Lots of strange things are occurring in the markets these days. Perhaps these oddities are a signal of sorts. Lots of Dow Theory media hype occurs this year, but, not so much over the last month. The green dots clearly show the higher highs in price occurring with both the Trannies and the Dow so it was all systems go from the Dow Theory perspective, however, starting mid-March things are not so rosy. The Dow continues to punch out new highs; the green dots show higher highs and a higher low so the upwards trend remains but the Trannies (red dots) show a downward trend now established with lower lows and lower highs. No one is talking about Dow Theory anymore. The divergence is clear.
The Fed's easy money and the money fleeing Europe is pumping the dividend stock bubble, blue chip bubble and consumer staples, healthcare and utilities bubbles as well. This behavior reinforces the move higher in the Dow. It appears the equity markets, especially perceived safe haven dividend stocks, are thought to be bullet-proof, and money is looking for a place to go creating this latest market phenomena. It is more likely for the Dow to roll over rather than the Trannies reverse a downtrend that is now in place. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
This chart shows the ongoing soap opera with new highs. The previous all-time closing high at 1565.15 was taken out last Thursday before the Easter recess as the wine was flowing like water. Yesterday is the red down candlestick. Today all of yesterday's losses are easily recovered and the SPX prints a new all-time closing high and new 2013 closing high at 1570.25 and new 2013 intraday high at 1573.66. The all-time intraday high at 1576.09, however, remains in place. Those are the three numbers to watch to gauge who is winning moving forward. Note the critical support at 1562.50 which should create a 5 to 10-handle drop if lost. The 20-day MA at 1555.28 needs tested. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
The Dow Industrials print a new all-time intraday high at 14684.49 and new all-time closing high at 14662.01. The bulls are relentless. The dividend and blue chip stock bubbles grow as the Fed's easy money bloats the divvy plays to where the seams are about to burst. In addition, money now fleeing Europe is rushing into these so-called safe plays. The black upwards channel remains in play. The red and purple rising wedges and negative divergence resulted in spank downs as would be expected but the pull-backs were paltry at only 100 to 200 points. The high today creates the blue rising wedge and along with the overbot conditions and negative divergence, another spank down is needed in the days ahead. The levels where the big selling volume occurred in mid-March, at 14400-14500, needs retested. The 20-day MA is 14469 that also needs tested and it is within this range.
Projection is down ahead despite the Fed pumping with the Dow coming down to test the 20-day MA, then the lower trend line for the channel, and then the 50-day MA at 14150 (sloping upwards) as the days and weeks move along. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
The broad indexes jump higher at the open as the futures dictate. The Factory Orders number was a shade better than forecast so that gave the SPX the push to touch 1471. The SPX then jumps to 1573; the all-time closing high is 1576.09. The SPX has now touched the upper BB on the daily chart as highlighted this morning. The 8 MA moves above the 34 MA on the 30-minute chart handing the baton to the bulls again. Each time the bears try to get something going with the 8/34 MA cross, the dip-buyers, encouraged by the Fed's easy money, jump in and buy. Consumer staples and defensive stocks such as KMB and CLX continue to print new highs day after day, creating new asset bubbles as a result of the Fed money pump (and influx of money fleeing Europe). HPQ, DELL and TXN (chips) all receive downgrades today. SOX is 429 remaining above the 425 bull-bear danger line. VIX is 12.83 remaining low and bull-friendly. GTX drops to 4888. Thus, status quo with the three main market influences right now, so the markets float sideways to sideways up.
The GM pick-up truck numbers show trucks lingering on the lot a lot longer as compared to a couple months ago. This is not a ringing endorsement of a strong economy. Looks like contractors are content with keeping the old truck on the road for a while longer and wait and see how the economy goes. TRIN remains above one today, now at 1.09, but continues to leak lower as the bulls pound the upside. Watch the 8/34 cross, SOX 425 and VIX 14.55. Copper remains weak.
Note Added 4/2/13 at 2:12 PM: SOX stumbles lower printing LOD at 425.21, now at 425.55, remaining above the SOX 425 danger line. TRIN remains above one today at 1.09 but the bulls keep the indexes elevated with the low volatility. VIX remains under 13. The SPX is trading trough a tight 1571-1573 sideways range for the last three hours and a very tight 1571.75-1572.25, a measly 50 cent range for the last hour. The 8 MA on the 30-minute chart is starting to curl over to the downside as long as the SPX prints at 1572 or lower. TRAN is down 0.4% today. Copper battled back today but remains lackluster overall. Keybot the Quant will likely flip short if SOX fails 425 and the SPX drops under 1558.47.
Note Added 4/2/13 at 2:35 PM: Look at the collapse in the socks. SOX dropping through 425, then through 424 in a heartbeat. This action in the semi's should pull markets lower. The SPX is at 1569. The 10-year yield is 1.86%. TRIN is 1.03 moving lower to help the bulls. VIX is now up over 13 at 13.04. Things are getting interesting. SOX now at 423.60... 423.50 ... Keybot the Quant likely needs to see SPX 1558.47 today otherwise will probably stay long.
The bears are not allowed to shine. The SPX thrusts higher at the opening bell and the 8 MA moves back above the 34 MA signaling bullish markets for the hours and days ahead, however, the move is tentative and it would not be surprising to see a whipsaw back in the hours ahead. The SPX touched the 1571 so a test of the all-time high at 1576.09 should occur but the HOD is 1572.47 so far, only a 2-1/2 point pop from 1571. The upper BB on the daily chart is 1572.75. The red lines show negative divergence in place but there is some momo due to the big move higher at the open. Note the prior market stick-saves, same-o story. The thrust higher at the opening bells reverse the 8/34 crosses (teal boxes). Note the teal dots that show in each instance, within one to two days, the SPX drops back down from where it launched. Watch the 8/34 cross, for now the bulls are driving the bus again. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
The bears push back a little yesterday but volatility remains low so the downside was no real threat. Keep watching VIX 14.55 for the bear confirmation signal. GTX 4930 remains important as well since it will provide further upside bull fuel if it is achieved. A key development yesterday was the semiconductors, a critical bellwether for the overall economy. Most everything you buy nowadays has a chip. The SOX dropped over 2% yesterday. It is remarkable to see copper collapse, semi's drop, and financials losing steam, while the safer haven stock bubbles grow. The markets are truly ignoring the warning signs. Rubber is down as well. If chips are now stumbling lower, it is hard to imagine how any recovery continues, however, the Fed is firing the money bazooka each day and the markets remain happy enjoying the Caligula-style upside orgy. Watch SOX 425 closely today. SOX begins at 427.80. The broad indexes are in serious trouble if SOX 425 fails; this has taken precedence over the importance of VIX 14.55 but both remain key to market direction.
Factory Orders are released at 10 AM so markets may take a stutter step. Motor Vehicle Sales are reported today. Listen for the pick-up truck sales since this is an indicator of economic strength, or lack thereof, mainly in the housing sector. Contractors will buy new trucks if they see steady work ahead. Fed's Kocherlakota speaks at 1 PM and Evans speaks at 7:30 PM. Additional Fed speak is now scheduled this week so they must see a need to raise the bullhorn and pump the markets. Eurozone unemployment rate hits a record high 12%. Italy's banks are weak today, however, Europe is holding up fine as they return to trading from the Easter holiday. Today is the calm before the storm. The back-half of the week will receive the BOJ, BOE and ECB central banker barrage as well as Monthly Jobs Report on Friday morning. Copper is weak this morning. The 10-year yield is up a couple ticks to 1.84% verifying the buoyancy in the S&P futures, now up seven.
For the SPX starting at 1562, the bulls need to touch the 1571 handle which will immediately create the test of the all-time high at 1576.09. The bears need to push below 1559 to accelerate the downside. A move through 1560-1570 is sideways action today. The 8 MA crosses down through the 34 MA on the SPX 30-minute chart signaling bearish markets ahead, however, as mentioned yesterday, the last few crosses have resulted with a bullish thrust the following morning to ruin the bear's fun. Watch the 8/34 cross closely. The 8 MA is 1562 so as long as the SPX stays below 1562 the bears are okay, but, the futures show otherwise to begin the day. In a nutshell, SOX 425, VIX 14.55 and GTX 4930 dictate market direction.
SPX weekly chart shows the rising wedge, overbot conditions and negative divergence that wants to see a price spank down moving forward. The RSI wanted to see a matching high this week with price and yesterday that was satisfied although the S&P futures point towards some additional buoyancy to start today. The SPX may want to print in the apex of the wedge which is the 1570-1576 zone. The 1576.09 is the all-time high from October 2007.
The bulls are at lofty heights with the price and moving average ribbon at the best levels possible with the price above the 20-week MA above the 50-week MA above the 200. It does not get any better than this. Projection is that the broad indexes are topping out currently. A week or two of sideways is not unreasonable but lower markets are anticipated for the weeks ahead with price moving towards the lower brown trend line at 1470-1500. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
SPX chart shows a nice spank down yesterday from the rising wedge, overbot conditions and negative divergence (red lines). This should begin further downside, however, the bulls are bouncing the S&P futures as this is written. Any move higher in price should result in continued negative divergence which would bring price lower again. The money flow is weak and bleak wanting lower lows in price. The RSI has not yet placed a lower low than a few days ago; watch the thin red horizontal line shown. If the RSI drops under that will signal bearishness ahead since price will not be down to the same low in price but the indicators will be confirmed bearish.
The upper BB is 1573 so the bulls may try to punch the SPX higher to tag the upper BB today. The BB's are coming in and tightening so a big move is on tap for markets this week. The tightening BB's do not tell you what direction, only that a big move in one direction or the other will occur. The prior tightenings (pink boxes) result in identifying the September-October top, the late December sell-off and the late February selloff. The December selloff was stick-saved by the fiscal cliff resolution. Both of these moves this year were down moves but the bulls quickly reversed price as soon as the lower BB was touched. Thus, when the SPX moves lower in the days ahead, watch the reaction at the lower BB. If they markets are rolling over the lower BB will start to drop and allow price to keep falling. In late February note how the lower BB turned flat and then back upwards ruining the bear's fun. The SPX remains elevated well above the 200-day MA and a reversion lower is needed.
The 20-day MA at 1553.03 likely needs tested. The 50-day MA at 1525.46 as well. The volume on Thursday's SPX move through the all-time closing high was stronger than recent days but only in line with the volume from the 1550-1560 level. Therefore, a move into this range is needed for a test and the range encompasses the 20-day MA. Big excitement is ahead this week. The chart says down ahead but the Fed's money-pumping is strong. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Happy April Fool's Day; stay on guard for tomfoolery. China PMI printed an 11-month high but the number was short of consensus. Japan Tankan Survey was weaker than expected so these two sank the Asian markets overnight and kept the S&P futures flat to negative to start the day. European markets are closed as traders enjoy the Easter holiday still yet. The SPX is trying to punch up through the 1570 level to make a run at the all-time high at 1576 but as yet not successful. A weaker ISM Manufacturing Index causes market weakness this morning. The VIX is 13.52 up almost a buck but remains far short of the 14.65 the bears require. Thus, the bulls have their feet up on the desk as they nurse stomach aches due to excessive hard-boiled egg and chocolate consumption over the weekend.
Copper continues to collapse and each day the broad indexes turn a blind eye. Commodities are weak with GTX at 4881. The bulls need to see GTX 4930 to receive upside market fuel. For now, the VIX remains below 14.65 and GTX below 4930 so markets float sideways. TRIN is 0.95 favoring the bulls by a small amount today. The 8 MA remains above the 34 MA on the 30-minute chart signaling bullish markets for the hours and days ahead (see this morning's chart) so the bulls are happy and content to begin the new quarter despite the slight market weakness. The first sign of market trouble is the 8/34 cross. The broad indexes are not in trouble as long as the VIX stays under 14.65; when the VIX moves above 14.65, the market trouble will begin.
Note Added 4/1/13 at 1:03 PM: The 8 MA stabs down through the 34 MA to signal bearish markets for the hours and days ahead, however, as this morning's chart shows, over the last couple weeks, each time the bulls find a way to thrust the SPX higher. The 8 MA is 1563 so if the bulls move the SPX above 1563 that action will curl the 8 MA upwards to ruin the bear's day once again. For now, the bears have a minor victory and it will stay that way if the SPX stays under 1563 and moves lower. The VIX punched up through 14 but leaked lower now at 13.75. Bears got nothing without VIX 14.55 (this number drops from the 14.65 mentioned earlier). GTX is now flat at 4909; the bulls need GTX 4930 to gain market strength. TRIN is 1.30 firmly favoring the bears ever since about 10:45 AM. The bears are trying to push lower, the SPX is at 1562, but without higher volatility, the bears got nothing. Watch to see if the 8/34 MA cross remains bear-friendly, or, if the bulls quickly reverse the cross. Snow fills the air in good ole Pennsylvania continuing the winter that never ends; everyone wishes that it is an April Fool's joke, but alas, it is not.
Note Added 4/1/13 at 2:10 PM: The 8 remains under the 34 MA on the 30-minute chart. TRIN is at 1.43. The 10-year yield is 1.84% remaining lower on the day. Three feathers for the bear cap, however, the VIX is at 13.60 leaking lower and helping the bulls keep the broad indexes elevated.
Note Added 4/1/13 at 3:50 PM: The Nasdaq is down one percent with the SPX down 0.5% and Dow Industrials down only 0.1%, almost flat. This shows the Fed's easy money continuing to pump dividend stocks and blue chips. TRIN is 1.41 so bears should be fine through the close. The VIX is 13.83 moving up but still not near the 14.55 danger line as yet.
Note Added 4/1/13 at 4:10 PM: Bears keep the 8 MA under the 34 MA on the 30-minute chart so that signals bearish action for the hours and days ahead. However, look back at previous 8/34 crosses; the following morning the bulls come in and ramrod markets higher so tomorrow's open will be important. The 8 MA is 1562 and the SPX closes at 1562 so the bulls must push the SPX above 1562 tomorrow while the bears will try to push under 1562. This action will provide the initial hint on market direction tomorrow. The 20-day MA is 1553 and likely needs tested. Volume was very light today as traders call in sick or leave early in search of Pepto Bismal that counteracts that last deviled egg that should have remained on the serving tray. The VIX is 13.58 unable to sustain any steady upside and remaining in the bull camp. But bears, however, can take comfort knowing that they are only 97 cents from VIX victory. So the stage is set for tomorrow, it is all about VIX 14.55; volatility matters. Small caps lagged today. Trannies down 1.5%. Copper, steel, aluminum, coal and tech all weak. The Fed's money fuels new asset bubbles in divvy stocks, blue chips, consumer staples, healthcare and utilities.
Q2 begins. The SPX tries to break up through Friday's high but fails after the ISM data, at least so far today. The 8 remains above the 34 so the bulls are in charge for the hours and days ahead. The purple square shows how the bulls taunt the bears with a potential 8/34 cross but it is only a tease and new highs are printed once again. The dots show the higher highs and higher lows characteristic of a rally. Note the spike low a short time ago created a lower low than the prior 1565-ish number so watch this level to see if a lower low locks in place that would signal a trend change. Note how price respects the 200 MA. The more touches that a candlestick performs the more clout that trend line or moving average line carries. Thus, another test of the 200 MA at 1555-ish would be in order.
The black square shows a Tweezer Top. The indicators are weak and bleak preferring to see lower prices. The rising wedge and negative divergence patterns also suggest downside ahead. Market bears got nothing unless they push the 8 MA down through the 34 MA today. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 4/1/13 at 1:35 PM: The 8 MA stabbed down through the 34 MA at 1 PM signaling bearish markets for the hours and days ahead. Watch to see if the bearish cross holds through the close, or not.
