Monday, June 23, 2014

Keystone's Morning Wake-Up 6/23/14; PMI's; Existing Home Sales; MU

The bears are slapped in the face day after day for nearly two weeks. Fed Chair Yellen stokes the bull fire by cheer leading stocks last week professing that the stock market is undervalued. If you need any more evidence that free markets are non-existent look no further. Equities simply move higher on the Fed and other central banker money printing. US futures are flat moving towards the first day of trading this week. Long traders are giddy drinking Fed wine and proclaiming that the Dow 17K milestone will print today.

Seasonality-wise, the week after OpEx in June is a very weak week. This month is odd, however, since the trading month began on a Monday rather than mid-week. This pushes the expected seasonal weakness into the end of month and quarter (EOQ2) where window dressing would be expected creating market lift. Since most funds probably own the successful stocks this quarter already, the window dressing effects may be muted this time around. To summarize, based on seasonality alone, market weakness would be expected this week with some lift potential middle to late week due to Q2 window dressing.

Copper was the dagger in the bears heart last week and continues to move higher today due to the rosy China PMI data. Through all this market roller coaster turmoil, Keybot the Quant remains long for the last month. Watch JJC 37.60 and RTH 59.00 for any potential cracks in the bull armor. For the SPX starting at 1963, the bulls only need one point, to touch the 1964 handle and bingo, another several-handle upside move is on tap taking price to 1970. The bears need to push under 1959 to accelerate the downside. A move through 1960-1963 is sideways action and very unlikely considering such a tight range. Bulls win above 1964. Bears win under 1959.

The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead so the bears got nothing unless they create a negative 8/34 cross. The sentiment indicators, VIX, CPC and CPCE continue to verify the rampant market complacency and fearlessness. This is also backed by the parade of pundits across the television screens each day one calling for a higher stock market than the other. The Fed booze is flowing like water and long traders are now shooting up on the crack cocaine easy money that Yellen promised last week.

Equities will pivot at 10 AM today on the Existing Home Sales.MU is a darling of long traders with funds maintaining strong bullish exposure so the earnings after the closing bell are important. Consumer Confidence is tomorrow morning a key monthly market metricBegin watching the June starting number at SPX 1923.57 since there are only six trading days remaining in JuneNext week is a 4-day holiday-shortened week with the July 4th holiday on Friday.

Bulls are cruising with JJC above 37.60 and RTH above 59.00. The upside party will continue with SPX 1964. The bears need to push copper and the retail sector lower, the SPX under 1959 and/or create a negative 8/34 MA cross on the 30-minute chart, otherwise, they got nothing.

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