SPX 60-Minute Chart 200 EMA Channel Rising Wedge Overbot Negative Divergence

One of Keystone's shorter-term signals is the 200 EMA cross on the 60-minute chart. The red and green circles show the last action along the 200 EMA and the move to announce bullish markets ahead occurred as the year began. The SPX has been well above the 200 EMA ever since. The bulls rush in to buy any tiny pull back but as price rises, the negative divergence remains in place, and overbot stochastics, signaling another spank down on tap. The long black rising wedge is squeezing in to push price out the bottom side. The 1498 support is key. The current print at 1413-1414 may serve as a head of an H&S pattern moving forward. The market bears will not be happy until the SPX moves under the 200 EMA. 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.

SPX Support, Resistance (S/R) and Moving Averages for Trading the Week of 2/4/13

SPX support, resistance (S/R), moving averages and other important levels are highlighted below.  The bulls are running strong and continue to test the 2007 highs daily. Friday's session creates new intraday and closing highs for 2013. The markets feel like 2007 and they sure are printing the same numbers. For Monday, the bulls need to push through 1514.50 to create an upside acceleration and a run to 1517 resistance then 1520 R.  The bears need to retrace Friday's orgy move and push under 1498 to create a downside acceleration and get their mojo back.  A move through 1499-1513 is sideways action.

The 12/11/07 top is interesting since this was the top that occurred after the SPX rolled over from the top at 1576. The SPX dropped and then popped to the 1524 before rolling over again and then it was all downside into the Fall 2008 crash. Thus, on the way up now, if the bulls continue to run, the 1523.57 is key R. The markets are running higher on global quantitative easing. Traders are chasing yield. The central banker's free money is pumping copper, commodities and dividend stocks higher fueling new asset bubbles.

·         1576 (10/11/07 All-Time Intraday High: 1576.09)

·         1565 (10/9/07 All-Time Closing High: 1565.15)

·         1556

·         1553 (10/31/07 Top: 1552.76)

·         1548

·         1540

·         1531

·         1528

·         1524 (12/11/07 Top: 1523.57)

·         1520

·         1517

·         1514.41 Friday HOD

·         1514 (2/1/13 Intraday HOD for 2013: 1514.41)

·         1513.17 Friday Close – Monday Starts Here

·         1513 (2/1/13 Closing High for 2013: 1513.17)

·         1511

·         1509

·         1505

·         1503

·         1500

·         1499.24 (10-day MA)

·         1498.11 Friday LOD

·         1498 (12/26/07 Top: 1498.85)

·         1495

·         1489

·         1485

·         1483.98 (20-day MA)

·         1481

·         1476

·         1475 (9/14/12 Intraday HOD for 2012: 1474.51)

·         1472.84 (200 EMA on 60-Minute Chart a Keystone Turn Signal)

·         1472

·         1468

·         1466 (9/14/12 Closing High for 2012: 1465.77)

·         1465

·         1461

·         1460

·         1457

·         1456

·         1453

·         1447

·         1446

·         1445.65 (50-day MA)

·         1444

·         1441

·         1440 (5/19/08 Intraday HOD for 2008: 1440.24)

·         1438 (9/13/12 Fed Announces QE3 Infinity)

·         1437.11 (100-day MA)

·         1435.98  (20-week MA)

·         1435

·         1433

·         1431

·         1430 (12/12/12 Fed Announces QE4 Infinity and Beyond)

·         1429 (11/6/12 President Obama Election Top)

·         1427 (5/19/08 Closing High for 2008: 1426.63)

·         1424

·         1422

·         1419

·         1418.73 (150-day MA; the Slope is a Keystone Cyclical Signal)

·         1416.49 (10-month MA)

·         1416

·         1414.27 (12-month MA; a Keystone Cyclical Signal) (the cliff)

·         1414

·         1413

·         1409

·         1406 (5/29/08 HOD: 1406.32)

·         1404

·         1403 (9/6/12 ECB Announces OMT Bond-Buying Program)

·         1402

·         1399.75 (200-day MA)

·         1399.23 (50-week MA)

·         1399

·         1397

·         1394

·         1391

·         1388

Keystone's Trading Week in Review and Path Ahead for Markets 2/2/13

On Friday, 1/25/13, the European banks handily meet LTRO requirements creating market optimism. German sentiment is better than expected. Draghi is interviewed in the morning and says 2012 was the rebirth of the euro.  The euro rallies higher, now well over 1.34, which sends futures markets higher.  The European debt crisis remains under the surface but the perception that things are improving is calming the markets. PG and KMB earnings beat. New Home Sales disappoint with lower than expected numbers but the prior month revisions are higher. The 10-year yield hits 1.95% with money moving out of bonds into stocks.  CAT and JOY, two China bellwethers sell off strongly.  Copper, oil and commodities move lower.  The markets continue to ignore any bad news and move higher into the afternoon from the 10-11 AM Fed money pump that occurs each day.  AAPL continues to drop falling under 440 intraday. XOM overtakes Apple as the largest market cap stock reclaiming the top spot. The tried and true old school company (Exxon) retakes the flashy company (Apple) after the sizzle flames out. Both will share the mantel moving forward. A shameful display of business television occurs when an argument between two large hedge fund activists, Carl Icahn and Bill Ackman, is aired over the public airwaves. Seasoned traders are amused at the display but the average person viewing the markets sees two billionaire cry babies complaining about how much money they make which serves to only worsen their opinions on investing and the stock market. The SPX is up eight days in a row, a pace not matched for five years.  The SPX closes above 1500, a key psychological level, and now the focus is on new all-time highs. Markets are having the best January in 20 years. For the week, the SPX is up 1.1% to 1503.  The Dow Industrials are up 1.8% this week to 13896. The RUT is up 1.4% to 905 and the Nasdaq is up a paltry 0.5% to 3150 on the week. Note how the small caps and tech are not showing strong leadership. Apple continues to sell off AH’s.

On Saturday, 1/26/13, violence escalates in Egypt on the two year anniversary of the initial demonstrations.  There are thirty deaths over the last couple days as the riots increase and the country becomes polarized. Geopolitical risk is not priced into the markets. Spain’s Rajoy says Germany should provide more help to the struggling euro nations. Merkel dismisses the comment saying Germany is already doing plenty.  S&P rating agency downgrades Illinois to the lowest rating of all States, now worse than California.

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On Monday, 1/28/13, Egypt declares a State of Emergency as the riots and chaos are growing out of control and the death count rises. Oil prices remain elevated with Brent oil at 113. Italy’s oldest bank, Monte Paschi, is in the spotlight since its bailout occurred without full disclosure of the bank’s financial situation. Draghi was involved with those decisions, so this may cause embarrassment or credibility problems for him as he attempts to right the European ship.  The Italian banks receive a large boost helping the Italian stock market. CAT, a key China bellwether, earnings beat but the guidance is lower and there is a big drop in back log.  CAT says the second half of 2013 should be better and provides such a large guidance range, so huge that a CAT dozer can drive through it, rendering the guidance worthless. CAT simply does not know what to expect this year. Companies are frozen in confusion due to all the central banker and political meddling in markets. The alleged China fraud and accounting problems are ongoing for CAT.  Fitch warns that a downgrade of U.S. debt may occur if the talks in Washington do not properly address the fiscal problems. Markets yawn ignoring any bad news. Durable Goods Orders are a blowout and bounce the futures higher, even though much of the increase was BA airplane orders. Pending Home Sales are much weaker than expected but the markets ignore bad news.  The markets are flat all day long.  The 10-year Treasury note yield hits 2% intraday. Moody’s cuts the Canadian banks including Bank of Montreal. Egypt continues to unravel as Morsi declares a curfew and requests talks to calm the turmoil. This meaningless rhetoric only inflames the protestors as they ignore the curfew and the protests grow.  The protestors say that Morsi has hijacked Egypt.  Oil price remains elevated.  After the bell, YHOO earnings beat.

On Tuesday, 1/29/13, France’s labour minister Michel Sapin says that France is ‘totally bankrupt.’.  The proclamation roils global markets as France scrambles to silence Sapin and perform damage control. Spain’s retail sales plummet. Spain will miss budget deficit targets due to the austerity measures. The austerity is destroying the economy which is already in a depression.  In this bazaar easy money world, however, traders pay no attention to bad news and only trade off good news. India’s central bank cuts rates as the global race to debase continues. The U.S. morning newspapers are plastered with headlines of optimism such as “Surging Stocks: Bears On Heels.” Newspapers often indicate key contrarian market turning points where too much euphoric optimism hints at a market top forming.  A USA Today article title highlights ‘Rational Exuberance’ in markets. PFE earnings beat. IP, the key paper company, is a miss. Case-Shiller Home Price Index shows house prices continuing to increase which further encourages the housing sector and markets. FOMC meeting begins. Consumer Confidence disappoints for the second month in a row now at levels not seen since November 2011, but the markets ignore bad news. The NYSE experiences a computer glitch that affects a limited number of stocks. Traders do not even notice the glitch since they are too busy buying with both hands without care or worry. These computer glitches will look interesting in retrospect in the future after the next flash crash occurs. The broad indexes are printing new multi-year highs each day. The SPX is at 1508. The Dow Industrials are only 50 points away from 14K at 13954. After the bell, AMZN misses earnings on both the top line and the bottom line. But instead of a selloff, Amazon jumps 8% in AH’s trading due to an improvement in margins. Bad news truly is good news these days.

On Wednesday, 1/30/13, Spain economic data is weak. Spain is rapidly deteriorating and recognizes that social unrest is now a serious concern. Frustrated and unemployed folks take to the streets. The Monte Paschi scandal remains in the news which may tarnish Draghi’s image.  Stanley Fisher, the Israel central banker, resigns unexpectedly.  Ninetendo (Wii) cuts the outlook and expects losses moving forward. The 10-year yield hits 2.03%. WTIC oil climbs to 97.86. Copper is catapulting higher along with commodities fuelling the recent market gains as global central banker easing is creating new asset bubbles.  The euro is over 1.35 a level not seen since December 2011 when the LTRO’s were announced. The major nations are in a race to debase so the euro is odd man out. Europe is in recession and depression with auto sales falling off a cliff. Draghi will need to weaken the euro moving forward to spur growth. Sapiem, an Italian oil services company, drops 40% in value. Interestingly, BAC sold millions of shares only days earlier. A stink is already rising from the ashes that smells like insider trading. Eurozone consumer confidence rises indicating that ignorance is bliss?  GDP surprises printing negative -0.1%, the lowest reading since December 2009. Two negative GDP quarters in a row constitute a recession. All the money printing and waste of U.S. taxpayer dollars over the last few years results in sickening negative growth. The Fed actions are harming the economy.  Markets were never allowed to correct properly.  Everyone wants the upside of capitalism but no one has the stomach for the downside, hence, capitalism no longer exists, the governments will always bailout companies with taxpayer’s hard-earned money.  Quantitative easing is digging a deeper hole but the Fed has no other ideas.  Markets leak lower as the session moves into the afternoon. The FOMC Rate Decision announces more of the same; the Fed will be accommodative for the foreseeable future. Markets are non-responsive to the news and continue to favor the bears today. The 10-year Treasury yield drops back under 2%.  The VIX moves up over 14. Oil remains elevated with WTIC near 98 and Brent over 114. The SPX drops six points to close at 1502 staying above the psychological 1500 level. The Dow Industrials were only fifty points from 14K but lost ground today closing at 13910. FB reports earnings after the bell beat on the top and bottom line, however, the stock is sold. FB usage is decreasing on the desktops and increasing on the mobile devices but producing ad revenue from the smaller screens continues to prove challenging. President Obama dismisses his Jobs Council.

On Thursday, 1/31/13, EOM. Deutsche Bank posts a three billion dollar loss but the capital requirements are acceptable moving forward.  German unemployment is better than expected creating hope that a recovery is on tap.  Spain is sold off hard with weak banks leading the way lower. Dollar/yen tops 91 not seen for over two years as Japan devalues the yen.  Dow Chemical (chemicals and plastics are the building blocks of a strong recovery, or lack thereof) misses on bottom line EPS and cites a slow China economy. UPS, the key shipping indicator for the global economy, misses on earnings citing a malaise across the shipping industry.  POT earnings and guidance are uninspiring. Copper weakens on the news.  The 10-year yield is 1.97% well off the 2.03% high yesterday.  Jobless Claims jump higher after the recent move lower.  The markets sell off to begin the day but the action is across the flat line for much of the day. A computer trade is identified milliseconds before the natty gas inventories which appears to show HFT (high-frequency trading) robots dumping natty gas futures milliseconds before the news release at 10:30 AM EST. The inventories increased which resulted in a natty gas selloff and big bucks for the HFT robot. The robots are superfast operating in a world of milliseconds. A future flash crash is probably far more likely than anyone realizes.   Keystone’s SPX 30-minute chart 8 and 34 MA cross indicator shows the 8 crossing down thru the 34 MA signaling bearish markets for the hours and days ahead. The session ends flat with the SPX dipping two points under 1500 at the close. Traders are waiting for the Jobs Report in the morning.

On Friday, 2/1/13, the China PMI is weaker than expected but shows a hair of expansion remaining in place. The HSBC PMI number was better than expected so global markets float upwards on copper buoyancy. Traders continue to follow the good news and toss the bad news aside. Spain lifted the short-selling ban on banks and they are sold off hard again today. The Spain markets dump 5% this week as European leaders tell everyone things are fine. The euro/dollar explodes higher to 1.3675 and the dollar/yen up to 92.2, phenomenal currency moves overnight. The higher euro sends equity futures higher.  The U.S. and Japan are in a race to debase while Europe stands by watching. Europe needs growth more than the other areas and the higher euro will only serve to hurt the manufacturers and exporters further. Draghi may have to take action next week. Eurozone unemployment rate is 11.7% remaining stubbornly high.  XOM earnings beat but MRK earnings disappoint. The Monthly Jobs Report disappoints with 157K jobs and a tick higher rate at 7.9%. The November and December numbers are revised upwards to over 200K. Traders wanted to see 200K today so instead the focus is on the higher revisions causing traders to buy the market. In addition, the higher rate means the Fed will print money indefinitely. The average hourly work week is flat and average hourly earnings lackluster so employers have no impetus to hire, they are getting by fine without needing any additional employees. The structural unemployment problem in the U.S. grows; 25 million people are either out of work or underemployed. The futures catapult higher on the weak news, the S&P’s up 10 and Dow Industrials up over 100 points.  The markets continue to ignore bad news and focus only on positive news bites. Consumer Sentiment and ISM Mfg Index is better than expected which provides further upward momo after the opening bell. Keystone’s SPX 30-minute chart 8 and 34 MA cross indicator shows the 8 piercing up thru the 34 MA to signal bullish markets for the hours and days ahead. The SPX punches out a new 2013 intraday high at 1514.41 and closing high at 1513.17. The Dow Industrials finished over 14K for the first time since 2007 making the headline writer’s job easy this weekend. The all-time Dow high is 14164.53 in October 2007 so the bulls only need about 150 more points. The euro moved above 1.37 before pulling back.  Higher euro = higher equity markets. The telecom sector is strong today as folks chase dividend stocks continuing to pump the dividend stock bubble.  Copper and commodities move higher over the last three weeks, taking the broad indexes higher, as the global central banker’s easy money policies create new asset bubbles. The utilities sector is lagging today.  During trading hours, video from Egypt shows thousands of demonstrators rushing Morsi’s palace. Fire bombs are thrown over the palace gates. A suicide bomber attacks the Turkey Embassy. Turkey is key due to the pipelines that move oil to and from the Middle East and Europe. Brent oil catapults to a 3-month high at 116.  WTIC oil moves higher to tag 98 before pulling back. Gasoline prices at the pump will increase due to higher moves in oil recently, many localities already commenting on nickel and more increases appearing overnight. It is remarkable to see the markets turn a blind eye to geopolitical events, not pricing in any worry or fear, sans the oil markets. For the week, the SPX is up 0.7%, the Dow Industrials are up 0.8%, the Nasdaq is up 0.9% and RUT up 0.7%. Tech and small caps are moving coincidentally with the broad indexes not showing leadership that should be expected for strongly bullish markets. The sequestration hits in 26 days.

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On Monday, 2/4/13, Factory Orders.

On Tuesday, 2/5/13, ISM Non-Mfg Index.

On Wednesday, 2/6/13, Oil Inventories.

On Thursday, 2/7/13, ECB Rate Decision and Press Conference. Jobless Claims. Productivity and Costs.

On Friday, 2/8/13, International Trade. Wholesale Trade.

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On Tuesday, 2/12/13, President Obama’s State of the Union address.

On Wednesday, 2/13/13, Retail Sales. Business Inventories.

On Friday, 2/15/13, Industrial Production. Consumer Sentiment.

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In February, Italy elections.

In February or March, the National People’s Congress convenes.  China President Xi Jinping and Premier Li Keqiang take over complete control and the ten-year transition of power is finished. China now sets inflation and budget targets moving forward. China will push to a domestic-led economy, private consumption, rather than an export-led economy, but a domestic economy will grow at a slower pace. The GDP projections are of particular interest, 2012 grew at an average 7.8% rate.

On Friday, 3/1/13, the Sequestration hits with one trillion in automatic spending cuts for government.

On Wednesday, 3/27/13, the Continuing Resolution (CR) is required to fund the government.

In March and April, the BOJ head’s will be replaced so stronger QE will continue. Perhaps a low in the Nikkei in January or February may provide an attractive entry for a long trade once the money-printing begins (weaker yen) in earnest.

On Sunday, 5/19/13, the 16.4 trillion Debt Ceiling hits.

In September, Merkel (Germany) seeks re-election and will not want to see Greece exit the euro before the election but will not care afterwards. Perhaps Greece and Germany will both exit the euro in the future.

Keystone's Midday Market Action 2/1/13; Dow 14K

The bulls are running again. The Dow Industrials printed 14K before pulling back.  Copper turned positive. Everything is going the bulls way once again. New money flowing in to start the month helps as well. Consumer Sentiment and ISM were a bit better than expected which helps maintain the elevated markets. The Sentiment was surprising since the Consumer Confidence number reported two weak months; the anticipation would be that Consumer Sentiment would be lackluster. The jobs report is nothing to be happy about, a paltry 157K that does not even handle the new folks entering the work force let alone add jobs.  However, traders continue to ignore any bad news and focus on the good news only. The higher job revisions for November and December carry the day. The 10-year yield dropped to 1.93% then recovered to 1.97%. Money is flowing into bonds and notes not out. So the bump in the equity markets are more due to momo players and new February money coming into the market, and perhaps Aunt Nellie placing her life savings in the market right now, rather than a rotation from bonds to stocks.  AAPL is down on the day. Mixed market signals continue. David Tepper, Appaloosa Management, who is calling for a huge market rally, just like he did in late 2010, due to all the Fed's easy money, is looking like an Einstein so far, a second Tepper Rally.

UTIL tested 475.49 today. A close above here will set up next week in favor of the bulls.  The SPX punched thru 1504 so it ran to 1511.  The HOD is 1511.42.  The 8 MA is surprisingly below the 34 MA on the SPX 30-minute chart still yet but it should pierce up thru at anytime. The only thing that would prevent this is a sharp market downdraft right now. TRIN is 0.81 favoring bulls so the markets will remain elevated unless the TRIN moves back towards 1.00. Keystone took the overnight profits on the NEM long trade exiting the position. The trade will pay for lunch today. Will look to reenter, NEM remains attractive.

Note Added 2/1/13 at 12:30 PM:  The euro popped above 1.37 in a wild short squeeze; the euro shorts are running for cover. Higher euro = higher markets.  Interesting drama today with UTIL 475.49. The bulls must push thru UTIL 475.49 to tke the broad indexes higher.  UTIL is now printing 474.83. Tom DeMark, a market timer receiving notoriety these days for calling a bottom in AAPL and a top in the SPX a week or so ago, said on a CNBC business news channel interview, that the same calls remain in place. Tom said Monday morning could bring a gap up to 485+ for Apple which would constitute an island reversal (reference the daily chart--the pattern is easy to see).  So Tom thinks you can buy Apple here for a long. On the SPX, even though price moved thru his 1492-1493 top target and continues higher, he still expects a roll over. Tom also said the Shanghai is close to an exhaustion move now. Interestingly, using the FXI as a proxy, this comment correlates with Keystone identifying the negative divergence with FXI and positive divergence with FXP. FXI moves higher with China and the Shanghai; FXP is the inverse ETF that moves higher if the FXI and Shanghai roll over. The SPX pushed thru the 1511 resistance; see if price is able to close above 1511 today, or not.  SPX S/R is 1505, 1511, 1516, 1518, 1520 and 1524 (12/11/07 top). Thus, the breach of 1511 opens the door to 1516.  The 8 MA pushed up thru the 34 MA on the 30-minute chart signaling bullish markets for the hours and days ahead, cheating the bears once again, not allowing so much as a one-day move for the 8 to stay under the 34. TRIN remains strongly bullish today at 0.84 so bears have no chance at a market reversal unless the TRIN climbs. VIX is under 13, traders are bullish expecting the upside to continue indefinitely.  Watch UTIL 475.49.

Note Added 2/1/13 at 1:52 PM:  UTIL 474.68.  Interesting. The SPX HOD is 1514.22. The Dow Industrials HOD is 14013.79.  The volume is lackluster today; the NYSE is at a run rate of about 85% of a days average expected volume, however, considering the new month in flows, volume will come on stronger at the close and should close above average today. Same old routine as the last couple weeks or so. The SPX punches out a new high but the indicators are not enthusiastic, setting up with negative divergence, which creates a spank down, and then bullish traders run in to push prices higher again. Typically, the negative divergence spank down is expected to have more legs. The hourly and minute charts are setting up with negative divergence again, same old thing, perhaps the action will become interesting into the close today. UTIL hourly and daily charts are setting up with negative divergence as well.  The Egypt turmoil grows as thousands of protesters are descending on Morsi's palace and fire bomb devices have been thrown over the walls of the palace. Amazing how traders are not paying any attention to geopolitical events. The rise in oil will raise gasoline prices at the pump.

Note Added 2/1/13 at 4:22 PM:  Traders had their eyes on Dow 14K from earlier this week and the headline writers have another easy weekend ahead; "Dow Hits 14K." The SPX places a new high as well going back to 2007 at 1513 with a HOD at 1514.41 at 2 PM. The TRIN sat at 0.85-ish all day long so the fix was in favoring the bulls. UTIL was very interesting today attacking the 475.49 mentioned this morning but unable to close above. The bulls must go through UTIL 475.49 to pave the way higher for the SPX.  UTIL closed at 474.53 so the bears have a feather for their caps despite the big up day. The UTIL 475.49 is important for all of next week, so, if you see UTIL move above at Monday's opening bell, the bears do not have a chance, the bulls will be running higher once again.  If UTIL sells off or stays under 475.49, the market bears are not giving up and are positioning themselves to growl strongly.

Keystone's Morning Wake-Up 2/1/13; Monthly Jobs Report

Happy February. The China PMI disappoints but remains a hair above 50 indicating expansion. The HSBC number released a couple hours later, however, thought to be more reliable, was up a touch so traders like this number better. Copper is buoyant but not the huge move higher that would be expected with better China news. The euro/dollar explodes higher towards 1.38, a phenomenal currency move overnight. Higher euro means higher equity markets and the futures are up ahead of the Monthly Jobs Report at 8:30 AM EST.  The dollar/yen jumps over 92 levels not seen since 2010 well over two years ago. The U.S. and Japan are weakening their currencies while Europe watches. The ECB meeting next Thursday will be a huge event. Europe needs growth and may force Draghi's hand to produce a rate cut. Spain is selling off again today as banks are hit after the short-selling ban is lifted. Eurozone unemployment remains stubbornly high at 11.7%.

But it is all about the Jobs Report today. The consensus is 165K jobs and an unemployment rate of 7.8%. Last months number was 155K. The ADP Job Report this week was 192K so this helps fuel the high expectations now in place. Traders are looking for a number north of 200K which may be priced into the markets. The enthusiasm has grown over the last couple days so there is an increased chance of a downside surprise. Most traders are on one side of the boat expecting a blow-out jobs number over 200K. The January 2012 number was north of 200K which excited everyone one year ago but it rolled over and things went downhill after that. Interestingly, the recent job cuts in the financial sector, thousands of jobs, do not appear to have had an impact. Granted many of the planned cuts will occur over time and through attrition, however, perhaps the financial layoffs will weaken the number. Construction jobs may have surged a bit further which would boost the number.

Markets are completely flat this week. Traders have been waiting for the jobs number all week long.  The Consumer Sentiment and ISM numbers at 10 AM will create a market pivot point so the morning offers lots of drama ahead.  The consensus in the markets is that a shallow pull back will occur, and yesterday may have been it.  When SPX 1500 gave way yesterday, more downside would have been expected so there is a supportive bid under the markets. With everyone expecting only a shallow pull back that should provide reason for skepticism.

UTIL 475.49 will provide an early guage for next weeks trading.  If UTIL closes near or above 475.49, then next week will be set up to strongly favor the bulls and the path to SPX 1520's. If UTIL is weak today and moves lower, bears can take comfort over the weekend. For the SPX today, starting at 1498, the bulls need to push up thru 1504 to create an upside acceleration towards 1511. The bears need only one point lower, to push under 1497, and this will create a downside acceleration that would surely slice straight down thru the strong 1495-1496 support in quick order.   A move thru 1498-1503 is sideways action but considering the data on tap, a direction will likely be chosen. The 10-year yield is 2.00%. A higher yield, 2.01% and higher will create happy equity bulls. A move lower in yield, 1.99% and lower, will create happy bears. The trio of data, Jobs, Sentiment and ISM will tell the tale.  Whoopsies daisies. Copper turned negative as this missive was typed.

Note Added 2/1/13 at 8:37 AM:  The deer remains frozen in the headlights. The Jobs Report is 157K jobs and 7.9% unemployment rate. The 200K number is on a milk carton. The rate bumps up a tick and the jobs number is disappointing. However, the prior two months were revised upwards, over 200K, so the markets are factoring that into the reaction. Futures are relatively tame, up about 4 to 6 S&P's before the news, now up 7 to 8.  The average hourly work week is 34.4 unchanged and average hourly earnings were up 0.2% compared to 0.3% last month. This is nothing to write home about and does not foretell an increase in hiring; companies are doing fine with the existing employees. The futures remain buoyant but the 10-year yield drops to 1.97% now recovering to 1.99%. WTIC oil is down at 97.32 but Brent is over 116 on the Middle East unrest. Pipelines move oil thru Turkey so the explosion is causing the move in Brent. Copper remains red. The Consumer Sentiment and ISM Mfg Index at 10 AM takes on added importance. Looks like the SPX will attack the 1504 level to try and bust up thru at the open.

USD/JPY Dollar/Yen Explodes Higher

Dollar/yen is exploding higher overnight printing 92.2.  The dollar/yen has not seen these levels for well over two years in 2010. The euro/dollar is jumping higher as well with the weaker dollar. Japan is on a mission to devalue the yen and they are succeeding so far (weaker yen drives the dollar/yen pair higher). A couple days ago it was a big deal for the dollar/yen to punch thru 91, note the attempts at the pink line before price broke up thru, but a couple days later the pair is now north of 92. The upward-sloping green channels are in play. The global race to debase continues with the U.S. and Japan determined to destroy their currency. Europe stands by watching since Draghi has not lowered rates to jump into the game, yet. The Q1 2013 period is creating epic economic history. 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.

EUR/USD Euro/Dollar Explodes Higher

The euro rocket launches overnight hitting 1.3675, a phenomenal currency move. In the global race to debase, the euro is left at the altar. The higher euro drives equities higher and overnight futures are up. The U.S. and Japan cannot destroy their currency fast enough, the dollar/yen is catapulting thru 92 now (weaker yen sends the dollar/yen pair higher), while Europe stands by watching. The funny thing is that Europe needs growth more than any other area of the globe and the higher euro will only serve to hurt the manufacturers and exporters further. Draghi, head of the ECB, did not even mention the possibility of a rate cut in the January meeting but he may have to change his tune quickly. The ECB meets on Thursday, next week, 2/7/13, which will be a key event. Q1 2013 is shaping up to be a turning point in economic and trading history. 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.