Keystone's Midday Market Action 10/25/12; AMZN; AAPL

The markets are set to bounce at the open. Watch RTH 44.47 to gauge the strength of the move. If RTH moves above 44.47 the move has legs, if not, the rally will fade.  Likewise GTX 4895. If GTX moves above 4895 the rally has legs, if not, the move will fade.  Watch the 8 and 34 MA cross on the SPX 30-minute chart as posted this morning. The rally has legs if the 8 MA crosses up thru the 34 MA.  The BPSPX is on the verge of dropping under 70% which reinforces a strong market sell signal so check that each evening.  Watch the slope of the SPX 150-day MA since it is flattening now and may roll over to a negative slope which would be a cyclical bear signal moving forward.  Likewise the UPS 20 and 50-week MA cross which is on the verge of crossing to signal a cyclical bear market, but not yet.

Pending Home Sales are at 10 AM, Natty Gas Inventories 10:30 AM and the Kansas City Mfg Index at 11 AM. The 7-Year Note Auction is at 1 PM.  AMZN and AAPL report earnings after the bell today. Apple's earnings and conference call is 5 PM EST. A Bradley window opens today for a market turn to occur at anytime over the next ten trading days but the turn would  be more expected next week.  If markets rally from now into next week that turn may manifest as a down move next week. If today's rally peters out and markets stay flat to lower into next week, the trend change may be to the bullish recovery rally side instead. Keystone will not be around in the afternoon today so use the above metrics to gauge the strength of the market recovery rally.  Today, we see what the bulls got.  SPX S/R is 1424, 1422, 1419, 1416, 1413, 1409, 1406, 1404, 1403.44 (20-week MA), 1403 and 1399. A move up to 1419 is no biggie for the bears. If the bulls can punch up thru 1419, however, that would encourage further upside. The euro is at 1.2985.

Note Added 10/25/12 at 10:16 AM:  RTH ran upwards, and a penny or so thru the 44.47, but then reversed and is now sitting at 44.32.  GTX is at 4866 under the 4895 level the bulls need to create happiness.  The SPX ran upwards and bumped its head on 1419, now printing 1418.  The 1422 and 1424 may be in play today.  The 8 MA remains under the 34 MA on the 30-minute chart favoring bears, for now, keep watching it all day long. AAPL is a smidge red. AMZN is flat. The COMPQ is up 0.59% while the SPX is up 0.64% so tech is not leading the broad indexes higher so the bulls probably do not have much oomph today.  The VIX is at 17.5, remaining elevated, playing around at the 200-day MA at 17.83.  The elevated volatility, here and higher, will start to create wild intraday price swings, and large day to day price swings, so the action may become quite turbulent moving forward. The earnings season is a circus.  If the earnings beat, the stock is rewarded by staying flat.  If the earnings meet or miss, or if one word is misplaced on a statement, look out, the guillotine falls and the stock's head lands in a basket. Some stocks are getting hit from 5% to 25% after their earnings releases.  BBY is the latest culprit this morning although their news is due to restructuring. As a rule, company layoffs are great for a stock price since it means expenses are lowered and the company is moving towards a lean and mean structure, all good. But a shake-up at the top will lose the confidence of traders, the perception is no one is steering the ship, and the stock will sell off.  Keystone continues to like his longs; AMD, BBY and DNDN and will continue adding as time moves along. For now they are simmering on the back burner.  The euro is 1.2970. If the euro is not enthusiastic, then there is no reason for the markets to be enthusiastic. Reference this morning's euro chart and see that the 1.2925 is the bottom rail of the triangle and would start downside trouble for the euro. Down euro = down markets.  Up euro = up markets.

Note Added 10/25/12 at 11:17 AM:  Markets bumping along today.  The COMPQ is now leading the SPX by a hair. If tech starts to outperform to the upside today it will pull the broad indexes higher. Copper is negative.  WTIC oil is negative at 85.57.  The euro continues to slowly leak lower now at 1.2956.

Note Added 10/25/12 at 11:29 PM:  The Dow Industrials turn negative.  Tech is not leading the downside, however, the bears will need that to happen to drive the SPX down for a potential test of the uber important support at 1403.  The SPX is fighting the strong 1409 support right now.  The euro is 1.2944....

Note Added 10/26/12 at 6:10 AM:  AMZN and AAPL disappointed on earnings after the closing bell. The iPad and iPhone sales are weaker than expected. AAPL went under 600 in the AH's trading.  Asian markets sell off on the the tech weakness. S&P rating agency downgrades BNP Paribas (France banks).  The Libor probe expands with more bank subpoenas on tap. Europe is selling off.  The euro is now at 1.2920 testing the bottom rail of the triangle Keystone described yesterday (simply type 'XEU' into the search box above to bring up the euro chart). S&P futures are down 11 printing at the overnight lows. Copper, gold and oil are all lower.  The euro is now 1.2916.......

Note Added 10/26/12 at 6:31 AM:  The euro is 1.2908..... 1.2905 .....see if it breaks the psychological 1.29 level. S&P's are down 11. GDP is two hours away.

Note Added 10/26/12 at 6:49 AM:  The euro lost 1.29 now printing 1.2893. S&P's are off 12.