Keystone's Morning Wake-Up 9/28/12; TGIF; EOM; EOQ3; Consumer Sentiment

Today is EOM and EOQ3 so the monthly charts will receive new prints. Yesterday's market action provides plenty of fuel for the conspiracy theorists. The Spain budget information hit the markets in the 10 and 11 AM EST time frame but came and went without fanfare. The information was leaked ahead of time so the release was a yawner.  Analysts looking for a reason behind the rally from noon on say the Spain budget news caused the joyousness. Balderdash. The markets were actually rolling over after the news.  The euro was most dramatic as we saw here yesterday dropping thru 128.60, 128.50, 128.40, and down towards the critical 128.30 level (type 'XEU' into the search box above to bring up the euro chart from a couple days ago displaying the importance of 128.30). The euro falling out of bed was in concert with the XLF (financials) and RTH (retail sector) tumbling thru their respective 50-day MA's. The Spain yields were elevated, ditto the VIX, it was all systems go for the market bears. As soon as the euro drops under 128.30, the hammer would fall on the markets, but, alas, whammo, and boiinng.  The euro explodes higher off the 128.30 line in the sand. The euro leaps to the high 128's and then back up and over 129. The higher euro slaps the dollar silly, since they have a continual inverse relationship, and the weaker dollar results in commodities, copper, gold, silver and equities all catapulting higher. Market stick save.  At the least, the action hints that a PPT (Plunge Protection Team) may actually exist.

Sticking to the technicals, the TRIN and TICK charts indicate that a market pull back is needed in the near-term and the futures agree with the S&P's down over 8 as this missive is typed.  For the SPX today, starting at 1447, the bulls only need three points, to push up thru 1450, and a market acceleration will occur into the weekend.  The bears need to retrace yesterday's move and push below 1434 to accelerate the market downside. The futures do not indicate a drop of this magnitude as yet but the Chicago PMI at 9:45 AM EST and Consumer Sentiment at 9:55 AM are on tap. Expect a market pivot point in this time frame just before 10 AM.  Spain's bank stress tests are on tap at about noon time (12 PM EST) and a Moody's downgrade of Spanish debt may occur which would cause serious market trauma and drama. Watch the Spain 10-year yield today. A move thru 1435-1449 is sideways action.

The broad indexes will remain weak as long as the SOX is under 395 and the UTIL is under 483. However, watch utilities closely today since the bears must close UTIL under 472.06. This is the level of interest for UTIL identified by Keystone's algorithm for all of next week.  UTIL is at 473.88 already above this level so watch this behavior closely. If UTIL closes above 472 today, that sets up Monday morning for Keybot the Quant to potentially flip to the long side in the markets.  If UTIL stays under 472 thru the close, the market bears are cruising. Watch to see if the 8 MA stabs back down thru the 34 MA on the SPX 30-minute chart today, or not.