Keystone's Morning Wake Up 7-5-11

The grills are quenched, the ground is littered with firecracker remnants and the patriotic music fades as the new trading weeek begins this Tuesday morning. The data, ECB decision and key jobs report is weighted later in the week so perhaps a sideways posture for the markets, to digest those big gains, is in order for the first couple days this week, with the excitement probably occurring Thursday and Friday.

The financials and semiconductors rose from the ashes late last week to give the broad markets the continued push higher.  For today, the SOX, now at 419.11, needs to stay above 416.71 to keep the market bulls happy.  The XLF, now at 15.63, needs to stay above 15.42 to keep the market bulls happy. If either of these move under the values shown, the broad markets will trail off sideways to sideways down today.  If both stay above, that will continue to allow buoyancy in the broad markets.

For the SPX today, the market bulls continue to have the wind at their backs.  Bulls only need to push a point or two higher, to touch the 1341 handle, and it will be off to the races for the upside again.  The futures this morning were hinting that this would occur but over the last hour, not so much. The market bears simply need to stop the bleeding after that huge run-up last week.  To do this, the bears need to prevent that 1341 handle from being touched today.  If so, they can eek out a sideways move thru the 1319 to 1339 range. Market bears cannot get any significant downside to occur today unless they can move under 1319. Factory Orders at 10 AM is a potential market pivot area today.