Keystone's Midday Market Action 4/13/12

Semiconductors, SOX, failed at the open, dropping under 423.50. This is a feather in the bears cap. The Nasdaq is down -.89%, on AAPL weakness, while the SPX is down -0.77%, so this provides the market down move some street cred. AAPL continues to receive the negative divergence smack down that has been chronicled here in the charts.  Current SPX print is 1375 still not near the 1369 that would accelerate the downside. UTIL is printing 454 above the 451.20 which will be in play as the session ends today. Financials are weaker today so watch the XLF 15.12 level.  XLF is now printing 15.27, thus, if fifteen cents more is lost, the selling in the broad markets will dramatically increase.  Consumer Sentiment was a bit lower than expected, perhaps the high gasoline price is finally weighing on consumer's minds. The markets were non-reactive to the news. Keystone took profits on TWM; also bot SSO.

Note Added 4/13/12 at 10:41 AM:  AAPL fell thru the 20-day MA at 613.44, current print is 610.31, and on volume, this is a key moving average and an important development that is allowing tech to lead lower. See if it holds, or not. The epic Apple run is in jeopardy. Keystone added more SSO; also bot MNKD to reestablish that position; also bot XCO to reestablish that position; also bot more USD (2x long semiconductors). Do not confuse USD with $USD which is the symbol for the U.S. Dollar.

Note Added 4/13/12 at 10:52 AM:  The 10-year Treasury yield drops under 2%. Markets are meandering sideways with utes and financials remaining buoyant while semiconductors and AAPL sell off, causing tech to lead the downside maintaining market negativity.  AAPL now has a 607 handle.

Note Added 4/13/12 at 11:19 AM:  Note how even though financials are weak today they are not failing the XLF 15.12 level. Also, utilities are remaining buoyant and the VIX is 18.90 remaining well below the 19.30 level. The AAPL weakness is casting a pall over the markets.  The broad indexes tend to drift higher on Friday's since shorts pare back positions for fear of positive news occurring on the weekend; this happens nearly all Friday's. SOX (currently bearish), XLF (currently bullish), VIX (curently bullish) and UTIL (currently bearish but would be bullish at 4 PM EST today if this print holds) are determining broad market direction today with AAPL causing a negative bias. This standoff sends the SPX sideways thru 1373-1376 for the last hour.  SPX S/R is 1391, 1389, 1386, 1382, 1378, 1375.79 (50-day MA), 1375, 1372, 1370.58 and 1370. Failure of 1369 would usher in strong market selling but the SPX remains five or more points away from this outcome. Price is oscillating to and fro with the 50-day MA. Keystone's SPX:VIX Ratio Indicator printed a 72 today and now has a 73 handle well above the critical 68 level so the bulls are favored according to this metric.

Note Added 4/13/12 at 12:37 PM:  UTIL near highs of day which is bullish for early next week. SOX remains in the bear camp.  Watch XLF 15.10; the bulls are keeping it elevated at 15.20 but only ten cents from danger. JJC, copper, is down 5% on the week, this bellwether says there is major trouble brewing for the global markets. VIX remains bull-friendly under 19. SPX continues to dance with the 50-day MA now at 1375.84. The 8 MA is headed downwards towards the 34 MA on the SPX 30-minute chart which would be very bearish for markets if it falls thru. SPX continues to drift sideways towards the weekend. Watch for possible Friday buoyancy. Keystone added more XCO. Chairman Bernanke is speaking shortly, rather than this evening, so watch for the market reaction. If he says 'accomodation' the markets will jump higher.

Note Added 4/13/12 at 1:54 PM:  Chairman Bernanke taking questions as this is typed.  The 10-year note yield is moving back above 2% as buoyancy creeps into the markets. The 8 MA crossed ever so slightly down thru the 34 MA but the 8 MA is already flattening and possibly curling up so the jury is out with this tool. SPX is above the 50-day MA. Keystone adding more MNKD and XCO.

Note Added 4/13/12 at 2:57 PM:  Lazy Friday meanders along. Watch UTIL 451.20 as the session closes out. Utes are drifting lower for the last two hours now printing 454. A close above 451.20 is a feather in the bulls cap for the Monday opening bell. Friday buoyancy remains on a milk carton thus far this afternoon with markets drifting sideways. Low volume day today with the NYA on a run rate for only about two-thirds, say 65%, of the 10-day average volume; many traders starting the weekend early. Keystone bot PAAS.

Note Added 4/13/12 at 5:25 PM: Crazy finish to a Friday the 13th day.  Volatilty spiked in the final minutes with financials dropping.  VIX finished pennies above 19.45 so it flipped to the bear side. Financials, XLF, came down for a look at 15.10-15.12 but closed a penny above remaining on the bull side.  The SPX printed a 1369 handle momentarily in the final minutes but bounced as buyers entered in the final couple minutes. How does Keystone identify these number to watch well in advance of when they occur?  The long trades brought on today such as MNKD, PAAS, SSO and XCO held in their fine as the markets fell.  UTIL remains above the critical 451.20 for next week as well so the bark was worse than the bite as the session ended.  Lots of information on tap to post this weekend after some time is allowed for the smoke to clear. Keybot the Quant remains long thru the weekend.