Keystone's Morning Wake-Up 10/29/12; Hurricane Sandy; U.S. Markets Closed

European trading is thin in response to the U.S. markets closure. Rajoy and Monti meet today. Spain continues to delay the bailout request but Italy wants the request to occur asap. The ECB bond-buying cannot begin until Spain requests the bailout.  Italy is looking out for its own interests since the bond-buying will help their debt situation, hence, they are encouraging Spain to forge ahead. The worries over Spain, light volume, as well as the hurricane, are creating global market negativity. Boiling down the charts and information since the Friday close, keep an eye on the following parameters to determine broad market direction moving forward;

• Watch the euro, $XEU, the 1.29 level; below and the equity bears are happy, above and the bulls are happy. 1.2880 signals market trouble deepening and 1.2830 signals significant market turmoil. The euro moves in the same direction as the equity markets, inverse to the dollar, $USD.
• Watch the 8 MA and 34 MA cross on the SPX 30-minute chart (reference the Turn Signal page on this site). The 8 is under the 34 right now, which is bearish for markets moving forward, but only by a hair.
• Watch RTH 44.47. The retail sector is bearish and shows signs of rolling over. The bears are happy with RTH under 44.47 since it causes broad market bearishness. Above 44.47 will make the bulls smile and create a recovery rally.
• Watch GTX 4895. The commodities sector is in the bear camp but only by a hair. Bears want GTX to remain under 4895 and head lower, bulls want GTX to move back above 4895 to create a recovery rally.
• Watch XLF 15.60. The financials sector is bullish currently, above this level, and contributing bullishly to markets. If the 15.60 fails, the bears will rule the markets with the SPX dropping well under 1400.
• When trading resumes, watch SPX 1403 and 1417. If the bears take out the uber strong 1403 support level, the markets will drop far lower.  The 1403 support is the Draghi put level (a floor of support for the broad indexes) where the OMT bond-buying program was announced; markets are in for a world of hurt should it fail.  The first stop lower would be in the 1371-1377 support zone. The bulls need to punch up thru 1417 which will create an upside acceleration thru 1419 and upward to test 1424 resistance. A move thru SPX 1404-1416 is sideways action. 

The euro is at 1.2911, slipping below 1.29 this morning, but recovering, now dancing across the psychological 1.29 level. The dollar is higher. S&P futures are down eight. The 10-year Treasury yield is at 1.73% well off the 1.80% and higher levels a week ago. A drop in yields reflects the rise in note and bond prices, as money drifts from the equity markets into perceived safety. Copper, a key global enconomic indicator, is dropping like a stone. Lots of excitement is ahead. Keep the car in the garage and instead prepare the canoe for service.

Note Added 10/29/12 at 8:33 AM:  Personal Income and Spending data is released as scheduled, albeit a minute late.  No great shakes to markets.  The euro is 1.2895. The 10-year yield is 1.72%. The S&P's futures are down 9.40, -0.67%.  The Nasdaq is down -0.88%. Tech is leading the broad markets lower which is bear-friendly. Futures markets will close in about 40 minutes at 9:15 AM EST and it is currently unknown when they will reopen (6 PM EST (5 PM CST) would be the targeted opening).

Note Added 10/29/12 at 9:22 AM:  Futures close with the S&P's at -5, Dow -60 and Nasdaq -15.  The 10-year yield is 1.71%.  The euro is 1.2900 not tipping its hand on which side of 1.29 it prefers.  Copper continues bleeding.  The waiting game begins.