Keystone's Midday Market Action 1/9/12

SPX decides to explore the top side first today.  Price punched up thru the 12-month MA at 1280.30-ish then ventured further to try to touch the 1282 handle, but, alas, on this first try, it received a spankdown from 1281.78, only 22 cents away from igniting a bullish party.  Price is drifting lower now off of the negative divergence on the minute charts.  SPX now printing under the 12-month MA by a couple pennies.  Watch SPX 1280.30. Utes are weaker, retail is weaker, semi's are stronger on a couple upgrades, volatility is higher, and copper and commodites flatish. SPX now printing 1279.22 a full point under the 12-month MA, perhaps the bears are starting to push.

Note Added 1/9/12 at 11:06 AM:  At the start of the session, the Nasdaq was up while the S&P was down, hence, the markets ventured higher to satisfy the tech strength.  Then the Nasdaq and S&P were trading dead even promoting sideways markets.  Now, the Nasdaq is down -0.24% while the S&P is down -0.15%. Thus, the Nasdaq is now leading the down side so if the market bears can start pushing and attack the SPX 1273 level they have a chance to start some real mayhem.

Note Added 1/9/12 at 11:26 AM:  Focus on SPX 1273.34. SPX LOD so far is 1274.55. If the 1273.34 is lost the market bears win. Bulls are fighting with all their might to prevent failure from occurring at this level.

Note Added 1/9/12 at 1:53 PM:  Bears did not have enough gas to take the markets lower so the bulls pushed the indexes higher. SPX 12-month MA is 1280.26.  SPX now printing 1280.25.  The fight for the 12-month MA continues.

Note Added 1/9/12 at 3:23 PM:  SPX 12-month MA is 1280.26.  SPX now printing 1280.29...........1280.26.......... The bull versus bear secular fight for the markets continues.

Note Added 1/9/12 at 3:38 PM:  High drama. The SPX close will be important to see which side of the 12-month MA is favored, bull or bear.  SPX now printing 1280.15 with 20 minutes remaining.

Note Added 1/9/12 at 3:45 PM:  SPX runs higher and tries to touch the 1282 handle. Two minutes ago SPX prints 1281.99, one penny away. It should make another run, see if the bulls got game, they need to touch 1282.

Note Added 1/9/12 at 3:49 PM:  SPX rides a roller coaster into the close today.  Now the SPX has dropped down to 1280.67. The market bulls got within one penny of 1282 and could not seal the deal, yet, so this shows they do not have underlying strength.   The bulls have ten minutes to redeem themselves. Keep watching the SPX 12-month MA.

Note Added 1/9/12 at 4:02 PM:  SPX price is a ping-pong ball into the close.   SPX closed pennies above the 12-month MA at 1280.26 which is a feather in the bulls cap. The action at the 1282 level, where the market bulls would have accelerated higher, was very interesting.  The market bulls pushed higher to come within one penny of touching that 1282 level--but they did not have the juice to get thru it. That action provides a feather in the bears cap. The session ends with the SPX traveling thru the tight range of 1275-1281 all day long.  The bulls did not have the strength to move above 1282 and the bears did not have the strength to move under 1273, so the day ends in a draw.  AA earnings are on deck.

Note Added 1/9/12 at 4:08 PM:  AA earnings met the bottom line estimate and beat the top line revenue.  AA bounced on the release but as the CEO speaks on CNBC, the air is leaking out of the balloon and the stock is now flat to down. With the huge capacity coming on line in China and the demand for aluminum falling overall due to the global slowdown, and tossing in the higher dollar and its currency effects, it is hard to make the case for a buoyant aluminum price. Aluminum should receive the deflationary vibe moving forward like all other commodities.