The higher volatility creates the wild action in markets today. Get used to it since a VIX climbing higher will only increase this drama. This is developing into a trader's paradise since it is much easier to maneuver and enter and exit positions with the large point swings in play. The ISM shows contraction, under 50, which was a negative surprise. Utilities broke down after the bell but then were goosed for a recovery. UTIL 480.80 and 477.91 are the two key levels. UTIL is now printing 481.85 trying to hang on to help the bulls. JJC is under 41 well under the important 41.40 level. VIX is also continuing to cause bearishness above 16 well above the 13.30 level the bulls need to regain control of markets.
The SPX is teasing the 1630-1631 support today. Whoopsies, SPX just drops down through now printing a 1626 handle. Dollar/yen broke 100 now at 99.60 so the stronger yen should be creating market weakness. The 10-year yield is down to 2.10%. Much of this action is shaky and erratic where the asset relationships are trying to figure out common ground.
Note Added 10:43 AM: VIX now above 17. SPX is down to LOD at 1625.16. SPX 1626-1627 is strong support so if a bounce occurs it would be from here, if not, next R is 1618 then 1614 then 1597-1600. UTIL remains above 480.80. Keystone took profits on SPXU exiting the position and continues to hold other index inverse ETF's that remain underwater.
Note Added 10:43 AM: SPX is holding 1626-1627, for now. UTIL moving up over 483. TRIN is 0.85 on the bull side. Keystone bot SPXL, a triple X ETF on the long side for a potential countertrend move. Also, added more SSG to this ongoing long position which is a 2X inverse ETF that is short the semiconductors.
Note Added 11:15 AM: UTIL knocking on 485 so the bears got nothing unless they drive utes lower. SPX now fighting at the 1626-1627 support level again. Remember, the 1625 is the bottom rail of the upward-sloping channel on the daily chart posted this weekend so 1625-1627 is an important confluence of support. TRIN 0.69 wants to see the bulls win today. Keystone bot NAT, a long shipping play, opening a new long position.
Note Added 11:23 AM: Dollar/yen drops under 99 to 98.89, now recovering back to 99.10, a dramatic move lower today which is a stronger yen. The 10-year yield is 2.08%. So yields are moving lower in concert with equities moving lower which is the standard disinflationary and deflationary theme. Last week, stocks were lower with yields running higher. The markets are sorting out these asset relationships; dollar, yen, euro, yields, equities, commodities. Price discovery is a mess due to the multi-year central banker intervention; markets are tied in knots. Keeping things simple, watch the SPX 1625-1627 support for a decision, bounce or die. Watch UTIL 480.80 and 477.91 with UTIL now creating bulishness at 483.08.
Note Added 12:02 PM: SPX 1628.16. SPX moving through 1623-1629 since 11 AM so the move above or below this range is telling. UTIL 484.67. 10-year yield 2.09%. JJC 41.16. VIX 17.27. TRIN 0.66. Dollar/yen 99.20. Euro 1.3096. With UTIL elevated, due to the lower yields today, the SPX will likely bounce from this zone. If UTIL loses 478, then SPX sub 1600 is on the way. Copper is moving higher so the bulls are trying to stage a come back. JJC is at 41.16 near the HOD at 41.19 and approaching the bull-bear line at 41.40.
Note Added 12:57 PM: SPX 1627.45. The beat goes on. VIX 17.21. JJC 41.24, bearish but climbing higher. UTIL 484.33 remaining bull-friendly. Ditto TRIN 0.62. Dollar/yen 99.17. Nikkei futures point to another -4% move lower on tap for this evening. Keystone bot WLT, a long coal play, a speculative trade, opening a new long position. WLT is setting up with positive divergence as is the coal sector in general reflected by KOL daily and weekly charts but they are knife-catches and may require further basing.
Note Added 2:23 PM: SPX 1630.80 sitting on the important 1630-1631 S/R where the 200 EMA on the 60-minute chart is 1630.11, a critical bull-bear line in the sand. UTIL is 484 above the critical 481 and 478 levels so the bears cannot develop any downside oomph today. TRIN 0.64. Keystone took profits exiting the SPXL trade using it as a day trade today. Also bot more WLT and NAT.
Note Added 2:34 PM: Markets meandering sideways. Keystone bot SPXL reentering this triple long X opening a new long position. TICK printing some lows at -600 to -700 over last few minutes.
Note Added 2:46 PM: Follow the TICK. The low TICK's identified the bottom at 2:30 PM, now a +900 TICK occurs 3 minutes ago to identify a top in the minute time frame. TICK now back down to -600. TRIN remains bull-friendly at 0.62.
Note Added 2:49 PM: TICK -800 and lower which may create another bottom in the minute time frame; see if the broad indexes float up a bit over the coming minutes.
Note Added 3:04 PM: The TICK machine is going to blow a gasket, wild moves up and down. Keystone took profits on SPXL again using it as another day trade, exiting the trade on the +800 TICK.
Note Added 3:48 PM: Markets floating higher into the close. JJC 41.30. UTIL 483.28. TICK just jumped above +1000 so Keystone bot SPXU, the triple X inverse ETF shorting the S&P, opening a new long trade.
Note Added 3:57 PM: Markets are pumped into the closing bell with the +1000 TICK's. UTIL has a 482 handle nearing the 480.80 that would give the bears the nod. JJC 41.28 nearing the 41.38 line that will give the nod to the bulls. TRIN 0.59 firmly bullish all day long.
Note Added 4:00 PM: SPX jumps to 1640.42 closing at the highs. This joyousness may temper the negativity in Japan slated for this evening. Copper and utilities will tell the tale tomorrow.
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