Lots of drama and theatrics ongoing under today's Big Top. Semiconductors are crushed with SOX now laying firmly in the bear camp. Financials, retail and volatility, XLF 20.13, RTH 54.08 and VIX 14.21, respectively, all failed into the bear camp today as well which created the gap down bludgeoning of equities at the opening bell. The bulls are pushing volatility lower right now with the VIX at 14.04 creating some market lift. Monitor these three parameters to determine market direction. Keybot the Quant flips short today and the bears appear in great shape if they can keep RTH and XLF negative.
Keystone took profits on the RTH short, covering the position and exiting. Also took profits on MZZ exiting that long ETF position which was short the markets. Keystone bot TLT opening a new long position which is the ETF that moves higher if yields drop (reference the previous $TNX chart). Also bot SCO opening a new long position which is an ETF that shorts oil. Also bot SPXL, the triple X long play today to help hedge against the heavy portfolio weighting to the downside (this position may be exited today using it as a day trade).
Note Added 12:32 PM: The 10-year yield is 2.78% off the 2.82% high today. SPX 1667.39 up off the LOD at 1659.24. XLF 20.10 only 3 pennies from turning bullish again at 20.13. RTH 53.83 firmly bearish under 54.08. VIX 14.04, under 14.21, so it is currently helping the bulls. TRIN 0.51, very bullish for today. The high TRIN on the initial selling only printed 1.4. For such a selling event it would be expected to be 2, 3, 4 or even higher. Traders are buying the dip today and remaining complacent even after the gap-down drubbing. Volume is above average today at a run rate of about 110% of a typical day's volume, more than you see on the buy days.
Note Added 12:58 PM: SPX 1665. VIX 14.12. XLF 20.08. RTH 53.82. TRIN 0.47 uber low number that will beg to move back above one either today or tomorrow, or Monday, which equates to market selling. The NYAD collapses to -2500 an uber bearish number that will want to see a market recovery to the upside today or tomorrow. Lots of mixed market signals continue. The higher yield on the 10-year hit 2.82%, with equities dropping, but equity weakness continues with yield dropping to 2.78%. The bond-stock relationship remains in flux. Markets continue to sort things out in a generally complacent backdrop, where no one appears particularly worried about today's sell off. Pay close attention to VIX and XLF. In this environment, also remember that markets may crash from oversold levels. Typically, oversold chart indicators are excellent signals for pending upside bounces, especially with positive divergence, however, in special market conditions under strong selling pressure, markets may crash from oversold levels. This is something to simply remain aware of and keep in the back of the mind while watching oversold indicators say on the SPX daily and hourly charts.
Note Added 1:06 PM: VIX 14.26.
Note Added 1:13 PM: UTIL tumbling to new lows now at 487.27 only 4 points from opening a trap-door for the equity markets.
Note Added 1:22 PM: Bulls successfully defend the LOD at 1659.24, so far. VIX 14.46. XLF 20.04.
Note Added 2:57 PM: SPX is 1662.63 with a new LOD at 1658.59. VIX 14.51. XLF 20.06. RTH 53.71. TRIN 0.42 (intensely low number--it is perplexing since TRIN should be 2, or 4 or higher??). UTIL 487. The SPX 50-day MA is 1656.76.
Note Added 3:40 PM: SPX 1660.59. Volume drops off slightly to a run rate of about 95% of a day's average expected volume. VIX 14.60. XLF 20.04. The 10-year yield is 2.77%.
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