Keystone's Morning Wake Up 8-17-11

DELL took the pipe after hours last night. DE beat by two pennies but pre-market shows it trading down 2% currently. CAT, DE, JOYG are excellent bellwethers for the global economy, thus, this deer may be road kill for the recovery.  Europe remains the 900 pound gorilla in the room.  Merkel and Sarkozy, now assuming a 'Merkozy' moniker, as media types add pizazz to their stories, say that taxation on financial transactions is planned. Banks sold off on the news.

The PPI hit minutes ago, futures paring back gains. Oil inventories are very important this morning and may provide a pivot area for the markets. Fisher speaks after lunch today so watch for his words.

Keeping things simple, for the SPX today, if it moves over 1204.22 after the open it plans on running higher several handles in short order boosting the recovery rally. The market bears need to push under 1180.50 today if they want to reignite the negativity. A range of 1181-1204 is sideways slop. The SPX:VIX ratio is above 35 and as long as that remains, the bulls are creating market buoyancy.  If the ratio loses 35, the bears are definitely regaining control of the markets. If the indexes move higher, watch for UTIL 429.81.  If the utes move above 429.81 today, or any remaining day this week, that signals that the recovery rally is real, until then, the bulls and bears duke it out.

Thus, watch SPX 1204.22 and 1180.50, SPX:VIX 35 and UTIL 429.81; these compadre's will tell you everything you need to know for today's broad markets.