Keystone's Morning Wake Up 3/6/12

Short and sweet today; the opening will be hectic.  China lower growth projections, Israel-U.S. relations, and Greece and Europe ongong debt drama is weighing heavy on markets.  The S&P futures have maintained weakness all morning long.  Thus, SOX will likely stay under 410.10, providing bear fuel.  Watch SPX 1359, the bulls must defend this line in the sand. The bears must punch down thru and by the looks of the futures, the bears appear set to puncture 1359.  If the SPX stays under 1359 for about ten minutes or longer, Keystone's proprietary algorithm, Keybot the Quant, shown in the left margin, will likely flip short. If the SPX drops under 1359 but then pops back above after a few minutes, this tells you that the bears did not eat their Wheaties today and do not have the strength to take markets lower.

Watch volatilty, VIX, today to see how far upwards it wants to run. The VIX 20-day MA at 18.37 is a support and resistance level serving as an ongoing soap opera for the last several days.  Use this as a gauge of bull or bear success.  Bulls win if VIX stays under 18.37, bears win today if the VIX moves up over 18.37 and heads higher. Monitor Keystone's SPX:VIX ratio as well, now at 75.  If the 68 level fails the bears are happy, but if the ratio stays above 68, any market down move is suspect and will likely recover in quick order.  So high drama today in the markets.  If the market bears are going to push lower now is the time. A broad market turn appears imminent.