THE SHORT-TERM CONSENSUS HOTLINE (SAMPLE)
Futures Update – prepared Tuesday, April 24, 2012, 3:15 p.m. eastern
PLEASE NOTE: The time that these reports go out is at the bottom of the report as “released.” The “prepared” time at the top of the report is when we begin production.
Dow 13009 (+82)
SPX 1372 (+5)
June E-Mini S&P 1367.75 (+5.00)
Nasdaq 100 NDX 2640 (-13)
Nasdaq Composite 2961 (-9)
Russell 2000 796.25 (+4.40)
XAU Gold and Silver Index 160.99 (-.04)
Feb Gold $1641.70 (+$9.140)
VIX 18.45 (-.52)
More about gaps.
Today, the rebound off of yesterday’s lows continued. In the case of the Dow, and apparently only in the Dow, yesterday’s gap was completely filled.
Of course, yesterday’s selloff was about the April 11 gaps in the SPX and Russell 2000. Those gaps marked the lows. Especially the gap in the SPX.
Here, as you can see in the chart below, the April 11 gap in the SPX at 1358.59 was almost filled to the tick during yesterday morning’s selloff, and, since then, the SPX has popped back up to recover 17 of the 20 points that it gave up yesterday (on an intraday basis). Of note, here in the cash there was no gap from yesterday’s down opening.
But there was a sizable gap in the futures, originally 14 points wide from 1375.25 to 1361.00. Now narrowed to just 4 points wide from 1375.25 to 1371.25.
Speaking of the futures, yesterday, as you know, we bought the exact lows, shown as 1354.25, as our M.I.T. order was at 1354.00, which was bottom tick. Today on the phone service I recommended tightening the stop to 1364.50 so we were stopped out of our long position at 1364.25 for a 10-point profit on an official basis. Now standing aside. If you are still holding long, you may wish to use a stop just under the afternoon low of 1363.25 but we will show that we are out and now standing aside.
The other big story of the day (if you could get to it through all the commotion about WMT and AAPL) was that of the RUT, which was making its own case for a market bottom. Here, there was also a gap from April 11 which was almost filled. The original gap was almost 7 points wide from 784.15 to 791.01. That’s almost 1% of the index. That’s like a gap in the Dow being more than 100 points wide. That might get somebody’s attention. Anyway, this gap in the Russell 2000 got the market’s attention (as usual) as the RUT bottomed at 785.37, less than 1¼ points from the bottom of that gap. From there it has popped back up into yesterday’s massive gap 795.56-804.05. Getting back up to fill that gap at the 804 level should be a minimum upside objective for this bounce.
The other part of yesterday’s story of the Russell 2000 was the now triple-bottom pattern in effect. For now, that triple bottom appears to be holding, though a break below the April 10 low of 783.56 would no doubt be a negative sign for the near term.
Meanwhile, the Nasdaq Comp appears, once again, to be in a world of its own. Though, this time, it’s not a good place to be, as it’s a world of relative weakness which is suffering under the weight of its one-time darling, market leader, AAPL.
In the Comp, yesterday’s selloff bottomed at the top of its March 8 gap. A break below yesterday’s low of 2946 should lead to the filling of that gap at 2935.69. That might be a spot to buy for a bounce.
The McClellan Oscillator settled yesterday at -93, once again approaching oversold. Today, it most likely will again be on the oversold side of neutral, but closer to the neutral zone, well off of recent oversold extremes.
On the sentiment front, that gap in the VIX from April 9 was almost filled last week, but not quite. Apparently, that was close enough to that gap to create some problems for the market.
H. Schiller
Released Tuesday, April 24, 3:33 p.m. eastern
PLEASE REMEMBER PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. FUTURES AND OPTIONS TRADING IS EXTREMELY SPECULATIVE AND ONLY RISK CAPITAL SHOULD BE EMPLOYED. SOME OR ALL OF INVESTED FUNDS CAN BE LOST IN FUTURES OR OPTIONS TRADING. NO GUARANTEES OF PROFITABILITY ARE MADE BY HARRY SCHILLER OR BY THE SHORT-TERM CONSENSUS HOTLINE.