Keystone's Morning Wake-Up and Midday Market Action 9/4/13; Beige Book

Trade numbers send the S&P futures lower a touch now at -2.5. Dow -32. Nasdaq is positive. Semiconductors may play a key role today if tech is showing signs of life. Copper continues to hold the key to market direction. Strength in copper sent markets higher yesterday, today, weakness sends markets lower. Watch JJC 40.00 as the bull-bear line in the sand. JJC begins at 40.68 and the copper weakness this morning will send JJC down towards a test of 40 at the opening bell. Equities will take another leg lower if JJC drops under 40 and stays under. Bulls will keep hopes for a recovery rally alive and well if they keep JJC above 40.  For the semi's, keep an eye on the SOX 467.60 bull-bear line in the sand.

For the SPX starting at 1640, the bulls need to move above 1651 to create an upside acceleration. The bears need to push under 1634 to create a downside acceleration. A move through 1635-1650 is sideways action. The 8 MA is below the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead but as highlighted on the 30-minute chart this morning, anything can happen. Important SPX support below is 1639, 1632.97 (September's starting number) and 1627. Resistance above is 1639.88 (100-day MA), 1647, 1647.05 (20-week MA),  1649, 1651.35 (Tuesday HOD), 1652, 1657, 1659, 1661.53 (50-day MA) and 1661. Watch JJC 40.00 since it steers the market ship today. The Beige Book at 2 PM EST will create a market pivot point and perhaps a wild couple hours of trading to end the day.

Note Added 9:50 AM:  JJC collapses to 39.68 at the bell providing bear fuel, however, the bulls pull a sneak attack with semiconductors, sending the SOX to 467.00. The recovery rally is firmly back on the table if the bulls can push SOX up through 467.60. The VIX and markets were both higher so one of them was wrong, and volatility has now gone negative. The SPX is testing the 1642-1644 level which is the upper trend line break out on the 30-minute chart highlighted this morning. TRIN 0.69 provides bull juice. The 8 MA pierces up through the 34 MA after the opening bell signaling bullish markets for the hours ahead.

Note Added 10:01 AM:  The 20-week MA is 1647.05, a key moving average that price respects. SOX 468.62 so semiconductors are firmly creating the market bullishness today.

Note Added 10:27 AM:  SPX 1648.16.  HOD 1648.43. The 20-week MA is 1647.22. The bulls punched up through, see if they can hold it for ten minutes, or not. SOX 469.14. Semi's are goosed up over +1.6% today. JJC now recovering to 39.83. Bulls only need 39.93 for more upside fuel and SPX is close to the 1651+ breakout level for today.  Bulls are making a very serious run right now. Watch JJC 39.93.

Note Added 11:00 AM:  SOX 471.15. JJC 39.77. SPX 1648.97. HOD 1649.10. VIX 16.07. TRIN 0.83. All the bulls need is another fifteen cents in JJC and SPX over 1651 and Keybot would likely flip to the long side. Utes are collapsing, now with a 468 handle. Markets may dance sideways until the Beige Book pivot at 2 PM.

Note Added 12:05 PM:  SOX 471.58.  JJC 39.79. SPX 1654.02. HOD 1654.56 so the upside accelerated four handles after 1651 was taken out. The retail sector is now determining the up or down fate for Keybot. Watch RTH 53.75 exactly where price now sits. If either JJC moves above 39.93, and/or RTH moves above 53.75, and stays above, and the SPX moves above 1655 and stays above, Keybot will likely flip long. The bulls mean business today. So this is important action right now and the Beige Book pivot is less than two hours away. Keystone took profits on ICN and SPXL exiting both positions. Will look to reenter ICN. SPXL would be attractive if Keybot flips long.

Note Added 12:51 PM:  Quite a soap opera today. The strength in retail and semiconductors is overpowering the weakness in copper sending equities higher. Watch RTH 53.74, now at 53.73 one single hair on the bear side. The to and fro dance continues. Keybot the Quant wants to go long right now, the algo number is above the signal line, but the algo needs to see the SPX price above 1655, and hold above, to flip long. SPX is 1653.81. TRIN 0.76. The last two days of uber low TRIN's will probably lead to a recoil move in the day or so ahead to relieve the uber bullish market pressure. The Beige Book market pivot is only one hour away so markets may drift along and then make a very important direction decision at 2 PM.

Note Added 1:51 PM:  RTH 53.69 (retail) is not cooperating with the bulls. Beige Book imminent. SPX 1653.82.