Keystone's Midday Market Action 3/28/13; Cyprus; Italy; SPX Exceeds All-Time Closing High at 1565.15

The intermittent Internet outages continue on this blustery day in wintry Pennsylvania.  Everyone wanted the SPX to exceed the all-time closing high at 1565.15 for the last three weeks with the refrain, "Just do it already and get it over with."  Today the SPX exceeded the 1565.15 at 10:33 AM EST about one-hour after the opening bell.  The bulls pushed the SPX above 1564 so punching through the old high was a given.  The all-time intraday high is 1576.09. For the higher print today to matter, the SPX needs to close above 1565.15 since this price is, of course, a closing high number.  The GTX plays around at the 4931 level today and at noon collapsed. This causes the weakness appearing in the SPX right now. Watch GTX 4931 today and more importantly, volatility. It is a broken record, but VIX 14.65 rules the roost. VIX is at 13-ish well under the 14.65 so the bulls rule. The bears receive their turn when VIX prints above 14.65.

The close may be interesting today with a volume push expected in the final half hour as funds rebalance and reposition for Q2. Volume is very light thus far. The monthly charts receive new data points today. This last week of March is typically bullish as well as the day before the Easter holiday so this seasonality helps the bulls finish the week. GDP missed by a tick at 0.4% and Chicago PMI disappointed as well but markets continue to ignore any bad news since the Fed's punch bowl is stocked with booze and long traders stagger to and fro imbibing while buying the market. Other analysts are beginning to point out the oddity of seeing consumer staples and utilities lead higher, which would actually be expected to occur when a market is topping.  The Fed's money is pumping the Dividend Stock Bubble each day and now European money is likely pushing into the same stocks as well. Tech is lagging and it should be leading. Continue watching SOX 422, semiconductors, for clues moving forward.

For today, watch to see if the SPX closes above 1565.15 to print a new all-time closing high, or not.  Also watch GTX 4931, VIX 14.65. The final hour of trading may create some excitement. The euro is 1.2823. The euro was well under 1.28 this morning on the weak German employment data but recovered.  The 10-year yield is 1.85% flat today. Cyprus bank runs are tame after some initial unrest as the banks open. Cypriots cannot do much except take their 300 euro's each day, check the balance, and go back home. The television reporters and crews likely outnumbered the worried depositors. Cyprus is the minnow and Italy is the big fish. Any news from Italy concerning new elections, or a government, will impact equity markets.

Note Added 3/28/13 at 2:25 PM:  Markets march higher despite the collapse in copper today. JJC is down 1.5% but the broad indexes do not care. Commodities in general are lackluster. TRIN is 1.10 continuing to prefer the top side of one today but it has not helped the bears, so far. VIX is at 13. Status quo, a lazy low-volume day into a holiday weekend. The SPX minute and hourly charts are setting up with negative divergence but price keeps moving higher. The HOD is 1568.30; watch to see if the SPX punches up through, or not.

Note Added 3/28/13 at 4:20 PM:  The broad indexes ramp higher all afternoon with the SPX gaining five handles in the last hour to close at a new all-time closing high at 1569.19 and new 2013 intraday high at 1570.28. The all-time high in the SPX is 1576.09 not yet achieved.  VIX drifted lower to end at 12.71; the low volatility allows the continuous upward market action. Copper finishes weak down -1.5% today and down -2% on the week, but markets do not care about Dr. Copper's illness. Look at SDY and the DVY, both closing at the highs today pumping the Dividend Stock Bubble. Look at utilities, UTIL closes at 508.40, an obscene upside orgy as folks are chasing yield and perceived safety regardless of price. UTIL is up 17% in 19 weeks; utilities are moving up one percent per week, that is astounding. Healthcare is another high flyer. Look at XLV closing at the highs. XLV is up 50% in the last two years, a pace of 25% per year. The Fed's easy money is feeding these new asset bubbles. The bears had the week stacked against them due to all the bullish seasonality factors mentioned last weekend and that was too much for the short sellers to overcome. The focus for the SPX next week will be if a new all-time high at 1576.09 occurs, or not. Cyprus and Italy remain in focus. The decision from Italy concerning new elections, or not, will impact markets come Monday. Event risk must be respected moving forward. The easiest way for the markets to hurt the maximum amount of traders is to experience an event overnight that causes markets to open far lower trapping the long side. Stay alert and aware. The extra day off tomorrow is welcome. For now, an apple pie requires closer study.