SPX:VIX Ratio Closes Below 68; SPXA150R Closes Above 90

The broad markets are in a knock down drag out bull-bear brawl right now, the markets will push hard one way or the other.  Perhaps some tools will shed light on which side has the upper hand.

For the turn signals, SPX:VIX went above and below the 68 level eighteen times today.  Truly a unique fight and representative of the bull-bear struggle ongoing.  The ratio closed at 66.69 so it states that broad market selling should begin now.

The SPXA150R managed to climb a smidge above the 90 level which favors further buoyancy favoring the bull side.

Thus, even the two turn signals cannot agree on a direction, although from watching these for a long time, and since the SPX:VIX ratio can be watched in real-time during trading hours, the ratio would be more important.

Perhaps turning to the five key ingredients in the market soup right now will provide insight; semi's, financials, copper, retail and volatility.  Retail has been weak for several days and it made no attempt today to mount any kind of bull move.  Likewise, copper has collapsed over the last couple days and volatility is very content in staying up towards 20 and higher.  Thus, those three items are firmly bearish.

On a side note, the high volatility now will continue to cause these violent up and down 150 point moves on the Dow Industrials going forward.

All five of those key areas were in the bearish camp to start todays trading.  The financials flew skyward out of the gate on the divvy and stock buyback hype, so for the bulls, that good news cycle could not have come at a better time.  So up the financials went today and this was a main driver in boosting the broad markets overall.  Thus, financials are fimly in the bull camp for now.

For semi's, they are sitting on the fence tonight.  Semi's popped but weakened after the open today and then roared back to life to help boost the broad markets but into the close the semi's faded again, ending the day on the bull-bear line.

Thus, mixing all this together and sprinkling some magic dust on it all, the SPX:VIX ratio says the broad markets should sell off now.  The only thing that would stop this is for the ratio to jump up over 68 at the open tomorrow.  Copper, retail and volatility are all firmly in the bear camp while financials prefer the bull camp.  Semi's are undecided.

The direction that semi's go after the open tomorrow will be the direction that the broad indexes move in as well.  Despite the strong up day for the market bulls today, the bears have an upper hand going into tomorrows open.

If the SPX:VIX ratio moves above 68, the semi's, SOX, are buoyant, and the SPX moves up over 1325.74, the bulls are in control tomorrow.  If the ratio stays sub 68, the semi's move down, even marginally down, and the SPX does not go over 1325.74, then the bears should be in control.

SPX support and resistance levels 1313, 1321 and 1331 are all playing a key role.  The SPX sits where it closed at after last Fridays sell-off, which is also the current fight for the 20 MA at 1322-1323.  In other words, the markets have only spun their wheels for the last couple days going no where.  A decision is coming fast, probably tomorrow, and will be forecasted by the SPX:VIX ratio behavior in relation to the 68 level, and, the direction in the semi's, tomorrow.