Keystone's Morning Wake-Up and Midday Market Action 4/16/13; Housing Starts; Boston Terrorism Attack

The Boston terrorism attack aftermath plays out. Three are dead, including a little 8-year old boy, with another 140 injured.  President Obama said last evening that the perpetrators will "feel the full weight of justice." The futures are in recovery mode this morning setting up for a dead-cat bounce. C says the "death bells for commodities are ringing." Gold is recovering today thus far. German investor confidence is weaker than expected. Luxury spending in Europe is trailing off. Semiconductors, volatility and financials are important today; watch SOX 425.65, VIX 14.30, and XLF 17.94, respectively. The market bulls need either SOX or VIX to meet the levels shown to stage a come back. The bears need to print the XLF number to continue the downside action.  If the three parameters remain as is, markets will float along sideways.

GS earnings minutes ago show beats on the bottom and top lines although guidance appears tentative. GS is trading up one and one-half percent pre-market. So JPM and WFC missed their top line revenue numbers while C and GS met theirs. GS should keep XLF elevated today and help stabilize the broad market. Housing Starts are on deck at 8:30 AM; this is the most important economic data point this week and will impact the futures. Industrial Production is 9:15 AM. Three Fed heads speak today; Duke at noon time, Kocherlakota at 1 PM, and, what may be the future Chairman, or rather Chairwoman, Yellen at 3 PM. The FBI will provide a briefing on the terrorism incident at 9:30 AM as the opening bell rings.

The markets typically move from a Tuesday low to a Wednesday high during OpEx week. This April week for OpEx is typically up seasonality-wise each year.  Many heavy-hitters are reporting earnings today including CSX, JNJ, INTC, KO, URI and YHOO. In a nutshell, to gauge market direction, watch SOX 425.65, VIX 14.30 and SPX 1556 which is the 200 EMA on the 60-minute chart. The SPX is under the 200 EMA signaling bearish markets for the hours and days ahead. The 8 MA remains under the 34 MA on the 30-minute chart signaling bearish markets for the hours and days ahead. Keybot the Quant is on the short side as the day begins. SPX S/R is 1576, 1574, 1569-1570, 1563-1565, 1563.13 (20-day MA), 1556 (200 EMA), 1553, 1548.63 (last week's low), 1548, 1546, 1540.08 (50-day MA) and 1531.

Note Added 8:08 AM:  GS, BLK and JNJ earnings all look fine and the stocks are higher pre-market. However, surprisingly, TGT lowers their Q1 estimates. This is a stick to the retail sector's eye but futures are unaffected with the S&P's set to move over ten points higher at the open. Housing Starts are key this morning especially the round number handles; 800K starts, 900K starts, or, over one million starts?

Note Added 8:36 AM:  The Housing Starts print over one million for the first time in almost five years. However, the permits are weak and permits lead to starts. The one million plus starts keep the futures elevated and will lock in a move upwards at the opening bell. The dollar/yen is 98.05 drifting upwards, which reflects a weaker yen, and higher futures.

Note Added 11:49 AM:  Both the SOX and VIX jumped into the bull camp after the opening bell, however, the VIX moved above the important 14.21 level returning to the bear camp. VIX is now 14.42 which creates market bearishness while SOX is above 425.65 creating market bullishness. TRIN is 0.59 so it is firmly the bulls day today. The SPX moved above the 200 EMA on the 60-minute chart at 1556 signaling bullish markets for the hours and days ahead but the 8 MA remains under the 34 MA on the 30-minute chart signalling bearish markets ahead. Keybot the Quant remains short and will likely not flip long today unless SPX 1581 and higher is printed. Keystone exited the SPXL one-day long trade with enough profit to buy a happy meal.

Note Added 12:07 PM:  The SPX is above the 20-day MA at 1563.99 so this is important to monitor today. Price is now testing the 1569-1570 resistance listed above. VIX is 14.31 one dime above the bull-bear line in the sand at 14.21; this is key today.

Note Added 3:11 PM:  All's quiet on the western front. Status quo. VIX above 14.21 causing bearishness. SOX above 425.65 causing bullishness. SPX vacillates through 1567-1572 since 11:30 AM.  TRIN is 0.82 under one all day helping the bulls. Bulls and bears are fighting it out in a sideways tape.  Flip a coin.