Keystone's Midday Market Action 12/19/12; Fiscal Cliff

The bears are pushing back a little today but the SPX dropping four points is nothing much compared to the 35-point rocket launch rally on Monday and Tuesday.  The VIX is back above 15.85 so the bears are creating market negativity. The VIX 50-day MA is 16.57. UTIL is down a couple bucks at 458 under the 466 bull-bear line so the utilities remain in the bear camp. The copper weakness pushed JJC under 45.47 creating market negativity but over the last few minutes JJC is moving back above. Keybot the Quant, Keystone's algorithm, wants to go short but will be held back today unless the SPX drops under 1430 which is a dozen handles lower. Besides, the JJC may recover. Keep watching VIX 15.85, JJC 45.47 and UTIL 466.

The 10-year yield is down to 1.78% so more bear friendly for equities. The euro is well off the 1.33+ high an hour ago. The SPX is having trouble punching thru the 1446-1448 resistance area. Looks like the two-hour and one-hour SPX chart needs another high to lock in negative divergence so perhaps markets recover moving towards lunch time to place this bump higher in that 1446-1448 resistance zone again. The fiscal cliff negotiations are becoming more confusing but traders remain convinced a happy ending will be announced at any time.

Note Added 12/19/12 at 11:37 AM:  TRIN is recovering now at 1.30 which represents steady-eddy selling pressure. SPX is testing the 1446 resistance again. VIX and JJC remain bearish although JJC keeps dancing across the 45.47 bull-bear line. The resiliency in the broad indexes is surprising considering the negativity now created by higher volatility and weaker copper. President Obama is to make comments on gun control in a few minutes. Markets want to hear about the fiscal cliff negotiations.

Note Added 12/19/12 at 12:43 PM:  The Nasdaq slipped in and out of red as the president spoke.  The VIX is printing the highs of the day at 16.63.  JJC is on top of Keystone's algo number at 45.47, how do you like that? UTIL is 460 remaining under 466. The SPX sits at 1446 now coming up for the high print on the two-hour chart to produce negative divergence. Euro is 1.3251, crazy action today, up over 1.33 and then back down in a few hours time. The beat goes on.

Note Added 12/19/12 at 1:32 PM:  Tight range today, the SPX moving thru 1442-1448, a six-point range. The weakness in commodities warrants attention, including the weakness in copper, both reflecting overall global economic weakness despite talk of China and Japan providing stimulus in the future. The three intraday tops today are identified by the three +900 and +1000 TICK's and higher; at 11:10 AM, 11:35 AM and 12:45 PM, all at SPX 1446-ish. If shorting you always try to enter shorts on a +900 or +1000 TICK since it will give you a little more bang for the buck. Conversely, if you are entering a long position, ideally, you enter at or near a -1000 TICK. A +1000 TICK shows that the buying is overdone and the bullishness too exuberant while a -1000 TICK shows pessimism and the selling is overdone.

Note Added 12/19/12 at 2:37 PM:  The euro is 1.3246.  The 10-year yield is 1.80%. JJC is 45.40 under the important 45.47. VIX is teasing 17 but did not print it yet today. The SPX is printing near the lows with a 1440 handle.  Tech and small caps are holding up for the bulls helping to support the indexes. The move into the closing bell may prove interesting. Keybot the Quant is in position to go short but has not triggered as yet. Keybot likely wants to see 1430 to flip to the short side today.

Note Added 12/19/12 at 2:44 PM:  There's VIX 17. SPX is 1439.