Keystone's Midday Market Action 3/29/12

At the open it is all about copper which was lower in the overnight session but is green as this is written minutes before the opening bell. Watch JJC 48.82 since broad market direction should follow copper.  Tech is not leading the downside in the premarket futures so even though the S&P's are showing a drop of five handles on tap the downside may be muted. If JJC moves under 48.82, the broad markets selling will gain strength to the downside.  CRB 312.10 is another key level to watch and commodities appear willing to stay underneath this level and thus will maintain a bearish bias on the broad markets.  The dollar is up today so copper should be expected to weaken.

For the SPX starting at 1405.54, the bulls need to push eight points higher to set off an accelerated upside and the bears need to push eight points lower to set off an accelerated downside. Thus, watch SPX 1413.50 above, and 1397 below. Even with the futures at 6 or 7 spooo handles lower, this still does not threaten the 1397 that bears need to drop under to start an orgy of selling.  A move thru 1398-1404 is sideways action.

The Natty Inventories are very important at 10:30 AM. If there is a huge build in gas inventories, two of you will need to grab the stretcher behind the door so you can carry good ole Keystone out.  BOIL (see previous chart projecting upside off the positive divergence) and UNG will pivot wildly on the news.  Keystone anticipates remaining in the natty long positions for a while either way.  In a nutshell, JJC 48.82, CRB 312.10, UTIL 446.15 and SPX 1413.50 (to make bulls happy) or SPX 1397 (to make bears happy) dictate broad market direction today. JJC printing 48.75 before the open, bear friendly by seven pennies. Also, Nasdaq futures down -0.51% with S&P's down -0.49% so tech is leading to the downside providing bear street cred, albeit only by a couple bips. AAPL down over five bucks pre-market no doubt affecting the Nasdaq. Bears have a chance in the early going but will have to drive the SPX under 1397, otherwise, they got nothing.

Note Added 3/29/12 at 10:41 AM: JJC is printing 48.37 well under 48.82 and CRB is now under 310 well under the critical 312.10 level. The dollar is stronger so all this action keeps the market bears in control.  Watch the utilities since UTIL had a 449 handle a few minutes ago. If UTIL loses 446.15, now only four bucks lower, the broad indexes will make a large move down.  Also, UTIL has to be above 463 by tomorrow's close, otherwise, the bears will maintain control to start the Monday session.  AAPL is weak but hanging on. Now that copper and commodities are firmly in the bear camp creating market bearishness, a fall in Apple will seal the deal for the bears and create strong downward pressure.  Tech is not leading the downside since Apple is holding on, thus, the bulls are muting the downside not allowing it to release lower.  AAPL is exhibiting a lot of influence on the markets now so watch it for clues.  Natty inventories jumped a little more than forecasted so the natty beating continues. Danke to the two of you that carried good ole Keystone out, he is now coming back around from the 75 cent beating in BOIL. BOIL and natty charts remain attractive for upside, however. With CRB in the low 309's and JJC now down to 48.32, at the lows, 50 cents under 48.82, the market bears have stayinig power.  AAPL is the key for bulls and bears.  Bulls look to it as a savior for today. Bears look at it as the last thing to push over the hill to start the serious market selling.

Note Added 3/29/12 at 10:50 AM: CRB now under 309 and in free fall, now low 308's, this is very market bearish. Oil is breaking down, WTIC now down over two bucks to the low 103's looking for a 102 handle. A 102 print should lead to 98.

Note Added 3/29/12 at 12:40 PM:  CRB has a 307 handle, JJC remains under 48.82 but it is trying to mount a comeback.  Tech is leading the downside with the AAPL weakness so the bears continue to press.  Keystone covered the AAPL short for about a percent and a half profit will look to reenter short. NYAD is down to -1900, not quite -2000 but it is a very bearish number that will want to see a snap back in the near term. TRIN is flat at 1.07 not favoring bulls or bears despite the SPX down 11 handles. Watch COMPQ versus SPX pecentages today to see if tech continues to lead down, or not. CRB now has a 306 handle, complete collapse of commodities today, the story that no one is noticing; this is very bearish for markets and reflects a move towards disinflation. Bot more SVU.

Note Added 3/29/12 at 2:34 PM:  Note that JJC is sitting directly on top of 48.82, it came up for a look and has brought the markets back up with it.  This is exactly where the drama began today.  A move above 48.82 shows that the bulls are wrestling back control on the markets.  A move below shows failure and the broad indexes should move back down towards the earlier lows.  CRB gave up the ghost today, now with a 305 handle, so bears are favored. Tech continues to lead the broad markets down today so that favors bears as well.  Bulls have pushed the SPX back above this morning's critical 1397 level, but price gapped up on the one-minute chart at about 2:15 PM creating an island. If JJC receives a spank down from the test of 48.82, then watch to see if SPX collapses back thru 1397 creating an island reversal on the one-minute chart.  JJC is now deciding who wins today, bulls or bears.

Note Added 3/29/12 at 2:47 PM:  JJC at 48.82.....48.81.......48.79....48.80.... high drama. The 8 MA remains below the 34 MA on the SPX 30-minute chart which is bearish but the 8 MA is curling up.  JJC 48.81 ..... bulls not giving up they are fighting for their life right now at JJC 48.82, either bulls jump up and over and head higher with the markets recovering, or, the 48.82 R holds and the markets fold like a cheap suit.

Note Added 3/29/12 at 3:38 PM:  JJC moved up thru 48.82 and the broad indexes followed along with the SPX punching back upp thru the psychological 1400 level. Bulls won this battle but there is still 20 minutes before the closing bell.  Tech still leads to the downside. CRB weakness today places commodities firmly in the bear camp.

Note Added 3/29/12 at 4:02 PM:  JJC appears to be settling a couple pennies on the bull side.  CRB is cooked, however.  UTIL recovered. Best to let the smoke clear. Mixed markets, goofy day, indexes are flat to down all day but volatilty flat, but the market bears have a firm toehold with the CRB collapse today.