Thursday, October 10, 2013

Keystone's Morning Wake-Up 10/10/13; Government Shutdown Day 10; Debt Ceiling Limit 7 Days Away

The president and House republican leaders will meet at the Whitehouse this afternoon to discuss a resolution to the debt ceiling limit. This perceived positive development causes global markets to move higher overnight. S&P futures are +14. The dollar bounced yesterday and today the euro briefly fell under 1.35 well off the 1.36 a couple days ago. Some retail earnings are on tap which will move the retail sector. Retail Sales hit tomorrow morning and the stakes will be high. Import and Export Prices and Jobless Claims are 8:30 AM today. Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Treasury Budget 2 PM.

The retail and utility sectors are impacting broad market direction. Watch RTH 54.79 (now creating bullishness at 54.81) and UTIL 483.63 and 485.90 (now creating bearishness at 483.16.  The bears need to push RTH under 54.79 to maintain market negativity. The bulls need to push the utilities above the levels shown to gain upside juice. Keybot the Quant is bearish but if UTIL moves above 485.90, and the SPX above 1662.50, and both remain above, Keybot will likely flip long. For the SPX today starting at 1656, the bulls need to push above 1662.50 to create an upside acceleration and the futures already point to this outcome. The bears need to push under 1646.50 to accelerate the downside. A move through 1647-1662 is sideways action. Since the Whitehouse meeting is this afternoon, the markets will likely spike higher at the open and then move flat all day long through the close until comments are received about the success, or lack thereof, of the meeting.

The CPC and CPCE put/call ratio charts highlighted this morning show that a relief rally is a reasonable expectation although further market weakness would be anticipated moving forward. The NYMO is -57 consistent where a relief pop would occur but the chart remains open for further lows after the bounce plays out. A relief rally may be from 20 to 50 SPX handles, thus, from 1656, a potential snap-back move to the 1669-1692 area is on the table. Watch RTH 54.79, UTIL 483.63 and 485.90, JJC 40.19, GTX 4888, XLF 20.00 to determine market direction and gauge the strength of the market upside today (the more parameters that turn bullish the stronger the relief rally; if none of the red numbers turn green then the markets will reverse and head lower in quick order again). The 20-week MA at 1662.02 and 100-day MA is 1662.02 are critical S/R levels. The 50-day MA is 1678.34 serving as overhead resistance. It would be prudent for price to back kiss the 50-day where it would bounce, or die.


  1. So SPX hit 1646, a number I have been touting for three weeks as support. We bounce off to rally to (1673?) ish -

    A great potential place to re-short with a tight stop if you missed the move down at this stage to the broader goal of 1600.

    should they double down on QE, an asteroid hit, or some other major headline - then you know what to do - but all in all - the trend is down, not up, down.

    Dont be the last one to turn the lights out.


    1. Good thing I don't actually listened to you. That's 1678 right there and without mention of QE or a debt deal. Heck of downtrend!

    2. No trades up, no figures, no nothing - hahaha

      short from 1703 to 1648 - I was, I dont think you were.

      Secondly - this IS a great place to short with a stop.

    3. The 1678 is the 50-day MA so it is key. Likewise 1682 which is the 200 EMA on the 60-minute. Also the 20-day MA at 1692. The Three Stooges.


    CPC seems to indicate yesterday was the bottom$SPX&p=D&yr=0&mn=4&dy=0&id=p77992880205&a=306373811&listNum=4

    the aroon in relationship to these other indicators are saying the bottom is in - how price reacts to 1705 will determine wave structure methinks$SPX&p=D&yr=0&mn=9&dy=19&id=p29300256519&a=317567577&listNum=6



  4. The bounce receives lots of short-covering fuel today. The SPX move for the relief rally is estimated at 20 to 50 handles, so from 1656 that is 1676 to 1706. So if the important 1692 R gives way, the test of 1706-ish would be likely. The move already exceeded the 20 handle minimum so the rally may run out of gas at any time. Bulls need higher copper, utilities and lower volatility to keep pushing markets higher.

  5. Bank earnings are huge tomorrow; JPM and WFC. They will dictate if the rally continues, or not, so watch them closely today and AH's.


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