Keystone's Midday Market Action 12/8/11

The Corzine Circus comes to town. The carnie barkers and con artists are out in force in Washington, D.C., this morning.  Watch your wallet.  For the SPX today, the market bears need to move under the 1245 handle to accelerate the downside.  The low today .........markets are dropping now so lows are printing.... is SPX 1249.21. Thus, watch to see if 1245 fails, if so, you will see some serious downside.

Copper, JJC, is now violating the level identified by Keystone's algo, 45.40. If JJC drops any lower this will accelerate market downside and assure a test of that SPX 1245.  The bears are making a push but the Nasdaq is not leading the SPX down so this hints that the downside will be muted and continued sideways is favored.  The SPX 8 and 34 MA cross on the 30-minute chart (see previous post) has failed, however, favoring bearishness.

Watch JJC 45.40 and SPX 1245.

Note Added 12/8/11 at 10:20 AM:  High drama.....JJC 45.43 only three pennies away from signaling market danger.  SPX printing lows of the day now......1247.21, only a couple points from where the markets will roll over.

Note Added 12/8/11 at 10:22 AM:  There you go, copper failed, JJC now at 45.15, this will effect markets negatively. If JJC stays under 45.40 which appears the case now, the broad markets will weaken further and SPX should test the critical 1245 number for today. Hang on.

Note Added 12/8/11 at 11:06 AM:  JJC now printing 44.90, failure today by Keystone's algorithm standards. Watch XLF testing the 13 level.  Also VIX approaching 30+. SPX printing a 1246 handle now.  Bears need to see a 1244 handle and the selling will accelerate. Utes, UTIL, are down 4 points currently adding to market weakness. Bingo, VIX is over 30 now. XLF lost the 13 level now printing 12.98. Hang on.

Note Added 12/8/11 at 11:15 AM:  SPX fails 1245. Broad market selling should accelerate. Italy 10-year yield back up to 6.46%. U.S. 10-year drops under 2%. The Nasdaq is not leading the downside which continues to hold back bear momo.

Note Added 12/8/11 at 11:37 AM:  SPX fighting it out at 1245. Copper remains in failure mode with JJC sub 45.40 so this will continue adding market pressure. Nasdaq continues to lag on the downside so this helps the bulls put up a fight.  XLF remains under 13 and VIX over 30, placing two feathers in the bears cap. Whoa......there you go.....SPX now printing a 1242 handle. Keystone shows sturdy support at 1240 and very strong support at 1235 (reference previous post that highlights the 1235-1268 range for the last six days; SPX now testing the lower part of the range).

Note Added 12/8/11 at 11:51 AM:  XLF printing lows at 12.96, the 12.75 level is key.  JJC is trying to mount a comeback, now at 45.12. VIX above 30. Markets moderating waiting to see if copper can mount a comeback. Once that 1245 failed, a larger down move is expected. SPX LOD thus far is 1241.66. A test of 1240 would be in order, perhaps as copper rolls over again.

Note Added 12/8/11 at 1:08 PM:  SPX fails 1240. XLF now printing the LOD at 12.91. VIX above 30 at 30.49.  JJC at 44.92.  Semiconductors would be the next sector to fail if it chooses.  SOX now at 373.66, watch the 371 level which indicates further trouble for the broad markets.  SPX 1235 is very strong support.

Note Added 12/8/11 at 1:31 PM:  SPX now back kissing the 1240 support/resistance.  See if it pops back to life, or if it fails.

Note Added 12/8/11 at 3:11 PM:  SPX meandering up a couple to 1242, now down to 1237, hanging along 1240 S/R. The Nasdaq did not lead the downside today so this continues to have a muting effect on the downward move.  Semiconductors are not breaking down; SOX at 373 above the critical 371 level. XLF at 12.85. If 12.75 is lost, that will substantially increase broad market selling. For now, markets bumping along sideways ahead of the E.U. Summit drama tomorrow.

Note Added 12/8/11 at 3:54 PM: In front of the close, SPX testing 1235, very strong and sturdy support. It fails.

Note Added 12/8/11 at 3:57 PM: SOX failure.

Note Added 12/8/11 at 4:00 PM:  Semi's, the SOX, failed into the close. SPX settling under 1235. Give some time for the smoke to clear. In the last 20 minutes, SPX fell from 1246 to 1232, 1.1%!, then recovered in the final couple minutes to 1234.