Keystone's Midday Market Action 6/13/12

The Retail Sales data are weaker than expected but not by a huge amount. This reinforces the slackening demand in the retail sector; the stores at the malls may see tumbleweeds and hear crickets in the background as the summer plays out.  The data pushed the S&P futures about 3 or 4 points lower. The important aspect will be whether the RTH drops under 41.10 after the opening bell, or not.  If so, the markets will tumble a strong leg lower. If the bulls can keep RTH above 41.10, the markets will remain buoyant. For the SPX today, starting at 1324, near the top of the sideways 1307-1326 channel, any print above 1324 will accelerate the markets higher. The futures were positive about 4 AM EST but have continually leaked lower ever since.

The bears, however, need to push under 1307 to reignite the market negativity.  A move thru SPX 1308-1323 is sideways action today. Interestingly, the moves after the opening bells are following a trend since last Thursday. Back then, the smart move was shorting the markets shortly after the open. On Friday, the move was to go long shortly after the open.  On Monday, go short after the bell rings. On Tuesday, go long after the opening bell, today, go short after the markets open for the first minutes or one-half hour? Since the mood has soured after the data, the opening minutes will be interesting.  Perhaps the drop occurs at the open, but a higher move will allow a better short entry if the trend over the last few days continues.  Watch the tight range Keystone identified last evening; under 1307 and bears win, over 1326-1330 area and bulls win. The 20-day MA at 1311.61 remains important. Keystone's trading algorithm, Keybot the Quant, will likely go short if the RTH loses 41.10 and the SPX loses 1307, otherwise, the bulls will continue driving the bus. Oil Inventories are at 10:30 AM which may create a market pivot point and also the 10-Year Note Auction at 1 PM. Markets remain at the mercy of Europe.  The major Bradley turn window remains open. The opening bell is occurring shortly.

Note Added 6/13/12 at 9:44 AM:  RTH is 41.22 so despite the markets drifting lower, the indication would be that the bulls will be okay today, although a dime of leeway is not much room for error. Allow some time to play out. Starting to look like more sideways slop today. RTH 41.20....

Note Added 6/13/12 at 10:12 AM:  RTH 41.38, markets recovering, sideways vibe.

Note Added 6/13/12 at 10:32 AM:  The 8 MA just pierced up thru the 34 MA on the 30-minute chart which is bullish for the minutes, hours, and day or two ahead.  Considering the sideways nature of markets, however, this could very well reverse course again today. RTH is 41.30 placing smiles on the bull faces.

Note Added 6/13/12 at 10:46 AM:  Keystone took profits on TNA exiting the trade.  Also bot TZA.

Note Added 6/13/12 at 11:18 AM:  Keystone took profits on TZA exiting the trade, then turned around and reentered again.

Note Added 6/13/12 at 12:13 PM:  Keystone took profits on TZA exiting the trade, will let things simmer for a while now and look for a reentry.

Note Added 6/13/12 at 12:35 PM:  SPX remains above the 20-day MA favoring bulls.  The 8 MA is above the 34 MA for the 30-minute chart  so this favors bulls. Price continues to wrestle with this top rail at 1326-ish for the sideways 1307-1326 channel the last few days. Markets continue along with a sideways vibe. The RTH at 41.32 prevents the bears from making any downside headway. Here's another test of 1326-ish. Keystone reentered TZA once again opening up a long position.

Note Added 6/13/12 at 2:09 PM:  Today's SPX range 1316-1326. RTH stays above 41.10 so despite any market selloffs, the bulls are stopping any big slide.  Keystone took profits on TZA, will look to reenter.

Note Added 6/13/12 at 2:50 PM:  SPX dropping over the last hour. RTH came down to tap on 41.10, that drama appeared suddenly. RTH popped but keep watching.  TNA may be interesting if it can come back down to 46.00.

Note Added 6/13/12 at 2:59 PM:  RTH is sitting at 41.10, markets will bounce or die here.  Keystone bot TNA, it came back down.

Note Added 6/13/12 at 3:08 PM:  RTH is under 41.10 for about eight minutes, this is very bear favorable, see if it holds, if so, the TNA trade just entered is unwise. The minute charts hint that the markets should bounce now.  If RTH stays under 41.10 and the SPX drops under 1307, that is big trouble for the broad markets.

Note Added 6/13/12 at 3:18 PM:  RTH dropping under 41 folding like a cheap suit. The bears are pushing lower, SPX 1307 is key. SPX now printing 1314, now 1313, now 1312.

Note Added 6/13/12 at 3:48 PM:  SPX now printing 1311.67, four points away from big trouble. RTH remains under 41.10 now printing 40.91.

Note Added 6/13/12 at 4:08 PM:  As the local police say, nothing to see here anymore folks, break it up, break it up, move along. Lots of excitment ends in a fizzle. The bears received the sub 41.10 RTH but did not receive the sub 1307 for the SPX. The SPX LOD is 1310.51; write this number down since it is very important for tomorrow. Today continues the trend discussed this morning with last Thursday down, Friday up, Monday down, Tuesday up, Wednesday down, Thursday ? SPX closes near the bottom rail of the 1307-1326 six-day sideways channel. RTH failing 41.10 is a very big deal and a large feather for the bear's cap. Watch it closely again at tomorrow's open. Keybot the Quant was a whisker away from going short but the algo remains long overnight tonight. Time to let the smoke clear for a while.