Keystone's Midday Market Action 9/24/12

SOX folded like a cheap suit today, staying under 395.43 and collapsing to sub 390 on downgrades at MU and VECO and overall weakness in the chips shown by INTC, AMD and others. Weak semiconductors is a very negative market sign moving foward. Chips go into most every product you touch nowadays, so if the chips are not moving, neither are products and parts, and neither is the global economy.  Thus, add semi worries to the tranny, utes, and copper worries, all valuable market bellwethers that continue to encourage the bears.

The SPX accelerated lower to print a LOD of 1452.06 so pay attention to this price moving forward. The 10-day MA at 1455.51 is holding as support, for now.  The SPX is printing 1457.20 as this is written. Price is now back kissing the pink channel failure at 1457 (1457-1466 channel) that was shown in this morning's 30-minute chart so watch to see if price starts tracking lower from 1457 again.  The 8 MA stabbed down thru the 34 MA on the SPX 30-minute chart at 10 AM EST so the bears are back in control for the hours and days ahead.  The SPX is down -0.2% while the COMPQ is down -0.6% so tech is leading the way lower and the market weakness should linger moving forward, despite how the markets may move intraday today. Euro is holding above 129 at 129.13. If you see the euro drop under 129, the selling will increase in the broad indexes. The TRIN is 1.12 ever so slightly favoring hte bears as would be expected with markets on the red side. The TRIN shows steady eddy selling in place today which tends to continue along. European markets are closing now with lots of red on the Euro screens, in fact some deterioration into the close.  Hollande and Merkel not agreeing on the approach to the banking union has traders in a sour mood.

Note Added 9/24/12 at 11:43 AM:  The SPX tracked upwards this morning after the down open perhaps honoring the opposite move expected as compared to Friday OpEx. Overall, for today, the Monday trend of down days is continuing.  Also of interest today is that a Bradley turn window opens for a market trend change to occur over the coming days, now thru Friday 10/5/12.  The SPX back kissed 1457-1458, and is now drifting lower again. Price is now fighting with the 10-day MA at 1455.35, only pennies above, if this fails, price will head back down to test the lows of the day. SOX now broke thru 389.  Bears are cruising lower today, no panic, no rush, orderly selling, flexing their muscles slowly. It is Autumn and the leaves are falling. The wind storm on the weekend creates a carpet of oak leaves that require attention.

Note Added 9/24/12 at 2:09 PM:  Price is still playing around at the 10-day MA at 1455.29. SOX is down another tick losing 388.  VIX is flat so the 'don't fight the Fed' mantra is alive and well. Traders are content with staying complacent, they think the down move today is meaningless and markets will jump higher at any time so there is no need to buy any protection. All the bearish indications mentioned above remain in place today so the bear's are smiling, enjoying a steady eddy market move lower that most traders do not believe will last.  AAPL is down on the disappointing iPhone 5 sales and tech's leadership to the downside has actually grown more bearish as the day moves along.  UTIL is up to 475.37 but remains far away from the 483.05 level the market bulls need.  Some traders may be starting to lean negatively but may want to stay long anyway so they are moving dough from the general market, and tech, into utilities and the transports that are also up today.

Note Added 9/24/12 at 2:23 PM:  The SPX maintains the support at the 10-day MA and uses it as a springboard to try and punch thru the 1457-1458 level retesting the 11 AM scenario today, which resulted in failure. Today's price move is thru a sideways range of 1454-1457 if you eliminate the spikes lower, and higher.  The bears need to keep a lid on price here maintaining the 1457-1458 resistance, the bulls need to punch up thru and return to 1460.

Note Added 9/24/12 at 2:45 PM:  SPX attacks 1458, punches up thru.  Looks like price wants to return to a sideways pattern like last week's pain in the butt markets.  Quick, someone tap Spain on the shoulder and tell it to make its mind up one way or the other, does it want a bailout or not, speak up so this market indecision can end.  Until then, the SPX meanders sideways thru 1450-1475 for the last eight days. Bears maintain the upper hand moving forward. Watch to see if the 8 MA comes back up to cross up thru the 34 MA as described above, or not.  The VIX is flatter than a note sounding from Keystone's guitar, showing that trader's are convinced markets will not go down and the push higher in the SPX this afternoon will only encourage this complacent behavior. The SPX now punches thru 1459. The plot thickens.

Note Added 9/24/12 at 2:58 PM:  The SPX tags 1460 where it started today, returning back to 1460 over and over, and over again in recent days.  1460 is the buffet table; price keeps returning to 1460 like Uncle Charley keeps returning to the buffet table.