Keystone's Market Action 4-15-11

SPX hit the 1317 handle this morning so the bulls accelerated the buying as expected.  1321 is resistance above, 1315 is key support.

Major sectors have not changed posture.  Picture a tug of war with one side of the rope pulled by utilities, retail, commodities (ex copper) and volatility while the other side of the rope is pulled by semi's, copper, and financials.  The pretty girl with the winner flag is bored since the rope only moves inches one way then inches the other way then back again.  A true standoff despite the indexes floating up today.

Chairman Bernanke's hot money continues to buy up oil, gold and silver, the easy money, as well as fund inflows has to be put to work and money managers simply toss it into commodities as the sectors and indexes stay indecisive.

Silver running up thru the mid 42's now so we will see if it wants to place a top in here.  GS says oil, gold and silver will languish over the next six months but their repeated releases on this topic go unnoticed.  The dollar index is green today and regained a 75 handle but now has backed off.  The charts show positive divergence for the greenback so a move up is expected.

Defensive sectors XLP and XLV are running today and are the main keys to the indexes buoyancy.  SPX:VIX ratio is almost at 86 now way above the 68 level which indicates a market selling event is occurring so the market bulls are in control.  VIX hit a 14 handle this morning showing no fear, the CPC put/call reinforces this thought, at 0.89 now, there is no fear in the market.  Bulls are supporting the market and do not believe the markets will fall.

The tiny gap remains above at 1340 for the SPX and that may be on tap next week if the SPX can close today above the 50 day MA, reversing the three day trend of closing under the 50 day MA.  The markets are facing a shortened trading week next week due to Good Friday, Easter is next Sunday, 4/24/11, so low volume action may continue for the next few trading sessions.

Simply watch the SPX S/R moving forward; 1321, 1323, 1326 and 1329 resistance, and, 1318, 1315, 1311 and1307 support.