Tuesday, October 21, 2014

SPX 60-Minute Chart 200 EMA Cross Inverted H&S Bull Flag Rising Wedge Negative Divergence Developing

The key SPX support and resistance is 1960-1961, 1958, 1951, 1942-1943 (62% Fib for the drop from 2019 to 1820), 1936-1937, 1928, 1924 and 1910. Price gapped-up today creating an island above 1910 and higher. The important moving average support gauntlet is at 1892-1913; this range engulfs the 200-day MA at 1907, 10-month MA at 1913, 12-month MA at 1898 and the 50-week MA at 1892. Price prints a HOD at 1942.45 testing the 1942-1943 resistance level.

The 200 EMA cross is a key VST indicator for market direction and the bulls dealt a fatal blow to bears today. The SPX moves above the 200 EMA on the 60-minute at 1937.68 signaling bullish markets for the hours and days ahead. This represents multiple nails in the bear's coffin. Since the 200 EMA cross occurs today, the bears have a chance on Wednesday, if they bring their 'A' game, to spank the SPX under 1938 and reclaim victory for the hours and days ahead. The bears have been in charge with price under the 200 EMA since late September until today. Watch 1937.68 since it tells you the path ahead.

The 62% Fib is 1942.88 (see previous chart). The HOD is 1942.45. How do you like those apples? You can see how the Fibonacci's matter. Tomorrow decides if price wants to poke up through the 62% Fib and move far higher, or, if the 62% Fib holds to allow the bears to growl again.

The brown lines show an inverted H&S in play with head at 1830, neck line at the strong 1897 S/R; this is 67 points difference that targets 1964. The 1960-1961 is very strong resistance so price may want to seek the 1960-1964 area to satisfy the inverted H&S. The neon blue lines show a bull flag pattern first leg 1820 to 1900-ish call that 80 points, then sideways to sideways lower consolidation, then the second leg begins from 1880 so 1960 is targeted by this pattern also. If 1830 is used as the starting point for the bull flag, a target of 1950 is calculated, call it the strong 1951 resistance. The purple lines show a rising wedge pattern which is bearish. The short red lines for the indicators show negative divergence that wants to see a spank down in price, however, the green lines show long and strong profiles for the MACD line and the RSI is squeezing out a tiny bit more juice, so price will want to come back up for another higher high after any pull back occurs in this one-hour time frame.

Therefore, universal neggie d should develop across all indicators in about 2 to 5 candlesticks which is 2 to 5 hours of time. This would equate to 2 or 3 of the 2-hour candlesticks (reference previous chart) and may or may not be quite enough time for the 2-hour chart to set up for the downside. Since the MACD line wants higher prices, and the SPX already printed near 1943 R, the bulls may be able to at least squeeze out 1951 R before topping, rolling over and reversing.

If equities begin running higher again on Wednesday the 1960-1961 level will likely become the target. Bears will be able to reexert themselves as long as price stays under 1943 (the 62% Fib)Above 1943, and the 62% Fib (for the 2019 to 1820 sell off) gives way, and price will target 1951 heading higher probably to the strong 1960-1961 resistance level.

Keybot the Quant is long and identifies XLF 22.90 (financials) as a major bull-bear line in the sand for Wednesday. The XLF begins at 22.87 only three pennies away causing bearishness. Thus, financials hold the key for the market path ahead. Like Caesar standing at the Colosseum, extending his arm and providing a thumbs up or thumbs down, to determine the fate of the gladiators, that is what financials will do on Wednesday. If XLF pivots above 22.90, the bulls will not look back. The party will be in full gear and the stock market will continue higher with a sustainable upside move ahead. The SPX will target 1951 then 1960-1961. If XLF stays under 22.90 and leaks lower a top is in for the stock market in the near term.

Thus, watch the SPX resistance levels at 1943, 1951 and 1960-1961. Watch the 200 EMA at 1937-1938. If price stays above 1937-1938, the bears will fold like a cheap suit. Watch XLF 22.90. Market bulls win big if XLF moves above 22.90. Bears win big and stop the market upside if XLF stays under 22.90. Listen for any bank news overnight that may impact the XLF when trading begins on Wednesday. The bulls severely crushed the bears today. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

SPX 2-Hour Chart V-Bottom Recovery Rally

The bulls are running strongly higher with the Nasdaq printing the best day of the year. The bears have abandoned ship. Traders are chasing prices higher buying indiscriminately. The market V-bottom four days ago came with the green falling wedge and positive divergence in the stochastics and money flow, however, technically, more weakness was desired. However, as the Fed and other central bankers have done for nearly six years, the stock market is saved with Bullard proclaiming QE 4 is on the way which created the immediate bottom and sent stocks higher. A day later the BOE promises more easy money. China chimes in and is injecting the banks with liquidity. The BOJ is printing yen every day sending the dollar/yen and stocks higher. The ECB promises more easy money and doubles down today with news reports that the ECB will begin buying corporate bonds. It is an obscene orgy of central banker perversion that would make Caligula blush. The S&P 500 catapults from 1820 to 1938, 118 handles in four days; +6.5%. 

The brown dots show the band violations and then price had to check in at the middle band and finally after the bottom was printed, price returned to the middle band then upper band where it sits now. Price may run along the upper band the mirror image of running down the lower band a couple weeks ago but the middle band is now on the table (at 1885 and moving higher). The stochastics are overbot and cooked. They can bounce along at elevated levels, however, until the other indicators negatively diverge. With the last candlestick price high, the RSI is flat but hinting that it wants to remain long and strong and the histogram is negatively diverged. The MACD line is long and strong and so is the money flow wanting higher highs after any pull back with the 2-hour candlestick/s. So there are likely another 2 to 8 candlesticks before the top prints which is 4 to 16 hours taking trading through today, into tomorrow, and perhaps Thursday. Thursday is a new moon late in the afternoon and equities are typically weak moving through the new moon each month so perhaps a top prints tomorrow or Thursday; it would be perfect timing for the new moon where the week would finish weak.

The key S/R is 1960-1961, 1958, 1951, 1942-1943 (62% Fib), 1936-1937, 1928, 1924 and 1910. Note the gap up today to 1910 and higher. The important moving average support gauntlet is at 1891-1908 engulfing the 200-day MA, 10 and 12-month MA's and the 50-week MA. Price is now up to 1940 as this is typed therefore the 1942-1943 is the next upside resistance level. The RSI is long and strong and the histogram is starting to develop more juice.

Today is a phenomenal run higher for the broad indexes. Bears run for cover so the market jumps higher back to elevated levels with everyone back on the bull side of the boat. This is not healthy market behavior. Very oddly, the TRIN remains at 1.00 neutral although it did push higher, and lower, intraday. Price should keep moving higher until the chart prints negative divergence across all indicators so the 1942-1943 will likely print and it will be key to see if it can hold as a top, since it is also the 62% Fib shown on the previous chart, or not. HOD is 1942.45 printing minutes ago.

Bears will be able to reexert themselves as long as price stays under 1943 (the 62% Fib). Above 1943, and the 62% Fib gives way, and price will target 1951 heading higher probably to the strong 1960-1961 resistance level. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 3:41 PM: The SPX poked up through 1936-1937 R (now support) so a test of 1942-1943 R should continue. Since price already took a poke at 1943 and the indicators on the 2-hour chart need more time to develop neggie d, price will likely move up through 1943 and target 1951 R. The only savior for bears would be very bad geopolitical news overnight. Comically, traders said earnings would matter this time around. Well they don't. Companies are reporting a mixed bag. KO, IBM and MCD are negative today. Overall, the top line revenue numbers remain lackluster across the board for the last couple years, however, ignore all this silly ole quant fundamental type analysis. The central banker orgy is all that matters and the CB's saved the markets again as described above. Grab your toga and join the party of perversion. Ignore the middle class and poor; they simply no longer matter. Rape the stock market with the Fed's easy money.

Note Added 3:51 PM: The SPX 1-hour chart is negatively diverged for the histogram, stochastics and ROC but the RSI and money flow is long and strong. This hints at a 2 to 5 candlestick time frame to create the top which is 2 to 5 hours of trading time. This would hint at a near-term market top tomorrow occurring at either 1943, 1951, 1958 or 1960-1961. You can gauge the further strength of the rally by noting how price reacts to the S/R levels. For now, the 1943 R is holding.

SPX Daily Chart Fibonacci Retracements Price is at 62% Fib

The chart shows the Fibonacci retracements for the move down from the 2019 top to the 1820 low. Price recovered to the 32% Fib at 1896, which represents the 50-week MA at 1891 and immensely important 12-month MA at 1895, and punched up through yesterday to create a move to the 50% Fib at 1920. Price dances here today exploding 16 points higher at the opening bell.

The important 200-day MA at 1906 and 10-month MA at 1908 and strong horizontal resistance at 1910 all fold like a cheap suit. The moving averages needed back tested but price simply blew up through a very bullish indication. Considering the importance of the moving averages, price should show more respect to the 1906-1910 range. If bulls can race above the 50% Fib the 62% Fib at 1943 would be in play. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 9:47 AM: SPX punches up through the 50% Fib now printing above 1922 over 100 handles off the 1820 low only four days ago. Strong support is 1920 and 1910. Strong overhead resistance is 1923-1924, 1928 and 1936. Note the gap fill needed at 1927-1928 from seven days ago. Bullish traders receive fuel from the weaker yen overnight and the ECB promising more stimulus. The central bankers are the market. The market bottom four days ago was created by Fed's Bullard's happy talk about a potential QE 4. The Fed and other central bankers continue to create great wealth for those that own stocks while saying to H*ll with the middle class and poor; 'let them eat cake'.

Note Added 10:02 AM: HOD 1923.99. The line in the sand is drawn at the 1923-1924 resistance. Bulls win big above 1924. Bears can remain in the game if they keep price under 1923 and heading lower.

Note Added 10:47 AM: Bulls push up through 1924 R and fill the 1927-1928 gap now trying to chomp through the strong 1928 resistance. HOD 1927.72. The 20-day MA is 1932.81 and dropping and price would like to back test this moving average going forward. The bulls are not taking any prisoners today. Dip-buyers are flooding into the market and traders are worried that they will miss the recovery rally so orders rush into the market to buy at any price. Traders chase price higher. AAPL is up +2.2% at 101.97 but off the 103.15 high.

Note Added 11:37 AM: Shorts throw in the towel creating a huge short-covering rally. Equities are running vertical printing at the highs of the day. The SPX pushes up through the strong 1928 resistance, that now becomes support, and targets 1936 R next. The 20-day MA is 1933.01. HOD 1931.86. Markets are in a huge melt-up move today.

Note Added 11:41 AM: Here is the test of the 20-day at 1933. Equities are in a bullish frenzy.

Note Added 8:08 PM: The 62% Fib is 1942.88. The HOD is 1942.45. How do you like those apples? You can see how the Fibonacci's matter. Tomorrow decides if price wants to poke up through the 62% Fib and move far higher, or, if the 62% Fib holds to allow the bears to growl again.

Monday, October 20, 2014

Keybot the Quant Turns Bullish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the long side at SPX 1900 a few minutes after 2 PM EST today. As always, stay alert for a whipsaw. The bulls have energy since they overtook SPX 1895. Tuesday will be a battle of retail stocks which will determine if the bulls have legs, or not. Watch RTH 61.95, now at 61.82. If the bulls push RTH only 13 little pennies higher tomorrow the recovery rally will be in full steam with the SPX moving toward 1920. The bears need to hold the line at RTH 61.95 or they will fold like a cheap suit. Listen for any news concerning retail stocks overnight. More information is found at Keybot's site;

Keybot the Quant

SPX 30-Minute Chart 8/34 MA Cross Upward-Sloping Channel Potential Inverted H&S

A new week of trading begins with the bulls pushing the SPX, Nasdaq adn RUT higher but the poor IBM results keep the Dow Industrials Index negative. The 8 MA remains above the 34 MA bullish markets for the hours ahead. The 8 MA is 1887-ish so the bears need the SPX to print below 1887 moving lower to curl the 8 MA downwards and create a negative 8/34 cross. Bears got nothing until the receive the negative 8/34 crossThe indicators on the 2-hour chart such as MACD line, histogram and stochastics are pointing to more upside for price. Price hints at a lot of sideways movement.

The blue channel is in play with price back kissing the lower rail. The brown lines show a potential inverted H&S with head at 1820 and neck line at 1898 targeting 1976 if the 1898 gives way to the upside. There is a big fight ongoing for price between 1891 and 1908.

Keystone's critically important SPX 12-month MA cross signal, the cliff, which tells you if markets are in a cyclical bull or cyclical bear is in play. The 12-month MA is 1895-ish signaling a cyclical bear market for the months or more ahead but this could change in a heartbeat if the bulls can push higher. If the SPX overtakes 1895, then 1900 plus is coming quickly and the bulls will extend the relief rally for price to attack the 200-day MA at 1906 and 10-month MA at 1908The 1895 level is a very big deal. It looks like price may want to poke up through and it would not be unreasonable to see a several-day fight between 1888-1908 since this is the key moving average cluster. The 50-week MA is 1891. The key S/R is 1928, 1924, 1910, 1897, 1889-1891, 1884, 1878, 1872-1874, 1848, 1841, 1828-1831 and 1808. Price is teasing the 1889-1891 area now. The 1891 would lead to a test of 1895 then 1897-1898.

Keybot the Quant remains short and is tracking UTIL 559.53 and SPX 1895 as key market directional signals. Utilities explode higher creating bull juice in the stock market. If the SPX moves above 1895 a test of 1897-1898 is next and Keybot may flip long above 1898. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 10:36 AM: The SPX HOD is 1894.73. The 12-month MA is 1894.69. Price overtook the 1891 resistance which is the 50-week MA at 1891 that now becomes support and price will want to back test. The price action is the same as Friday. The SPX is fighting at the 50-week and 12-month MA's. The 1895 is immensely important and with price at 1892, the stock market is in a cyclical bear market for the weeks and months ahead. Bulls need three SPX points to reverse this dire forecast otherwise they will receive daily beatings going forward.

Note Added 10:45 AM:  Bulls are pushing hard attacking 1895 resistance again. Now above 1895 by a few pennies......... 1895.03 ... spank down .. 1894.51... the drama continues......

Note Added 10:38 PM: The bulls slap the bears in the face today sending the SPX above the 12-month MA at 1895 and equities into a cyclical bull pattern. The rally gains steam due to the strength in utility stocks. Keybot the Quant flips long at SPX 1900. The SPX stops short of the 200-day MA at 1906 and 10-month MA at 1908. As mentioned over the last few days, these critical moving averages need back tested so it may as well be now. Since critical horizontal price resistance is at 1910, a strong resistance gauntlet is formed at 1906-1910. Bulls win big above 1910. Bears win big if the SPX remains under 1906. The 8 MA remains above the 34 MA for the 30-minute chart above signaling bullish markets for the hours ahead. The 30-minute chart shows a long and strong RSI and money flow so another higher high in price is desired. The SPX 1-hour and 2-hour charts show long and strong indicators with no real threat of negative divergence as yet so the SPX may float higher all through the Tuesday session (several hours forward). It appears the bulls have running room and would be expected to test the 1906-1910 resistance gauntlet. The charts hint at a push up through the gauntlet. Bears will receive help if retail stocks are weak tomorrow and more importantly from any negative news concerning global events, wars, Ebola, all that drama. If the world is quiet, the bulls should be able to run higher up through the 1906-1910 resistance gauntlet. The 1906-1910 battleground will decide the fate of both bulls and bears on Tuesday.

Friday, October 17, 2014

Keystone's Midday Market Action 10/17/14

The volatile market week is coming to a close with a bullish stock market orgy in play. The central bankers are up all night partying ever since Fed's Bullard popped the first cork of Fed Booze just before lunch time yesterday. Other Fed members chime in with dovish talk. The BOE is ready to further support their market. The ECB plans to begin purchases to goose European stocks. The BOJ is printing yen to send the dollar/yen pair higher overnight and create today's rally. The PBOC also plans to pump the Chinese economy. Grab your toga and join the debauchery. Mingle with central bankers and enjoy the Caligula-style orgy of perversion that pumps asset classes higher to make the rich richer while laughing at the poor.

As the previous chart indicates, the key cyclical bull and bear signal for the broad stock market (SPX 12-Month MA Cross) is currently on the line. The 12-month MA is at 1875-ish. Below 1895 ushers in the long-awaited cyclical bear market while above 1895 leads the way higher with continued Fed-induced bullish joy. Watch SPX 1895 like a hawk. If the SPX overtakes 1895 then 1900 plus is coming quickly and the bulls will extend the relief rally allowing price to attack the 200-day MA at 1906 and 10-month MA at 1908The 1895 level is a very big deal. It looks like price may want to poke up through and it would not be unreasonable to see a several-day fight between the 1888-1908 S/R since this is the key moving average cluster. The 50-week MA is 1888. The key S/R is 1928, 1924, 1910, 1897, 1889-1891, 1884, 1878, 1872-1874, 1848, 1841, 1828-1831 and 1808. 

Utilities are important as identified by the Keybot the Quant algorithm. Watch UTIL 559.53 which is a line in the sand for bulls and bears for all of next week. So check the closing UTIL price today to receive a heads-up for Monday. If UTIL finishes above 559.53, the bulls are going to continue rockin' higher at Monday's opening bell. If UTIL finishes below 559.53, the bears are going to create weakness at Monday's opening bell. If thinking of nibbling short for a trade, you can monitor UTIL to see how Monday may shape up. UTIL is currently printing 562.82 at the highs today so this hints at continued bullish juice into early next week.

Yesterday is a Bradley turn date and the period of two turns, one on 10/7 and one on 10/16 remain in play. The 10/7 may have been the near term top resulting in the stock market drop and yesterday's Bradley may now signal the relief rally. The upside joy may continue into next week as price plays inside the wide SPX 1888-1910 moving average cluster. A new moon is Thursday and markets are typically weak moving through the new moon. Use the moving averages and S/R listed to gauge the strength in today's move higher.

Keystone took profits on the SSO, DFE and ATRS long trades there is probably more up to them but the SSO and DFE were countertrend rally trades and we are receiving the countertrend rally right now. ATRS can be held longer. With the ECB juice announcement, DFE should continue running higher as traders will be chasing stocks higher with central banker easy money. For now, the overall price action will be monitored and a lot of plays do not look particularly attractive long or short at the moment.

Note Added 11:42 AM:  The SPX punches up through the 12-month MA at 1894.83 signaling a cyclical bull market for the months ahead. Price is at 1895.91. Watch to see if the bulls can remain above for 7 to 10 minutes to lock it in, or not.

Note Added 11:47 AM: Here is the test of the 1897 resistance right now.

Note Added 11:48 AM: SPX keeps punching out new highs. Traders are chasing the long side. A move above 1897 sets up the back test of the 200-day MA at 1906 and then the 1908-1910 resistance gauntlet representing the 10-month MA at 1909 and strong horizontal price resistance at 1910. The bulls are finishing the week strong. UTIL 563.70 placing more distance up and away from the UTIL 559.53 level.

Note Added 11:58 AM: SPX drops back to back kiss the 12-month MA at 1894.83. It is bounce or die time. The bears must push lower now or they will fold like a cheap suit. A bounce will assure bull victory........ 1894.76..... 1895.04 .... 

Note Added 12:11 PM: The bears growl pushing SPX under 1895 to 1892 ushering in a cyclical bear market for the months ahead. How many more times will this flip-flop today? UTIL 562.24.

Note Added 3:06 PM: SPX 1880.96. Looks like the bulls ran out of gas. UTIL 561.25. The TRIN prints an uber low 0.23 this morning which is excessive bullishness and that leads to the recoil. Traders were buying any stock with a heartbeat this morning all pumped up over the central banker stimulus provided around the world. The 12-month MA at 1895 is holding for bears and interestingly, the SPX is now at 1883.35 and the 50-week MA is 1888.33 so it will be important to see where price ends in relation to the 1888. Marry the 1888 with the 1889-1891 resistance and a confluence of resistance is in place at 1888-1891 so bulls win above 1891 and will attack the 12-month MA again and bears win below 1888. Bulls are going to receive upside market juice on Monday morning unless the the bears push UTIL under 559.63. Keystone bot ENZY opening a new long position. The stock is thinly traded only moving 9K shares today. The weekly and daily charts show attractive positive divergence across all indicators. It is a knife-catch and the typical highly-dangerous and speculative style stock Keystone plays. The expectation would be for a recovery rally after ENZY's one-year beating.

Note Added 3:20 PM: Here is SPX at 1887.63 attacking the 1888-1891 resistance gauntlet. Can the bulls push up through before the closing bell and take over that critical 12-mth MA? Or will the bears maintain the 50-week MA resistance ceiling area and go home happy? UTIL 562.09. Bulls have the utility sector feather in their caps with another one-half hour remaining in the week.

Note Added 3:49 PM: The bulls call for all hands on deck and they make a late day rush for glory punching up through, 1888, 1889, then 1891, now fighting inside the 1888-1891 resistance gauntlet. It is time to bounce or die. Bulls win at 1891 and higher. Bears win at 1888 and lower. UTIL 562.79 with bulls determined to keep utility stocks well bid.

Note Added 3:56 PM: SPX 1888.72. 50-week MA 1888.44. A game of pennies.

Note Added 4:01 PM: The bounce or die results in a die. Price ends at 1886.75 so bears were unable to maintain both the 50-week MA and 12-month MA today after they were taken out to the upside. Give the bears a feather for their caps. UTIL ends at 562.55 above the important 559.53 level for all of next week so this will help the bulls maintain market buoyancy come Monday morning. Give the bulls a feather for their caps. That was quite a snap-back rally that started from the 1820 low. The possie d on the SPX 2-hour bounced price, then Bullard goosed the markets with dove talk, then overnight last night all the other central bankers chimed in dropping money from the sky that created the market rally. HOD 1898.16 so watch that number on Monday. A 78-point move in only three days is impressive.

SPX 30-Minute Chart 8/34 MA Cross

The bulls are running with the ball. The 8 MA crossed above the 34 MA yesterday afternoon signaling bullish markets for the hours ahead. Price launches higher today to HOD at 1893 so far. The indicators remains long and strong, ditto on 1-hour and 2-hour charts so the market buoyancy has a good chance of remaining well through the afternoon.

Keystone's critically important SPX 12-month MA cross signal, the cliff, which tells you if markets are in a cyclical bull or cyclical bear is in play. The 12-month MA is 1895-ish signaling a cyclical bear market for the months or more ahead but this could change in a heartbeat if the bulls can push higher. If the SPX overtakes 1895 then 1900 plus is coming quickly and the bulls will extend the relief rally for price to attack the 200-day MA at 1906 and 10-month MA at 1908. The 1895 level is a very big deal. It looks like price may want to poke up through and it would not be unreasonable to see a several-day fight between 1888-1908 since this is the key moving average cluster. The 50-week MA is 1888. The key S/R is 1928, 1924, 1910, 1897, 1889-1891, 1884, 1878, 1872-1874, 1848, 1841, 1828-1831 and 1808. Price is teasing the 1889-1891 area now which would lead to a test of the 1897 resistance which places the critical 12-month MA described in play. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 11:17 AM: The importance of the current price action cannot be understated. The SPX is at 1894.29 a whisker from the 12-month MA at 1894.74 (only 45 pennies away) which will determine the short-term, intermediate-term and even long-term fate of the stock market going forward.

Note Added 11:20 AM: Bulls breach the 12-month MA. HOD 1894.86. Whoa. Hold on. The bears spank price immediately lower to 1893. Do you think this level is important? The fight will probably continue all day. A bull and a bear are wrestling on the edge of a cliff at SPX 1895; one of them will fall over the side the other one will win. Which side will win?

Thursday, October 16, 2014

SPX 2-Hour Chart Oversold Falling Wedge Positive Divergence Price Extended to Downside

May as well post the 2-hour chart again since we have been watching it for several days. The chart was setting up with universal positive divergence but the MACD line has not yet cooperated. It was very close this week but the negative news flow especially the Ebola outbreak that may be spreading in the US has everyone in a tizzy and the MACD line kept falling lower. How unsurprising it is for people to suddenly care about a deadly virus once it may affect their own lives? Humans are so predictable.

So the markets tank on every Ebola news bite. S&P futures are -29 pointing to another drubbing after the opening bell. The market selling yesterday results in the RSI printing a lower low. The last two candlesticks have equal price lows so technically the green lines show positive divergence in place even with the MACD line, universal possie d opening the door for the bottom and upside ahead, but in such wild markets that is a fig leaf of possie d iwth the RSI and MACD line. Price may want to come back down to make double-sure that the relief rally is on tap ahead.

The stochastics and money flow are firmly positively diverged and very instrumental in creating the launch higher for the current candlestick. These indicators are long and strong as well wanting to keep moving price higher. The RSI is near taking out the prior high which would also create more bullishness. Price is extended to the downside (blue dots) so a mean reversion is needed (price moves higher). So the cards are lined up for the bulls despite the drastically negative futures. Equities may wash-out after the opening bell and then print a bullish day going into the weekend.

The S/R levels to watch are 1897, 1889-1891, 1888 (50-week MA), 1884, 1878, 1874-1872, 1848 (starting year number), 1841, 1828-1831, 1808, 1803, 1800 and 1796This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 12:43 PM: The SPX holds the 1841 support level. Price dipped into the 1835 (LOD) to 1840 area but this was short-lived. So watch the 1841 S and the LOD at 1835.02. Price may want to take a look at the 1831 support since it violated the 1831-1841 area. SPX recovers today after Fed's Bullard says QE may be extended. Bullard was a hawk but now a dove as he rips off his Joseph A Bank five-for-one suit jacket to expose dovish wings. He flies around the stock market exchanges winking to the traders and dropping money from the sky. Markets run higher with traders ready to rape the stock market upside as the Fed will provide more easy money in the future. The central bankers are the market. Equities enjoy buoyancy with the SPX printing a HOD at 1867.82 so watch that number. For the 2-hour chart saga above, the indicators recover as described and point to higher highs ahead. The RSI is flat compared to three candlesticks ago so that really needs to start moving higher to prove that the bulls have juice. The positive MACD line cross is also needed to prove the bullishness. The Fed saves the day today. All Hail the Fed! They provide the daily market sustenance. Interestingly, a Fed surprise statement like Bullard's should provide far more upside juice than it is. The SPX was 1845-ish when Bullard pumped the markets so a 20 to 30-handle move due to the lip service would target 1865-1875. Price is at 1858.

Note Added 12:59 PM: The SPX is positive up to 1865 running higher so it is receiving the boost expected from the Fed dove talk.

Note Added 1:49 PM:  Bulls take out yesterday's HOD at 1874 which is a feather for their caps. Price is currently fighting in the 1872-1874 S/R zone. Above 1874 R charts the way to 1878 R. The 2-hour chart indicators are long and strong now with the RSI pointing higher and the MACD positive cross about to occur. Looks like the bulls have their relief rally in progress. Bullard's dovish talk creates 30 handles of upside typical for a Fed pump. The BOJ is printing yen sending the dollar/yen pair from 105.60 to above 106 over the last few hours so the weaker yen creates the upside market fuel. The central bankers are out in force today with Bullard providing Fed lip service and the BOJ bludgeoning the yen.

SPX Daily Chart

The wild circus continues. Markets collapse yesterday to the low at 1820.66 so pay attention to that number going forward. The brown lines show the strong support and resistance levels at 1897, 1889-1891, 1884, 1878, 1874-1872, 1848 (starting year number), 1841, 1828-1831, 1808, 1803, 1800 and 1796. The only positive divergence is with the stochastics that are also oversold. The ADX line (pink box) moves higher indicating that the downward move in price is developing into a stronger trend. The indicators are weak and bleak (red lines) so lower lows in price are expected after any bounce.

The lower standard deviation band is violated so a move higher to the middle band, at 1954 and falling is on the table (the middle band is falling sharply). Back kisses are needed to the 150-day and 200-day moving averages. The 150-day MA and 200-day MA are flattening and potentially rolling over a very bearish indicator that verifies a cyclical bear market ahead for weeks and months possibly a year or two if they continue rolling over. Watch the 150-day MA each day forward. The last few days print the following 150-day MA's starting with last Tuesday; 1929.88, 1930.50, 1930.83, 1931.02, 1931.07, 1931.13 and 1931.24 yesterday. Since each number increases the 150-day MA slope continues higher. Market bears need the slope to turn negative to prove that extended and sustainable downside is locked in place. Simply write down the 150-day MA at the end of each day forward and see if the slope rolls over to the downside.

The lower support at 1828-1831 did not hold yesterday so price may want to take a look at 1808. A dead-cat bounce is needed and may occur with a wash-out this morning. S&P futures are strongly lower down -30 for a weak start on tap. This would send the SPX down to test the 1808, 1828-1831 and 1841 support levels after the opening bell. A strong relief rally is expected but the indicators show that lower lows in price will likely occur as the future days play out and the rally fizzles. This agrees with the weekly chart that wants to see lower lows after any bounce occurs. Perhaps a move lower to 1808-1831 at the opening bell then a huge recovery today to the 1872-1878 resistance gauntlet. Price should move higher to back kiss the 200-day MA at 1906 at a minimum as time plays out. The SPX is under the 200-day MA for the first time in two years. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Copper Weekly Chart Descending Triangle

Dr Copper is a key economic indicator. There is 4 or 5 pounds of copper in the average car and about 50 pounds or more in a house. The automobile and housing sectors lead an economic recovery so it is easy to monitor the strength of the economy with copper. Copper is moving lower for the last four years forming the ominous red descending triangle. The baseline is 3.00 which is actually failing this morning. The two vertical sides of the triangle are 1.6 and 1.2 so the downside target zone is 1.4-1.8. Obviously, if copper slips under 2 the world is in a serious global recession and depression a la the Great Depression.

If the economy is as robust as economists and analysts claim, copper should be moving higher. The green lines show positive divergence for March of this year that bounces copper higher. Even though price in July 2014 did not match the December 2013 highs, the indicators are strong. Thus, higher prices above 3.3 would actually be expected but instead copper collapsed down to the psychological 3 level again. Since price is not below the prior low in March 2014 at 2.85-2.90, positive divergence cannot exist. Copper is in a sideways vibe through the purple channel at 2.85-3.30.

If the 2.85 level fails, copper and world markets and the global economy are all going down the rabbit hole into a worldwide deflation. Price is below the moving averages (blue dots) so a mean reversion would be expected (price moves higher). Watch copper going forward. The triangle ends as the year ends. So before 2015 arrives, copper would have either broken out above the upper trend line to nullify the descending triangle and signal a stronger economy and happy times ahead for 2015, or, copper would have collapsed through 3.00 and 2.85 and we are all heading down the rabbit hole together. As they said in the 1930's, "hey buddy, can you spare a dime?" This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 6:37 AM: Copper drops to 2.96 losing -1.6% this morning.