Keystone's Morning Wake-Up 5/18/12; Facebook or Faceplant?

The Facebook IPO circus parades thru town today. The most vocal pumpers on television and in media are all holders of FB shares already looking to cash out today.  Pump and dump in plain view for all to see. FB will be around for many years but trading is all about price and there are far better stocks to play than a telemarketing-advertising company where the insiders cannot get out the back door fast enough. FB is set to open for trading about 11 AM EST at $38. If FB finishes the day sub 38 it will have to change its name to Faceplant.

U.S. futures were up this morning then the news on the Fitch downgrade of Greece dropped the futures to flat line.  Spain is looking at placing a ban on short selling the banks. This news added stability to the futures markets and they have tracked steadily higher ever since.  The SPX starts the day at 1305 only 11 points away from the bull-bear danger line at 1294 that confirms the NYA 40-week MA signal that markets have now fallen into a secular bear market. The futures indicate a bounce, however. The CPC is at 1.45 which signals that a relief rally is needed now. All the complacency has now turned to fear, thus, the markets would bounce due to the contrarian response expected. The NYAD closed at an uber low -2245 that definitely needs to see some market upside today to relieve this extreme negativity. TRIN is exhibiting odd behavior since it spent the bulk of yesterday in bullish territory between 0.50 and 1.00 but the markets were red. The Trannies are down 4% this week which is a very dire indicator for growth moving forward. If the wheels of business are not turning, the economy and markets are in trouble. Quantitative easing, however, will change the mood.

Keystone's Inflation-Deflation Indicator is CRB/10-yr price = 289.55/100.266 = 2.89.  Under 2.9 says the economy now remains mired in Deflation. The 10-year yield printed under 1.70% yesterday. The asset relationship to start today is in the bulls favor since the dollar is finally red after two weeks of upside; dollar down = euro up = commodities up = copper up = gold up = silver up = equities up.

With the FB hoopla dominating the news, remember today is OpEx, so volatilty may be elevated in today's trade. The last hour of trading may be volatile. The way the markets move this afternoon on OpEx Friday typically sets up an opposite direction move for Monday. The main market mover remains Europe, specifically Spain and Greece, as well as Portugal, Hungary and Italy, these last three folks have forgot about with all the other turmoil ongoing. For today, the market bears need to see SPX 1294 to place a final nail in the bull's coffin. The market bulls need to move back to 1326 resistance to reignite the upside. The neckline at 1340 for the H&S pattern has not yet been back tested so a relief rally has potential to complete this task. The market bears have performed significant technical damage to the markets over the last two weeks so any bounce is viewed as a dead cat bounce, for now. A move thru SPX 1306-1325 is sideways action today.