Keystone's Morning Wake Up 2/6/12

The Greece drama continues along to no one's surprise. The deadline dates are meaningless at this point.  The markets may finally respond to the uncertainty today.  Even though the U.S. futures are lower currently, the Nasdaq is not leading the S&P's to the downside so this limits any selling action. Watch to see if tech accelerates any weakness, or not.

There is no economic data today but Fed's Fisher will speak at lunchtime.  Keystone was waiting for the RBA (Australia) rate decision but it is tonight, not overnight last night.  Pesky time zones. So the RBA move this evening will impact currencies, commodities and miners. Watch YUM earnings after the bell today since the numbers serve as a great proxy for China's economic activity.  YUM owns brands such as KFC, the Colonel's chicken, Pizza Hut and Taco Bell, and is continual expanding in China, especially the popular KFC.  But, are the stores expanding still yet or is business dropping off? The results this afternoon will provide the answer.

Keystone highlighted some of the very short-term indicators such as CPC at a complacent 0.77, TRIN at an uber bullish 0.59 (which typically results in a snap back), NYAD printing numbers towards the top end at +2100 typically requiring retracement, NYHL negatively diverged ready for a smack down, NYMO negatively diverged, and volatility ready to pop, all add up for the bears to at least attempt a market move lower.

UTIL 453.69 (utilities) and CRB 309.50 (commodities) are very important today and this week.  If market bulls break up thru UTIL 453.69, the broad markets will run higher.  If UTIL stays under 453.69 and CRB stays above 309.50, as is currently the case, markets stumble sideways.  If UTIL stays under 453.69 and CRB drops under 309.50, strong broad market selling will occur finally placing a short term top on the rally.

For the SPX today, starting at 1345, with red futures currently projecting a loss of about six or seven handles, will send the SPX lower to test the 1337 support area. So perhaps a lot of action today will center around 1337.  For the market bears to get the downside momo going, they need the SPX to lose the 1326 sturdy support area today which is nearly 20 points lower, a formidable task. A move thru 1327-1344 is sideways action.

The Superbowl Indicator sees the Giants as the winner which means the markets will have a healthy up year ahead, but, in 2008, when the Giants won and the same prognostication was projected via the indicator, the markets experienced the epic crash.  Seasonality is fun to watch but always view these indicators with a grain of salt.