Keystone's Morning Wake Up 9-15-11

Jobless Claims rise and Empire State Manufacturing is more negative. Industrial Production hits in a few minutes before the open but the main data point to watch today is the Philly Fed Survey at 10 AM. This is a market pivot point today considering how the data last month tanked the markets, so make sure you are sitting in front of the terminal for that one.

Yesterday, the retail sector moved up thru the key level mentioned, so the markets moved higher. Once the intraday high was taken out at 1180 around 12:30 PM, it was off to the races. The utilities, UTIL, then bounced above 427.21, a key number for this week as well, so the bulls did not look back.  Some leakage occurred into the close, traders anxious to lock in any profits after getting whipsawed day after day. Interesting to note that the typical OPEX week trade where you buy Tuesday to sell Wednesday worked again this month as it typically does, month after month.

Semi's have led the equities bounce but watch them and tech closely today; RIMM and ORCL will effect this trade.  The Euro news continues to be the market driver so if Merkel of Sarkozy smiles, the markets go up, if they frown, the markets go down.

Some technicals to watch today include UTIL 427.21, RTH 103.30 and CRB 338.30. Utes and retail are in the bull camp so the levels shown need to hold if the bulls want to run the indexes higher. If either of those numbers fail, then the market bulls are running out of gas.  The commdoties, CRB, currently bearish, need to move above the level shown to jump over to the bull camp and push the equities markets higher. This is a formidable task, however, considering current copper weakness and dollar strength.

The inflation data a few minutes ago does not make the deflation case yet so this tells you that Chairman Bernanke continues to have a wee bit of room before going full bore with QE3 strategies. As the dollar rises and you see CRB leak down towards 300, that will tell you when the Fed has to come in with guns blazing since we will be falling into disinflation and deflation.

For the SPX today, starting at 1189, market bulls win if the 1202 level is achieved. Buyers will enter the markets in force and you will see some dramatic upside follow. The bears need to push the SPX down to 1163, if so, the sellers will accelerate the markets lower, yesterday's euphoria will be long forgotten. A move thru 1164-1201 is sideways slop indicating markets in idle mode. If the UTIL and RTH levels above are maintained today, the equities markets will maintain upward buoyancy.  Remember, 10 AM is key today.

Note Added 9:20 AM:  Big announcement. A coordinated effort between the ECB and other world central banks, providing liquidity by offering dollar loans to Euro countries thru the end of the year, bounces equity futures, the euro bounces to over 1.39 (euro and equities move in the same direction), the 10-year yield bounces to 2.11% and gold continues along sub 1800.