Keystone's Evening Nightcap 5/24/12

The SPX 30-minute chart continues with the sideways vibe highlighted in this morning's chart. The sideways nature of price movement today causes the 8 MA and 34 MA cross to whipsaw, moving from bearish to start the day, to bullish at 10:30 AM and the 8 MA remains above the 34 MA overnight tonight to allow the bulls to be favored at the bell tomorrow.  A more firm committment should occur with this 8 and 34 MA cross either tomorrow or Tuesday (U.S. markets are closed on Monday in Observance of Memorial Day). Thus, only 6 1/2 hours of daytime trading is remaining until Tuesday, 5/29/12, at 9:30 AM EST. At 4 PM Friday, positions must be placed that will remain until Tuesday morning. Typically, markets are buoyant on Friday's and especially pre-holiday weekends since the risk is that positive events will occur.  Thus, shorts will pare back positions creating market buoyancy on Friday afternoon.  This is tricky for tomorrow, however, since many traders may be happier at the barbeque knowing they are net short rather than net long, and may choose to allow short positions to remain as is.

The retail sector surprisingly moved higher today despite the weak TIF earnings indicating that the global luxury boom has now ended. The RTH has more lives than Jason, the hockey mask guy of Friday the 13th fame. Watch RTH 41.15 after the opening bell rings.  RTH printed 41.07 at the close only eight cents away. If the RTH moves above 41.15 the markets will take another leg higher. Watch NYA 7637, the critical 40-week MA, that failed a few days back indicating that markets have fallen into a secular bear market (reference the Secular Signal page on this site). The bulls will regain market control if the NYA overtakes 7637 and at 7552, is only 85 points away. VIX 18.25 is important as well but it printed 21.54 at the close, above, and favoring bears.

For the SPX for Friday starting at 1321, the bulls need to touch 1324 to create an upside acceleration and the bears need 1310.50 to accelerate the downside. A move thru 1311-1323 is sideways action into the barbeque weekend. Consumer Sentiment is 10 AM and this will create a market pivot point. In a nutshell, RTH 41.15, NYA 7637, and SPX 1324 and 1310.50 will determine broad market direction. Watch Keystone's SPX:VIX Ratio Indicator as well now at 61.31.  If the ratio moves above 68, this will add nitro rocket fuel to the bullish move higher. Markets are giving Europe the benefit of the doubt. Any disappointing news should slap markets hard.

FB's Zuckerberg remains on a milk carton. His first appearance in public in the near future is probably the most important appearance of his entire career at the helm of FB. Zuckerberg will either rise in stature explaining how he will now lead FB forward, or, simply zip up his hoodie and continue hiding under the pilllow's. Someone should suggest he use Facebook and reach out using social media. How ironic is that?