Keystone's Midday Market Action 11-22-11

S&P is down 0.30% and Nasdaq is down only 0.14% indicating that the down side is limited. RTH remains low and VIX remains high so that favors market bears.  The SPX:VIX ratio, however, is 35.99, a point above danger, so this helps the market bulls. Thus, we have a standoff until the VIX 31.50 or SPX:VIX 35 tips its hand. The NYAD and other charts from this morning are providing some market support for the bounce; the NYAD is printing +192 bouncing from the -2500 print yesterday.

Note Added 11/22/11 at 9:48 AM:  Keystone's algorithm now calculates VIX 32.00 as the bull-bear divide, thus, at 32.18 now, only pennies away from confirming some more robust bullish strength. VIX under 32 will enable the bulls to sustain the upside and move markets higher. Bears need to keep VIX elevated above 32. Current print 32.14...............

Note Added 11/22/11 at 9:54 AM: The 32.00-32.05 area for VIX now being tested...if VIX moves lower from here the bulls will throw confetti, if the VIX rises from here the bears will start to slap the bulls around again. This is the bull-bear line in the sand for today, 32.00-32.05.......what is the decision?

Note Added 11/22/11 at 9:57 AM:  VIX collapses, now printing 31.66, watch markets rally.

Note Added 11/22/11 at 10:24 AM:  VIX jumped back above the 32 level at 10:12 AM so the slight bullishness occurred for 15 minutes amounting to nothing more than a half-inflated life preserver thrown to a drowning man. VIX printing 32.24 now so the RTH and the VIX continue to favor the bears. The SPX:VIX ratio at 37 favors bulls, thus, the standoff continues with markets meandering sideways. Here we go again.......VIX 32.14 and dropping........bulls need the VIX under 32 or they do not have a chance today.

Note Added 11/22/11 at 10:54 AM:  Bears are pushing with VIX ticking back up now at 32.35. Watch SPX 1183 and 1181 support. SPX:VIX ratio well above 35, however, indicating that the downside is limited. Nasdaq is down 0.60% and the S&P is down 0.61%, dead even, so this hints that the down side does not have much steam.

Note Added 11/22/11 at 1:07 PM:  At 12:08 PM, about an hour ago, the VIX collapsed thru 32 again indicating the bulls were running higher. This market jump occurred in concert with the IMF announcement that more help is on the way for Europe; euro moved up, dollar moved down and equites up. Interesting since the announcement occurred just as the SPX was testing 1181-1183, critical support with only air underneath; failure there means several handles lower in short order. Market bulls will nudge the indexes higher as long as they keep VIX under 32.

Note Added 11/22/11 at 2:06 PM: VIX slowly creeping upwards now printing 31.72........