Keystone's Midday Market Action 11-23-11

The game plan was to watch VIX 32.05, SPX 1181 and SPX:VIX 35.  VIX jumped above 32 at the open so that allowed bears to puff their chests.  SPX 1181 failed leading to much lower numbers.  SPX support and resistance identified 1173 as strong support. It failed minutes ago.  Keystone's SPX:VIX ratio dropped under 35 at 10:03 AM EST which locks in a large down day for the indexes today--as long as the ratio stays under 35.

Utes, UTIL, are also of interest, the only sector supporting bulls and that is in jeopardy of failing.  Watch the critical 50 week MA at 424.36, reference the chart this morning for a detailed discussion; UTIL now printing 425.85 dancing with the devil, only a point or so above where the broad markets are in a whole new area of worse trouble.

Note Added 11/23/11 at 10:24 AM:  Watch SPX 1166 support.

Note Added 11/23/11 at 10:56 AM: Keystone's SPX:VIX ratio jumped back above 35 at 10:53 AM so that dampens the bear's parade today. Markets will recover. UTIL was just saved from collapsing thru its 50 week MA, perhaps another try on tap? SPX 1166 support held, 1173 serves as overhead resistance now.

Note Added 11/23/11 at 11:11 AM:  UTIL ruptured the 50 week MA, this means big trouble for the broad markets. SPX:VIX is maintaining posture above 35, however, providing the bulls a sliver of hope. SPX testing 1166, if that fails that should push it all over the cliff.

Note Added 11/23/11 at 11:35 AM:  SPX:VIX lost the 35 level at 11:31 AM.  All systems go for bears.  SPX lost 1166 support, now it becomes resistance, next support is 1163 and 1155.

Note Added 11/23/11 at 12:41 PM:  The soap opera continues....SPX:VIX back above 35 at 11:32 AM. And now, back down at 35.00 as this is typed.......UTIL recovered but it is now back on top of the 50 week MA at 424.33..... SPX:VIX 35.02....markets are deciding right now......hang on......

Note Added 11/23/11 at 1:22 PM:  SPX:VIX ratio remaining above 35 keeping the market bulls in the game today.  UTIL now printing 425.01, above the 50 week MA at 424.34, this has been high drama all day long, now 424.97, only 63 cents above danger that will send the broad markets strongly lower. SPX S/R 1178, 1173, 1166, 1163, 1155 in play.

Note Added 11/23/11 at 2:20 PM:  UTIL failed the 50 week MA at 2:10 PM, and failed big-time, ushering in the market selling. UTIL now printing 423.47 a point under the danger line. SPX:VIX is under 35.  All systems go for the bears into the close. SPX 1166 failed again so next watch 1163 support.

Note Added 11/23/11 at 3:11 PM: UTIL keeps hanging around the 50 week MA at 424.33, price is now back above this critical level. Same-o for SPX:VIX with the 35 level, now printing 34.92. Today is a hot potato, neither side wants to run with the ball, as soon as control is siezed, the ball is tossed back to the other side again.

Note Added 11/23/11 at 3:51 PM:  Note that Keystone's Inflation-Deflation Gauge shows current prints at 306.69/101.031 = 3.03, only a hair above Disinflation.

Note Added 11/23/11 at 4:44 PM: The indexes gave up the ghost into the close. UTIL collapsed in the final minute--to close under the 50 week MA. This is very bearish for markets. SPX:VIX dropped under 35 to 34.19 verifying the large down day. SPX lost 1166 and 1163 support, so a test of 1155 may be coming. NYAD printed a low -2334 number so that would be agreeable to see a relief pop for the markets. Same due to high TRIN of 3.37. Same NYMO -106. There may be a little more market downside, especially since the utes gave it up today, but a recovery bounce would be expected at any time to provide relief to short term indicators.