The first full week of trading for 2013 begins today. Markets are idling flat overnight, futures are flat, the euro is drifting lower to 1.3040. The 10-year yield is hanging out at the 1.90% decision line (type 'TNX' into the search box above to review the 10-year Treasury note chart). Copper is negative. Oil is down. AAPL is down over one percent pre-market. The Nasdaq futures are down a hair more than the S&P's which is encouraging for bears but only marginally.
The Basel regulations were relaxed on bank liquidity requirements so the European banks are bouncing today. Europe in general is negative. Toyota cuts auto forecasts for China and says they have no plans for any new plants before 2016. Senator McConnell takes taxes off the table and says spending is the focus ahead of the debt crisis deadline. The president says not-so and that we have only begun to start taxing. The politicians love the theatrical stage and both are currently barricading themselves in their dressing rooms.
Sticking to the technicals to make sense of it all, the SPX minute and hourly charts from the weekend show that a pull back is at hand. Even though futures are flat, the fair value read is pointing to a few points of weakness after the open. This would begin to satisfy the spank down needed from the rising wedges and negative divergence shown on the charts. Look for a test of 1459-1461 strong support. If it fails then a downside acceleration will occur and the bears will flex their muscles. If this support level holds, the bears got nothing, and the bulls will take the broad indexes up again to explore Friday's highs. .
Most important, as measured by Keystone's algo, is the utilities sector. If the bulls can push UTIL above 466, the markets are going to take another leg higher. The market bears must prevent UTIL 466 today; it is their most important mission. UTIL 466 will tell you which side has the strength moving forward, bears remain in the game under UTIL 466, but will crumble if the bulls take out UTIL 466 to the upside. For the SPX starting at 1466, the bulls need two green points to touch 1468 and this will send price to test 1472 in very quick order. The bears need to push under 1459 as mentioned above. A move thru 1462-1467 is sideways action today. There is a tech conference and healthcare conference today so tech, healthcare and biotech names will receive attention. In a nutshell, watch UTIL 466, SPX 1468 (happy bulls) and SPX 1459 (happy bears).
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