SPXA150R Daily Chart
The SPXA150R is a Short-Term Market signal. As price moves higher above 80 the bulls are rallying strongly but a skeptical eye has to be taken towards equities. When price moves above 85, this is a Strongly Bearish signal for markets. When price moves above 90, this is an Uber Bearish signal, a gift to short-sellers since it is screaming that a market top has now occurred. Those shorting at the May top when this was highlighted were happy campers as the May-June swoon followed. Now price recovers back above 85 on 7/11/13 over 17 trading days ago. Interestingly, the SPX has made new highs compared to May but the number of stocks above their 150-day MA's are falling, the opposite of what should be expected for a continuing rally.
The move through 85-90 illustrates the bull-bear ongoing fight for market control. Bulls win above 90 but all that does is provide a signal to go short with conviction. Bears win under 85. SPXA150R cannot make a decision as yet, perhaps it will in the week ahead. Markets are topping currently. Projection is down ahead, however, even if markets continue to stretch the upside, a move over 90 on this chart will be another gift for short-sellers. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
I love this chart. Thanks for coming in on Saturday, Keystone.
ReplyDeleteCheck this out when you have a moment, I think you'll enjoy it.
https://www.youtube.com/watch?feature=player_embedded&v=Kx4tSsAX6Lo#at=13
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Peter Schiff is a long time gold bull and inflation hawk. He becomes animated at times which detracts from his points but a lot of what he says is true. He is incorrect, however, on the inflation front and that hurts his gold bullishness call. The majority of folks believe in the inflation story, due to the Fed money printing for five years now, which will happen, but it is a matter of when. Folks, such as Schiff, have been calling for inflation since late 2009.
DeleteYields are starting to move up but the 10-year yield would be very agreeable to flattening out here and drifting lower for the next couple years, keeping inflation on a milk carton for many months perhaps years forward. A key metric on Friday's jobs report was the wage component. Watch this very closely, that move lower in wages is more important than any of the other numbers. It shows you the employers have the power over the employees and will simply keep whipping them daily to keep the output steady or increasing. At the same time the structural employment problem grows. If the economy was in great shape, folks would be looking for other opportunities and jobs so employers have to start raising wages to keep talent and bring in new talent. This is not the case now. Inflation cannot exist until wages inflate. We have seen wage deflation the last few years and this is the main reason that inflation does not exist.
There was some food inflation, but crops are doing well these days. Oil is moving up in price, and perhaps utility bills, insurance costs, and tuition, but barring these, although important, they cannot move the inflation needle. It is all about wages, and if wages are disinflationary and deflationary, inflation will remain on a milk carton for some time forward.
K.s.,
ReplyDeleteThe SPXA150R looks nice. Why isn't it included in your daily analysis? Or did I miss something? Isn't an analysis directly on S&P more relevant than correlations (copper, Yenn, Vix)? Or is it a matter of timeframes.
SPXA150R is an ongoing signal, it is regularly updated on the Short-Term Market Signals page (link in the right margin). Same with SPX:VIX ratio. Sometimes time will pass with various signals not doing much but after a while, they all come back in play. Down the road it will be interesting trading action when SPX:VIX moves down to 68 again. For SPXA150R it is interesting to see if it can move back above 90, which will be an easy short the market call, of if it simply continues drifting lower from here. The 80 level is key, if that fails, it signals continued ongoing market trouble moving forward.
DeleteThese signals are mentioned in the commentaries only when they become pertinent. SPXA150R was highlighted as part of the May top call. The focus on copper, volatility, utilities and other sectors or areas of interest are all dictated by Keybot. The algo produces a very attractive benefit besides the general market directional call. The algo highlights which specific area or sector is most influencing market direction at any point in real-time. That is why JJC 39.02 is important moving into Monday. Volatility and commodities are important as well. So the algo is dictating all that commentary. But not one idea, signal, concept, pattern, etc..., takes precedence, it is more important to view them all as tools in the toolbox and they all have to be used together to build a house; you cannot build a house with only one tool. The difficult and treacherous trading nowadays is purely due to the central banker intervention, they are the third man on the field. The music keeps playing but when and how it will end is the big mystery. Even though traders fully believe in all the QE money printing and pumping, and markets continue higher, markets may wake up one day, and simply, not believe.
thanks for this elaborate reply. I'll be back everyday as I believe a change in trend is coming. I think it's a typical wave 5 thing to believe that anything is possible and the sky is the limit. Timing is always hard with 5s. Most expensive words : this time it's different.
ReplyDeleteJust a thought; could the distance from sma 150 be an additional signal? I reckon distance can go down without crossing the sma 150.
Sure but the distance price is above the 150-day MA is simply part and parcel to studying the entire moving average ribbon, so watch it all to see if the extension occurs where price is above the 10-day MA, above the 20MA, above the 50 above the 100 above the 150 above the 200. For the 150-day MA, watch the slope of this line since it is one of the Cyclical Market Signals. The 150 MA is powering relentlessly higher showing the power of the central banker money and how traders firmly believe in QE forever. It will flatten and roll over at some point forward.
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