Monday, September 30, 2013

Keystone's Morning Wake-Up and Midday Market Action 9/30/13; CR Deadline and Government Shutdown Only Hours Away

The House returned a new CR bill to the Senate but this will not be addressed to 2 PM. The Senate and Whitehouse already say it is dead on arrival since it includes a delay of Obamacare for one year and a roll back on the medical device tax. The Senate and Whitehouse want a clean bill without any Obamacare stipulations and will likely meet at 2 PM, strip out the Obamacare stuff, and return it to the House. The politicians are dysfunctional. No one will talk to each other and each side simply repeats what it is doing. Leadership is absent from President Obama so politicians flounder around and foster bipartisanship. The CR deadline is midnight tonight so if an agreement is not reached, the government shutdown begins tomorrow. Overnight, the 10-year yield drops under 2.60%, China manufacturing data is weaker than expected, and Italy's fragile coalition government is falling apart. S&P futures are -15 at their overnight lows. Dow -129. Nasdaq -25.

The market action begins where it left off Friday. XLF 20.01 is very important. Equities will extend the downside, and it will be sustainable, if XLF drops under, and stays below, 20.01. Also watch UTIL 483.57 (now creating bearishness), JJC 40.02 (now creating bullishness) and GTX 4889 (now creating bearishness). The movement of these four parameters will send markets in the same direction. For the SPX today, a down open is on tap.  Key SPX support is 1691, 1685, 1684.97 (200 EMA on the 60-minute), 1684.74 (20-day MA), 1680.18 (50-day MA), 1669, 1657, 1652, 1649, 1639 and 1627. The SPX is above the 200 EMA on the 60-minute chart signaling bullish markets for the hours and days ahead, however, the 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead. One of these will flinch.

Today is the EOM and EOQ3. Earnings season begins next week with AA next Tuesday. Chicago PMI is 9:45 AM today and may cause a market stutter step. Dallas Fed Mfg data hits at 10:30 AM. Markets are typically bullish from the last day of the month through the first four days of the new month, especially as a new quarter begins, however, the political turmoil will override seasonality factors. A new moon occurs on Friday and markets are typically weak moving through the new moon. Keystone's eclipse window remains open for a major market selloff (see this morning's chart) to occur and the SPX is currently about 40 handles off the top. The low CPC and CPCE put/call ratio's are flexing their muscles creating equity selling due to the uber complacency these days. Everyone is bullish and even today will likely champ at the bit to buy one of the dips. Since the Senate does not convene until 2 PM, equities may take the initial drop, then travel sideways until later this afternoon. Watch XLF 20.01 as the main market metric today. Market bulls are okay if the XLF stays above 20.01. If XLF fails at 20.01 it signals sustainable market weakness ahead. The VIX at 15.46 is far above the 200-day MA at 14.45 which is a very bearish signal for markets. Bulls got nothing unless they can push the VIX under 14.45.

Note Added 10:24 AM:  The markets are off and stumbling. SPX LOD is 1674.99 so watch this number. The 50-day MA is 1679.96 so a fight is occurring now for this support. Bounce or die. XLF is 19.91 a dime under the bull-bear line in the sand at 20.01 ushering in sustainable market weakness. VIX jumped over 17 now at 16.88. UTIL dead flat at 482.14 remaining under 483.57The SPX lost the 200 EMA at 1684.88 on the 60-minute signaling bearish markets for the hours and days ahead. The SPX dropped to a 1674 handle so far, the top of the 1671-1674 gap, and is now bouncing likely to back kiss the 1685 which would be a critical test today. Bounce or die. Keystone took profits on the ERY long trade exiting the position. Also bot more JCP at the early low, adding to this ongoing long, then as JCP jumps higher, took profits for the dead-cat bounce exiting the trade. Will consider reloading JCP after it drops moving forward. Also bot more URA since the attractive positive divergence remains in place. Also bot UUP for a near-term bounce as per this morning's dollar charts.

Note Added 10:31 AM:  SPX is 1682.52 floating higher to back test the critical 200 EMA. TRIN spiked to 2 now down at 0.86 to help the bulls. SPX now moving sideways through the range with 50-day MA at 1679.97 as support and the 200 EMA at 1684.87 and 20-day MA at 1687.18 as resistance, call it 1680-1685.  Bulls win above 1685. Bears win below 1680. No sign of the Senate as yet. They are busy receiving massages and drinking booze; they will stagger to work at 2 PM.

Note Added 10:41 AM: Watch the 200 EMA at 1684.88, a big test for price now. Bounce or die from this level. The lower price today on the 1-hour SPX chart turns the falling wedge (see this morning's chart) into more of a downward-sloping channel now since the RSI prints a lower low. Looks like the SPX 1671-1674 gap may come.

Note Added 10:46 AM:  Here is the test of the 200 EMA.... 1684.85 ... 1684.69 is bounce or die time. A collapse under 1685 locks in the negative 200 EMA cross and signals negativity moving forward. Bulls must keep their heads above water above 1685.

Note Added 2:06 PM:  The Senate has started voting on the House bill which they will no doubt turn down, then return a clean bill to the House and blame the House for the government shutting down. In reality, probably all three branches will get blamed equally; the president, Senate and House; all three are dysfunctional. The SPX played around at the 1685-1687 resistance and is now at 1683, so the bulls are having difficulty recovering today. Note the SPX 20-day MA at 1687.27 and the HOD today is 1687.26. Obviously, the 20-day MA now holds serious clout as resistance above. Watch the bracket formed by the 20-day above at 1687 and 50-day below at 1680. The 200 EMA is 1684.84 and tells you who is winning. XLF is 19.94 after back kissing the critical 20.01 about one-half hour ago. UTIL is 481.73. GTX 4841. TRIN 1.35 in the bear camp for today.

Note Added 3:00 PM:  Senate votes to strip the Obamacare provisions and send the CR bill back to the House; the game of ping-pong continues. XLF marched higher to 19.97 but slips lower again, and the broad indexes weaken in sympathy. Bulls are in trouble as long as XLF stays under 20.01. XLF 19.90. SPX now coming down for a look at the 50-day MA at 1679.96.

Note Added 3:16 PM:  The SPX is testing the 50-day MA, bounce or die.

SPX 60-Minute Chart 200 EMA Cross Falling Wedge Positive Divegence

Equities are set to drop at the opening bell this morning with the S&P's on tap to lose about one-dozen points.  Keystone's SPX 60-minute chart with 200 EA cross is a key market signal and regularly updated on the Short-Term Market Signals page. Bad things will happen to markets if the 200 EMA at 1684.97 fails. The 20-day MA is also at 1685-ish so this identifies 1685 as a key support level. The SPX is above the 200 EMA which signals bullish markets for the hours and days ahead, but, perhaps things will change in favor of bears in the hours ahead? The falling green wedge is a bullish pattern. The indicators are positively diverged as well. This says that a low print today would likely be a great buying opportunity for a quickie recovery bounce move. However, if the political news, or bad Italy news, becomes worse, price may seek the 1671-1674 gap fill. If the 200 EMA fails that will need a back test moving forward.

Thus, one scenario is a bounce from 1685, unlikely since futures are far lower. Thus, a potential bounce from 1680. If the failure at 1685 then leads to a failure through 1680, a target area of 1669-1674 is on tap for a potential bounce. If this occurs watch for a back test of the key 1685 where markets will either recover, or die and collapse. The whole day may need to play out, especially with the Senate not showing up today until 2 PM with only a couple hours of trading remaining in the session, so it would not be surprising to see price close around the 1680-1685 level. If so, treat the falling wedge with respect since a big upward goose move may occur, perhaps as the politicians reach an agreement late at night tonight, then a bit catapult higher move in the morning. Even if a bounce occurs in the near-term, further market weakness is likely moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 7:01 AM on 10/1/13:  The SPX dropped to a LOD at 1674.99 and bounced. The day ended at 1682Lots of action around the 20-day and 50-day MA's and 200 EMA so these levels are important moving forward.

SPX Daily Chart Gap S/R

S&P's are set to drop a dozen points or so at the opening bell. The 50-day MA is 1680.18 so watch this like a hawk since price will try to seek support here. The brown support line on the chart is 1685 so the 1680-1685 level is an important support gauntlet. Bears win big sub 1680 while bulls will be happy above 1685. The 1685 also satisfies the need for a back test of the 20-day MA at 1684.74. The brown lines highlight the key S/R at 1691, 1685, 1669, 1657, 1652, 1649, 1639 and 1627.

The negative divergence and overbot conditions created the spank down as highighted about one-week or so ago. The indicators remain weak and bleak although the money flow is trying to create positive divergence. With the weak opening on tap today, the money flow will become weak and bleak as well. This hints that price will seek lower lows even after a bounce occurs. The stochastics are slicing under the 50% level into bear territory. Watch to see if the RSI loses 50% today which would create further negativity. Today will be interesting to see where the dip-buyers want to give it a go. Traders remain complacent and bullish, as evidenced by the low put/call ratio's highlighted over the last couple weeks. Markets are not climbing a wall of worry, instead, markets climb a wall of Fed (easy money). There is a big gap at 1671-1674 that price will want to fill at some point forward.

The chart wants to see continued weakness moving forward. Watch the following support levels for a potential near-term recovery bounce; 1685, 1680, 1674, 1671, 1669 and 1657. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 7:01 AM on 10/1/13:  The SPX dropped to a LOD at 1674.99 and bounced. The day ended at 1682. Lots of action around the 20-day and 50-day MA's so these levels are important moving forward.

Keystone's Eclipse Indicator

This esoteric signal is very interesting and has not been updated since the April market top was called. The eclipse technique starts with identifying the eclipse dates and note where they cluster. Within that cluster area, markets are prone to large sell offs.  Once a center point is identified for the dates, a time period of one month before that date, and one month after that date are key, as shown by the small red boxes, and overall the entire box creates a zone for a potential large sell off. The market down moves tend to start at the first or second boxes rather inside the larger rectangle rather than the middle area. Typically, if a large sell off occurs from the first small red box, the second box becomes benign. The eclipse window is open right now for October, November and early December. Of key interest is the window from 9/12/13 through 10/10/13 (now) and 11/12/13 through 12/10/13. So far, the SPX has dropped about 40 handles from the peak, from 1730 to 1690-ish, directly in sync with the indicator.

The previous eclipse sell off windows show how reliable and repeatable this indicator is despite its metaphysical basis. The circles show the successful market tops identified by the indicator. Every eclipse box resulted in a significant market pull back. Watch to see if the selling continues currently, if so, a large drop in equities will likely make the 11/12/13 to 12/10/13 window less applicable.  Interestingly, a major Bradley turn date, another esoteric indicator, occurs on 10/8/13 and another major Bradley turn date on 11/3/13.  Bradley turns do not forecast direction, only that a trend change or strong melt-up or melt-down move will occur in equities (large up or large down moving forward).

So the markets sit in the first small red box right now, prime area for a potential significant market sell off which has currently resulted in -40 SPX handles thus far.  The next two weeks will be interesting as well as the next two months. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

USD US Dollar Weekly and Daily Charts Falling Wedge Sideways Channel Death Cross

The dollar is weaker this morning to 80.20. This keeps the euro at 1.35 or higher which hurts the European economy. The euro will likely have to weaken to help the recovery across the pond which would provide dollar buoyancy moving forward. The charts are interesting since, in a nutshell, the daily says up and the weekly says down. So nimble traders are provided opportunities with the dollar bulls likely winning out as time moves forward. The dollar weakness occurs as the Fed continues to print money and pump the QE crack cocaine into long equity trader's veins. The black circle shows a death cross (50 crosses under the 200) which signals further dollar bearishness moving forward, however, as often highlighted on the site, a death cross typically occurs and price will bounce, just as a golden cross will occur and price will typically pull back down. If the death cross remains it will point to further weakness in the weeks and months ahead but over the near term 

The weekly chart shows a 2-year sideways channel controlling the price action through 78.80-83.50. Global currencies and yields will likely move sideways for many months forward. Price is leaking towards the lower rail. The 200-week MA at 79.85 would be an extremely important support test. Since the green falling wedge is in play (bullish) and the stochastics are oversold, the dollar should base in this 79-81 area moving forward. The histogram is already content with the dollar bottoming and now moving sideways to sideways higher, however, the other indicators are weak and bleak (red lines). Thus, after a bounce occurs, the indicators want to see a lower low on the weekly basis.

That bounce should occur due to the positive aspects of the daily chart, which is 180 degrees opposite of the weekly chart. The daily chart is very bullish with positive divergence across all indicators (green lines) so the drop in the dollar today is likely a very attractive long entry point--for the nimble traders since the weekly chart weakness will likely reassert itself in the days ahead. The UUP ETF is the long dollar play and it is positively diverged on the daily chart as well. A bounce is expected from the green circle. The top rail of the falling wedge on the weekly is at about 80.7 and note on the daily this is overhead resistance, thus, an attractive upside target, then 81. In summary, dollar should bounce in the near-term, for a few days, then some weakness will reassert due to the weekly chart, then the dollar should bottom and move sideways to sideways higher for the weeks and months ahead. So dollar longs can likely be scaled into beginning today and depending on the amount of bounce, the position can simply be added to over time moving forward, or, profits taken on the bounce, and then reload once price comes back down as per the weekly chart. Note that traders are the least bullish on the dollar since April. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 7:10 AM on 10/1/13:  The dollar drifts lower overnight printing a 79 handle now recovering back above 80. The 200-week MA support is in play at 79.87.

Sunday, September 29, 2013

XLF Financials 5-Minute Chart Sideways Symmetrical and Descending Triangle Patterns

Financials are the most important sector affecting market direction as the new week of trading begins. Keystone's trading algorithm, Keybot the Quant, identifies XLF 20.01 as a key bull-bear line in the sand (thick maroon line). Bad things will happen to the equity markets if XLF 20.01 fails. If XLF remains above 20.01, the broad indexes should float sideways and higher. The blue sideways symmetrical triangle was in play on Friday and the sideways vibe continues. The bulls broke out to the upside late-day so it looked like the XLF was headed for 20.13 and higher and the equity bulls win. However, President Obama started speaking at the red circle and the XLF dropped back down to 20.02 before recovering to close at 20.05.

There is also a red descending triangle pattern in play with base line at 20.02. If 20.02 fails, the XLF should drop to 19.95 and equities would be falling in earnest. The brown lines show important sideways channels through 19.99-20.12 and a tighter channel at 20.02-20.09 so price movement through these levels will indicate market strength, or weakness. To boil it all down, watch 20.01-20.02. Under and markets are in big trouble. Above and the bulls keep hanging on floating markets sideways and higher. Listen for any news on the banks overnight since this tidbit of news will likely dictate the movement of the entire broad market come Monday. If another major bank is downgraded, this will be the last nail needed in the financial coffin to send the XLF, and equities, down the rabbit hole. If a major bank is upgraded, or if all of a sudden JPM's woes are looking better, then the bulls will dodge a bullet and send the XLF, and markets, higher. XLF 20.01 holds the key. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

UTIL Weekly Chart Sideways Symmetrical Triangle

Utilities are important this week and moving forward. Most algo's program two important numbers, the weekly closing price 15 weeks ago to determine if there is an ongoing up, or downtrend, and, the 50-week MA now at 483.54, call it 483.57 if price moves higher for a potential cross. The weekly closing price 15 weeks ago is the low print in June at 471.77, an easy beat for bulls this week so this will create broad market lift. UTIL is at 482.19 under the 483.54 so this helps the bears. Note that the 15-week look-back number is much higher for the next week at 485.90. At 4 PM Friday, as the week ends, pay attention to the 485.90 since it will set up trading for the week of 10/7/13.

Considering the two 15-week look-back numbers in play for the next two weeks, 471.77 and 485.90, use this as a sideways channel bracket at 472-486. Market bulls will win above UTIL 486 and bears will be happy under 472. The 50-week MA at 483.57 serves as the main rudder since price relative to this number tells you which side is favored moving forward. If UTIL was to collapse this week under 472, it would be an important signal forecasting significant market downside ahead. Since the 15-week look-back number at 472 is far under the 50-week MA, the UTIL trap-door is closed. The 472 represents the trap-door for markets this week and the 483.57 is the trap-door for the week of 10/7/13.

Utilities are moving sideways through a symmetrical triangle and not tipping a hand as to which side will win moving forward. The vertical side of the triangle is about 80 handles, so a bull breakout at 495 targets 575 while a bear collapse at 475 targets 395. The move in the utes will also likely forecast the move of the broad indexes forward so a lot is riding on the triangle pattern. Note that price may move sideways for another month remaining inside the triangle not making an up or down decision. For this week, UTIL 471.77 and 483.57 matter, so price begins in the middle. A move above 483.57 and equities are likely headed higher. If UTIL stays under 483.57 this week, utes will likely simmer in the background but come Friday at 4 PM, when 485.90 and 483.57 become important for the set up for the following week, the bears may be favored. If Friday's close is above 486, that likely signals bullish markets ahead for the next week and that markets are probably rallying late this week. For now, the market bears have a slight advantage. Watch the 10-year yield since up yields means weak utilities and down yields means up utes. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Keystone's Key Events and Market Movers for Trading the Week of 9/30/13

Key Dates and Times for the Trading Week Ahead:


Sunday, 9/29/13: The CR Continuing Resolution deadline is tomorrow so Congress and the president are performing their last minute clown antics to find a solution. Keystone’s Eclipse Indicator continues to identify this time period, now through 10/10/13, as having potential for a major market sell off.
Monday, 9/30/13: EOM; EOQ3. Chicago PMI 9:45 AM—market pivot point. Dallas Fed Mfg Survey 10:30 AM. The CR Continuing Resolution to fund the U.S. government deadline occurs at midnight. Senate is not in session until 2 PM EST with two hours of trading remaining in the day. Will the shutdown be averted? Markets are typically bullish from the last day of the month through the first four days of the new month. Earnings: CALM, FONR, OMN, OSN, PTN.
Tuesday, 10/1/13: Q4 begins. China and Asia PMI’sEuropean PMI’s. Motor Vehicle Sales. Construction Spending and ISM Mfg Index 10 AM—market pivot point. The Affordable Care Act (Obamacare) exchanges open so people without health insurance can sign up for healthcare but will the exchanges be ready? Bradley turn window opens for a strong market move to occur, up or down (Bradley model does not predict direction only the time of an event), between now and 10/15/13. Earnings: ATU, GPN, WAG.
Wednesday, 10/2/13: Mortgage Applications 7 AM. ADP Jobs Report 8:15 AM. Oil Inventories 10:30 AM. Chairman Bernanke speaks 3 PM—markets will react. Earnings: MON.
Thursday, 10/3/13: Challenger Job Report 7:30 AM. Jobless Claims 8:30 AM. ISM Non-Mfg Index and Factory Orders 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. Fed’s Fisher (hawk) speaks 12:30 PM. Fed’s Powell speaks 12:45 PM. Markets are typically bearish moving through the new moon. Earnings: IDT, STZ, XRTX.
Friday, 10/4/13: Monthly Jobs Report 8:30 AM.  Fed’s Kocherlakota speaks 1:45 PM. New moon. Earnings:


Sunday, 10/6/13: European bank stress tests will occur in Q4. Also, now that the elections are over and Merkel is reelected, Germany’s high court must decide if the ECB’s OMT program is constitutional, or not.
Monday, 10/7/13:  Consumer Credit 3 PM. Earnings:
Tuesday, 10/8/13: Major Bradley Turn date—markets would be expected to move violently up, or violently down, within +/- 7 days, especially +/- 3 days. NFIB Small Business Optimism Index 7:30 AM. International Trade 8:30 AM. JOLTS Job Openings Report 10 AM. Fed’s Plosser speaks 12:30 PM. 3-Year Note Auction 1 PM. AA kicks off Q3 earnings season. Earnings:
Wednesday, 10/9/13: Mortgage Applications 7 AM. Wholesale Trade 10 AM—market pivot point. Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. FOMC Minutes 2 PM—market pivot point. Earnings:
Thursday, 10/10/13: Import and Export Prices and Jobless Claims 8:30 AM. Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Treasury Budget 2 PM. Earnings:
Friday, 10/11/13: PPI and Retail Sales 8:30 AM. Consumer Sentiment 9:55 AM.  Business Inventories 10 AM—market pivot point at 10 AM-ish. Earnings:


Monday, 10/14/13: Columbus Day. Markets are Open. Banks are Closed. Canada’s Thanksgiving.  Earnings:
Tuesday, 10/15/13: Eid al-Adha (Feast of the Sacrifice, a Muslim Holiday). Empire State Mfg Survey 8:30 AM. Earnings:
Wednesday, 10/16/13: Mortgage Applications 7 AM. CPI 8:30 AM. TIC data 9 AM. Atlanta Fed Business Inflation Expectations and Housing Market Index 10 AM. Beige Book 2 PM—market pivot point. Earnings:
Thursday, 10/17/13: Fed’s Fisher speaks 7:45 AM. Jobless Claims and Housing Starts 8:30 AM. Industrial Production 9:15 AM. Philly Fed Survey 10 AM. Natty Gas Inventories 10:30 AM. Oil Inventories 11 AM. Fed’s Kocherlakota speaks 2:45 PM. The nation reaches its Debt Ceiling Limit. Will the debt ceiling be raised to avoid a downgrade of U.S. debt? Earnings:
Friday, 10/18/13: Leading Indicators 10 AM—market stutter step. Earnings:


Monday, 10/21/13: Chicago Fed National Activity Index 8:30 AM. Existing Home Sales 10 AM. Earnings:
Tuesday, 10/22/13: Richmond Fed Mfg Index 10 AM. Earnings:
Wednesday, 10/23/13: Mortgage Applications 7 AM. FHFA Home Price Index 9 AM. Oil Inventories 10:30 AM. Earnings:
Thursday, 10/24/13: China and Asia Flash PMI’sEuropean Flash PMI’s. Jobless Claims 8:30 AM. New Home Sales 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. Kansas City Mfg Index 11 AM. 30-Year TIPS Auction 1 PM. Earnings:
Friday, 10/25/13: Durable Goods Orders 8:30 AM. Consumer Sentiment 9:55 AM—market pivot point. Earnings:


Monday, 10/28/13: Pending Home Sales Index 10 AM. Dallas Fed Mfg Survey 10:30 AM. Bradley turn window opens for a strong market move to occur, up or down (Bradley model does not predict direction only the time of an event), between now and 11/10/13. Earnings:
Tuesday, 10/29/13: FOMC 2-day meeting begins. S&P Case-Shiller House Price Index 9 AM. Consumer Confidence 10 AM—market pivot point. 5-Year Note Auction 1 PM. Earnings:
Wednesday, 10/30/13: Mortgage Applications 7 AM. ADP Employment Report 8:15 AM. GDP 8:30 AM. Oil Inventories 10:30 AM. 7-Year Note Auction 1 PM. FOMC Meeting Announcement 2 PM—market pivot point. Does QE tapering begin? Earnings:
Thursday, 10/31/13: Happy Halloween. EOM. Challenger Job Report 7:30 AM. Employment Cost Index, Personal Income and Outlays and Jobless Claims 8:30 AM. Chicago PMI 9:45 AM. Natty Gas Inventories 10:30 AM. Farm Prices 3 PM. Earnings:
Friday, 11/1/13: All Saints Day. China and Asia PMI’sEuropean PMI’s. Motor Vehicle Sales. Monthly Jobs Report 8:30 AM. Construction Spending and ISM Mfg Index 10 AM—market pivot point. Earnings:


Sunday, 11/3/13: Major Bradley Turn date—markets would be expected to move violently up, or violently down, within +/- 7 days, especially +/- 3 days.
Monday, 11/4/13: Factory Orders 10 AM. Earnings:
Tuesday, 11/5/13: International Trade 8:30 AM. ISM Non-Mfg Index 10 AM. Earnings:
Wednesday, 11/6/13: Mortgage Applications 7 AM. Productivity and Costs 8:30 AM. Oil Inventories 10:30 AM. Earnings:
Thursday, 11/7/13: Chain Store Sales. Jobless Claims 8:30 AM. Natty Gas Inventories 10:30 AM. Consumer Credit 3 PM. Earnings:
Friday, 11/8/13: Consumer Sentiment 9:55 AM—market pivot point. JOLTS Job Openings and Wholesale Trade 10 AM. Earnings:


Monday, 11/11/13: Veteran’s Day.  Markets are Open. Banks are Closed.  Earnings:
Tuesday, 11/12/13: 3-Year Note Auction 1 PM. Keystone’s Eclipse Indicator targets 11/12/13 through 12/10/13 as having potential for a major market sell off. Earnings:
Wednesday, 11/13/13: Mortgage Applications 7 AM. Import and Export Prices 8:30 AM. Atlanta Fed Business Inflation Expectations 10 AM. 10-Year Note Auction 1 PM. Treasury Budget 2 PM. Chairman Bernanke speaks 7 PM.  Earnings:
Thursday, 11/14/13: Jobless Claims, PPI and Retail Sales 8:30 AM. Business Inventories 10 AM—market pivot point. Natty Gas Inventories 10:30 AM. Oil Inventories 11 AM. 30-Year Bond Auction 1 PM. Earnings:
Friday, 11/15/13: Empire State Mfg Survey and CPI 8:30 AM. Industrial Production 9:15 AM. Earnings:

------------------------  2014  ---------------------------

Tuesday, 1/1/14: Major Bradley Turn date—markets would be expected to move violently up, or violently down, within +/- 7 days, especially +/- 3 days.
Wednesday, 1/9/14: Major Bradley Turn date—markets would be expected to move violently up, or violently down, within +/- 7 days, especially +/- 3 days.
Friday, 1/31/14: Chairman Bernanke’s term ends at the Fed. Yellen and Kohn are candidates for the position, and perhaps Bernanke and Geithner as well. Summers had to bow out so Yellen appears to be the choice, however, the possibility of Bernanke extending his term, or Geithner riding in on a white horse to take the job, are on the table.
Friday, 2/7/14Winter Olympics begin in Sochi, Russia, through 2/23/14. Watch $RTSI and RSX.
February/March: The new Fed Chairman testifies before Congress.
March: ESM is officially ‘fully operational’. The banking union schedule has been delayed from January 2013 to January 2014 and now to March 2014.

April: MSFT no longer supports Windows XP.

Saturday, September 28, 2013

Keystone's Trading Week in Review and Path Ahead for Markets 9/28/13

On Friday, 9/20/13, India surprises markets by raising rates to try and protect their currency.  The new AAPL iPhone is on sale around the world creating small crowds.  Germany and Tokyo have very large lines. The gold iPhone is popular. Today is OpEx Quadruple Witching. The low CPC and CPCE put/call ratio’s continue to signal market complacency and a significant market top at hand. Stanley Druckenmiller, a well-respected and successful fund manager, comments on the inequality of QE saying it is “the biggest redistribution of wealth from the middle class and the poor to the rich ever.” The broad indexes bounce at the open but fall on their sword in quick order and drift lower. At about 10 AM, the utilities turn ugly dragging the broad indexes lower. At 11:30 AM, Speaker Boehner takes the podium.  The House passed a CR bill  to fund the government but the bill also requires defunding of Obamacare.  The Senate will not approve, and the president will veto, any bill that contains a defunding of Obamacare. In fiery comments, Boehner says “the American people don’t want the government shut down and don’t want Obamacare.” A software glitch surfaces with Obamacare which may cause serious problems with open enrollment in the health exchanges which is set to begin on 10/1/13 only 10 days away.  At about 1 PM, Fed’s Bullard says the Fed decision to not taper was a toss-up and that “the October meeting is ‘live’ (taper remains on the table).” Equities continue to weaken printing lower lows and lower highs into the closing bell. Traders are not so much concerned about the Bullard comment on a late October taper as much as they are at the mass confusion coming from the Fed. The Fed is floundering with lack of clarity and simply making everything up as they go along.  COL drops -6% as defense contracts dry up. NOC, GD and LMT all dump 2% in sympathy.  At 3:00 PM, BBRY is halted from trading on pending news.  BlackBerry reports earnings one week earlier and the numbers are horrible. In addition, BBRY is canning 4500 employees, about 40% of the workforce. Where are these folks going to find jobs? No where. BBRY reopens for trading at 3:30 PM and collapses losing -23%. The session ends with the SPX losing 12 points, -0.8%, to 1710 in the area before the Fed decision. The Dow loses 185 points, -1.2%, to 15451. The Dow rebalancing with the new additions, as well as Quadruple Witching, creates a huge volume surge. The utilities dump -1.5%. The 10-year yield is 2.74%. Gold retreats from its gains dropping -3.2% to 1325. For the week, the SPX is up +1.3%, Dow +0.5%, Nasdaq +1.4% and RUT gains +1.8%. Trannies gain +2.6% this week. Outperforming tech, small caps and trannies are bullish for the stock market but are these sectors rising because of a healthy economy or rising because traders know they should be rising if the economy was healthy so they simply take the Fed’s easy money and pump these asset bubbles higher? The Fed said Wednesday the economy is sick since there is no taper. At this point, the Fed is doing far more harm than good. At about 5 PM EST, President Obama calls Speaker Boehner to tell him that he will not negotiate on the CR bill. Looks like the spirit of cooperation does not exist as usual in the dysfunctional political system. Political pundits comment on how the president will negotiate with Syria, Russia, and now perhaps Iran, but not with the U.S. House. LNKD may have hacked client accounts to generate sales leads. AAPL iPhone sales receive a positive push today with initial sales numbers expected on Monday.

On Saturday, 9/21/13, Typhoon Usagi continues wreaking havoc across Asia and now targets Taiwan and the Philippines. The new AAPL iPhone’s are well received but the fingerprint reader may not work properly if the finger is wet and then the reader may take several minutes to reset. The iPhone user can always log in with their PIN code which is what the fingerprint reader seeks to eliminate. The Affordable Healthcare Act, Obamacare, is using ‘navigators’ to guide folks through selecting healthcare for the health exchanges opening in only 9 days. The navigators are only receiving 20 hours of training, not receiving any significant background checks, and will have full access to everyone’s addresses, social security numbers and all other personal information.


On Sunday, 9/22/13, a terrorism and a hostage situation is ongoing at a Kenyan mall with 39 dead and 150 wounded; some are Americans. Islamist extremists are targeting non-Muslims. Typhoon Usagi hits Hong Kong and then peters out as it moves across greater China.  Germany reelects Merkel and now there is no longer a need to keep countries like Greece or Cyprus in the euro, or even Germany itself.

On Monday, 9/23/13, China HSBC PMI is 51.2, better than expected, at a 7-month high, however, China imports drop which send copper lower. Crude oil is trading lower as Russia rejects any potential Syria strike. Angela Merkel is reelected for a third four-year term. Eurozone PMI is 51.1, lower than expected. The euro remains elevated at 1.3511. Draghi speaks in front of a Parliamentary Committee and stands ready to provide more stimulus perhaps an LTRO3. The Euro Stock 600 Index has the lowest amount of short positions in place since 2006 (traders are complacent across the globe).  C announces a 10% drop in revenues ahead which follows along with JEF negative news last week so the banking sector may be weak today. At 7 AM EST, explosions occur at the Kenyan mall hostage situation and the mall is on fire with 59 now dead. AAPL announces a blow-out 9 million sales number on iPhones far past estimates of 5 to 7 million. AAPL catapults 25 dollars moving above 490 pre-market. Shipping bellwether FDX is downgraded and drops -2%. Equities sell off to begin the week with the SPX losing the 1700 level mid-day. Stocks stabilize as Fed’s Dudley, a voting member, speaks dovishly wanting to see better economic data before beginning the QE taper. Financials are the weakest sector and this is troublesome for long traders since banks are expected to lead the broad indexes higher moving forward. Volatility climbs higher with VIX well above 14 again.  At about 2:30 PM, Fed’s Fisher says “the Whitehouse has terribly mishandled the process for picking the new Fed Chair.” Fisher says the next Fed selection process “should not be a public debate.” On Yellen, he says she is “wrong on policy but would make a great chairperson.” Equities drift sideways all day. Traders complain that the Fed talks out of both sides of their mouth and there is no leadership. Fed’s Dudley was dovish earlier in the day but Fisher was hawkishMarkets end down on the day but marginally, now weak for three consecutive days following the big Fed decision giving up the entire Fed rally. The sick financials raises concern. MS and C are down in excess of -3%. Biotech, a stalwart sector this year, sells off. Crude oil drops with WTIC at 103 and Brent at 108. AAPL is the bright spot finishing the day up +5% to 491 helping the Nasdaq. The Justice Department plans to sue JPM over mortgage bond shenanigans.  JPM’s lawsuit woes continue with the stock dropping on the news and creating further negativity in the financial sector. BBRY receives a bid to buy the company at $9 per share. Chrysler files for an IPO to slow down Fiat’s push to own the company. Fiat owns nearly 60% of Chrysler and is very unhappy with the news. RHAT earnings EPS is in line but top line revenue misses and the stock is punished -10% in AH’s trading. Hedge funds begin advertising on television to gain clients. Lois Lerner, the center of the IRS scandal investigation, retires after enjoying a paid vacation the last few months. Lerner pleaded the Fifth during Congressional Testimony to avoid answering questions and emails and other evidence contradict her initial comments. Congress will continue to dig deeper into the IRS scandal to find out who gave her instructions to target conservative and tea party groups before the presidential election.

On Tuesday, 9/24/13, South Korea does not select a winner for an 8 billion fighter jet contract. BA thought they were a shoe-in but S. Korea wants state-of-the-art aircraft due to N. Korea turmoil and the BA jets are slightly older technology. German business confidence misses expectations.  The euro drops on the news from 1.35. The 10-year yield is 2.68%. Copper is weak for three consecutive days. Senate Leader Reid calls the House bill, which includes the funding of 99.9% of the government but will defund Obamacare, dead on arrival. KBH and LEN earnings beat but both show orders actually decreasing. Copper collapses as the regular trading session opens. Equities are flat to lower to begin the day. Consumer Confidence is weaker than expected.  At 10:30 AM, markets place a bottom and then move higher on news that a rumor about an Italian debt downgrade was false. Gold is having continued bad luck down -13 to 1313.   President Obama speaks at the U.N. jabbing Putin saying that thinking the rebels launched the chemical attacks in Syria is an “insult to human reason.”  The SPX recovers from 1695 up to 1708 at 2 PM.  Senator Cruz from Texas begins a filibuster-type talk on the Senate floor at 2:40 PM EST pledging to “speak as long as I can stand.” Cruz is passionate about defunding Obamacare and is a republican presidential hopeful for the 2016 election. Markets sell off from 2 PM into the closing bell and end the day lower. The SPX drops under 1700 closing at 1697. Weak copper and financials drag equities lower. After the bell, CY a semiconductor company, drops -10% on lackluster guidance moving forward.  In the evening, Secretary Lew warns that investors may be too calm and optimistic about a positive debt-ceiling outcome and the deadline may be coming faster than thought within 3 weeks time. The $USD dollar index chart creates a death cross with the 50-day MA dropping under the 200-day MA.

On Wednesday, 9/25/13, Tokyo Electron and Applied Materials merge to create a 29 billion chip technology company. Alibaba abandons thoughts of a listing in Hong Kong and instead considers listing in the U.S.  Italian Prime Minister Letta warns on the risk of a U.K. exit from the European Union (EU). The U.K. is becoming concerned about a housing bubble. France business sentiment drops. The euro remains at 1.35. Cruz continues the Senate non-filibuster filibuster, now the 8th longest in history, reading Green Eggs and Ham by Dr. Seuss (as long as he remains standing he can say or read whatever he wants).  Secretary Lew says the government will run out of funds by 10/17/13 tightening the debt ceiling deadline. Markets trend sideways to begin the day. DB slides lower on weaker guidance another negative for banks. New Home Sales are better than expected.  At 12:25 PM, a large sell program hits the markets causing a 30-point drop in the Dow and a 4-handle drop in the SPX in only a couple minutes time.  Senator Cruz ends his non-filibuster filibuster at 21 hours and 19 minutes. Leader Reid calls the Cruz performance “a big waste of time.” At 1:30 PM, a rumor hits that WMT is cutting orders; the stock plummets and sends the Dow lower. About 20 minutes later, a Walmart spokesman says the order cutting rumor is ‘misleading’ since WMT is constantly readjusting orders and managing inventory with vendors.  WMT recovers to 75. If Walmart has inventory piling up on shelves and in back rooms, the many supplier companies stocking those shelves will be very negatively affected, as well as all the employees that work at these companies. Markets are in a tizzy over WMT into the closing bell. The markets close down on the day with the SPX at 1693. The RUT prints a new intraday high today at 1082.00 before pulling back to 1074. Small caps benefit to a great extent from the phenomenal biotech sector this year.

On Thursday, 9/26/13, European markets are mixed as Italy’s Berlesconi political drama heats up again. California raises the minimum wage to $10 per hour, the highest in the U.S. HTZ drives off a cliff losing -9% pre-market after lowering forward guidance. If the car rental business is falling off, business people are not meeting with customers and folks are not going on vacations.  GDP is 2.5% in line with estimates. Stocks move higher after the opening bell and the SPX is back above 1700. FB hits 50. FHA may need a first-ever taxpayer bailout to remedy the damage from the 2005-2008 housing debacle. Speaker Boehner takes the podium and says he does not want a government shutdown. President Obama says he will not negotiate over the CR. Boehner says, “I’m sorry, it just does not work this way.” The broad indexes weaken after Boehner’s comments.  JCP announces a stock offering which will dilute the stock price. The stock plummets -10% as traders complain that CEO Ullman said hours before that all was fine; this behavior may require an SEC investigation. JBL drops -10% after reporting lower earnings and guidance. The day ends with the SPX at 1699 and Dow at 15328. The U.S. and Iran conduct talks over the nuclear program; the first high-level talks between these two nations in 35 years. NKE earnings are a beat on EPS but the top line is flat. Companies continue to face challenges with sales and meet EPS by lowering employee head count and expenses. NKE margins are up so the stock catapults +7% higher. The CPC and CPCE put/call ratios continue to print uber low numbers verifying complacency and a broad market top at hand.

On Friday, 9/27/13, U.K.’s Carney says the recovery is strengthening which may indicate less need for stimulus. Worries continue over the U.K. housing bubble where London prices are up 30-40% in only 6 months time. S&P futures are weak at -4 at 4 AM EST. At 5 AM, S&P’s -6. At 6:30 AM, S&P’s -8. The threat of the government shutdown looms as the CR deadline on Monday approaches. The debt ceiling deadline is 10/17/13. An IPO comes to market, Violin Memory, VMEM, with loud boisterous applause at the opening bell. The joy fades quickly and the crowd goes silent as the stock plummets -16% on its debut. The broad indexes tumble lower at the bell with the SPX falling through 1690. Consumer Sentiment is lower than expected. LL dumps -11% as corporate offices are searched by the Fed concerning lumber origin, much like the raid on Gibson concerning their guitar wood.  GS and BAC are downgraded by Guggenheim. Weaker utilities and higher volatility sends markets lower. The VIX moves above 15 briefly. The financials continue to tease the XLF 20 level but the bulls hang on and send the SPX sideways at 1692. Keybot the Quant, Keystone’s trading algorithm, flips to the bear side at SPX 1689. President Obama speaks at 3:45 PM, fifteen minutes late from the planned time, and berates the House as usual repeating the mantra that he will not negotiate. The Washington dysfunction continues on all sides. Equities drop as the president speaks but then recover into the closing bell with the SPX ending at 1692. The broad indexes are down about one-half percent across the board today. The Dow is 15258. For the week, the SPX is -1.1%, Dow -1.3%, Nasdaq +0.2% and RUT +0.1%. Tech and small caps lead which is a bullish indication. Small caps are supported by the small speculative biotech stocks. AAPL’s 2-week rally boosts the Nasdaq.

On Saturday, 9/28/13, the House convenes to discuss the CR bill. Either the House approves the Senate bill, which is a clean bill that simply approves funding the government without any reference to Obamacare, which will be quickly approved by the president, or, the House will modify the bill by attaching a different stipulation than defunding Obamacare, such as delaying the individual mandate for the health bill for one year or making it law that Congress and all staff should be subject to Obamacare. How sickening it is for the politicians to ram the higher health care costs down everyone’s throat while they conveniently exempt themselves? The system is obviously broken.

On Sunday, 9/29/13, the CR Continuing Resolution deadline is tomorrow and the drama continues on the Sunday morning political talk shows.  Congress and the president are performing their last minute clown antics as usual. The debt ceiling limit is only 18 days away; 14 trading days.

On Monday, 9/30/13, EOM. EOQ3. Chicago PMI. The CR Continuing Resolution to fund the U.S. government deadline occurs this evening. Senate will not be in session until 2 PM EST today. Will the shutdown be averted?

On Tuesday, 10/1/13, Q4 begins. China and Asia PMI’sEuropean PMI’s. Construction Spending. ISM Mfg Index.

On Wednesday, 10/2/13, ADP Jobs Report. Oil Inventories. Chairman Bernanke speaks.

On Thursday, 10/3/13, Jobless Claims. Factory Orders. ISM Non-Mfg Index. Natty Gas Inventories. Fed’s Fisher and Powell speak.

On Friday, 10/4/13, Monthly Jobs Report. Fed’s Kocherlakota speaks.  European bank stress tests will occur in Q4. Also, now that the elections are over and Merkel is reelected, Germany’s high court must decide if the ECB’s OMT program is constitutional, or not.


On Thursday, 10/17/13, the nation reaches its Debt Ceiling Limit. Will the debt ceiling be raised to avoid a downgrade of U.S. debt?

----------------------------- 2014 ----------------------

On Friday, 1/31/14, Chairman Bernanke’s term ends at the Fed. Yellen and Kohn are candidates for the position, and perhaps Bernanke and Geithner as well. Summers had to bow out so Yellen appears to be the choice, however, the possibility of Bernanke extending his term, or Geithner riding in on a white horse to take the job, have to be placed on the table as well.

On Friday, 2/7/14, Winter Olympics begin in Sochi, Russia, through 2/23/14.

In February/March 2014, the new Fed Head testifies before Congress.

In March 2014, the ESM is officially “fully operational.” The banking union schedule has been delayed from January 2013 to January 2014 and now to March 2014.


© The Keystone Speculator. All Rights Reserved. 2012. 2013.

Friday, September 27, 2013

Keystone's Midday Market Action 9/27/13

The broad indexes drift lower as traders become more concerned over the CR deadline. The VIX pops above the 14.67 bull-bear line in the sand and UTIL fails through the 485.33 and 483.57 critical levels. The bulls push GTX above 4889 which is holding back equities from stumbling lower. Ditto the XLF remaining above 20.01. Keybot the Quant is on the short side now but the markets remain in a very indecisive mode. Keep watching the rudders for the market ship; UTIL 485.33, 483.57, VIX 14.67, XLF 20.01, and GTX 4889. Okay, watch XLF now at 20.02, this is huge for markets, bears need a couple more pennies........

Note Added 11:19 AM:  Here it is..... XLF 20.01 smack dab on top of the bull-bear line in the sand. This is huge for markets. Equities will move in the same direction that XLF moves. What say you XLF? Bounce or die.

Note Added 11:46 AM:  Bounce. Today is wild action. Markets are a coin flip right now. UTIL 482.54 below both key levels. VIX 14.81 teasing the 14.67 breakout. XLF 20.06 not wanting to fail at 20.01. GTX 4890 hanging on for the bulls by its chinny chin chin. TRIN 1.27. SPX did not perform the island reversal but instead simply dropped lower to fill the 1688-1691 gap. Last week's low is taken out at 1691.98 which is a market negative. SPX is at 1692 back kissing this number as this is typed. The SPX came very close to back testing the 20-day MA at 1684.74 and rising. Another gap is below at 1671-1674. The beat goes on. XLF 20.01 carries a massive amount of clout and the bulls are hanging on to it with all their might. Keystone is looking around for a coin to flip.

Note Added 11:55 AM:  GTX 4889 failure so this should usher in market negativity. VIX 14.91. XLF is 20.04 coming down for another look at 20.01.......

Note Added 12:41 PM:  UTIL 482.19. VIX 14.90. GTX collapsing at 4861. XLF 20.04 with the bulls fortifying the financial sector, circling the wagons, to place a last stand at 20.01. Bulls can stay in the game with XLF above 20.01 but if XLF fails 20.01 the bulls have lost control of the markets. The 8 MA remains under the 34 MA on the 30-minute.

Note Added 12:52 PM: XLF 20.03.... high drama at the banks today. GS and BAC were downgraded creating negativity. Bears need 3 cents.....

Note Added 1:02 PM:  The SPX continues fighting along last week's low at 1692. SPX is dead flat through 1691-1693 for the last 2 hours. This 1691-1692 support area plays a key role. Bulls win above 1692.  Bears win below 1691. UTIL 481 handle. VIX almost a 15 handle. XLF 20.03..... the Fed is busy propping up the banks today.

Note Added 1:12 PM:  XLF 20.04.  Keystone took profits on SSG exiting this long position which is a 2x inverse ETF that shorts the semi's. Will look to reenter. Also bot NUGT opening a new long position in this speculative and dangerous 3x gold miner bull ETF.

Note Added 1:16 PM:  Note the sideways symmetrical triangle on the XLF 5-minute chart. Price is at the apex and needs to choose up or down. The move should be 10 to 14 cents. XLF is 20.03, time to choose, either explode higher to 20.13+ allowing the markets to recover into the closing bell, or, XLF collapses to the low 19.90's paving a sustainable path forward for market bears. What will it be XLF? Keystone needs some heart pills.

Note Added 2:31 PM:  XLF 20.03. The financial theatrics are intense. XLF is moving dead flat unable to commit up or down but knowing it must choose now. The sideways triangle is textbook on the 5-minute XLF chart. Come on now XLF, pick one way or the other, you know that you have to, the time is nigh. VIX 15.50.

Note Added 3:00 PM:  President Obama will talk at 3:30 PM. Here comes the political antics at the podium. This clown behavior will continue from all political parties through the weekend into Monday evening. Instead of bashing the House, perhaps the president will announce the new Fed Chairman, or Chairwoman? XLF 20.03.

Note Added 3:18 PM:  Keystone took profits on the NUGT long trade using it as a few-hour day trade. Will look to reenter. No use giving up those gains today especially with the president about to speak which may influence the gold market. Also bot JCP for a dead-cat bounce. JCP hourly and minute charts are setting up for a bounce. The 80/20 rule leaves the door open to the 7.50-8.20 area as a bottom for JCP, but, for now, a bounce may occur at any time, now or Monday morning, due to the bludgeoning over the last day.

Note Added 3:20 PM:  XLF 20.02. Bears, you need another penny or two lower for XLF and you will receive a very ugly close. Bulls will hang on into the weekend if they keep their heads afloat above XLF 20.01.

Note Added 3:32 PM:  XLF 20.05 so bulls may be able to float markets out sideways into the weekend. The president is late as usual. The staff should simply schedule each speech 10 or 15 minutes later each time then he would always be on time. Keystone bot NUGT opening a new long trade.

Note Added 3:42 PM:  Here is the president. He will be talking about the CR deadline so Yellen will have to wait. XLF 20.07. SPX is 1691.88 as the speech begins. Last week's low is 1691.88.

Note Added 3:48 PM: XLF 20.03. SPX 1690.72. Markets weaken as the president speaks and reiterates his 'no negotiation' stance, already blaming republicans ahead of time for a pending government shutdown. The Washington dysfunction and fear-mongering continues. As dear ole Mom would say, 'it takes two to tango'.

Note Added 3:58 PM:  The president could have phoned-in the speech; same-o stuff. Markets meander sideways. XLF 20.07.  SPX 1693.

Note Added 4:01 PM:  SPX closes pennies under last week's low and logs a negative week honoring the seasonality that the week after September OpEx is down 80% of the time. The UTIL 50-week MA trap-door at 483.57 opened today but surprisingly the markets only experience a moderate drop. The XLF refusing to drop under 20.01 propped the indexes up today. Political grandstanding and posturing will continue all weekend long with drama on tap for the Sunday morning political talk shows. Monday will be an epic day in stock market history. Perhaps global events on Sunday out of China, Japan, Italy or Portugal may take precedence over the U.S. theatrics? It is always the event out of left field over by the food stand that surprises you when everyone's attention is toward the show on the main stage.

Keybot the Quant Turns Bearish

Keystone's algorithm, Keybot the Quant flips short at SPX 1689. Lower utilities and higher volatility are causing the market weakness. Bulls are in the game pushing GTX above 4889 to limit the downside thus far. XLF remains above 20.01. Watch UTIL 483.57 closely (this number replaces the 483.55). As always, stay alert for a whipsaw move back to the long side either today or Monday. For now, the bears are driving the bus. More information is found at Keybot's site;

Keybot the Quant

Keystone's Morning Wake-Up 9/27/13; Consumer Sentiment

NKE beat on EPS last evening but is flat on top line revenue. Companies continue to make earnings not through ever-increasing sales that signal a healthy economy, but instead through cutting jobs and expenses streamlining operations. This behavior has a finite life. JBL is puking -10% and should create slight negativity in the tech sector. JCP is dumping -8% after the stock dilution news and now becomes an interesting long play. Allow a few days or week or two for the smoke to clear with JCP and it will likely be an attractive long play. Futures are lower this morning with the S&P's -8 and Dow -54. NKE should create a strong boost in the Dow if the AH's trading bounce continues which makes the weak Dow futures appear ominous. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead. The SPX is above the 200 EMA at 1685 on the 60-minute chart signaling bullish markets for the hours ahead. For the SPX starting at 1699, the bulls need to touch the 1704 handle and price will jump to 1710 in a flash. The bears need to push under 1693 to accelerate the downside, which would fall through the gap at 1688-1691 in short order. A move through 1694-1703 is sideways action. Watch last week's low at 1691.88. The 20-day MA is 1680.13 and continues to need a back kiss. Th 1680-ish is also the middle standard deviation band that price should visit since the upper band was violated several days ago.

The following parameters dictate market direction to end the trading week; UTIL 485.33, 483.55, XLF 20.01, JJC 40.02, VIX 14.67 and GTX 4888. Utes, financials, copper and volatility continue to aid the bulls causing market lift each day. Commodities are in the bear camp creating market negativity. Therefore, for the bulls to move equities higher, GTX must move above 4888 to signal the all-clear. The bears must cross any one of the utility, financials, copper and volatility targets to create negativity. Markets will move flat today if all the parameters remain as is. If UTIL loses 485.33, watch 483.55 since this may open a trap-door for equities with the SPX tumbling 20 or 30 handles in quick order. Utilities will move opposite to the 10-year yield now at 2.63%. Keybot the Quant remains bullish, however, if any two of the five bull parameters mentioned turn bearish, and the SPX prints under 1693, and stays under, Keybot will likely flip short. Note that the yields have been slipping, as stocks slip lower, in tune with Keystone's disinflationary and deflationary theme moving forward that 95% of traders and analysts continue to poo-poo.

Personal Income and Spending data hits shortly. Consumer Sentiment at 10 AM will create a market pivot point. Fed heads are speaking again with Rosengren and Dudley on tap. The Fed speak is only creating further confusion each day. The CR deadline is Monday, the end of the month, EOM, but traders are not worried at all. It is the 'boy who cried wolf' syndrome. Everyone expects the politicians to kick the can down the road and vote in favor of easy money policies and pork for all, so there is no need to worry. The low VIX and low put/call ratios, as highlighted in last evening's CPC and CPCE charts, verify the uber complacency and the put/calls signal that a significant market top is at hand. Long traders are wearing rose-colored glasses while sipping the Fed's champagne.

Keystone's Eclipse Indicator time window is now through the next two weeks for a potential major market sell off to begin. The week after OpEx in September is down about 80% of the time. This week started at SPX 1709.91 so perhaps this reliable seasonality factor will hold true again. The Q3 window dressing was in play yesterday helping to bounce markets. September typically ends with two weak days and today and Monday are the last two days of the month. Markets are a crap shoot since any politician can take the podium at any time and proclaim a big upside rally, or, crushing downside collapse, with their chosen words. This is what happens when free markets are abandoned in favor of central banker control and intervention. The stock market is now beholding to the Fed and other central bankers for their daily easy money drug supply of crack cocaine. The Fed is the market. September began at 1633 so keep this in mind as the month ends. There are two days remaining, 13 hours of trading. Will the bulls print a positive month come Monday at 4 PM EST, or, will the bears spoil the upside fun and send the SPX under 1633 by Monday afternoon (60+ handles lower)?

Watch the SPX 8/34 MA cross on the 30-minute since it tells you who is winning moving forward. Watch UTIL 485.33, UTIL 483.55, XLF 20.01, JJC 40.02, VIX 14.67 and GTX 4888. The moves of these parameters will send markets in that respective direction. The UTIL 483.55 level carries serious negative clout. A big day is on tap. Perhaps Keybot will flip short today? Check the mic at the podium in Washington since the political talk will likely dictate the market story. The politicians are buying stocks and options right now since they know how their words will move markets. That way they can pay for the new beach house with cash. As George Carlin would quip, "it's a big club, and you ain't in it."

Note Added 8:33 AM:  Fed's Evans speaks and creates more confusion. The Fed is a joke; it has become a caricature of itself. Evans is so twisted in his words that he no longer even knows what he is even saying, he is confusing himself! The Fed may taper, but maybe not, the taper will occur either this year, or maybe next year, etc... It is pure comedy but tragically, there is no reason to laugh, since folks are suffering each day due to the structural unemployment and the sick lackluster U.S. economy. The Fed's actions benefit the have's at the expense of the have-not's. S&P's -7. Dow -50. Nas -13.

Note Added 8:58 AM:  NKE is trading up five bucks pre-market. Use a rule of thumb of 8 for Dow components to project the move in the Dow. Thus, 5x8 = 40. NKE will create 40 positive Dow points today on its own. With the Dow futures at -50 right now, if NKE was flat, the futures would be -90.