Keystone's Morning Wake-Up and Midday Market Action 10/2/13; Shutdown Continues; Bernanke Today

The government shutdown drama and political theatre lingers on with the blame game in high gear. Remember what dear ole Mom told you as a youngster that when you point a finger at someone else there are three fingers pointing back at you. Fed's Rosengren speaks at noon and Chairman Bernanke is on a web cast at 3:30 PM, it may be 3 PM, at any rate, during the last hour of trading today. The ADP Jobs Report was 166K lower than the expected 180K jobs showing a continuing sick economy and if the Monthly Jobs Report is cancelled for Friday morning due to the shutdown, the ADP Report sets the tone forward. Oil Inventories are 10:30 AM. The bulls appear to have a lock on the upside with the big rally yesterday, the 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets ahead, and price is above both the 20-day MA at 1689.93 and 50-day MA at 1679.96. The SPX is also above the 200 EMA on the 60-minute chart at 1685.33 signaling bullish markets for the hours and days ahead, however, there may be a battle at this level today. Market bears got nothing unless they create a negative 8/34 MA cross on the 30-minute and/or a drop under the 200 EMA at 1685.33.

Watch UTIL 483.53, JJC 40.13 and XLF 20.01. All three are bullish, especially after a late-day orgy that spiked prices during the last minute of trading yesterday. Keybot the Quant is short but wants to go long. All it needs to see is SPX 1696+ (keeping it simple) and a flip to the long side should occur for the algo. The S&P futures, however, are weak pointing to a -10 or more handle drop at the opening bell. This may save the bears today. Despite any drop in the broad indexes, the market bears must attain at least one of the three parameters mentioned, if not, markets will reverse to the upside and start the trek to SPX 1700. The degree of market weakness today is identified by if one, two or all three of the parameters turn bearish, or not. CPCE put/call ratio drops to 0.53 continuing to signal a rampant complacency among traders that believe the Fed will always be there to pat everyone's behinds, so there is no reason to worry about anything. As Alfred E. Neuman quips, "What, me worry?" Watch the range created by the 20 and 50-day MA's at 1680-1690. Bulls win above 1690. Bears win below 1680. A bull-bear fight continues through 1680-1690. Copper is all over the map in early trading. UTIL 483.53, JJC 40.13 and XLF 20.01 dictate market direction today.

Note Added 10:24 AM:  XLF drops under 20.01. UTIL drops under 483.53. Bears pull a handkerchief from their pockets to dab off the beads of forehead sweat and relax for a few minutes; bears may have dodged a bullet today. SPX is fighting in the center range 1680-1690 described above. Bulls remain in the game keeping copper elevated with JJC above 40.13. Oil Inventories are on tap in a few minutes then Rosengren will either ruin the bears, or bulls, lunch, then Bernanke late-day. The 8 MA is curling downwards for a potential negative 8/34 MA cross on the 30-minute. The SPX drops under the 200 EMA on the 60-minute chart at 1685.29 signaling bearish markets for the hours and days ahead. Watch these two indicators closely today. The band plays on.

Note Added 1:57 PM:  Nasdaq trying to turn positive. Bears ran out of gas today. XLF moves above 20.01. UTIL is above 483.53. Both create bull fuel and the market recovery today. Bulls are also pumping commodities. Watch GTX 4889, now at 4880, since more bull fuel will be added to the broad indexes above 4889. Keybot the Quant is short but wants to go long again. If the SPX moves above 1696.50 before today's closing bell, and stays above, Keybot will likely flip long. Bears have to move XLF under 20.01 or UTIL under 453.53 to stop the market recovery. TRIN is 0.55 obscenely low pumping equities higher. The 8 MA came down to touch the 34 MA on the 30-minute chart but cannot punch down through as yet so the bulls remain in control for the hours ahead. Ditto the SPX now above the 200 EMA on the 60-minute at 1685.52. Use XLF 20.01, UTIL 483.53 and GTX 4889 to gauge the market strength, or weakness, ahead. Looks like the close will be important and Bernanke should offer up some words in the final hour as well. SPX is 1692.25.

Note Added 2:13 PM:  Whoopsies. XLF 20.00. XLF drops from 20.06 to 20.00 over the last hour taking the wind out of the bull sails as the pendulum swings back the other way. Markets are erratic and indecisive. UTIL has a 483 handle; see if comes down for a look at 483.53.