Keystone's Market Action 8-8-11

Another wild day where a healthy heart is needed to handle the skipped beats.  The utes, UTIL, lost the 50 week MA at the open so the day was in for a rough ride.  Once the SPX lost 1168, the Friday LOD, the selling accelerated as would be expected.

The 1150-1170 zone is the bulls last stand, the bull's Alamo, that must be defended at all costs.  Losing 1150 means complete loss of control with the markets.  Low print today is 1151.88.  Thus, watch the range of 1151.88 to 1168.09.  Whichever the way SPX moves out of this range will tell you that an accelerated move will occur in that direction.

The TRIN is at 1.1, very muted for the bearishness today.  A spike did occur to 2.5-ish after the open to help usher in the negativity today but it has pulled back substantially since then. The one level is neutral so the 1.1 level provides no substantial advantage for the bears today despite the down markets. A move under one will actually be bullish.

The financials, semi's, small caps and industrials are all in a bear market now, having fallen in excess of 20% off their tops. The smoke continues to clear today.  A bounce should be in order from these levels but time will tell. SPX:VIX ratio now has a 30 handle. Since it is under the 35 level, when the ratio moves back above 35, that will tell you when the bounce back rally will occur for the broad markets.

Watch the SPX range of 1151.88 thru 1168.09.  Last print is 1155.53. Whichever way it moves out of that range the move will accelerate. Bears want to see 1151 and bulls want to see 1168.