VIX teased the 15.79 level twice so far but at 15.84, the bears have a one nickel advantage. RTH is over 45 remaining firmly bullish. Ditto XLF. The SPX placed a LOD at 1425.96 but this only lasted a few minutes before recovering. The bears need to keep the SPX under 1427 for at least ten or more minutes to create a downside acceleration. The TRIN is 0.69, uber bullish, so this favors some market buoyancy in the minutes ahead. The 8 MA is curling down and converging on the 34 MA on the 30-minute chart but remains bullish for now. Thus, status quo sideways action so far. The Business Inventories were in line at 10 AM so the data turned out to be a yawner with the SPX drifting higher after the release.
Keystone took profits on the BBY long trade, exiting the position on this morning's hype about a buyout. Also tried to short RTH but no shares were available. Also bot more FAZ adding to this long trade.
Note Added 12/13/12 at 11:32 AM: Speaker Boehner is speaking now, laying an egg, and the markets are drifting lower. Boehner is stressing the need for spending cuts. Boehner utters a classic and hilarious line, "Ifs, and ands, and buts are like candy and nuts, if that were the case everyday would be Christmas." The Nasdaq experienced technical problems again today causing trades to be cancelled. This behavior in the exchanges continues to ratchet up the worries and belief that another flash crash will occur, it is only a matter of when. The VIX jumps up and over 16, now at 16.21, so the bears are flexing their muscles over this move. The 8 MA stabbed down thru the 34 MA on the SPX 30-minute chart so market bearishness is forecasted for the hours and days ahead. The SPX 1427 failed, as described this morning, so a downside acceleration to 1423 occurs thus far. SPX S/R is 1429, 1426.63, 1424, 1422, 1419.69 (20-week MA), 1419, 1416, 1415.83 (50-day MA), 1413, and 1409. Note the strong confluence of support at 1419. RTH and XLF sectors remain elevated, TRIN is strongly bullish at 0.75, and the Nasdaq is moving coincidentally down with the SPX (tech is not leading to the downside, or upside, it is moving with the SPX) so the bears do not have a lot of downside oomph. AAPL is negative. Tonight is the new moon and markets are typically weak in front of the new moon.
Note Added 12/13/12 at 12:06 PM: Leader Reid steps up to the plate to refute Speaker Boehner's remarks but the video feed is bad and his words are lost, however, everyone already knows he would have said everything is the republican's fault. The SPX moves sideways at the lows today. Pay attention to the LOD at 1423.30. The beat goes on.
Note Added 12/13/12 at 12:46 PM: The LOD folded like a cheap suit and the SPX is now testing the 1419 support. COMPQ is down -0.78% and the SPX is down -0.60%, so tech is now leading the downside which encourages the bears. TRIN is now back to neutral at 1.00. Volatility climbs higher. XLF is 16.07 remaining above the 15.77 bull-bear line. RTH is 44.80 remaining above the 44.35 bull-bear line, although well off the highs. No wonder they would not give good ole Keystone the shares to short. The bulls must keep the XLF and RTH in their camp or the SPX will be headed far lower. S&P rating agency lowers the U.K. rating to a negative outlook from stable.
Note Added 12/13/12 at 2:15 PM: The SPX lost 1419 support, the 20-week MA failed, price now attacks the sturdy 1416 support. RTH is 44.78 and XLF is 16.01. Both of these characters may set up for dramatic moves as today finishes and tomorrow plays out.
Note Added 12/13/12 at 2:58 PM: The SPX bounced directly off of support at 1416.00, thus the floor is 1416 and the ceiling is 1419 for the last hour and one-half. Bulls win above 1419, bears win below 1416. The 50-day MA is 1415.71 and price was within 29 cents, close enough to call it a back test. Thus, it is important to see whether price bounces higher off the 50-day springboard, or, if price collapses down thru to lead to more bearish days ahead. The fight at the 50-day MA can easily continue thru tomorrow. The bulls cannot make any progress higher since the VIX is above 15.79. The bears cannot make any progress lower since the RTH is above 44.35 and the XLF is above 15.77. One of these will flinch. If the XLF and RTH remain bullish thru the close that would hint at a positive day tomorrow, perhaps allowing price to move higher again for a reset. The -1000 TICK at 2 PM identifies today's low for the markets. Tech leads to the downside today. The 10-year yield is 1.73%.
Note Added 12/13/12 at 3:41 PM: Big spike higher in the markets due to news that President Obama and Speaker Boehner will talk at the Whitehouse at 5 PM EST. The SPX jumps up and out of the 1416-1419 range, now printing 1422. The TICK machine hits +1100. Big shots must have needed a pop in the markets to exit long positions. Keystone bot DRYS opening a new long position.
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