Keystone's Morning Wake Up 9-1-11

Jobless Claims continue along in the 400K area, the four-week moving average above 400K as well. The high unemployment is a big drag on any recovery. Companies are holding on to their core employees but how long can that continue if many are logging in overhead hours rather than billable charges? The ISM manufacturing data is out a half hour after the opening bell so watch the energy sector response. This data is a potential maket pivot point.

The President and Congress continue their petty behavior as their relaxing vacations draw to a close. The clown show begins anew with both sides not even able to agree on scheduling. The President targeted next Wednesday for his jobs speech, fully aware of the pre-scheduled republican debate night. This type of petty behavior is casting serious negativity on global stock markets as well as dragging the psyche of the American people lower each day. This junior high school behavior will continue to cast a dark cloud on markets; folks lose more and more confidence in the leaders each day. September is known as a bad stock month and with the President and Congress budget talks and bickering starting up again, market optimism is missing from the agenda.

Ignoring these distractions, the technicals will lead the way as usual. Yesterday the bulls pushed the retail, copper and commodities sectors higher into bullish territory, as perceived by Keystone's proprietary algo. Today we see if these levels can hold, or not.  Watch RTH 104, JJC 54.6 and CRB 342. These three indicators will show you the direction of the broad markets today.

For the SPX today, starting at 1219, the bulls need to touch 1231 to keep the party going. If 1231 is touched, the 1233 level will be quickly tested and the bulls will thrust up thru for several more handles. The market bears need to drive lower to push under 1209.35. If this level is lost, the bears will accelerate the losses in short order. A move thru 1210-1230 is sideways slop with no resolution.