Keystone's Morning Wake-Up and Midday Market Action 8/6/13; KORS; DIS

International Trade data hits at 8:30 AM. JOLTS job-opening data is 10 AM. The 3-Year Note Auction is 1 PM. Lots of earnings on tap with the Mouse House (DIS) front and center. KORS is also important today to see if the wealthy continue to spend and pump the retail sectors, RTH and XRT, higher, or not. Ramadan is ending so the terrorism talk will be front and center. No one mentions that the two top terrorists, fully aware of all the NSA spying drama these days, may simply be playing the U.S., performing a fictional communication about a terrorism incident and then sitting back watching America run around like chickens with their heads cut off. Never underestimate the enemy. The coming days we will see if a terrorism event occurs, or not. The new moon occurs at about 6 PM EST today after the closing bell. Markets tend to be bearish working through the new moon.

Copper, commodities and volatility, JJC 39.02, GTX 4800 and VIX 14.20, respectively, determine market direction currently, especially copper. Copper is up 1% in early trading so it appears that the bulls will turn JJC bullish at the opening bell and squash any bear hopes. The S&P futures point to a negative open but without weak copper, the bears probably do not have the juice again today. Keybot the Quant remains long. If JJC stays under 39.02 and SPX drops under 1704 and stays under, Keybot will likely flip short. For the SPX today starting at 1707, the bulls need to push above 1709 and an upside acceleration will occur to 1712 and higher in quick order. The bears need to push under 1704 to develop downside mojo. A move through 1705-1708 is sideways action and since this is a tight range, there will likely be a winner chosen today, bull or bear. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullishness for the hours ahead (see this morning's chart) but the bears can develop some downside momentum if they push the SPX under 1706 and lower and create a negative 8/34 cross. JJC 39.02, GTX 4800, VIX 14.20 and SPX 1709 and 1704, and the 8/34 cross, determine market direction today.

Note Added 10:40 AM:  The 8 MA stabs down through the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours and days ahead. After one week of teases, the 8 finally slices down through.  Keybot the Quant remains long since copper turns bullish today, JJC is now at 39.03, only a single hair above the 39.00-39.02 bull-bear line in the sand. If JJC drops under 39 and the SPX drops under 1695, Keybot will likely flip short. If JJC stays above 39.02, the broad indexes should recover today. So copper tells the tale. Volatility is higher. VIX 12.52 but still under the 14.20 bear level. GTX is 4824 is remaining above the 4800 bear level. TRIN 0.92 actually a touch bullish despite the down markets. Watch JJC 39; bears need weaker copper to develop a sustainable down move.

Note Added 11:38 AM:  JJC failed 39 only fifteen minutes after the last message. JJC is now at 38.97 making a come back only three pennies in favor of bears. Keybot the Quant remains long with lots of drama there today. The algo wants to go short but continues to be held back. Currently, the algo needs to see JJC stay under 39 and the SPX to drop under 1693.29, and hold under for 7 to 10 minutes, and that should cause Keybot to flip short. If JJC recovers above 39, all bets are off for bears, and bulls will be fine. Bulls got trouble with JJC remaining under 39 and if GTX falls under 4800, now at 4819; the trouble would be double. VIX keeps inching higher. TRIN is 1.03, bearish by three pennies, nothing that bears can hang their hats on. SPX is 1696.81 about 3-1/2 points above the 1693.29 support level the bears need to unleash mayhem.

Note Added 12:31 PM:  SPX 1696. JJC 38.94. GTX 4829. VIX 12.60. TRIN 1.13. Bears win with SPX 1693.29 and lower. Bulls win with JJC 39.00 and higher. The beat goes on. One side or the other will likely be chosen today. The SPX 2-hour and 1-hour charts rolled over from the negative divergence highlighted yesterday afternoon.

Note Added 2:54 PM:  JJC 38.97 remains under 39.00 albeit by 3 cents. SPX 1697.20 remaining 4 points above the 1693.29. Status quo. Neither side wants the ball but the bulls are trying to regain copper with all their might. VIX 12.78. GTX 4822. TRIN 1.13. The 8 MA remains under the 34 MA on the 30-minute signaling bearishness ahead. Price is at the 8 MA right now at 1697-1698, therefore, the break from this level will tell a lot. Bulls win above 1698 since JJC 39.00+ will likely occur in concert.  Bears win below 1697 and copper should march lower.

Note Added 3:21 PM:  Potential bear flag patterns on the 15-minute and 30-minute SPX charts. First leg is 1710 to 1693. So potential second leg down starts from 1697-1701 which would target 1680-1684.

Note Added 3:37 PM:  Markets are stumbling along unable to commit to a direction. Perhaps traders are waiting for DIS results. JJC 38.95. SPX 1697.39. Volume remains below average but higher today for the sell side than yesterday's upside.

Note Added 4:16 PM:  DIS earnings beat on EPS by 2 pennies but the Mouse House is short on top line revenue. Scrooge McDuck sent the stock lower on the knee-jerk Grumpy reaction but then it recovered to the Happy side, and now it is drifting lower again in Goofy and Dopey trading.