Midday Market Action 5/23/12

Markets drop at the open, now testing the strong 1307 support.  Tech is leading the downside in the early going favoring the bears.  Keystone took profits on the TZA overnight trade. Also added more RIMM. 

Note Added 5/23/12 at 9:48 AM:  The bounce occurred off of SPX 1307. Markets will probably wait for the New Home Sales data at 10 AM, minutes away. Keystone bot more SVU.

Note Added 5/23/12 at 10:07 AM:  SPX pivots downward on the home data, now moving sideways thru 1307-1312.  Keystone currently distributing GNOM taking profits, still like it will look to reenter.  Also back into TZA reopening a long trade which is short small caps.

Note Added 5/23/12 at 10:26 AM: Euro broke 126 so markets are in a tizzy. SPX 1307 failed. 1298 is strong support.  Keystone took the money on the TZA half hour trade, will look to reenter.  Also bot IDCC opening a new long position.

Note Added 5/23/12 at 10:43 AM: Note that tech lost its downside leadership so this hints that the down move should fade and SPX 1298 support should hold. Markets are venturing dangerously close to the 1292-1295 bull-bear line in the sand that permanently changes the markets for the worst. SPX just stabbed at 1313.47.

Note Added 5/23/12 at 11:01 AM:  SPX 1298 support is holding so far. Keystone bot SSO opening up a new long position.

Note Added 5/23/12 at 11:19 AM:  SPX 30-minute chart 8 MA just stabbed down thru the 34 MA, bearish. Watch 1307 R above and 1298 S then the critical 1292-1295 S below. Keystone bot back into TZA again. Also bot more RIMM.

Note Added 5/23/12 at 12:04 PM:  SPX failure at 1298. See if it holds from 7 to 10 minutes, if so the SPX now tests the ominous line in the sand at 1292-1295. Asset relationship; dollar up = euro down = commodities down = copper down = gold down = equities down. Remember, markets never bottom on a Wednesday and markets should be buoyant Thursday and Friday into the holiday weekend. For now, Keystone places a limit sell order for TZA at 23.63. Now its time to tend to the garden.

Note Added 5/23/12 at 1:33 PM:  Markets recovering from 12:30 PM LOD at 1296.53. SPX ruptured the strong 1298 support at noon but that did not hold and even the move at 12:30PM was only under for eleven minutes before recovering back above 1298. So the bulls are fighting back.  For the 30-minute chart, the 8 MA is well under the 34 MA signaling bearishness in the daily time frame moving forward but the 8 MA downward slope may be slowing. That critical 1292-1295 cliff looms.  Sideways range is in place thru 1296-1307 for three and one-half hours. S&P down -0.93% today but Nasdaq down less at -0.78%.  Thus, tech is not leading the downside that is why the move lower is stalled. RIMM may be catching a bid.

Note Added 5/23/12 at 1:47 PM:  NYAD prints a low -1900 which is very low, not quite -2100, but very low nonetheless.  TRIN printed a high today at 2.64, uber bearish. Thus, these two tools would be content with seeing markets snap back with a rally to relieve the negativity.  At the same time, the NYAD may print a -2100 today still yet, there is plenty of trading remaining today. The PMI's are the wild card overnight tonight. Maybe one more push lower this afternoon, perhaps into tomorrow morning, then the holiday buoyancy may kick in to take trading into the weekend and finish out the week. The exact number for the SPX 12-month MA is 1292.57. This is the exact edge of the cliff.

Note Added 5/23/12 at 3:13 PM:  SPX broke up thru resistance at 1307 about one-half hor ago. Rumors of happy talk out of Europe are encouraging the buying. Tech does not lead the downside but it is tightening up; there may be some excitement on tap into the close. Traders must handicap the PMI's coming overnight. SPX at 1310.59.  The 150-day MA is 1515.56.  Would be nice to see a run at the moving average and exit the SSO and look for the short side (in this VST time frame). 1314 is very strong resistance so price may come up to tap that and reverse.

Note Added 5/23/12 at 3:25 PM:  SPX 1312 is resistance as well, close enough for government work. Keystone took profits on the SSO day trade today. Keystone added more TZA. SPX tapping on 1314 resistance, see if it holds, or not. Big spike... 1314.52....

Note Added 5/23/12 at 3:32 PM:  Late day excitement but on the bulls side right now.  Price blew thru 1314, next strong resistance is 1316. This entire 1314-1318 area is the gauntlet if you remember when we came down thru here the other day. The battle now is for the 150-day MA at 1315.59. Now printing 1315.70...........whoa, 1316.48..... RIMM and IDCC rockin' and a rollin'.

Note Added 5/23/12 at 3:45 PM:  SPX running as if it saw a ghost.  Almost tagged 1321. Keystone was selling SSO into strength but surprised the SPX kept on going. That must be one heck of a rumor about Europe news, maybe they solved the entire crisis as they stuffed their faces with jelly donuts from the free buffet.  Remember the high volatilty leads to these large market moves, and the spikes up and down will only continue.

Note Added 5/23/12 at 4:00 PM:  SPX goes out at 1319, choosing the optimistic path ahead of Flash China PMI this evening and European PMI's overnight into early morning. The PMI's wiill be known for U.S. trading in the morning and represents the last catalyst for markets ahead of the holiday. Bulls would like to simply float higher with an upwards buoyancy straight into the weekend but the PMI's have to bless this direction tonight, or not. The 8 MA remains under the 34 MA on the 30-minute chart which is bearish in this very short daily time frame. SPX closes above the 150-day moving average so this is a feather in the bull's cap.  Markets are simply parked here until we see the PMI's. Keystone's Inflation-Deflation Indicator falls deeper into Deflation; CRB/10-yr price = 286.50/100.078 = 2.86; under 2.90 signals Deflation.  HPQ reports great earnings and is higher in the AH's. HPQ is listed on the long possibilities list on the Positions and Picks page due to the positive divergence so it is enjoying a pop tonight. DELL is the odd man out although HPQ's weak forward guidance may cause its joy balloon to deflate.