Keystone's Morning Wake-Up and Midday Market Action 7/23/13; DD; MO; T; UPS; AAPL

NFLX lays an egg with earnings after the bell yesterday and is whacked about -6%. TXN tempered the tech negativity saying it will beat estimates. Telecom mergers take place overnight providing a boost to this sector and T earnings are on tap. China promises 7% growth or higher. This hints that the PBOC will provide easy money policies to maintain this growth so the S&P futures are +4 at this writing a couple hours ahead of the opening bell. The FHFA House Price Index is 9 AM and will receive attention in light of the weak Existing Home Sales yesterday. Richmond Fed Index is 10 AM. 2-Year Treasury Note Auction is 1 PM and is important for the 2-10 spread which dictates if the banks are at an advantage, or not. Earnings of interest today are AAPL-tech, AKS-steel, APD-industrial, DPZ-pizza, DD-chemicals, FCX-copper and gold, ITW-industrial, LMT-defense, MO-smokes and divvy, NBR-oil, NSC-rails adn coal, PNRA-bread, RSH-retail, T-telecom and divvy, UPS-shipping bellwether, UTX-defense and industrial, VLO-refiner, VMW-tech and WAT-water. Apple earnings are after the closing bell.

Copper and volatility rule the roost. The smack down in volatility on Friday and Monday has created the SPX thrust towards 1700. The bulls are in good shape as long as VIX stays under 14.18.  Bulls will receive upside fuel, like yesterday with the SPX nearly touching 1698, if JJC (copper) moves above 39.21. JJC starts today at 39.05. Copper is weak in early trading. So bulls need JJC 39.21 for happy time and bears need VIX 14.18 for happy time. If JJC stays under 39.21, and VIX stays under 14.18, the markets will float along sideways with an upward bias. For the SPX starting at 1696, the bulls need to touch the 1698 handle, only a couple points higher, and it will be smooth sailing above 1700 in quick order. Bears need to push under 1691 to accelerate the downside. A move through 1692-1697 is sideways action today. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullishness for the hours and days ahead. Bears need the SPX to print 1695 and lower to curl the 8 MA to the downside. Watch JJC 39.21, VIX 14.18, and SPX 1698 and 1691 to determine market direction.

Note Added 10:48 AM:  JJC is at 39.20 exactly on top of the 39.20-39.21 bull-bear line in the sand. Markets will move higher with JJC at 39.20+ but will weaken under 39.20. Whoa, there is a big spike to JJC 39.24. VIX is inching higher this morning up to 12.92. Bulls are trying to pump copper to gain upside juice. TRIN is 1.03 unwilling to choose a side yet today. The SPX touched the 1698 handle, in fact printing a new all-time high at 1698.78, but could not hold the 1698 level for 7 to 10 minutes to lock it in, so the SPX peters out and drifts lower. JJC 39.20 is the rudder for the market ship today, above and markets will recover, below and markets will weaken.

Note Added 12:24 PM:  JJC floats up to 39.30 and now at 39.25 remaining above the critical 39.21 level. VIX moves over 13 but now trails lower to 12.65. TRIN is 0.82 choosing the bull camp. Thus, copper floats up a bit, and volatility and TRIN drop a bit, so the SPX recovers off the lower limit for today at the LOD at 1691.13 to print 1694.04. Dollar/yen is 99.73 dropping from the 100 level this morning so the slightly lower dollar/yen (stronger yen) move creates a slightly lower move in equities. UTIL (utilities) are flat at 507, bouncing in the 505-509 area as highlighted in this morning's chart, trying to decide on a direction. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets ahead, however, the 8 is now moving lower and is set to perform a negative 8/34 bearish cross in about one hour's time. Therefore, the bulls must catapult markets higher right now to prevent this cross from occurring. Watch JJC 39.21. It's a lazy hazy day of summer.

Note Added 1:03 PM:  JJC 39.26. VIX 12.59. TRIN 0.81. SPX 1693.48. On the 30-minute, the 8 MA is 1693.67 and 34 MA is 1692.15. Price is between the two moving averages which are about to create a negative cross over the next one-half hour.  Bulls have to strongly bounce markets in the minutes ahead or they are going to lose the upside momo with a bearish 8/34 cross on the 30-minute chart.

Note Added 1:19 PM:  Right on cue. SPX bounces a couple points now over 1695. JJC 39.26. VIX 12.48. TRIN 0.86.  The VIX beach ball is kept underwater but it is difficult to continue holding it under water. Bulls must prevent the negative 8/34 cross by all means necessary and are going to need more juice from higher copper and lower volatility and TRIN. Dollar/yen is 99.69 not moving up as yet to support the SPX moving up, instead, a touch lower.

Note Added 1:39 PM:  JJC 39.29. VIX 12.44. TRIN 0.86.  SPX 1695.21. Note copper squeezing a shade higher and volatility a shade lower. Bulls are doing everything possible to keep the markets elevated. Dollar/yen 99.57 not cooperating with equity bulls.

Note Added 3:08 PM:  JJC 39.48, wowza, bulls making a statement with copper. VIX 12.60 stuck in a rut. TRIN 0.85.  Dollar/yen 99.42 continuing to leak lower. Look at how the bulls prevent the 8 and 34 MA cross on the 30-minute, curling the 8 MA to the upside again with the stick-save over the last two hours. The cross remains in play moving forward.The 8 MA is 1694.27 so the bears need to push the SPX under 1694.27 to curl the 8 MA lower again.  Regardless, this 8/34 MA cross drama will continue through the opening bell tomorrow. Interesting markets. Perhaps the Fed is keeping things buoyant until they can line up all their short positions in the off shore accounts. Looks like everyone is waiting for the Apple show in less than one hour.

Note Added 3:35 PM:  JJC 39.47. VIX 12.65.  TRIN 0.87. UTIL is 507.80 remaining unable to choose a direction from the 505-509 area. With copper running higher, utilities will become more important in the days ahead. SPX 1694.47 at the 8 MA described previously. Equities are in idle mode until they can take a bite of the Apple within one-half hour.

Note Added 3:51 PM:  SPX is weakening finally starting to roll over from the negative divergence on the hourly and minute charts, receiving a spank down. Keystone shorted RTH opening a new short position which is short retail.

Note Added 3:57 PM:  The 8 MA curls to the downside again to continue the 8/34 MA cross drama. The opening bell is critical tomorrow for an up or down market decision. Therefore, AAPL and T earnings are mucho importante. Keystone shorted IYZ (telecom) opening a new short position. T is a telecom.

Note Added 4:02 PM: The SPX prints a new all-time intraday high at 1698.78  but not a new all-time closing high. Dollar/yen 99.46; note how it leaked lower this afternoon not buying into the SPX moving higher, and, as the day finished, the SPX reversed to the downside to follow the dollar/yen. T is an odd one missing by a penny on EPS but top line beats. This is a twist from nearly all other stocks that beat by a penny and keep missing on the top line.  T closed at 35.82 and is now at 35.83, a flat reaction, so far.

Note Added 4:06 PM:  BRCM beats on EPS but misses on top line; its trading flat AH's.

Note Added 4:09 PM:  PNRA is trading lower, must have been some moldy bread. VMW beats so it jumps 11%; this will help tech and counteract BRCM now giving up -4%. The Apple tension mounts. AAPL closed at 418.99 and is sitting flat awaiting the verdict.

Note Added 4:21 PM:  JNPR is hit -7% so that is another negative for the tech sector. DD ended slightly negative today after the trumpets were blaring and long traders were tripping over themselves to buy at the opening bell. They all lost 3 bucks on the stock in a short few hours, about -6%. Chemicals are the building blocks of a strong global economy and the news continues to be unenthusiastic. UPS closed a touch negative as well, a global economic indicator since everything needs shipped including business contracts, parts and products. Perhaps the brown trucks are sitting in the parking lot with squirrels and chipmunks living on top of the engine block. It will be interesting if AAPL keeps trying to tell everyone that a skinny Smartphone screen is better than a larger screen even though the buying public says otherwise.

Note Added 4:36 PM:  AAPL beats due to better than expected iPhone sales. iPad sales missed expectations and the guidance is lower moving forward but traders are focused on the better iPhone sales and send the stock to 430 about 11 bucks above the closing price, +2.6%. So it is happy time, a ripe apple instead of a rotten one.