Keystone's Market Action 6-23-11

SPX:VIX under 68 indicates that the selling will remain for today with a large point drop. NYA dropped under the 40 week MA indicating a move of the broad markets into a secular bear.

For the selling thus far, the TRIN has not jumped any significant amount, spending its time between 0.9 and 1.2.  This indicates that the selling is not all that strong despite the dramatics of it all.  TRIN now at 1.26 so this has to be watched.  If TRIN moves up thru 1.5 and 2.0, then this day will become very ugly, but, at this junctue, does not look to be the case.

The indexes have now either matched or moved under the lows from a few days ago, while the indicators for the most part are all showing positive divergence, thus, this reinforces the thought of a bounce in here.

The most important thing to watch now is Keystone's Ute Indicator.  For this week, the UTIL 418 level is critical.  UTIL is now 420.67, only two and one-half points above danger.  If the 418 level is lost anytime today or tomorrow, the broad market selling will be quick, and substantial, and take on a panic tone.  But, as long as the market bulls can keep UTIL above 418 today and tomorrow, the bulls will be able to stabilize the indexes and moderate them sideways.

TRIN now 1.21.  Use 1.3 as a guide today, if TRIN sneaks above 1.3 then the market bears are not finished with the selling today, but, if TRIN stays in these lower numbers and moves back towards one, you will see broad market buoyancy.