Alcoa kicks off Q3 earnings season this afternoon. YUM, a key China bellwether due to the KFC (Kentucky Fried Chicken) franchise, reports as well. NFIB Small Business Optimism is being released now. International Trade 8:30 AM. JOLTS Job Openings Report 10 AM. Fed's Pianalto speaks 12:25 PM. Fed's Plosser speaks at 12:30 PM. 3-Year Note Auction 1 PM. GTX 4888, JJC 40.19, RTH 54.79 and XLF 20.02 are the key market directional drivers today. Commodities, copper and retail are helping the bulls while financials are helping the bears, respectively. Markets will move to and fro based on how these parameters move.
For the SPX starting at 1676, the bears need a one-point drop under 1675 to accelerate the downside while the bulls need to push above 1687 to accelerate the upside. A move through 1676-1686 is sideways action. Keybot the Quant remains short. If the XLF moves above 20.02, and the SPX moves above 1687, and both stay above, Keybot will likely flip long. The SPX is under the 200 EMA on the 60-minute chart at 1685 and the 8 MA is under the 34 MA on the 30-minute chart both signalling bearish markets for the hours ahead. Key S/R is 1691-1692, 1685.08 (200 EMA on the 60-minute), 1689, 1687, 1685, 1682, 1680, 1679.53 (50-day MA), 1675, 1672 and 1669.
The CPC and CPCE put/call ratio's continue to signal complacency and lack of fear in the markets. The higher VIX, however, shows concern and worry beginning to surface. The VIX beach ball may explode from under the water (scroll back to Sunday's cartoon). The NYMO is negative but not yet at -40, -50, -80 and -100 that are better areas where a market bounce would occur. The VIX violated its upper standard deviation band which hints that a near-term market bottom is at hand. The next couple days are very important for markets. Copper is very influential now and helping the bulls prevent significant downside. If JJC 40.19 fails, markets are in trouble. For market direction today, watch GTX 4888, JJC 40.19, RTH 54.79, XLF 20.02 and SPX 1675 and 1687. Keystone added some DNDN yesterday to this ongoing speculative long trade.
Note Added 10:26 AM: Status quo with commodities, copper and retail remaining bullish and financials bearish. Thus, markets stagger sideways similar to the politicians after a typical lunch. SPX range is the 1672 support on the bottom side and 1675-1676 on the top side, so far. Bulls win above 1676. Bears win below 1672. Price remains under the 50-day MA at 1679.33, bearish. Equities meander waiting for the next politician to take the podium, of course after their underlings place trades so they all can play the markets on their own news. TRIN 1.04 so it cannot make its mind up either, teetering around the neutral 1.00, favoring the bears but only by a hair. The SPX may want to test the low from last Thursday at 1670.36 (last week's low). If 1669-1670 fails, the algo's should kick in more sell programs since a weekly failure is important. Under 1669, strong support is 1657, 12 points lower, with 1664 a stop-over place on the way there.
Note Added 10:49 AM: Here's the test of last week's low at 1670.36. Price is 1670.57..... whoosies daisies, now 1669 handle, so it stabbed down through. The SPX is now at a critical juncture, strong support at 1669-1670, it is time for the broad indexes to bounce, or die. What will it be bulls and bears?
Note Added 2:56 PM: It died. President Obama is speaking, rambling on with the same-o dialogue, cruising at 40,000 feet, blaming everyone else for the current political situation. All these political folks better get together soon since equities are starting to feel the pressure. VIX is over 20 now and hit 21 today. RTH failed at 54.79 which creates this afternoons weakness. TRIN is 1.69 helping bears. The SPX fell through 1669 support, tapped on 1664 from above and below, then fell to the LOD today at 1657.34. The SPX 2-hour and 1-hour charts continue to look weak although price is attempting to place a bottom. Look back at the SPX S/R list from the weekend to monitor support and resistance. If 1657 fails, then 1652 and 1649 support levels are on tap next. SPX sits at 1660.
Note Added 3:16 PM: The president continues talking and the markets remain weak; he needs to exit stage right. The president does not plan to negotiate so he could have said that in 5 minutes. As in musical performances, exit while you are at the top of your game since the longer you play, or talk, the more the audience disengages. RTH is 54.71 under the critical 54.79. UTIL 482.07. JJC 40.36. GTX 4909. VIX 20.58. TRIN 1.79.