The SPX drops to test 1505 support. The 20-day MA at 1510.56 failed so a back kiss would be in order for the bears to make sure they want to take things lower. VIX is 15 heading higher but not at 15.70, yet. GTX is collapsing to 4958 but not under 4930, yet. The bears are pushing. Keystone bot IAG, a gold miner that has been bludgeoned from 17 to 7. The charts are set up with positive divergence. NEM, GDX and GDXJ are also of interest moving forward but IAG appears to be a good entry for a starter long position.
Note Added 2/21/13 at 10:28 AM: The SPX fell through the 1505 support turning it into resistance and here is the back kiss of the 1505 resistance. Either price punches back up through and will set its sights on the 20-day MA back test, or, it fails. The VIX ran above 15.70 causing the bears to pop the champagne corks but minutes later, the level would not hold, so the bears were frantically attempting to push the corks back into the bottles. VIX pulled back now printing 15.19. GTX drops to 4956 but remains above 4930. The bulls are holding on today. Watch to see what happens at SPX 1505 S/R. The 200 EMA on the SPX 1-hour chart at 1498.28 is important and will signal big market trouble if it fails. The bulls will remain relaxed if they hold 1498.28. The H&S mentioned yesterday with head at 1531 and neckline at 1514 targets the 1497 level. The 1498 is long term historic support as well. Obviously, the 1497-1498 support level now takes on significant importance and is a critical bull-bear line in the sand for markets. Bulls are coolio above 1497-1498, the bears will rule under 1497-1498. The LOD is 1499.56, pay attention to the low prints today. Keybot the Quant remains long and will likely not flip short today unless the LOD at 1499.56 is taken out. The 10-year yield drops another tick to 1.97%, the lower yield moves, the better for equity market bears. The equity bulls need to see higher yields.
Note Added 2/21/13 at 11:15 AM: VIX is climbing again. SPX 1505 resistance appears to be holding for now. Keystone took profits in the IAG trade on its wildly enthusiastic positive divergence bounce this morning, for a couple-hour trade. Will likely reenter before the close today. Also bot to cover LL closing out that short trade taking profits. All the housing sector stocks are getting hit as has been discussed here in the charts over the last couple or three weeks. SRS should continue higher for the days and weeks ahead. APL looks like it will be a good long buy from 415-440. Apple may spike down quickly intraday to 420-ish in a heartbeat that may be the time to snag it, like fly-fishing, and then it should recover. GOOG receives 1000 price targets from analysts this morning, just like the kiss of death with AAPL's 1000 targets. As repeated almost daily, the GOOG weekly chart is nasty, firm negative divergence, and is likely an M top. Whoever buys or bot GOOG over the last month will likely have their head handed to them as the days and weeks play out. GOOG has a juicy gap at 705-735 which serves as a landing area perhaps as the Easter Bunny comes to town.
Note Added 2/21/13 at 11:36 AM: The SPX is 1502. VIX 15.52. GTX 4963. Tech (COMPQ) and small caps (RUT) continue to lead the broad indexes (SPX and INDU) lower, a bearish indication. NYSE volume is ruining above average again today thus far. TRIN is 1.52 firmly favoring the bears with steady-eddy selling. The SPX 1497-1498 is the line in the sand; Heaven above, Hades below. WTIC oil lost the 93 level now tagging the projection on the charts a week or so ago once the 95.50 gave way. According to Keystone's 80/20 rule, if oil loses 92, the 88 level may be on the way.
Note Added 2/21/13 at 1:07 PM: VIX moves above 15.74 emboldening the bears. VIX 15.74 will dictate market direction today; now at 15.76 helping bears by a couple pennies. The SPX comes down to tease the 1499 handle, testing the 10 AM low, but bounces. The LOD is 1499.28. Keybot the Quant wants to flip short but is being held back by internal programming rules; if the SPX drops under 1499.50 and stays under for about five minutes, Keybot will likely flip short. Of course VIX must stay above 15.74 as well. The SPX 1-hour and 2-hour chart indicators indicate a preference to see lower lows in price so this may create weakness well through this afternoon. Trouble will begin if the LOD gives way.
Note Added 2/21/13 at 1:33 PM: VIX back kissed the 15.74-15.76 area and bounced, now printing 15.88. The bears are not fooling around today. SPX is 1501. TRIN 1.56. The 10-year is 1.96%. GTX 4958. UTIL 473.39. Euro 1.3182.
Note Added 2/21/13 at 3:25 PM: Keybot the Quant flipped to the short side at SPX 1498 at about 2 PM EST. Watch for a whipsaw, the SPX is mounting a recovery already. The VIX above 15.74 created the market weakness, now the volatility has dropped again. Keystone took profits on RTH, covering the shorts and exiting the position. Will look to reenter short in the days ahead.
Note Added 2/21/13 at 3:46 PM: Keystone bot PBR opening up a new long position. PBR is showing attractive positive divergence on weekly and daily charts and has been beaten from the 50's to 14 over the last three years, it appears that the beatings should now end.
Note Added 2/21/13 at 3:53 PM: Keystone bot NEM, the largest gold miner, opening a new long position. NEM is setting up with positive divergence and may bounce right away or need a little while to base. The position will be added to if it works lower.
Note Added 2/21/13 at 3:58 PM: Keystone added more PBR.
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