Keystone's Morning Wake-Up and Midday Makret Action 9/3/13; ISM

The bulls are set to jump higher to begin September since President Obama back pedaled from acting on Syria and will now instead wait for Congressional approval. The Congress clowns are returning to the Big Top this week and will be in full session next Monday forward. The vote on Syria is expected next week. Copper jumps large over the holiday as PMI's around the world met or beat expectations. The ISM Mfg data hits at 10 AM EST and will create a market pivot point. Keybot the Quant is short with copper and utilities playing a key role. The bulls need to push JJC above 39.97 which is likely at the opening print. This will provide bull fuel and help establish a relief rally. UTIL 483.32 is key as well. If the bulls can push above UTIL 483.32, it is likely that Keybot would flip to the long side. However, the 10-year yield is climbing this morning and now at 2.83%. Higher yields should hurt utes. If UTIL moves above 483.32, the recovery rally is real and likely has legs well up into the SPX 1660's. If UTIL stays below 483.32, the rally probably does not have staying power.

Important SPX resistance above is 1639, 1639.42 (100-day MA), 1640.08 (Friday's HOD), 1647, 1649, 1652, 1657, 1659, 1660.58 (50-day MA) and 1661. Markets are typically negative when Congress is in session. Markets are typically bullish from the last day of the month (last Friday 8/30/13) through the first four days of the month (9/6/13). The new moon is Thursday 9/5/13 and markets are typically weak moving through the new moon. The Jobs Report on Friday will take on a circus feel this week. Keystone's Eclipse Indicator targets 9/26/13, give or take a week or two (window from 9/12/13 through 10/10/13), for having potential for a large market selloff. Watch the 10 AM pivot and JJC 39.97 and UTIL 483.32 to assess the strength of the bulls.

Note Added 10:06 AM:  ISM Mfg is stronger than expected, following along with global PMI's, but equities are moving sideways after the news. At first blush, it may be the good news is bad news dealio since traders will look for QE tapering sooner rather than later. Copper jumped higher at the opening bell with JJC at 40.43 causing much of today's bullishness. Utilities are weak since the 10-year Treasury note yield is 2.89%. Keystone's algo now identifies retail and semiconductors as key sector influences. Watch RTH 53.75 and SOX 467.60 since a move above for either of these, along with the SPX above 1651.35 and staying above, will likely cause Keybot to flip long. The SPX jumped to 1649 resistance and also tested the strong 1652 R. So the 1647-1652 range is in play. Bulls win above 1652. Bears win below 1647.

Note Added 11:41 AM:  Speaker Boehner says he will support military action in Syria, so will Representative Cantor, and others, so the leadership is falling in line behind the president in favor of striking Syria. Equities drop on this news. Oil pops with WTIC crude at 108. The SPX comes down to back kiss the 1639 support as discussed in the SPX S/R missive this morning. So price moves through 1639-1647. Watch the 100-day MA at 1639.89.  RTH 53.29 well off the highs. Ditto SOX 463.09.  JJC 40.53. UTIL 473.93 now 10 points below the bull-bear line. VIX 16.85, flat today.  TRIN is 0.59 uber bullish for today so this should help the bulls recover. The 8 MA moves up through the 34 MA on the SPX 30-minute chart signaling bullish markets ahead, however  the bears are already trying to turn the 8/34 cross negative again. The 8 MA will curl to the downside to help the bears if the SPX stays under 1640 and heading lower.

Note Added 11:58 AM:  SPX 1639.67.  The 100-day MA is 1639.88. Bounce or die.

Note Added 1:41 PM:  Die, although it is a very slow illness, the SPX failing the 100-day MA at 1639.88 with a LOD at 1634.43 but now recovering to 1637.  The 1639 S/R will serve as resistance moving forward. TRIN is 0.57 which continues to give the bulls the nod today so perhaps a sneak stampede is in store. The bears, however, have something different in mind as they curl the 8 MA down towards the 34 MA on the 30-minute trying to create a negative cross before the closing bell. Copper remains uber happy with JJC at 40.60. Bulls are riding the higher copper and lower TRIN today hoping that is enough to recover. Gold is at 1413 rising on the war talk like oil. VIX is positive on the week above 17 so expect more and more wild point moves intraday and day to day as time ticks along. The stale donuts at KKD are stinking even more as the stock price slips on some Boston Cream icing on the dirty linoleum floor. Keystone took profits covering the KKD short and exiting the position. The trade took some patience since the momo ran KKD higher, but it worked out in the end. Also bot ICN opening a new long position which is the Indian Rupee ETF, a very speculative and dangerous trade. ICN charts are set up with positive divergence so the blood shed should give way to a dead cat bounce. Also bot more SPXL adding to this ongoing long play which is a countertrend position that is a triple X long ETF that longs the S&P 500. The portfolio is heavily short so SPXL continues to hedge-in some counterbalance for a move to the long side especially if the TRIN has its way.

Note Added 2:06 PM:  The 8 MA just stabbed down through the 34 MA on the 30-minute signaling bearish markets for the hours ahead, albeit by one single penny, both moving averages now at 1638.34. If the bulls plan on fighting back they have to do something quick and now, to prevent the cross, otherwise, the 8/34 cross should bring in further market negativity.

Note Added 2:13 PM:  Bull pump shows up on schedule. The 8 MA is back above the 34 MA signaling bullish markets for the hours ahead, but this is an ongoing fight into the closing bell, and will tell a lot about market direction. A new candlestick prints in 15 minutes on the 30-minute chart so that should provide clarity.

Note Added 2:32 PM:  The 8 MA is down through the 34 MA in a more decisive manner indicating bearish markets for the hours ahead. SPX 1636.16. LOD 1633.68. RUT turns red.