Keystone's Morning Wake-Up 1/9/13

Markets may continue sideways today waiting for the ECB decision in the morning, about 24 hours from now. If Draghi cuts rates, the euro drops and so does equities.  If there is no cut, the euro will likely pop higher and provide buoyancy to equity markets.  Oil Inventories are released at 10:30 AM and are important since the drop in WTIC yesterday helped usher in market weakness. WTIC is at 93 and Brent is at 112, negative today, but elevated above the 90 and 110 pivots. The 10-year yield is 1.88% and an auction occurs at 1 PM.

The markets are in a stalemate since the bulls cannot move UTIL above 466.21 or GTX above 4950 and the bears cannot move RTH under 43.75, JJC under 45.72 or VIX above 16.30. One of these five parameters will flinch and that will send the markets in that respective direction.  MON and AA start the earnings season on an up note and that helps create GTX buoyancy.  Copper is up this morning which will send JJC higher. The market sentiment is strongly bullish and the broad indexes are maintaining an underlying bid. The SPX 1460-1461 support gave way but it will likely play an important role ahead.  The bulls need to push the SPX above 1462 and that will create an acceleration to 1468 and the highs from a few days ago.  The bears need to push under 1452 to create a downside acceleration which will target 1444.   A move thru 1453-1461 is sideways action today.

The 10:30 AM oil inventories and 1 PM note auction may create a couple blips in the markets but perhaps things remain sideways until tomorrow due to the ECB. Pay attention to the 8 MA and 34 MA cross on the 30-minute chart, currently favoring bears.