Keystone's Midday Market Action 12/27/11

Lots of drama with SOX today.  SOX collapsed at the open taking the broad markets lower, then at 9:47 AM, the SOX exploded above Keystone's algo number of 368.60, slapping the bearish open and favoring the market bulls.  SOX is now printing well over 369. Whoa, hold the presses.  As this is typed, the SOX is leaking again.  Now the SOX is back down to 368.72.  For the tug-of-war for today's broad market direction, SOX pulled the indexes lower at the open, then higher as we move towards the Consumer Condidence release, and now a smidge above the critical 368.60 level favoring market bulls by only a hair.  Markets will move on the Consumer Confidence data any minute, and whichever way the SOX goes, goes the broad markets.  SPX punched up thru the 1267 resistance which is a feather in the market bulls cap.

Note Added 12/27/11 at 10:07 AM:  Consumer Confidence was better than expected, the broad indexes received some buoyancy.  Note the SOX staying above the 368.60 level and now printing 369.  Thus, things look good for the market bulls. The SPX is up 0.23% and the Nasdaq is up 0.21% so the market upside does not have a lot of oomph behind it.  The SPX is printing 1268.92.  Reference the SPX S/R a few posts back.  The SPX 50-week MA is 1267.82 so price is fighting to overtake this critical resistance. Resistance above is the 1267 (now starting to look like possible support), 1267.82, 1268, 1270, 1272, 1275, and then a sturdy resistance cluster at 1277-1281. Note that volatility is actually higher as the indexes move up further questioning the market upside move today. SPX now printing 1269.15. See if 1270 resistance holds.

Note Added 12/27/11 at 10:34 AM:  SOX now printing 370 well above danger. Market bulls will remain in full control today as long as the SOX stays above 368.60.  If semi's do remain strong all day long then copper will be the next key sector to watch for further bull market strength.  The light volume holiday trading makes the Santa Claus rally suspect but, for now, the eggnog continues to flow and the bulls are in control.

Note Added 12/27/11 at 11:01 AM:  The VIX moving up was a tip-off that today's upside move was suspect.  The SPX dropped back under the 50-week MA at 1267.76 at 10:44 AM, abou ten minutes ago.  The SOX dropped under the critical 368.60 at 10:52 AM a few minutes ago.  Note the broad market weakness.  Markets will head lower as long as the SOX stays under 368.60. Probably lots of sideways ahead during this holiday week. SPX now trying to use Friday's HOD at 1265.42 and Friday's close at 1265.33 as support.

Note Added 12/27/11 at 1:17 PM:  In the 11 o'clock hour, the SOX moved back above 368.60 and is now printing 370.68, two points above danger and providing the broad markets with lift.  The SPX is moving in a one and one-half point range since lunch time between 1266.40 and 1267.90. The 50-week MA is 1267.79 and this is firm resistance today spanking down price at lunch time and also at about 12:45 PM.

Note Added 12/27/11 at 2:06 PM:  The SPX punched up thru the 50-week MA again at 1267.81 at 1:48 PM so price launched from there.  Here comes the back test, SPX drifting back down.  Watch to see if the SPX bounces here or collapses back thru 1267.81.

Note Added 12/27/11 at 2:40 PM:  The 50-week MA at 1267.79 would not hold, price collapsed thru. SPX now jumping again and coming back up for another test of this moving average.  SOX is 369.95 continuing to support the market bulls. Nasdaq is leading the SPX on the upside so this further supports the bull case. SPX now printing 1267.85, the fight for the 50-week MA continues.

Note Added 12/27/11 at 3:44 PM:  SOX failure at 3:37 PM, giving up 368.60 so market weakness is expected. SPX loses the 50-week MA and loses 1267 support. Look for a test of the 1265.42/1265.33 support again. Last print 1266.23.....

Note Added 12/27/11 at 3:47 PM:  SOX now back kissing the 368.60......it will take the markets with it whichever way it breaks now.

Note Added 12/27/11 at 3:50 PM:  SOX printing 368.44....368.51....368.59.....it's deciding.......368.52......

Note Added 12/27/11 at 3:56 PM:  SOX printing 368.48....it's slipping.....368.45.......368.38......368.35......it does not appear to have the energy to overtake 368.60 so the indexes should weaken the last few minutes. The SOX finish in relation to 368.60 is key and separates bullish markets from bearish markets. There it is.....SOX 368.28....failure.....368.16.

Note Added 12/27/11 at 6:24 PM:  SOX closed at 368.01, what a wild ride it had today but ending the day firmly in the bear camp wanting to place a drag on the broad markets moving forward.  The SPX closed at 1265.43.  The 1265.42/1265.33 support held, by a penny, which is a small feather in the bull cap but the SOX position is much more important and will create further broad market weakness, as long as, and you know the mantra by now, as long as the SOX stays under 368.60. Above that and markets will run higher as today's action clearly showed.