Keystone's Morning Wake-Up and Midday Market Action 7/2/13

Today picks up where yesterday ended. The SPX is fighting at the 1618-1624 resistance gauntlet so watch the 20-day MA at 1616.87, 200 EMA on the 60-minute chart at 1618.90, and 50-day MA at 1624.04. Price is moving through the 20 and 50-day MA bracket between 1616-1624. Bulls need to push utilities higher today. Watch UTIL 480.74. Price jumped above, then failed below, now back above again at UTIL 481.10. Bears need to push either XLF under 19.25 or RTH under 51.60 to gain downside fuel. The 200 EMA cross on the 60-minute and the 8 and 34 MA cross on the 30-minute, two important near-term market signals, are both walking a tightrope right now. Whichever direction they both agree on is the market direction forward.

The dollar/yen is above 100 now at 100.34 so equities are higher. Factory Orders are at 10 AM so a market pivot point may occur. Fed's Dudley speaks at 12:30 PM so after noon time, his speech may be released which will probably bump the SPX a few handles higher as he pumps the QE talk. Keystone started shorting KKD, opening a new position, which is short donuts. Also bot PBR opening a new long position.

Note Added 9:59 AM:  TRIN is 1.00 flat neutral and not wanting to choose a side today. VIX is down again today at 16. Keystone took profits on FRO exiting the long trade, will look to reenter.

Note Added 10:03 AM:  Markets initially pivot to the downside after the data; the SPX loses a couple points. UTIL just came down to tease the critical 480.75 danger line, and bounced. UTIL is 481.15. Watch utilities as a rudder for market direction today. Up utes is up markets, down utes is down markets. Dollar/yen is 100.36.

Note Added 10:51 AM:  UTIL 482.25. TRIN 1.03. VIX 15.99. SPX 1622.23. The beat goes on with the ongoing battle across the 1618-1624 gauntlet. Keybot the Quant remains long since utilities, retail and financials all remain in the bull camp. Keystone added more SPXU to this ongoing long trade which is short the S&P's.

Note Added 2:30 PM:  Egypt is falling apart. The army says they will oust Mursi and suspend the constitution. There are millions of people in the streets, squaring off on both sides, so the situation could grow ugly and send the country into turmoil. Of course the Suez Canal is important to the oil industry, and WTIC crude moves up towards 100 now at 99.74. Gold is not receiving a safe haven bid. Mursi may be pleading 'mercy' in a few hours. UTIL drops back under the 480.75 danger line so the markets weaken. RTH and XLF remain bullish. The SPX is losing altitude now under 1610. VIX is positive on the day now up to 16.72. TRIN 1.14.  Dollar is 83.47 moving higher. Dollar/yen 100.51, down a little so equities leak lower. The 1618-1624 resistance gauntlet continues to hold favoring bears. The SPX is under the 200 EMA on the 60-minute chart at 1618.90 signaling bearish markets for the hours and days ahead. That pesky 8/34 MA cross on the 30-minute, however, continues to ......... whoopsies, ....  the 30-minute just printed a new candlestick for 2:30 PM and the 8 MA just stabbed down through the 34 MA to signal bearish markets for the hours ahead and this places the 60-minute and 30-minute in agreement giving the overall negative prognostication forward street cred. The next one-half hour is key since the bulls must spike the indexes higher right now to stop the slide and hold the bears at bay, otherwise, the bulls will lose their grip on the markets. Since the Egypt news will likely remain concerning, equities should continue to leak lower.

Note Added 2:39 PM: Dollar/yen 100.47. UTIL 478.57. VIX 16.88. TRIN 1.19. RTH 52.40. XLF 19.45. SPX 1607.95. The 8 MA is holding under the 34 MA on the 30-minute chart, so far, so the bears develop a cautious smile. DNKN is upgraded today so this was unfortunate timing to short donuts, but, KKD should drop anytime forward.

Note Added 3:00 PM:  Another candlestick prints now on the 30-minute chart and the 8 MA is clearly down through the 34 MA signaling bearish markets for the hours ahead, however, another one-half hour is needed to make sure the 8 stays under the 34. The bulls may have a trick up their sleeve. Fed's Powell will pump the markets about one hour after the closing bell today and the pre-holiday buoyancy may enter the markets. If the Egypt situation worsens, however, it trumps all, and markets will head lower.

Note Added 3:54 PM:  UTIL 479.57.  SPX 1613.48 remaining under all the important moving averages highlighted in pink above. Keystone shorted more donuts, KKD, adding to this ongoing short position opened today.

Note Added 3:57 PM:  The 20-day MA is 1616.65. SPX is 1614.35. Volume is lighter today than it was yesterday which says tomorrow will be fumes and vapors with the early close.

Note Added 4:10 PM:  Keystone's two short-term market signals, the 200 EMA cross on the 60-minute, and 8/34 MA cross on the 30-minute, finally agree, after the last few days of mixed signals, and the decision is favoring the downside. You know what this means. The signals are tentatively bearish so the bulls can mount one, last-ditch effort, to reverse the negativity, at the opening bell tomorrow. The bulls must catapult equities higher at the opening bell to send the SPX over 1619 and the 8 MA above the 34 MA on the 30-minute to reverse the market negativity. So bulls need to see the overnight futures at +5 or higher to light the way. Fed's Powell is on deck shortly. Egypt will be watched all evening long into tomorrow since Mursi may end up pleading 'mercy'. UTIL 479.95, below 480.75, causing bearishness.  XLF 19.53, above 19.25, causing bullishness.