Keystone's Midday Market Action 7/30/12

The bulls launched a run at SPX 1389, bumping their heads for the first hour but then pushing up thru. This leads to the strong resistance level at 1391 in quick order where price is having difficulty.  Typically, the acceleration move would be several handles but the 1391 is putting up a fight.  The SPX is up 0.28% and the Nasdaq is up 0.15% so tech is not leading the broad markets. This is one reason that price is having trouble moving thru SPX 1391 thus far today.

Telecom continues to run as Ma and Pa continues to pump the Dividend Stock Bubble higher; Keystone's T short trade is feeling pain.  Note that copper is negative all day thus far. JJC is down a nickel to 43.39. The bulls need 44.20 to signify substantial and extensive market upside ahead. Thus, SPX plays around the 1389 S/R, held in check by tech not leading the broad indexes higher and weak copper. Watch 1391, if price punches up thru and stays above for a few minutes, 1400 plus is on the way.  To stop the market upside, the bears must push hard preventing 1391 and also push price back under 1389 and lower. The +955 TICK at 10:22 AM marked the top for the broad indexes thus far today. The NYAD has pulled back trying to burn off the uber bullishness. The TRIN is at 1.03, actually favoring the sell side above one, despite the higher move in the markets today. Utilities run higher but remain extremely attractive from the short side.

Note Added 7/30/12 at 11:02 AM:  Markets settling into a sideways vibe.  Watch SOX 375.30, now at 381.26.  Bears need six points lower to cause market damage; bulls are fine above 375.30.  Watch VIX 18.80, now at 17.89. Bears need a point higher to cause market damage; bulls are fine below 18.80.  SPX S/R is 1394, 1391, 1389, 1388, 1385, 1377 and 1374. The Nasdaq is now red, tech is leading the broad markets lower. So sideways is the direction for now. The upside is held back since copper is weak and tech is not leading the upside. The bears cannot gain traction on the downside since the SOX and VIX are not cooperating. Time to fire up the tractor and catch up on some mowing.

Note Added 7/30/12 at 1:04 PM:  Status quo. Dow Industrials remain above 13K. The SPX 1385 S/R level is serving as resistance ever since it failed at 11:19 AM EST.  Since 1385 failed a test of 1377 would be in order.  JJC remains weak and the Nasdaq continues to lead the broad indexes lower.  The VIX remains under 18 and the SOX is at 379.18. Traders may be playing a waiting game since the excitement will steadily grow thru the week beginning tomorrow.  Case-Shiller is at 9 AM, Chicago PMI at 9:15 AM and Consumer Confidence at 10 AM that will likely create a market pivot point.  The Case-Shiller data wiill affect Keystone's SRS trade.

Note Added 7/30/12 at 1:30 PM:  Keystone closed out the UNG trade. Natty came on long and strong as expected but the entry into this trade was too early (February-March). Probably will result in about a 10% loss, no biggie, losses will be written against gains this year for tax purposes. Actual loss will be calculated once the books clear this evening. Natty remains favorable moving forward but the recent run looks to be coming to an end chart-wise so a rest would be in order for natty before then resuming the uptrend.  The textbook W pattern bottom in UNG and natty is very attractive for the intermedate and longer term, especially since the W is under the 50 and 20-day MA's which provides extra strength for the pattern.

Note Added 7/30/12 at 3:00 PM:  Uneventful day today, meandering sideways. Traders appear content to float the indexes sideways.  SPX 1385 S/R is the location of the action today; the close above or below will be of interest. Perhaps the final hour will provide excitement.

Note Added 7/30/12 at 4:00 PM:  SPX 1385.29 as price settles out at the close.  The market action should ramp up beginning tomorrow.