Wednesday, February 26, 2014

Keystone's Midday Market Action 2/26/14

Lots of drama with volatility today. Watch VIX 13.93. Bulls win below and bears win above. VIX is printing 13.96 only three pennies on the bear side. Whichever way VIX moves, equities move opposite, and volatility is the key metric affecting market direction right now. XLF dropped to 21.43 today but recovered. XLF is at 21.51 above the 21.43 bull-bear line in the sand. Copper remains weak. The SPX keeps attacking the 1851-1853 resistance. The 8 MA moves up through the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead (see this morning's chart). Bears must reverse this cross immediately, otherwise, markets will likely float higher for a few days forward. Keybot the Quant is long with the algo going wild today printing nine numbers thus far in the session. Watch VIX 13.93 since it provides the market direction answer.

Note Added 2:42 PM: The 8 MA stabs under the 34 MA on the 30-mintue chart signaling bearish markets for the hours ahead. The last two days are an all-out bull-bear fight for market control. VIX jumps to 14.41 so the bears puff their chests out and start growling. XLF is 21.45 now only two pennies from the critical 21.43 bull-bear line in the sand. If XLF stays above 21.43, the bulls will be fine and send markets sideways into the closing bell. If XLF fails 21.43, the SPX will take another leg lower of several handles and Keybot may flip short. Just when it looked like the bears were rolling over to hibernate they jumped up and are fighting fiercely. Bears, however, got nothing unless they achieve sub XLF 21.43. The main market directional parameter now is XLF 21.43 since it will dictate the fate of equities into the closing bell.

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