Watch UTIL 485.33, 483.35, GTX 4889, JJC 39.97 and VIX 14.60. All five parameters are bullish as the opening bell rings. The direction of UTIL will likely dictate market direction from the start. A lid will be placed on the market upside if any of the parameters turn bearish. Bulls will float markets higher if the parameters remain bullish. The SPX begins at 1710 with the bears only needing one-point lower to accelerate the downside to quickly test the 1705-1706 support. A move through 1710-1724 is sideways action today. The 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead.
The week after September OpEx is typically down 80% of the time. Window dressing typically helps the bulls as September, and Q3, comes to an end. The last two days of September are typically weak. Stocks are trading flat and mixed in the opening minutes, the SPX slightly lower and the Dow and Nasdaq positive. C pukes -2.6% after announcing lower revenues on tap, just like JEF last week, so the banking sector, which the bulls require to be a market leader moving forward, is weak today.
Note Added 9:38 AM: SPX has a 1706 handle so the test of the 1705-1706 support occurs early in the day. Bounce or die. UTIL 483.23 falling under two critical levels listed above. GTX 4857. JJC 40.28. VIX 14.03. The weaker utes and commodities are creating the slight market weakness today and will place a lid on market upside if they hold. Watch UTIL 485.33, 483.53 (use 485.53 instead of 485.35; this number is the UTIL 50-week MA) and GTX 4889. The 10-year yield is 2.73%.
Note Added 11:32 AM: The 10-year drops from 2.73% to 2.71% so interest rate sensitive utes leap higher and UTIL is well above the two key levels, 483.53 and 485.33, helping bulls. GTX collapsed under 4889 so this helps bears. The current market fight is now centered around volatility and financials. Watch VIX 14.67 and XLF 20.00. VIX is below 14.67 and XLF above 20 so both parameters are creating bullishness but both are on the ragged edge. The move in the VIX from 14.67 right now will dictate market direction. Up VIX means down equities and down VIX means up equities. European markets are closing and dropping into the close due to the U.S. weakness. The SPX lost 1709 so that sent price to the 1705-1706 support test, that failed, so price is now testing 1698-1700 support. If 1698 fails, 1691 support is next. UTIL 4990.26. GTX 4849. JJC 40.38. VIX 14.61. XLF 20.14. Bulls are hanging in there despite the market weakness. Keystone took profits on SSG and will look to reenter.
Note Added 2:45 PM: VIX was rejected at the 14.67 bull-bear line in the sand so markets drifted higher today up off the lows. SPX bounced off the 1698 support, LOD 1697.10, and back kissed the 1705-1706 resistance, now drifts lower again to 1703. The 10-year yield is 2.72%. UTIL 490.87. GTX 4853. JJC 40.48. VIX 14.35. XLF 20.15. TRIN 1.29.
Note Added 3:32 PM: SPX 1701 handle leaking lower again for a look at 1698-1700 support. VIX 14.30. XLF 20.13. Keystone bot NUGT, the long gold miner 3X ETF, a highly dangerous and speculative trade. NUGT is setting up with positive divergence, if it prints a lower low, so there can be some downside ahead as it continues to base, however, the gap fill from August at 51.5 is just filled, so it is a logical point to make an initial entry.
Short again - geez this has been a losing trade from 1703
ReplyDeleteBB
once everyone was leaning the same direction... POW right in the kisser. things that make you go hmmmm, pretty convenient that the fed says the complete unexpected and the very next day says you misunderstood. LOL what a rigged game.
DeleteThere is not a chance in hell that the FED will taper the easing program, you will see an expansion to $105 BB or a foreign crisis before a taper.
DeleteThink about it, the data is morbid and getting worse, forward guidance is constantly being lowered, the FED wants a wealth effect to promote consumer confidence and some inflation to spur spending; but if he tapers QE, the wealth effect is over immediately. The red numbers will be on every TV in America. Does that make consumers feel confident? Would that spur spending? Not a chance. He cannot taper now, he's backed himself into a corner.
If a new ringmaster comes in an scraps the QE plan and in fact does actually start a taper, the shorts I've been getting murdered on since January will finally payout big returns.
Keystone put it best when he said you have to have your hand in many pieces of pie in order to make gains.
FeS2
What are you shorting?
ReplyDeleteFeS2
How come the indexes and utilities are moving away from each other?
ReplyDeleteFeS2
Utilities are interest rate sensitive like REIT's and telecom. If rates fall, utes go up, if rates move higher, utes move lower. For Keybot the Quant's program, UTIL and GTX are important, and GTX turned bearish so they act as a counterweight to each other. Equities have already moved on. Watch VIX 14.67 and XLF 20 as the two key metrics moving forward. VIX is 14.54 so that tells you markets will recover today. If VIX moves above 14.67, equities will take the next leg lower.
Delete"The week after September OpEx is typically down 80% of the time. Window dressing typically helps the bulls as September, and Q3, comes to an end. The last two days of September are typically weak. "
ReplyDeleteI don't follow. Should the end of quarter window dressing help this week, or not?
The indications are in conflict, sometimes seasonality factors may contradict each other. So you wet your finger and hold it in the air to see which way the wind blows. The weakness after OpEx week in September likely carries a bit more clout since the trend has repeated over many years. Since markets are likely topping, window dressing may be less of a concern since folks may simply lock in this years profits if they stayed long the whole time and take the rest of the year off.
DeleteThank you!
DeleteMost days it feels like wet finger method anyway.
Lol.
DeleteFeS2
KS,
ReplyDeleteWhat are your thoughts about BBRY being a long setup from a bullish positive divergence?
Also, what do you think about the Japanese bank stocks like MFG and SMFG as being attractive buy candidates?
thanks,
TW
BBRY is a broken stock and likely not playable long or short, just toss it into the junk bin. They will be sold which may create a pop but the stock is now only a lottery ticket and highly speculative trade.
DeleteJapanese bank stocks may eek out some more highs but watch the rising wedge versus ascending triangle patterns. The U.S. banks are taking on a negative tone so that negativity will likely move through global bank stocks. Bot stocks are probably topping in the days and weeks ahead and headed for a sideways to sideways lower vibe.
Man this whole month has been window dressing.
ReplyDeleteFeS2
That is funny. But, by definition, window dressing can only be the last few days of any given month, and especially only the last few days of any quarter.
DeleteYeah I know, I just dont like to hear bulls complain about missing the EOM gains, as if they are being short changed or something. Lol.
DeleteFeS2
Check out my view:
ReplyDeletewe have 2 previous wave 4's : one at 1695-1696 and one at 1680-1682.
My point is that if this correction ends here at 1690's this was the 4'th wave of final ramp in this primary 3 (up to 1760-1779 maximum) .
If this correction goes as deep as 1680- maybe down to 1660's well my friends this is called "subdivision" !
And it means 1627-1730 was only a wave 1 , 1730 - (1680-1660's) is wave 2 and a wave 3 might go up to 1826-1835 (final primary 3 targets: 1950-2100)
Please note on a post-it those numbers! They will help you !
So: the question now is: how low this correction will go ?
If bulls kick now in the 1690's, the bears will win (for a small time period, although!) if bulls wait a little bit more (down to 1660-1670's) it's a subdividing wave we are looking at ! (like the one from november 2012 until may 2013). So something big!
V.
V-
DeleteYou aren't following the eclipse indicator anymore?
You guys will enjoy this. Big shot out Kruggy, you've been great.
Deletehttp://www.youtube.com/watch?v=orh64vypKwU
FeS2
We are 30 points off the high, so we expected selling of 50-100 handles, I think you may settle for 30 before the upside orgy resumes.
ReplyDeleteThe doorman told me today that equities are where you want to be these days.
FeS2
VIX 14.67 is a key metric. Market bulls are fine if VIX stays under 14.67. The bear move lower for equities will be real and develop a sustainability if VIX moves above 14.67. VIX is now printing 14.23 about one hour before the closing bell.
ReplyDeleteI wanted NUGT today, but I didn't get it in on time!! Damn, that thing was a bargain at $50! I hope it holds still on the opening bell.
ReplyDeleteFeS2
FeS2,
ReplyDeletefyi- You can still buy NUGT after hours for a bargain!
My other trades didnt clear yet, so I dont have the margin requirement right now. Will have to wait until tomorrow.
ReplyDeleteFeS2
In trading, sometimes bargains become bigger and bigger bargains. LOL Like the old Wall Street joke goes, if Keystone liked NUGT at 51, he has to love it at 47. LOL
ReplyDelete