Keystone's Midday Market Action 4/30/12

The market bears receive the early nod although markets have a sideways texture thus far today.  The Nasdaq is leading the broad market lower, mainly due to a red Apple, which reinforces bearishness. Copper, JJC, has only dropped by pennies, printing in the 48.90's still yet so the bears do not have any serious oomph to the downside.  SOX and UTIL are both weaker, albeit slightly, favoring the bear side. Keystone's SPX:VIX Ratio Indicator is at 82 well above the 68 danger level.   Markets are relatively well-behaved so far today and moving sideways. The financials are weak and require watching. XLF is printing 15.41, watch the 15.15 level. Watch the 10-year yield, now at 1.92%, see if it wants to venture under 1.9% which is equity market bearish as money moves out of stocks into Treasuries (Bond or note price up means yield moves down).  Here's the test of 1397.................

Note Added 4/30/12 at 9:48 AM:  Failure at 1397, now a back kiss occurs. Specifically watch 1397.30, as long as the bears can keep the index under this number for seven to ten minutes, the bears will accelerate markets lower.  Boiiiinnnng, as this is typed the SPX launches higher over 1398 to recover, the failure only held for three minutes so the bears could not lock it in. Watch for another push down thru; use 1397.30 as your guide.  SOX is about to break 414, bearish. JJC is at 48.85 well above danger, bullish. Here's another test, SPX now printing 1397.36 .....

Note Added 4/30/12 at 9:53 AM:  The strawberry patch needs weeding but we will have to see how markets settle in first.  Bears moved the SPX back under 1397.30, see if it holds for seven to ten minutes.

Note Added 4/30/12 at 9:58 AM:  Hello.  Failure thru 1397 again. The Nasdaq is leading lower which is bearish. SOX has a 413 handle now five points or more under the 418 plus the bulls need to see but JJC is at 48.84 well above the 48.25 the bears need to see.  The VIX is higher helping the bears.  SPX now has a 1395 handle, price needs to hold under 1397.30 for another couple minutes to lock in negativity for today. Without copper cooperating lower, however, the market downside is limited.  SPX S/R is 1397, 1394, 1391, 1389, 1388, 1387, 1386.33 (20-day MA), 1385.99 (10-day MA), 1385, 1384.11 (50-day MA), and 1378. Note the strong confluence of support at 1384-1388 as mentioned on the weekend.

Note Added 4/30/12 at 10:08 AM: SPX pops back above 1397.30. The bears are having difficulty moving the broad indexes lower since copper remains buoyant. Lots of sideways thus far today wth a mini bull-bear fight occurring at 1397.30.  AAPL is off 2% helping provide the market bias lower. The 50-day MA for AAPL is 580.06 so keep the 580 number in mind this week. The Nasdapple continues to lead the SPX lower which favors the bears.

Note Added 4/30/12 at 11:53 AM:  SOX leaps off the bottom at 11:38 AM so the bulls are trying to get something started. JJC is now positive by a couple pennies; the market bears will not make headway lower unless copper weakens.  XLF is flat today.  VIX is up a buck to 17.31 dancing between the 20-day MA above at 17.83 and 50-day MA below at 17.10; watch which side price exits.  The 20 MA above the 50 is bullish for volatility, bearish for markets. AAPL is down 2.3% today so the Nasdaq leads the SPX lower, albeit slightly, which favors the bearish bias. Volume is light today at a run rate of about three-quarters of a day's average expected volume. TRIN is 1.4 reflecting steady-eddy selling, which is occurring. Copper will not let the markets go lower.  The dollar is stronger, but only by a hair which allows the copper buoyancy.  Market bears need a higher dollar so commodities and copper are spanked down, which in turn will take the markets lower.  Some copper buoyancy may remain in anticipation of the RBA rate cut late this evening. SOX is continuing upwards now printing over 415; market bulls will be celebrating if semi's move over 418.25, now only three points higher.

Note Added 4/30/12 at 3:11 PM:  Same-o, same-o, dollar up but by a smidge unable to place pressure on copper or commodities so the broad markets experience limited downside today. SOX is 411 so the bulls are not making any progress.  Look at how SPX bounced off the 1394 support at 2:38 PM. Markets are moving up ever since.  The 1394 S now serves as a line in the sand for bulls and bears. VIX continues to sit inside the bracket formed by the 20 and 50-day MA's. Gold and the miners recovered as the day moved along. Typically since the low target gave way at SPX 1397, a move lower than 1394 would have been more likely to occur today, at least a test down to 1391 support.  Dr. Copper is Atlas holding the markets up today unless a late day swoon occurs.

Note Added 4/30/12 at 3:25 PM:  On the SPX 30-minute chart, the 8 MA crossed down thru the 34 MA at noon time which is bearish over the short term, as long as the 8 stays under the 34. Natty moving up nicely today but there is a gap that will need filled at 2.0-2.07 and the 20-day MA is 2.05 so a back kiss of this confluence would be in order. SPX has basically moved across 1395-1397 all day long, a couple point range. The calm before the storm? It's a fight between bulls, with copper in their corner, and bears, with semi's in their corner.  One or the other will win. Volume fell out of bed as the day went on, a run rate of 75% of a day's average volume has now eroded into a day that will experience only about 65% of a day's average volume. The trading floor looks like a wax museum, to steal Art Cashin's comment form years ago, 'everyone is standing around, standing still, you recognize all the faces, but no one is doing anything'.

Note Added 4/3012 at 3:38 PM: SPX is getting goosed; the fishing line is being tossed out to see who bites. Watch price at that 1397.30 level which played an important role all day long. This is a mini bull-bear battle, whichever side of 1397.30 the close occurs on.  Also, looks like the SPX will log a negative month for April ending a five-month winning streak and placing the first negative month of 2012.  Here's the test ..... 1397.21.... 1397.37 .......1397.48.......

Note Added 4/30/12 at 4:03 PM:  SPX closed on the top side of 1397.30, in the last minute, a small feather in the bulls cap.  Market bulls got nothing unless they boost SOX, bears got nothing unless they send copper lower. Bears need a stronger dollar. Markets are sideways waiting for a catalyst. The VIX move is important, closing at 17.18 pennies above the 50-day MA, a move under at 17.10 will crank the bull party up again, a move above the 20-day MA at 17.82 will drain the punch bowl. If VIX moves up above 18.10, the bears will be running strong with markets selling off. Bulls must prevent VIX 18.10 with all their might.