Keystone's Midday Market Action 11-4-11

The jobs circus passed thru town about an hour ago, numbers in line, revisions were upbeat, but manufacturing and construction jobs are weak, so that is nothing to be happy about.  Italy 10-year yields now spiking north to 6.35%, that is not good for the Europe situation.  Retailers are downgraded today so that may help start the RTH spank down. The Nasdaq is down 0.55% while the S&P is down 0.69%, thus, since the Nasdaq leads, the downside is limited today.  Watch to see if the Nasdaq accelerates to the down side, or not.

For today, watch four key sectors, copper, volatilty, financials and retail, represented by JJC, VIX, XLF and RTH, respectively. If JJC stays below 46.75 and VIX above 30, the market bears are happy. If XLF stays above 12.95 and RTH above 107.70, the market bulls are happy. Simply watch to see which side blinks first which will be reflected in one of these four parameters.

If the day motors along with none of the four items changing their posture, the market action will be sideways into the weekend.  Today, SPX 1263 is a magic number for bulls and 1235 is the magic number for the bears. Increased buying, or selling, respectively, will occur if these levels are hit. A move thru 1236-1262 is sideways action as thoughts of weekend fun take over.

Note Added 11/4/11 at 3:42 PM: Utes, semi's, retail and financials remain bull-friendly. RTH remains above 107.70, and XLF remains above 12.95 so the market bears did not have the juice today.  Conversely, the market bulls have nothing to be excited about, a down day currently, and copper price remains weak, JJC well under 46.75 and the VIX remains elevated over 30.  Thus, we see a stalemate day.  Also, the Nasdaq percentage has been down less than the S&P all day long so far so that muted the down side action. SPX moved thru 1239-1261 today, thus, the bulls had no oomph to touch 1263 to ignite the upside, and the bears did not have enough energy to push the SPX under 1236, hence, sideways action today. Perhaps the Greek vote this evening will break the sideways log jam and set up trading for next week. 

Note Added 11/4/11 at 4:15 PM after the close: The VIX came down to 30.16 but still remains above 30 favoring market bears.  BAC tumbled 6% today but the other banks and financials hung in there only losing a percent or two, thus, the effect on the XLF was minimal keeping the market bulls happy on a down day.