Keystone's Morning Wake-Up 5/10/13; Chairman Bernanke Speaks

The dollar/yen moves above 101 overnight with analysts calling for 105-110 by the end of the year. The current print is 101.30. The BOJ is weakening the yen and the easy money pumps global equity markets and the European bond markets. The Nikkei jumps 3% to 14608. The markets respond directly off of central banker action these days. Fed's Plosser voices concern over too-big-to-fail banks yesterday afternoon but this is expected since he is a hawk. The dollar/yen and equity same-direction relationship is in place today with the higher dollar/yen creating higher stock futures. The S&P futures are up about four with the opening bell about three hours away.

Despite the market bullishness, the bears can seize control if the VIX moves above 13.73. If the VIX moves above 13.73 and the SPX drops under 1623, Keybot the Quant will likely flip to the short side. The bulls will try to keep their foot on volatility's throat holding the VIX under 13.73. The bulls can develop more upside juice if JJC (copper) moves above 41.90 and/or GTX (commodities) move above 4810. For the SPX today starting at 1627, the bulls need to push above 1635 to launch an upside acceleration likely tagging the 1640 handle in quick order. The bears need to push under 1623 to accelerate the downside to 1619 and perhaps 1613. A move through 1624-1634 is sideways action. The 8 MA remains above the 34 MA on the SPX 30-minute chart signaling bullish markets ahead but the 8 MA is converging on the 34 MA for a potential 8/34 bearish cross.  The bulls must create a strong upside market move at the opening bell today to curl the 8 MA upwards and prevent the 8/34 cross from occurring. 

The G7 meetings begin today. Chairman Bernanke speaks at 9:30 AM. Fed's Evans is on tap to speak next then the Fed's George speaks at 2 PM. Thus, lots of money-printing talk is likely on tap today which will help the bulls. The central bankers have to be growing concerned over the obscene market intervention. The wealthy are becoming wealthier as stocks rise but Joe Sixpack remains unemployed and regular families struggle. Marty Feldstein, noted economist, says the Fed's policies have hit a dead end. The Treasury Budget is released at 2 PM. All eyes will be watching the higher dollar/yen today (weakening yen due to BOJ actions) which is giving the green light to more asset bubble creation around the world. In a nutshell, bulls want SPX 1635, JJC 41.90 and GTX 4810 while bears want SPX 1623 and VIX 13.73.