Keystone's Midday Market Action 10/22/12; Final Presidential Debate Tonight

Utilities fell at the start.  Copper remains weak.  The VIX remains elevated.  The SPX comes down to test the 1430 level which is important for today but bounces instead of falling thru, and now moves sideways thru the 1433 and 1435 S/R levels.  The third and final Presidential Debate occurs this evening and with the coal stocks up with help from BTU, traders are expecting Romney to wave the coal banner.  CAT has reversed its pre-market losses and is now positive. The following three characters remain bearish so the markets will remain weak; UTIL 485.67, JJC 46.33, VIX 16.30. Watch for any changes. In addition, watch the retail sector.  RTH is now printing 44.67 very near the danger level of 44.45. The broad indexes will take a strong leg lower if RTH 44.45 fails.  The SPX is playing around on each side of the 50-day MA at 1434.07.  WTIC oil is hugging the 90 level.  Use that as a gauge, below 90 and market bears are happy, above 90 and market bulls are happy.  The euro is 1.3071.

Note Added 10/22/12 at 10:41 AM:  UTIL has a 480 handle. If UTIL falls thru the 20-day MA and 20-week MA both at 479-ish, this would send it down in the direction of beginning the second leg of a two-step bear flag pattern. Remember, the utes leading the broad markets lower, as has occurred over the last weeks, is very ominous for markets. If UTIL continues lower it will lock in extended bearishness for the broad indexes. RTH is printing 44.60 staying above the 44.45 bull-bear line. Watch to see if the SPX comes back down to test the 1430 today. If the retail sector breaks down, the SPX will target 1424 and 1419. WTIC oil fell under 90 now down towards 89.50. Rajoy says the Spain bailout may be delayed until November. The markets should have dropped on this news but is hanging in there.  Rajoy probably wants to get thru the Catalonia elections on 11/25/12. So far it is a hazy lazy day of Autumn.

Note Added 10/22/12 at 12:44 PM:  UTIL, JJC and VIX remain bearish causing market negativity. RTH remains bullish. The SPX lost 1430 which dropped price to the LOD at 1427.46 but a further drop to the strong 1424 would have been expected. Markets are meandering sideways. Note that the COMPQ is +0.13% (AAPL up 14 bucks) while the SPX is -0.25% thus, tech is not leading the downside today, this helps the bulls stall the downside.

Note Added 10/22/12 at 1:24 PM:  Here's the test of the strong 1424 and price bounces on the first attempt lower. The SPX is now about eight points under the 50-day MA at 1433.88. The Nasdq is now negative but Apple continues to support the entire circus today.  Here's the second test of 1424.......

Note Added 10/22/12 at 1:59 PM:  SPX falls thru 1424 to print a LOD at 1422.06.  RTH is 44.47 only two pennies away from triggering serious downside. The bulls are hanging on by a tiny thread. The euro is 1.3049.

Note Added 10/22/12 at 3:23 PM:  RTH would not fail at 44.45 so the markets are recovering. The Fed says a new super duper bazooka is on the way that can supplement QE3 Infinity spiking markets higher. This is pathetic, infinity squared. RTH is now printing 44.53 eight pennies above danger.

Note Added 10/22/12 at 3:41 PM:  AAPL is up over 20 bucks printing the highs of the day at 630.77. Apple keeps the Nasdaq positive and prevents tech from leading the broad indexes lower, thus, markets are in suspended sideways animation. RTH is now printing 44.56 a dime above danger.

Note Added 10/22/12 at 4:05 PM:  AAPL is the bull's sugar daddy holding back the markets from a more serious down move today.  RTH came down for a look at 44.45 and bounced but since price took the trouble to test this important support, another test may be on tap tomorrow.  The VIX daily chart shows the squeeze of the tight BB's that sent price vertically and more upside is expected perhaps to 21 this week, but, into the close the VIX was taken out back and beat up next to the dumpster in the alley way.  VIX plummeted from 17.70 to 16.78, almost a buck, in the final fifty minutes.  VIX is above 16.30, however, closing at 16.71, so the higher volatility will continue to cause market negativity. The SPX, Nasdaq and Dow Industrials all finished positive. The RUT (small caps) finished negative.  The Fed's article this afternoon (pointed out in the Comments section) on MarketWatch at about 2 PM, where the Fed will supply a new super-duper-duper bazooka, helped to bounce markets off the lows today. UTIL, JJC, VIX and SOX all remain in the bear camp, with RTH teetering, so the bears continue driving the bus at this juncture despite any recovery rally. YHOO and TXN earnings are on deck.

Note Added on 10/22/12 at 4:20 PM:  YHOO beats on the bottom line and beats by a hair on the top line; YHOO yells yahoo moving up 3% in the afterhours. Mayer will be on the conference call so watch and see if she remains mayor of happy town, or not, once she begins speaking. WDC blew the cover off the ball jumping 4% AH's. Calling TXN, calling TXN, please report to the earnings desk. Face it like a man.

Note Added 10/22/12 at 4:33 PM:  TXN looks like it may have missed by a penny, but the numbers may be apples and oranges, top line revenue was in-line. TXN is slapped around, now down one percent but the stock is jumpy. Guidance is lowered which is never a good sign and should assure some amount of downside ahead. Looks like further clarity is needed.