Keystone's Midday Market Action 8/12/13

Today is a battle of semiconductors and volatility and the bulls are pushing back. The SOX moves back above the 473.10 bull-bear line in the sand creating market buoyancy. At the same time, the Fed is beating volatility with a baseball bat, the VIX is down to 13.00, creating market lift. At the open, the SPX lost 1686 which created an acceleration to 1683 but if you blinked you missed it. The dip-buyers are tripping over each other to buy today's low. Keybot the Quant remains bearish but if the SPX moves up through 1699-1700 today, and holds above, Keybot will likely flip long. The 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets ahead, however, the bulls are pushing higher trying to curl the 8 MA upwards. The 8 MA is 1691 so if the bulls can push price above 1691 and higher, they will begin the move upwards to tackle 1699-1700 today. TRIN is 1.02 unwilling to choose a side today. Markets remain erratic, unstable and indecisive.

For OpEx week, Monday's are typically up and a Tuesday low typically leads to a Wednesday high. Retail Sales tomorrow morning are huge and will greatly impact markets as well as all the retail earnings on tap this week including JWN and WMT. Financials appear very weak. The negative divergence on the XLF weekly and daily charts has been highlighted over the last couple weeks. XLF lost its 20-day MA four days ago. Watch XLF 20.15, now at 20.36 causing bullishness. If XLF loses 20.15, market selling would begin in force. For now, the bulls are fighting back today with the goal of moving above 1699-1700 so the upside can resume. Watch SOX 473.10, XLF 20.15, GTX 4800 and VIX 14.20. All four parameters are causing market bullishness currently. Keystone took profits on JO exiting this long position. Will look to reenter. Long coffee remains one of the few attractive LTBH areas.

Note Added 11:13 AM:  SPX 1689.41. Bulls are trying to push above 1691-1692 to light the way higher to test 1699-1700. SOX 474.47. XLF 20.35. GTX 4841. VIX 12.93. TRIN 1.07. The 8 MA remains under the 34 MA on the SPX 30-minute chart.

Note Added 1:25 PM:  SPX 1688.05. Sideways slop so far today. The beat goes on. SOX 474.79. XLF 20.31. GTX 4868. VIX 13.04. TRIN 1.12.

Note Added 3:10 PM: SPX 1688.33. Flatness today. SOX 473.83, slipping away but the bulls are holding the line at 473.10. XLF 20.33 with a LOD at 20.27. GTX 4873. VIX 13.02. TRIN 1.04. The 8 MA remains under the 34 MA on the 30-minute, however, the 8 MA is 1688 so the bulls will curl the 8 MA upwards and gain upside strength above 1688. Bears need to keep the SPX under 1688. Bears win with SOX 473.10. Bulls win with SPX 1699+. If neither occurs today, both sides go home to think about it all until the Retail Sales data tomorrow morning.