Keystone's Midday Market Action 5/9/12

RTH fails 41.35 at the open and SPX:VIX ratio fails 68. This ushers in the bullish negativity but the SPX is unable to pierce down thru 1348, yet.  Since bears cannot push that extra bit lower to trigger a downward acceleration, the bears are trying to fight back by pushing the RTH back towards 41.35. As long as the SPX:VIX ratio stays under 68 today, now printing 65.23, the large down day will remain in place with the Dow Industrials down triple digits. Tech is not leading the downside and that is one of the reasons the bears are having trouble punching down thru 1348 in the early going.

Note Added 5/9/12 at 10:03 AM: SPX bounced off the 1348 printing a LOD at 1347.64. The important level is 1347.75 so the bears did pierce it, albeit for a few seconds, by eleven cents to the downside.  Another test should occur, watch 1347.60-1348.00 where the bulls must make a stand while the bears must stab down thru. Oil Inventories hit in one-half hour and the 10-year auction is at 1 PM. The bears had it in their hands minutes ago, can they bring it back down again? Whoa, sneaky bulls, they are pushing RTH higher, now printing 41.35. Bears are running out of gas. This remains a toss up still yet.

Note Added 5/9/12 at 11:30 AM:  Wild action today.  SPX finally pushed under 1348 to accelerate the downside that explored 1343 but quickly bounced and the markets recovered. Note how the RTH pushed higher back up thru 41.35 and now printing 41.57. This retail sector upside brings the markets higher.  Keystone's SPX:VIX Ratio Indicator pops back above 68 confirming the RTH recovery; didn't we watch this story yesterday? Same old stuff, a knock-down drag-out bull-bear struggle ongoing. VIX is 19.74 well above 18.14 and XLF is under 15, both in the bear camp.  RTH and SPX:VIX are back in the bull camp, so we are right where we started and promoting the sideways move today. Here is the European close. An announcement on Greece is coming which is helping buoy markets. Lots of drama today.

Note Added 5/9/12 at 1:25 PM:  SPX:VIX is at 68.06, flip a coin. VIX and XLF say bears will win moving forward. RTH a hair above 41.35 says bulls will win. Markets are sorting it out. 10-year auction came and went without fanfare. SPX moving thru 1353-1359 for last 2 1/2 hours. Holy schmolies, SPX:VIX spike upwards now printing 68.86 so the bulls stop the 68 from failing again; the VIX tumbles lower. SPX is over 1360. News hits that Europe is throwing Greece a small life line to tie them over until June...details developing. Markets love free easy money floating around. SPX:VIX is 69 now and RTH 41.48. The bull-bear fight continues.

Note Added 5/9/12 at 3:16 PM:  SPX:VIX ratio dropped under 68 before the ink was dry on the chart posted.  So now the bears are driving markets lower again.  RTH just tested the 41.35 level and bounced, so the bulls are tenacious and do not want to give up the fight. Watch RTH closely into the close.

Note Added 5/9/12 at 3:27 PM:  VIX is at 20.  NYA is at 7828 with the 40-week at 7620 so the bulls remain about two hundred points above serious secular market danger. The NYAD did peg -2100 on the downside today so a snap-back rally would be desired to remove some of the negativity. TRIN is at 0.98; 1.00 is the neutral equal level so the action is balanced between bulls and bears.  RTH is in the high 41.30's with bulls trying to keep it elevated with all their might.  SPX:VIX is 67.40, under 68, so the markets weaken.

Note Added 5/9/12 at 3:57 PM:  SPX:VIX pops back above 68 at 3:42 PM. Keystone needs some dramamine for this bumpy ride. Sideways for the most part for today. AMRS is getting beaten hard today. The gold miners and juniors, GDX and GDXJ, bounced. Oy vey, SPX:VIX now at 67.98..... where's that dramamine? RTH is at 41.40 remaining stubbornly bullish.

Note Added 5/9/12 at 4:07 PM:  SPX:VIX finishes below 68 favoring market bears moving forward, but, tomorrow's another day. Watch CSCO earnings which will move markets.  Here it is...... beat by a penny, and top line revenue is smack in line. The stock is up so it likes the news.