Keystone's Morning Wake-Up 3/13/13; Retail Sales

The interesting sets of palindromes continue this week, today's is 31313. Retail Sales is the most important data point this week, only one-half hour away. The RTH charts posted this morning say down, however, charts can only price in everything known up to the minute, so the data can easily send retail, and thus the equity markets, wildly in one direction or the other. The bears are pushing and the S&P futures are down about three or four points at this writing but typically there is a market buoyancy from a Tuesday low into a Wednesday high. Perhaps the Fed's money pumping between 10 AM and noon will boost markets into lunch time and then the action will become far more important this afternoon.

The 8 MA fell down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead. The bulls can reverse the 8/34 cross and spoil the bear's fun by thrusting the SPX higher at the open. Therefore, the importance of the Retail Sales data becomes even more intense. If the bulls can boost commodities higher and push the GTX above 4930, that will supply plenty of fuel for the SPX to print new all-time highs. The bears need to push the VIX above 15.20 to ignite strong downward market pressure. If the GTX stays under 4930, and the VIX under 15.20, the sideways malaise continues with flat markets with a slight upward bias.

For the SPX today, starting at 1552, the bulls need to touch the 1557 handle, about five points higher, and the 1560's will follow along in quick order. The bears need to push under the strong 1548 support to start a downside acceleration. The SPX tested 1548 twice yesterday but the bulls held the support. A move through 1549-1556 is sideways action. The SPX new 2013 intraday high is 1556.77 and new 2013 closing high is 1552.38 so watch these numbers like a hawk. The Retail Sales are key and Import and Export Prices will hit at the same time. The broad indexes will pivot at 10 AM with Business Inventories. Oil Inventories 10:30 AM. The 10-Year Note Auction is 1 PM. Lots of retail earnings are on tap today which places a further spotlight on the great American consumer.

As always, reference Keystone's Key Events and Market Movers missive on the weekend for each day's trading itinerary. This can also be accessed directly from Google's home page by typing 'Keystone's Key Events'. Mortgage Applications are down nearly 5% this morning resuming the downtrend, now down four of the last five weeks. This data is important to gauge the true strength of the housing recovery, or lack thereof. The euro dropped under 1.30 and now teeters on this tightrope. Equity bulls win above 1.30 and bears win below 1.30. The 10-year yield is 2.01%. Equity bulls win above 2% and bears win below 2%.

Note Added 3/13/13 at 8:38 AM:  Retail Sales are up 1.1% much better than expected. Gasoline sales likely helped elevate the numbers.  Gasoline prices move higher like a rocket but fall like a feather. The S&P futures move to +1 so the retail sales add about four points and remove this morning's negativity, however, the move is not drastically higher and the negativity on the RTH charts is real and provides a wet blanket moving forward.  Watch the 8 and 34 MA cross on the 30-minute chart at the opening bell and then the market pivot at 10 AM with Business Inventories data. The 8 MA on the 30-minute is 1551.11, thus, the bears need to keep the SPX under 1551 and heading lower while the bulls need to print above 1551 heading higher. Copper remains weak this morning. The euro is 1.2966 .... 1.2964 .....