Keystone's Morning Wake-Up 7/24/13; BA; LLY; PEP; F; CAT; FB; V

Today is another earnings lollapalooza. Many blue chips are beating the lowered estimates helping to keep the S&P futures elevated at +5. AAPL earnings were in line last evening due to better than expected iPhone sales, however, the lower margin phones are in more demand rather than the expensive phones. Consumers in general are gravitating to the lower priced phones. iPad sales disappointed far short of estimates and guidance is lowered moving forward but traders take comfort in the iPhone sales and reward the stock with a +4% move. LLY, BA, PEP and F are up on earnings.  PNRA, BRCM, CAT, T and NSC are down on earnings.  CAT weakness is due to the weak mining sector. The weak data on rails will likely hurt coals today. T may create a negative vibe in the telecom sector. China's PMI is weaker than expected overnight which hit the banks and commodities but the Germany and Euro zone PMI's are a shade above 50, indicating expansion, so the tone changed to happiness, with the euro jumping higher to 1.3238, dollar lower, copper higher and S&P futures higher. Traders also realize that China will likely stimulate their economy with easy money moving forward so the bulls see a silver lining in good and bad data. Good news is good and bad news is good. Dollar/yen has recovered back to the 100 level so the move up is in concert with the S&P's moving up which would be expected.

Copper is strong again today and this is the focus of bulls trying to push equities higher. Watch JJC 39.21, the bull-bear line in the sand. The bulls pushed up through yesterday and today the loftiness will be maintained which is a feather in the bull's cap. Ditto the volatility which remains low. Bears need to push the VIX above 14.18 and/or JJC under 39.21 or they got nothing. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling bullishness for the hours ahead, however, the bears keep trying to create a negative 8/34 cross (see this morning's chart). Bears got nothing unless the push the 8 MA under the 34 MA on the 30-minute chart.  For the SPX today starting at 1692, the bulls need to touch the 1699 handle, and hold it for 7 to 10 minutes to lock it in, and the mid 1700's are on tap in quick order.  The bears need to push under 1691 to gain downside mojo. A move through 1692-1698 is sideways action. SPXA150R and NYMO charts continue to signal a market top in place with a roll over to the downside anticipated at any time moving forward. SPX hourly and minute charts started to receive a negative divergence spank down yesterday afternoon.

Mortgage Applications are down for another week extending a couple month trend of weaker housing numbers but traders do not care looking through rose-colored glasses and realizing that bad news is great news with more Fed easy money. New Home Sales are 10 AM where a market pivot point is likely to occur.  Thus, however markets are moving in the first half hour of trading may reverse at 10 AM. Oil Inventories are 10:30 AM and very important these days as oil continues to edge higher on Middle East unrest. The 5-Year Note Auction is 1 PM. FB and V earnings are after the closing bell today. Watch JJC 39.21 and SPX 1699 as key market direction indicators to begin the day.

Note Added 9:21 AM: Bulls are set with a happy open. S&P's +5. Dow +30. Nasdaq +30. Oil dropping. Copper popping. Dollar/yen 100.24 which provides lift to equities. The 10-year note yield is 2.58% which may place pressure on utilities.

Note Added 9:35 AM:  VIX is up aand SPX is up so one of them is wrong. SPX HOD 1698.38 just shy of the 1699.  VIX 12.78.  JJC 39.47. TRIN 0.89 bullish as usual day after day. TRIN will recoil above one at some point. UTIL 504.45 dropping under the 505-509 area showing weakness due to the up in yields. Telecom, REIT's and other interest-rate sensitive stocks may weaken on the higher yeilds. Coals are hit because of NSC.

Note Added 10:03 AM:  New Home Sales are a blow-out to the upside with house prices rising rapidly as speculators chase property reminiscent of the housing bubble. The SPX was already drifting lower after the initial pop to 1698.38 and bounced on the data but as this is typed the SPX is falling on its sword. VIX is over 13 so it looks like volatility was correct so far today sending equities lower.  JJC 39.41. VIX climibing to 13.25. The VIX 14.18 bull-bear line in the sand may come into play today now less than a buck away. TRIN stays low at 0.78 so this is the ace in the hole for bulls. SPX is 1689.84 losing the neck line on the 10-minute chart.

Note Added 10:16 AM:  The negative divergence on the hourly and minute charts highlighted this morning, along with the weak and bleak profile of indicators, is creating the weakness in the SPX. The 8 MA is very near crossing down through the 34 MA on the 30-minute chart, but, not yet. Perhaps the negative 8/34 cross will occur when the new one-half hour candlestick prints in about ten minutes time.

Note Added 10:28 AM:  There's the negative 8/34 cross on the 30-minute now signaling bearish markets for the hours and days ahead. See if it holds today, or not. The 30-minute chart this morning shows the bear frustration with the pink boxes so perhaps this time may be the real deal for several days, or not. Copper remains elevated above the bull-bear line in the sand at JJC 39.21; price is now at 39.46. Bulls are hanging their hat on the low TRIN at 0.71. Bears need to push the TRIN above 1.00 to firmly chart the course south. VIX 13.33 near the highs for today but remaining in bull territory under 14.18. UTIL has a 502 handle.

Note Added 10:56 AM:  Here's the recovery move in equities due to the low TRIN and higher copper. The SPX is back testing the neckline on the H&S on the 10-minute chart at 1690-1691.  Bears need to hold this resistance while bulls need to punch up through. Chairman Bernanke ran into the basement of the Eccles Building and is running a printing press himself to keep the easy money flowing and try to save the day.

Note Added 11:20 AM:  Note copper pulling back with JJC now at 39.33 only 12 pennies above the bull-bear danger line at 39.21. If price drops under 39.21, that will help confirm the negative 8/34 cross and the market downside will accelerate for the bears. Bulls will try to keep the TRIN low today to provide upside strength while also keeping JJC above 39.21.

Note Added 11:51 AM:  Tight range today for SPX through 1688-1691. Bulls receive more juice above 1691, bears under 1688. JJC 39.35. VIX 13.03. TRIN 0.75 giving the bulls lift. UTIL 500.65 perhaps losing the five hundo level today.

Note Added 12:10 PM:  Well, look at that JJC 39.21.  It's sitting there for you bears, grab the brass ring. Markets should either bounce, or die, from here. TRIN is 0.76 remaining in the bull camp.

Note Added 12:17 PM:  The SPX has a 1685 handle which moves into the target area of the H&S pattern highlighted on the 10-minute chart this morning. JJC is frozen at 39.21 like a deer in the headlights. Whichever way copper goes from here, the broad indexes will follow.

Note Added 1:55 PM:  SPX 1683.54. JJC 39.06. VIX 13.44 now 74 cents away from the bull-bear line at 14.18.  Keybot the Quant remains long but if the VIX moves above 14.18, the algo may flip short.  TRIN is 0.77 remaining low so that will provide the bulls with some juice to make a run this afternoon. If JJC stays under 39.21, there is likely no further upside in the SPX past the highs printed over the last few days. President Obama is speaking in front of a friendly crowd but the Nasdaq has gone negative, markets remain weak and copper is dropping as he talks.

Note Added 2:21 PM:  As soon as the president stopped talking the markets float higher. Nasdaq is positive. The low TRIN today helps create the market buoyancy.   JJC is 39.07 which makes the market bears smile, especially considering the drastic reversal in copper today. Bulls need JJC above 39.21 if they want to see SPX 1700+.

Note Added 3:18 PM:  SPX 1683.91.  JJC 39.08.  VIX 13.45. TRIN 0.83. Nasdaq negative.

Note Added 4:10 PM:  SPX ends at 1685.94. VIX is 13.30 dropping slightly into the close providing the market lift in the final minutes.  TRIN recovers to 0.92. JJC 39.10 remaining bearish. QCOM earnings beat but guidance is lowered; the stock pops +4%.  FB beats and the stock takes a big +16% pop to print above 30. FB holders are happy campers.

Note Added 4:17 PM:  V beats and it pops higher so there is a trifecta of positive earnings this evening which helps the bull case. JJC (copper) 39.21 is the most important parameter effecting market direction right now. Watch copper overnight.