The markets pick up where they left off on Friday. Pending Home Sales are on tap at 10 AM. The dollar/yen falls through the 98 level so the stronger yen beat the Nikkei Index -3.3% overnight. The week may be off to a calm start but the kitchen will be hot from here on through Friday. Bulls need higher copper and utilities. Bears need lower semiconductors, lower utiliities and higher volatility. Copper is negative today and utilities are flat, so the bulls are challenged. SOX is 473.58, three-points above the SOX 470.70 line in the sand and VIX is 13.47 remaining under the VIX 14.26 line in the sand.
Bulls only needed a tiny smidge of green in the futures overnight to launch the move towards SPX 1700 but red was the color instead. If bulls can push above SPX 1692 today, and hold it a few minutes, that will create an upside acceleration. Bears need to push under 1676 to regain downside mojo. A move through 1677-1691 is sideways action today, the move thus far. The 8 is above the 34 MA on the 30-minute chart signaling bullish markets for the hours ahead. The bears need to push the SPX under 1687 to create market negativity, otherwise, they got nothing. With JJC staying under 39.20 and UTIL under 523, the bulls cannot gather upside momo. With SOX above 370.70, VIX below 14.26 and UTIL above 481, the bears cannot gather downside momo. Everything is sideways market noise until one of these parameters makes a decision and the markets will follow in that direction.
Some interesting ETF plays under potential consideration this week are long DBA, TLL, HDGE, SJB, JO, ERY, SKF. Interesting individual stock longs of interest are MUX, OSUR, TRQ and SD. Some shorts of interest are KKD, MYL, RTH, XRT, DIS, TSLA, DPZ and BA. DBA is long commodities. TLL is short telecom but it is thinly-traded. HDGE is a bear fund. SJB is short high-yield. JO is long coffee. ERY is short energy. SKF is short financials. MUX and TRQ are miners. OSUR is a biotech. SD has had high short interest so it may be prone for a large pop. KKD is short donuts. MYL is short pharma and the PFE and MRK results tomorrow will dictate the action in this sector. RTH and XRT are short retail plays. The Mouse House looks weak with a negative divergence top, ditto electric cars, pizza and airplanes, respectively.
Note Added 10:02 AM: Pending Home Sales are weak which was expected. SOX is 472.34 teasing lower so it may create drama and theatrics today like Friday as it is in the 470.70 neighborhood. If SOX 470.70 fails, the stock market should head south in force. Bulls are not concerned with semiconductors remaining elevated. VIX 13.56 only 70 cents from VIX 14.26. TRIN is 0.90 bullish as usual. The bulls laugh each day as they maintain a low TRIN. SPX 1688.25. Dollar/yen 98.09. 10-year yield 2.59%. Crude and copper lower, gold and silver higher.
Note Added 10:09 AM: SOX 471.71 now only one thin point from causing market mayhem.
Note Added 10:17 AM: SOX 470.88. Use SOX 471.15 as the line in the sand rather than 470.70 (these numbers are constantly recalculated by Keybot). This is failure right now but bears will need to hold it a few minutes. If so, markets should sell off strongly. Whoa, there's a bounce to SOX 471.25 stopping the negativity. Watch SOX 371.15 since it rules the show today. Under SOX 371.15 is thumbs down for the stock market. Above SOX 471.15 and bulls are fine today. The theatrics begin.
Note Added 10:23 AM: SOX 472.05, big bounce. Nothing to see here, move along, move along. VIX 13.55. TRIN 0.88. SPX 1687.62.
Note Added 2:40 PM: SOX failed at 471.15 at 11:06 AM. The weak semi's sent equities lower today. Keybot the Quant remains long but if SOX stays under 471.15 and the SPX drops under 1676, the algo will likely flip to the short side. SOX is oscillating above and below 471.15 for the last 45 minutes trying to make a decision. If SOX moves higher, equities will move higher into the closing bell. If SOX stays under 471.15 and lower, equities will sell off into the bell. VIX is 13.40 at the lows for the day so the crushing of volatility during the session once again creates market lift. TRIN 0.81 on the bull side today. SPX 1688.36. The 8 MA stabbed down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead but the 8/34 cross can go either way due to the current market indecision. Bears can smile if they keep SOX sub 471.15.
Note Added 3:20 PM: SOX 470.49 so the bears are happy. VIX 13.47. TRIN 0.83. SPX 1686.12. Dollar/yen 97.86 so the lower dollar/yen pair is in sync with lower equity markets. Copper is now positive. The 10-year is 2.59% flat all day. The 8 MA just moved up through the 34 MA on the 30-minute chart signaling bullish markets ahead. This 8/34 cross behavior verifies the erratic, unstable and indecisive markets right now, like a deer in the headlights ready to leap but does not know which way.
Note Added 3:59 PM: SOX 469 handle.
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