Keystone's Midday Market Action 1/4/12

The bears are running with the ball today.  Semiconductors collapsed at the open.  SOX fell thru 368.  Copper, JJC, dropped under the 44.75 but then recovered, only to collapse, now printing 44.19. Both of these are creating the market weakness today just as they created the market strength yesterday. Keystone's algorithm would like to go short now but only if the SPX drops under 1259. Thus, the ducks are aligned to take markets lower but a further push, or catalyst, will be needed, otherwise, the market bulls will step back in.

NYHL drops down to 30 reflecting the market selling.  If JJC is pushed under 44 that will increase broad market selling. The CRB is at 312.84 over two points under the critical 315 favoring bears.

Note Added 1/4/12 at 11:13 AM:  Copper, JJC, failed the 44 level, now printing 43.97. SPX is down 0.37% and Nasdaq is down 0.32%; one of the reasons the downside move does not have energy, the Nasdaq is not leading the down side.

Note Added 1/4/12 at 12:21 PM:  Broad markets have recovered but JJC remains under 44.75 and SOX remains under 368 so the market bulls got nothing. Watch SOX, however, now printing 367.43, it just came up for a look at 368 and received a spank down.  Focus on that SOX 368, its behavior will dictate broad market direction.

Note Added 1/4/12 at 1:00 PM:  SOX is deciding the fate of the broad markets right now at 367.85, higher and the market bulls will claim victory, lower and the market bears will resume the selling. SOX now printing 367.54, market bears pushed it back down, for now.

Note Added 1/4/12 at 2:27 PM:  SOX drama continues. An attempt to breach 368 occurred at 1 PM resulting in a spank down.  Price came back up again for a try at 2 PM resulting in another slap down. Does SOX have the energy for a third try at 368? There is a semi conference next week so this sector requires close attention.  Last print is 367.39 so market bears are winning. JJC is 44.00, bearish. CRB 313.44, bearish but only a smidge away from 315. SPX 10-month MA is 1270.72 and 12-month MA is 1280.02. SPX now printing 1277.27. Whoa, here comes the drama again.  SOX spike to 367.86..........

Note Added 1/4/12 at 2:37 PM:  Use the SOX 367.85 as the line in the sand number now. SOX now printing 367.80 so whichever way SOX goes, so goes the markets.

Note Added 1/4/12 at 2:47 PM:  SOX resolution is to the upside, 367.93, then 368.00, then 368.17. The semi's have flipped back over into the bull camp so they will help create further market buoyancy, unless SOX falls back under 367.85.  See if SOX holds.

Note Added 1/4/12 at 4:02 PM:  SOX remains above 367.85, bullish.  Copper remains below 44.75, bearish. CRB remains below 315.00, albeit by only a point, bearish.  Markets end the day flat.  SPX remains under the critical 12-month MA.