Keystone's Midday Market Action 12-1-11

SOX handily above 370.50. JJC is above 45.25.  XLF is at 12.73 smack dab on top of the bull-bear line.  The markets are holding up fine for the market bulls overall. The S&P is down more than the Nas so any downside will be limited. NYAD dropped into negative territory and TRIN is moving up remedying those very short term bearish signals. XLF has established itself as key today. If XLF moves above 12.73 and higher, broad markets will move up, if XLF moves down under 12.73 and lower, broad markets will show weakness.

Note Added 12/1/11 at 10:24 AM: The utes, semi's, retail, financials, copper and lower volatilty are all bullish keeping broad markets elevated.  Voaltility, VIX, now has a 26 handle with the 30's a distant memory already. Financials, XLF, are the most likely to give up the ghost should any weakness appear. XLF now printing 12.77, above 12.73, and providing market buoyancy.

Note Added 12/1/11 at 10:48 AM:  XLF now printing 12.69, falling thru the critical 12.73 level, ushering in the current broad market weakness.

Note Added 12/1/11 at 11:18 AM:  XLF is 12.65.  SOX is ......whoa. As this is typed, SOX lost the 370.50 level, now trying to recover. JJC only pennies above the critical 45.25 level.  Thus, you see further weakness in the broad markets.

Note Added 12/1/11 at 11:35 AM:  Merkel (Germany) slaps the Eurobond idea again which is a negative for equities markets.  XLF is at 12.60 printing the lows of the day.  SOX at 370.31 under the 370.50 level.  JJC at 35.30 only a nickel above the important 35.25 level that will usher in further broad market bearishness. Financials gave up the ghost today, they are the main cause of current market weakness.  The semiconductors, SOX, are now wrestling with that critical 370.50-370.60 area. SOX will decide market direction in the minutes ahead.  Look at it go. SOX now printing 371.11 so market bulls are favored.  S&P is down -0.45% but Nasdaq is down less at -0.20%, thus, the downside move is muted.

Note Added 12/1/11 at 2:38 PM:  SOX at 375 having a good ole bull time. JJC tested 45.25 before lunch and popped, now at 45.64 helping continue the market bullishness.  XLF is exactly on the bull-bear line at 12.73.  Thus, for these three characters, the first are adding to market buoyancy and XLF is currently deciding. The way XLF moves will highly influence the markets behavior into the close so keep watching.

Note Added 12/1/11 at 3:17 PM:  XLF is perched at 12.73, still deciding, therefore the broad markets stumble sideways, whichever way XLF goes, so goes the markets.