Chairman Bernanke's talk causes the 10-year yield to jump from 1.85% to 1.89%. Check that, the 10-year Treasury note yield is now 1.90% filling the gap highlighted on the TNX charts this morning. The dollar/yen is printing new highs at 101.94; looks like a 102 handle is coming. The major indexes are a hair positive receiving help from the dollar/yen buoyancy (yen weakness). The stronger dollar, however, creates pressure on copper and commodities. Crude oil is under 94. Brent oil is under 102. Gold is down 47 bucks to 1421. The euro drops like a stone losing 1.31 yesterday and 1.30 today now printing 1.2949.
This mornings metrics are SPX 1635 and 1623, and VIX 13.73 (currently at 13.19 causing market bullishness), JJC 41.90 (currently 41.19 causing market bearishness) and GTX 4810 (currently at 4668 causing market bearishness). The SPX is traveling sideways unwilling to yet choose 1635 for happy bulls, or 1623 for happy bears. The 8 MA stabs down through the 34 MA on the 30-minute chart a few minute ago signaling bearish markets for the hours and days ahead but watch the cross closely to see if it holds through the closing bell (reference the previous chart). Keystone's trading algorithm, Keybot the Quant, is long but if the VIX moves above 13.73 and the SPX under 1623, the algo wil likely flip short. It is all there on a silver platter for the bears today but they must start pushing hard if they want it. Well bears, do you want it? European markets are closing now. Keystone took profits on MCP exiting the position.
Note Added 11:32 AM: The 10-year yield is now 1.91%. Dollar/yen 101.89. Dollar is up to 83.36 (reference this morning's dollar chart) slapping commodities. Markets appear unstable today. The 10:30 AM central banker pump is creating buoyancy in the SPX moving price off the 1625 bottom back up to 1630. VIX 13.06. TRIN 1.13 favoring bears by a smidge.
Note Added 11:45 AM: 10-year yield 1.92%; it is possessed today. Asset relationships may undergo an adjustment moving forward. The higher dollar/yen and higher yields are not having a particularly strongly higher effect on equities today. The higher dollar which creates commodity weakness is raining on the bullish parade to some extent. SPX is 1626 testing the H&S neckline described on the 30-minute chart. VIX 13.19. TRIN 1.27. The 8 MA remains under the 34 MA as discussed above. The XLI (industrials sector) is down today after a six day upside orgy of rotation running from 41 to 43, +5%. Tech (COMPQ) is up today on strong chips (SOX and SMH). RUT (small caps) is up. The beat goes on.
Note Added 12:02 PM: 10-year yield 1.91%. Dollar/yen 101.66 off the highs. SPX 1625. VIX 13.27. If the bears want it they need to run with the ball right now and quit the dilly-daddling, otherwise, the bulls are going to take the ball back. Keystone bot TLL, the leveraged inverse telecom ETF, another dangerous and speculative ETF, and also a thinly-traded play, opening a new long position. TLL weekly and daily charts are setting up with attractive positive divergence.
Note Added 3:01 PM: VIX drops under 13 slipping on a banana peel. Say no more, you know the broad indexes are not going to sell off if volatility is dropping. TRIN is 1.03 dead flat neutral so traders likely want the markets to float out sideways into the weekend. Copper recovers today, JJC now teasing the 41.90-ish area called out this morning. Dollar/yen is 101.55 which appears to be sticky S/R so the move either way off of 101.55 will be important. The SPX and Dow are flat but tech and small caps are printing new highs. XLK and XLI are flat today so the rotation into these sectors continues to gain interest despite their charts looking as over extended as any other sector. Traders blindly follow the GS call one week ago to buy XLK, XLI, XLB and XLF (the sectors). The 8 MA remains under the 34 MA signaling the bears in charge for the hours ahead but the bearish resolve is questionable. Bears need to keep the SPX below 1628 during this final hour to maintain the 8/34 cross. Bears got nothing until they attain VIX 13.73. Bulls need JJC 41.90. SPX is 1629.
Note Added 3:28 PM: The big recovery in commodities occurred at 2 PM EST. Lots of market action is occurring around the 2 PM hour these days. The trading day is 6-1/2 hours. The market trades in six 65-minute sessions. The fifth session is from 1:50 PM to 2:55 PM so traders are making moves at the beginning of the last two trading segments of the day. VIX is 12.92 so the bears are looking for a bottle of '5-hour energy' to find the strength to move forward. SPX is 1629. JJC 41.83. TRIN 0.99. Dollar/yen 101.57 at the sticky 101.55. Markets appear undecided today and unstable not knowing which way to commit. Many traders are full steam ahead tripping over each other to buy tech, industrials, materials and financials, while others are starting to question the bullish euphoria. Monday's opening bell is setting up to be a potential key event.
Note Added 3:47 PM: Bulls running higher since the bears do not want the ball. SPX towards 1632. VIX 12.88.
Note Adde4d 3:50 PM: SPX over 1632. Price jumps from 1629 to 1632, three handles in ten minutes.
Note Added 4:02 PM: New highs are printed for indexes. The 8 MA remains under the 34 MA but is poised to pierce up through at Monday's opening bell. JJC provides drama into the close ending at the 41.90-41.93 bull-bear line. VIX collapses to 12.55. The Monday open will be interesting and very important.
Where have all the TA geniuses gone?
ReplyDeleteYou are the first one Anon; this market action missive was only posted a few minutes ago.
DeleteThey are makin' money.... ;)
DeleteV.
KS, what is a better RSI in a day trade RSI or RSI Wider? Thanks
ReplyDeleteYou mean RSI Wilder, its the RSI its all the same. You can play around with different durations, stockcharts defaults to 14. RSI is likely the number one chart indicator you want to look at, at least in the top five with volume, stochastics, MACD and money flow.
Deletethanks much
DeleteFwaidy cat beaws hand the ball wight back to the bulls.
ReplyDeleteYep, the bears did not eat their Wheaties today. Markets may want to just move out sideways and spend the weekend sorting things out. Some wild stuff has developed over the last 24 hours with the yen, dollar and 10-year. Use the 8/34 MA cross on the 30-minute chart. The bears receive a feather in their caps, independent of where the numbers actually close, as long as the 8 MA finishes the day under the 34 MA. If the 8 moves above the 34, then the bears have rolled over again.
ReplyDeleteI'm kicking myself ---not literally--- for selling the YCS too early. Grant it, I made a pretty nice chunk on it, but it's been on a tear the past couple of days.
ReplyDeleteThat is not the way to look at it, Shane. You made a great trade. A flat trade should even be considered a great trade. Lots of trades are in too early, out too early, out too late, in too late; there are lots of fish in the sea, simply roll with the flow. Keystone left a bunch on the table today with MCP but, no worries, it worked out fine.
DeleteKS, do you mean VIX collapses to "12.55" on your post. However, I'd love to see VIX collapses to "21.55" ;)
ReplyDeleteAlso, I check $SOX RSI is 71.05, it's overbot, should negative divergence moving forward?
Danke for the correction. Semiconductors are goosed beyond belief, straight up vertical this week over 3% higher. Chips have momo so probably a bit more upside. SSG likely a good trade in the coming days, perhaps over the next week or two.
Deletehttp://www.zerohedge.com/news/2013-05-10/how-manufacture-record-high-stock-market-close-friday-afternoon
ReplyDeleteI'm sure everyone would just love to see clear signs of market direct manipulation ...
they are directly moving the market just as they want to ...
V.
Yep, the closing action was very interesting. The Monday opening bell will be very important. Perhaps the action was the great suck-in to make sure no one will short the market, all longs remain in place without any thought of exiting, and the retail investor, Joe Six, runs to jump in long since he typically is happy on a Friday afternoon since the work week is ending anyway. It would all set up for a nice flush at Monday's bell if that is the chosen path.
Deletethese markets are a complete farce---just look how they ended the day---Plain and simple manipulation--have a good weekend--god help these markets when the FED one day stops funding them--
ReplyDeletehttp://www.marketwatch.com/story/fed-maps-exit-from-stimulus-2013-05-10-191031815?link=MW_home_latest_news
ReplyDeleteBULLISH NEWS! Buy stocks until you drop dead! :D
V.
don't get too bearish anyway ... i think that this rumour was released after the closing hours on Friday for a little correction on Monday - Asia and Europe - ... why do I get the feeling this is a bear trap setting ?
Delete...no POMO on Monday - just to excite some frustrated bears - and than , during the second part of Monday .... BANG ! a big wave up to clear all those who are "wrong" as per the FED assessement of the markets....
V.
Looks like this New Moon did not weaken market enough for us to get a nice correction ~5%. OpEx next week will bring market even higher. I am a sad and exhausted bear!
DeleteThat article is interesting. Remember Thursday the big up in the afternoon with the dollar/yen orgy, then the SPX collapsed but the dollar/yen remained elevated? That drop in the SPX was due to a Fed rumor about 'tapering'. This is the article likely the base for the rumor. On Friday, the rumor was forgotten already and the higher dollar/yen moving to 102 led equities higher. This would be viewed as negative market news since it was released under the cover of darkness on a Friday evening. That is when all market and political news is released that is detrimental since the negative impact is lessened (folks are staggering drunk by then and miss the news and the news also has two days to settle as well). Interesting stuff. The upside orgy into the closing bell would be perfect to set up a Monday flush.
DeleteAlso, the aritcle is written by Jon Hilsenrath who many consider to have an inside track with the Fed. If he says the Fed is mapping out a strategy to exit, they are definitely mapping out a strategy to exit. The Fed likely realizes that they are now damaging the markets more than helping. New asset bubbles are pumped higher, the dividend stock bubble right now as well as REIT's, staples and others. Look at the initial collapse in the utilities bubble we watched form over the last couple months. Next week will be interesting.
ReplyDeleteYes, Hilsenrath previously in other 2 instances as I know hintered about FED stance changing. He is the media guy that 'prepares' the population for the changes to come.
DeleteBut the Big Boys from the top big 5 banks don't really find quite great the idea of "less QE".. and they will do something!
Remember when I've wrote here that the key to markets will be the 18-19 June 2013 FED meeting?
Some bunch of dirty banksters will pump next week the market after apparently shorting it during monday morning (to suck in some late shorters).
The week after the OPEX week will be the Big Key not to less stimulus BUT TO MORE STIMULUS starting 18-19 June '13 FED meeting. An important top ( not THE TOP) will be registered during the week after the OPEX week.
The private banksters will change the triggers in their bots to simulate some crash (let's say, controlled crash, not a "real" one) everyone will get scared like hell and the FED will positively adjust QE, not tappering it, in order to "assure market stability, blah-blah-blah ... " the usual media blabering ....
The banksters want more money and they will get the money! All they wanted was that the FED be more flexible regarding the QE monthly volumes (Bennie 'the jolly pumper' pointed out that the FED has a more flexible approach regarding the level of stimulus - everybody thought that it's all about downsizing it... no! it's about 'simulting' some dumb crash that will make all sheep retailers remember the 2009 experience and "extracting" more money from FED...it's simple as that!) ...
Who could be so childish to believe that when the whole world (BOE, BOJ, soon ECB) is involving in the currency war the US will abort this game started by them? C'mon ! Let's be realistic!
But for the media and the politicians to accept this QE up-sizing some "financial earth-quake" is needed!
Enjoy May and June'13! Interesting months!
V.
p.s. Of course I might be just dead wrong, don't take my words as a cornerstone of your actions! Everybody is responsible and financially accountable for his decisions!