Keystone's Midday Market Action 7/30/13

SPX 1684.  SOX 473.89 two points above danger. VIX 13.94 moving up today but remaining short of the 14.28 the bears need. VIX and SPX were both positive this morning which hinted that something is going on with volatility today. So VIX will likely become a bigger player now forward. GTX is 4799 remaining above the 4785 danger line.  So the bulls are hanging on despite the afternoon lull in the markets. Copper is collapsing today. TRAN is sitting exactly on its 20-day MA at 6427 deciding up or down.

SPX came down to tease the 1681-1682 support level that is important for today, and bounced. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead but the 8 is looking like it wants to stab down through over the next one-half hour or so. TRIN 1.03 reflecting market indecision unable to choose a side today. The SPX has explored today's upper limit at 1691-1692, and now the lower limit 1681-1682, and does not know which way to move, this 1681-1692 range is now a two-day range. Thus, bulls win above 1692 as 1700+ is on the way. Bears win under 1681 with the important 1670-1672 support on the way. Watch SOX 471.15, VIX 14.28, GTX 4785, and SPX 1681 and 1692. Whichever parameter gives way will send the markets in that respective direction.

Note Added 2:52 PM:  Banks keep weakening in recent days. One of the main reasons that equities keep floating higher to make new all-time highs is the financials. Traders that want to become bearish see the strength in financials and instead stay bullish. This may be changing. JPM is hit with a 400 million fine for alleged energy market manipulation. No wonder the protests and riots in the world are increasing. The banks continue to step on the average citizen, making billions in ill-gotten gains, then paying a token fine, and then everyone heads to the Hamptons for fun in the sun. No one ever goes to jail. No one is ever charged with wrong doing. Are the markets rigged? Of course they are. Bulls are jamming SPX higher to try and curl the 8 MA upwards and avoid the negative 8/34 cross mentioned above.

Note Added 3:00 PM:  The 10-year yield is 2.61% at the top of the one-week sideways range 2.56%-2.63%. $TNX is in a 5-week sideways range 2.46%-2.70%. SPX dead flat at 1685. SOX almost 475. VIX 13.74 dropping a quarter over the last hour allowing markets to float upwards off the afternoon bottom. GTX 4804.  TRIN 0.92. The 8 MA just stabbed down through the 34 MA on the 30-minute chart by only 2 pennies signaling bearish markets for the hours ahead but obviously, this may change back again before the closing bell. If the bulls push higher they should be able to reverse the negative cross once again to continue the indecisiveness and drama.

Note Added 3:11 PM:  That did not take long. Now the 8 is above the 34 again by a few pennies signaling bullish markets for the hours ahead. This flip-flop 8/34 behavior simply does not occur often; it is very rare. It verifies that markets are frozen in place about to jump one way or the other but still do not know which way. Keystone took profits on the IYZ short covering the position. Will look to reenter short as telecom should have plenty of downside ahead. Also bot JO which is long coffee opening a new long position. Long coffee remains a Keystone fave moving forward for the considerable future.

Note Added 3:49 PM:  The 8 MA stabs down through the 34 MA on the 30-minute signaling bearish markets ahead. This flip-flop action is ridiculous. Markets must decide. There is more drama ongoing than an episode of Madmen. SOX, VIX, GTX remain bullish. TRIN 0.95.