Keystone's Morning Wake-Up and Midday Market Action 7/31/13; EOM; GDP; FOMC Announcement

ADP Jobs Report is 200K so this will cause the Friday Monthly Jobs Report estimates to bump up with traders looking for 200K or more. FB hits its 38 IPO price jumping 46% in four days from 26 to 38. FB and AAPL pumped the Nasdaq higher yesterday. Dollar/yen dropped to 97.69 a short time ago but is very jumpy now leaping back above 98. The 10-year yield just popped. The recent range held the 2.63%-2.64% as the resistance ceiling and yield was teasing this level all morning long, now popping above on the jobs number. Yield should now move to 2.72% resistance perhaps higher. Futures are flat ahead of the GDP number minutes away. Today is the EOM and the bulls will log an up month for July. The monthly charts will receive a new print today at 4 PM. 

Watch the usual suspects of the last few days; SOX 471.20, VIX 14.26 and GTX 4785.  All three are causing market bullishness and keeping the indexes elevated. Bears need at least one to move to the bear camp to begin market selling. For the SPX today starting at 1686, the bulls need to push above 1693 and it is all blue skies to 1700. The bears need to push under 1682.50 to accelerate the downside. A move through 1683-1692 is sideways action today. The GDP and the FOMC Announcement at 2 PM this afternoon are the two main events.

Note Added 8:31 AM:  GDP is 1.7% at the upper part of the consensus range of 0.7%-2.0% better than expected. The 10-year yield is now 2.69%. Futures are flat and non-reactive. The Fed changed the way the GDP is calculated revising all the data so it is all simply a pile of mashed potato's now.

Note Added 8:33 AM:  S&P's drop 3 handles on news that the first quarter revision is 1.1% down large from the 1.8% original number. This would have been expected to be higher with the new way of calculating data. It is all a mess. So first quarter is 1.1% and second quarter is 1.7%, a sick 1.5% economy. After all the QE and money-printing, this is shameful.

Note Added 8:41 AM:  Dollar/yen now up to 98.40; this should help maintain equity buoyancy. Futures remain flat. Dollar is higher dampening gold and silver. Copper is strong all morning long. China says it wants to maintain the 7%+ growth rate so that is probably providing the copper lift. Markets remain frozen like deer in the headlights. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets ahead, however, SOX, VIX and GTX, as described above, remain bullish. Hence, a standoff. Looks like the deer will leap in one direction or the other either this afternoon or tomorrow morning. IBM down -1% pre-market. MA earnings beat and jumps over +3% pre-market. Markets are typically bullish from the last day of the month through the fourth day of the new month, thus, if markets do sell off today or tomorrow, that may set up an opportunity for a scalp long that can be exited next Tuesday.

Note Added 9:33 AM:  SOX explodes higher towards 478 well above 471.20 danger level. VIX up a tiny hair to 13.48 the day starting out like yesterday. Look at that, GTX exactly at the 4785 danger line, so it looks like commodities want to dance today. TRIN 0.86, bullish, helping maintain market buoyancy. SPX moving up to attack the 1692-1693 resistance for today as bulls try to create a positive 8/34 cross on the 30-minute chart. Bulls are off to a strong start sans GTX, and volatility is a touch positive.

Note Added 10:11 AM:  GTX recovers back above 4785 returning to the bull camp. Markets will float higher if GTX stays above 4785 but a lid on the upside will occur if GTX fails and stays under 4785. SOX 477. VIX 13.59 moving up today with up SPX so one of them is wrong. TRIN 0.76 strongly bullish for markets today. Thus, bulls are favored. Markets will likely stagger along until the FOMC Announcement at 2 PM.

Note Added 10:16 AM:  Big up in GTX now 4798.

Note Added 10:51 AM:  GTX comes down to back test 4785 and bounces. SPX prints HOD 1696.75 eyeing the 1699 level. VIX flat lining at 13.42. TRIN 0.76 creates upside. Dollar/yen 98.25.  10-year yield 2.68%. SPX may tease 1700 moving into the 2 PM announcement.

Note Added 11:20 AM:  The 8 MA is above the 34 MA on the 30-minute chart signaling bullish markets ahead. HOD remains at 1696.75, a 4-handle gain after the 1693 was breached. GTX is 4820 with a big up after the threatened weakness a short time ago.

Note Added 1:53 PM:  FOMC Announcement a few minutes away. The HOD at 1696.75 still holds. SPX is now at 1689.68 well off the highs.  GTX 4839.  VIX 13.69.  SOX 478.37. TRIN 0.83.  Copper up big; JJC 38.18.  Gold and silver are down. Oil is up.  Dow 15532 after printing an intraday all-time high at 15634.32.  10-year yield 2.66%. Please take your seats and focus your attention on the center ring. The jugglers are finishing up; here comes the clowns.

Note Added 2:02 PM:  No change to purchases; 85 billion. Fed to remain accomodative. Economic activity expanded modestly (old word moderately) but unemployment rate remains elevated. Downside risk to economy has diminished. Fed's George dissented since she is more concerned about inflation. Sounds like same-o, same-o. Equities are floating higher on the news. SPX 1694. Dow 15570. VIX is flat to negative at 13.36. 10-year yield is 2.64%.

Note Added 2:09 PM:  SPX 1691. VIX 13.45. 10-year yield 2.66%. Jumpy tape has changed direction five times in last ten minutes.

Note Added 2:13 PM:  SPX 1692.  VIX 13.40. 10-year 2.65%. Settling in the middle of the two extremes since the news.

Note Added 2:30 PM:  SPX 1693.  VIX at low of day at 13.26 helping bulls. TRIN 0.79. 10-year 2.62%.  Dollar/yen 98.00. Markets are erratic and need some time to line out.

Note Added 2:48 PM:  SPX 1696 printing a new HOD at 1697.17 which is a feather in the bulls cap. Dollar dropping so that sends dollar/yen lower to 97.85.  Silver turns positive on weaker dollar so traders are believing in the more QE philosophy. Thus, equities float higher since the Fed spigots remain on indefinitely. Euro is up to 1.3326 moving opposite the dollar. Up euro in concert with up equities. VIX 13.04 sends the SPX higher.