Keystone's Midday Market Action 6/26/12

Markets pop slightly at the open honoring the demands of the uber low NYAD and high TRIN yesterday. Bingo, the SPX is printing a 1320 handle now so consider this a back kiss of the 20-day MA at 1319.70. This is important. When a back test occurs, price will now collapse if the back test is successful, or, price will drive up thru and head higher to show that it did not want to fall thru the critical 20-day MA. Note that Keystone's SPX:VIX Ratio Indicator is coming up now printing 67.52 less than a half buck away from the critical 68 level. Bulls will rock today if the ratio moves over 68. Bears will continue to have game moving forward if the ratio stays under 68. RTH is 41.21, bearish. VIX is 19.57 well above the 18.90 so high volatility helps the bears creating market negativity.

Note Added 6/26/12 at 9:50 AM:  SPX:VIX ratio receives a spank down now printing under 67. The bears have their claws dug into the markets despite the market buoyancy currently. Markets are heading sideways waiting for the Consumer Confidence pivot minutes away.

Note Added 6/26/12 at 10:11 AM:  Markets pivoted upwards at 10 AM but only headed higher enough to fall on their sword. SPX:VIX ratio is 66.35 indicating that the bears are steering this ship despite any market buoyancy you see. The bears will not be able to develop mojo, however, without dropping under SPX 1309. The back kiss of the SPX 20-day MA at 1320 was successful so price has received the all clear signal to drop. We will see if it does.

Note Added 6/26/12 at 10:30 AM:  Keystone took profits on TZA exiting the trade, timing the exit with the drop in the TICK to -900-ish, will look to reload.

Note Added 6/26/12 at 10:40 AM:  Waiting for the TICK machine to print another high, say +500 or higher, to consider reentering TZA.......

Note Added 6/26/12 at 10:48 AM:  TICK prints uber low -1000 instead. Keystone bot TNA opening up a new long position.

Note Added 6/26/12 at 11:01 AM:  Keystone took profits on TNA exiting at the high TICK at +900-ish. Also now opened up a new long position in TZA. Keystone is hearing the siren song of the hammock out back under the oak trees.

Note Added 6/26/12 at 11:11 AM:  How is Keystone going to get his hammock time with this market action? Keystone exited the TZA taking profits on the low -1000 TICK. This market is a traders dream today. Hanging tight now to let some of this smoke clear.

Note Added 6/26/12 at 11:16 AM:  Would like to see TNA 46.10 for a possible entry.

Note Added 6/26/12 at 11:22 AM: TNA came down within pennies, with a -1000 TICK, but could not snag it. Always best to stay disciplined with entries and methods even if you miss the bus.  No worries, another bus always comes along.

Note Added 6/26/12 at 11:35 AM:  Merkel (Germany) says never in her lifetime will she agree to Eurobonds. Markets muddle along without any strong reaction, drifting sideways.

Note Added 6/26/12 at 11:48 AM: Markets favoring sideways action now. TICK just popped to +600. Keystone bot TZA opening up a new long position. The SPX:VIX ratio under 68 is nothing to fool around with, watch to see if it stays under 68. The SPX LOD is 1310.30 not near the 1309 so the action today is thru the sideways projection from this morning.  SPX is moving thru a sideways 1310-1320 range this week thus far so the break from this range is important. There's a +1000 TICK, uber bullishness, so markets should drift back down again (in the minute time frame).

Note Added 6/26/12 at 12:38 PM:  SPX:VIX is 66.59 maintaing the below 68 bearish profile. These markets keep interrupting Keystone's valuable hammock time. Keystone sold RIMM taking profits, exiting the trade, will consider reentry. Bulls are trying to push thru the upper rail of this weeks sideways channel at 1320. SPX:VIX coming up now at 67.13. If WMT comes back up to test 68.90 that should serve as a nice short entry.

Note Added 6/26/12 at 1:55 PM:  SPX keeps bumping its head on the 1320 above so the two-day sideways channel thru 1310-1320 remains in play. The SPX:VIX ratio is 66.94; the bulls cannot move it above 68 thus far today, so the bears are whistling dixie. If the SPX:VIX stays below 68, the market bears win the day.  Keystone's long BBG is feeling the love today while APKT is out back receiving a beating. ANR continues its weakness especially after the China news on the weekend about phony baloney data and slackening demand. If the electricity usage is down and coal is stockpiled, the basic materials sector in general is whipped hard. As you know from following the blog, the CRB proves the current deflation that the country dropped into over the last month. All three tickers remain attractive long plays. WMT keeps playing hard to get today; Keystone will take a short at anything above, say, 68.87, current print is 68.77, a dime away.

Note Added 6/26/12 at 2:06 PM:  Keystone took profits on BBG exiting the trade, will consider a reentry moving forward.

Note Added 6/26/12 at 2:10 PM:  Keystone shorted WMT opening up a new position. Also added more TZA; note the +1000 TICK now printing.

Note Added 6/26/12 at 2:14 PM:  High drama, SPX jumps higher, thru the 1320 level now printing over 1323.   SPX:VIX ratio is 67.85, this is for all the marbles today folks. If the ratio jumps above 68, the TZA add would have not been wise. The +1000 TICK, however, provides confidence that the uber bullishness was too off the charts over the last ten minutes. The tension mounts..... SPX:VIX 67.80.... 67.82.......

Note Added 6/26/12 at 2:19 PM:  There it is, SPX:VIX punches thru 68.... 68.01... 67.98... if bearish you do not want this to move one cent higher, if bullish you want it to run above 68 and the markets will finish strong today. The SPX is now back above the 20-day MA at 1320. Keystone needs his heart pills, the chest palpations are increasing.  ....68.15, it is thru, see if it can hold. Whoa, over the last fifteen minutes the TICK machine prints not one but two uber +1200 TICK's. Off the charts bullish euphoria. The retail sector, RTH, jumped back above 41.27 into the bull camp. VIX is 19.44 remaining above the 18.90 level staying in the bear camp.

Note Added 6/26/12 at 2:36 PM:  Whoopsies daisies. SPX:VIX ratio drops back under 68 now printing 67.81. Flip a coin, the bulls and bears are battling. Watch RTH now at 41.39 to see if it drops back under 41.27, or not.

Note Added 6/26/12 at 3:10 PM:  If the SPX:VIX stays under 68 and RTH stays over 41.27, the markets move sideways thru the close. If the SPX:VIX moves above 68, the bulls will rally the markets higher into the close. If the RTH drops under 41.27, now printing, 41.40, markets will sell off into the close.

Note Added 6/26/12 at 3:26 PM:  SPX:VIX 67.25.  RTH 41.38.

Note Added 6/26/12 at 4:00 PM:  Sideways was the answer although the RTH was dropping into the close, looks like the bulls are hanging on by one fingernail. Note how the SPX topped today at 2:20 PM--exactly when the uber bullish +1200 TICK's occurred. The SPX closed exactly at the 20-day MA at 1320; looking back at today's action you can see why the 20-day MA's are so important.

Note Added 6/26/12 at 8:07 PM:  Note that Keystone's SPX 30-Minute Chart with 8 MA and 34 MA Cross Indicator turned bullish in the last half hour of trading today. Watch this very closely at the opening bell tomorrow to see if the 8 MA stays above the 34 MA, or not. Reference the Turn Signal page for more information.