Keystone's Midday Market Action 12/23/11

SPX rings a bell at 1258, the starting year number. Once it moved up thru 1255, the bulls were running.  The 200-day MA is 1259.15. The starting year number is 1257.64.  Watch SOX 368.60 level, above here and the upside bull party will expand into an orgy. SOX leaped up at the open tagging a high at 368.51 minutes ago. If SOX 368.60 is taken out to the upside, search for a lamp shade, the booze will be flowing like water and the bulls will be celebrating with Santa into the weekend.  If SOX 368.60 is not attained, markets will languish sideways or weaken.

Note Added 12/23/11 at 10:08 AM:  The SPX breaking out above the 200-day MA, should it occur, would be in concert with the SOX overtaking 368.60.  The semi's must provide the new bull fuel, if the SOX cannot, then the markets will stall.  SPX now at 1258.83 between the starting year number and the 200-day MA.  SOX now printing 367.14, a point and a half under the level the market bulls need for further upside.

Note Added 12/23/11 at 10:13 AM:  The SPX HOD is 1259.10 and the 200-day MA is 1259.15. HIgh drama as price came within a nickel of busting loose further upside momo. Now printing 1258.85........

Note Added 12/23/11 at 10:58 AM:  The 10-year yield is back up and over 2%. SPX remains nestled between the 200-day MA and the starting year number.  SOX is 366.38, two points below the level where additonal bull euphoria will occur in the markets.  Thus, the markets languish along sideways for now.  SOX showing an upside move developing now......366.67...keep watching...366.77.

Note Added 12/23/11 at 11:26 AM:  The SPX breaks thru the 200-day MA. A back kiss test should occur at 1259.16.  The SOX is now printing 367.72, steadily moving up.  The broad market should have limited upside unless the semiconductors cooperate with SOX getting up and over 368.60.

Note Added 12/23/11 at 11:35 AM:  The SOX now over 368, printing 368.10; the market bulls needs 50 cents more. The euro is slightly red, this is odd since the euro moves with equities. The euro says that the markets should be flat today not bullish, or, the markets are saying the euro should move higher. SPX S/R is 1258, 1261, 1267, 1268 and 1277. SPX has now punched up thru the 1261 R and is printing 1261.62.  SOX at 368.42 now. The whole day is being decided now.  See if SOX has another 18 pennies. See if SPX can hold 1261 support, and more importantly the 200-day MA support now at 1259.17. High drama, the SOX 368.60 level will tell you the answer.

Note Added 12/23/11 at 11:39 AM:  That did not take long, SOX slap down, SOX now printing 368.03 about to lose the 368 handle. Semiconductors are still not able to supply bull fuel yet.

Note Added 12/23/11 at 3:38 PM:  SOX threatened the 368.60 level just after lunch time but failed, unable to move higher.  Thus, the broad markets move sideways.  Without semi's, broad indexes have no oomph.  The Nasdaq upside is lagging the SPX upside so that is not a sign of market strength. Into othe close, watch the 1261 support, 200-day MA at 1259.17 and the starting year number 1257.64. The SPX did not back kiss the 1259.17 level that it broke thru before lunch time.  Without the semi's providing market upside oomph, a move back down in the SPX would not be surprising.

Note Added 12/23/11 at 3:45 PM:  SOX is running higher.  Bulls are not done yet. SOX now printing 368.38.  See if it can muster up another 22 pennies.

Note Added 12/23/11 at 4:44 PM:  SOX closes exactly on top of 368.60.  How does Keystone know these numbers in advance? We watched all day and in the final minute SOX tags 368.60. This move up in semi's into the close provided enough razz-a-ma-tazz to push the SPX up to 1265.33 at the close.  Thus, SPX closes between the 1261 support and 1267 resistance.  The low volume allowed the late day market pop.  The NYSE volume today was only 50% of the 10-day average daily volume so lots of traders are at home or at the pubs drinking eggnog already. The broad indexes printed higher today despite the euro selling off, the Nasdaq lagging the SPX, and a back test of the 200 day MA not yet occurring. Tuesday's trade will pick up where this drama ended at SOX 368.60.  Whichever way the semiconductors move out of the gate on Tuesday, so goes the broad markets. The 1260's printed as the rising wedge in the chart above targeted.  A pull back is needed but this three-day bull trend is strong, so after any pull back the upside should run a bit more.  But, lots of time to think thru it all and develop a plan before Tuesday's trade occurs. More interesting original analysis and charts will be posted this weekend.  Only four more trading days remaining in the year.  The EOM, EOQ4 and EOY 2011 is Friday, 12/30/11. Merry Christmas. Happy Hanukkah. Happy Holidays. Ho, ho, ho.