The bulls are running strong today with the SPX crossing up over 1600 and the Dow Industrials up over 15K to new all-time highs. The SPX HOD is 1618.46 and the Dow HOD is 15009.59 so watch these numbers closely today. VIX is at 12.87. TRIN is 0.74 off the uber low 0.53. Oddly, the TICK did not surpass +725 today; for this type of upside orgy you should expect to see +1000 print if not +1200. The utilities, UTIL, are actually down today. Tech and small caps are outperforming to the upside. Traders are moving from the utility sector bubble back into the tech sector. The XLI, industrials sector, is up over 2% today with traders also rotating into these stocks expecting a strong economic recovery despite all the weak manufacturing data.
The broad indexes pivoted upwards on the 10 AM data. The 10-year is at 1.73% a big move from the 1.63% this morning showing that traders are favoring the risk-on trade and moving out of bonds. The SPX 1600 must have ignited animal spirits; it ignited the trading robots and caused many short-sellers to throw in the towel. The SPX is now printing 1615.96 and the Dow is at 14984.59. Stronger commodities will help the bulls maintain an elevated stock market. JJC (copper) is up 6.5% but this is off the very low numbers after the couple month sell off. FCX, still used as a copper proxy although it is more diversified now, is up 3.6%. SCCO is up 5%.
Note Added 12:30 PM: Dollar/yen 99.15 about one point higher from one day ago. The push to 100 may be occurring again. Up dollar/yen means weaker yen due to BOJ easing and higher equities. The euro is 1.3110 up and over 1.31, up euro is up markets. The following asset relationships are falling back in sync. Weaker yen (BOJ easing) = higher dollar/yen = higher euro/dollar = lower USD dollar basket (Fed easing) = higher commodities = higher oil = higher equities = weaker bonds (higher yields). Stronger yen (less BOJ easing) = lower dollar/yen = lower euro/dollar = higher USD dollar basket (less Fed easing) = lower commodities = lower oil = lower equities = stronger bonds (lower yields). Risk-on is higher equities and lower bonds (higher yields) while risk-off is lower equities and higher bonds (lower yields). The interesting thing about the jobs report is that 165K jobs does not even keep up with the jobs needed to handle the new entrees into the workforce (about 150K to 180K jobs). Crude oil is now 95.72 on its way to 96. VIX is 12.88.
Note Added 1:59 PM: The broad indexes jumped this morning and stuck, moving through 1515-1518, a tight range today. SPX is leaking down to look at the 1615 support. Despite the strong up day, the 2-hour, 1-hour and 30-minute charts are all agreeable to the SPX rolling over again. TRIN is 0.84 coming up off the bottom but remaining firmly bullish. Volume is below average running at about three-quarters of a day's average expected volume although there should be a big push into the closing bell today. VIX is stone-cold flat at 12.87 reflecting the flat sideways range of the SPX. The 10-year yield is up to 1.75%. The dollar/yen is 99.13, flat since a couple hours ago, reflecting flat equities. Crude oil also moving flat at 95.78. Gold is flat today at 1464. The Dow 15K level will likely generate drama into the closing bell; the newspaper headline writer's are cheerleading the push higher since 15K is a lot more exciting than a new all-time high at 14990. Note that the SPX HOD at 1618.46 and Dow HOD at 15009.59, the new all-time highs, from this morning, are holding as resistance, so far.
Note Added 2:29 PM: The SPX support and resistance in this new uncharted territory is interesting. The robots must be trading in 50 cent and one dollar increments. The initial jump this morning on the SPX is to 1612, then S/R moving higher is 1613, 1614, 1615, 1616, 1616.50, 1617, 1617.50, 1618 and 1618.50-ish (the all-time high is 1618.46). Price tested 1615 support one-half hour ago and it held, so far. VIX 12.84. TRIN 0.84.
Note Added 3:24 PM: SPX 1613.05 testing the 1613 support now. VIX 12.96 remaining under 13 helping the bulls. TRIN is 0.84 remaining bullish today. The Dow is 14968.50 needing 32 points to receive the happy 15K weekend newspaper headline.
Note Added 3:41 PM: SPX 1614.94 at the 1615 level. Dow is 14980 on the dot needing 20 more to approve the fireworks display for this evening. VIX 12.86 leaking lower pushing equities higher. TRIN is lower at 0.78 providing a push of bull fuel.
Note Added 3:45 PM: Dow 14990 ten points away.
Note Added 3:57 PM: Dow 14977 slipping.
Note Added 4:00 PM: The juice was not there for Dow 15K; the bulls will have to wait until next week and the headline writer's scratch their heads with dull pencils wondering how they can make 14974 sound exciting. The new all-time highs from this morning held all day long. SPX new all-time high at 1618.46 and new all-time closing high at 1614.42. The numbers are continuing to settle out.
This little rally in the S&P sure is interesting, but the fastest two minutes in sports is tomorrow. And what I'm really wondering is do I go with a long shot Black Onyx or do I stick the favorites? It's supposed to rain, which actually makes it wide open.
ReplyDeleteI'm no horse racing stud, but I generally don't bet on horses that have been scratched.
ReplyDeleteBK
arnie, are you adding SDS today?
ReplyDeleteyes, I am adding SDS to my LT positions; small batches though since I am 90+% long net. This is hedging. My preferred count sees this going to 1750+, my alternate count says it may be over any time...
Deleteguys,
ReplyDeletedon't want to be a party-terminator here but I've looked on the ES charts (futures spx 500) and applying the boillinger bands what have I observed?
- Market is at: 1611.45 (on ES + 5 pt = spx 500 cash)
1 month = upper boillinger band: 1615.96
1 week = up.BB: 1633.92
1 day= up.BB: 1609.19 (!) - so we've breached the upper BB and we know what that means for the next days...
5 hours = 1608.49 (!) - so we've breached the upper BB and we know what that means for Monday/Tuesday...
1 hour = 1616.57
So, boys and gals :D, it would be my pleasure to continue to see the next week a parabolic up movement "a la 1987" ... I always like parabolic markets :) ...they're so ... optimistic :D!
V.
That is a good summary V, the daily is key, weekly and monthly not as much. Perhaps one more day over, than a throw back to the downside.
ReplyDeleteThe bulls are running today, it should be an interesting close. The low VIX at 12.84 will keep the broad indexes elevated. Dow 15K will create excitement, do you think the newspaper headlines will write 15K this weekend, or not? The next hour or so will decide.
Good points, V. I just want to add that stocks/indices can ride BBs for a long time. That is, they can go up the upper BB or down the lower BB rather than reversing subsequent to a piercing (ouch!).
ReplyDelete''I just want to add that stocks/indices can ride BBs for a long time''
DeleteYes, you're right, the waves can ride BB quite some time, but there are also some other technical indicators.
MACD is trying (!) to point to higher highs the next 1-3 days.
RSI is pure crime = 1h and 5 h overbought. also 1 week and especially (!!!) 1 month. on the monthly RSI chart it's 74.12 - it can ride higher but the upside is clearly limited (to 1620 - 1628 - 1650 at the maximum).
$nymo -1 day- had in the morning a sell signal but now I guess it has been erased - anyway it's deep in the overbought zone, so upside it's limited also here.
$Stochastics -1day- are in overbought zone since morning and today's agressive move get it stronger in the overbought zone.
$cpce (cboe options equity put/call) in the morning registered a RECORD (!) level of longs versus shorts (0.55 ratio)... next week guess where will be the maximum pain ? :D?
VIX is verifying the floor established since April and I might guess that during May the level estimated by me (9.5-10.5) might be reached on VIX to create a minimum risk point for buying VIX.
Oh, I've almost forgot! :D
The Keltner band on 1 day chart!!! The upper K band it's at 1609.28 on spx cash, not on ES. If the cash market closes today above 1609.28 any further development will be less and less sustainable.
From the Elliot wave point of vies we now are in wave 5 of the bigger int. 3 wave (so the calling of "Big Tops" are funny at the moment).
This wave 5 of intermediate 3 of cycle wave 3 will top somewhere between 1618 and 1628.
At the end of MAy/ first half of june interm. 4 will reach 1552 or 1523 and than finally int. 5 will reach 1638-1647.50. And that should end Cycle wave 3. (so the TOP isn't here). We have to experience further Cycle wave 4 (a down cycle)and 5 (final up cycle). Final target of 5th wave cycle is located between 1770 and 2100 and as time (Gann theory based) between december 2013 and march 2014.
So The Top might be reached in q4'13 or q1/14.
Of course , if market wants.... can easily pass over every theory (Elliot's, Gann's or whatever and just start to drop happily right from here ... :D ... but the chances are thin).
Corrections will be along the way. Cycle wave 4 , for example has a target of 1210-1266 on spx.
There's a long way to go for this market ...
V.
I know it sound crazy like hell.
V, spot on that's what I think will be the case.
DeleteThank you Arnie.
DeleteI wanted to clear things up on how I view technically based the medium and long term view after one perplexed and lost Anon left a message at a previous article.(Hey, Anon, all I wanted to say is that end of May and start of June will shock a little those mighty bulls out-there !...)
Hope I helped him clear the long term view...
Numeric targets can experience slight variations (+/- 1 or 2%) but this is my main road-map for medium-long term.
I still consider that the May-June'13 period will see the end of interm.3 wave of cycle 3 wave and the start of interm.4 of cycle 3 wave with a rough target of 100 points (+/- 15 points) from aprox. 1618-1628 to 1552 or 1523 or even maybe (!) 1499. - all spx 500 cash numbers , not ES - the futures of spx.
This (and the inflation numbers) will drive really crazy all those decidents from the FED obsessed by "stock capitalization indicator" and monthly QE might (will?..) be enlarged from 85 bln/month to 100-115-130 bln/month = thus kick-starting the summer'13 intermediate 5 up-wave of cycle wave 3- a real toxic wave for the most resistent perma-bears left alive.
The date of interm. 5 of cycle wave 3 starting : 19-20 June'13 (remember also the Bradley turn for 22 June'13!!!) after the FED meeting from 18-19 June'13. It's target might be located at 1638-1647.5- if overstreched: 1670 (+/- 10 pts).
After that, 4th cycle down-wave will start (end of sept'13/oct'13- target: 1210-1266 - the latter more probable than the first).
The end of the 2013 year will be a little more positive under the positive sign of final 5th up-wave cycle, and that will be the one that wil mark the TOP. Might be tricky cause it might truncate or it might overextend (that's why my 5th cycle wave targets are so large 1770 - 2100)....really, really tricky!
V.
Dow is 14980, the headline writers need twenty more points.
ReplyDeleteFor what it's worth, you guys (Arnie, V, and our amazing master of ceremonies, the delightful KS) are awesome. Have yourselves a great weekend.
ReplyDeleteBK
BTW V, I think you may be right about May. Next Friday, 5/10/13 is both New Moon and the starting of a Snake month.
ReplyDeleteI read about the past Snake years that there definitely always something biggg. We'll see what Snake year will bring to the world this year. Must get ready!
Thanks A, all I can see is that all the conditions start gathering on the same page so to speak...
DeleteWe have an extended move since 15 November'12, we have the technicals in place (overbought, small or lack of participation, heavy divergences, and so on), we have the bears completely destroyed now (or almost), we have complacency, we have almost all conditions for a true whiping event in May or June 2013 (the 18 May - 19 June period)!
That's why I'm saying that now in May we will see a true strong up movement (as gains, not so much as participation) until a certain point when something will happen!
That's no reason for loading shorts - it would be completely unwise to do that! You will only "feed" the uptrend by loading shorts!!!
As much as you and I and others can we will have to ride the up-wave but with a strong risk-reward management in terms of exposure and always, ALWAYS with a cash reserve up to 50% prepared for difficult moments.
I don't have instruments to determine when it will happen but it will happen!
May will be a joyfull bullish ride month, yes it will be! But watch out cause something's brewing!
There's no reason not to participate in it, but remember to control the greed, always control fear and greed and always every dollar in the market should be backed by another dollar in your pocket! I know that's a strong rule, an old-man's rule (although I'm only 31 years old :D) but in terms of risk-reward ratio in the current conditions of May-June 2013 markets it will be useful!
The bulls have prepared a month of joy in May, but be ready for the bill after the party, in the second part of May or in June!
Take care,
V.
a very interesting analysis of FX, stock index markets , gold, USoil ...
ReplyDeletehttp://www.dailyfx.com/forex/video/daily_news_report/2013/05/04/Forex_USDJPY_Can_Break_100_in_SP_500_Wake_but_EURUSD_Will_Struggle.html
I like this guy cause he is a very good technician, a true senior trader that has to be listened.
It's 30 minutes long but the time spent really pays off.
also interesting correlations between FX market, commodities and SPX 500.
Cheers and have a fine week-end!!!
V.
The rupee was at 60.64/67 in early trades as against Thursday’s close Of 60.43/44. Agri Tips
ReplyDelete