Keystone's Morning Wake Up 11-9-11

Lots of excitement this morning as Italy bond yields climb higher and higher. The Italy 10-year yield moved over 7% a couple hours ago and kept on going now near 7.5%.  Wild day on tap today. At 9 AM, the diesel fuel numbers are available for the trucking sector. This will shed light on the economy since fuel usage equates to shipping which equates to the economy.

The markets open at 9:30 AM and so does Chairman Bernanke's mouth for a morning talk. Wholesale trade hits at 10 AM, then Oil Inventories at 10:30 AM. This sets up a dramatic first hour trade. Then the smoke will clear until the 10-Year Note Auction at 1 PM.  The Crop Report is out today so the ag sector will be active.

As if the drama was not heightened enough already, the Emergency Alert System (EAS) will be tested at 2 PM this afternoon.  A one minute test will intrerrupt communications lines and foster increased Twitter and blog action as we usher in a new era of Big Brother.

Earnings continue in full swing. GM just hit with a beat on the bottom line and the top line is in line with estmates, no doubt employees had to search the sofa cushions in the customer lounge to help meet projections.  GM pre-market is down a buck. Cisco earnings are no tap today and trading in CSCO will impact tech in general.  A gauge on dollar stores, retail, coffee, infrastructure and natty is also provided thru earnings.

Cutting thru the drama and only dealing with the technicals, SPX 1255 is very important at the open. If the 1255 handle is lost, the markets will move further south in short order and usher in sustained bearishness today.

Most imporantly, watch volatility. If the VIX moves above 30.35, the down side move in the broad markets is real and a large down day will be on tap.  If the markets sell off large as the futures currently show, but the VIX does not move above 30.35, then the market bears got nothing. The down side will moderate and recover. VIX 30.35 will tell the story as the opening bell rings.  Chairman Bernanke will clear his throat to talk, washing down a jelly donut with taxpayer-provided freshly-squeezed orange juice, brushing the powdered sugar from his neck tie.