Keystone's Midday Market Action 2/1/13; Dow 14K

The bulls are running again. The Dow Industrials printed 14K before pulling back.  Copper turned positive. Everything is going the bulls way once again. New money flowing in to start the month helps as well. Consumer Sentiment and ISM were a bit better than expected which helps maintain the elevated markets. The Sentiment was surprising since the Consumer Confidence number reported two weak months; the anticipation would be that Consumer Sentiment would be lackluster. The jobs report is nothing to be happy about, a paltry 157K that does not even handle the new folks entering the work force let alone add jobs.  However, traders continue to ignore any bad news and focus on the good news only. The higher job revisions for November and December carry the day. The 10-year yield dropped to 1.93% then recovered to 1.97%. Money is flowing into bonds and notes not out. So the bump in the equity markets are more due to momo players and new February money coming into the market, and perhaps Aunt Nellie placing her life savings in the market right now, rather than a rotation from bonds to stocks.  AAPL is down on the day. Mixed market signals continue. David Tepper, Appaloosa Management, who is calling for a huge market rally, just like he did in late 2010, due to all the Fed's easy money, is looking like an Einstein so far, a second Tepper Rally.

UTIL tested 475.49 today. A close above here will set up next week in favor of the bulls.  The SPX punched thru 1504 so it ran to 1511.  The HOD is 1511.42.  The 8 MA is surprisingly below the 34 MA on the SPX 30-minute chart still yet but it should pierce up thru at anytime. The only thing that would prevent this is a sharp market downdraft right now. TRIN is 0.81 favoring bulls so the markets will remain elevated unless the TRIN moves back towards 1.00. Keystone took the overnight profits on the NEM long trade exiting the position. The trade will pay for lunch today. Will look to reenter, NEM remains attractive.

Note Added 2/1/13 at 12:30 PM:  The euro popped above 1.37 in a wild short squeeze; the euro shorts are running for cover. Higher euro = higher markets.  Interesting drama today with UTIL 475.49. The bulls must push thru UTIL 475.49 to tke the broad indexes higher.  UTIL is now printing 474.83. Tom DeMark, a market timer receiving notoriety these days for calling a bottom in AAPL and a top in the SPX a week or so ago, said on a CNBC business news channel interview, that the same calls remain in place. Tom said Monday morning could bring a gap up to 485+ for Apple which would constitute an island reversal (reference the daily chart--the pattern is easy to see).  So Tom thinks you can buy Apple here for a long. On the SPX, even though price moved thru his 1492-1493 top target and continues higher, he still expects a roll over. Tom also said the Shanghai is close to an exhaustion move now. Interestingly, using the FXI as a proxy, this comment correlates with Keystone identifying the negative divergence with FXI and positive divergence with FXP. FXI moves higher with China and the Shanghai; FXP is the inverse ETF that moves higher if the FXI and Shanghai roll over. The SPX pushed thru the 1511 resistance; see if price is able to close above 1511 today, or not.  SPX S/R is 1505, 1511, 1516, 1518, 1520 and 1524 (12/11/07 top). Thus, the breach of 1511 opens the door to 1516.  The 8 MA pushed up thru the 34 MA on the 30-minute chart signaling bullish markets for the hours and days ahead, cheating the bears once again, not allowing so much as a one-day move for the 8 to stay under the 34. TRIN remains strongly bullish today at 0.84 so bears have no chance at a market reversal unless the TRIN climbs. VIX is under 13, traders are bullish expecting the upside to continue indefinitely.  Watch UTIL 475.49.

Note Added 2/1/13 at 1:52 PM:  UTIL 474.68.  Interesting. The SPX HOD is 1514.22. The Dow Industrials HOD is 14013.79.  The volume is lackluster today; the NYSE is at a run rate of about 85% of a days average expected volume, however, considering the new month in flows, volume will come on stronger at the close and should close above average today. Same old routine as the last couple weeks or so. The SPX punches out a new high but the indicators are not enthusiastic, setting up with negative divergence, which creates a spank down, and then bullish traders run in to push prices higher again. Typically, the negative divergence spank down is expected to have more legs. The hourly and minute charts are setting up with negative divergence again, same old thing, perhaps the action will become interesting into the close today. UTIL hourly and daily charts are setting up with negative divergence as well.  The Egypt turmoil grows as thousands of protesters are descending on Morsi's palace and fire bomb devices have been thrown over the walls of the palace. Amazing how traders are not paying any attention to geopolitical events. The rise in oil will raise gasoline prices at the pump.

Note Added 2/1/13 at 4:22 PM:  Traders had their eyes on Dow 14K from earlier this week and the headline writers have another easy weekend ahead; "Dow Hits 14K." The SPX places a new high as well going back to 2007 at 1513 with a HOD at 1514.41 at 2 PM. The TRIN sat at 0.85-ish all day long so the fix was in favoring the bulls. UTIL was very interesting today attacking the 475.49 mentioned this morning but unable to close above. The bulls must go through UTIL 475.49 to pave the way higher for the SPX.  UTIL closed at 474.53 so the bears have a feather for their caps despite the big up day. The UTIL 475.49 is important for all of next week, so, if you see UTIL move above at Monday's opening bell, the bears do not have a chance, the bulls will be running higher once again.  If UTIL sells off or stays under 475.49, the market bears are not giving up and are positioning themselves to growl strongly.