Financials, copper and volatility are the key metrics affecting market direction currently; XLF 20.01, JJC 39.99 and VIX 14.67. All three are bullish, but the XLF sits directly on the bull-bear line and copper is only pennies away. Copper is up in early trading. As XLF goes today, so goes the markets. XLF is up a nickel in pre-market moving towards 20.06. This would keep the bulls in business and buoyancy in equities. Bears need to flip at least one of the three parameters negative to create broad market selling. Keybot the Quant remains bullish. If XLF drops under 20.01, JJC under 39.99, and SPX under 1695, and they all hold under, the algo will likely flip to the short side. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead. The bulls need a gap-up open, or at least a strong open, to send the 8 MA higher to create a positive 8/34 cross and take over control for the near-term.
For the SPX starting at 1697, the bulls need to touch the 1708 handle and an upside acceleration will occur. Bears need to push under 1695 to create a downward acceleration to test 1691-1692 immediately, as highlighted in this morning's charts. A move through 1698-1707 is sideways action today. The SPX has two potential gap fills needed at 1672-1674 and 1688-1691. The 20-day MA is 1675.77 and needs to be back kissed as well as the 50-day MA at 1679.44. Last week's low print was 1691.70. The SPX violated the upper standard deviation band on the daily chart so a move back to the middle band, at 1676-ish, is a reasonable expectation moving forward. For today, watch XLF 20.01 for all the marbles. Also JJC 39.99, VIX 14.67 and SPX 1708 and 1695. Also the 8/34 MA cross on the 30-minute. These factors will steer the market ship today. New Home Sales will create a market pivot point at 10 AM. Oil Inventories are 10:30 AM. 5-Year Note Auction is 1 PM.
Note Added 9:18 AM: Secretary Lew says the government will run out of funds by 10/17/13 tightening the schedule for the ongoing political theatrics. Futures are flat. XLF is 20.05 pre-market so this should maintain market buoyancy to begin the day.
Note Added 10:36 AM: XLF failed under 20.01 after the opening bell but recovered. Volatility moves higher which creates the slight market weakness but remains under 14.67. Despite the slightly negative indexes, XLF, JJC and VIX all remain in the bull camp so the SPX stays buoyant. TRIN 1.02 dead neutral unable to choose a side yet today. SPX LOD is 1691.97 testing last week's low, the top of the 1688-1691 gap and the strong 1691 support, and bounced. Equities stumble sideways. XLF 20.08. JJC 40.17. VIX 14.13. Bulls are not concerned since financials, copper and volatility remain bullish.
Note Added 11:16 AM: XLF 20.10. JJC 40.22. VIX 14.07. TRIN 0.90. SPX 1698. The bulls keep cruising and Senator Cruz keeps cruising with the filibuster. The 10-year yield is 2.64%. Keystone took profits on the NUGT long trade exiting the position. Will look to reenter, it is a wild, roller coaster, psychotic ticker. Also bot URA, the uranium ETF, a dangerous and speculative play since nobody like's nuke power, opening a new long position. When the word nuclear is mentioned, everyone says NIMBY! and BANANA! acronyms for 'not in my back yard' and 'build absolutely nothing anywhere not anytime'. The URA weekly and daily charts are set up with attractive positive divergence so the risk-reward is favorable for a bounce to occur at any time but it is thinly-traded. Also bot SSG, the inverse 2X ETF that moves up if semiconductors (SOX and SMH) move down, opening a new long position.
Note Added 3:14 PM: XLF 20.15. JJC 40.17. VIX 13.93. TRIN 0.97. SPX 1697. The beat goes on. Markets stumble sideways with upward bouyancy since financials, copper and volatility continue to enjoy the bull camp. Interestingly, the 8 MA remains under the 34 MA on the 30-minute signaling bearish markets for the hours ahead. Markets continue to tap dance to and fro along an indecisive tight rope.
Note Added 4:01 PM: Sideways indecision. XLF, JJC, VIX and the 8/34 MA cross on the SPX 30-minute are all where they were when the day started. SPX closes just above the critical 1691-1692 support discussed in this morning's chart. The 10-year yield is 2.62%.
KS,
ReplyDeleteFrom your experience, any idea why after EIA reports surprise rise in U.S. crude, 2.6 vs. 1.5 expected by analysts, the WTI crude remains up instead down?
thanks!
Well, WTIC crude has been flat all day at 103-ish, Brent flatish at 109.40-ish. The inventory numbers cannot be used to really gauge the price since the data is erratic and has many components, distillate, gasoline, crude, you have to consider all that, and the inventory numbers that come out the night before. On top of that the move in the dollar will typically move commodities in the opposite direction. Syria and Middle East tensions caused price to move up so any news on this front moves price. Most importantly, the globe is likely in an economic malaise that will only worsen, so that will greatly reduce demand. Juggle all that in the air and you end up with price, not an easy task. This 103 area is important support for WTIC, if lost the mid to upper 90's would be a reasonable expectation. SCO may be a potential long play (it shorts oil 2x), perhaps if price back tests the 50-day MA at 28.94 or the gap fill a touch lower. maybe a 28.2-28.9 entry.
DeleteKS,
ReplyDeleteURA looks washed out, and an attractive spec buy. Their largest holding, USU, also looks like an interesting spec.
TW
Yep, other uranium plays are setting up. They require caution, however, since it is a typical knife-catch trade based on positive divergence on the weekly and daily, and this sector is traded more thinly than others.
DeleteKS-
ReplyDeleteWhat is your exit point on NUGT?
FeS2
Nevermind , I saw that you exited already. I was salivating on that thing at $47, but I can't handle the swings. Stayed out of the trade.
DeleteFeS2
Yep, simply cycled in and out. It is one of the psycho triple X's. NUGT remains attractive and would not be surprising to see it take a big leap higher even after today's jump. There's a gap at 65. May be some weakness in the minutes say hour or two ahead but perhaps an entry will be available. The 30-min, 1-hour adn 2-hr may set up with a bull flag that will take it into the 60's.
DeleteI wanted it at $47, but as you said, its a pscyhotic product. You need some serious heart medication to trade that thing.
DeleteI'll keep an eye out for an entry.
FeS2
So after NUGT popped, is this the time to play DUST?
DeleteAny suggestion will be appreciated?
Since the miners are mostly set up favorable moving forward, having based or continue to base, so playing the miners from the long side is considered, and the entry is always key, but playing them on the short side is undesirable at this juncture. Keystone has plenty of heart pills and they are needed these days.
DeleteThank you Super KS! :)
DeleteThat 10% pop on NUGT is nothing, it pops 20-35% in either direction, unexpectedly, Lol. If trading long, I have to depend on Keystone to identify the entry and exit points.
DeleteFeS2
Well, that's not good, you have to learn to cook your own fish dinner, its more fun that way. Watch the divergences, chart patterns, S/R and other technical indicators. Paper trade as well. If you see the reasons to go long, write them down and record the stock price, play it on paper only, and then see what happens and reassess how you did. This will help build TA skills.
DeleteFor tomorrow, if Dow can not hold 15300, it will be in serious trouble. Dow closed below that number today. Remember, Dow is the leader. We'll see.
ReplyDeleteStill short -
ReplyDeleteBB
BB,
DeleteWhat's your view for the next few days?
BB,
DeleteWhat's your view for the next few days?
KS,
ReplyDeleteCLF is coming down. Looks like entry point. What do you think?
Thanx!
Amy, you should list why you think it is attractive now. The weekly chart does have a bull flag look to it so that is worth watching. A drop to the 20-week MA at 19.77 may complete the sideways consolidation flag then the target would be 29-30. Daily chart may be developing a scary descending triangle, at the least leak lower to continue forming the bull flag. Since under 22 for a close, the 80/20 rule says 18 may be on the table. Probably not worth considering long until sub 20.
Delete