Keystone's Morning Wake-Up 11/8/13; Monthly Jobs Report; Consumer Sentiment

The Monthly Jobs Report hits within the hour, delayed one week due to the government shutdown. The consensus is 120K jobs and a 7.4% unemployment rate. Last month was 148K jobs and a 7.2% rate. As always, pay attention to the average hourly workweek and earnings numbers. Analyst projections are all over the map with this release since the data collection efforts may have been hampered. Thus, the report may not have much effect on the futures that currently show the S&P's at +1, Dow -12 and Nasdaq +5. DIS may create a 10 or 20-point drag on the Dow today. The S&P's were +5 a couple hours ago. Consumer Sentiment at 9:55 AM will create a market pivot point so markets will not settle in for the day until after 10 AM.

Markets sold off strongly yesterday led by tech, small caps and momo stocks. The SPX drops to tag the 20-day MA at 1746.61 which was desperately needed. The volume was the strongest since the move off the September market top. The high-flyers continue to roll over including QCOM, YELP, Z and AMZN.  TSLA is down almost -30% off its top and with STCY dumping -17% yesterday, Elon Musk wishes he had stayed home. Keybot the Quant remains short although the algo was in position to flip long for a brief period yesterday afternoon. Watch UTIL 504.41, XLF 20.39 and VIX 14.32. Utilities are helping the bears while financials and volatility continue to allow the stock market to remain elevated. Note how XLF closed directly on top of the 20.39-20.40 bull-bear line in the sand identified by Keybot. It is amazing how the algo identifies these numbers ahead of when they occur. Since XLF teeters on the bull-bear line, as financials go today, so go the markets. Financials will be effected by the jobs number. Volatility is helping the bulls. The VIX spiked +10% higher yesterday but no biggie. The VIX 20-day MA is 13.90 so watch to see which way price pivots at the opening bell. Bears need to move above the VIX 200-day MA at 14.40 or they got nothing. Keybot identifies VIX 14.32 as the key bull-bear danger line. Thus, a VIX under 14.32 and bulls are not concerned. Above the VIX 14.30-14.40 area and markets are in big trouble. Note how the CPC and CPCE put/call ratio's did not budge yesterday despite the sell off. Long traders are trained to buy the dips like Pavlov's dog so they are not phased by the market sell off at all and the uber complacency in the markets continues.

For the SPX starting at 1747, the bulls need to retrace yesterday's move to regain the upside mojo, a formidable task. The bears need to push under 1746 to accelerate the downside. A move through 1747-1774 is sideways action. Typically, the day after a large move results in a sideways day. Watch UTIL 408.47 at the closing bell for a heads-up for Monday trading. If bulls close UTIL above 408.47 today, this sets up happy rally times for early next week. If UTIL trails lower today and ends under 408.47, this is a big feather in the bear's cap. If UTIL closes down near 5 hundo or under, that will hint at very bad things coming for equities. For today, watch UTIL 504.41, XLF 20.39, VIX 14.32 and SPX 1746 to determine market direction. The circus is about to begin for another day under the Big Top. Strike up the calliope. The jugglers keep balancing the spinning plates in the air, for now.  What say you jobs numbers?

Note Added 8:34 AM:  The Jobs Report is up a surprising 204 K with a 7.3% rate. Previous months' job numbers are revised upwards. So much for all the negative talk due to the shutdown. Retail, healthcare, manufacturing and engineering employment all increases. Futures drop since good news on jobs is bad news for the stock market--the Fed may now taper QE sooner since the economy may be in better shape than suspected. The S&P's are -6, Dow -60 and Nasdaq -6. The 10-year yield catapults higher to 2.72%. Traders clearly believe the tapering will now occur sooner rather than later. Hours worked drops which is odd. Companies actually do not need to hire if they cannot even keep their own employees busy. The odd report will need some time to sort out. Futures moderate but remain flat to negative.

Note Added 9:57 AM:  Consumer Sentiment is 72.0 the lowest initial read on sentiment since March. Sad consumers do not spend as much on the holidays. Equities float higher today so far with the SPX at 1751. Utilities collapse due to the 10-year yield sky rocketing to 2.74% on the jobs number. UTIL is 495 now approaching the 50-week MA at 488-ish which is a trap-door for the markets. Keep this in mind as the days and weeks continue. XLF is 20.59 bouncing off the 20.39 danger line. VIX moves lower to 13.70. Thus, utes, financials and volatility remain in their respective camps so markets stagger sideways. Keystone bot NUAN opening a new long position which is setting up with positive divergence. NUAN (tech) is a Carl Icahn darling so it may be due for a big bounce. DNDN (biotech), NUAN, SJB (short high-yield) and PANW (tech) are all setting up as attractive longs right now. Keystone remains in the speculative DNDN long trade. No positions in SJB or PANW as yet.