Keystone's Midday Market Action 9-23-11

Utes holding in there fine, UTIL well above the 423.83 danger level all morning now printing 430.83. Thus, the indexes are buoyant at noon time.  For confirmation of the bull side, watch retail, RTH, so far today it was testing the 103.75 level, as monitored by Keystone's algo, and a move above will indicate the bulls will be running further. But, price played around in the 11 AM hour trying to bust up thru, and failed. Thus, RTH moving above 103.75 today will show bull strength for the overall markets. If RTH stays under, then the markets will languish into the weekend.

Commodities, CRB continues lower, the 10-year briefly dropped under 1.70% this morning, historic, history-making events. Gold and silver continue to tumble, silver down another 10% today, that makes three double digit down days in a row. Boy, blink your eyes and things are changing. Gold and silver now going into free fall to some extent, gold losing the 1650 level, silver now has a 31 handle. This, along with the dollar rising shows deflation on the way and Keystone's Inflation Deflation Indicator signals DISINFLATION as of yesterday.  For the SPX, the market bears did not get the 1114 handle to usher in stronger selling today, at least not yet, so the markets languish sideways.

The markets had a capitulative flush feel to them before the open today but the open turned out to be wimpy without a convincing downward flush, thus, the underlying market weakness should keep hanging around a day or two.  The all out fear and creschendo cymbal-crash did not occur this morning. It actually felt like many traders were thinking the same thing and took short profits right away immdiately adding the market buoyancy we see thus far in today's session. For the remainder of today, UTIL 423.83, RTH 103.75 and SPX 1114 will tell you all you need to know about broad market direction. SPX S/R is 1158, 1555, 1152, 1150, 1145, 1144, 1141, 1140, 1138, 1133, 1131, 1128, 1128, 1127, 1124, 1121, 1119 and 1118. Curently, SPX is hanging out between the 1119-1124 support cluster and 1140 resistance ceiling, more specifically using the 1131 support level now.

Note Added 3:00 PM:  RTH came up to test 103.75 an hour ago but could not punch up thru and hold it to help the bulls. This is the converse of what happened yesterday with UTIL where the utes could not break under UTIL 423.85 to help the market bears. Thus, the market is supported underneath at SPX 1119 and on top by 1140. The break under would be with UTIL losing 423.83. A break above would be with RTH moving above 103.75. Until one of these two things happen, SPX plays around between 1120-1140.