The higher volatility creates the wild action in markets today. Get used to it since a VIX climbing higher will only increase this drama. This is developing into a trader's paradise since it is much easier to maneuver and enter and exit positions with the large point swings in play. The ISM shows contraction, under 50, which was a negative surprise. Utilities broke down after the bell but then were goosed for a recovery. UTIL 480.80 and 477.91 are the two key levels. UTIL is now printing 481.85 trying to hang on to help the bulls. JJC is under 41 well under the important 41.40 level. VIX is also continuing to cause bearishness above 16 well above the 13.30 level the bulls need to regain control of markets.
The SPX is teasing the 1630-1631 support today. Whoopsies, SPX just drops down through now printing a 1626 handle. Dollar/yen broke 100 now at 99.60 so the stronger yen should be creating market weakness. The 10-year yield is down to 2.10%. Much of this action is shaky and erratic where the asset relationships are trying to figure out common ground.
Note Added 10:43 AM: VIX now above 17. SPX is down to LOD at 1625.16. SPX 1626-1627 is strong support so if a bounce occurs it would be from here, if not, next R is 1618 then 1614 then 1597-1600. UTIL remains above 480.80. Keystone took profits on SPXU exiting the position and continues to hold other index inverse ETF's that remain underwater.
Note Added 10:43 AM: SPX is holding 1626-1627, for now. UTIL moving up over 483. TRIN is 0.85 on the bull side. Keystone bot SPXL, a triple X ETF on the long side for a potential countertrend move. Also, added more SSG to this ongoing long position which is a 2X inverse ETF that is short the semiconductors.
Note Added 11:15 AM: UTIL knocking on 485 so the bears got nothing unless they drive utes lower. SPX now fighting at the 1626-1627 support level again. Remember, the 1625 is the bottom rail of the upward-sloping channel on the daily chart posted this weekend so 1625-1627 is an important confluence of support. TRIN 0.69 wants to see the bulls win today. Keystone bot NAT, a long shipping play, opening a new long position.
Note Added 11:23 AM: Dollar/yen drops under 99 to 98.89, now recovering back to 99.10, a dramatic move lower today which is a stronger yen. The 10-year yield is 2.08%. So yields are moving lower in concert with equities moving lower which is the standard disinflationary and deflationary theme. Last week, stocks were lower with yields running higher. The markets are sorting out these asset relationships; dollar, yen, euro, yields, equities, commodities. Price discovery is a mess due to the multi-year central banker intervention; markets are tied in knots. Keeping things simple, watch the SPX 1625-1627 support for a decision, bounce or die. Watch UTIL 480.80 and 477.91 with UTIL now creating bulishness at 483.08.
Note Added 12:02 PM: SPX 1628.16. SPX moving through 1623-1629 since 11 AM so the move above or below this range is telling. UTIL 484.67. 10-year yield 2.09%. JJC 41.16. VIX 17.27. TRIN 0.66. Dollar/yen 99.20. Euro 1.3096. With UTIL elevated, due to the lower yields today, the SPX will likely bounce from this zone. If UTIL loses 478, then SPX sub 1600 is on the way. Copper is moving higher so the bulls are trying to stage a come back. JJC is at 41.16 near the HOD at 41.19 and approaching the bull-bear line at 41.40.
Note Added 12:57 PM: SPX 1627.45. The beat goes on. VIX 17.21. JJC 41.24, bearish but climbing higher. UTIL 484.33 remaining bull-friendly. Ditto TRIN 0.62. Dollar/yen 99.17. Nikkei futures point to another -4% move lower on tap for this evening. Keystone bot WLT, a long coal play, a speculative trade, opening a new long position. WLT is setting up with positive divergence as is the coal sector in general reflected by KOL daily and weekly charts but they are knife-catches and may require further basing.
Note Added 2:23 PM: SPX 1630.80 sitting on the important 1630-1631 S/R where the 200 EMA on the 60-minute chart is 1630.11, a critical bull-bear line in the sand. UTIL is 484 above the critical 481 and 478 levels so the bears cannot develop any downside oomph today. TRIN 0.64. Keystone took profits exiting the SPXL trade using it as a day trade today. Also bot more WLT and NAT.
Note Added 2:34 PM: Markets meandering sideways. Keystone bot SPXL reentering this triple long X opening a new long position. TICK printing some lows at -600 to -700 over last few minutes.
Note Added 2:46 PM: Follow the TICK. The low TICK's identified the bottom at 2:30 PM, now a +900 TICK occurs 3 minutes ago to identify a top in the minute time frame. TICK now back down to -600. TRIN remains bull-friendly at 0.62.
Note Added 2:49 PM: TICK -800 and lower which may create another bottom in the minute time frame; see if the broad indexes float up a bit over the coming minutes.
Note Added 3:04 PM: The TICK machine is going to blow a gasket, wild moves up and down. Keystone took profits on SPXL again using it as another day trade, exiting the trade on the +800 TICK.
Note Added 3:48 PM: Markets floating higher into the close. JJC 41.30. UTIL 483.28. TICK just jumped above +1000 so Keystone bot SPXU, the triple X inverse ETF shorting the S&P, opening a new long trade.
Note Added 3:57 PM: Markets are pumped into the closing bell with the +1000 TICK's. UTIL has a 482 handle nearing the 480.80 that would give the bears the nod. JJC 41.28 nearing the 41.38 line that will give the nod to the bulls. TRIN 0.59 firmly bullish all day long.
Note Added 4:00 PM: SPX jumps to 1640.42 closing at the highs. This joyousness may temper the negativity in Japan slated for this evening. Copper and utilities will tell the tale tomorrow.
As a simple trading rule, price tends to touch the Bollinger bands which suggests SPX 1614 is on tap. OTOH the refusal of UTIL to die here suggests a bounce from the 1622 level V. mentioned last week might occur. Tricky price action to be sure. Best not to bet the farm on any position here...
ReplyDelete1614-1622 is the bottom of this 4 wave (A-B-C now with an internal ending diagonale).
ReplyDeleteif short, get the f* out cause 5th is coming 1690-1720 target.
Than we get a big 4th down (1536-1543)
V.
1620-1624 is a buy although it might shortly spike down 3-5 minutes to 1614 and that up we go!
Delete1624-1614 might be the "e" segment of the ending diagonale formed in the 5th wave of "c" from a-b-c (the 4th wave).
all shorts are advised to take their money!
V.
not seeing any reason to go long until SPX breaks above 1660. The market is now where I'd like to buy break outs not dips... Most likely Int. Med. III is in and Int. Med IV is on the way; price target of 1550-1600. (Hard to get it more accurate at this time); but may go as log as 1530s... After 5 months of up, up, up; it's time for a good bull shake out and scare most of 'em out of their positions IMHO. 1620s or 1600 won't do that. 1550 +/- 15 will...
Delete@ Arnie:
DeleteYes, probably you're right.
I'm long 30% of portfolio at 1623 spx and tomorrow i'll add some more.
The correction from 1687 shows me on the chart an A, a B, and a C that now is in terminal phase (5 internal small waves a-b-c-d-e => ending diagonale).
I know what Caldaro's saying and others but it's what I'm seeing. I see an ending pattern.
V.
@ Arnie:
Deletethere's one more possibility according to your view.
that A-B-C for only one single wave A, next it's a B wave up to 1675-1687, and then a C wave down to 1540 +/- 7 points.
That could work also.
But here we have a bottom.
V.
UTIL is the key, it looked good for bears after the bell but the lower Treasury yields keeps the utes buoyant and wanting to recover. UTIL is at 483.86 so bears got nothing unless 481 at a minimum fails. If utes do not fail SPX will likely bounce from here, SPX 1624-1627. If UTIL 477.91 fails, then we are headed to sub 1600 probably within a day or so.
ReplyDeleteThe European and Asian markets are in red or correcting.
ReplyDeleteUS ISM shows contraction. Market is weak...
How can US market still able to stay in green or bounce to 1700s with VIX above 17 plus weak Copper?
I am confused...can somebody explain?
Thank you.
call it the wonders of 4th waves :)
Delete2 weeks ago it was a moment when VIX and SPX rose both during the same day. :)
my bottom call for 1614-1622 was made strictly on TA (technical analysis) reasons and it's for a determined section, until 1675-1687, or 1690-1720.
Anyway nobody is crazu to stay long until the final points of the up move ... at 1680-1690 I'll be out, don't care if it goes up farther. I'll use the extra possible points for getting cheaper shorts.
V.
"nobody is crazY (!)" :)
Deletesorry typo... I write very fast :)
V.
KS, you seem to agree with V. that a bounce here is possible and perhaps likely, since you bought SPXL. The VIX pop way above the Bollingers and the CPC and NYMO readings also strongly suggest we get a pop, deserved or not...
ReplyDelete:D
DeleteMore like I agree with KS considering the hours of posting the messages. :) 10.43 am versus 11.56 am :).
V.
good point! I was kinda referring to your call for a bounce from 1622 last week, which is looking very good right now with SPX green at 1632.
DeleteJust using UTIL 481 and JJC 41.40 as guides. The bears cannot gain any oomph lower since they cannot move down through UTIL 481. Meanwhile, the bulls are sneaking copper higher, JJC is 41.28. Everything is about time frames. Overall, on a weekly and monthly basis forward, markets should continue to roll over, so an up move can be tolerated if willing to hold the short side for a while. Remember, the BPSPX and SPXA150R over 90, all that stuff indicates that we have made or are making a significant top. The trades today should all be viewed as quickie short term trades. SPXL is played to also bring on some long exposure since the portfolio is so heavily weighted on the short side currently. The broad indexes up or down does not matter as much as UTIL 481 where bears win, or JJC 41.38 where bulls win. JJC is 41.30 now.
Deletenice play KS, well-balanced portfolio. Most of my longs were sold using trailing stops last Friday. I have a few remaining; but am now around 1/3 long, 1/3 short and 1/3 cash. I will likely short the next bounce making it ~ 2/6 long, 3/6 short and 1/6 cash. If the bounce turns into something more bullish. It will become ~3/6 long, 1/6 short and 2/6 cash.
DeleteWatch the TICK to time shorter term trades, enter long or cover a short on a -1000 TICK, if you can get it, and enter the short side or sell out of longs at the +1000 TICK.
DeleteKS, do you consider this is a dead cat bounce just for today? thx!
ReplyDeleteWe'll let the smoke clear a while and figure it out. If JJC moves above 41.38 the bulls will have several days of upside juice. If you see copper weaken from here and head lower again that should take the broad indexes lower. UTIL is dropping into the close with a 482 handle, bears have to push this lower and they will be easily moving south.
DeleteKS, I thought you're opening a long position for spxl until spx reaches 1675-ish, what make you exit the trade or change your mind? Thanks!
ReplyDeleteDid two round trips on SPXL, the long side, just doing some day trading using S/R, divergences and TICK. Watch copper and utilities to indicate market direction, bulls need JJC 41.38 and higher and bears need UTIL 481 and lower. One side will probagly win tomorrow.
DeleteWhat spx level is keybot monitoring to flip long?
ReplyDeleteIf JJC moves above 41.38 and if the SPX moves above 1641 and higher Keybot will likely flip to the long side tomorrow.
DeleteIt will be interesting this evening to see if Japan takes the U.S. late-day rally and runs higher forgetting all their cares and woes, or, if Japan ignores the U.S. rally and continues lower, which, may then cascade to Europe and then the U.S. setting a sour tone for markets tomorrow instead.
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ReplyDelete