Thursday, August 14, 2014

Keystone's Midday Market Action 8/14/14

The bulls run with the ball taking out the 200 EMA on the SPX 60-minute chart at 1948.34 which places the bulls in control for the hours and days ahead. Watch this level to see if the bulls maintain the happiness through the closing bell, or not. Keybot the Quant turns bullish at SPX 1952 since XLF is above 22.53, VIX below 12.87, SOX above 617.76 and UTIL above 543.81. These four parameters are providing the bullish oomph so watch these for any potential cracks in the bull thesis.

The bulls are pushing the SPX through the critical 1949-1951 resistance gauntlet but note how it is taking some time which verifies the importance of this key level. The 20-day MA is 1952.66 and 50-day MA is 1956.70 so price is trying to punch through the 20-day and will likely not look back. The upside resistance is 1952.66, 1956.70 and then the very strong 1960-1961 resistance gauntlet which is also the bull flag pattern target discussed in this morning's chart. The bulls are running with the ball. Bears need weakness in financials, semi's and utilities and need the VIX to move higher, otherwise, they got nothing and will fold like a cheap suit. Nonetheless, with the above parameters flipping bullish, the SPX should be up 20 handles and more and it is not, so, to paraphrase the famous quote from Hamlet, "something may be rotten in Denmark."

Note Added 12:03 PM: The market action is wild today. SOX drops under the critical 617.76 bull-bear line but is now back above. It appears the bulls are settling in for more upside. Watch the 20-day MA at 1952.66 that will firmly lock in the upside path, or not, if price fails. The 10-year yield fell under 2.40% but is now above. Traders are buying stocks and bonds today. So dip-buyers are wiling to take a chance to rape some more upside with the Fed's easy money but at the same time are remaining cautious keeping money in the perceived safety of Treasuries.

Note Added 12:07 PM:  The SPX is testing the 20-day MA resistance now with price at 1952.70 punching a few pennies up through. Do the bulls have the gusto? SOX is flying higher now at 618.35 so this will provide more bull juice. TRIN is 1.01 dead neutral not favoring bulls or bears today.

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