Keystone's Midday Market Action 3/25/13; Cyprus; Italy

The SPX ran higher at the opening bell to a HOD at 1564.91 (new intraday high for 2013) only 24 cents from the all-time closing high at 1565.15.  Drama day after day.  The Dutch finance minister said that Cyprus could be used as a template moving forward, in other words, be careful of the money held in banks. If you hold over 100,000 euro's in any Italy or Spain bank you now know you will lose some portion of your money moving forward. The smaller deposits are not even safe anymore since the genie is out of the bottle. One analyst after another said the Cyprus depositor confiscations were a solitary event and will not occur in the other European nations; it did not take long to contradict that opinion. So the broad indexes fell on the Dutch comments, the SPX now at 1552. The 8 MA is curled to the downside on the SPX 30-minute charts so watch that to see if the bears receive the go ahead signal today, or not, with the 8/34 MA cross. SPX support is 1556, 1553, 1551, 1548, 1546 and 1543. The 1546 S is key for today, it is fails, the broad indexes will accelerate strongly lower. The bulls will target 1565.15.

UTIL hit 500 today and someone rang a bell. The perceived safe havens with divvy's such as Dow blue chips, dividend stocks in general, utilities, healthcare, high-yield corporate's, all are continuously pumped, gorged and bloated higher with Fed free money. All are new asset bubbles.  The euro came back down through 1.30 and then fell like a stone through 1.29; the euro now printing 1.2860. The VIX recovered up through 13 and even above 14.  The VIX is now back to 13.89, remaining under the bull-bear line in the sand at 14.70 (this number is lowered by Keystone's algorithm). SOX is 428.07 remaining above its bull-bear line in the sand at 422.00 (this number is adjusted from the 421). Thus, bulls remain unconcerned since VIX and SOX remain bullish. Copper continues its stumble lower but folks now say copper no longer matters. That is simply silly, of course copper matters. The 10-year is 1.92% dropping in yield verifying the bearishness in equities. TRIN is 1.55 so bears in firm control.

Chairman Bernanke is wiping the jelly stains off his necktie as he prepares to talk at 1:15 PM.  He will show up with a money bazooka and the long side will become happy again. Fed's Dudley beat Bernanke to the punch saying, minutes ago, the Fed will continue to pump indefinitely. The market reaction is muted since traders know that Dudley, Bernanke and Yellen are the three doves and will continually say that the printing presses are running full steam, so it is not much of a surprise. European markets are closing. Banking stocks are hit since people, and rightfully so, will pull their money out to avoid the confiscation that occurred in Cyprus. The broad indexes may pump higher once Bernanke speaks. FB is selling off today, note that it fell through the 200-day MA at 25.43 so watch this as the day plays out. The gap fill is 24.80 is highlighted in the charts as the next support. Simply type "FB" in the search box to bring up the Facebook chart for further study.

Note Added 3/25/13 at 1:08 PM:  The euro is now at 1.2948 failing through the 200-day MA at 1.2861.  The 10-year yield drops to 1.91%.  Dow is down over 100 points. The SPX broke through the 1551 S, now testing the strong 1548 support, check that, there it goes.  The bears have it in their grasp if they want it. A failure through 1546 will accelerate the downside. The VIX is now at 14.46 only 24 cents from the 14.70 bull-bear line in the sand that will accelerate the market selling. Well, bears, did you have your Wheaties this morning? This is a window, if there is a time to push markets lower, this is it, exactly as Bernanke will speak. Either a stick-save occurs, or collapse. Bounce or die. LOD print is 1546.22. TRIN is 1.89 verifying the strong bearishness today. The bears will keep pushing all day long if the TRIN remains at this elevated level.

Note Added 3/25/13 at 1:16 PM:  Big drama and excitement  VIX is 14.61 only nine cents away from triggering market selling. SPX is at 1547 maintaining 1546 support. This is for the whole ball of wax today, Bernanke will either succeed or fail as he places his half-eaten drumstick on a napkin and begins speaking. Bears need VIX 14.70 and SPX 1546 and it is smooth sailing south. Also Keybot will likely flip short if the VIX moves above 14.70. If Bernanke pumps the free money talk, then the bulls will have the last laugh once again and markets will recover.

Note Added 3/25/13 at 2:17 PM:  Markets bounce. Stick-save again.  The Dutch finance minister retracts his statement about Cyprus acting as a template for Europe so the markets catapult higher. Politicians and central bankers dictate market direction. The 8 MA stabbed down through the 34 MA on the 30-minute charts signaling bearish markets for the hours and days ahead, however, with the rumor pumping, anything is possible. If the SPX stays at 1553 and lower this will continue to keep the 8 under the 34 and keep the bearishness in effect moving forward. The markets are like the Wild West; these days anything goes. The SPX LOD at 1546.22 and 1546 support holds, for now. The bears did not have enough oomph. The VIX prints a HOD at 14.61, close, but no cigar for bears that need 14.70 and higher to begin any market mayhem. VIX has now plummeted to 13.65. TRIN is 1.39 so bears remain favored today. Probably sideways churn ahead for markets into the closing bell. Gold sits at 1600. The euro is 1.2871 regaining the 200-day MA so this fight will continue. The 10-year yield is 1.91%, very interesting since this remains in the equity bears favor today despite the market pop. Copper remains negative.

Note Added 3/25/13 at 4:06 PM:  Markets skid out sideways at SPX 1551. VIX 13.77. SOX 429. Traders likely waiting to see what happens with potential bank runs tomorrow. Cyprus is opening the banks tomorrow excluding the large trouble banks which will now stay closed until Thursday, which is nearing a two-week closure. There are capital controls in place now limiting the amount that can be withdrawn so that will be interesting to watch tomorrow. If Cyprus announces this evening that all banks will be closed tomorrow still yet, that will likely be a market negative. The VIX could not move above 14.70 so the bulls are not worried.