Keystone's Midday Market Action 6/11/12

Equities markets jumped higher at the open, then fell on their sword. The tell this morning was the stubborn Spain 10-year yield that has now printed above 6.5% signaling more turmoil than last week--despite the bailout.  In addition, Italy 10-year yield poked above 6%. The NYA was not able to poke up thru the 40-week MA, so this remains bearish.  The SPX:VIX ratio did not print above 68, so this remains bearish. The SPX 60-minute chart bumped its head on that 200 EMA and it appears the negative divergence is starting to slap price down, thus, this tool remains bearish.  The bulls can continue hanging their hat on the SPX 30-minute chart since the 8 MA remains above the 34 MA. The RTH is at 41.54 well above the 41 level so that is another banner the bulls can wave.  Utilities are flat to positive hinting that the markets should come back up. Big trouble begins if/when the utilities sector rolls over. For now, sideways action rules the day; the SPX is moving thru the 1319-1326 range for the last couple hours. See which way price wants to exit. MS is getting hit today due to European exposure.

Note Added 6/11/12 at 12:27 PM: SPX continuing with the sideways vibe thru 1319-1326. Keystone took profits on the TZA trade from late Friday, a tiny proift that will only allow the purchase of a hotdog and a coke. Also bot SSO opening up a new long position.

Note Added 6/11/12 at 1:21 PM:  SPX testing the top end of the 1319-1326 range today. Keystone took profits on the SSO trade, will look to reenter.

Note Added 6/11/12 at 1:47 PM:  SPX range can be called out as an even tighter 1321-1326 range today, now testing the low end once again. Keystone bot TNA opening up a new long position. Also bot KWK opening up a new long position.

Note Added 6/11/12 at 2:19 PM:  Spoke to soon, the sideways range today is 1319-1326 with price tumbling lower and falling thru the 1319. Now printing 1317.76. The SPX 20-day MA is 1313 and the 1314-1319 zone is strong price support so the 1313-1319 area is a strong gauntlet of support.

Note Added 6/11/12 at 2:31 PM:  On the SPX 30-minute chart, the 8 MA is barely above the 34 MA now. Bulls will need to bounce things higher now or they will lose control. Keystone bot more TNA.

Note Added 6/11/12 at 3:03 PM:  On the SPX 30-minute chart, the 8 MA is now one single hair away from stabbing thru the 34 MA. Will it occur or is a stick-save on tap? The range is 1318-1326 into the close--unless the bears can push hard. LOD is 1317.55; see if this area holds as support, or not. Keystone's ANR is getting slapped silly today, but the charts remain favorable. Coal is getting slapped because of steel downgrades; painted with the same brush.

Note Added 6/11/12 at 3:27 PM:  Note the test of the SPX 20-day MA at 1312.53. SPX printing LOD at 1312.70, the 20-day MA has held so far. The 8 MA sliced down thru the 34 MA on the 30-minute chart which is a bearish signal for the hours and day or two ahead.

Note Added 6/11/12 at 3:51 PM:  SPX punctures the 20-day MA, very bearish.

Note Added 6/11/12 at 4:00 PM:  The SPX 1307-1308 support held after the 20-day MA collapsed. The Spain 10-year yield at 6.51% was the skunk at the garden party today. RTH dropped today to close at 41.15 pennies away from a very bearish trigger for the markets. Consider this as a line in the sand for tomorrow that will dictate broad maket direction. Watch RTH 41.08 only seven pennies under; markets are in big trouble if 41.08 fails tomorrow. Keystone bot to cover the DIS short trade and closed it out for another hot dog and a coke worth of profit, will look to reenter, it remains an attractive short. Keystone is net long overall and took a beating today. Best to receive treatment for the bruises, whip marks and cuts from the falling knives, then perhaps have a slice or two of apple pie to contemplate these skittish markets.