Keystone's Midday Market Action 5/8/13

Mortgage applications were up so that is encouraging for housing although the bulk of the applications are refinacing. The light week of data continues with Oil Inventories at 10:30 AM and the 10-Year Note Auction at 1 PM. The Dow is over 15K.  The SPX all-time high is 1626.03 and all-time closing high is 1625.96 so these numbers are obviously important today. The 2-hour, 1-hour and 30-minute charts are negatively diverged hinting at some weakness ahead. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling continued bullishness so watch to see if an 8/34 cross occurs today for the bears, or not.  For the SPX today, starting at 1626, the bulls only need to see a smidge of green and it will be off to the races to the upside with the SPX 1630 handle likely on tap in quick order. The bears need to push under 1617 to accelerate the downside to 1613 in short order.  A move through 1618-1625 is sideways action today.

Volatility remains key. Bulls are happy if VIX stays under 13.75. Bears got nothing until they move the VIX above 13.75.  Watch commodities, GTX, now at 4728. A move above GTX 4810 will provide more bull market fuel. Bears need to keep GTX under 4810. Dollar/yen moves below 99 so futures move lower.  The 10-year yield is 1.77% down a single basis point from 1.78% a short time ago. Futures point to a slightly lower open minutes away.

Note Added 9:43 AM:  VIX 12.90 cannot even move above 13 so bulls are already looking for the booze to celebrate another relaxing day. Ditto TRIN 0.85 favors bulls today. Copper is strong (+3%). The copper weakness for two months did not drag equities lower, as would typically be expected, but copper strength helps the markets (bad news is good news and good news is good news). SPX off marginally. Dow remains above 15K.

Note Aded 10:04 AM:  VIX 12.87. TRIN uber low 0.64, very bullish. Dollar/yen moves higher to 98.77. All three are bullish so markets would be expected to be up, and, the broad indexes recover with the SPX printing another new all-time high at 1627.31.

Note Added 10:36 AM:  Big up to another new all-time high at 1629.01 so the smidge of green in the SPX today already pushed price over 1629.  The bulls want to see GTX 4810 to receive more upside market fuel. The bears need to touch either JJC 41.93 or VIX 13.75 to initiate market selling; strong selling if both fail. VIX 12.80. JJC 41.98. GTX 4729, dropping. TRIN 0.64. Dollar/yen 98.74.  10-year yield 1.77%. WTIC crude oil at 96.

Note Added 10:47 AM:  Another new high at 1629.48; the bulls charge higher with reckless abandon. JJC 41.99.  TRIN at 0.63 pumps markets higher.

Note Added 10:57 AM:  Another new high at 1629.63. JJC 42.02. VIX 12.82.  GTX 4743. The 8 remains above the 34 MA on the SPX 30-minute chart. The 8 MA is now at 1627 so bears need to see the SPX print unde 1627 to curl the 8 MA to the downside.

Note Added 11:04 AM:  JJC 41.93.

Note Added 12:08 PM:  JJC 41.80, bearish, but VIX remains sub 13, TRIN is 0.69, dollar/yen moving up to 98.85, so the SPX inches higher and prints another new high at 1631.14 right now.

Note Added 3:20 PM:  SPX new all-time high at 1631.24 as price rockets upwards late day. VIX was above 13 but fell on its sword and collapses over the last fifteen minutes to 12.85 sending equities higher. TRIN is 0.71 staying bullish all day long keeping markets elevated.  Volume is below average, as usual, only running at about three-quarters of a day's average volume. JJC is 41.65 leaking lower after this morning. Watch the JJC 41.93 bull-bear line in the sand closely over the next day or two.

Note Added 3:30 PM:  SPX new all-time high at 1631.93 printing now; the bulls are unstoppable. VIX 12.78.  Small caps are lagging today. Look at XLI, XLB and XLK pump higher with traders jumping on the rotation into industrials, materials and tech band wagon.

Note Added 3:34 PM:  SPX new all-time high at 1632.33.  VIX 12.77. TRIN 0.71. JJC 41.65. GTX 4742. The 8 MA remains above the 34 MA on the SPX 30-minute chart so the bulls have been sipping wine all day long without a care or worry. The 8 MA is moving flat now at 1631.82 so as long as the SPX stays under 1632, this will curl the 8 MA over to the downside. With each of the couple-handle eeks higher in the SPX, the hourly and minute charts continue to favor a rolling over of price. Lots more short sellers are likely throwing in the towel adding to the late day upside fuel.

Note Added 3:50 PM:  SPX new all-time high at 1632.47.

Note Added 4:00 PM: Another big up into the close. SPX prints new all-time high at 1632.78. VIX collapses to 12.66 providing the bull fuel, along with the low TRIN, which climbs at the close to finish at 0.83.