Tuesday, November 19, 2013

Keystone's Morning Wake-Up 11/19/13; HD; BBY; Chairman Bernanke Speaks This Evening

Bulls had the red carpet laid out yesterday but instead of walking confidently across pausing for tabloid snap-shots, the bulls trip, scraping their face on the cement sidewalk below coming to rest next to a cigarette butt. Keybot the Quant remains short since the bulls could not hold the new all-time high at 1802.33. If the SPX prints above 1802.50 today, and this level and higher holds, Keybot will likely flip long. Keybot wants to go long but the internal programming rules continue to hold it back. UTIL 503.04 remains key all week long and the bulls are comfortably above near 506.84.  VIX is very important since it moves back above 13 yesterday. The bull-bear line in the sand is VIX 13.97. Bulls are fine if they keep VIX under 13.97.  Markets will begin selling off in force if VIX moves above 13.97.

For the SPX today, closing at the strong 1791-1792 S/R (reference the SPX S/R missive from this weekend for further study on support and resistance), the bulls need 1802.50+ and it is blue skies ahead with an upside orgy on tap towards 1810. The bears need to push under 1788, only about 3 points lower, to accelerate the downside. A move through 1789-1801 is sideways action today. Fed's Evans will pump the stock market at 2:15 PM EST today and Chairman Bernanke speaks tonight at 7 PM. Earnings play a larger role today since there is no significant data on tap. HD already released and beat, and guides higher, up +3.1% pre-market, however, the upbeat news had little effect on S&P futures now at -3.5 about 2-1/2 hours before the opening bell. Other notable earnings include BBY, DKS and TJX providing a gauge on retail spending and CPB will tell us if the soup is mmmm, mmmm, good, or, if there is a fly in the soup.

The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets ahead, however, the 8 MA may stab down through the 34 this morning (reference this morning's chart). Bears got nothing unless the negative 8/34 cross on the 30-minute occurs. Watch UTIL 503.04, VIX 13.97 and SPX 1802.50 and 1788 to determine market direction.

Note Added 7:24 AM: BBY beats on EPS, matches the top line, but must be guiding lower since the stock trips, landing on the sidewalk rubbing its face into a dirty wad of gum. The bears eagerly kick BBY -6.3% lower pre-market. S&P's -4 now setting up for a potential test of the important SPX 1788 level after the opening bell.

Note Added 10:33 AM: SPX came down to test 1788 and bounced. Bears needed to eat more Wheaties. UTIL drifts lower towards 503.04 but it recovered. VIX is teetering on each side of 13 remaining under 13.97. Thus, the SPX staggers sideways today. The bulls may try for those 1800+ numbers today but the hourly and minute charts for equities are more favorable to sideways to sideways lower. Bears got nothing without the negative 8/34 cross on the 30-minute. A bullish long trader in the food sector asks the waiter, "what is that fly doing in my CPB soup?" The waiter replies, "the backstroke." CPB is selling off -5.2%, mmmm, mmmm, bad. Interestingly, soup is a comfort food. If there is a terrorism incident or other such mayhem, stocks such as CPB, CAKE and HSY catch a bid as folks seek a respite from negative news with soup, cakes and chocolate. To read a lot into things that may or may not be there currently, the disinterest and lack of sales in CPB may reflect a general complacency by the general public.  Folks likely believe that the chances for a terrorism or other major geopolitical event occurring are extremely low moving forward. This behavior would make a contrarian trader take notice.

Note Added 10:47 AM:  The 8 MA stabs down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead but the cross just occurred. Either the bulls have to spike the SPX vertical now to reverse the cross immediately or the bears will run lower holding the negative 8/34 baton proudly. Watch to see if the negative 8/34 cross holds, or not.  If so, bears are happy, if not, and the 8 moves back above the 34, bulls will rule. The next one-half hour to one hour is critical for markets. BBY is puking -9.1%. Copper is higher this morning.

Note Added 12:15 PM:  UTIL 502.50 failing 503.04 at 11:20 AM ushering in market negativity. The bulls are trying to push utes higher for a recovery so a back kiss should occur at 503.04 where price will make a more firm commitment up or down.

Note Added 12:25 PM:  UTIL 503.04.  What say you, utilities? As UTIL goes, so goes the markets. VIX 13.35. SPX 1793. TRIN 1.00 dead flat neutral unwilling to choose a side today.

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