This morning's drama results in the SPX jumping to near 1590 after the opening bell. HOD is 1589.64. VIX is 14.39 trailing lower but staying above 14 which helps the market bears. TRIN is 1.27 favoring bears today despite the up markets. The 10-year yield is at a steady 1.64%. The euro is 1.3077 weakening on Draghi's comments. The dollar/yen is 97.78. Use the 10-year yield, euro and dollar/yen numbers as pivots today. Bulls want higher yields, higher euro and higher dollar/yen. Bears want lower yields, lower euro and lower dollar/yen. Germany 10-year yield is now 1.17% testing the all-time lows at 1.16%-1.17%.
The 8 MA remains under the 34 MA on the SPX 30-minute chart as the session begins. A move through 1582-1597 is sideways action today. S/R is 1593, 1589, 1586, 1579, 1576, 1574.07 (20-day MA), 1569, 1565, 1563, 1561, 1556, 1555.55 (50-day MA), and strong support at 1552-1553. The day begins with the bulls punching up through 1586 and now attacking 1589 R. The 1593 resistance test is next if 1589 gives way. The 20-day MA and the strong floor at 1576 form a confluence at 1574-1576 so this support level may serve as both a magnet to draw price lower and an important test for the markets where a bounce or die moment will occur. The markets may idle along sideways today as trader's begin to set their sites on the Monthly Jobs Report at 8:30 AM now less than 23 hours away. Time for a walk to enjoy the beautiful summer-like day in scenic Pennsylvania.
Note Added 12:36 PM: The VIX falls through 14 and the TRIN dropped under one, thus, the broad indexes move higher. The SPX went through 1589, then 1593 R, then up to test the all-time high at 1597.57, managing to print a new all-time high and HOD today at 1597.86. The bulls are unstoppable and can taste the 1620's. The 8 MA moves up through the 34 MA signaling bullish markets for the hours and days ahead so the bulls frustrate the bears once again not allowing the bears to shine. The bears need to drop the SPX quickly, moving price under 1593 and lower, to reverse the 8/34 cross. The euro is 1.3061 moving flatish to a bit lower so this is a hair of downside pressure for the market indexes. More importantly, the dollar/yen is at 98 moving up, which means weaker yen, and higher equities. So the bulls have the BOJ to thank again for today's move which recovers yesterday's loss. The 10-year yield remains low at 1.62%-1.63% so obviously money is not rotating from bonds to stocks but instead, new fresh money, easy money from the central bankers, continues to float into the stock market. TRIN is 0.96, neutral. For such a strong up day the TRIN should be 0.7 or 0.8. VIX is 13.87 so the bulls will continue pushing markets higher. The bears will stop the upside if the VIX moves back above 14 and/or the TRIN above one. The high print today in the SPX creates a triple top over the last three and one-half days with price continuing to bump up against 1598, not yet able to print the 1598 handle. Watch VIX 14, dollar/yen 98 and SPX 1597.86.
Note Added 1:18 PM: VIX 13.78. Dollar/yen 97.98. SPX 1597.28. TRIN is 0.89 dropping lower to help the bulls.
Note Added 3:03 PM: VIX is 13.66 at lows of the day so the broad indexes are at the highs of the day. SPX prints a new all-time high and HOD at 1598.60. TRIN is 0.97, neutral, which is odd, as well as the low 10-year yield, since the TRIN should be lower and yield higher for such a bullish day. The low volatility and higher dollar/yen provides the bull fuel today, as well as the typical morning pump by the Fed. Note the dollar/yen leaking lower, now at 97.90, down from 98. The euro is 1.3055 dead flat today so the ECB does not have much affect today. The main thrust is the Fed, BOJ and weaker volatility. Crude oil is regaining the 3% loss from yesterday although copper can barely make back one-half of yesterday's drop. Semiconductors, SOX, are up +1.3% today moving above 447, providing market fuel. Utilities are lower for two days in a row. The bulls are focused on the 'increase' word in the Fed statement which hints at continued QE. Traders do not appear worried about any negativity from the Jobs Report in the morning.
Note Added 3:30 PM: VIX is at the lows today at 13.61 so this keeps the broad indexes elevated; the lower vol provides the juice. Dollar/yen is at 97.95 idling sideways. The euro idles sideways. Volume is below average today running at about 70% of a day's average expected volume so this trend of lower volume up days continues. If VIX keeps dropping below 13.60, and 13.50, and lower, the SPX will run over 1600. The VIX 50-day MA is 13.83 so pay attention to the final print today. TRIN 0.98. The 10-year yield remains stuck at 1.63%. A new all-time high is printed today at 1598.60. The all-time closing high is 1597.57 so watch this number. SPX is now printing 1597.53 only pennies away.
Note Added 3:52 PM: VIX 13.60. TRIN 1.04. SPX 1596.82.
Note Added 4:02 PM: VIX goes out at 13.59 at the lows under the 50-day MA, a big plus for market bulls. The SPX prints a new all-time closing high and new all-time intraday high today. The SPX all-time intraday high is today, 5/2/13, at 1598.60 and all-time closing high is today, 5/2/13, at 1597.59 (a new closing high by two measly pennies).
I don't see the point in even releasing the unemployment data anymore. There never been more intellectual dishonesty with the data. "Unemployment claims fall to five year low".... "only because record numbers of workers have fallen out of the work force all together". It's not exactly a pretty picture once they're honest with the data. This is a country that isn't working.
ReplyDeleteYep, the data is always sketchy. This occurs since the revisions that come later place the numbers in a more correct position, however, the market effects on the initial number are long forgotten. It is simply part and parcel to the overall fun. Trader's except it since you have to deal the hand that is given. The company earnings that continue to can workers to meet EPS while top line revenue growth falls off, is likely more telling than the economic data anyway.
DeleteBrain is short-circuiting a bit today; 'Accept' not 'except'.
DeleteUtilities yawning so far...
ReplyDeleteUTIL quite a move over two days from 538 to 529, -1.7% in two days time. The negative divergence is supplying the initial spanking but with such momo over the last few weeks, price will likely bounce sideways for the days ahead or week or three or so before rolling over. It is interesting to see utilities weaken. If utes weaken and roll over moving forward, and lead the broad markets lower, that would represent extra market negativity.
ReplyDeleteHOD is 1598.46. Really, 1600 is not out of the question.
ReplyDeleteShould we not all assume that this market is rigged, and through all the tech analysis, the bottom line is, news is generated to take the market up then down and that after this huge upswing we will not see anything more than a 300 point down day followed by to 150 point gains. 100 down a 100 up, the rig is in. The market will got to knew highs with a bear market, the way we think we know it, never really happening again.
ReplyDeletemarket has always been rigged, and always will be (too much money to be made to make it a fair game), just live with it, nothing to get heart burn from. Remember that ALL bull markets end the same: big fat crash. Just like ALL bear markets end the same: big fat up! It's just the cycle of things in life, nature, humanity. Nothing else. So regardless how high this goes, it will come crashing down. Simple laws of nature and physics. No CBer in the world that can stop that. I am starting to add shorts to my LT account, as a hedge, just in case 'cause we may -sooner or later- wake up one day and stare at a 150 point down day indeed... These are smaller positions, buying at key SPX levels. Just hedging, never hurts...
DeleteI like you and the others fellows here... so I'll share my thoughts: 2 resistence pivots in front of us: 1614.34 and 1621.02... and one interesting period: the opex week of may'13.
Deleteplay it nimble, the trend it's up, but play it nimble! it's good to have longs, hedged by SOME shorts (shorts not more than 50% of your portfolio). Forget about "sell in may and go away"! Too many traders know that, may be without value now, this year, with so much rigged tendencies - CB's , dark pools and stuff like that!
Focus on 2 periods please : 7-8 may and 1614 pivot followed by a revisit of 1644-1655 area and 18-23/25 may (1621-1647.38) followed by a series of small flash crashes and some big, fat, 2-3 crashes that might make us revisit 1460-1485 until 18 June 2013.
Those big fat ugly bankers are starving and want MORE green paper! FED's Bennie The Pumper announced that QE might be decreased or INCREASED as per the evolution of inflation and jobs market evolution! The 18-19 may 2013 FED meeting is the key!
Those sleezy banksters will pump the market in May to make all belive that , ok, the May correction was in April and now, up we go until the end of summer'13. And at some point, suddendly, they will crash the market BEFORE the 18-19 may'13 FED meeting to squeeze MORE CASH from FED.
Listen to me!
KS and others will remember this comment of mine!
Yes, There is some upside in front of us, you can play it nicely, but don't you dare to use more than 30-40 % of your total portfolio on longs (hedged by shorts, or simply hedged by neutral "cash on hold" position).
Don't view the 18-23 may 2013 perios as a fixed determined period. It might be 18-26 may, or 18-29 may..... In that period a significant top will be painted.
Starting from the end of May until mid -June 2013 we will rumble to the downside!
Please close all your shorts around 15 June 2013 (+/- 2,3 days) cause after that (1440-1474 on spx) new all time highs are coming until september/october 2013.
But I'll be around here to tell you more :) ...
The first half of year was quite and easy (it's the year of snake in chinese horoscope, remember what this signifies! and May is the month of the snake, also! so watch out your wallet!) the second half of the year will experience more unexpected sudden movements,up and also down.
V.
''Focus on 2 periods please : 7-8 may and 1614 pivot followed by a revisit of 1644-1655 area''
Deleteshould be read:
Focus on 2 periods please: 7-8 may and 1614 pivot followed by a revisit of 1544-1555 area...
Sorry for the typo ..
V.
@ Arnie:
Delete''The 18-19 may 2013 FED meeting is the key!
''
:) it's 6 in the morning here, when I write and i didn't drink my coffee :)
i wanted to say 18-19 june 2013 fed meeting :)
sorry
V.
Interesting stuff. These are special markets these days with the central banker intervention, the third man on the field.
DeleteIn my experience, to say that the market is rigged is synonymous with saying that I'm doing everything right but I'm not making money. It is, of course, possible that Bernanke or Soros or the Easter Bunny is controlling everything; but it's also possible that markets change without a star chamber's control and that indicators that used to be reliable prove to be less so. Please understand that I'm not saying that the market isn't rigged. I'm saying that I don't know but that, when things don't turn out as I had planned, I always blame myself first, second, and third.
ReplyDeleteKS, I'm all curious what number will be printed today on $nymo ... are there any chances to be a number greater than 43 (the latest top) ? ...or $ nymo topping requires more days, not just only one spiky day?
ReplyDeletealso $nysi, $ cpc, and others are to be watched...
Thanks,
V.
Sure, NYMO may print higher, but that only marks another top.
DeleteJeez, SPX, just touch 1600 and roll over already!
ReplyDeleteLarge point swings are caused by the higher volatility so when the VIX moves above 14 again, then 15, 17, 20, the intraday and day to day moves in the Dow will be far more than 100 handles. Markets keep meandering along, fueled by the central banks on the bull side, Fed, BOJ, ECB and BOE, while the economic and global economic data worsen, China's activity is trailing off, and the U.S. earnings keep losing top line revenue showing lack of growth and a structural unemployment problem that will continue for years, which should help the bears, but the easy money is trumping the fundamentals right now. As long as everyone believes in the central bankers, we keep floating higher.
ReplyDeleteThe lower volatility keeps boosting the SPX higher. VIX is now at another low for today at 13.62. SPX back above 1598. Volume remains below average.
The 10-year yield is at 1.63% all day long refusing to budge. This is interesting, obviously there is no great rotation occurring from bonds to stocks so that does not foretell long term market upside happiness. It shows that folks are playing the stock market like a casino now, with new money and Fed and BOJ easy money, simply go long, cash out, then reenter long, and keep on going and playing as long as the music is playing. Shorts are not in the market now since they figure there will be plenty of time later and with the upside momo it is best to wait. The Jobs Report may be quite a show tomorrow.
ReplyDeleteKS,
ReplyDeleteI was looking at your "picks and pans" list, and are you long PANW, or short PANW in your model portfolio?
Also, what is the attraction for being long DCTH?
thanks,
TW
Those are only potential picks. The ones in play are shown towards the top of the page as ongoing positions. So not in either PANW or DCTH right now but watching them. PANW is moving sideways and uninteresting. Boy, DCTH fell out of bed yesterday now down to 0.79 cents losing one-half its value yesterday, holy smokes. That makes you glad to not be in it but that goes with the territory in top and bottom calling and in speculative trading. These type of drastic drops makes the calmer, lower risk, Keybot the Quant model, appear much more attractive and less stressful. These are very tricky and treacherous markets for the last year.
Delete