Keystone's Midday Market Action 12/22/11

The bullish scenario starts the day with SPX touching 1245 so several additional handles of upside were in order, the HOD thus far is 1250.27.  XLF is 12.94 well above 12.71 and providing much of the bullish thrust for the broad markets. RTH is over 112.  Watch the semiconductors as a next indicator of bullish market strength. The SOX is printing 361. If the 368 and higher level is tagged, this will add further bullish oomph to markets.  For now, it looks like the expected bullish seasonality ahead of the holiday is taking shape. The Consume Sentiment will hit in minutes.  If the market pivots, it will be over the next ten minutes.

Note Added 12/22/11 at 10:01 AM: Bulls continuing higher after the data.  Keystone's SPX:VIX Ratio Indicator is now in the 60's. An alert signal kicks in for a potential market reversal if the ratio hits 68. The Nasdaq is up 0.66% and the SPX is up 0.60%, so a slight edge to the Nas which will help the broad markets maintain buoyancy. SOX HOD 362 thus far today.

Note Added 12/22/11 at 10:17 AM: SPX S/R is 1258 (the starting year number), 1252, 1247, 1240.  Price came up and hit its head on 1252. Watch today to see if 1252 can be taken out and if the SPX has the energy to make it back to even on the year at 1258.  Only five more trading days remaining; markets are closed on Monday.

Note Added 12/22/11 at 2:05 PM: The SPX punched up thru 1252 R at 12:23 PM, so the starting year number of 1258 is now in sight.  See if 1252 holds as support now into the close.  Since price popped above 1252, it has formed an island above this level, and testing this island base line now at 1252.88.  See if price bounces or dies.

Note Added 12/22/11 at 2:15 PM: XLF is over 13. RTH near 112. Both are market bullish. Note how the semiconductors are pushing higher since they will be the next sector to either push the market bulls higher, or hold them back.  SOX is now printing 366 and the level of interest is now 369 where a large boost in the broad markets will occur if it is attained.  Volatility, the VIX, printing a 20 handle today. Copper and commodities remain weak. Utes remain strong continuing their topping action. SPX just popped off that island base at 1252.80. Watch this level closely the remainder of the session.

Note Added 12/22/11 at 2:25 PM: The SPX 200-day MA is 1259.38 and has served as a resistance ceiling since the October top, two months ago. Thus, the starting year number at 1258 and 200-day MA at 1259 form a confluence and will offer up a sturdy ceiling.

Note Added 12/22/11 at 2:30 PM: SOX printing at the highs of the day currently, the semiconductors are providing the broad market oomph right now.

Note Added 12/22/11 at 3:00 PM: SPX came down to test the 1252.80, and collapse. See if 1252 can hold as support.

Note Added 12/23/11 at 5:47 AM: The SPX 1252 support held at the 3 o'clock hour yesterday with a close at 1254.00 after zig zag trading during the last hour.