Keystone's Midday Market Action 6/27/12

The SPX sliced up thru 1324 at the opening bell and runs higher now testing the critical 1326 resistance highlighted in this morning's charts. The RTH is 41.39 above the 41.27 which adds market positivity. The VIX, however, is 19.63 maintaining above the 18.90 level, bearish. This is interesting since the SPX:VIX ratio is printing 67.41 not above the 68 level, thus, the upside move is in question. The 8 MA is above the 34 MA on the 30-minute chart, bullish, but keep an eye on it thru the 10 AM and 10:30 AM pivot points. Remember, these are 30-minute candles so give the markets a couple hours to sort themselves out.

Very interesting start to the day. The jury remains out.  The SPX:VIX not moving above 68 is a very big deal and very bear-friendly. Keystone took profits on the WMT short at the opening bell, will look to reenter.

Note Added 6/27/12 at 9:52 AM:  RTH failed at 41.27 ushering in the bear leg lower for the markets. VIX and SPX:VIX remain bearish. So watch to see if the 8 MA curls over and rolls back down thru the 34 MA on the 30-minute chart, if so, that tells you markets are headed firmly lower. For now, there remains more of the sideways slop occurring. Keystone always references that when a key level is breached, give it 7 to 10 minutes to make sure it is locked in. The 1326 was pierced and six minutes later price was already back down thru unable to change this critical resistance into support, at least so far today.

Note Added 6/27/12 at 10:10 AM:  Big fight at the SPX:VIX ratio 68 level now, huge market direction decision now occurring.  Keystone exited the long oil USO position taking profits.

Note Added 6/27/12 at 10:36 AM:  Keystone bot BGZ (3x ETF short large caps) opening up a new long position. The SPX:VIX battle at 68 continues. If the ratio moves above 68, the BGZ entry will be unfortunate. RTH is 41.36 pennies above 41.27.

Note Added 6/27/12 at 11:46 AM:  SPX:VIX ratio is testing 68 again, the drama continues, this will tell you market direction, once it decides which side of 68 it favors. RTH is at 41.33 a hair on the bull side. A new feather in the bull's cap is the SPX 60-minute chart where the SPX has moved above the 200 EMA, bullish; SPX has to stay above 1330.24 to maintain this bullish signal.

Note Added 6/27/12 at 12:18 PM:  The TICK logged uber bullish +1200 and +1000 TICK's over the last half hour.  The SPX is testing 1333 R. The SPX:VIX ratio is 68.55 and now bullish, but, stay tuned since the markets appear to be blowing where the wind blows today. News out of Europe says the ECB may provide a rate cut at the meeting next week so that is providing the happy market bump. The VIX remains well above 18.90 in the bear camp. The RTH is at 41.33 hanging on by a fingernail on the bull side. The SPX 30-minute 8 MA and 34 MA cross and 60-minute 200 EMA tools are both bullish.

Note Added 6/27/12 at 12:43 PM: The bulls have the upper hand today but it is not decisive as yet. Pay attention to RTH now at 41.32, if it loses a few pennies it will drag everything down. Other than that, the beat goes on. The SPX 1333 resistance has held so far. RTH now printing 41.31.... 41.30 ....a retail analyst is on the business cable news television as this is typed slapping the retailers with downgrades, that was good for a couple pennies lower in RTH. What a circus. The markets are completely news-driven nowadays. RTH now printing 41.29......

Note Added 6/27/12 at 1:41 PM: Keystone had to search for the dramamine to handle the up and down drama. SPX:VIX ratio is back below 68, bearish. RTH is under 41.27, bearish, creating the market negativity over the last one-half hour. The 8 MA on the 30-minute chart is starting to curl so keep an eye on that; the chart remains bullish. Watch the 200 EMA on the 60-minute chart now at 1330.26 so price is battling this level right now. A drop under 1330.26 indicates further bearishness ahead, if price stays above, market buoyancy.

Note Added 6/27/12 at 3:00 PM:  The dance across the ragged edge continues. Neither side wants to firmly assume command, today is very much an ebb and flow day. The Euro Summit and Affordable Healthcare Act decision tomorrow will light the way. RTH is at 41.16 under the 41.27, bearish. VIX is 19.90 over the 18.90, bearish. XLF is 14.26 under the 14.35, bearish. Keystone's SPX:VIX Ratio Indicator is 66.89, under the 68 level, bearish. SPX is under the 60-minute 200 EMA at 1330.25, bearish. The 8 MA remains above the 34 MA on the 30-minute chart, bullish, two more candles will print today on this chart. The SPX is 1329 four points from the intraday high and nine points from the intraday low. Utilities, UTIL, are up over five points today.

Note Added 6/27/12 at 3:19 PM: RTH is at 41.24 coming back up for another look. SPX 60-minute chart now back above the 200 EMA, bullish. The theatrics continue. Watch RTH, now 41.26... there's 41.27, see if it holds, 41.28..... SPX:VIX 67.66.

Note Added 6/27/12 at 3:28 PM:  Three +1000 TICK's in the last few minutes with the high of the day printing.

Note Added 6/27/12 at 4:00 PM:  RTH closes at 41.27 with numbers still settling out. How does Keystone know these numbers ahead of time? RTH is bearish. VIX bearish. XLF bearish. SPX:VIX 67.71, bearish. SPX 30-minute and 60-minute charts are bullish. Something for everyone going into tomorrow's main events. It is interesting that Merkel, Germany's leader, probably is the single most person now that holds the fate of world markets in her hands.

Note Added 6/27/12 at 9:05 PM:  SPX:VIX ratio needed another minute or two to settle out, it is at 68.48, in the bull camp overnight. Bears need to push it back under 68 otherwise more upside tomorrow. RTH direction will dictate market direction at the opening bell.