Keystone's Morning Wake-Up 3/26/13; Consumer Confidence; Cyprus; Italy

Cyprus banks remain closed. Those poor folks do not know what is going on as the banks declare a continued bank holiday now nearly two weeks old. As this drama plays out, equity markets stumble sideways. The Dutch finance minister will likely remain quiet for several days after yesterday's stumble. He did not get the message that politicians and central bankers are supposed to lie to create happy perceptions and confidence. He will receive a refresher course today. The Italy theatrics continue as well and there should be a decision on a new government at any time, or, a potential new election in May or June. Markets will not receive a new Italy election well.

The 8 MA is under the 34 MA on the SPX 30-minute chart so use that as the best bull versus bear gauge as the day begins. If the 8 stays under the 34 the bears will remain happy while bulls will try to push the 8 MA higher back up through the 34 MA. If the SPX stays under 1552, the 8/34 cross should remain bearish, if price ventures above 1552, which the futures currently indicate, that would set up a potential cross favoring the bulls. For the SPX starting at 1552, the bulls need 13 points, to touch 1565, to launch an upside acceleration. The 1565.15 all-time closing high would give way. The bears need to push under 1547 to create a downside acceleration. A move through 1548-1564 is sideways action today. Volatility remains key as described in this morning's chart. Bulls are happy if the VIX stays sub 14.70; bears will rule above VIX 14.70.  SOX 422 is another bull-bear line in the sand to watch as the days and weeks play out. Keybot the Quant will likely flip short if the VIX moves above 14.70.

The housing sector is in focus today with Case-Shiller, just reporting some encouraging numbers again, and New Home Sales at 10 AM.  A market pivot point will occur at 10 AM when all the data hits; Richmond Fed Mfg Index, New Home Sales and most importantly, the Consumer Confidence number. Thus, the first half hour of trading will not tell a lot. Wait for the pivot for the true tell. In a nutshell, VIX 14.70, SOX 422, and SPX 1565 and 1547, will dictate market direction today.

Note Added 3/26/13 at 10:08 AM:  The data disappoints but the markets stagger sideways brushing off the negativity. Consumer Confidence is back in the 50's at 59.7; a surprising miss to the downside. Perhaps folks are not as joyous as thought. Traders focus on the Fed's money pump instead; the SPX now above 1561 with the bulls trying to push towards 1565. The VIX is low and SOX is high so the bulls are happy today. Today may churn sideways like yesterday since the drama with the Cyprus bank runs does not occur until tomorrow. The 8 MA just pushed up through the 34 MA on the 30-minute charts signaling bullish markets for the hours and days ahead. Perhaps the bullish seasonality for this week is appearing.  Bears must push the SPX lower immediately to reverse the 8/34 cross. These 8/34 crosses are far too frequent and uncharacteristic of markets and verifies the erratic and unstable nature of markets these days. The market bears are currently encouraging the Dutch finance minister to grab a microphone and start talking.