Keystone's Midday Market Action 1/10/12

The market bulls came to play today.  The futures were elevated overnight and the SPX 1282 gave way in quick order cranking up the bull party. The lower dollar is boosting commodities and copper which are adding the bull fuel for the broad markets.  Interestingly, the asset relationship in place for months, euro up=dollar down=commodities up=equities up=treasury price down yield up, remains in place. Perhaps the dollar up=stocks up action over the last few days was temporary as Keystone opined. The asset relationship appears to be all in place again but warrants continuous monitoring.

The market bulls are driving the train now and they are cruising. Watch JJC 44.70 and CRB 313.00, copper and commodities, respectively, since the broad indexes will probably not weaken unless these two characters reverse and price falls back below the levels shown. 

Talking support and resistance, the SPX is above the October high on 10/27/11 at 1292.66 which is impressive.  Watch for price to play around here today. The 1292-1293 level was strong resistance and price punched up thru without any problem.  SPX 1295 is the next resistance, where price is printing currently, then, 1296, 1298, which is strong resistance, and if that gives way, 1307 is likely on tap.

With price now exceeding the October high prints, negative divergence is appearing on the SPX daily chart indicating that you needed to be at the bull party already to take advantage of today's pop, and the projection ahead is not rosie. The NYAD popped to +2160 today verifying the uber bullishness but numbers in the 2,000's typically lead to a pull back for the move to take a rest. The TRIN currently printing 0.88 verifies the bullishness as well, a low at 0.66 was printed today which is extremely bullish.

The bulls are in control, for now.  Watch JJC 44.70 and CRB 313.00 which will signal the intial signs of the broad markets weakening. JJC is now printing 44.96 and CRB is now printing 314.72 so the market bulls have no worries.

Note Added 1/10/12 at 11:06 AM:  Here's a test of the 10/27/11 HOD at 1292.66.  Watch to see how price behaves.  SPX now printing 1292.56.........1292.59.....

Note Added 1/10/12 at 11:09 AM:  SPX now printing 1293.43, the first test of 1292.66 was successful for the bulls. See if price wants to come down again for another look.

Note Added 1/10/12 at 12:10 PM:  SPX remains buoyant, not yet coming down for a second test of 1292.66.  Copper and commodities are strong creating the bull support. CUR got its pop, up 25%, sure looks pretty.

Note Added 1/10/12 at 12:23 PM:  SPX is printing 1292.40, it's testing the 1292.66, high drama, see if price uses it as support for a second time and catapults higher, or, if price collapses thru.

Note Added 1/10/12 at 12:26 PM:  Collapse.  SPX now trying to hold 1290.

Note Added 1/10/12 at 12:31 PM:  The SPX 1292.66 level, which was the 10/27/11 HOD, has developed serious support/resistance street cred today, especially with its behavior at 11 AM and minutes ago, where price collapsed.  Write that number down for future reference. SPX has weakened since the October high was lost, now printing a 1289 handle.

Note Added 1/10/12 at 1:14 PM:  SPX taking another look at 1290 support. XRT, the S&P Retail Index, is negative today. Perhaps that negative divergence retail sector spankdown will begin. TIF, a long time consumer discretionary bullish fave of traders is taking a beating today, off 11%.

Note Added 1/10/12 at 1:43 PM:  SPX is coming up to back kiss the 1292.66.  That's why you had to write that number down.  SPX now printing 1292.28. Price will either come up and bump its head on 1292.66 and stagger lower showing that the bullish upside momo is gone, or, price will punch back up thru 1292.66 to finish the day with continued bullish buoyancy.

Note Added 1/10/12 at 1:50 PM:  SPX came up and bumped its head, now it staggers lower...1292 is lost......1291.52. Thus, this is a feather in the bears cap confirming the overhead resistance at 1292.66 and now opening a more free path for the downside. Copper and commodities remain strong providing the bullish energy. Watch the dollar to see if it wants to strengthen, or not, since all trading takes its direction from the greenback (inverse of euro). JJC (copper) is up 2.5%. The dollar is lower and talk of China easing has everyone excited about copper again.

Note Added 1/10/12 at 2:26 PM:  Lots of drama around that 1292.66 today.  Here comes price back up for another look.  SPX now printing 1292.48 so it may have bumped its head again only to drift lower. Lots of trading remaining in the day. Dollar remains down, copper and commodities up creating the market buoyancy.

Note Added 1/10/12 at 2:50 PM:  SPX punches up thru the 1292.66 resistance taking the feather from the bears cap and placing it in theirs. See if the bulls can hold at 1292.66 or higher over the next few minutes. Keystone posted the 30-minute SPX chart showing the ascending triangles in play and the negative divergence that spanked price down from 1295-ish at 10 AM this morning. SPX now printing 1293.68.  Considering the negative divergence explained in the 30-minute chart technical analysis, watch to see if price can overtake 1295-1296 again, or not.