Monday, April 28, 2014

Keystone's Morning Wake-Up 4/28/14; Russia Sanctions; Pending Home Sales; HLF; BWLD

The bears receive downside fuel with weaker retail stocks. Bulls need RTH above 58.95 to receive the upside nod. Bears need either XLF under 21.77, JJC under 37.47 and/or VIX above 14.75 to receive downside juice. Keybot the Quant remains long. Bears need at least 2 of the 3 parameters (XLF, JJC, VIX) to turn bearish to create the conditions for the algorithm to go short.

Watch the VIX 200-day MA at 14.40 a critical bull-bear market signal. VIX is at 14.06 favoring bulls by 34 cents. Bears need VIX above 14.40, and especially 14.75, or they got nothing. The BPSPX remains on a market sell signal (see this morning's chart for further study). A Dow Theory non-confirmation remains since the Dow Industrials cannot print new highs this year to confirm the upside in the trannies (reference this weekend's chart for further study).

For the SPX starting at 1863, the bulls need 15 points today to touch the 1878 resistance level to create an upside acceleration, a difficult task but not at all impossible. S&P futures point to a gain of from +5 to +9 for the SPX at the opening bell. Bears only need three points lower, to push under 1860, to accelerate the downside. This is the important 1859-1860 support level highlighted in this morning's chart. The 1859 is strong support and the 200 EMA on the 60-minute is 1860.48. The SPX is above the 200 EMA signaling bullish markets for the hours and days ahead so bears got nothing until they receive the negative 200 EMA cross under 1860.48. A move through 1861-1877 is sideways action for Monday.

Key SPX S/R is 1897, 1891, 1884, 1878, 1872, 1868, 1859, 1848, 1841, 1831, 1828, 1815 and 1808. Markets are not reacting negatively to the news of new sanctions against Russia today. Sanctions, schmanctions. More bluster. Bulls are fine above 1859-1860Bears will growl strongly under 1859-1860. Pending Home Sales are 10 AM. Dallas Fed Mfg data at 10:30 AM. HLF and BWLD earnings after the bell.

Will geopolitical turmoil ever matter to traders and investors? Bulls need stronger retail stocks. Bears need weaker banks and copper and higher volatility. Watch RTH 58.95, XLF 21.77, JJC 37.47, VIX 14.75 and SPX 1878 resistance and the critical 1859-1860 support to determine market direction. April began at 1872.34 so price may want to play around at this level into month-end on Wednesday. The 20-day MA is 1862.39. The 50-day MA is 1858.35

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