Keystone's Midday Market Action 8/27/12

Markets start the day sideways but move up thru the 1413.50 which opened the door to a three point move to the 1416.17 HOD thus far.  SPX is now playing around at the 1415-1416 62% Fibonacci retracement discussed this morning for the 30-minute chart.  For the 30-minute chart, the higher high in price results in continued negative divergence--except for the MACD line, so price wants to continue to test this current area before rolling over.  The 8 MA is above the 34 MA on the SPX 30-minute chart so the market bulls are driving the bus for the hours and days ahead.

JJC is 44.03, UTIL is 473.38, SOX is 398.41 and NYA is 8062, thus, the bulls are on easy street, and the bears got nothing today.  The VIX moved above 16 today causing bears to salivate but is now printing back below 16.  TRIN is 1.09, basically flat at one providing no advantage to either side today.  AAPL is feeling love today after the Samsung verdict, also NOK and RIMM. Keystone was looking for a top in AAPL at 680 or lower, today's HOD is 480.87. It is very important whether or not AAPL closes above or below 680 today since 680 should lead to 720 according to Keystone's 80/20 rule where 8's will lead to 2's. An AAPL 2% pop is not impressive for a veridict that is supposed to be a big deal. Perhaps it is all hype, one billion is peanuts to these companies. A licensing agreement down the road will allow them to kiss and make up. Tech continues to lead the broad markets higher, due to the happy Apple talk, so when tech leads the bulls are happy, and the markets remain buoyant. CDXS is bouncing off the positive divergence.

Note Added 8/27/12 at 12:12 PM:  SPX daily chart would set up with across-the-board negative divergence with a print at 1420-ish in the coming days, which would also print an M Top for the broad markets on that chart. Keystone took profits on CDXS, the market maker grabbed it quick so there is likely more upside for this move, will look to reenter but would prefer a pull back. Keystone bot UVXY opening up a new long position.  Also likes ERY but 8.2 may lead to 7.8, thus, perhaps wait a bit to see if ERY will provide a lower entry at 7.7-7.8. For ERY, any buy in here at 7.70-8.22 is attractive for a long play. 8.22 is the current print.

Note Added 8/27/12 at 1:32 PM:  SPX appears very attractive for developing negative divergence on the minute charts, including across the board confirmation with negative divergence on the 30-minute chart (reference that chart from this morning), if 1415.50 and higher will print in the time ahead. The 1415.50-1417.00 area may prove tastey for bears contemplating the short side. Trannies are down continuing to show a Dow Theory non-confirmation. TRIN is exactly 1.00 indicating a stone-flat trading day today. Gold closes at 1675 still debating the breakout from the descending triangle on the weekly chart to the upper side which would negate the ominous descending triangle pattern.  The important gold 65-week MA is 1657 so the gold bulls have a feather in their caps, albeit by less than 20 bucks. Interestingly, CPB and SJM are up, which are comfort food type stocks, sometimes indicative of troubled times, terrorism and/or other drastic events occurring, or on tap. Of course Hurricane Isaac is motoring along but perhaps the need for soothing soup portends much more serious U. S. or global events moving forward.

Note Added 8/27/12 at 3:26 PM:  SPX drifts lower from the 1415.09 high printed at the last message. SPX 1409-ish was the 38% Fib retracement from this morning's chart so watch to see if the bears make a run at it.  The SPX is now printing 1411.64.  VIX is at 16. JJC sits at 44 well above the 43.61 level that would signal serious market selling.

Note Added 8/27/12 at 3:55 PM:  Keystone took profits on UVXY as a day trade, will look to reenter.  Also bot HPQ opening up a new long position as it shows attractive positive divergence on the daily and weekly charts.

Note Added 8/27/12 at 3:59 PM:  Keystone reentered UVXY at the close reopening a long position in this one.

Note Added 8/27/12 at 4:29 PM:  Uneventful day, sideways thru SPX 1410-1415, the week begins with a sleepy tone.  The ConCon in the morning will liven things up.  The bulls pushed the SPX above 1413.50 to provide upside juice and tech led upwards all day which helps maintain market buoyancy. Into the close, however, volatility ran higher, the VIX closing well above 16 at 16.35.  The four key parameters listed this morning, all bullish, remain all bullish, so the markets floated sideways to sideways up. MCP is up over 5% AH's on news that operations at a California plant are cranking up; that will be excellent to see after tomorrow's opening bell.