Keystone's Morning Wake-Up 8/13/13

Retail Sales data is a slight disappointment. Local anecdotal evidence supports the lackluster sales since store parking lots are not nearly as filled as the go-go days. S&P futures were +6 a couple hours ago, then started to drift lower, and now, after Retail Sales, are +2. Keybot the Quant is short as the Tuesday session begins but wants to go long. If the SPX moves up through 1691-1692, which is only a couple points higher, Keybot will flip long today. Interestingly, this move appeared to be a slam dunk a couple hours ago but now the futures point to a test of 1691-1692 and drama. The bears can stop Keybot from flipping long if they either move SOX under 473.10 or XLF under 20.12. SOX starts at 473.62 and XLF begins the day at 20.34.  Either of these two failures immediately place the bears back in business.

The 8 MA remains under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead. Watch the 20-day MA at 1692.09 as the decision level today. This morning's SPX daily chart highlights the tight standard deviation bands which require a sharp and strong move, either up, or down. If the bulls win and move the SPX above 1692, the 1699-1700 resistance is next, the 1707, 1710, and likely the 1720's, all by Friday. If the bears win and move the SPX under 1692 and lower, the 1685 level will fail which places the H&S pattern on the 30-minute into play sending the SPX to the 1660's by Friday. So today is a huge day for markets. Watch SOX 473.10, XLF 20.12 and SPX 1692 since these three parameters dictate market direction today. The low VIX and put/call ratios signal complacency in the markets so despite any market up move that may ocucur, the projection for the weeks forward is likely lower prices for equities. Business Inventories are 10 AM where a market pivot point will occur. Fed's Lockhart speaks at 12:45 PM. During OpEx week, a Tuesday low typically leads to a Wednesday high. Time for a slice of blueberry pie.

Note Added 1:42 PM:  The Fed performed another stick-save today. Lockhart (a non-voting member) had to pump the markets from noon on since the BOJ pump overnight, with the weaker yen (dollar/yen moving above 98), did not supply enough upside juice for the bulls. The bears had their chance the last couple days but could not develop enough downside oomph so the bulls took over. Keybot the Quant flips to the bull side. Markets remain very indecisive so a whipsaw move back to the short side by Keybot over the next day would not be surprising. Semi's are well above SOX 473.07 now at 478.49.  XLF is well above 20.12 now at 20.45. The Fed took a baseball bat to the VIX beating it relentlessly down to 12.33. The TRIN was next slapping it down to 0.82. Same-o playbook; crush both volatility and the Arms Index to send markets higher. The 8 MA is about to move above the 34 MA on the SPX 30-minute chart which provides an all-clear signal for bulls. The SPX is above the 20-day MA at 1693.01. The Fed and central bankers are the markets, it is plain to see.