Keystone's Midday Market Action 8/17/12; TGIF

Thank Goodness It's Friday; TGIF.  A rest is needed from this daily drama. Futures are flat.  For today for the SPX, starting at 1416, the bulls need to see 1417.50 and an upside market acceleration will occur.  The bears need to see 1404 to accelerate the downside.  A move thru SPX 1405-1415 is sideways action. The SPX broke up and out of the sideways range yesterday now establishing a higher range thru 1406-1417. Thus, the 1404-1406 area is very important today. Bulls receive a feather in their caps if they can keep the SPX elevated above this level today.

Expect a market pivot point at 9:55 AM upon release of Consumer Sentiment data. Leading Indicators hit at 10 AM, minutes later, so the 10 AM time will provide market theatrics. Interestingly, the new moon is at its peak at 11 AM, perhaps some gremlins may appear. Markets are typically weak in front of a new moon but that was certainly not the case yesterday. The weakness in the utilities sector is very important, watch to see if that continues. Reference last evenings chart where UTIL 472 signals major market trouble.  Watch copper as well, JJC 43.60. The bulls need copper to cooperate but it continues to refuse for now. Also watch the Trannies, and small caps, as well as the upper trend line on the NYA, RUT and DAX. Lots of drama to finish the trading weak.  Markets bounced yesterday on continued rumor pumping; German agrees with the ECB plan; Spain is going to officially ask for the bailout; and on and on, over and over, day after day, the same comments. Markets are going to balk at some point if real concrete action is not provided.


Note Added 8/17/12 at 10:10 AM:  The SPX touched the 1417.50 level twice so far today but could not maintain the level, so far.  Copper is the big story today. After copper lagged the entire market rally, a critical test is now ongoing.  Watch JJC 43.60, now printing 43.37.  If the 43.60 is taken out to the upside, the bulls will send the markets far higher, the rally will be substantiated and the bulls can throw a ticker tape parade.  The bears must prevent 43.60 with all their might.  Utilities are weak. UTIL printed a 478 handle today teasing ever closer to the danger signal at 472.  Look at that pesky dollar, $USD, exactly at the important 82.6.  These fickle markets are remarkable.  Keystone has to search out some additonal heart pills to hang in there in front of the weekend. Note the direct downward market pivot at 10 AM. VIX is flatish today. Watch JJC 43.60 and SPX 1417.50 which are telling the story today.

Note Added 8/17/12 at 11:25 AM:  Status quo. JJC is at 43.32 and SPX at 1415. VIX flat. Traders are trying to quietly move into the weekend but lots of trading remains today. Note that the 8 MA may curl over on the SPX 30-minute chart due to the lower price action.  This action will cause the 8 MA to continue to drop; the magic number is 1416. If the bears keep the SPX under 1416, they can put up a fight. If the bulls push above 1416, especially the 1417.50 targeted before the open, the bulls will rule, and the bears are going to need the weekend to nurse all the pain. Look at the utes moving lower, now printing a 477 handle, ever closer to the 472 danger level.  Perhaps Keystone can sneak in some hammock time as the markets sort things out.

Note Added 8/17/12 at 3:18 PM:  SPX plays around in a tight range today thru 1415-1417. TRIN is 1.12 which is actually favoring the sell side, despite the up day.  Utes remain weak. TRAN at 5190 breaking up thru that upper trend line. Quite a lot of action at SPX 1417.35-ish, which is serving as a resistance ceiling, no less than six touches trying to poke up thru but price keeps receiving a spank down.  There is an ascending triangle on the SPX 5-minute chart and the 1417.35-ish is the base line where the breakout would occur. The vertical side of the ascending triangle at about 2:00 PM yesterday would be about four points, thus, a break up thru at 1417.35-ish opens the door to tag the closing and intraday highs for this year at 1419 and 1422, respectively.  Watch the triangle pattern and watch 1417.35-ish.  JJC is printing 43.36, remaining under 43.60 all day long, so the market bears can hang their hats on this parameter.

Note Added 8/17/12 at 4:44 PM:  The SPX broke out above the base line of the ascending triangle; reference the chart posted.  SPX 1419 and 1422 are targets.  AAPL closed just shy of 650, over 600 billion market cap. Keystone projects the 648-680 range as a high for Apple that will hold for a long time into the future as per the weekly chart last evening, so this range will be interesting to watch next week.  UTIL finished down only seven points above the 472 danger level that will be watched all next week.  TRAN, RUT, NYA and DAX are all sitting at the upper trend line on their respective weekly charts; watch the DAX for clues early Monday.  Markets are at an inflection point everywhere you look; the SPX is approaching the April highs as well as 2008 highs.  A big week is on tap next week. Either markets punch higher and confirm the sustained central banker rally with JJC moving above 43.60, or, markets start the week with a spank down, with the major indexes rejecting price at the key technical levels highlighted resulting in a strong downside move. At this juncture, JJC 43.60 and SPX 1419 are the two most important items to watch come Monday.