Keystone's Morning Wake-up 4/17/12

GS earnings look great but traders are ho-hum with price lower pre-market. GS will likely trade up as the day moves along.  KO and JNJ earnings were well received with both up pre-market. Housing Starts, one of Keystone's key monthly indicators, were 654K, a healthy number, use 600K as a guide moving forward from here each month.  This is the lowest number since October but all these numbers have been in the same area.  Keystone's internal stuff shows that the housing market pulled out of the double dip scenario in February but it can easily fall back.  SRS is the double short inverse for real estate and that remains an attractive long play moving forward, thus, sideways to sideways lower housing starts would be expected moving forward based on the SRS chart. The 2-year Spain auction went okay which buoyed the futures.

For the technicals today, watch VIX 19.00, XLF 15.09 and SOX 421.50 since these three levels will likely impact trading the most.  VIX starts at 19.45 so see if the first prints are sub 19, if so, the bulls are happy and pouring drinks. The bears need to keep VIX above the 19 level.  XLF starts at 14.26 so watch the extent that GS earnings affect the financials sector.  Bears need to move the XLF under 15.09 and bulls need to keep it above.  SOX begins at 417 in the bear camp. Bulls need to move it above 421.50 which will signal extended upside for the broad markets. Bears need to keep the socks under 421.50. AAPL is up a smidge pre-market so this will help the market bulls, since Apple is the markets.

For the SPX, starting at 1370, the bears need to push under the strong 1366 support level, if so, the broad markets will accelerate lower.  The futures, however, are projecting an almost nine point jump on tap for SPX.  The bulls need to push above 1379.50 to accelerate the upside for the markets. Note that the futures places price directly at this level for an early test.  A move thru 1367-1378 is sideways action.  Look for price action at the 50-day MA at 1376.60.  SPX S/R is 1388, 1386, 1382, 1379.50 (today), 1378, 1376.60 (50-day MA), 1375, 1372, 1370.58, 1370, 1368, 1366, 1363.61 and 1363. The S&P futures are up 0.76% and the Nasdaq is up 0.56%, thus, the upside move for the broad markets should be muted since tech is not leading the upside. Focus on VIX 19 and XLF 15.09 in the opening minutes which will tell the market story.