A 3-Year Note Auction occurs at 1 PM and Consumer Credit is 3 PM but other than these non market moving events, the quiet economic data days continue. Key earnings today are DIS, KS-paper, LPX-lumber, MRO, SD and Z-real estate. The CPC put/call ratio is once again in the 0.7's indicating a market top. The SPXA150R bumps higher yesterday now at 91.20, nose-bleed heights, showing a very plump market and a great time to bring on shorts. NYMO is at 44 continuing to indicate a market top at hand. The dollar/yen moves sideways this morning at 99.20-ish; higher and markets move higher, lower dollar/yen and markets move lower. Germany's DAX joins the bull party printing a record high over 8200.
The bulls are focused on moving commodities higher since that will create further market buoyancy. The market bears need to see volatility move higher with VIX moving above 13.75, or they got nothing. For the SPX today starting at 1618, the bulls need to touch the 1620 handle and the mid 1620's should occur quickly. The bears need to push under 1614 to accelerate the downside. A move through 1615-1619 is sideways action. Traders will be watching to see if the Dow Industrials can move above 15K and close above. Gold is down 17 bucks to 1450.
Note Added 9:32 AM: The session begins. The 10-year yield is up to 1.79% encouraging market bulls. WTIC crude oil is back under 96 which is surprising since the Syria, Israel, Iran and Middle East tensions are increasing. The Dow just printed a HOD above 15K by a hair. VIX is flat at 12.70. TRIN is 0.70 setting up another happy bull day, so far. The beat goes on.
Note Added 9:42 AM: SPX prints a new all-time high again, three days in a row, the HOD is 1622.94. Once 1620 was tapped, the move to 1623 occurs quickly. Dollar/yen 99.15. VIX is flat at 12.61. TRIN 0.76. Gold down 20 to 1448.
Note Added 10:19 AM: Dollar/yen loses the 99 level now at 98.93. VIX is at the highs at 12.87 (remaining under the 13.75 bull-bear line in the sand). The 10-year yield drops from 1.79% to 1.77%. TRIN leaps higher to 1.48 now bearish above one. TRIN is all over the map today. All four parameters move to the bear side so equities should be moving lower. SPX is now at 1617 six points off the high. SPX prints a new all-time high at the HOD at 1623.74 before retreating. Note that XLI and XLB are higher (reference this morning's XLI chart for a discussion on the potential sector rotation ahead).
Note Added 2:54 PM: SPX prints a new all-time high at 1625.91. VIX is 12.79, up a smidge, but remaining under 13 and also under the all-important bull-bear line at VIX 13.75. But the SPX and VIX are both up, one of them is wrong. Dollar/yen sits at 99 on the dot. 10-year yield is 1.78% traveling flat today. TRIN is 1.03 dead neutral. For such an up day with new highs again, the VIX should be in the low 12's and TRIN should be under 0.80. The SPX 2-hour, 1-hour and 30-minute charts remain negatively diverged so the broad indexes should roll over moving forward, however, the Energizer Bunny keeps going. Keystone bot SPXU, another highly dangerous and speculative triple X inverse ETF, that shorts the S&P 500, opening a new long position.
Note Added 3:02 PM: SPX prints a new all-time high at 1626.03. Dow Industrials are over 15 K. The RUT, SPX and Dow all lead higher at +0.5-0.6%. Oddly enough, the new rotation into tech is not working today since the Nasdaq and XLK are lagging. Whoa. Look at the rotation into industrials and materials, flying higher, the XLI is up over +0.8% and XLB is up 1.0% today. Traders are climbing over each other to buy these two sectors like possessed madmen, as if they are placing the last bet before the window closes at the Kentucky Derby.
Note Added 3:09 PM: Consumer Credit data rises only about half the consensus expectation with a small increase in credit. Auto's and student loans grew the largest. Just what everyone needs, folks buying more vehicles they cannot afford that will rust out before the loan term ends, and more young folks sadly accumulating 50K of debt to work at MCD, if they find a job at all.
Note Added 3:27 PM: The beat goes on. The HOD at 1626.03 is holding, for now. SPX 1625.62. Dollar/yen 99.02. VIX 12.87. TRIN 1.09. Keystone bot more SPXU.
Note Added 8:26 PM: The SPX prints a new all-time closing high at 1625.96 and new all-time high at 1626.03. The Dow closes above 15K for the first time ever and prints a new all-time closing high at 15056.20 and all-time high at 15056.67. NYMO now at 57.22 indicating a reversal at hand. Tomorrow (Wed.) should be a very interesting session.
KS , when is this going to drop, it only going in one direction - Up ?
ReplyDeleteAre we going to see a drop soon you think?
arnie, are u adding more sds to your lt account?
ReplyDeleteMan, you're so redundant! ....
Delete:)
V.
no. not for now
DeleteThe ongoing trend is for the market to simply ignore any technical reason to go down. There comes a point ---and for me I think that point is now--- where I can no longer feel that I'm being financially responsible by being Long the market. I'm not quite motivated to go short either. There's been plenty of technical opportunities to short the market. Most of those have failed. The pull-backs that we have seen have been short-lived and nowhere near as deep as anyone expected. The market could feasibly continue to melt up from here. The breaking point that everyone is waiting for begins with the FED and I think we all agree that it's a while yet before the Fed changes policy. Yes, things can blow up in the middle east, but the market doesn't seem too worried about that scenario. I'm cash-neutral at the moment. As more investors start to feel the same way ----how can you possibly buy here--- is may result in a topping out effect.
ReplyDeleteNow we're in a 3'rd up-griding wave of the final up 5th wave of the grand cycle up 3'rd wave.
DeleteThere's no TOP here or too soon.
I have to restate here that targets for this 3'rd are 1616-1635 and if this area is reached and surpassed 1658-1679 on spx cash.
As time this 3rd wave will take more 2-3 maybe 4 weeks.
I thought those info might be helpful.
V.
when i've wrote "TOP" i meant "THE TOP", not some top... THE TOP will be registered during the next spring or so...
DeleteV.
THE TOP will reach a target of 1770-2100 (if it truncates or gets overextended)
Delete;)
V.
v., I agree. Please see my elliot wave count of the move off the Nov. '12 low here: http://soulsurferusa.wordpress.com/. I have a target of 1640 +/- 10 (click on picture to enlarge).
DeleteNote that the ~1640 area is "only" Int. Med III... then Int. Med. IV down to 1550s (heavy support). Then Int. Med V to ~1700 to finish Major 3, then Major 4 (10+% correction) followed by a Major 5 to ~1800, to finish Primary III. Then a primary IV and V to finish it all. Probaly end of Q1 into Q2 of 2014.
Thank you Arnie, you presented it more accurately than me.
DeleteI observed your target is based on a minor 1= minor 5 ratio. But wave 5 can also reserve some surprises ... can truncate or overextend.
In a BOJ/FED driven market, my bet is on overextension fibo based - 138.2% or more...or not :)...we will see.. :)
Thank you for your clear explanations.
V.
true V, 5ths often truncate. However, the EW channel is spot on. Also, the NYSE has a clear 138.2% extension target for a (minor) wave 5, which corresponds to SPX ~1638. The NYSE counts beautifully hitting all the text book FIB extensions. The SPX and DOW are messed up (QE...). So we'll see.
DeleteNote that when this is all set and done, I expect a ~50% loss of value. Regardless of the exact top' it will target the 800-1000 area...
ReplyDeleteit's a very long road until we will see a true bear market ... it's truly amazing for me, you know?
Deletei work here in Romania on a version of structured products that follow SPDR's on SPX 500 ...man! Day after day after day I see important volumes fromm retailers going into shorts day after day after day ...
To understand at one local monetary unit in longs there are 9 to 10 monetary units in shorts ..and this in a bull market!
Can you believe me that I've seen that since the start of this up wave from Nov'12?
I can't understand.... a bull market with bearish retailers :))))
V.
hall mark of a 3rd wave: being shorted or longed all the way up or down... retailers = stupid money
Deletebeing long is too expensive (sso) and since spxa150r is in the 90s and nymo close to 60, risk/reward says to go short. KS, why did you use SPXU instead of SPXS since it's cheaper? does SPXU track better?
DeleteNope one is similar to the other. Simply opening multiple positions. Other inverses are underwater except SDP is profitable. May use SPXU as more of a day trading and VST vehicle if it works out that way.
DeleteInteresting thoughts all. Everyone is bullish and resigned to markets going up from here without fear or worry. Perhaps that is correct, but right in here is a good spot to reverse. The hourly and minute charts appear ready. The secular bull ran from 1982 to 2000, and the 18-year cycle, the most reliable cycle, says this is a secular bear from 2000 to 2018. When the hyperinflation hits, likely a lot further out than everyone thinks, say 2015-2020, when it begins, that is when the trek to SPX 2000 and higher occurs, Dow 20K+, gold to 3 or 4K or higher, and so forth. However, everyone's guess is as good as the next one.
ReplyDeleteThe interesting thing with the Fed is that when we knew certain programs were expiring, like QE1, and QE2, and Operation Twist, markets became tentative and sold off forcing the next announcement of stimulus. Chairman Bernanke changed the game plan when he proclaimed QE forever citing 'infinity' to help the ECB receive a boost at the same time with the OMT announcement. Thus, there is no deadline, that is what Bernanke wanted to eliminate, hence the thinking is that markets go up forever since QE never ends. However, we all know that will not happen and it is a long over 4 year rally already, and a long time without significant 5 or 10% corrections, so it a matter of what will signal when the Fed and BOJ juice runs dry? VIX and SPX are both up today, one of these are incorrect and we likely find out tomorrow. Dow should print the 15K tonight so the newspaper headline writers will be happy.
so true KS. The count/path described is my primary count, until the market proofs it wrong. My alternate count is a top soon and then.... poofffffff...
Deleteps: take a look at CLF. Massive falling wedge in place. Good spot to go long!? Downside risk a few $$$s, upside potential 10s and 10s of $$$s...
ReplyDeleteks, is eem forming a cup and handle pattern?
ReplyDeleteNYMO and SPXA150R at more elevated levels than Sunday. Tomorrow should be a very interesting day. CLF is more tricky now, it is on the potential buy list, the cleaner positive divergence bottom was a couple weeks ago. CLF has a long and strong set up with the daily and weekly indicators but the gap below on the daily may need addressed. Perhaps an 18.2-19.20 print would be the ideal entry. It's tricky, however, since commodities may all roll over again, especially on a lower euro, higher dollar. The C&H on EEM is not apparent. Perhaps you mean the long 5-year weekly chart but the pattern over that entire chart is nothing to pay attention to. C&H's are like inverted H&S's they are best after long sell offs and identify bottoms. Using them in combination with positive divergence is a very good technique that increases liklihood for success.
ReplyDelete