Keystone's Market Action 3-16-11

The utilities sector was the skunk at the garden party today.  The deterioration in the utilities caused the broad markets to sell off.  UTIL lost the 399.03 level which is the major contributor to the increased negativity.  The next level that must be held with the utities, UTIL, is the 50 week MA at 393.21.  Caution is needed since if the 50 week MA is lost the broad markets will go into free fall. At this writing, the UTIL is 395.35.

SPX is now negative on the year with a 1254 handle.  Nearby S/R includes 1267, 1263, 1258, 1255, 1252, 1250.  The pre-Lehman bankruptcy in Fall 2008 occurred at 1252.

CPC holding just above 1.2 which actually hints that much of the selling is done for now.

TRIN at highs of day at 3.3+ so that says the selling is heavy and reaching its peak now, especially since yesterday saw a high of 14.  Again, these levels are more where you cover shorts and think about quickie longs.

SPX:VIX now way down at 41 which is nearing a level where you have to watch for a bull market rally so this is also indicating that the bulk of the heavy selling is coming to a close.

The broad markets have now sustained structural damage.  As long as the 50 week MA on the UTIL is not lost, the broad markets should settle out and meander sideways.  If the UTIL 50 week MA is lost, the broad markets are lost,and the indexes will be in free fall and crash.  At this juncture, it looks like the UTIL 50 week MA will hold and the broad market negativity should subside.