 15 days.
Monday, April 8, 2013
SPX Daily Chart Shows Ongoing Down-Up-Down-Up Sequence for 13 Consecutive Days
Note Added 4/9/13 at 4:21 AM: The markets finish up on Monday, 4/8/13, so the streak is now 14 days in a row. For Tuesday, 4/9/13, watch to see if a down day occurs to continue the streak to 15 days.
Subscribe to:
Post Comments (Atom)
KS,
ReplyDeleteI've never really dug too deeply into how the magic number is determined. Like how did you determine that the key level for SOX is 425 and 14.47 on the VIX? Are you just looking at support/resistance, moving averages? Why is it 425 and not say 423?
Actually on the SOX, it seems pretty strait forward that it's based on the MA. It's less clear with the VIX.
ReplyDeleteShane, Keystone receives that question all the time but that is part of Keybot's secret sauce that took a decade to develop. Some are similar to moving average calculations since the calculation uses near-term data but they have other tweaks in them as well. They are formula's that calculate the number and they adjust in real-time, the number for the SOX right now is 424.80 down from the 425 on the weekend. Obviously, these calculations cannot be divulged, unless of course, if GS or others want to buy the model.
ReplyDeleteThe beauty of Keybot is it does a few things at one time. The algo identifies volatility, financials and semiconductors as the key three sectors currently dictating market direction. That is part of a larger program running that decides what factors are most important concerning market direction. Remember when other sectors such as utilities, UTIL, and copper, JJC, and commodities, GTX, were important over the last couple months but now they are not mentioned? Keybot is cycling through all the sectors as they rise and fall out of favor. Utes do not have much of an effect anymore since they went parabolic and are creating firm market bullishness. Sectors such as copper and commodities collapsed and are now firmly in the bear camp. Therefore, the algo places these on the back burner now and focuses attention on different sectors that are more important to market direction in real-time, now, which are VIX 14.47, XLF 17.82 and SOX 424.80. So not only are the levels fluctuating but the actual sectors themselves change. A couple weeks from now, these three sectors may no longer have importance and the algo would have moved on to more important sectors. If markets sell off from here, VIX and XLF are important over the coming days. If the markets are rising, SOX is important over the coming days and then the algo will likely refocus attention in areas such as copper and commodities.
The short answer is, that the answer cannot be divulged. That is why Keybot's commentary is updated dialy, as well on this site, with the areas of interest, so a heads-up can be provided as Keybot does its thing. The bears had it on a silver platter today with VIX 14.50 printing, but, they continue to clutch defeat from the jaws of victory, so markets stumble sideways until either VIX 14.47 or SOX 424.80 decides who is the winner moving forward.
Thanks for the explanation, KS. My best guess is the bulls are waiting for "good news" from Bernanke or AA--some excuse to reverse the malaise and shoot higher. I just saw an article on Bloomberg that aluminum stockpiles in China have skyrocketed to new highs--doesn't look like there's much demand for more aluminum, so AA's forward guidance might be a downer. As for the Bernank, what else can he say? the spigot is already wide open. Is repeating that he's gonna keep the spigot open enough to goose a tired market? Hard to see how it would.
ReplyDeleteYep, you are on to something. A lot of aluminum companies started up in China over the last five years so aluminum is coming out of everyone's ears, like steel. And China property bubble looks prime for popping. AA chart is actually attractive from a long term buy and hold perspective, folks would be a lot better off buying AA instead of utilities right now since over the next couple years Alcoa will likely base and move higher, while utes should give up much of their current price. it is always hard to gauge earnings, typically, everyone knows the bad news about AA so it may end up bouncing in the AH's. AA lost the 8.2, but now at 8.7, but a potential long entry would be at 7.5-7.9. Agree about the Bernank, then how about the outcome no one expects, a subtle hint or discussion on tapering. That would be a surprise and since he is head dove it is unlikely, but if he even says the word 'taper' that may cause a lot of market anxiousness.
DeleteKS, Thanks for the 411. Charles, I like "the Bernank". I'm going to steal that. CNN'S new Fear& Greed index is at neutral.
ReplyDelete