Keystone's Market Action 8-18-11

Indexes down about 3% at this writing, just another day in the neighborhood.  SPX:VIX ratio has dropped back under 35 so the bears have taken back control of the broad markets--as long as the ratio stays under 35. Last print 29.34, thus, a full five plus points under. The market bulls will have no upside momo until the ratio returns above 35. Broad market bears will rule as long as the ratio stays sub 35.

For the utes, they move along less effected than the other sectors and broad markets, down about a percent and a half, many traders parking money in utes for safety. UTIL, now at 420.54, remains above the critical 414.10 level. This level announces a trap door for equities markets. Thus, at six points above, this move down in the broad markets appears contained for now. If 414.10 is lost, run for the hills, the markets will collapse.

SPX now testing the 200 week MA at 1154 which serves as sturdy support. No sooner that this is written and the support fails, SPX now at 1149, now testing 1145.  Reference the support and resistance levels in the previous post. 1120-ish was sturdy support, the 1119-1121 zone.  Also watch to see if the trap door holds, or not, at UTIL 414.10.