Keystone's Market Action 6-16-11

The wild action continues.  Note the importance of that 1262 level Keystone told you to watch today, bouncing earlier, then falling thru a short while ago, but with no real strength, it lost the obligatory 2 or 3 additional handles at a minimum, but then came back up, now over 1262 again, and no real test of the starting number for the year, 1257-1258 occurred.  This places a feather in the rally hat.

TRIN now 1.11 and has moved down, this is only marginally in the bears favor, if the selling was rampant and strong this number would be 1.5, 1.7, 1.9 and even over 2, that is not happening.  TRIN is now closer to the bull-bear standoff line of 1.0.

Volatility jumped nicely, Keystone exited the VXX since the gap was filled from April. Utes have been green today as well.  Remember, utilities will typically lead major sell offs, and the utes have not cooperated with any of this move down in June, thus, indexes should come back up to allow the utes to set up and the next move down should occur with ute weakness.

June has been a very weak month so far.  18 of the last 20 times, the week after June OPEX is down, that would be next week, the week of 6/20/11.  Also keep in mind there is typically an OPEX opposite day move where the markets tend to open Monday morning the opposite way they close on OPEX Friday.  Now that your head is spinning, what does it all mean?

Piecing it together, now would be a good spot for a bounce, bears tried to run it lower over the last hour but the SPX is now above 1263, above that 1262 danger handle for today, after two tests of the level today, the TRIN is moving to one, volatility jumped but it looks like the gap fills may satisfy volatility's jump for now.  SPX daily chart showing positive divergence as well. Thus, if we bounce two or three days, that would set us up to follow the trend for next week which would be a down week. Otherwise, markets would work lower from now thru next week, and considering all the weakness lately, a bounce today and tomorrow may be in order. Tomorrow afternoon you can sort out the OPEX opposite move going into the weekend.

At this writing now, TRIN now at 1.02, that's not bearish, its's neutral, SPX now approaching 1264.  We'll see, markets are trying to catch a rally vibe into the close now.