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Two $ES_F Relationships That Still Work: $AAPL And $GC_F (Inverse); A Conspiracy Theory Ahead Of IPO


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Snippets: And yesterday’s new all-time record falls to the wayside … leading to more white flags a fluttering –  for some – NO mas … Tug-o War … What would the month end bring – profit taking or more markup? Once upon a time … it could have been both. Profit taking, knocking the indice at least 10 handles below the opening range followed by a rip. Ah, those were the days – now let’s just deal with hard, cold reality.

I had previously posted a study by Cyrus … Recall that I ran a quick study a few weeks ago? … these were the constraints:  1) new 50 day high.  2) volume below 30d average.  3) since 1965 and these were the conclusions:  1) bullish for 6m and 12m.  2) but mildly bearish for shorter timeframes modifying the third constraint to recent years (ie, since the recovery began in 2009), the conclusions change:  1) neutral in the near-term.  2) decidedly bullish in the intermediate- and long-term (ie 3m and beyond) this reflects the high level of skepticism in the economic recovery and rebound in the equity markets… and, more importantly, low participation does not preclude higher prices … Cyrus.

Cy – what do you think for the short term here? (morning email)

In words, still constructive.

As trite as this expression is, it’s still apropos … “As [AAPL] goes, so goes the market” … After having achieved a local top in late 2012, AAPL-SPX correlations plunged to -75%, recovered briefly in Spring 2013, only to turn negative again in Fall 2013. However, since making this “higher low,” the relationship has maintained its positive bias …

For the conspiracy theorists in your room, here’s a nugget … a clue: 1001 nights and 40 thieves … biggest IPO ever … will the establishment allow a 10% correction ahead of this monumental event? It’s basically this year’s version of Pitbull’s [FB] theory from 2012 …

ALI BABA – 28 people control ali baba all offshore required filing with SEC.

GAECKE Quant Report new positions:

▪ The Tornado Index is gaining strength and medium breadth today can activate the alert

▪ The Tornado alert occurs during periods of aggressive market breadth and signals a blowoff–shorting and selling should be avoided during Tornado alerts

▪ US 30-year Bonds triggered a sell signal y’day at 138.7826

▪ The most recent US Bond sell signal was in January 2014 for a small gain of 0.47%

Today started with 125k ESM traded on Globex, trading range was 1914.25 – 1917.75. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1918.00 – 1907.50 before settling at 1917.90, up 8.8 handles. Consumer spending unexpectedly fell in April after the biggest surge in almost five years as incomes slowed.

Today’s RTH’s, pit session, opened 2 handles lower at 1916.00 – 1916.30 traded an early low of 1914.70 before continuing the sideways to higher grind into month end – double topping at 1919.50 in the S&P future and 1921.48 in the [SPX] by 10:48. Nothing has changed in this environment, slow trade in thinning midday volume.  FuturesTNT (09:43)  After grinding sideways to higher, the equities sat in the upper end after printing another new all-time intraday high.

Chicagostock (11:25) GC catching bid.. ES should go offered.. “should – ES vol windows 1910.75×1920.25. Chicagostock (11:33) bingo … Chicagostock (11:34) GC / Equities only inverse relationship lately. Well, you guessed it … the equities started to fade off the highs and by 11:40 the [SPX] was back to testing and holding the intraday low before bouncing back. Chicagostock (12:02) ES bear flagging 1916 support off cash low 191425. Bears need to breach this support to shake out intraday longs, give way to lower vol window 191075. Was not in the cards for today …

Kathy (12:03) WB … tsk tsk tsk 7 cents?     william_blount (12:04) RAISE YOUR HAND if 1921.55 CASH LOOKS FAMILIAR TO YOU ? stephen yes WB. Albie WB yes, many times since May 1st “overshoot to as high as 1921.55 cash.”

Chicagostock (12:25) Cash low @ 191425, feels like we go after that, if so will squeeze out longs from this 1916 level … Pivot at 1425 as well with bottom range 1263 and lower vol window 1075. Well, by 1:30 we were back to retesting the daily highs … fooled ya – didn’t I?

Kathy @structuraltrading midday update

@PivotBoss midday vid ADR Trgts

@FuturesTNT  midday update

The MiM – MrTopStep Imbalance Meter started with a small to modest sell imbalance $232M, then up to $263M before fading back to only $60M and the FLIPPING / RIPPING to a BUY of $890M going into the month end cash close. Oh, and to top that off … there was a paper buyer of 2.5k big S&P in da pit, surprisingly the buy side pressure extending the all-time intraday record to 1922.00. The cash close traded 1921.00 before settling at 1920.50, up 3.6 handles on volume of 1.15M e-minis, while the [VIX] was down 17 ticks.

Eco calendars:

Previously posted on humpday:

A note from Dick Arms: An extreme lack of fear begets instability. There are times when the market gives the impression it is fading into nothingness. Volume becomes very low, trading ranges become very small, volatility becomes very low. Also, there is very little change in market levels, and day-to-day fluctuations are minimal. Looking back at history, when that happens, it is almost always a sign of a market high point.  Now, Dennis Gartman: We Were Wrong Calling for a Correction  

william_blount (08:18) every once in a while the commentary has a little conceptual thought in it-I actually like to write it for something a grain wizard told me to do back in 1989 – ‘make it so my 7th grade daughter can use it’ – EXTRACT THE PRICES, look at the pictures  -  today had a little conceptual work thrown in from 2006 but it is LITERALLY VISUAL – at 1913.50, on the high. At the end of the day each trader must decide which way he or she thinks the markets are going. For me, it’s simple; nothing has changed. For the last two years the market timers, from Robert Prechter of Elliott Wave to Tom DeMark to Dennis Gartman, have all cried wolf. WHO YOU GOING TO READ ME or them? ROFLMAO  –  no time to explain, but DICK ARMS is EXACTLY RIGHT, he just fails to COMPLETE THE thought …

stockmarketwhisperer (14:50) what is with this pathetic volume? ugh

william_blount (14:52) it has been the bane of BEARS in grinding 3rds for almost 3 years SMW.  DICK ARMS is SPOT ON — grinding 3rds are the precursor and diminished VOLUME part of the TELL before we MORPH to AV or DOWN TONE BUT AND THIS IS A BIG BUT – FINDING THE END OF THE GRINDING 3RD IS THE deal and many a BEAR in the morgue because of that one critical witches tale over the past 3 years ‘we have to go down, there is no volume’ = we HAVE TO GO UP because you have no anxious supply and LOOSE MONEY.

Mikey_P (14:55) Kind of like, option traders don’t die, they just expire worthless! But so far my short from 1912 seems ok.

william_blount (14:56) bears got the 68 — the lean will be s2H tomorrow — best shot they have had in 8 sessions for a pullback – they ACCOMPLISH nothing until 1887.

stockmarketwhisperer (14:57) I’m with you WB.. …and closing on the lows today would help.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Previews Trading Ideas


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