Keystone's Morning Wake-Up 7/25/13; Durable Goods; DOW; GM; CL; DHI; PHM; AMZN; SBUX; DECK

The U.K. GDP, German sentiment and Spain unemployment are better than expected overnight. There is nothing to be excited about, however, since the U.K. growth is a paltry 0.6%, lower than the U.S., and Spain unemployment remains about 27%, a country mired in depression. The futures and metals dropped in the 5 and 6 AM EST hours this morning with the S&P's at -10 but they have since recovered. The Durable Goods number is stronger than expected due to BA airplane orders. The S&P's are now -6 and factoring in fair value points to a two or three point drop in the SPX after the opening bell, no biggie.  Markets continue to idle along trying to make a decision on which way to run.

QCOM, FB and V all posted positive earnings last evening. The happiness continues today with DOW, GM and MMM waving the bullish flag. Home builders such as PHM are more lackluster hinting at continued challenges ahead for this hot sector.  After the bell, AMZN, SBUX and DECK report. SBUX should change the name of the company to Ten Bucks since every time you walk in you spend $10.  Natty Gas Inventories are at 10:30 AM and Kansas City Fed is 11 AM. The 7-Year Note Auction is 1 PM.

The broken record continues over the last few days; copper and volatility are the two main market drivers right now. Watch JJC 39.21 and VIX 14.18. JJC is below the number listed so this creates market bearishness. VIX is below the number listed so this creates market bullishness. Bulls need to push JJC above 39.21 today to signal the all-clear for markets and the trek to SPX 1700 can resume. If JJC stays under 39.21, the top is likely in for the SPX.  Copper was flat hours ago but then took a large drop with futures, now recovering to about -0.2% currently. Nonetheless, this will send JJC lower to begin the day. Bears need to push VIX above 14.18 to create stronger bearishness in the markets. Keybot the Quant remains long but may flip short if volatility rises. Watch semiconductors today, SOX 470.90. Price is above this level creating market positivity but any drop under SOX 470.90 will increase market selling. The QCOM happy earnings may actually send the SOX higher today. Thus, bulls need to move copper higher while keeping volatility low and semiconductors elevated. Conversely, the bears need to keep copper under JJC 39.21 while moving volatility higher and semi's lower.

NYMO finally dropped from its high perch hinting that the market selling should continue. The TRIN chart and SPXA150R are another couple of tools forecasting a market top at hand. For the SPX today beginning at 1686, the bulls need to move above 1698 and the 1700's will occur quickly.  Bears need to push the SPX only three points lower under 1683 to accelerate the downside. Note that the futures would place price at this level for a support test at 1683 directly after the opening bell. A move through 1684-1697 is sideways action today. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead. As copper goes, so goes the markets. Watch JJC 39.21 closely. There are five trading days remaining in July and the month began at SPX 1606.

Note Added 9:50 AM: SPX LOD 1680.31 falling through the 1683 support that is important for today, to gain three more handles lower, however, the bears cannot hold the lower levels and price recovers back to 1685.  JJC is 39.01. VIX 13.31. SOX 474.03. Thus, status quo with bearish copper and bullish volatility and semi's. TRIN is 0.90, the tie-breaker, which is leaning bullish for equities today. TRIN did spike to 1.65 at the open but quickly reversed to the bull side now. The beat goes on. Markets stagger sideways and needs either copper, volatility and/or semi's to make a decision which would send markets in that respective direction. Dollar/yen is 99.76 moving back under the 100 level and in concert with lower equities. The 10-year yield is 2.62% which should pressure utes, telecom, home builders and REIT's.

Note Added 10:15 AM:  Traders were tripping over each other buying the dip after the opening bell so now markets float along sideways to absorb the action. SPX 1686.51. JJC 38.85. VIX 13.26. SOX 474.46.  TRIN 0.89. Status quo. The beat goes on. It is developing into a slow watching-paint-dry type day, the long-drying paint, porch and floor enamel.  FB tags the 33-ish C&H break-out level as described in this morning's chart.

Note Added 12:00 PM:  SPX 1681.77. Bulls are pumping copper, now positive, trying to mount a comeback in the broad indexes. JJC 39.07 inching higher. VIX 13.39.  SOX 473.33. TRIN 0.99 dead neutral unable to favor a side today. Dollar/yen 99.60, lower than a couple hours ago, in concert with equities a bit lower. The 10-year yield is 2.62%.

Note Added 12:10 PM:  The 8 MA remains under the 34 MA on the SPX 30-minute signaling bearish markets for the hours ahead. Note the 30-minute chart a couple posts back that discusses the H&S with neck line at 1684. The neckline ruptured today, price is now at 1682. So look for a back kiss of the neck line at 1684 where a bounce or die decision would be made. A successful back test will collapse price from 1684 and send it towards the H&S lower target area at 1670-1672. The bulls need higher copper to launch the SPX above 1684 and take equities higher. JJC 39.07.