The fight for UTIL 506.22 and JJC 40.19 continues as the new week of trading begins. Both are on the bear side so this places a cap on equities and the broad indexes are stalled, although elevated. Both the SPX and VIX are higher so one of them is wrong. This behavior only happens about 10% of the time but over the last few days it is appearing frequently each day. Traders are holding their longs but bringing on more downside protection. Pending Home Sales were weaker than expected so housing numbers will be soft moving forward. Insiders are selling stock, such as Blackrock, but no one cares since the Fed will pump the stock market higher forever. Party on.
The SPX printed positive today so it popped to near 1763 and is currently teasing these highs again. The SPX minute and hourly charts hint at a roll over to the downside is on tap moving forward. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. The bears need to push the SPX under 1760 asap to develop market weakness. Bulls will try to float the markets out sideways today awaiting the Apple earnings at 4 PM EST. SPX is 1762. UTIL 504.05. JJC 40.11. VIX 13.50. TRIN 0.81 which helps the bull case today. UTIL 506.22 and JJC 40.19 are the bull-bear lines in the sand currently, identified by the Keybot the Quant algorithm, and are dictating market direction. Bulls cannot move equities higher unless they punch through one or both of these parameters.
Scott,
ReplyDeleteI know you are expecting more upside, but I think a dip is coming in the next day or so. Any thoughts on the downside level it may reach before the market continues to go higher?
Are you still possibly thinking no lower than 1725ish SPX?
Thanks.
there are some divergences setting up on just a few of my failsafe indicators BUT this is consistent with a sideways consolidation before a move higher and is consistent with the mid Nov intermediate top -
Deleteif we havent had the end of Oct pullback we will get a quick move below 1750 and that sure doesnt look like its gonna happen...! so I am still expecting a pop here - the VIX seems to be bear flagging and the indices are bull flagging...?
one day at a time.
I hate to say it (I real;y do!) but the VO data looks like the beginning of the year when nobody (yours truely included) trusted that there was a new uptrend starting.
http://www.flickr.com/photos/75188609@N07/10539931393/
http://www.freestockcharts.com/help/Content/US%20Market%20Indicators.htm
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=5&dy=19&id=p25932118704&a=303885030
ps - nobody seems to be talking about the Zweig Thrust that confirmed last week...
DeleteThank you Scott.
DeleteThe ADX is interesting since it moved up to 26 or so in the back half of August indicating that the market down move was developing into a strong trend but instead, boing, markets recovered. So ADX is creeping up again but at 24 still not matching the August downtrend. Bulls need ADX to continue higher into the mid and upper 20's to verify that the trend upwards in SPX is strong, otherwise, it will reverse in here just like the selling reversed when September began (the ADX is not yet confirming a strong uptrend, it needs a few more points, so next few days are key).
DeleteMrs Zweig was talking about it, : )
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=RSP:$CPCE&p=D&yr=0&mn=11&dy=0&id=p42650465976&listNum=4&a=286337063
ReplyDeleteNote how the CPC peaks directly identify the market bottoms. The CPC lows create the market tops within one to two weeks time. We are at about 7 trading days from the CPC low right now directly in the window where a top would be expected. Interesting to see the 2 lows in CPC over last 3 weeks are at the market tops. The question is if the current set-up is the top, or not. We do not have to wait long, it is a matter of days, or hours now, where something is going to happen.
Delete