Keystone's Midday Market Action 4/18/13; Philly Fed; Leading Indicators

Today is a relatively calm day considering all the market theatrics thus far this week. The bears are driving the bus to begin the day. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets ahead. Ditto the SPX under the 200 EMA on the 60-minute chart as highlighted this morning. The BPSPX has now issued a market sell signal as well. The bearish signals are starting to accumulate. The market sell signal from the CRB Rind Index was important one week ago. The SPX 1540 represents the neck line for an H&S that will target 1485 if the 1540 fails. For the SPX today starting at 1552, the bulls need to touch 1575 to get their mojo back. The bears need to push under 1544 to accelerate the downside and immediately attack the 1540 neckline support. A move through 1545-1574 is sideways action today.

Philly Fed and Leading Indicators are released at 10 AM so look for a market pivot point here. Natty Gas Inventories are at 10:30 AM. 5-Year TIPS Auction is 1 PM. A couple of Fed heads speak today.  MS (a proxy for Europe) and VZ earnings were in line this morning. FCX, GOOG, MSFT and IBM earnings are key today. Typically, when a large Wednesday down day occurs, markets will print a lower low on Thursday, so this will be interesting to monitor today. Volatility, semiconductors and financials are the key drivers of market direction right now. Watch VIX 14.25 (now causing bearishness), SOX 425.20 (now causing bearishness) and XLF 17.95 (now causing bullishness). Any change to these three parameters will immediately send the broad indexes in that respective direction.  Dollar/yen is 98.20 so a weaker yen overnight sends the dollar/yen pair higher and futures higher. Market bulls want to see the dollar/yen move up to take equities higher; bears want to see the dollar/yen drop under 98 so more bear fun can continue. Here is the opening bell.

Note Added 9:38 AM:  There's the lower print on the SPX for today now down a couple points to 1550. VIX is 16.60, well above the 14.25 bull-bear danger line, creating market negativity.  This is a change; volatility is remaining elevated today unlike recent days where it would collapse to favor bulls. SOX is at 420.55 well under the 425.20 bull-bear line creating market negativity.  XLF is 17.94 under the 17.95. Whoa, Nellie.  The bears will slap the markets hard today if XLF stays under 17.95. Note that the SPX is remaining under the 200 EMA on the 60-minute chart, so far, which keeps the downward market bias in place. XLF 17.95 is the key today so use this as the market rudder. Keystone added more AAPL to this ongoing long trade. It is a beautiful spring day in Pennsylvania; perhaps it is time to survey the oak trees and decide on a position for the hammock this summer.

Note Added 2:03 PM:  XLF gave up the ghost, losing 17.95, now printing 17.88. Semiconductors are weak, volatility remains elevated. The bears continue to try and punch down through the 1544 level all day long but cannot stay under. If so, the important 1540 H&S neckline will be attacked and that would provide high drama.  Now that the XLF financials broke down it is very surprising that the SPX isnot ten handles lower. Keystone bot SPXL opening a new long trade solely to hedge against the heavily-weighted short portfolio right now. Also, seasonality-wise, this April OpEx week is usually a bullish week so the bulls may stage a comeback into the weekend. TRIN is 0.97, neutral, so neither bulls nor bears are favored today.  AAPL is under 392 right now, a rotten apple today, already venturing towards the 380's.

Note Added 2:16 PM:  There goes SPX 1544. There goes the 50-day MA at 1543.10, 1543...., 1542..., 1541.  SPX is testing today's lows at 1541 right now, this is a critical area 1539-1541, do or die for both bulls and bears.

Note Added 2:18 PM:  SPX fails through 1541. The bears can create havoc if they push for it. Whoa, baby. Price came down and printed 1540.00 exactly, and bounced. The drama continues. The bulls are trying to hold the 1540 since if it fails, the H&S pattern would then be in play with a target at 1485 moving forward.

Note Added 2:22 PM:  There goes 1540, the market bulls are in trouble now, the bears may start to steam roll lower. LOD is now 1539.46. The fight will likely continue across 1540, this is a big deal. Bounce or die, an important inflection point for the broad indexes.

Note Added 2:47 PM:  SPX is coming down again to the lows. This is it.......

Note Added 2:54 PM:  SPX now at 1538.14, the bears are doing some damage. The bulls just lost their footing at the top of the stairs and are falling backwards with arms flailing. If the bulls supply a stick-save it has to be right now or they will lose control.

Note Added 2:56 PM:  SPX now at 1537.33 with LOD 1536.86. TRIN 1.08 favoring bears by a hair. VIX is over 18 now.

Note Added 3:21 PM:  The bulls are not going down without a fight.  SPX recovers to 1541. The 50-day MA is 1543.02 so see if that holds as a ceiling today through the closing bell, or not.