Keystone's Midday Market Action 6/20/13

Equities are slapped around for another day.  The Dow is down in excess of -200 points. Shipping bellwether FDX is beaten almost -5% today. UTIL is 471.92 well under 481.10 paving the way lower. Commodities are collapsing on the weak China news overnight. GTX fails 4764 adding bear fuel to markets. VIX is over 19. XLF is 19.32 three pennies away from the bull-bear line in the sand at 19.29. Watch this closely. If XLF fails 19.29, the broad indexes will collapse another leg lower with the SPX likely heading towards 1593. RTH 51.50 is another bull-bear line in the sand that requires watching. RTH is printing 51.61. The SPX lost the 50-day MA at 1618.54.  The LOD is 1601.01 so price did not lose the pyschological 1600, yet. Remeber, 1597-1600 is very strong and key support. Price will likely test this zone and bounce, or die.

Keystone took profits on the MYL short trade exiting the position, will look to reenter. Also took profits on SSG exiting this long position, will look to reenter. Also took profits, which is actually a dead-flat trade, on the SRS long trade exiting the position. This exit is fortunate to free up the dead capital. Housing is hit on the higher yields. Also bot DNDN opening a new long position as it tries to hold its 20-day MA. Also bot SLV opening a new long position that is long silver. Also bot GDXJ, the junior gold miners, opening a new long position. Also bot DRYS, a shipper, opening a new long position.

Note Added 11:09 AM:  XLF 19.29, bounce or die. This XLF 19.28-19.29 will tell a lot about broad index direction forward. Financials now hanging on by one single thread.

Note Added 11:18 AM: XLF 19.28 hanging on by a fingernail. Keystone bot more DNDN adding to this long position opened today.

Note Added 12:08 PM:  XLF is up to 19.36 eight pennies above the critical 19.28 level so the market bulls are fighting back. XLF LOD is 19.26 so the bears are pushing but could not get the job done, yet. SPX is now at 1606.23 with a LOD at 1599.45 cracking the 1600 but only for one minute of time. Note that last week's low is 1608.27. The failure below the previous week's low is always a negative signal so watch to see if the bulls can regain the 1608.27, or not. SPX S/R is 1623, 1620, 1618.63 (50-day MA), 1618, 1617, 1614, 1611, 1609, 1608.27 (last seek's low), 1607, 1600, 1599, 1598, 1597, 1593, 1589, 1586, 1583.07 (20-week MA), 1583, 1579, 1577.07 (100-day MA) and 1576.

Note Added 12:35 PM:  SPX 1606.50 under last week's low with 1607 R creating a ceiling. UTIL 472.88. VIX 18.14 with a one-point drop over the last hour helping bulls. XLF 19.40. RTH 51.64. TRIN 0.61. Markets stumbling sideways. Financials, XLF, are the key metric now.

Note Added 1:04 PM:  TRIN sneaks higher to 0.74 and VIX recovers higher over the last one-half hour to 18.67 so the SPX leaks lower. Perhaps the markets want to explore the 1597-1600 bounce or die zone and battle it out with either the bears exiting lower leading markets south, or, the bulls exiting higher leading markets north. XLF is 19.35 but starting to leak lower again. The bulls were breathing a little easier when the XLF bounced off the 19.28 line in the sand one and one-half hour ago but now they are using the asthma inhalers again to prevent hyperventilation.

Note Added 1:37 PM:  XLF bounces again, however, the retail sector is falling out of bed now with RTH at 51.47, use the 51.47 as the line in the sand, like the XLF 19.28 number. If RTH loses another tick, to 51.46 and lower, that will push equities south for the next leg lower. TRIN keeps floating higher now at 0.87 which helps send equities lower. Ditto VIX now over 19 again.  RTH 51.47 and XLF 19.28 tell you everything you need to know. SPX sits at 1600.

Note Added 1:51 PM: XLF is 19.36 above the 19.28 danger line. RTH is 51.54 above the 51.47 danger line. SPX 1602.84. The bulls are holding the line at 1600 with financials and retail remaining buoyant. Keystone bot SPXL, the dangerous and speculative leveraged long ETF for the S&P, opening a new long position, viewing it as a quickie long countertrend play. SPXL will obviously be a bad entry if either XLF or RTH fails in the minutes ahead as described.

Note Added 2:04 PM:  XLF 19.36.  RTH 51.53. The drama continues. The bulls are stopping the slide, for now. SPX 1603. Economics professor Jeremy Siegel repeats his 17,000 Dow call for this year, within six months time. The Dow is now 14.8K. With the stock market off the highs, from the top at SPX 1687, both Jeremy Siegel and hedge fund manager David Tepper may have unwittingly called the top, not by their choice, but rather conversely, by their uber bullishness, in May. Both are extremely bullish and stocks have sold off ever since their prognostications one month ago; perhaps the market top will be known as the Siegel Summit and/or the Tepper Top.

Note Added 2:12 PM:  RTH 51.47, just touched 51.46, at the bull-bear inflection point, this is very important for the remainder of the day. RTH is losing it, now 51.42. SPX now down through 1598. Hang on tight.

Note Added 2:18 PM:  RTH recovers above 51.47, now back below 51.47, lots of drama. RTH 51.47 will tell you the market story into the closing bell. XLF 19.33.

Note Added 2:22 PM:  RTH collapses to 51.31.  SPX collapses to 1595 likely to test 1593. XLF 19.28. Bulls are losing complete control of the markets. Bears need to push and it will be carnage into the close. Note the big change in TRIN now firmly bearish today at 1.24.

Note Added 2:33 PM:  Dow down nearly -300. SPX now testing the strong 1593 support. RTH 51.27. XLF 19.25. The bears are not playing around today; they mean business. SPX 1589 S is next if 1593 fails.

Note Added 2:43 PM:  VIX 19.70 at the highs starting to tease the 20 handle. RTH 51.34.  XLF 19.27 only one tick on the bear side. SPX LOD 1592.75 so the 1593 support is holding, for now. XLF 19.28 will determine if markets bounce, or not.

Note Added 2:59 PM:  There's 1589 S.  If this fails, 1586 is next and price likely wants to look at its 20-week MA at 1582.19.  Traders are likely locking in the year's profits; only a fool would give up such a run higher. May as well take the summer off and spend it at the beach. With RTH under 51.47 and XLF under 19.28, the markets are toast. The clock just fell off the wall at the Eccles Building. Gold down 95 bucks to 1279.

Note Added 3:50 PM: SPX in the 1580's.

Note Added 7:06 PM: SPX falls 41 points, -2.5%. Dow down 354 points, -2.3%. Nasdaq is down 79 points, -2.3%.  RUT drops 26 points, -2.6%. VIX is 20.49 spiking over 21 today. The 10-year yield is 2.42%. CPC put/call is 1.39.  There is finally some fear and panic in the air. This is a good time to at least nibble on long positions.