Happy Friday the 13th. A black cat crosses Keystone's path this morning but that is one of the friendly barnyard cats that are only bad luck for the mice and chipmunks. So will today be bad luck for the bulls or the bears? The 'Buy Rosh Hashanah and Sell Yom Kippur' adage is working, Yom Kippur is tomorrow. There is an exciting barrage of data on tap this morning beginning with PPI and Retail Sales at 8:30 AM. Watch RTH and XRT. Then markets will pivot at 9:55 AM on Consumer Sentiment, followed by another pivot five minutes later at 10 AM on Business Inventories. Markets will then settle-in for the day after all the excitement passes.
The negative divergence on the SPX hourly and minute charts are creating price weakness. Markets may adopt a sideways feel since the Fed decision is now less than four trading days away. The strongest S/R levels are at 1691, 1685, 1669, 1652, 1649 and 1639. Thus, consider a potential sideways move in front of the Fed through 1669-1691. If 1691 is taken out, the bulls are running higher to 1700+. If 1669 fails, 1650-ish is likely ahead. For the SPX today, starting at 1683, the bulls need to touch the 1690 handle and the 1691 will give way like a hot knife through butter lighting the way higher to 1700+. The bears need only a point or so lower, to push under 1682, to create a downside acceleration that will likely tag 1675 in quick order. An island reversal pattern may occur if the SPX drops through the gap from 1672 to 1675. A move through 1683-1689 is sideways action today. The S&P futures are -1.6 at this writing but factoring in fair value this is a flat to hair higher start on tap.
The copper collapse yesterday placed the lid on equities. Watch JJC 39.94 but it should remain bearish. Volatility will be key today. Watch VIX 14.58. Equities will move sideways with a slight upward bias today if VIX stays under 14.58. If VIX moves above 14.58, equities will take another leg lower. The 8 MA is above the 34 MA on the SPX 30-minute chart (reference this morning's post) signaling bullish markets ahead, however, a negative 8/34 cross may be at hand. If the negative 8/34 cross occurs and the VIX moves above 14.58, the bears will be ram-rodding markets south today. Watch RTH 53.74 as well today considering the Retail Sales data. RTH is far above at 54.84 causing market bullishness but the data may throw a wrench in the works, or not. VIX 14.58 and the 8/34 cross on the 30-minute are the two key metrics to watch today to determine the market direction forward.
Note Added 9/14/13 at 9:39 AM: The bulls hold the 8/34 MA positive cross on the 30-minute chart and hold the VIX below 14.58 so the bears folded like a cheap suit. VIX HOD was 14.55 only three pennies away from the goal the bear's needed to unleash market selling (14.58), but bear's could not push volatility any higher. Amazing how Keybot can identify these numbers before they occur (VIX 14.55-14.58 as the bull-bear line in the sand). The low put/call ratio's signaled a market top a few days ago so the days, hours, minutes ahead is prime territory for market selling to begin. An ideal time to kick in downside would be Monday morning since the week ended on a bullish note, most traders are remaining bullish, and the market complacency is rampant. Next week will be entertaining.
KS,
ReplyDeleteI know you're a busy man but I'm having withdrawal symptoms from your lack of mid-day posts.
I'm rocking back and forth at my desk in the fetal position... :)
Who knew posting charts was an aggressive act?
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=4&dy=0&id=p89624348930&a=306373811&listNum=4
1690 is the quadrant resistance but it will break out soon
Hi KS,
ReplyDeleteOn SPX daily chart 1627 low can qualify as a neckline touchdown for a possible inclined H&S ? Or a classic H&S would request a trip to 1560 +/- 20 points before a right shoulder?
If the present structure can qualify as a H&S can I consider that right now we are at the peak of the right shoulder?
I observed on several indexes bearish structures: on DIA a classic H&S, on SPX a weird H&S, on Nasdaq a rising wedge and on IWM something like a double top.
Thank you ,
V.
On SPX daily, sure, that can qualify as a slanted H&S, although you look for more subtle slanted H&S patterns, this one is a bit steep. So head in early August is about 100 handles above the neckline (at about 1610-ish), so a break of the neckline, say at 1650-1660 if you continue the slanted neck line higher, would be a lower target at 1550-1560 if the 1650-1660 level fails. You never know if the right shoulder is done for sure, until it is done.
DeleteThank you KS!
DeleteI appreciate your answer!
V.
FLD's are pretty bullish
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=5&dy=0&id=p35831038379&a=308023575&listNum=6
I've had two long term analyses that have provided guidance on the bull/bear arguments.
the weekly indicates a top around Dec 1 with a price of 1784 +/- 50 points
http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=5&mn=0&dy=0&id=p88780284991&listNum=6&a=308399180
the monthly indicates a top a bit later but with a price target of 1843 +/- 50 points
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=20&mn=5&dy=0&id=p20781046781&listNum=6&a=308262414
these projections as well as the weekly slope regression data and the short term "T's" are what have kept me from switching bearish overall.
comments of every kind always welcome...lol
Scott, how do you determine the mid-line (if that is what it is called), which is near the 1250 mark? Or, maybe a better way to ask, what is the significance of that level?
Deleteyou take the point where price crosses the FLD on the current cycle which occurred in 2011. I use the 1 ma with red dots to spot it easier.
Deletedrawing a line across the whole chart appears confusing I guess but I am targeting the cross of the FLD in 2011. I highlighted it in an updated version for you.
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&yr=20&mn=5&dy=0&id=p20781046781&a=308262414&listNum=6
the monthly is the cleanest chart.
interestingly, this guys Delta chart matches my monthly FLD chart somewhat...
Deletehttp://2.bp.blogspot.com/-aqfZM2qu0qY/UjKvZOC9czI/AAAAAAAAPMQ/bVawyWzbhKo/s1600/130913+Delta+Pattern+vs+German+DAX+30.png
oops - posted the guys shot term chart showing his 18-20 target
Deletehere is the longer term one that indicates a top in December
http://3.bp.blogspot.com/-tqh-De_3L8A/Ui6lJxTdHzI/AAAAAAAAPME/oNVp7P08sk0/s1600/130909+DJIA+2013+vs+1935.png
scott i like your charts, although I do understand some of the basic principles some of the more complex stuff is above me. How do i learn to chart like you, whats the best source for learning this?
DeleteHurst books are a start for the FLD though he was decidedly cryptic and many people have over extrapolated his work.
Deletethen the T theory stuff from Terry Laundry who passed away a year ago July.
Get a stock chart subscription and speed time with Hill and Co. over there.
Note how the upper NYAD indicator on the SPX chart was long and strong, until now, showing negative divergence now as the SPX printed the July top.
DeleteSame with DPO indicators on monthly SPX chart. Note how they are long and strong from the 2000 to 2007 top, wanting to see another high in the future. We receive the new SPX high but now the DPO's are negatively diverged, no longer interested in seeing new price highs.
Scott, based on the link you posted above comparing 1935 and 2013, seems like a low is coming on Oct. 1st? Would that be the low of a C-wave down after this B-wave finishes? What are your time cycles telling you? Thanks.
ReplyDeletethe cycles are pretty much in agreement with that other guys chart I posted by mistake - The average daily cycle is between 36 and 42 trading days so at the very least we should be moving to 1700ish through next week.
DeleteI personally am focused on a higher high but again I wouldnt expect anyone to follow me there
peace and have a great weekend
Still short - will get stopped out 1689-1690
ReplyDeleteHappy to hold over the weekend - trade below 1681 Monday and im going to hold my short - for the midterm
Scott is bullish but has been bullish from the 1710 high right down at 1620 he was still bullish - trade over 1689 and i'll cover and so should you but we are looking to go down with trading below that figure
and when we do - some will still post bullish charts right down to 1580 because after all - over time we do go up but i guarantee they are stuck in the trade.
BB
Well, in trading the bulls will always pump their case despite markets moving the opposite way, just as the bears will do the same thing to pump their case, despite how the market moves. That is why time frames have to always be referenced in relation to bullish or bearish positioning. That is the beauty of TA, you simply go where the charts point you (and of course different technicians can view the same chart is different ways), and do not care about the bull-bear monikers. That is also why you want to always have fingers in both pies, diversify across bull and bear positions and across all time frames, VST positions, short-term positions, IT and LT positions as well, so it is never a case of fully bearish or fully bullish, it is a matter of degree. Keystone is currently about 70% bullish and 30% bearish (left margin), but, as always, if Keybot flips sides, that is a huge part of the portfolio, so the port would immediately move towards a 90/10 weighting in favor of the bears. The Fed stuff this week should turn the markets into a circus, more so than each day under the Biog Top.
DeleteThe bears can continue to sleep easy due to the low put/calls printed about a week ago now. The low CPC and CPCE signal a significant market top, and these market tops typically occur from one to 10 trading days later. The bulls ran last week so we are already about one week beyond the put/call ratio's lows. This places markets directly in the bulls-eye for a correction to begin at any time, any day, any hour. If something occurs over the weekend, the Monday opening may be dramatic.
KS,
DeleteThis comment of yours is truly relvant!
Thank you,
V.
edit: "relevant"
DeleteV.
this is such self serving nonsense - I was bearish and recommending TLT around aug 2 - check the posts.
DeleteI became bullish around the 20th when it became clear that the correction was a SECONDARY correction.
I am neither a bull or a bear but I AM BULLISH NOW - CHECK OUT THE FUTURES and stop the PERSONAL ATTACKS and fear base analysis.
KS - you discredited yourself here, piling on the absurd finger pointing.
This comment has been removed by the author.
ReplyDeletehi guys is the monday of OPEX week and FOMC week typically green or red?
ReplyDeleteAs I recall, op-ex week is typically bullish for every month but January. I've never seen it broken down to the daily level and I don't really understand why you would anyway.
DeleteBesides, we're in a bull market. It doesn't have to make sense, it only is what it is until it ain't and trying to invent a bear case for a bull is a waste of time and money.
QE adds almost net 50-pts to the SP500 each month. Something will force Bernanke's QE hand eventually (that something is just beginning to rise from its slumber) and the central banker fueled bull market will die violently just like it's always done before.
Scott's charts are pretty good stuff, by the way.
During OpEx week, Monday's are typically bullish. Then, a Tuesday low typically leads to a Wednesday high. Volume is heavier on Friday. The way markets move on Friday, 9/20/13, they will likely move opposite on Monday 9/23/13. Type "Keystone's September Seasonality" into the search box above, or into google, to bring up this months seasonality factors. The week after OpEx in September is down about 80% of the time. Since September trading started with a Monday rather than one or more days the week before, the expected 80% of the time weakness may actually occur this week of OpEx this week, instead of next week. Window dressing should appear in the final days.
DeleteAnother great comment KS!
DeleteWhat you are saying brings light considering also the strong negative div. built on daily charts of indu and spx.
V.
The NYSE summation index got a bullish cross early this week and it's now solidly bullish.
ReplyDeleteYep, the daily NYSI shows positive divergence from the June low to the August low creating the bounce. RSI is above 50% which is bullish. Stochastics are already overbot. NYSI weekly chart has a sideways look. NYMO is back up to the May and July tops. CPC is 0.77 and CPCE 0.6 not yet bouncing properly off the uber low numbers about one week ago so a market top and sell off definitely remains on the table. Everyone should at least maintain some short side protection for the days ahead.
DeleteMore Syria calm occurs so oil and gold may move lower to begin the new week. The SPX 1691 resistance held to continue the market drama through the weekend. The 8/34 MA cross on the 30-minute is on the bull side but Monday morning a major decision will occur in the first one-half hour that may determine market direction into Wednesday. The bulls held VIX below 14.58 so the bears folded like a cheap suit. The 8/34 cross and VIX 14.58 now only becomes even more important on Monday morning.
ReplyDeleteI think I have really come on the right place for getting the perfect info. mis sold ppi
ReplyDelete