Happy Victoria Day for all Canadian friends. The bulls keep beating the bears day after day. Last week the Tepper Rally, lower volatility, lower TRIN, accomodative Fed, MS raising S&P 500 price target to 1750, and upbeat Consumer Sentiment, all created strong market upside. Markets are up four weeks in a row; the SPX moving up at a pace of 30 handles per week, about six handles per day, a phenomenal pace. The economic data this week is not in play until the back half of the week. Next Monday markets are closed for Memorial Day so pre-holiday bullishness may appear on Thursday and Friday this week.
Volatility is the major market influence right now as identified by Keybot the Quant. Watch VIX 13.18. Bulls will continue to drive higher with the VIX under 13.18. Bears will growl with VIX above 13.18. The dollar/yen drops from over 103 on Friday to 102.55 this morning (stronger yen). This places pressure on equities but the futures are flat for the most part. For the SPX today starting at 1667, the bulls only need to see a smidge of green in the futures and that will send the SPX into the 1670's after the opening bell. The bears need to push the SPX under 1652.50 to regain their mojo. A move through 1653-1667 is sideways action today. Watch VIX 13.18 since even if markets sell off, if volatility does not rise, the bears got nothing. Watch the TRIN since the uber low readings day after day, under one, which creates daily bullishness, should subside. Despite weaker manufacturing and other data and weak top line revenue numbers, traders believe the underlying economy is fine, so this helps maintain the market buoyancy. Retail sector earnings are key this week with numerous companies reporting including heavy-hitters such as HD and TGT.
Note Added 10:09 AM: Interesting start to the day. Volatility launches at the opening bell. The level to watch now is VIX 13.10-13.11. VIX is now printing 13.20 so the market bears are happy by one dime's worth. The SPX is a hair positive but the higher VIX should send the broad indexes lower, unless of course, the bulls save the day again by jamming volatility lower and allowing markets to recover. TRIN is low again today printing a 0.51 LOD but is moving up to 0.82. Thus, TRIN remains bullish under one. The SPX squeezes out new highs, a HOD at 1668.60, using the remaining oomph highlighted in the indicators in the 30-minute chart this morning. This action sets up negative divergence for this few-candle time period (1 to 2 hours). The 2-hour, 1-hour, 30-minute, 15-minute charts are all negatively diverged wanting to see weaker prices moving forward today, however, the bulls keep finding a way. Dollar/yen is 102.56 and it is surprising that the stronger yen is not creating more market weakness. Chalk it up to good news is good news and bad news is good news. Keybot the Quant is in position to flip to the short side but has to satisfy several programming rules before it can trigger short and one of those is for the SPX to drop under 1653-ish today. So, the beat goes on. Watch VIX 13.10 as the rudder for the markets today.
Note Added 10:29 AM: VIX 13.10. Bears must decide here, bounce volatility, or die. TRIN at 0.75 keeps the bulls happy.
Note Added 11:04 AM: VIX 12.94... 12.90... 12.89. TRIN 0.74. Say no more. SPX printing new all-time highs again. Watch VIX 13.12 as the bull-bear line in the sand moving forward. Bulls are cruising again with the morning POMO pump.
Note Added 12:21 PM: Market antics continue. VIX 12.94. TRIN 0.73, unbelievable how the TRIN is bullish day after day. Say no more. SPX prints a new all-time high at 1672.84. Keystone took profits on NEM and SLV, one day trades; they both look good moving forward. Will look to reenter. Also added more SPXU, the dangerous and speculative triple X inverse ETF. If VIX stays under 13, the bulls will ride high all day long. VIX 13.12 remains as the bull-bear line in the sand.
Note Added 12:43 PM: Perhaps the negative divergence on the hourly and minute charts is appearing. VIX is 12.90 and TRIN is 0.77 both firmly bullish so it remains a struggle for bears today. Market pivots have been occurring around 2 PM so watch the 1:50 PM to 2:05 PM area, about one hour from now, for a pivot down if moving up, or, a pivot up if moving down. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling continued bullishness, however, the 8 MA is 1669, so if the SPX starts to fall under 1669 it will curl the 8 MA to the downside for a potential negative cross in the hours ahead. Time for a slice of apple pie.
Note Added 2:39 PM: The SPX ventures lower for a LOD at 1663.52 at 2:04 PM. Price now printing the infamous 1666. There is a sneaky pivot area occurring these days between 1:50 PM and 2:05 PM. This is the start of the fifth 65-minute trading segment each day; perhaps it is algo-related. Today markets dropped, then popped, for this 2 PM pivot. Bears do not have a chance with VIX 12.95 and TRIN 0.77. If the bulls keep their foot on volatility's neck, the markets remain elevated. It is interesting to see how the VIX came up to print 13.12-13.13, the exact level identified by Keybot, at 1:46 PM, and then fell on its sword again.
Note Added 2:52 PM: The SPX, Dow and RUT are all flat. Ditto tech as shown by COMPQ (Nasdaq) and XLK. SOX is negative so chips and tech do not show the continued leadership that surfaced over the last couple weeks as the SPX printed new highs. Note how XLB is outperforming to the upside today and also XLI continues its upside orgy. This tells you that traders continue to chase the materials and industrial sector themes and this helps create overall market buoyancy. The music continues to play and everyone is dancing having a good old time.
Note Added 3:12 PM: The 10-year yield is 1.96% up a couple ticks from the 1.94% printed early this morning. The 8 MA on the SPX 30-minute chart is 1668.32 so as long as price stays under 1668 the bears can continue to curl the 8 MA down towards the rising 34 MA. If the SPX starts to print above 1668, the broad indexes will rally into the close. VIX 12.98. TRIN 0.70. Bears should be able to push lower into the close into tomorrow with the negative divergence on the hourly and minute charts on their side but volatility will have to get back above VIX 13.12 and the TRIN needs to move up towards one.
Note Added 3:48 PM: VIX 13.07; bears need five more pennies. TRIN 0.80. SPX moving sideways at 1666. Copper is very important again and will be tomorrow.
Terimakasih anda telah membaca artikel tentang Keystone's Morning Wake-Up and Midday Market Action 5/20/13. Jika ingin menduplikasi artikel ini diharapkan anda untuk mencantumkan link https://globaloilproduction5.blogspot.com/2013/05/keystone-morning-wake-up-and-midday.html. Terimakasih atas perhatiannya.