Keystone's Midday Market Action 12/29/11

XLF is above 12.90, over a dime away from danger helping to buoy the broad markets.  Semiconductors, SOX, are recovering some ground from yesterday's selloff sitting at the 20 day MA at 364.50-ish, well under 368.60.  Thus, the market bears are kept in check by the XLF staying above 12.80 and the bulls are kept in check by the SOX staying under 368.60, so markets languish sideways.

The starting year number at SPX 1258 should continue to provide drama into the closing year print tomorrow afternoon. SPX now favoring a sideways move thru the S/R range of 1252-1258. Use XLF 12.80 and SOX 368.60 as two guiderails, whichever one gives way first (either XLF down thru 12.80-bearish, or, SOX up thru 368.60-bullish) dictates broad market direction.

Note Added 12/29/11 at 9:58 AM:  XLF moving up....now 12.98.  Interestingly, semiconductors are now weaker on the day. The SPX is up 0.42% and the Nasdaq is up only 0.14% so there is no further upside market oomph available.

Note Added 12/29/11 at 10:45 AM:  XLF is now above 13 at 13.06.  The semiconductors are providing market lift as well although still far short of SOX 368.60. Nasdaq continues to lag the SPX to the upside so that limits the move up.  SOX moving above 368.60 is where the bull orgy would begin so for now, markets simply bump along sideways, the SPX positive on the year by one point at 1259. Key S/R is 1261, 1258 and 1252.