Keystone's Morning Wake-Up 6/13/14; Friday the 13th; PPI; Consumer Sentiment; Iraq Turmoil

PPI comes in below expectations disappointing inflationists and those expecting higher Treasury yields. The 10-year yield is 2.63% after taking a wild ride yesterday from 2.66% down to 2.58% and now sitting mid-way between the upper and lower moves. US futures are flat. The market bears are flexing muscles but the move lower is not very impressive as yet.

Keybot the Quant remains long but teased a potential move to the short side yesterday. Watch RTH 58.98 as the key market metric dictating market direction today. The RTH begins at 59.00, two pennies on the bull side, creating market lift. If RTH remains above 59 and head higher today, the stock market will move higher and remain buoyant into the weekend. Market selling will increase with the SPX attacking the 1920-1928 support zone if RTH loses 58.98. If the RTH turns bearish, and the SPX drops under 1926, Keybot will likely flip short.

Keep watching the RUT 150-day MA slope. The day begins with the 150-day at 1142.83 moving sideways. If the RUT 150-day MA slope turns negative (the 150-day MA numbers begin dropping), this will signal the conception of a cyclical bear market beginning. As long as the 150-day MA keeps sloping higher, the bears got nothing and the bulls continue to rule the equity markets. The BPSPX remains on a market buy signal at 81.80. A top occurs at 82.50 over the last couple days so the bears need the BPSPX to drop under 76.80 (six percentage points) to receive a market sell signal and this would be several days away. The BPSPX is more of a confirmation signal rather than leading indicator.

Equities are typically bullish moving through a full moon which occurs today. The SPX 30-minute chart wants to see a move higher in price but the 2-hour chart wants to see lower lows for price. Therefore, equities may move sideways to sideways higher to end the week, and then place a bottom in the 1920-1928 support area early next week, then recover to 1939-1943, or higher, for later next week, to place a potential double top (M top) for equities and set up more substantive downside going forward. The 8 MA is under the 34 MA on the SPX 30-minute chart signaling bearish markets for the hours ahead. Bulls got nothing unless they create a positive 8/34 cross.

For the SPX today starting at 1930, the bulls need to push above 1943 to regain their mojo. This is a formidable task so instead bears will simply focus on a stronger retail sector and RTH staying above 59 which will at least send equities flat to higher today. The bears need to push under 1926 to accelerate the downside to 1920. A move through 1927-1942 is sideways action. Markets will pivot at 9:55 AM on the Consumer Sentiment number. Watch RTH 58.98 since it tells you market direction today. Today is Friday the 13th so beware of black cats and avoid walking under ladders. That will not be easy since a black cat patrols the garage area to keep it free from mice and chipmunks and the ladders are out today to clean gutters and trim tree branches. Oh well.

Note Added 9:19 AM: Futures catch a bid. S&P +2. Dow +8. Nasdaq +8. Crude is pulling back off the highs from overnight. WTIC crude is under 107 with Brent at 113. Dollar/yen moves higher from a low at 101.67 overnight back up above 102 to 102.11. Banzai! The BOJ always comes to the rescue with Kuroda beating the yen with a baseball bat to allow US stocks to move higher (a weaker yen sends the dollar/yen currency pair higher and US and Japanese stocks higher while a stronger yen, like yesterday, sends the dollar/currency pair lower and US and Japanese stocks lower). Retailer EXPR is targeted for a takeout leaping over +22% so this will help pump the retail sector higher. The fix may be in today for bulls since RTH staying above 59 and moving higher will help stocks recover.

Note Added 10:24 AM: Consumer Sentiment is 81.2 under the 83 expectations and last month's 81.9. Folks are likely becoming beaten down by higher gasoline prices and a sick stagnant economy without job opportunities. Surprisingly, at the start, the RTH collapses under 58.98 ushering in the market weakness. High drama is occurring now with RTH recovering creating the recovery move in the stock market and is now fighting at the 58.97-58.99 bull-bear line. The RTH 58.98 level is more important than the broad indexes since the retail sector will dictate market direction today. Dollar/yen remains above 102 helping bulls. INTC joyousness helps bulls. Lower volatility helps bulls. Whoa. TRIN collapses to 0.57. This provides the bulls with a huge eagle feather for their caps. This low TRIN will send equities higher all day long today. Keybot the Quant remains long but is threatening to go short again but likely needs to see the SPX print under 1926 and heading lower. Price is now at 1934 well above. The SPX 30-minute chart positive divergence highlighted this morning creates the market bounce that should run for a few candlesticks. Watch RTH 58.98. RTH is printing 58.96 holding on to the bear side by a hair despite equities moving higher. If RTH stays under 58.98 it will overrule all the positive things mentioned and it will drag equities lower. If RTH moves above 58.98, the bulls will have a big par-tay today. SPX 1939 serves as overhead resistance.

Note Added 10:39 AM: RTH 58.96. The bears hold the line with RTH 58.98, for now. The drama continues. The 8 MA on the 30-minute chart is curling upwards so the bulls will try to create a positive 8/34 cross today. TRIN is 0.61 pure bull fuel. 

Note Added 10:51 AM:  RTH is 59.02 now confirming the market upside; see if the bulls can hold RTH 58.98, or not. Long trades are already popping the corks on the wine bottles to begin the weekend fun early. Bears better push the retail sector lower or they will have their face rubbed in the sand today. TRIN 0.66.