Keystone's Morning Wake-Up 4/17/13; Beige Book

The news flow is overwhelming these days. A letter laced with ricin was sent to the Mississippi Senator Wicker so folks are wondering if this is related to the Boston terrorism. The bird flu epidemic continues. North Korea has not gone away. China data shows further weakness so copper, commodities and materials are slammed again overnight. This created a malaise and then around 4 AM, Germany's DAX took a sharp move lower, on volume, falling under 7600. U.K. unemployment rises signaling a triple-dip recession likely. European auto sales fall for eight months in a row. The Italy election mess continues. Cyprus plans on selling gold over the following months so the gold and miner story remains front and center in the media. Then, about an hour ago, BK and BAC banks both miss earnings, the S&P futures drop from -7 to -12. The Dow futures dropped into triple digits, -100.  All this action already and most folks are not even out of bed yet.

The Beige Book is 2 PM where markets will pivot. EBAY, Fleabay, reports earnings today. Fed heads are speaking today, Bullard's comments at 9:30 AM may be of interest. Oil Inventories are 10:30 AM and take on importance since WTIC crude oil sits on the bottom rail of the sideways symmetrical triangle at 88 highlighted yesterday. Oil will bounce, or die. A drop in oil reinforces the deflationary theme moving forward. VIX is the most important parameter today to gauge market direction. Bulls win today if they keep VIX under 14.21. Bears win today if they send the VIX above 14.21. Semiconductors are also important, watch SOX 425.80; price is above so it is creating bullishness in the markets. Keybot the Quant is short but will likely flip long if SPX prints above 1575. In light of the weak bank earnings, XLF is of interest today, see if it breaks 18 which would usher in extended downward behavior for the broad markets moving forward.

For the SPX at 1575, the bulls only needed a smidge of green in the futures, only a point higher at the opening bell for the SPX, and an upside acceleration will occur, however, the S&P's are currently projecting a drop of from ten to twelve handles. The bears would have to retrace yesterday's 22-point up move to regain their mojo, a formidable task but not impossible. A move through 1553-1574 is sideways action today. The 8 MA remains under the 34 MA on the 30-minute chart signaling bearish markets for the hours and days ahead, but the 8 MA is sloping up ready to cross up through for the bulls, however, the futures show that the bears may maintain control moving forward, so watch the 8/34 behavior today. Markets may idle along all day, especially after the Oil Inventories, until the Beige Book at 2 PM hits. CAC (France) and DAX Germany) are now both down -1.7%.