Today ends February, EOM. The monthly charts receive new prints this evening. Keystone's Job Report Friday Market Indicator (Other Signals page) was forecasting an up February based on the up Jobs day, and currently that is on track with six and one-half hours of trading remaining. The SPX started February at 1498 so that will be a level worth watching today to see if February does close up, or not. The SPX closed at the strong 1516 support yesterday. Watch the strong 1518 and 1520 resistance above like yesterday. The bulls will launch an upside acceleration above 1520. The bears need to see 1495 today to accelerate the downside, a formidable task, retracing yesterday's up move, but not impossible. Bears will be content with simply sending volatility higher today to stop the market upside move. February typically finishes weak the last couple days. Yesterday definitely smacked that seasonality factor silly which happens now and then. Perhaps the expected seasonality will kick in today? March begins tomorrow.
Much of yesterday was a short-covering upside orgy. Volume was light at only about 70% of a days average expected volume. Copper selling volume far outpaces the buying volume over the last few days. Tech and small caps lagged the broad market over the last two days. For bullish markets, you want tech and small caps to lead the way, not lag. The Dow Industrials ($INDU) and SPX ($SPX) moved above their 20-day MA's at 13954.79 and 1510.97, respectively. The Nasdaq ($COMPQ) and RUT ($RUT) are not above their 20-day MA's so pay close attention to 3166.97 and 911.08, respectively. The 8 MA is above the 34 MA on the SPX 30-minute chart signaling bullish markets for the hours and days ahead so watch to see if the 8 MA curls over and heads down, or not. The SPX also moved above the 200 EMA on the 1-hour chart at 1500.27 signaling bullish times ahead so pay attention to the psychological 1500 level.
Keystone's Inflation-Deflation Indicator sits at 2.90, now in disinflation, on the verge of falling into deflation. This sounds like craziness in light of the wild upside equity market move yesterday. The many market cross-currents continue. Be very wary and skeptical of these markets, Fed or no Fed. The 'don't fight the Fed' mantra is always correct, until it isn't. Over the last week, the Dow has printed a new high but the Trannies have not. Thus, to keep Dow Theory on the bullish side, the bulls need to see $TRAN take out 6020 right away this morning. The Dow is within 100 points of its all-time high adding even more drama to today's theatrics. The new all-time high would make for spectacular weekend newspaper headlines. Sequester, schemester, no one cares. Traders know politicians will kick the can so there is no worries. The CPC put/call ratio, and lower VIX yesterday confirms this ongoing complacency. There is simply no fear or panic in markets and stocks are not attractive on the long side until you see the panic and fear surface. Watch VIX 15.70 today, bulls win if the VIX stays below 15.70, bears win above 15.70. The XLF 17.21, financials, remains important as well.
JCP and GPRN are puking this morning. It is a shame how the JCP brand was destroyed. Dear ole departed Mom would shop at JCP as her fave store for decades. If she was here now, she would be shopping at M, TGT and WMT, not JCP. JCP alienated all their loyal customers. MCP rare earth company had bad news so that may pound all the rare earths today. KSS earnings are weak with weak guidance. Ditto LTD (Victoria's Secret) and BKS (books). Watch the retail sector, RTH, today. The GDP number is +0.1% recovering from the initial -0.1% last month. It is shameful that the huge amount of Fed money pumping since early 2009 results in a flat GDP, absolutely shameful; nothing for the taxpayer's money and the young people are now screwed for their life times being stuck with the bill. The economic data in general a short time ago did not affect the futures which point to a flat start today. Natty Gas Inventories are 10:30 AM and the Kansas City Fed's Manufacturing Index hits at 11 AM. Farm Prices at 3 PM will affect the ag sector and commodities. Fed's Fisher and Evans speak this evening. The 10-year yield jumped from 1.85% back up to 1.90% yesterday and overnight back down to 1.88%. Up yields = up equity markets, down yields = down equity markets. The euro is 1.3118 above the 1.31 level which serves as a bull-bear line for today; bulls win above 1.31, bears win below 1.31. Crude oil is hovering around 93; above 93 and equity bulls are happy, below 93 and bears are happy.
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