Keystone's Morning Wake-Up 9/11/13; 9-11 Twelve-Year Anniversary; Wholesale Trade; 10-Year Note Auction

The bulls enjoy a 3-day move from 1640 to 1684 filling the 1680-1685 gap. The 1685 and 1691 key resistance levels are the only barriers for the bulls remaining before 1700+ prints again. Therefore, the bears must place reinforcements at 1685 and 1691 drawing firm lines in the sand. Mortgage Applications are down continuing the sick 3-month housing malaise. Wholesale Trade numbers at 10 AM will create a market pivot point. Ditto Oil Inventories at 10:30 AM. Oil remains buoyant despite President Obama retreating from Syria military action. The 10-Year Auction is at 1 PM with the yield now at 2.94%. Trader's are of two minds now; yields will continue higher and stocks higher, or, yields higher and stocks lower. It is always the one that no one looks for such as yields lower, stocks lower. MW and VRA earnings will effect the retail sector.

Keystone took profits on the SPXL long trade yesterday exiting the position. Also added more SMN.

The bulls pushed the VIX under 14.58 yesterday which clearly paves the way for higher equities. However, VIX begins at 14.53, only a nickel on the bull side, so the pathway ahead is not yet decided. Volatility is the key market metric today. Very simply, equities move higher if VIX stays under 14.58. Equities will sell off if VIX moves above 14.58. For the bulls to push through the important SPX 1685 and 1691 R levels, utilities must cooperate. If UTIL moves above the 482-483 level, the market upside will be cast in stone and 1700+ is coming and likely a move to the 1720's. Bears must prevent UTIL from moving above 482-483, otherwise, they will feel pain.

Recent charts posted highlight the uber bullish complacency with the low CPC and CPCE put/call ratio's, the low TRIN numbers, and the falling VIX, all showing that bulls are tripping over themselves to buy stocks. The party is in full swing, there is no fear or worry. The juncture right now is reminiscent of July 2011 before the waterfall crash. Markets had sold off in June-July, but then recovered, and everyone was quickly convinced that the sky was the limit once again moving into August, when equities collapsed. At that time the debt ceiling talks were in play, like now. The low CPC and CPCE numbers signal that a significant market top is in place.

For the SPX starting at 1684, the strong 1685 R is key. If bulls push up through 1685, then a test of 1691 is a given. The 1691 is the last level that can prevent 1700+. The bulls will be pouring more drinks if 1691 is taken out since new market highs will be on tap. The bears must push under 1675 today to accelerate the downside. A move through 1676-1684 is sideways action. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. Bears need to print sub 1682 numbers to curl the 8 MA downwards for a potential negative 8/34 cross. Bears got nothing until the negative 8/34 cross occurs on the 30-minute. VIX 14.58 is the key metric that will dictate market direction today.