Keystone's Midday Market Action 12/20/11

RTH pops to 110.34 as expected, so retail is back in the bull camp.  Thus, the market bulls have their three-legged stool back; utes, retail and lower volatility. VIX is down to 23.54. Utes remain elevated.  Look at the shift in the SPX and Nasdaq relationship.  The Nasdaq is leading the upside, up 2%, while the SPX is up 1.7%, so the bullish move today has some street cred.  Note that the SPX broke up thru the 1224.50 level so its all going the bulls way now, further upside would be expected from here.   XLF is 12.52, a long way from 12.82, so this brings a wet blanket to the party today.

Note Added 12/20/11 at 9:46 AM: XLF is now at 12.60. 5-year auction at 1 PM. The SPX 1230's came quickly once that 1224.50 was breached after the open.

Note Added 12/20/11 at 10:58 AM: The SPX is at 1234 right where Keystone's algo entered short so the markets have been dead flat for over a week now. XLF is 12.63 and Keystone's number of interest drops to 12.75. If the financials turn bullish the Santa Claus rally will be here. If XLF does not move above 12.75, the broad markets could easily reverse at any time and drift lower.

Note Added 12/20/11 at 11:06 AM: All Dow Thirty stocks are higher.  NYAD is printing +2371, big-time bullish, says the bull move has some juice but a pull back will be needed for a rest at some point over the next day or so to remedy such a large number.

Note Added 12/20/11 at 11:12 AM: TRIN is at 0.31, now uber bullish today, remedying the uber bearish 2.7 number yesterday. This uber low number will need to snap back over the next day or so which will correspond to the broad markets weakening again. XLF at 12.65 now making its way north towards 12.75.  The market bulls are serious today, they need the financials for a stronger rally so they are pushing XLF hard.

Note Added 12/20/11 at 12:04 PM: XLF is 12.60, not making any headway to the upside.  Many folks becoming giddy and bullish over this bullish market move now.  If the XLF does not move above 12.70, this rally today will mean nothing.

Note Added 12/20/11 at 3:30 PM: XLF broke out above 12.70, financials are bullish again creating further market upside.  Keystone's algorithm flipped to the long side at SPX 1240 at 2:49 PM.  Stay alert for a whipsaw since these markets are very jumpy currently. The banks were the key. XLF now printing 12.74. Watch the 12.71 level.  Thus, currently financials are three pennies on the bull side and providing broad market support.

Note Added 12/20/11 at 3:44 PM: Market bulls are running. XLF is 12.75. Financials and semiconductors are a major focus moving forward.

Note Added 12/20/11 at 3:54 PM: TRIN is printing 0.19! NYAD +2300.  These are uber bullish numbers that will need remedied with some market selling as we move forward.