Keystone's Morning Wake Up 2/7/12

Here are some short and sweet notes for this morning and Keystone can pick up the action after trading gets underway today. The Greece drama continues with no end in sight; markets appear indifferent. The RBA (Reserve Bank of Australia) keeps rates on hold which was unexpected; another ease was expected.  Thus, this may deflate the commodities trading today. All eyes and ears are on Chairman Bernanke as he speaks at 10 AM EST, one-half hour after the open. Watch for any hints, or not, of quantitative easing since this will immediately impact markets.  KO (Coke) earnings hit this morning, then the Mouse House (DIS) after the bell. Consumer Credit data is released at 3 PM.

The week of trading should heat up now moving forward.  The China CPI is very important overnight tonight and will impact currencies, commodities and miners.

If the market bulls move UTIL above 453.69 today, the upside bull party will kick into gear again for another leg higher.  If UTIL remains below 453.69 and CRB remains above 310.50, as it is now and was yesterday with no change, then the markets continue to stumble along sideways.  If the CRB drops under 310.50, the market bears will finally be able to stop the upside market momo and hand the markets some noticeable downside.

For the SPX today, starting at 1344, closing at the highs yesterday, if the market bulls can simply provide green futures, even by a few pennies, this will be enough to accelerate the broad markets higher.  Alas, futures are red as this is written and slowly leaking lower.  The market bears need to push the SPX down to touch the 1337.50 level.  The 1337 level is key support and held yesterday favoring the bulls.  If 1337.50 is touched, however, about seven points lower, the downside will accelerate with large block sellers entering in force. A move thru 1339-1343 is sideways action.

Note Added 2/7/12 at 7:46 AM: Watch the Nasdaq versus SPX relationship today.  The current futures show the Nasdaq and S&P futures down an equal -0.31% currently. Yesterday the Nasdaq led lower early in the session which correlated to the market selloff.  Then the Nasdaq ran out of steam and the SPX was leading the downside so the broad market down move petered out.  Tech leads the markets.  Interestingly, in the final fifteen minute of trading Monday, the Nasdaq once again led the downside but time ran out with the closing bell.  Yesterday was also the lowest volume day for the indexes so the broad markets are floating upwards on vapor.  Watch the Nasdaq versus S&P relationship before the open and after to determine if the bears have legs to the downside since tech will lead the broad markets.