Monday, November 30, 2015

USD US Dollar Index Daily Chart Overbot Rising Wedge Negative Divergence XEU Euro Daily Chart Oversold Falling Wedge Positive Divergence

The pink boxes show that the trend higher in the dollar, and trend lower in the euro, are strong trends and continuing, however, a reversal is needed in the near term. In October, ECB President Draghi announced plans to provide more QE (quantitative easing) stimulus at the upcoming Thursday, 12/3/15, meeting. The euro drops and the dollar pops since their respective currency baskets are heavily weighted with each others currencies (they move inverse to each other).

The inverse relationship between the dollar, USD, and euro, XEU, is clearly evident on the charts. The five-week move, however, needs to pause. For the 
dollar, the overbot conditions, rising red wedge and negative divergence (red lines) are all bearish wanting to see a spankdown for the dollar in this daily time frame. For the euro, the oversold conditions, falling green wedge and positive divergence (green lines) are all bullish wanting to see a move higher for the euro

After the near-term pull back for USD and move higher for XEU, the expectation would be for a sideways move ahead for both currencies those expecting a dollar well above 100 will be disappointed and those expecting the euro to collapse to parity (1.00) in the short term will be disappointed.

Of course the ECB meeting on Thursday morning holds the key. It appears that much of the move expected from more ECB QE is priced-into the market. Over the last five weeks, the dollar is up from 94 to above 100 gaining over +6.4%. The euro drops from 1.15 to 1.06 over the last five weeks a drop of -7.8%. The expectation in the near term is for the dollar to pull back and the euro to rally, however, King Draghi holds the ultimate answer and will bring the tablets down from on high on Thursday morning and the central bank will tell global traders how to trade. 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.

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Tuesday, November 24, 2015

SPX S&P 500 2-Hour Chart

Here is the SPX 2-hour rolling over as was forecasted from last Friday morning. Price prints matching highs for four candlesticks (red line) and indicators go neggie d so price is spanked lower. The indicators are weak and bleak and the negative MACD cross occurs so the chart would need at least 2 to 4 candlesticks to produce positive divergence to turn the ship higher again; this is about 4 to 8 hours trading time which is all day today into tomorrow.

Of course events can always send charts violently one way or the other at any time. This morning, Turkey shoots down a Russian jet over Syria which escalates the mess in the Middle East creating a sour mood in markets. For the rally move from 2020 up to 2096, the first Fibonacci retracement at 38% is 2067.

Reference the prior SPX S/R missive for price support levels. Price is at 2078. LOD 2076.55. November began at 2079.36 and determines whether the month ends negative or positive on Monday, 11/30/15. Resistance above is 2079-2081, 2084 and 2091-2093. Support below is 2075, 2071 and 2065-2067. The 20-day MA is 2080. The 200-day MA is 2065. The 50-week MA is 2063. The 2063-2067 area may serve as a magnet for price. 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.

VIX Volatility 10-Minute Chart Battle at the 200-Day MA

The VIX battles at the critical 200-day MA at 16.26 which serves as a bull-bear line in the sand. Bears win with higher volatility above the 200-day while bulls win below the 200-day with less volatility. This battle tells you market direction today. At 16.37, above the 16.26, the market bears are winning so far. The Keybot the Quant algorithm wants to see VIX above 18.20 before serious market selling would be locked on course. Watch VIX 16.26 like a hawk.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 10:20 AM EST: VIX is 16.79 so the market bears are smiling today. SPX is at 2077 under the important 20-day MA resistance at 2080 and November's starting number at 2079.

Note Added 9:00 PM EST: The VIX dropped under 16.26 before lunch time so you knew stocks would recover. VIX ends the day at 15.93. The bulls punch the bears in the face.

USD US Dollar Index Tags 100

The US dollar index tags 100 on Monday, 11/23/15. The move was very quick to 100.07 before lunch time and then price immediately drops back to the 99-handle. The USD briefly touched one hundo in early March this year but that was short-lived. The last time the dollar was firmly above 100 was from 1997 through 2003 about 12 years ago. 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.

Monday, November 23, 2015

SPX S&P 500 and COMPQ Nasdaq Composite Daily Charts 150-Day MA Slopes Signal Cyclical Bear Markets but Battle Continues

The slope of the 150-day MA can be used to determine whether any stock or index is in a cyclical bull or cyclical bear market. The S&P 500, SPX, enjoyed the multi-year cyclical bull until mid-August when the 150-day MA slope rolled over ushering in a cyclical bear market. If you are bullish the markets you want to see the 150-day MA curl higher and resume the uptrend. This would likely set up all new all-time highs for the major indexes. If the 150-day MA continues drifting downward, the stock market remains in a cyclical bear market pattern and stocks will weaken.

The Dow Industrials, INDU, is in a cyclical bear market just like the SPX chart above. The Russell 2000 small caps, RUT, has rolled over the strongest and firmly in a cyclical bear. Tech stocks, the Nasdaq Composite, COMPQ, has flattened; you can give a slight edge to the bears for a cyclical bear market ahead but watch this closely. If the broad markets want to go higher it will first show up with the Nasdaq 150-day MA curling higher and resuming a new uptrend. The market bears would be toast.

If the Nasdaq 150-day MA continues to roll over and slope to the downside the market bulls are toast as all four major indexes would be in a firm cyclical bear market pattern for weeks and months to come. 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 S&P 500 Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 11/23/15

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SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 10/19/15. Levels shown in bold are strong resistance and support. Bold and underlined levels are very strong and important S/R. The SPX all-time intraday high is 2134.72 on 5/20/15 and the SPX all-time closing high is 2130.82 on 5/21/15. The intraday low for this year is 1867.01 on 8/24/15. The closing low for this year is 1867.61 on 8/25/15.

For Monday, 11/23/15, today, as the holiday-shortened week of trading begins, with the SPX starting at 2089, the bulls need to push above 2097 to create an upside acceleration into the resistance levels highlighted below. The bears need to push under 2083 to accelerate the downside. A move through 2084-2096 is sideways action for Monday.

The bulls need to push up through the strong 2091-2093 resistance, that will lead to a test of the 2097 strong resistance where last week’s price move stalled. A move through here will test the 2099-2100 resistance gauntlet. You can lump this whole area together and call the 2097-2103 level as a serious resistance zone. Bulls win big above 2103 since 2109-2110 will occur in a heart beat and then higher from there. Bears remain in the game under 2097.

The bears need to push down through the 2083-2084 support, this will immediately test November’s starting level at 2079. There are only five trading days remaining in the month and 2079 determines a positive versus negative November. EOM is Monday, 11/30/15. The 2079 also serves as a back kiss of the 20-day MA, so price would bounce or die from this level. If price collapses, 2075 support is next then 2071.

Looking at the big picture the strongest S/R is 2121-2123, 2114, 2109-2110, 2102-2103, 2099-2100, 2097, 2093, 2091, 2084, 2081, 2079, 2075, 2071, 2067, 2061, 2056, 2046, 2040, 2032, 2019, 2011, 2002, 1985-1988, 1978, 1973, 1965, 961, 1951, 1942, 1924, 1897, 1884, 1878, 1874, 1872, 1848, 1841, 1808 and 1803. Note the air pockets between 1872 and 1848 and between 1841 and 1808. There is a tiny gap fill remaining up top at 2119-ish.

The full moon peaks on Wednesday at 5:44 PM EST and markets are typically bullish through the full moon. Markets tend to be bullish in front of a holiday and the Friday shortened session is typically always bullish although the track record is mixed in recent years. Therefore, seasonality-wise, the bulls have an advantage say from Tuesday afternoon into the weekend. Markets are closed on Thursday for Thanksgiving Day. The stock market closes early at 1 PM EST on Friday.

Consumer Confidence on Tuesday at 10 AM EST and Consumer Sentiment on Wednesday at 10 AM EST are key data points this week.

2135 (5/20/15 All-Time Intraday High: 2134.72)
2133 (7/20/15 Intraday High 2132.82)
2131 (5/21/15 All-Time Closing High: 2130.82)
2130 (6/22/15 Intraday High 2129.87)
2128 (7/20/15 Closing High 2128.28)
2126 (4/27/15 Intraday High: 2125.92)
2124 (6/23/15 closing High: 2124.20)
2121 (4/24/15 Intraday High: 2120.92)
2120 (2/25/15 Intraday High: 2119.59)
2118 (4/24/15 Closing High: 2117.69)
2117 (3/2/15 Closing High: 2117.39)
2097.06 Previous Week’s High
2097.06 Friday HOD
2094 (12/29/14 Intraday High: 2093.55)
2091 (12/29/14 Closing High: 2090.57)
2089.17 Friday Close – Monday Starts Here
2082.82 Friday LOD
2079.36 November Begins Here
2079 (12/5/14 Intraday High: 2079.47)
2078.67 (20-day MA)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2073 (11/26/14 Closing High: 2072.83)
2071 (11/21/14 Intraday High: 2071.46)
2064.85 (200-day MA)
2061.36 (50-week MA)
2059.30 (10-month MA)
2058.90 Trading for 2015 Begins Here
2057.61 (150-day MA; the Slope is a Keystone Cyclical Signal)
2056.26 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2056 (11/18/14 Intraday High: 2056.08)
2053.91 (12-month MA; a Keystone Cyclical Signal) (the cliff)
2046 (11/13/14 Intraday High: 2046.18)
2033.86 (100-day MA)
2032.63 (20-week MA)
2020.33 (20-month MA)
2019.91 (50-day MA)
2019.39 Previous Week’s Low
2019 (9/19/14 Intraday High: 2019.26)
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2003 (8/29/14 Closing High: 2003.37)
1993 (1/15/15 Closing Low: 1992.67)
1991.71 (100-week MA)
1991 (7/24/14 Intraday Top: 1991.39)
1988 (7/24/14 Closing High: 1987.98)
1986 (7/3/14 Intraday Top: 1985.59)
1985 (7/3/14 Closing High: 1985.44)
1981 (2/2/15 Intraday Low: 1980.90)
1968 (6/24/14 Intraday Top: 1968.17)
1963 (6/20/14 Closing High: 1962.87)
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1902 (5/13/14 Intraday Top: 1902.17)
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1891 (4/2/14 Closing High: 1890.90)
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1878 (3/7/14 Closing High: 1878.04)
1876.20 (150-week MA)
1868 (8/25/15 Closing Low for 2015: 1867.61)
1867 (8/24/15 Intraday Low for 2015: 1867.01)
1851 (1/15/14 Intraday Top: 1850.84)
1849 (12/31/13 Intraday High Top for 2013: 1849.44)
1848 (1/15/14 Closing High: 1848.38) (12/31/13 Closing High for 2013: 1848.36)

Sunday, November 22, 2015

SPX S&P 500 Daily Chart Fibonacci Retracements

From the September-October bottom (treat them as the same low price level), to the November top, the stock market retraces down to its 38% Fib retracement at 2017-ish and bounces. The chart illustrates why you always want to keep an eye on the Fibonacci retracements for technical trading. If price would have fell a bit lower, the 50% Fib at 1988 would have been targeted. Instead, the 38% Fib held and the robots took over sending the stock market higher. 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.

BPSPX S&P 500 Bullish Percent Index

The BPSPX maintains a double-whammy market sell signal on the stock market since price fell under the 70% level and also performed a six percentage-point reversal off the  top. The market sell signal remains in effect unless the bulls can push above 70. The bottom three days ago is 64.70 so a six point reversal is 70.7. Thus, lump this together with the 70 level as the line in the sand.

Market bears are okay as long as the BPSPX stays under 70 and heading lower. If the BPSPX climbs above 70-71, a strong rally is on tap with stocks heading to new all-time highs. 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.

GTX Commodities Weekly Chart Oversold Falling Wedge Positive Divegence

Commodities have been slapped silly over the last year. This same technical analysis can be used for the CRB an identical chart. Price popped from the positive divergence in August and did not have to come back down again chart-wise, however, the central bankers are the markets, and since the ECB crushed the euro with promises of more QE, the dollar ran higher sending commodities lower. The possie d, oversold conditions and falling wedge are all bullish indicators so the expectation is for prices to recover going forward.

If commodities rise, the US dollar index must be stabilizing and even expected to drift lower rather than higher as the universal consensus expects. The pink box shows that the downward trend does remain in play. A relief rally is anticipated but commodities will likely head more sideways for months to come. Long plays such as DBA or ANDE can be considered going forward. No rush to enter long now simply place them on your long play watch list. 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.

TNX 10-Year Treasury Note Yield Weekly Chart Sideways Symmetrical Triangle

The markets are writing an epic story now and into 2016. After nearly seven years of obscene Keynesian money printing, the Federal Reserve's grand experiment, initiated by former Fed Chairman Bernanke and continued by Fed Chair Yellen, will emerge as a success or a devastating failure. The chart above hints at a date-certain when the historic market story's final chapter will be written.

If you extend the sideways symmetrical triangle out the apex occurs around April 2016 five months away. So a huge global economic decision is coming say as the new year begins. Those that worship at the Federal Reserve's feet and believe in a stronger economy ahead and higher inflation will be rewarded if yields break above 2.30% and heading higher. The vertical side of the triangle is 80 basis points so the upside target would be 3.10%.

If the Federal Reserve's grand experiment is exposed as a seven-year failure and the global economy falls into a complete deflationary collapse, which would likely rhyme with the Great Depression, the yield will collapse from the triangle at 2.05%-ish so the downside target would be 1.25%.

The pink boxes show that the upside move in yields in 2013 was a strong trend but it petered out as 2014 began. The downside move in yields was a strong trend as 2014 ended but that trend petered out earlier this year. The ADX remains very low verifying that there is no trend occurring with the 10-year yield now only sideways behavior. Ditto the moving averages that are lining out sideways. Yield is setting up for the epic move that will occur between now and springtime.

Getting out in the weeds for some of you more advanced technical traders, many times a sideways triangle pattern will initially breakout or breakdown, about one-half to two-thirds of the way through the pattern (like where the above chart is), however, this move is typically a fake-out and the yield will return into the triangle pattern and then commit to the other side. Thus, as the central bankers play their reindeer games, the 10-year may poke above 2.30%, 2.40%, 2.50% but remain skeptical. Above 2.50% and the bond bears (lower prices higher yields) are likely correct and the move is the right move higher and yields will move on to higher highs. But if yields roll over, and then reenter the triangle, they will likely begin dropping like a stone falling through the triangle and out the bottom side and destined for a one-handle.

There will be lots of drama ahead over the next few months. Considering the deflationary collapse in commodities, China and other economies slowing, weak copper, the sick Baltic Dry Index, and other factors, Keystone currently  favors the deflationary outcome ahead. The 18-year stock market cycle is the most reliable cycle and the secular bear ends 2018 followed by a secular bull 2018-2036. It is common to see big cyclical stock market rallies in a secular bear. Thus, with only about three years remaining in the stock cycle, it would not be surprising to see the stock market print  say 2 or 3 losing years over the next 4 years. A sick stock market would be in concert with the deflationary outcome for the 10-year yield chart above with a one-handle on the way. We will not have to wait long; the final chapter is currently being written for bond and stock markets from now into February-April. 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.