Keystone's Midday Market Action 6/25/13; Consumer Confidence

The bulls need the SPX to jump above 1588 and touch the 1589 handle to unleash the upside and price is there to start the day. The strength of any recovery bounce will depend on SOX 457.00, RTH 51.48 and XLF 19.25. SOX jumps above 457 providing bull fuel for the broad indexes today. RTH and XLF continue to enjoy the bear camp, for now, so the market upside may be limited. If either RTH or XLF joins the bull side, then the SPX takes another leg higher.

The economic data this morning places markets in a good mood. The S&P futures did slip a couple points as the data hit hinting that some traders thought the good data reinforces Chairman Bernanke's bullishness and thus reinforce the idea of tapering QE, but then just before the open the futures shot several handles higher. Markets may idle in front of the Richmond Fed Mfg data, New Home Sales and Consumer Confidence at 10 AM that will create a market pivot. The Con Con number was blow-out last month at 76.2, the highest number since early 2008, so use the 76.2 as a metric when the number hits. The 2-Year Note Auction is 1 PM and important in respect to the 2-10 spread since this will impact the banking sector moving forward. The 100-day MA is 1579.34. The 20-week MA is 1585.85.  The 10-year yield is 2.54%. The SPX was rejected at 1588-1589 on the first try, here she comes again. What say you bulls, do you have the juice to touch 1589 and set loose the upside?

Note Added 9:48 AM: Another spank down from 1588-1589 with the SPX now fighting the 20-week MA at 1585.78. Traders want to see Con Con. Markets may move a couple minutes ahead of 10 AM since privileged folks likely receive information ahead of time. SOX 458.48.  RTH 51.15. XLF 19.02. VIX 18.82, under 19, but continuing to cause bearishness as long as it stays above 14.20. TRIN is 0.72 verifying the market bullishness so far today. Watch SOX and RTH when the Con Con hits.

Note Added 10:36 AM:  Con Con prints another blow-out number not seen since January 2008 over five years ago. Markets did not pivot on the news choosing more of a sideways indecision path for today. SOX fell into the bear camp again but now is back above the 457.20 bull-bear line in the sand (use this number instead of 457.00). So there may be lots of drama around SOX 457.20 today. Watch RTH 51.48, now at 51.07, since bulls next need higher retail to move markets higher. XLF is under 19 and will need to move to 19.25 to supply bull fuel. TRIN is at an uber low of 0.55 which will greatly help the bulls today. The beat goes on.

Note Added 12:49 PM:  The 8 MA moves above the 34 MA on the 30-minute chart at 11 AM signaling bullish markets for the hours ahead. SOX 459.81. XLF 19.10 (watch XLF 19.20 as the bull-bear line in the sand). RTH 51.27. VIX drifts lower intraday and TRIN stays low at 0.59 helping create the market lift. The SPX has made five attempts at breaking up through today's 1588-1589 resistance, and did touch the 1589 handle, but continues to struggle to punch up through to light the acceleration path higher. If financials jump a few more pennies, with XLF moving above 19.20, that will provide the bull fuel needed. If XLF stays under 19.20, the bulls may have a tough time moving higher. Keystone took profits on DNDN exiting the trade. Will look to reenter. DNDN remains an attractive long moving forward. Also bot MUX, a speculative mining play, opening a new long position. Also added to the ongoing SLV long position.

Note Added 1:12 PM:  Keep the SPX 1630.74 in mind the next three days since this was the starting number for June. Key SPX resistance above is 1589, 1593, 1597-1600, 1609, 1614, 1618, 1623, 1626-1627, 1636 and 1649-1650. The SPX keeps playing at the 20-week MA at 1585.81 with price now at 1586.50. The 1589 R has held as a ceiling so far today. Whoopsies. Look at SOX drifting lower.. 459.30 .... 459.00 ...458.67... 458.40.

Note Added 2:58 PM: SOX recovers back to the highs today now near 461 helping the market bulls but XLF is at 19.10 remaining under 19.20 in the bear camp. Ditto UTIL at 475 that was sneaking upwards today. Without help from XLF or RTH the bulls cannot receive additional oomph, but the 8 MA above the 34 MA on the 30-minute, and low 0.62 TRIN keeps markets elevated. The SPX keeps punching at 1589 and boom, it made it up through at 2:34 PM, but slipped on a banana peel and immediately traced lower within 5 minutes.  Price needs to hold the higher levels for 7 to 10 minutes to lock them in. If SPX takes out 1589 R, then the strong 1593 R is next.

Note Added 3:06 PM:  Financials are trying to run higher; XLF is 19.13.  SPX is at 1588. The financials would provide the bull juice to test 1593 R and then perhaps 1597-1600 R if XLF can gain another 7 cents. If the bears can move SOX back under 457.20, markets will sell off again.

Note Added 3:11 PM:  XLF 19.14. SPX 1589.24. With three day settlements before the EOM and EOQ, today would make sense to be a bullish day.

Note Added 3:12 PM:  XLF 19.15 ......

Note Added 3:34 PM:  XLF 19.19 moving higher so SPX runs up to the highs of the day towards 1593 R. Bulls need one more penny for XLF. There it is XLF 19.20; bulls need to hold it 7 to 10 minutes and that would indicate further upside with SPX probably targeting 1597-1600.

Note Added 3:43 PM:  SOX running higher like a banshee now at 463.47 well above the 457.20 danger line indicating that the bulls are developing upside strength. Whoopsies. XLF drops to 19.16 so SPX hits its head on 1593 and staggers lower to 1591.

Note Added 4:01 PM:  XLF stumbled into the close performing a face plant at 19.11 so the SPX ran out of gas and dropped back down through the 1589 S/R. Even though bulls ran out of gas into the bell, they pulled the SOX back into their camp today and also the 8 MA moves up through the 34 MA on the 30-minute chart, so they place two feathers in their caps. Place XLF 19.20 on the top of your watch list when the bell rings tomorrow to determine broad market direction. The 10-year yield is 2.60%.