Chairman Bernanke's talk causes the 10-year yield to jump from 1.85% to 1.89%. Check that, the 10-year Treasury note yield is now 1.90% filling the gap highlighted on the TNX charts this morning. The dollar/yen is printing new highs at 101.94; looks like a 102 handle is coming. The major indexes are a hair positive receiving help from the dollar/yen buoyancy (yen weakness). The stronger dollar, however, creates pressure on copper and commodities. Crude oil is under 94. Brent oil is under 102. Gold is down 47 bucks to 1421. The euro drops like a stone losing 1.31 yesterday and 1.30 today now printing 1.2949.
This mornings metrics are SPX 1635 and 1623, and VIX 13.73 (currently at 13.19 causing market bullishness), JJC 41.90 (currently 41.19 causing market bearishness) and GTX 4810 (currently at 4668 causing market bearishness). The SPX is traveling sideways unwilling to yet choose 1635 for happy bulls, or 1623 for happy bears. The 8 MA stabs down through the 34 MA on the 30-minute chart a few minute ago signaling bearish markets for the hours and days ahead but watch the cross closely to see if it holds through the closing bell (reference the previous chart). Keystone's trading algorithm, Keybot the Quant, is long but if the VIX moves above 13.73 and the SPX under 1623, the algo wil likely flip short. It is all there on a silver platter for the bears today but they must start pushing hard if they want it. Well bears, do you want it? European markets are closing now. Keystone took profits on MCP exiting the position.
Note Added 11:32 AM: The 10-year yield is now 1.91%. Dollar/yen 101.89. Dollar is up to 83.36 (reference this morning's dollar chart) slapping commodities. Markets appear unstable today. The 10:30 AM central banker pump is creating buoyancy in the SPX moving price off the 1625 bottom back up to 1630. VIX 13.06. TRIN 1.13 favoring bears by a smidge.
Note Added 11:45 AM: 10-year yield 1.92%; it is possessed today. Asset relationships may undergo an adjustment moving forward. The higher dollar/yen and higher yields are not having a particularly strongly higher effect on equities today. The higher dollar which creates commodity weakness is raining on the bullish parade to some extent. SPX is 1626 testing the H&S neckline described on the 30-minute chart. VIX 13.19. TRIN 1.27. The 8 MA remains under the 34 MA as discussed above. The XLI (industrials sector) is down today after a six day upside orgy of rotation running from 41 to 43, +5%. Tech (COMPQ) is up today on strong chips (SOX and SMH). RUT (small caps) is up. The beat goes on.
Note Added 12:02 PM: 10-year yield 1.91%. Dollar/yen 101.66 off the highs. SPX 1625. VIX 13.27. If the bears want it they need to run with the ball right now and quit the dilly-daddling, otherwise, the bulls are going to take the ball back. Keystone bot TLL, the leveraged inverse telecom ETF, another dangerous and speculative ETF, and also a thinly-traded play, opening a new long position. TLL weekly and daily charts are setting up with attractive positive divergence.
Note Added 3:01 PM: VIX drops under 13 slipping on a banana peel. Say no more, you know the broad indexes are not going to sell off if volatility is dropping. TRIN is 1.03 dead flat neutral so traders likely want the markets to float out sideways into the weekend. Copper recovers today, JJC now teasing the 41.90-ish area called out this morning. Dollar/yen is 101.55 which appears to be sticky S/R so the move either way off of 101.55 will be important. The SPX and Dow are flat but tech and small caps are printing new highs. XLK and XLI are flat today so the rotation into these sectors continues to gain interest despite their charts looking as over extended as any other sector. Traders blindly follow the GS call one week ago to buy XLK, XLI, XLB and XLF (the sectors). The 8 MA remains under the 34 MA signaling the bears in charge for the hours ahead but the bearish resolve is questionable. Bears need to keep the SPX below 1628 during this final hour to maintain the 8/34 cross. Bears got nothing until they attain VIX 13.73. Bulls need JJC 41.90. SPX is 1629.
Note Added 3:28 PM: The big recovery in commodities occurred at 2 PM EST. Lots of market action is occurring around the 2 PM hour these days. The trading day is 6-1/2 hours. The market trades in six 65-minute sessions. The fifth session is from 1:50 PM to 2:55 PM so traders are making moves at the beginning of the last two trading segments of the day. VIX is 12.92 so the bears are looking for a bottle of '5-hour energy' to find the strength to move forward. SPX is 1629. JJC 41.83. TRIN 0.99. Dollar/yen 101.57 at the sticky 101.55. Markets appear undecided today and unstable not knowing which way to commit. Many traders are full steam ahead tripping over each other to buy tech, industrials, materials and financials, while others are starting to question the bullish euphoria. Monday's opening bell is setting up to be a potential key event.
Note Added 3:47 PM: Bulls running higher since the bears do not want the ball. SPX towards 1632. VIX 12.88.
Note Adde4d 3:50 PM: SPX over 1632. Price jumps from 1629 to 1632, three handles in ten minutes.
Note Added 4:02 PM: New highs are printed for indexes. The 8 MA remains under the 34 MA but is poised to pierce up through at Monday's opening bell. JJC provides drama into the close ending at the 41.90-41.93 bull-bear line. VIX collapses to 12.55. The Monday open will be interesting and very important.
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