Keystone's Morning Wake-Up 5/31/12 EOM

The VIX is over 24 so expect more of these large up and large down days with plenty of market excitement.  The ADP Jobs Report is usually on Wednesday's but it was delayed one day due to the holiday and wiill be released in about fifteen minutes. This will provide insight into the Friday jobs number.  Jobless Claims and GDP are on tap as well. Chicago PMI is at 8:45 AM. Natty Inventories are 10:30 AM and Oil Inventories are at 11 AM, delayed one day due to the holiday. Futures project a higher start on tap with the S&P's up about 4 or 5.

The NYAD printed an uber low -2100 number and the TRIN spiked higher so these hint that a quickie bounce move is needed. Watch the SPX 30-minute chart, however, the 8 MA and 34 MA cross, since it is currently bear friendly. Today is the EOM so the monthly charts receive a new print.  The SPX 12-month MA at 1293.24 is the cliff edge for markets but if the closing print today is above the bulls will log another bullish market month.  The RTH 41.16 level is key today. Yesterday we saw the fickle RTH unable to commit to a side spending equal time in bull and bear camps.  Whichever way the RTH goes, so goes the markets today.

For the SPX, starting at 1313, the bears only need a two point drop, under 1311, to accelerate the downside. Thus, the economic data is important before the open.  The bulls need to recover yesterday's losses to reignite the upside, a diffcult task, so instead the bulls will simply try to keep the RTH above 41.16 to keep the markets elevated.  A move thru 1312-1330 is sideways action.  Oil and the 10-year yield were too big stories yesterday. The euro, $XEU, has a 123 handle and the dollar, $USD, printing over 83.   Copper took a beating and this is ominous for markets. The utilities are remaining elevated so this remains a feather in the bulls cap.  When the utes head lower that will signal broad market trouble.

Keybot the Quant, Keystone's algorithm, shows the algo number directly in line with the signal line so the robot is open to the possibility of flipping to the long side.  However, any market bounce currently has the look of a bounce to short.  Bear flag patterns are in place on many charts. The big economic data push today and tomorrow continues into the Monthly Jobs Report tomorrow morning. In a nutshell today, watch RTH 41.16 which will dictate market direction. Market bears need to push the SPX under 1311 and the path to 1300 will be locked in.

Note Added 5/31/12 at 8:20 AM:  ADP jobs number is up 133K but the consensus expectation was about 150K; thus, a bit disappointing.  Futures lose a smidge.  Jobless Claims and GDP on tap.

Note Added 5/31/12 at 8:34 AM:  GDP prints 1.9% which is nothing to be happy about. The futures lost all their gains but recover to the slightly green side.  The 10-year yield drops under 1.60% printing a 1.59% handle, truly epic markets occurring in real-time.