The Washington, D.C. baby talk continues now creating concern in global markets. S&P's are weak overnight into the opening bell with the S&P's -15. The same themes are in place as last week. Utilities are important and start out on a sour note if UTIL stays under both the 483.53 and 485.90 levels this week. Since UTIL is under both levels, the market trap-door is open and a small flush is on tap for the opening bell. Keybot the Quant remains short through the market choppiness that is chewing up bulls and bears alike. It is typically best to sit tight and trade less through this whipsaw action. Other key areas and numbers the algorithm is tracking are JJC 40.13, XLF 20.01 and GTX 4889 so these metrics will steer the market ship today. Copper (JJC) and financials (XLF) should turn bearish after the bell which will create further broad market negativity.
The SPX is sitting at the strong 1691-1692 support to begin the week. The lower standard deviation band, described in this morning's chart is 1669 and rising. The 20-day MA resistance ceiling is 1695. The 50-day MA support floor is 1680. A failure at 1680 should set up a test of the 1669 level. If this fails, the 1661-1662 support would be targeted next. The 200 EMA on the SPX 60-minute chart is 1685-ish and begins on the bull side but at the bell the SPX should drop under 1685 to place the bears in charge. Watch the 1685 very closely since it is a key pivot point for bulls and bears today. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets ahead but watch for a negative 8/34 cross early today. The market bears must receive this negative 8/34 cross or they got nothing and will fold like a cheap suit.
Watch UTIL 483.53, 485.90, JJC 40.13, XLF 20.01 and GTX 4889 to determine market direction today. Are the dip-buyers losing their gumption? We find out just how loyal the dip-buyers are over the next hour or two. There is no significant data on tap today except for Consumer Credit at 3 PM. Q3 earnings season kicks off tomorrow with AA after the bell. Thus, in the absence of data and earnings, the politicians will send the markets to and fro as they stand at the podium pontificating their ongoing nonsense.
Note Added 2:05 PM: The SPX sits at 1685.11 not much of a surprise. The 200 EMA on the 60-minute is 1685.17 so the fight for bull or bear control continues at 1685. The 8 MA stabs down through the 34 MA on the SPX 30-minute but the 8 is already curling up and may create a positive 8/34 cross before the close. UTIL is under 483.61 and 485.90 creating market bearishness. Ditto XLF under 20.02. Ditto GTX under 4888. Bulls are hanging their hats on copper, however, with JJC above 40.19, which prevents the indexes from falling in earnest. TRIN is 0.76 which will help the bulls today. Note how price continues to remain inside the moving average bracket with the 20-day MA ceiling at 1695.51 and 50-day MA floor at 1679.68. Internal to this range is the 1685 pivot. So bulls win above 1685 and gallop to victory above 1696 on their way to 1700+. Bears win below 1685 and will crush the markets lower to 1669 if the 1680 level gives way again. Note how price bounced at 1674 today the top of that 1671-1674 gap that remains in play. Thus, a failure of 1680 leads to a test of 1674, then a test of 1669-1671, then further lower support at 1661-1662, then 1657. A bounce would be anticipated from one of these levels.
Note Added 2:27 PM: GTX 4888. The pivot from here tells a lot. Higher GTX and equities move higher, lower GTX and the bears push equities lower again. GTX 4889 ...... 4890 ...
Note Added 2:31 PM: GTX 4887. The circus continues. Watch GTX 4888 and SPX 1685.
nice strong move right now in SPX , VIX has formed a black 'fail' candle at the upper BB.....
ReplyDeleteV.
Yep, completely up through the upper band, that marked previous market bottoms. It may be a little bit different this time since everyone was gun-ho bullish this year and had zero concern for protection, but now are starting to seek protection (buying volatility).
DeleteV-can u pls elaborate further..
ReplyDeletemy opinion is that the market is on it's way to make a nice rounded bottom.
Deletethere's too much respect for the 1670-1680 area (50 dma).
everybody expected a deal this week-end between democrats and republicans. Such a thin move on Monday makes me think (and I hold shorts now!).
I will close my shorts (at 1700-1710) if what I expect will happen.
Everybody seems to expect that everything will be arranged until Oct.17 - not the same emotion level as in 2011.
Makes me think!
Vix = what I've said signifies failure of a move that should have gone to 19-20 at least.
If my stop loss for shorts is in the 1710 area, if we get down to 1660 I think I will close my shorts and get some longs.
The bears' thing doesn't work too well as far as I see.
V.
You are so right! The bears never gonna win!
ReplyDeleteI don't trust in sentences that contain the word "never".
DeleteThey will have their moment and their bear market. Just not now.
Now it's a correction in a bull market. And this correction gives signs that doesn't push down anymore.
I'm waiting with my shorts THE BIG FALL , but ... like KS once said.... "waiting for Godot" :) ....
V.
closed my shorts now.
DeleteV.
V, is this the shorts you jump in last Friday when spx bounced?
DeleteMarkets have been beaten pretty good over the last couple weeks so a relief bounce is a reasonable expectation. The VIX may perform a quickie pull back to allow that but after a few days the expectation currently would be for more lows. Copper is key, watch the JJC 40.19 line in the sand. Also GTX 4888. XLF 20.02. And SPX 1685 a key pivot now.
ReplyDeleteI know folks have probably asked this before since GTX isn't recognized at IB or Ameritrade. Is there a different commodity index/etf that could be tracked, and of so, what levels are significant? thanks!
ReplyDeleteThat should be available, email them to find the ticker, it is likely only a matter of placing the right prefix in front or adding a suffix. You can monitor perhaps CRB 286-ish may be a comparable level.
DeleteAlso you can simply follow $GTX on stockcharts.com. If you have a subscription, you can monitor the one-minute chart all day long.
DeleteUp for AIR - bounce buyers beware - rinse and repeat
ReplyDeleteDown tomorrow again - up for air - buyers go in but open down trapping you in!
We are not a the bottom - still short from 1703 -
Friday was a great place to short - but that's hindsight - I'm expecting down tomorrow without a peek up.
BB
Bears will accelerate a move lower with only one point drop in SPX under 1675. Futures are flat Tuesday morning. The 1669 may need tapped.
DeleteMany articles out regarding Congress faces deadline...
ReplyDeleteNo worries, they will work things out last minute and bull market will continue:)
According to the Fed, the longer the shutdown, the more money they save...
It is interesting. Just like the boy who cried wolf. Or Pavlov's dog. Traders are universally convinced that an 11th hour stick-save will occur and the can will be kicked down the road. No one expects downside although there is some concern creeping in as evidenced by the VIX moving higher. The boat remains loaded on the side that the politicians will solve the deadlines and stocks will pop 2 or 3 %.
ReplyDelete