TGT earnings beat on EPS but top line was only in line with estimates. The guidance is strong so TGT jumps higher pre-market and the futures become buoyant. JOY earnings, the global bellwether, are key today. Chairman Bernanke will continue speaking at 10 AM on Capital Hill, promising a chicken in every pot. Mortgage Applications are down this morning for three down weeks in a row, surprising, since everyone says the housing recovery is running full steam ahead. Durable Goods are released in one-half hour. Pending Home Sales data at 10 AM may create a market stutter step. Oil Inventories are 10:30 AM and the 7-Year Note Auction at 1 PM. The month of February typically finishes with a couple days of weakness. It is interesting how the Monday low led to a Tuesday high with the full moon providing the edge to the bulls.
The retail earnings are key today and will affect RTH. DRYS is an important indicator for shipping. The shippers have fallen off the cliff over the last few days and no one is commenting on this important barometer. The continued weak Baltic Dry Index and shippers does not verify a strong global economy. The financials are struggling the last few days and are expected to be the leadership sector moving forward. Watch XLF 17.21 which failed yesterday, but recovered. The markets will take another leg lower if XLF 17.21 fails. Bulls are fine if they keep XLF above 17.21. Watch volatility as well. The market bears are fine as long as the VIX stays above 15.70. The bulls will have a recovery rally in place if the VIX drops through 15.70. The volume yesterday was the same as the day before as the markets churn sideways. The Nasdaq and RUT noticeably unperformed the broad indexes yesterday which is a feather in the bears cap.
The SPX starts at 1497. The bulls only need two points, to punch up through 1499, and hold it for several minutes, and the upside will accelerate to 1503 and 1505. The bears need to retrace yesterday's move and push under 1485 to regain mojo. A move through 1486-1498 is sideways action today. The 20-day MA is 1510.56 and the 50-day MA is 1478.09 which may serve as boundaries for a sideways range. The euro is 1.3106. Very simply, the market bulls win if the euro is above 1.31 and heading higher. The market bears win if the euro drops under 1.31 and heads lower.
Note Added 2/27/13 at 8:35 AM: Durable Goods weaker than expected on headline number. The euro falls under 1.31 now at 1.3075. Crude oil turns negative. TGT does an about face and falls on its sword, now down 3% pre-market. Futures flat. Strike up the calliope, another day at the circus begins.
For the benefit of Mr. kite there will be a show tonight......
ReplyDeleteGreat job as always reclamation point
Check out the 10yUSbonds interest ...dropping like a rock along with crude :) ...I think that they announce something :)
ReplyDeleteV.
XLF 17.42 above the 17.21, firmly bullish. VIX leaking lower to 15.93 now. So markets float higher. Housing Index hits right now and Bernanke will start to speak again.
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ReplyDeleteHi Keystone,
ReplyDeleteKB remains Bearish. Would you expect whipsaw today?
Thank you!
Perhaps Serenay, equities are moving higher but copper and commodities are lagging. For now, Keybot remains on the bear side. The drop in the VIX causes the market move higher. VIX is at 14.91 helping bulls. Bears will need to see the VIX regain 15.70 and higher.
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