Keystone's Morning Wake-Up 4/9/12

Futures are remaining at the lows seen on Friday morning after the disappointing Jobs Report.  China CPI is 3.6% coming in hotter than expected, above the 3.4% estimate.  The Asian markets sell off since many traders were already banking on stimulus measures but this becomes less likely considering the data.  The Nasdaq futures are down 1.2% with the S&P's down 1.3%, thus, somewhat coincidental with each other. This hints that the markets may level off and flat line today after the intial opening sell off. If the Nasdaq starts to lead lower, then the broad indexes will continue lower.  If the Nasdaq lags the S&P, as the futures currently show, this will help the bulls stop the bleeding.

For the SPX today, two critical levels require monitoring; 1388-1389 which represents strong horizontal support as well as a key level representing one of Keytone's turn signals, and, 1370-1372 which represents strong horizontal support and the 50-day MA. To gauge the extent of the market pull back, watch CRB 312, UTIL 464.68, JJC 48.87, SOX 423.50, all are currently representing the bears. If the bulls try to bounce the markets, and the dip-buyers jump in to save the day, watch these four sectors, especially JJC 48.87 and SOX 423.50. If a bounce occurs for the broad indexes but none of the sectors recover, the bounce is simply an opportunity to press the short side harder. If the bulls start to regain control of any of these sectors, then the broad markets can recover.

CRB begins the day with a 304 handle.  The dollar is stronger (bear friendly) and copper is lower. This action will take CRB and JJC out of the game today and embolden the bears. WTIC oil broke down thru 102, so a move to 98 may be on tap.  The 10-year Treasury is now down to 2.03% with a move under 2% now appearing imminent. Even the Mouse House, DIS, provides no love, receiving a downgrade today and this is a member of the Dirty Thirty (Dow Industrials). Pre-market, DIS is set to lose a point, so using eight as a rule of thumb, this means that DIS will contribute to at least eight points of the Dow loss at the open. The Dow is set to drop under 13K at the bell.

AAPL is down over seven bucks in the pre-market (recieving a downgrade from BTIG) so this may help the Nasdaq gain momo to the downside and create a sustainable down day. In a nutshell, the bears have the ball, for Monday, watch SPX S/R at 1388-1389, 1386, 1378 and 1370-1372, and also continuously monitor CRB 312, UTIL 464.68, JJC 48.87, SOX 423.50, and Keystone's SPX:VIX to see if 68 is breached, or not. Chairman Bernanke speaks this evening and traders will be listening for any comments on the weak jobs data.