Utilities collapse at the open. UTIL 477.91 fails with UTIL now printing 476.70. This is the trap-door so it will be interesting to see if the broad indexes take a whoosh lower over the next half hour. The SPX drops to test the key 1626-1627 support. The SPX falls under the 200 EMA on the 60-minute chart at 1630.58 signaling bearish markets for the hours ahead, however, the failure is tentative so far. Dollar/yen 99.57. VIX 16.67. TRIN 0.82 trying to help the bulls recover. UTIL 480.83 and 477.91 dictate market direction today.
Note Added 9:49 AM: UTIL just back kissed 477.91 and moves lower again. Fasten seat belts and helmets tightly.
Note Added 10:03 AM: Markets moderate after the economic data. Dollar/yen 99.43. SPX continues to fight at the 1626-1627 support. UTIL jumps back above 477.91 now printing 478.76 so this closes the trap door, for now. UTIL remaining below 480.83 will maintain market weakness moving forward and prevents Keybot from going long. UTIL 477.91 is the key number today. Here she comes lower again......
Note Added 10:14 AM: The hinge on the trap door is oiled and begins to open again with UTIL at 477.22.....
Note Added 10:18 AM: Trap door opening a bit further. SPX 1622 should lead to 1618. UTIL 476.50. SPX drops to a LOD at 1620.81, so far.
Note Added 10:24 AM: Dollar/yen 99.38. UTIL creeping back up now at 477.29. SPX 1622.08. TRIN 1.07. Keystone took profits on the SPXU trade exiting the position, will look to reenter.
Note Added 10:33 AM: Dollar/yen 99.38. UTIL 477.62. SPX 1623.22. Keystone is back in SPXU opening a new long position (which is short the S&P). Also bot DNDN, a dangerous and speculative biotech stock, opening a new long position.
Note Added 10:47 AM: Dollar/yen 99.51. VIX 17. UTIL 477.22. TRIN 1.11. The 10-year yield is 2.10%; note how yields move down with equities contrary to the great bond unwind a week ago that showed yields moving higher with equities lower. Lower yields and lower equities is disinflationary and deflationary type behavior. The UTIL 477.91 trap door must be rusty but she should give way.
Note Added 11:04 AM: SPX now testing 1618 support, whoa, 1617. This area is strong support with 1614 next. UTIL closed the trap door with UTIL now at 478.40 but the markets remain weak. Dollar/yen now 99.16 dragging equities lower. Keystone took profits on the SPXU using it as a day trade, flipped into SPXL to play the countertrend.
Note Added 11:10 AM: SPX is at 1616. If UTIL stays above the 477.91, now at 478.67, this will prevent the markets from dropping to 1614 and 1600. If UTIL 477.91 fails again, then 1600 is likely on the way.
Note Added 11:29 AM: UTIL fails 477.91 so the trap door for the broad indexes opens again. Keystone needs his heart pills. SPX 1617. WLT is feeling some love.
Note Added 11:37 AM: UTIL 476.30. SPX 1616.71. Keystone took profits on SSG exiting the trade which is short semi's, will look to reenter. Also bot KOL opening a new long position (reference this morning's KOL chart).
Note Added 12:01 PM: SPX LOD is 1613.99 (smack-dab on the important 1614 support). Time to bounce or die. The UTIL 477.91 trap door remains open and has created -16 spu's so far today. Even the TRIN is in the bear camp today at 1.29.
Note Added 12:08 PM: Dollar/yen 99.12. If dollar/yen loses 99 then SPX sub 1600 is a given. For now, dollar/yen is holding this 99.12-ish area. UTIL 476.34. VIX 17.29. TRIN 1.60. SPX 1612.95. LOD is 1612.75. This is all air between 1600 and 1614. Markets may hang around 1614 S/R until the Beige Book at 2 PM, now less than two hours away.
Note Added 12:56 PM: Dollar/yen loses 99. SPX 1609 handle. UTIL 476.51. VIX 17.71 now up +9% today. TRIN 1.82.
Note Added 1:06 PM: Dollar/yen back above 99 to 99.10 so the SPX recovers to 1612.
Note Added 1:18 PM: Utes are goosed to help the markets recover. UTIL at 477.06, now 477.16. SPX now back at the 1614 S/R. The SPX under 1630 and UTIL under 477.91 are very strong negative factors for markets moving forward and prohibit any substantive recovery.
Note Added 1:28 PM: Dollar/yen up to 99.33 so the SPX recovers to 1616. UTIL 477.22 teasing higher but remaining under the critical 477.91.
Note Added 2:08 PM: Dollar/yen 99.23. Beige Book not much of an event with the broad indexes idling sideways. UTIL is fighting along the 477.91; the winner will dictate market direction. This is an inflection point with UTIL 477.91 and SPX 1614 S/R. Which way will they pivot?
Note Added 2:26 PM: The pivot is down; UTIL 477.32 and SPX 1611. Large sell offs on Wednesday's usually lead to lower lows on Thursday. This did not work last week but did work the week before. Interestingly, the last three Wednesday's are all strong selling days. Whoopsies. Markets just slipped on a banana peel. UTIL down to 476.85 and SPX to 1609.
Note Added 2:32 PM: UTIL 476.13; the trap door is officially open again. SPX 1607 printing new lows likely on its way to 1600. TRIN remains bearish at 1.88. Dow is under 15K down over -215 points. Keystone's SPX:VIX Ratio Indicator is at 90 now finally arriving near the 68 neighborhood again. The SPX:VIX will come into play now that volatility is jumping; a drop under 68 indicates a major market technical failure but it will probably be a few days before it becomes pertinent. The SPX 50-day MA is 1604.20 and serves as a bounce or die point. Support below at 1604, 1600, 1597 and 1593.
Note Added 3:37 PM: UTIL 478.28 so the theatrics continue and the gallows operator has to raise the trap door again and wait for 477.91. The SPX is sticky at 1614 S/R. The LOD at 1607 remains three points from the 50-day MA at 1604 so a proper test of this important moving average did not occur and remains on the table.
Note Added 4:05 PM: UTIL finishes under 477.91 leaving the trap door open. UTIL loses both 480.83 and 477.91, a significant negative market development. The UTIL 477.91 drama continues tomorrow.
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