Keystone's Key Events and Market Movers for Trading the Week of 4/1/13

Key Dates and Times for the Week Ahead:

·         Keystone’s Comments on the Upcoming Week: Happy, or rather, Hoppy Easter. The Cyprus and Italy drama’s continue. Italy takes the front seat this week.  China PMI will set the tone for the start of the week and the ISM Mfg Index will move markets 10 AM Monday.  The ECB Rate Decision and Press Conference is Thursday morning and the week finishes with the Monthly Jobs Report.  The Sequestration is here and will bite as time moves along.  The Debt Ceiling limit is mid-May, only 5 weeks away. The Continuing Resolution (CR) to fund the government will need approved in September. Traders are no longer worried or concerned of any market downside since politicians always kick the can. Of course, if a stumble occurs, it would impact markets severely because of this ongoing complacency. Congress is taking a break so this is a market positive. The European debt crisis drama continues with Italy and Cyprus dominating the news flow.  Italy needs to either form a government or announce new elections. The equity markets will sell off on uncertainty in Italy. Watch the Italy, Spain, Portugal and Greece 10-year yields to see if they blow out to the upside signaling trouble, or not.  As the euro goes, so goes the equity markets but this asset relationship is skewed over the last month with the euro dropping but equity markets rising. Spain is delaying their bailout request so the ECB’s OMT bond-buying program cannot be unleashed in full force, although simply having the OMT in place has greatly calmed Europe in recent months.  Spain and other nations are reluctant to give up sovereignty and accept conditionality as terms of a bailout package. Italy wants Spain to request a bailout since the ECB bond-buying will immediately improve Italy’s debt situation. Look for a strong market bounce and rally if Spain requests a bailout. Merkel wants Greece to stay in the euro until her re-election in September but will not care afterwards. The next ECB Rate Decision and Press Conference is Thursday, 4/4/13.  Draghi is walking a tightrope as the European manufacturing, export and automobile sectors weaken in large part due to the U.S. and Japan debasing their currencies. Draghi will have to capitulate by lowering rates to stimulate the economy and help Europe grow out of the debt mess, perhaps on 4/4/13, which will send the euro lower, however, the euro is now dropping under its own weight.  China PMI is released overnight Sunday evening and will affect copper, CAT and the commodity currencies, as well as set the tone in the S&P futures. The China hard versus soft landing saga continues. Watch for further China easing measures such as lowering rates or triple R’s, which will bounce copper, commodities and equity markets. As copper and commodities go, so goes the markets, but the equities markets move higher over the last month as oil, copper and commodities collapsed, verifying that the move up in equities is purely Fed-driven. The copper-equities relationship has broken down (Dr. Copper leads the markets) but should reestablish itself moving forward.  China correctly worries about the new commodities inflation and asset bubbles that will be created by their easy money policies (Chairman Bernanke incorrectly defends QE saying it does not create asset bubbles, even as the current dividend, blue chip, utilities, healthcare, REIT’s, home-building and high-yield corporate perceived safe haven bubbles grow). New leaders President Xi Jinping and Premier Li Keqiang are in power now targeting a 7.5% growth rate for 2013. The China data continues to forecast blue skies ahead but how is this possible when their number one customer, Europe, is in recession and depression, the U.S. is flat, and uninhabited cities litter the China countryside.  The urban shift to a domestic-led economy is occurring far more slowly than anticipated and the new housing is too expensive for folks moving to the cities.  China demographics are a mess due to the multi-decade one-child policy now causing a lack of workers to fuel economic health.  Income figures show that the rural Chinese are making more money than the urban dwellers providing no incentive to move to the cities.  Retail sales are lagging and manufacturing data shows a standstill. CAT, YUM, and DE, three key China bellwethers, are unenthusiastic moving forward.  JOY is more upbeat but his is exposed as unwarranted optimism.  FDX reports a slowdown in China. Commodity currencies such as Australia and Canada are weakening due to China and Asia weakness. The equity markets continue to ignore the geopolitical landscape. Syria is out of control with refugee’s now threatening collapse of neighboring nations and chemical weapons may have been used. Egypt remains in chaos creating trouble along the Suez Canal. The Israel-Iran tensions grow.  Use Brent oil 112 level as a proxy on the Middle East violence.  WTIC crude oil stumbles sideways at 97 on over supply issues and a weakening China economy.  As oil goes, so goes the markets but oil dropped like a stone and equities moved higher. This verifies that the equities rally is due to the Fed’s money-pumping which is causing a break down in expected asset relationships.  North Korea is saber-rattling creating tensions in Asia. Confessional (pre-announcement) season is in play so listen for any lowered guidance from companies. FDX and CAT lowered guidance but markets do not care.  CAG and MON are important releases on Wednesday which will affect the ag sector and commodities.  In general, top line revenues continue to be challenged and many companies are decreasing dividends. Companies are meeting EPS targets by squeezing every last drop out of each employee. If top line revenue remains flat or lower, companies will have to start cutting jobs rather than adding jobs.  Tech (COMPQ) and small caps (RUT) are not showing the leadership they showed in January and February.  Oddly, healthcare, staples, utilities, the defensive stocks, are leading, which is not a sign of a robust recovery. Tech and financials should be leading not the safer plays that are typically favored in recessions. This is due to the Fed’s easy money with traders chasing the same stocks creating new asset bubbles in dividend stocks, blue chips, and the other perceived safe haven, high-dividend plays. The light market volume indicates a lack of conviction and there are signs of distribution taking place. The VIX remains at six-year lows but is expected to launch higher moving forward.  Broad market topping and roll over action is anticipated for the broad indexes moving forward. Keybot the Quant remains long and is focused on volatility, commodities and semiconductors for the new week ahead. If the VIX moves above 14.65, Keybot will likely flip short.  In the most simple terms for equity markets, the market bears will do damage when the VIX moves above 14.65. Bulls will continue to party sideways with an upward bias if the VIX stays under 14.65. The SPX all-time high is 1576.09.

·         Sunday, 3/31/13: Easter. China PMI overnight which will set the market tone-watch copper, CAT and the commodity currencies.

·         Monday, 4/1/13: U.S. Markets are open for trading after the three-day holiday weekend. Construction Spending and ISM Mfg Index 10 AM. First day of trading for the new month and for Q2. Markets are usually up the first day or two of the month, especially as a new quarter begins. Earnings: ASUR, CALM, DPW, RH, STP, VECO.

·         Tuesday, 4/2/13: Factory Orders 10 AM. Earnings: GPN, MKC, RSOL, PBY.

·         Wednesday, 4/3/13: BOJ meets with new members and the money pumping and yen weakening continues. Mortgage Applications 7 AM—is the trend up or flat? (2/13 down; 2/20 down; 2/27 down; 3/6 up; 3/13 down; 3/20 down, 3/27 up, 4/3 ?) ADP Employment Report 8:15 AM-initial indication for Friday’s job numbers. ISM Non-Mfg Index 10 AM. Oil Inventories 10:30 AM. Earnings: CAG, MIND, MON, OMN, SCHN.

·         Thursday, 4/4/13: Challenger Jobs Report 7:30 AM.  ECB Rate Decision 7:45 AM and Press Conference 8:30 AM. Jobless Claims 8:30 AM Natty Gas Inventories 10:30 AM. Earnings: GBX, WDFC, XRTX.

·         Friday, 4/5/13:  Monthly Jobs Report 8:30 AM.  International Trade 8:30 AM. Consumer Credit 3 PM.

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·         Monday, 4/8/13: Earnings: ADK, AA kicks off earnings season after the bell.

·         Tuesday, 4/9/13: NFIB Small Biz Optimism Index 7:30 AM. Wholesale Trade 10:00 AM. 3-Year Note Auction 1 PM. Earnings: EXM, ZEP.

·         Wednesday, 4/10/13: Mortgage Applications 7 AM—is the trend up or flat? (2/13 down; 2/20 down; 2/27 down; 3/6 up; 3/13 down; 3/20 down, 3/27 up, 4/3 ?). Oil Inventories 10:30 AM. 10-Year Note Auction 1 PM. FOMC Minutes 2:00 PM.  Treasury Budget 2 PM. New moon-markets are typically weak moving through the new moon. Earnings: APOG, BBBY, KMZ, STZ, FDO, FAST, JKS, NG, RT, TITN.

·         Thursday, 4/11/13: Jobless Claims and Import/Export Prices 8:30 AM. Natty Gas Inventories 10:30 AM. 30-Year Bond Auction 1 PM. Earnings: JBHT, PIR, RAD.

·         Friday, 4/12/13: Producer Price Index (PPI) and Retail Sales 8:30 AM. Consumer Sentiment 9:55 AM. Business Inventories 10 AM. Earnings: CSUN, KNL.

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·         Sunday, 5/19/13:  16.4 trillion Debt Ceiling limit is hit.

·         In September:  Merkel (Germany) seeks re-election and will not want Greece to exit the euro before the election, but will not care afterwards.  Perhaps Greece and Germany will both exit the euro in the future.

·         In Q4 2013:  European bank stress tests will occur.

---------------------------------  2014  ----------------------------------

·         On Friday, 1/31/14: Chairman Bernanke’s term ends at the Fed, unless there is news during Q4 2013 that he will stay on.

·         In March 2014: ESM is officially ‘fully operational’. The banking union schedule has been delayed from January 2013 to January 2014 and now to March 2014.

Keystone's April Seasonality

The largest gains in the stock market typically occur between November and April each year. We are now only four weeks away from "Sell in May and go away." With the broad indexes up over 10% this year (last year up about 10-12% at this time as well), who would blame traders for taking profits and running away before May? Tech and biotech sectors receive the largest gains in Q4. Tech is running out of gas and biotech appears to be topping in Q2. The month of April typically sees gains of about 1.2% for the broad markets. April is typically the best month of the year for OTC (over-the-counter stocks).

The first couple days of a month tends to experience new money inflows which creates market buoyancy.  Markets are typically up on the Monday of OpEx week, 4/15/12, and up from Tuesday into Wednesday during OpEx week which is 4/16/12 into 4/17/12. The third week in April is typically the best week for stocks during Q2 (perhaps the market selling occurs due to tax deadline day of 4/15/12 with market buying occurring after tax day passes).  The FOMC two-day meeting is 4/30/12 and 5/1/12.

Home builders tend to be weak in April. This is interesting since the home building stocks are all at lofty heights. Small caps typically do well in April-May but they have already ran strong in Q1. Tax refund checks tend to help consumer spending. Markets tend to move down in front of the tax deadline 4/15/13 since fat checks to Uncle Sam must be written. The tax day of 4/15/12 is a Monday, so the potential for market weakness exists for the first couple weeks of the month with a recovery during OpEx week. Beef tends to rally from the first of the year into mid-April so TSN and HRL are viewed as potential shorts. There is typically a large biotech conference during April so this may supply some additional go juice for the biotech sector, although, considering the large run-up the last few months, perhaps the conference may serve as a top marker for biotech.

On the esoteric side, markets are typically up moving through the full moon on 4/25/13 and down moving through the new moon on 4/10/13, which bolsters the idea of market weakness in the first half of the month then a recovery in the back half. 

SPX Support, Resistance (S/R) and Moving Averages for Trading the Week of 4/1/13

SPX support, resistance (S/R), moving averages and other levels of interest are provided below.  Q1 finishes up over 10%. Monday begins Q2. The SPX took out the all-time closing high at 1565.15 from 10/9/07.  The new all-time closing high is 1569.19 and the all-time high remains in place at 1576.09 from 10/11/07. The bulls need to see one positive point in the S&P futures overnight Sunday into Monday and a test of SPX 1576 is guaranteed when the opening bell rings.  The bears must prevent positive futures with all their might and at the same time push under 1561 after the opening bell to accelerate the downside. A move through 1562-1568 is sideways action.

The Fed's easy money, as well as money fleeing Europe is pumping the dividend stocks, Dow blue chips and other perceived safer havens creating new asset bubbles. This action creates the new highs day after day.  Markets continue to ignore any bad news. Italy is important this week, ditto Cyprus. China PMI will impact overnight S&P futures Sunday evening. ISM Mfg Index will move markets on Monday. The ECB is Thursday and Monthly Jobs Report on Friday. New money typically comes in for the first day or two of a new month, especially a new quarter, so the bulls should enjoy some further buoyancy as the week begins. Note how the moving average ribbon is 100% bullish, at a peak that cannot be improved upon; price is above the 10-day MA above the 20-day MA above the 50 above the 100 above the 150 above the 200. The SPX will need to test the 20-day MA at 1551 and rising and the 50-day MA at 1524 and rising as time moves along.

·         1576 (10/11/07 All-Time Intraday High: 1576.09)

·         1570.28 Thursday HOD

·         1570 (3/28/13 Intraday HOD for 2013: 1570.28) (Previous Week’s High: 1570.28)

·         1569.19 Thursday Close – Monday Starts Here

·         1569 (3/28/13 All-Time Closing High: 1569.19) (3/28/13 Closing High for 2013: 1569.19)

·         1565 (10/9/07 Market Top: 1565.15)

·         1564

·         1563

·         1561.08 Thursday LOD

·         1561

·         1557

·         1557.00 (10-day MA)

·         1556

·         1553 (10/31/07 Top: 1552.76) (3/24/00 Top: 1552.87)

·         1551

·         1550.83 (20-day MA)

·         1548

·         1546 (Previous Week’s Low:  1546.22)

·         1543

·         1540.50 (200 EMA on 60-Minute Chart a Keystone Turn Signal)

·         1539

·         1531

·         1528 (3/24/00 Closing Top: 1527.46)

·         1525

·         1524 (12/11/07 Top: 1523.57)

·         1523.67 (50-day MA)

·         1521

·         1520

·         1518

·         1516

·         1514

·         1512

·         1509

·         1505

·         1503

·         1500

·         1498 (12/26/07 Top: 1498.85)

·         1495

·         1489

·         1485

·         1481

·         1479.98 (20-week MA)

·         1476

·         1475 (9/14/12 Intraday HOD for 2012: 1474.51)

·         1472

·         1471.42 (100-day MA)

·         1468

·         1466 (9/14/12 Closing High for 2012: 1465.77)

·         1465

·         1461

·         1460

·         1459.10 (150-day MA; the Slope is a Keystone Cyclical Signal)

·         1457

·         1456

·         1453

·         1447

·         1446

·         1444

·         1442.52 (10-month MA)

·         1441

·         1440 (5/19/08 Intraday HOD for 2008: 1440.24)

·         1438 (9/13/12 Fed Announces QE3 Infinity)

·         1435.09 (200-day MA)

·         1435

·         1433

·         1431

·         1430 (12/12/12 Fed Announces QE4 Infinity and Beyond)

·         1429 (11/6/12 President Obama Election Top)

·         1427.79 (12-month MA; a Keystone Cyclical Signal) (the cliff)

·         1427 (5/19/08 Closing High for 2008: 1426.63)

·         1424

·         1423.73 (50-week MA)

Keystone's Trading Week in Review and Path Ahead for Markets 3/30/13

On Friday, 3/22/13, the Nikkei plummets -2.5%. The Cyprus finance minister returns from Moscow empty-handed.  Russia is out of the talks until the Troika makes a decision. Merkel is very unhappy with Cyprus delaying talks with the Troika (EU, IMF and ECB).  News occurs that Cyprus Popular Bank will close and reorganize. Hundreds of protestors and bank employees take to the streets in front of the bank and clash with police. Cyprus parliament is in session trying to find a solution to the crisis. S&P rating agency downgrades Cyprus debt.  France business confidence drops. The U.K.’s Mulberry (high-end bags) announces disappointing sales and lowers guidance moving forward (the wealthy consumers are not spending). Contagion across Europe from the Cyprus crisis is tame and contained so far since Italy and Spain bond yields are maintaining a flat posture. The German 10-year yield is down to 1.35%, a level not seen in about one year, so traders are definitely seeking safety. The euro/dollar sits at 1.29. Cyprus needs 5.8 billion dollars within three days time; the clock is ticking.  The tax on Cyprus depositors will likely occur changing the face of global banking forever, and, of course Russia will find a way to retaliate. German business confidence misses estimates. Italy continues to try and form a government. The broad indexes open and jump higher. The remainder of the day the SPX moves through the 1553-1556 range, bumping up and down depending on Cyprus rumors. At 12:30 PM, the 8 MA moves up through the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours and days ahead.  Fitch rating agency places the U.K. on negative review. The SPX closes at 1557 flat on the week. The Dow was also flat this week closing at 14512 but the Dow prints a new intraday all-time high at 14547. The Nasdaq (tech) and RUT (small caps), the market leaders, are negative on the week. The markets do not sell off since traders optimistically expect a solution to the Cyprus situation and, after the closing bell, Cyprus votes to approve capital controls on banks which opens the door to receive a bailout. The smaller Cyprus bank depositors (under 100,000 euro’s) will be protected but the wealthier depositors will have their funds confiscated, perhaps as much as fifty-percent or more. The Russians, making up the bulk of the wealthier depositors, will likely seek retaliation. The capital controls are needed since bank runs will occur come Tuesday morning and restrictions are needed to limit the amount of funds that can be pulled. Moody’s rating agency downgrades three Cyprus banks one notch based on the pending depositor confiscations and serious problems in the banking sector. Traders involved in the JPM London whale trading debacle are under investigation and charges may follow.

On Saturday, 3/23/13, the Senate finally approves a budget after four years without one.  Cyprus leaders are currently meeting with the Troika (EU, IMF, ECB). Cyprus retailers and other businesses are hurting due to the lack of cash with banks closed for one week.  Eurozone finance ministers are meeting tomorrow and the Cyprus parliament wants to wait until this meeting ends before they convene. Cyprus must set the levels and conditions and approve the money confiscation from the wealthy depositors before Monday to avoid a meltdown which would cause Cyprus to exit the euro. Things are on track to approve the confiscation of the wealthy depositor’s money but the worry remains over bank runs.

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On Sunday, 3/24/13, Palm Sunday.  Russian tycoon Boris Berezovsky is found dead in the U.K. due to suspicious circumstances. The majority of Cyprus citizens want to exit the euro.  Eurozone finance ministers meet followed by the Cyprus parliament. At 7 PM EST, word of an initial agreement occurs and futures jump higher. At 9 PM, the Cyprus bailout terms are announced. The solution was expected since politicians and central bankers will always kick the can and wall paper over problems. Interestingly, the futures are not as high as would be expected; the S&P’s up only about six handles when 10 to 30 handles are typical when each of these bailout events occur.

On Monday, 3/25/13, Cyprus drama continues with equity markets trading higher.  S&P futures are up eight. The euro is over 1.30. Traders remain happy due to the Cyprus bailout, or rather ‘bail-in’, as some are calling it (since the depositor money was confiscated to help resolve the situation). Protestors take to the streets in Cyprus. Bank employees know that the majority of them will lose their jobs. In Italy, Berlesconi is pushing for new elections.  In the northern U.S. a major spring snow storm creates a slow start to the week.  At the opening bell, the markets jump higher, the SPX stops within pennies of the all-time closing high at 1565.15, reversing on news from the Dutch finance minister that says Cyprus can serve as a ‘template for the rest of Europe.  The broad indexes plummet. Italian and Spanish, as well as U.S. banks, are sold off hard.  Obviously, if you have your money in an Italy, Spain, or Portugal bank, or any bank for that matter, you are on notice that your money can be confiscated just like Cyprus.  The 8 MA stabs down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead.  The euro falls down through 1.30, then 1.29. Copper weakens further. Volatility jumps higher. The 10-year yield drops to 1.92%. The Fed’s Dudley speaks dovishly but the markets do not bounce. Chairman Bernanke speaks at 1:15 PM but his comments are not market moving.  The Dutch finance minister retracts his statement about Cyprus as a template but the genie is out of the bottle.  Markets bounce on his retraction but barely recover half of the drop today.  Everyone knows that the world has changed; your money is never truly safe in a bank ever again.  Markets skid out sideways to end the session.  Cyprus planned to open the banks tomorrow but announces that all banks will be closed until Thursday, placing the bank holiday at near two weeks time.  When banks open Thursday, capital controls will only allow 100 euro withdrawals (about $130 per day). Obviously, a prudent investing plan moving forward should include a small fireproof safe, hidden in your home, where you can tuck away a few dollars each pay day month after month, building a cash reserve. That way, if future bank holiday’s occur, which is likely, you will be protected from having to stand in line all day to receive one hundred  bucks, and then show up the next day to do the same. Fed’s Fisher says he expects a 3% growth rate by the end of the year.

On Tuesday, 3/26/13, Passover.  The euro remains subdued at 1.2875, the lowest numbers since last November. France confidence sentiment drops as well as industrial output data.  Cyprus tries to calm people by saying a further bailout would not be needed but this is overshadowed by news that the capital controls may continue for a few weeks.  S&P rating agency downgrades Eurozone GDP from a -0.1% projection to -0.5%. The broad indexes move higher at the opening bell ignoring the Cyprus drama. The 8 MA pierces up through the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours and days ahead.  The whipsaw verifies the ongoing indecisive and erratic market behavior.  Utilities, UTIL, prints above 500 as traders chase yield and perceived safety. The Dividend Stock Bubble is pumped higher as well. Europe continues to downplay the comment that Cyprus serves as a template for all banks but Portugal comes out in support of the depositor confiscations. That says Portugal may be next and you had better pull your money before it is too late. Volatility remains low so the markets remain elevated into the closing bell finishing up strongly taking back yesterday’s losses. The SPX is at 1564 only one point away from the all-time closing high at 1565.15.  The CPC put/call ratio, and low VIX, confirms the complacency in the markets. Traders are fully convinced that the Fed will support equity markets forever. President Obama signs the Continuing Resolution (CR) to fund the government into September.  The Debt Ceiling limit will heat up now since the May deadline is only one month away.

On Wednesday, 3/27/13, the European bond yields react wildly to ongoing uncertainty. The 10-year yield shows Greece jumping over the 12% level, Portugal is over 6%, Spain is now back above 5% and Italy is moving towards 5%. The perceived safe havens are all seeing lower 10-year yields such as Germany dropping under 1.30%, and the U.K. now at 1.74%.  The U.S. 10-year Treasury yield is falling like a stone from the mid 1.9’s yesterday to 1.85% this morning.  A big flight to safety is occurring.  The euro falls through 1.28.  The S&P futures are down six.  Negative comments from Europe are causing the weakness. Bersani says that a new Italy election is likely and it is ‘insane’ to run Italy at this time. Monti says he can hardly wait to leave. The broad indexes drop at the opening bell with the S&P giving back all of yesterday’s gains.  Volatility remains low, however, at VIX 13, so the markets recover as the day moves along. Several Fed heads speak today offering dovish comments but the markets do not rally on the happy QE talk.

On Thursday, 3/28/13, Germany retail sales are better than expected setting a happy tone, but, a short time later, Germany unemployment data shows an unexpected increase of 13K claims when a drop was projected. The euro immediately drops printing well under 1.28.  The Cyprus banks reopen with a 300 euro withdrawal limit (about $390) in place. Check-cashing will not occur. Transactions out of the country are limited as well.  Crowds appear at the banks but the scenes are orderly and peaceful since capital controls are very restrictive. Older citizens, especially those without ATM cards, are the most cash-strapped. A new phase of the Euro crisis develops since a euro in Cyprus is now actually worth a little less than the same euro in the main continent due to less liquidity. Think about that. The capital controls on the banks should continue for many weeks and months and likely longer. Schaeble (Germany) says “Cypriots are projecting their anger at others.” Markets recover into the U.S. open. Today is the end of the month, EOM, and end of the first quarter, EOQ1. The GDP is 0.4% one tick below consensus. Chicago PMI disappoints.  The markets are flat to up, however, ignoring the bad news.  At 10:33 AM EST, the SPX all-time closing high at 1565.15 is breached for the first time in five and one-half years. The pre-holiday buoyancy kicks in and the markets run higher into the closing bell. The SPX closes at a new all-time closing high at 1565.19 but remains under the all-time high at 1576.09 from October 2007.  The markets are fueled by the Fed’s easy money. The utilities, UTIL, are now over 508, moving up at a ridiculous rate of one percent per week since the Autumn. The Dividend Stock Bubble shows parabolic moves in DVY and SDY. Healthcare and consumer staples lead the rally as well which is odd, since tech, financials and semiconductors should lead if the recovery was reflective of a normal business cycle. Healthcare is up 50% over the last two years. The Fed’s money printing is bloating the perceived safer haven sectors such as dividend stocks, Dow blue chips, utilities, healthcare, REIT’s and high-yield corporate’s. The central bankers are making a mess of the markets creating new asset bubbles. In addition, money fleeing Europe is seeking perceived safety and pumping the same stock sectors which blows the bubbles bigger and creates the new market highs day after day. The Dow Industrials (INDU) printed another new all-time high and all-time closing high at 14578.54. The leadership by small caps and tech in January and February has started to lag in March. The first quarter ends with the SPX up over 10%, the strongest move since 1998. Traders begin the Easter holiday weekend in high spirits since the Fed is the Easter Bunny delivering candy and guaranteed higher markets every day.

On Friday, 3/29/13, Consumer Sentiment surprises to the upside. This is a surprise since gasoline prices remain elevated and other sentiment indicators are turning sour. Italy struggles to form a government and President Napolitano considers stepping down.  Germany’s Schauble says that Europeans should not worry and their savings are safe. The hit to the major Cyprus depositors may now be a shocking 60% confiscation.

On Saturday, 3/30/13, Italy’s President Napolitano plans to meet with a select group of individuals to find a way to form a government. The Italy mess becomes more confusing by the day. Cyprus depositors wait for confirmation today that as much as 60% of their funds will be confiscated from the accounts holding over 100,000 euro’s. It is absolutely shameful that a bank steals 60% of your money. The world has changed forever. Russia will likely retaliate since they make up the majority of the wealthy depositor’s.  Since Russia controls much of the gas and oil flow to Europe, next winter may be very chilly for the Europeans.

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On Sunday, 3/31/13, Easter.

On Monday, 4/1/13, China PMI.  ISM Mfg Index. Construction Spending.

On Tuesday, 4/2/13, Factory Orders.

On Wednesday, 4/3/13, ADP Employment Report. BOJ meets with new members for a two-day meeting; the money pumping and yen weakening will continue.

On Thursday, 4/4/13, ECB Rate Decision and Press conference. Jobless Claims.

On Friday, 4/5/13, Monthly Jobs Report. International Trade. Consumer Credit.

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On Sunday, 5/19/13, the 16.4 trillion Debt Ceiling hits.

In September, Merkel (Germany) seeks re-election and will not want to see Greece exit the euro before the election but will not care afterwards. Perhaps Greece and Germany will both exit the euro in the future.

In Q4 2013, European bank stress tests will occur.

On Friday, 1/31/14, Chairman Bernanke’s term ends at the Fed, unless there is news during Q4 2013 that he will stay on.