Keystone's Midday Market Action 1/18/12

NYA pushed up thru the 7688 level igniting the bullish move in the markets.  The magic number for bulls, however, remains at SPX 1303 today, so bears are in business unless 1303 is touched. SPX punched up thru the top rail of that sideways 1281-1297 channel. See if price holds above 1297, or falls back into the channel.  Look at the 30-minute chart that continues from where this mornings chart left off.  See the price high now met with drastic negative divergence.  Price should receive a spank down now.

Staying on the 30-minute chart, the 8 MA remains above the 34 MA, for now.  RSI and stochastics are above the 50% levels but negatively diverged.  The Nasdaq is leading the SPX to the upside today due to the strength in chips, thus, this is providing the bullish support under the markets. CRB is also in a fight with 311.50 which will provide a further tell on the markets.

Bulls got nothing unless they touch 1303.  Utes (UTIL) are red. Trannies (TRAN) have recovered today to print a higher high but the daily chart is negatively diverged. Volatility was moving higher this morning until one-half hour ago when it gave up the ghost. Watch NYA 7688, CRB 311.50 and SPX 1303 to determine broad market direction today.

Note Added 1/18/12 at 12:23 PM:  NYA staying above the 40-week MA favoring bulls.  CRB drifitng lower favoring bears.  SPX keeps knocking on that 1303 door but has not touched it yet so bears remain in the game today. Here it is, four pennies away........

Note Added 1/18/12 at 1:07 PM:  SPX pokes above the 1303 but the surprise so far is the lack of upside oomph.  The HOD is 1304.69 only about a point and a half above the 1303 threshold.  A move several handles higher would have been expected, perhaps the SPX used up all its energy to simply get there.  The 30-minute chart continues to show negative divergence for this price high at 1304 which hints that this is topping action. Lots of trading remaining today.

Note Added 1/18/12 at 3:30 PM:  SPX runs up and over 1308, more in line with what would be expected once 1303 gave way.  Keystone is surprised the 1303 gave way. The SPX heads higher but the minute charts continue to log negative divergence so price is now only rising on vapor.  Today will be an interesting close. The early week seasonality did play out afterall as discussed on the weekend, where the first day of OpEx week is typically bullish, and the move from Tuesday to Wednesday is bullish.  This week had the Monday holiday so it was an odd set-up, but early this week thus far is definitely going the bulls way.  Let's see if the bulls can hold it together for another half hour.