Keystone's Morning Wake-Up 10/30/13; Fed Announcement; V

The bulls continue to pump markets higher since traders expect the QE tapering to not begin until March 2014 or later, and the Fed is expected to reinforce this opinion this afternoon with the 2 PM EST decision. The boat is fully loaded to the bull side and the S&P futures are already +5 at this writing. The boat was fully loaded to the bear side for the prior Fed meeting which provided a big surprise in the opposite direction. Also of interest is the 5/22/13 market top which occurred exactly at that Fed announcement that said tapering is on the table. The short-sellers gave up yesterday and are unwilling to hold shorts heading into the announcement. This adds further short-covering bull fuel to push equities higher. Markets may want to idle sideways ahead of the Fed decision since it is only a few hours away. The ADP Employment Report is minutes away. This provides a heads-up for the Monthly Jobs Report that is now delayed from this Friday until next Friday, 11/8/13. CPI is on tap at 8:30 AM. Oil Inventories 10:30 AM. 7-Year Note Auction 1 PM. The Fed announcement and a market pivot point occurs at 2 PM. Earnings continue with V the heavy-hitter today.

Copper and utilities continue to dictate market direction; JJC 40.19 and UTIL 506.22. JJC is above 40.19 creating market bullishness and copper is up strongly this morning so this does not appear to be changing providing the bulls more happy news. UTIL moved above 506.22 to confirm further market upside, but reversed, and UTIL finished the day under 506.22 keeping the bears in the game. Keybot the Quant is short but if UTIL moves above 506.22, and the SPX moves above 1772, and both stay above, Keybot will likely flip long. The bulls can eek out additional market upside with the help of copper, commodities and utilities.

For the SPX today starting at 1772, the bulls only need a sliver of green in the futures, which is the case currently, and an upside acceleration will occur towards 1780. The bears need to push under 1763 to accelerate the downside. A move through 1764-1771 is sideways action. The SPX is up 4 days in a row, up 9 out of the last 10 days, and up 13 of the last 15 days. The SPX price is extended above the moving average ribbons in all time frames begging for a mean reversion (lower prices). The low CPC and CPCE put/call ratio's occurred about 7 trading days ago so markets remain in the window where a significant market top is at hand. The CPC drops to 0.74 and CPCE to 0.52 with yesterday's bullishness confirming the ongoing complacency and fearlessness in the markets.  Traders are not concerned about any market downside since since the Fed will be goosing markets until March 2014 and beyond. Party on Garth. The thrust higher currently is likely a gift to exit the long side.

The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours ahead. Bears got nothing until they receive a negative 8/34 cross. The negative divergence on the SPX hourly and minute charts continue to signal a spank down on tap. This behavior may create weak price action into the Fed decision at 2 PM where all bets are off. Chairman Bernanke will simply turn his thumb up, or down, like Caesar, and determine the fate of the markets this afternoon. The Fed and other central bankers control the markets as evidenced yesterday by a goose higher in the SPX when the BOE's Carney promised more stimulus. Watch JJC 40.19, UTIL 506.22, VIX 14.60 and GTX 4890. Bulls need higher utilities and commodities to send the SPX to 1800. Bears need lower copper and higher volatility to begin a market move lower.

Note Added 8:15 AM: The ADP Jobs Report is a paltry 130K jobs. This is sickening; not even enough jobs to absorb new workers entering the work force. Traders will not care, instead, they will be happy since more Fed QE crack cocaine will be on tap.

Note Added 10:17 AM:  Sideways drama so far. UTIL is on each side of 506.22, now on top at 506.85. Keybot the Quant will likely flip long if UTIL stays above 506.22 and the SPX moves above 1775.22. VIX sneaks above 14. Bears may be gunning for 14.60 to initiate market downside. Both the VIX and SPX are up today; more odd behavior; one of them is wrong. This only occurs about 10% of the time but now the SPX and VIX are both moving up together for the last few days. Very odd. Equities may stumble sideways until the Fed today at 2 PM, less than 4 hours away. Whoopsies daisies, UTIL under 506.22 again. It is all a crap shoot today. Flip a coin.

Note Added 10:31 AM:  Weird vertical spike lasting seconds for VIX above 21. Now back down to 14.09. Strange stuff going on for Halloween Eve. Watch your wallet moving forward. UTIL 506.62.  SPX 1771.77.