Keystone's Midday Market Action 1/5/12

Semiconductors are taking off to the upside like a rocket.  SOX now printing 370.06, far from the 367.85 danger level.  This muffles any broad market downside worries. If the semi's remain elevated, the markets will not drop signficantly.  Retail, RTH, is a receiving a nice spank down as the negative divergence and rising wedge foretold of its arrival.  TGT holiday sales were disappointing. The RTH, now printing 111.66, however, still needs to lose another pont and one-half, down to the 110.25 level, if the market bears want to do serious damage to these markets. The start was not as dramatic as the futures showed since the semiconductors came out of the gate happy. Watch SOX 367.85, RTH 110.25 and SPX 1268 to determine broad market direction.

Note Added 12/5/11 at 9:47 AM:  There it is, SOX 367.85, hang on............

Note Added 12/5/11 at 9:57 AM:  SOX bounced off the 367.85. SPX dropped thru the 1268 which accelerated a move to the 1265 handle but the SOX remains elevated, so the market move down does not mean anything, unless the SOX cooperates to the downside, or, if RTH cooperates by dropping under 110.25. Thus, it is watch and wait mode.  SOX should come back down for another look at 367.85, and then we will find out the fate of the broad indexes today. The euro is leaking under the 128 mark for the last hour.

Note Added 12/5/11 at 10:30 AM:  SOX remains elevated now at 371 preventing any move lower in the broad markets, thus, markets bump along sideways now. SPX now filling the inital gap drop at the open at 1272, so watch to see if further upside is preferred or if this level now serves as a resistance ceiling today which would open up a move thru the 1265-1272 range. The 50-week MA is 1267.36. The SPX LOD today is 1265.26, rupturing the moving average, but then recovering. The SPX 10-month MA is 1270.12.

Note Added 12/5/11 at 1:47 PM:  The SOX remains elevated preventing the broad market from moving lower.  Financials are a turn around story today helping boost the broad indexes. Retail is weak. The SPX dropped under 1267 this morning but it was a non-starter without weak semi's.  As the session continues, the bulls are taking the indexes higher since the bears do not want to take them lower.  The utes are recovering slightly from the weakness so far this year.  Copper remains weak.  The SPX moved upwards to try to push thru the 1278-1279 resistance. At 1:15 PM, price busted up thru and accelerated higher as would be expected. The dollar is stronger so commodities and copper remain weak. The critical 12-month MA is at 1280.44 and SPX is now printing 1282.28 which serves up drama for this afternoon.

Note Added 12/5/11 at 2:19 PM:  The SPX is taking a look at the 12-month MA. Semi's coming off the top. SPX 1280.43........1280.34........1280.30....see if it stays under the 12-month MA or if price bounces back up.