Keystone's Midday Market Action 9/6/12; ECB Announces Bond-Buying Plan

The SPX touches 1409 after the bell and accelerates higher now printing 1417, the 1419 resistance in sight.  UTIL jumps back up over the important 467.35 level returning to the bull camp.  Likewise, the SOX leaps back above 391 into the bull camp. JJC remains elevated well above 43.70 and the VIX is well under 18.35, now actually under 17.  The 8 MA remains above the 34 MA on the SPX 30-minute chart. It is all going the bull's way to start the day.  There's the SPX 1419 print, HOD thus far at 1419.19. This is strong resistance so a bullish move above here would be a strong sign of strength. The tight Bollinger bands on the SPX daily chart appear to be squeezing out an upside move, if so, price will move to 1427. If this rally move is a fake out, it has to reverse right away this morning. The Monthly Jobs Report is in the morning so traders will prepare for the next chapter of this story. Keystone sold PAAS exiting the position at a loss, was in too early on that one. PAAS has had a strong run off the bottom but it may start to run out of gas moving forward. Also bot more UVXY.

Note Added 9/6/12 at 9:50 AM:  The bulls and bears fight over the SPX 1419 resistance.  TRIN is bullish printing 0.86 or lower.  Two near +1000 TICK's occurred after the open. Keystone bot TWM opening up a new long position. TWM weekly, daily and minute charts are setting up with positve divergence. The hourly and two-hour chart a bit less so, thus, the markets may maintain buoyancy this morning into the lunch time. Oil Inventories at 11 AM, delayed one day due to the holiday, are important. ISM Non-Mfg may offer up a market pivot point in the minutes ahead at 10 AM.

Note Added 9/6/12 at 10:01 AM:  ISM Non-Mfg comes in better than expected boosting markets. The SPX is thru 1419 now making a run at 1422 R. SPX 1424 is the next R, then the important 1427. The Bollinger bands have squeezed a move higher from 1403 to 1423 so far, 20 handles in one-half hour's time, that is what the tight BB's will do. The set-up is interesting today since the charts do not look particularly healthy. UTIL is up and over 470. Draghi has worked the bull's up into a frothy lather. A +900 TICK prints as this is typed. Keep your helmet on.

Note Added 9/6/12 at 10:12 AM:  Keystone added more TWM. Time to let things simmer a while.

Note Added 9/6/12 at 12:18 PM:  All systems go for bulls, now thru SPX 1427 with sights on 1440. HOD is 1431.23.  Tech is leading the broad markets higher with the COMPQ up 2.1% and SPX up 2.0%, albeit by a smidge. This relationship is worth watching today. The tight BB's squeezed out a move from 1403 to 1431, now 28 handles of upside in less than three hours. UTIL now over 471. SOX is 404 now thirteen handles above the 391 danger line. This rally qualifies as an upside orgy, the bulls broke open the lock on the liquor cabinet and continue the celebration as the day moves along.  The TRIN is at 0.38 illustrating the off-the-charts bullishness (which will need to see relief either this afternoon or tomorrow). NYAD prints a high +1900 print but not excessively uber high as you would expect with this type of euphoria. The bulls are running. From the Draghi low where he started jawboning the bond-buying move in late July, the SPX has ran from 1330 to 1430, 100 handles. So that answers the question about how much has Draghi's promise of stimulus added to markets. 100 SPX handles, a whopping 7.5%, in barely six weeks time.

Note Added 9/6/12 at 2:12 PM:  The broad indexes are making various multi-year highs. TRIN is at an uber low 0.32. Lots of shorts ran for the exits today. NYSE volume is at a run rate just under a day's average expected volume, at about 96%, which actually may trail lower into the close. Tech continues to lead the broad markets higher, by a smidge, but enough to keep the indexes elevated. Euro, XEU, comes up today to 126.50-ish, just under the neckline resistance shown in this morning's chart. The dollar is down by only a smidge continuing to test its neckline level as well. So no great shakes on those two charts. VIX is printing near the lows today at 15.92, a fifteen handle. The 20-day MA is 15.65 so watch to see if that is violated to the downside, which would cause bulls to raise their glasses in victory once again, or, if the VIX maintains the 20-day MA as a base of support here forward.

Note Added 9.6.12 at 3:34 PM:  The bulls are ramming it into the close, ahead of the Jobs Report in the morning. Bearish traders are likely reluctant to think about shorting again while long players are letting the good times roll.  One of the ways to inflict the maximum amount of pain to market participants now would be an event overnight, like the Jobs Report, or other events on tap in September, that occur when the U.S. daytime markets are closed, which would compress the markets quickly when markets do open. If the markets would drop strongly as a result of an overnight event, those that gave up shorting would miss the ride down, while the bullish traders end up underwater since they took the upside for granted after today's rally.  It always pays to sleep with one eye open. Stay cautious in these markets. The NYSE run rate is the same as before, today's market up move is lining up to fall a few percent short of an average day's volume. The VIX is now at 15.74, with a low at 15.72, testing the 20-day MA at 15.64. If the bears are looking for a glimmer of hope, the VIX holding the 20-day MA would provide at least a small feather for their caps. Copper has been weak all day long, on the red side, Dr. Copper, the leader of the markets, is not leading this rally.

Note Added 9/6/12 at 3:48 PM:  TRIN is at 0.31, this low of a number typically signals a market near term top. At the least, an uber low 0.31 will need to see the markets snap back with some selling, probably tomorrow, to relieve the uber bullish pressure.

Note Added 9/6/12 at 4:01 PM:  Indexes closed at the highs. The bulls took no prisoners today. Keystone's short positions were beaten badly. The VIX 20-day MA is at 15.64 and price came down in the final minutes to 15.66 and bounced, so the bears can place a tiny feather in their caps, watch this closely after tomorrow's open as an immediate tell on market direction.