Keystone's Midday Market Action 3/21/13; Cyprus

The bears push lower at the opening bell but volatility did not make any major move higher so you knew the selling would subside.  VIX is 13.15 and bullish.  The bears are steadily pushing the VIX higher but the 14.90 level, that launches major market selling, remains far above still yet.  VIX 14.90 will tell you the market story moving forward. TRIN is 1.26 moving higher and reinforcing the bearish theme today. The higher TRIN and higher VIX can feed off each other and work higher, if so, the markets will move lower.  The first bearish signal would be the 8 MA falling under the 34 MA on the SPX 30-minute chart, as previously highlighted with a chart, so use that as step one to see if stronger bearishness develops, or not.

The euro is 1.2910 clinging to the 1.29 level like a Titantic victim clinging to a floating suitcase. The Cyprus drama escalates as video of lines at ATM's are shown on cable news television and the talks with Russia are tense. The 10-year yield is 1.93% so a couple ticks lower from this morning's 1.95% favoring equity bears but not to any great extent. Copper was positive this morning, likely on China's PMI, but turned negative as the U.S. markets opened. The SPX is 1553; the 1552-1553 level is strong S/R. Above leads the way to 1556 R.  Below leads to 1548 S. The SPX 20-day MA is 1537.50 and it needs a back kiss moving forward. SOX, semiconductors, show a 427 handle; the broad markets will sell off strongly if the SOX 422 level fails. Keystone wanted to short HYG high-yield but the broker says shares are not available. Keystone shorted XLV opening a new position that shorts health care.

Note Added 3/21/13 at 1:39 PM:  The 8 MA stabs down through the 34 MA on the 30-minute charts signaling bearish markets ahead. The bulls and bears are fighting over the strong 1548 support. The next support is 1547.36 (last week's low), 1543, 1537.37 (20-day MA), 1532.48 (200 EMA 60-minute chart) and 1531. VIX is 13.69 remaining in the bull camp, well under the 14.90 level that would create market mayhem. For now, bulls remain worry-free. TRIN is 1.56, elevated, but basically reflecting the orderly selling today. SOX is 426.31. The bears are in control but cannot claim victory unless volatility moves higher. Trannies, another key bellwether, $TRAN, are down 2% today, 3% on the week. Perhaps traders are finally noticing that the bellwether domino's such as Trannies, copper, CAT, FDX, etc.., are falling and should adversely effect the global economy. The Dow is down -100. SPX is printing 1547.45--look at that, it is testing last week's low support at 1547.36, if it fails, the market negativity will increase. The euro is 1.2914. The 10-year yield is 1.93%.

Note Added 3/21/13 at 2:46 PM:  The beat goes on. VIX moved above 14 but fell back down. Bulls scoff at bears since VIX 14.90 remains out of reach, so far. TRIN is 1.53 so the bears will growl moving forward. The SPX moves through the 1548, 1547.36 and 1543 S/R. Keystone added more MCP for this ongoing long trade. MCP minute charts show a sideways symmetrical triangle that will resolve one way or the other. LL is puking 3% due to the negative divergence highlighted this morning.

Note Added 3/21/13 at 3:21 PM:  There it is again, a test of SPX 1547.36, last week's low.  TRIN 1.56.  VIX 13.69.