Keystone's Midday Market Action 11-3-11

If you are following this morning's guidelines, there is no change in the sectors despite the bullish start.  Utes, semi's, retail and financials all remain above their critical levels. Note the weakness in retail despite the move up in the broad markets. RTH now printing 109.06 only a point and a half from turning bearish, as perceived by Keystone's proprietary algo, which will drag the broad markets lower.

Copper price, JJC, is also losing ground, this is why the broad markets could not sustain the up move out of the gate, at least so far.  The VIX also remains above 30 which keeps the market bulls in check.  The Nasdaq is negative, obviously not as happy as the S&P, thus, since the Nas is the leader, this will also mute the upside.

The SPX touched the 1242.50 level so it took off like a rocket up to print a HOD of 1250.74 thus far, but for the reasons above, the happiness was short-lived.  SPX now negative as well as this update is written.  To gauge the bearish down action now occurring, watch RTH 107.30 and XLF 12.95 closely.  RTH now printing 108.74 and XLF now printing 13.04. If either fail the level shown, the broad market selling will increase substantially. Should this occur, watch the critical SPX 1220 support.

Note Added 11/3/11 at 10:30 AM:  Broad markets are maintaining a sideways posture currently since the bulls cannot move copper price higher or move volatility lower, and, the bears cannot move utes, semi's, retail or financials lower. Watch these six key sectors today since any change to any one sector will determine broad market direction; focus on the RTH, XLF and JJC levels previously discussed, these three tell you everything you need to know today.