Keystone's Morning Wake-Up 9/9/13

Copper is up in early trading so this will keep JJC elevated above 39.93 and send the markets higher. Keybot the Quant, Keystone's trading algo, remains short but has been wanting to go long since Wednesday. With copper up, and S&P futures +4, it appears that Keybot will likely flip long today. The SPX above 1657, a key pivot the last couple days, will likely give the bulls the nod. Watch RTH 53.74 since this will provide additional upside bull fuel. If RTH cannot move above 53.74, it hints that any up move in equities will weaken and roll back over to the downside. If RTH moves above 53.74, the recovery rally will be real and extended at least for a day or three. Retail earnings and Retail Sales on Friday are a major focus this week and will directly impact RTH. The higher oil price is sending gasoline at the pump higher which, in turn, will hurt retail sales moving forward. Utilities are important as well, both UTIL 482.16 and 483.35. If UTIL takes out these levels, the SPX will be headed to 1700+. If UTIL stays under these levels, the overall downside market malaise will continue.

The 10-year yield is 2.90%-2.91%. WTIC crude oil sits at 110. Syria drama continues with President Obama conducting interviews with media today and will meet with Congress members at various meetings today and tomorrow. All these theatrics reach a climax at 9 PM EST Tuesday night, 9/10/13, when the president speaks on television addressing the American people. The 9-11 Anniversary is here as well. The Fed's taper decision is 8 days away. HOV earnings are important for a gauge on housing. FLOW earnings indicate the strength of engineering projects ongoing. PVH provides insight into the retail sector.

The SPX 20-day MA is 1656.79 and is a key metric today to tell you which side wins. The 50-day MA is 1665.51. The TRIN Arms Index continues to print sub one numbers so a move to higher numbers is needed which would correspond to the broad indexes selling off. The CPCE put/call is at an obscene low of 0.50 indicating complete complacency and lack of fear across the board by traders, which occurs at market tops. This is interesting considering the Syria trouble, Fed tapering, the debt ceiling and government funding deadlines, the NSA, IRS and Benghazi Whitehouse scandals, weak jobs report, and on and on. Traders are addicted to the Fed's easy money crack cocaine and fully convinced the party will never end. Keystone's Eclipse Indicator targets 9/26/13, give or take a week or two, for a major market sell off. This creates a window from now through 10/11/13. Although esoteric, this indicator is surprisingly reliable as previous eclipse charts have shown (type 'eclipse' into the search box at right to bring up the chart that called the April top and also illustrates the past hits for this interesting indicator).

As the new week begins, looks like the bulls want to run. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. Watch JJC 39.93 (now creating bullishness) and RTH 53.74 (now creating bearishness) since these two parameters steer the market ship to begin the week.