Keystone's Morning Wake-Up 5/2/12

The ADP job number laid an egg, coming in less than expected which weakened futures.  The SPX is projected to open down seven to nine points but this is short of the ten points needed to accelerate the downside. The lower rail of the channel shown on the 30-minute chart, at 1401-ish, should fail at the open. Thus, lots of price action is set up for the 1395-1401 area.  SPX S/R is 1415.32, 1413, 1410, 1408, 1406.64, 1406, 1404, 1403, 1399, 1397, 1395.73 (Wednesday only), 1394, 1391, 1389 and 1388. A sturdy support confluence is formed with the 20-day and 50-day moving averages on top of each other at 1385.77 and 1385.04, respectively. Markets would be in deep trouble if this 1385-1386 area is lost. Bulls will win today if the 1415 print occurs, bears win today with a downside acceleration on tap if the 1396 fails, 1395.73 if you want to be exact.

The dollar is stronger today, so market bears are happy, thus the euro is lower and commodities, copper and oil, as well as gold and silver, are all down. This creates the lower futures. CRB now printing a 306 handle well below the 311.75 the market bulls need to boost the markets higher. Watch SOX 418.50 today, remember all the drama yesterday around the semiconductors which rightfully pointed toward something rotten underfoot as the markets ran higher but semi's did not have the strength to help out. The market bulls have to have the cooperation of the semiconductors to move the SPX up towards that 1425 gap fill. If the bulls cannot move SOX above 418.50, they got nothing. Watch the 8 and 34 MA cross on the SPX 30-minute chart.

The Nasdaq futures are down 0.54% and the S&P's are down 0.54% so, neither tech nor the broad markets are leading lower. This hints that the bears may not have a lot of downside juice but the bulls do not have any strength to fight back either. Watch AAPL, now down a buck or so, since weakness in this high flyer will send the Nasdapple lower and fuel the bears. Factory Orders are at 10 AM and Oil Inventories at 10:30 AM creating market pivot points.  Lots of Fed talk again today so traders are lined up listening for hints of quantitative easing like drunks lined up at the bar. The ECB Rate Decision and Draghi Press Conference is in the morning, eastern time.