Keystone's Morning Wake-Up and Midday Market Action 7/18/13; Chairman Bernanke Senate Testimony; AMD; CY; GOOG; MSFT

The markets jump higher to begin the day. Company earnings were on the positive side this morning, sans the top line revenue numbers that continue to be challenged so this creates the happy bullishness along with knowing that rich Uncle Bernanke is coming to town today to hand out more money. Chairman Bernanke takes Q&A from the Senate at 10:30 AM. Perhaps the Senate will ask more challenging questions than the House, but, probably not. VIX drops to 13.55 in concert with the SPX moving higher testing the prior all-time high at 1687.18.  The Dow punches through its all-time high this morning with a new all-time high and HOD at 15552.70. Watch VIX 14.19; bears got nothing unless they push volatility higher.  TRIN is 1.12 oddly favoring bears, not bulls, for today's action. Tech earnings are important after the bell.

Keystone took profits on JO on this morning's bounce and will look to reenter. As mentioned several times, coffee is likely making a multi-month and multi-year low, similar to natty gas one year ago, and plenty of upside is expected for coffee for weeks and months ahead. Keystone does not like many areas for the LTBH (long-term buy and hold) approach to investing but coffee, miners, shippers, perhaps PM's, and maybe a few select tech and biotech stocks, are the few areas of interest from a longer term long perspective. Also shorted MYL opening a new short position. Also bot SCO opening a new long position which is the double X inverse ETF that shorts crude oil. Good luck to all the golfers at The Open Championship now underway. Lots of birdies so far which should set up for an exciting finish Sunday evening.

Note Added 10:12 AM:  There's a new all-time intraday high for the SPX at 1688.47 taking out the May high and now in uncharted territory. VIX 13.43. TRIN 1.11. Chips (SOX and SMH) are weak today in sympathy to INTC earnings. Equities print new all-time highs as the chips, which go into virtually every product manufactured these days, drop.

Note Added 10:37 AM:  SPX HOD and new all-time high 1691.97 so pay attention to this number moving forward. VIX 13.21 now one-point under the bull-bear line in the sand at VIX 14.19. TRIN 0.95 now bullish. The Congressional testimony bullishness is playing out this week. Bernanke will try and thread the needle again today not ruffling any feathers.

Note Added 11:02 AM:  SPX HOD and new all-time high 1693.12 so pay attention to this number moving forward. VIX 13.34. TRIN 0.86. The 15 and 30-minute SPX charts show an ascending triangle that now formed over the last six days with a break out base line at 1683. Keystone can post a chart after the action settles. Everything is going the bulls way; the Tuesday to Wednesday OpEx buoyancy, the Congressional testimony bullishness, the lower VIX falling under 14.19, the 80/20 rule that would hint at SPX 1720's since price has closed above 1680 and even the full moon coming on Monday. However, exercise caution since these are not your Grandfather's markets. An expectation of a market reversal remains at any time and short exposure should be maintained especially to guard against any overnight negative news events that may rattle markets out of the blue. For now the bulls are cruising. Copper and utilities must move higher to provide further bull fuel for markets but both remain somewhat challenged. Chairman Bernanke begins the Q&A in front of the Senate Banking Committee.

Note Added 12:19 PM:  SPX new all-time high at 1693.12 holds in place. SPX is printing 1690.80. VIX 13.48. TRIN 0.76 very bullish. Bernanke testimony continues without anyone making waves so the bulls cruise along. The ascending triangle on the 30-minute chart targets a potential move to 1696 but a back kiss to the triangle break-out line at 1683 would be prudent.

Note Added 3:17 PM:  SPX 1689.10. VIX is 13.71 at the base line of an ascending triangle on the 5-minute chart that would target the 14.19 bull-bear line in the sand if the VIX stays above 13.70. TRIN 0.92 but moving towards neutral 1.00. The SPX moves through 1687-1693 all day long. The new all-time high and HOD at 1693.12 holds since 11 AM. The 8 MA on the 30-minute chart is 1689.49 so the current print for SPX will cause the 8 MA to curl downwards towards the 34 MA for a potential negative 8/34 MA cross tomorrow. Bull continue along on easy street as long as the VIX stays under 14.19 and the 8 MA remains above the 34 MA on the 30-minute chart.

Note Added 3:29 PM:  SPX 1689.33. VIX 13.70. TRIN 0.86.  Tech earnings after the bell are two big ones GOOG and MSFT, also AMD and CY.  CY will greatly impact the chip sector (SOX, SMH, SSG). GOOG weekly and daily charts are negatively diverged across all indicators so even if earnings are great, that action would only create a nice shorting opportunity. Same-o with MSFT although Mr. Softy may squibble out sideways on the daily chart for a short time; weekly chart is negatively diverged so its luck will run out moving forward. AMD is a healthy chart still yet so it can likely squeeze out a bit more upside. CY charts also look encouraging for sideways action through 11-14 for the weeks ahead.

Note Added 3:40 PM:  A descending triangle is forming on the 5 and 10-minute SPX charts with base line at 1688 so the bulls have to hold the line here at 1688, or, a downside target of 1683 would be in play and interestingly enough, that is where the break out occurred from the ascending triangle this morning that has yet to be back kissed.

Note Added 3:42 PM:  SPX 1688.16.  VIX 13.68.  TRIN 0.86.

Note Added 3:45 PM:  SPX 1688.05 deciding to bounce or die.

Note Added 3:50 PM:  SPX 1689.28 up a touch since VIX is 13.65 down a touch and TRIN is 0.83 down a touch. Will be interesting to see if the descending triangle remains in play, or not.

Note Added 4:14 PM:  GOOG and MSFT miss on earnings so they pull the stove away from the wall, sever the gas line, and start sucking hard in the AH's, takin' the pipe.  GOOG drops over -5.0% while Mr. Softy melts away -3.6%.  This may set a negative tone for trading tomorrow, especially in the tech sector and Nasdaq. Interestingly, a weak tech sector by default means a weak financial sector since financials are such a big user of tech, however, traders trip over each other to buy banks long worried they are missing out.