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Thursday, August 22, 2013

Keystone's Midday Market Action 8/22/13

The bulls are staging a come back today. SPX is 1652. Watch the 8/34 MA cross on the SPX 30-minute chart, now signaling bearish markets for the hours ahead with the 8 under the 34, however, the bulls are attempting to push the 8 MA above the 34 MA.  VIX is 14.96 remaining above the 200-day MA at 14.65 favoring bears. These two key market metrics indicate if the bulls are beginning a relief rally move higher for equities, or not.

 XLF is 20.01. RTH is 53.55. UTIL 476.79. All three parameters continue to create market negativity under their bull-bear levels of 20.12, 53.97 and 483.16, respectively. The XLF is the nearest its bull-bear line so use the financials, along with the 8/34 cross and VIX 200-day to determine if the relief rally is real. Bulls will receive lots of upside juice if XLF exceeds 20.12 today, however, bears will create market weakness if the bulls run out of gas falling short of XLF 20.12. The SPX 50-day MA is 1658.80 so price may have its eyes on testing this resistance.

 Note Added 1:59 PM:  The Nasdaq remains halted since 12:20 PM. AAPL falls through the 500 level minutes before the halt. Trading is shut down for one hour and forty minutes. The Nasdaq is likely having trouble identifying the problem since they are worried that it will happen again if the exchange is reopened. Confidence in the markets takes another hit. 111 Nasdaq issues are in the SPX, about 22% of the S&P 500. UTIL, RTH, XLF and VIX all remain bearish creating market negativity, however, the 8 MA pushed up through the 34 MA on the 30-minute chart signaling bullish markets for the hours ahead. SPX is 1655.32. HOD is 1656.69. LOD is 1645.03.  The 50-day MA is 1658.84. The VIX is 14.83 remaining above the 200-day MA at 14.65. TRIN 1.00 is unable to choose a side. The 10-year yield is 2.91%. The restart to the Nasdaq may be quite dramatic as markets sort out trades in limbo and also seek price discovery in thin markets.

 Note Added 2:20 PM:  The Nasdaq is now halted for 2 hours. SPX 1654.40.  Dow 14955. UTIL 479. RTH 53.45. XLF 19.99. VIX 14.88. TRIN 1.08. NYSE volume is very light at a run rate of only about 60% of a day's average expected volume.

 Note Added 2:22 PM:  Nasdaq is to resume trading at 2:30 PM with a 15-minute quote period. Full trading should be in place by 2:45 PM.

 Note Added 2:34 PM:  Nasdaq intends to reopen 'limited' trading at 2:45 PM. Obviously, they need to test the computer system at 2:45 PM with a few stocks first, before they open the whole way.

 Note Added 2:49 PM:  Nasdaq intends to reopen the system for quotes at 3:10 PM and then full trading should resume at 3:25 PM. Mass confusion. The clock is ticking.........

 Note Added 2:56 PM:  AAME is going to be the first stock trading when the Nasdaq reopens in a few minutes, Atlantic American, so keep an eye on that one.

 Note Added 3:07 PM:  AAME is showing a bid at 3.83 and ask at 3.88, and the numbers are fluctuating, now 3.85 and 3.88, but charts are not updating........

 Note Added 3:19 PM:  The mess continues. Some charts are starting to update, such as AAME, but they are on a delay. There is only forty minutes of trading remaining in the session. The situation is dicey and getting worse since Nasdaq does not want to provide any updates. Trading is supposed to be on line in a few minutes......... good luck .....

 Note Added 3:32 PM:  Nasdaq trading resumes at 3:25 PM. AAPL has a bid at 501 and ask at 499. Strange. QQQ is a bid at 76.06 and ask at 76.07. AME is a bid at 3.79 and ask at 3.85. There is AAPL in line now with a bid at 500.67 and ask at 501.06. Today's debacle is now dubbed the "Flash Freeze."

 Note Added 3:49 PM:  SPX 1658.04 taking out yesterday's high. The 50-day MA is 1658.57.  XLF 20.03.  VIX 14.73 (pennies from the VIX 200-day MA at 14.65 that the bulls need for a market upside signal). TRIN 0.94.
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45 comments:

  1. AnonymousAugust 22, 2013 at 10:39 AM

    100 DMA is still waiting.
    Today or after 1 week?

    Anyway it will be cut in half! Buying here exposes the market player at the risks of a rising wave in a declining market!

    V.

    ReplyDelete
    Replies
    1. AnonymousAugust 22, 2013 at 10:42 AM

      This bulls are real crazy persons!
      On monthly they go against the R level of channel of the whole rally from 2009 and against the monthly BB and still there are persons now that have the heart to buy here .....IN THE FACE OF QE TAPERING IN ABOUT 2-3 WEEKS !

      God! :)
      :)

      V.

      Delete
    2. AnonymousAugust 22, 2013 at 10:44 AM

      V,

      There have to be persons that buy at the peaks! Why destroying the party? Let the people take some overvalued and overbought shares!

      Frankie

      Delete
    3. scottAugust 22, 2013 at 11:27 AM

      V - trade the charts and price not the story in your head...

      Delete
  2. scottAugust 22, 2013 at 10:47 AM

    1680 or bust!

    the DCL here is going to be too strong I think, especially given the oversold quality of the osc's and the trin...

    ReplyDelete
    Replies
    1. AnonymousAugust 22, 2013 at 10:58 AM

      Just curious.... if "bust" .. to what level?
      100 DMA, lower or higher?
      or maybe some pivot?

      V.

      Delete
    2. scottAugust 22, 2013 at 11:17 AM

      bullish confirmations were on 5/21 and then again on 7/11

      prices were 1675 and 1677 respectively

      I've been posting a number a charts for a couple of weeks now that will keep you in the good fight here...

      go back to those posts and save the charts you can work with - here are 3 I use every day

      http://stockcharts.com/h-sc/ui?s=SDS&p=120&yr=0&mn=4&dy=0&id=p89888527581&a=310132103&listNum=4

      macd confirms secondary bearish trend (which is what we just had) within a bullish uptrend:
      http://stockcharts.com/h-sc/ui?s=$SUPHLP&p=D&yr=0&mn=11&dy=0&id=p59532092098&a=310789872&listNum=4

      this is a bottom guide - main chart I used to determine that we were at a bottom here
      http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p23760020198&listNum=4&a=312666360

      cpc still hasnt confirmed nor the nasi but it should be clear that the cycle was WAY oversold and itching to recover...

      Delete
    3. scottAugust 22, 2013 at 11:25 AM

      PS - if the 50 ma isnt breached then price could fall back to 1631 before bouncing but bounce it will

      Delete
  3. AnonymousAugust 22, 2013 at 11:15 AM

    http://www.nasa.gov/content/goddard/20130820-nasa-spacecraft-capture-earth-directed-coronal-mass-ejection/

    today and tomorrow strong magnetic storm spiked from the sun.
    watch for electronic and telecommunication problems and also watch for stocks crashes potential problems (70-80% of the trading is made by speclialized software, so....you understand what I mean!)

    V.

    ReplyDelete
    Replies
    1. AnonymousAugust 22, 2013 at 12:53 PM

      http://www.marketwatch.com/story/trading-of-nasdaq-listed-stocks-options-halted-2013-08-22?link=MW_home_latest_news

      ... got a crashy-crashy feeling?
      some...magnetic feeling? :D?
      We are already blasted by the magnetic storm, starting today - the peak will be tomorrow!

      Keeeeep buying , you'll have fun in case of a crash!

      V.

      Delete
    2. AnonymousAugust 22, 2013 at 12:55 PM

      Oh, but why stop now?
      Buy with your both hands!!!!! :D!

      V.

      Delete
  4. scottAugust 22, 2013 at 11:47 AM

    http://stockcharts.com/h-sc/ui?s=$SOX&p=D&yr=0&mn=10&dy=0&id=p37941865607&a=309132841&listNum=4

    sox is still in a bullish pattern

    ReplyDelete
  5. scottAugust 22, 2013 at 12:27 PM

    V - I didnt respond to your "bust" comment as I dont think we bust here - BUT a revisit to the june lows is still on the table as long as the 50ma and the 60 min gap put up a fight - I wouldnt bet the farm on the bears here.

    http://stockcharts.com/h-sc/ui?s=$SOX&p=D&yr=0&mn=10&dy=0&id=p37941865607&a=309132841&listNum=4

    new highs are a comin in sept before the fall.

    ReplyDelete
  6. AnonymousAugust 22, 2013 at 12:42 PM

    V, are you still long and waiting for 1680 pivot range?

    ReplyDelete
    Replies
    1. AnonymousAugust 22, 2013 at 12:50 PM

      No, I'm in a straddle option from 1642.50 on spx.

      V.

      Delete
    2. AnonymousAugust 22, 2013 at 1:01 PM

      +/- 50 points head and bottom of the option

      V.

      Delete
    3. AnonymousAugust 22, 2013 at 1:32 PM

      Are you using SPY put/call option @ 164?
      Thx!

      Delete
    4. AnonymousAugust 22, 2013 at 2:24 PM

      yes, from that area

      V.

      Delete
  7. UnknownAugust 22, 2013 at 1:07 PM

    Hey Scot,

    Love your charts but I see money being sucked out of the SOX. seems like there are technical issues on the Nasdaq so maybe I am wrong but FWIW the fundamentals do not support a new high.

    Lauging as I type......

    ReplyDelete
    Replies
    1. scottAugust 22, 2013 at 1:17 PM

      All I am saying is that until SOX breaks that support zone it is more likely that you are getting a "partial decline" within the broadening formation - that is bullish.

      http://lh6.ggpht.com/_APmrYvpA45s/SxXMcvOW7pI/AAAAAAAAFmw/ZgpfE64zUVE/BroadeningTopSample_thumb.png?imgmax=800

      How are you measuring money flow on the SOX?

      Are you familiar with the idea of cash build up that then looks for a better entry point?

      Delete
    2. scottAugust 22, 2013 at 1:30 PM

      http://stockcharts.com/h-sc/ui?s=$NYUD&p=D&yr=1&mn=0&dy=0&id=p69898155331&listNum=4&a=312380641

      this chart illustrates what cash build up is all about - as long as the rising bottoms pattern in the OsC holds, then the "cash build up" phase is over on the correction and you would expect strength up into the highlighted cycle...

      Delete
    3. scottAugust 22, 2013 at 1:57 PM

      Billy - how are you measuring volume on the SOX?

      from what I can see there was profit taking in June but no exodus since

      here is an example of using a custom Volume OsC
      to determine the cycles

      http://stockcharts.com/h-sc/ui?s=$NAAD&p=D&yr=1&mn=0&dy=0&id=p07687691077&a=313444570&listNum=6

      Delete
  8. UnknownAugust 22, 2013 at 1:27 PM

    Hi Scott,

    Broadening top is one of the more reliable patterns and I do understand the retracement.

    I am a fan of Tom.

    However the volume does not look a it should for a successful pattern outcome.

    http://www.thepatternsite.com/volshapes.html#USV

    ReplyDelete
  9. AnonymousAugust 22, 2013 at 1:31 PM

    http://www.testosteronepit.com/home/2013/8/21/leaked-german-government-warns-key-entities-not-to-use-windo.html

    don't use Windows 8 and generally Microsoft products.
    You are exposed to direct surveillance!
    Read the article!

    p.s. Maybe GS guy will open a huge MSFT short when Nasdaq reopens ? :)?
    V.

    ReplyDelete
    Replies
    1. AnonymousAugust 22, 2013 at 1:53 PM

      GS has gone really quiet since his insane calls...!

      Delete
    2. AnonymousAugust 22, 2013 at 2:05 PM

      Actually he was right to exit before the low at 1635 during asian market.
      maybe he know more than all here - if he's not around here that doesn't signify he's not in the market :).

      V.

      Delete
    3. scottAugust 22, 2013 at 2:07 PM

      contrary indicator...lol

      Delete
    4. AnonymousAugust 22, 2013 at 2:23 PM

      we don't know his position now.
      V.

      Delete
    5. UnknownAugust 22, 2013 at 2:29 PM

      I'm in some hidden orders at various levels, nothing important... when they will be executed you'll notice some minimum 2-3% swings in the market, don't worry :)

      GS guy

      Delete
    6. AnonymousAugust 22, 2013 at 2:40 PM

      as if by magic...! lol

      Delete
  10. scottAugust 22, 2013 at 2:10 PM

    Billy - I think the volume patterns and the AD data on the Nasdaq are more bullish when you consider the advance of the index in spite of the major decline of apple

    ReplyDelete
  11. Keystone SpeculatorAugust 22, 2013 at 2:13 PM

    The 8 MA moves above the 34 MA on the SPX 30-minute chart so this is a feather in the bull's relief rally cap. Watch the VIX closely, now at 14.83 only pennies above the 200-day MA at 14.65. Bulls need sub 14.65 on the VIX, otherwise, they got nothing, if so, the relief rally will kick into gear. The Nasdaq halt is interesting, now less than 2 hours remaining in the day. If it does not open by 4 PM, that will be very bad for markets.

    ReplyDelete
  12. Keystone SpeculatorAugust 22, 2013 at 2:15 PM

    The UTIL, RTH, XLF and VIX parameters all remain bearish, with levels identified by Keybot, so for a relief rally to occur, the bulls need at least one of these to turn bullish. Watch UTIL 483-ish and XLF 20.12 as go signals for a bull rally. If the bulls cannot obtain either, or push the VIX under 14.25, they got nothing. If 1 of the 4 turn bullish, that will tell you the relief rally has some legs.

    ReplyDelete
  13. Keystone SpeculatorAugust 22, 2013 at 2:28 PM

    Nasdaq to resume trading 2:30 PM with a 15 minute quote period and should be fully functional by 2:45 PM. It should be interesting.

    ReplyDelete
  14. scottAugust 22, 2013 at 2:32 PM

    http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=1&mn=11&dy=0&id=p59337458544&a=304881690&listNum=4

    close to confirming the bottom?

    http://stockcharts.com/h-sc/ui?s=$VIX&p=D&yr=0&mn=10&dy=0&id=p84156383280&a=303385635&listNum=4

    ReplyDelete
    Replies
    1. Keystone SpeculatorAugust 22, 2013 at 2:49 PM

      As a rule of thumb, the VIX is very good at calling market bottoms (with uber high VIX numbers) and the CPC and CPCE are good at calling market tops (with uber low numbers). VIX low numbers will also call a market top and CPC and CPCE high numbers will call a market bottom but the first two mentioned carry a bit more clout. An attractive long-term bottom for stocks will likely not occur until the VIX spikes into the 20's, 30's and higher, this may occur in days ahead, or weeks ahead, or months ahead.

      On second chart, the bands are more tricky for VIX, just as gaps are and other TA rules. Volatility is, well, volatile, it is an animal unto itself. The upper band violation may identify a near term market bottom right now, or, like May-June continue to shimmy higher following the upper band higher. It all looks like a crap shoot right now.

      Delete
    2. AnonymousAugust 22, 2013 at 2:53 PM

      Scott,

      On your link directly above, there is a text bar that says you need 3 things for a Vix buy signal.

      The text box is chopped off. Do you know what it says?

      thanks,

      TW

      Delete
    3. scottAugust 22, 2013 at 2:57 PM

      I cant remember...LOL! just joking - you can see it by increasing the length of the chart in the date window below

      I here's the text

      For a Vix confirmed signal you need 3 things:

      1. A close outside of the 2.0 Bollinger Band.

      2. A close back within the 2.0 Bollinger Band. This creates the signal.

      3. A higher close (sell) or a lower close (buy) than the close of the day back inside the Bollinger Band. This serves to confirm the signal.

      Delete
    4. AnonymousAugust 22, 2013 at 3:20 PM

      thanks, Scott!

      Delete
  15. AnonymousAugust 22, 2013 at 2:52 PM

    Now 3:10-3:25 EDT restart.

    ReplyDelete
  16. Keystone SpeculatorAugust 22, 2013 at 3:11 PM

    AAME bid and ask numbers are moving so Nasdaq is testing the system.......

    ReplyDelete
  17. AnonymousAugust 22, 2013 at 4:08 PM

    closed shorts at the close.

    BB

    ReplyDelete
  18. AnonymousAugust 22, 2013 at 4:52 PM

    small position long - from close

    BB

    ReplyDelete
  19. Keystone SpeculatorAugust 23, 2013 at 7:05 AM

    UTIL 483.16, XLF 20.12 and VIX 14.23 are key, all three are bearish and surprisingly not one flipped bullish despite the rally in the afternoon. That is surprising. So the answer to market direction is the bulls will gather upside strength if 1 or more more of these 3 turn bullish. If all 3 stay bearish, then markets will simply start selling off again.

    ReplyDelete

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