Keystone's Morning Wake-Up 8/23/12

The China Flash PMI came in at under 48 a drop from 49.3 in July, showing slowing growth and demand. A China official says "China is at the beginning of a harsh winter."  One wonders if he means a Kondratieff Winter?  China's factory output is slowing.  In this perverse market, traders are encouraged that China will provide more stimulus, so copper, commodities, and thus, equities, move higher. Thus, the FOMC Minutes pledge for stimulus as well as China overnight causes copper to run higher which will provide broad market buoyancy. Fed's Evans also says today that China and the Fed should provide more easing. They all must be smokin' the crack they provide to goose the markets.

Today, European leaders are meeting to discuss Greece.  Germany's Merkel and Schauble are playing good cop-bad cop, Schauble reading Greece the riot act, which sets up Merkel to ride in on a white horse to save the day.  The European debt crisis saga is political theatre. The Schauble comments caused markets to hesitate at 5 AM EST but futures remain buoyant overall. Tech is not showing broad leadership to the upside so far so any market move higher would likely not have much oomph. Merkel and Hollande are scheduled for dinner in the upcoming hours so perhaps a tape bomb will hit as a result of their musings from the free buffet table.

Jobless Claims will hit in about an hour. Then PMI data. Look for a market pivot point at 10 AM with the New Home Sales and FHFA Home Sales data releases.  Watch JJC 43.61, UTIL 472, SOX 389 and SPX 1416 (bullish acceleration will occur to 1419 and 1422) and 1407 (bearish acceleration thru the strong 1406 and 1403 support levels with sub 1400 on tap) to determine broad market direction today. This evening, at 7:30 PM EST, watch the news wires from Australia's RBA and note any impact on copper and commodities.