Tuesday, July 19, 2011


Keybot remains short. The algoirthm printed a higher number in front of the close but that did not change the current bearish posture.  Retail, measured by RTH, did not fail the 109 level so that helped stop the selling yesterday.  The NYA, after slipping under the 40 week MA to indicate long term bearishness ahead for markets, recovered late day and now is back above the 40 week MA indicating that the secular bull market remains in place.

For the SPX today, the futures are green currently.  SPX starts at 1305 and if the market bulls can follow thru with the futures and touch the 1316 handle, the upside will accelerate and several more handles will click off quickly, moving up to test resistance at 1318, 1321 and 1323. The market bears need to push lower today to lose the 1296 handle if they plan on regaining downside momentum. A move thru 1297-1315 is a sideways rest day.

Housing Starts are a key data point each month so watch that closely in a couple hours time since it will move futures. Yesterday the SPX came down to touch the 1297 gap and this is the same level as the 62% Fibonacci retracement before bouncing.  The candle shows that the close was slightly above the halway point on the candle so these circumstances favored the bulls for today. Financials and semiconductors have been beaten badly but now show positive divergence on the charts which should help the bulls in the coming days.  Markets remain unstable, caution is warranted.

7/31/11; 7:00 PM EST EOM =
7/29/11; 10:00 AM EST =
7/26/11; 10:00 AM EST =
7/24/11; 7:00 PM EST =
7/19/11; 9:00 AM EST =
7/18/11; 3:54 PM EST = +4; signal line is +17
7/18/11; 10:06 AM EST = -10
7/17/11; 7:00 PM EST = +4; signal line +15
7/15/11; 10:00 AM EST = +4
7/11/11; 10:34 AM EST = +4; signal line is +12; go short 1324; (Benchmark SPX for 2011=+5.3%)(Keybot this trade=+3.0%; Keybot for 2011=+7.8%)(Actual this trade via IWM=+3.7%; Actual for 2011=+2.8)

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