Monday, March 30, 2015

Keybot the Quant Turns Bullish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the long side this morning at SPX 2082.

Wednesday, March 18, 2015

Keybot the Quant Turns Bullish

Keystone's proprietary algo, Keybot the Quant, flips back to the bull side at SPX 2090. The whipsaws continue. The bears need to drop UTIL under 596.72 to stop the market upside. More information is found at Keybot's site;

Keybot the Quant

Tuesday, March 17, 2015

Keybot the Quant Turns Bearish

Keystone's algo, Keybot the Quant flips back to the bear side after this morning's opening bell at SPX 2077. Markets are very erratic and unstable. The whipsaw move leads to the likelihood of another whipsaw move for tomorrow (Wednesday) morning back to the bull side again. Keybot will likely flip long unless the bears can send the VIX above 15.86 and the NYA under 10842. The excitement continues. More information is found at Keybot's site;

Keybot the Quant

Monday, March 16, 2015

Keybot the Quant Turns Bullish

Keystone's proprietary trading algorithm, Keybot the Quant, flips to the bull side after this morning's opening bell at SPX 2066. Bulls are receiving upside juice with JJC above 31.88, NYA above 10841 and VIX under 15.87. If any of the three parameters turn bearish, the upside stock market rally will stall. As always, stay alert for a whipsaw. Markets remain very erratic and unstable. Note how SPX price is fighting to push up through the 2075-2079 resistance gauntlet described in the previous post. The fear previously described in the CPC and CPCE put/call ratios created the near-term bottom. More informaiton is found on Keybot's site;

Keybot the Quant

SPX Support, Resistance (S/R), Moving Averages and Other Important Levels for Trading the Week of 3/16/15

SPX (S&P 500) support, resistance (S/R), moving averages and other important levels are provided for trading the week of 3/16/15. 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 2119.59 on 2/25/15 and the SPX all-time closing high is 2117.39 on 3/2/15. The low for this year is 1980.90 which identifies the starting point of the huge February rally.

For Monday with the SPX starting at 2053.40, the bulls need to touch the 2065 handle to accelerate the upside. At this writing about 3-1/2 hours before the opening bell, the S&P futures are up +9 threatening to attack the 2065 area. Bears need to push under 2041 to accelerate the downside. A move through 2042-2064 is sideways action to begin the week. The SPX began the year at 2059 so stocks are slightly negative on the year. March began at 2105 so the month Is currently printing negatively.

In the previous CPC and CPCE put/call ratio charts posted on the weekend, Keystone highlights the tinge of panic and fear in markets which typically identifies a near-term bottom. Markets may float higher into Wednesday when Fed Chair Yellen brings the tablets down from on high to instruct global markets on how to trade. This week is OpEx so Monday is typically higher, as well as a Tuesday low into a Wednesday high. This week in March is typically bullish 80% of the time so everything is going the bull’s way. On Friday, a new moon occurs in the morning and markets are typically weak moving through the new moon so Yellen’s words may disappoint late in the week but overall the week should finish higher.

The 2061 and 2067 levels are strong overhead resistance. If the 2065 level is overtaken today, the 2067 resistance will likely give way and price will immediately seek 2071 R. Market bears are in good shape as long as they do not relinquish the 200 EMA on the 60-minute chart at 2074. The 2075-2079 level is a strong resistance gauntlet but if 2074 is taken out price will likely run higher taking out the gauntlet and crushing the bears. If price takes out last week’s 2083 high, the SPX will be running into the 2090’s.

On the downside, the 2046 is strong support (100-day MA). Bears can accelerate the downside if they push down through 2040-2041 support; the 2030-2032 support will be tested quickly. Markets remain elevated for years due to central banker intervention and the party continues with the ECB QE program.

Looking at the big picture the strongest S/R is 2120, 2118, 2110, 2094, 2091, 2079, 2075-2076, 2067, 2061, 2046, 2040, 2038, 2032, 2030, 2023, 2019, 2011, 2002-2003, 1997-1998, 1993, 1988, 1985-1986 and 1982. The 2002, 2032 and 2040 levels are the strongest S/R levels for the entire 120-point range between 2000 and 2120.

2120 (2/25/15 All-Time Intraday High: 2119.59)
2118 (3/2/15 All-Time Closing High: 2117.39)
2115
2114
2111
2110
2105
2104.50 March Begins Here
2104
2101
2100
2099
2098
2097
2094 (12/29/14 Intraday High: 2093.55)
2091.91 (20-day MA)
2091 (12/29/14 Closing High: 2090.57)
2089
2088
2086
2083.49 Previous Week’s High
2083
2082
2080
2079 (12/5/14 Intraday High: 2079.47)
2076 (11/28/14 Intraday High: 2075.76)
2075 (12/5/14 Closing High: 2075.37)
2074.06 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
2074
2073 (11/26/14 Closing High: 2072.83)
2072
2071 (11/21/14 Intraday High: 2071.46)
2069
2067
2065
2064.56 Friday HOD
2063
2061
2059.27 (50-day MA)
2058.90 Trading for 2015 Begins Here
2057
2056 (11/18/14 Intraday High: 2056.08)
2055.96 (20-week MA)
2054
2053.40 Friday Close – Monday Starts Here
2052
2050
2046 (11/13/14 Intraday High: 2046.18)
2045.75 (100-day MA)
2041.17 Friday LOD
2041
2040
2039.69 Previous Week’s Low
2038
2034
2032
2030
2024
2023
2021
2019.59 (150-day MA; the Slope is a Keystone Cyclical Signal)
2019 (9/19/14 Intraday High: 2019.26)
2018
2016.40 (10-month MA; a major market warning signal)
2016
2014
2012
2011 (9/18/14 Closing High: 2011.36) (9/4/14 Intraday High: 2011.17)
2009
2007 (9/5/14 Closing High: 2007.71)
2005 (8/26/14 Intraday High: 2005.04)
2004
2003.46 (200-day MA)
2003 (8/29/14 Closing High: 2003.37)
2002
2001
1999
1998
1997.62 (12-month MA; a Keystone Cyclical Signal) (the cliff)
1997
1995
1993 (1/15/15 Closing Low for 2015: 1992.67)
1992
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)
1984.48 (50-week MA)
1983
1982
1981 (2/2/15 Intraday Low for 2015: 1980.90)
1979
1978
1976
1973
1970
1968 (6/24/14 Intraday Top: 1968.17)
1965
1964
1963 (6/20/14 Closing High: 1962.87)
1962
1961
1960
1958
1956 (6/9/14 Intraday Top: 1955.55)
1951 (6/9/14 Closing High: 1951.27)
1949
1947
1946
1942
1940
1937
1936
1931
1928
1925
1924 (5/30/14 Intraday Top: 1924.03) (5/13/14 Closing High: 1923.57)
1920
1917
1912
1910
1906
1902 (5/13/14 Intraday Top: 1902.17)
1901
1897 (5/13/14 Closing High: 1897.45) (4/4/14 Intraday Top: 1897.28)
1894
1891 (4/2/14 Closing High: 1890.90)
1889
1886
1885
1884 (3/21/14 Intraday Top: 1883.97) (3/7/14 Intraday Top: 1883.57)
1882
1880
1879
1878 (3/7/14 Closing High: 1878.04)
1877
1874
1873
1872
1871
1868
1867
1865

Saturday, March 14, 2015

CPC and CPCE Put/Call Ratios Daily Charts Signaling Near-Term Bottom


A few days ago Keystone highlighted the high print in the CPC put/call ratio which typically identifies a near-term bottom, however, the CPCE remained benign not moving higher. For the CPC, a move above 1.20 shows fear and panic entering markets and that is when a market bottom occurs; ditto the CPCE above 0.80. When the CPC drops under 0.80 complacency is rampant in markets identifying a near-term top; ditto a CPCE under 0.55.

Thus, with the CPC above 1.20 and CPCE above 0.80, a near-term bottom in the stock market is very likely leading to a rally next week. If thinking of playing the long side in a quickie trade, it would be ideal if markets were weak on Monday since any further weakness can be bot on the long side. Even without any further drop in stocks the expectation would be for a recovery rally since traders are becoming worried. Once the boat is fully loaded with worriers and people becoming fearful, bingo, stocks recover. The fear and panic was rampant for the mid-October bottom. Keystone highlighted the low prints in late February (market complacency) calling for a near-term market top, which occurred. So if you are a very short term swing trader you can cover the short side that you enjoyed over the last two weeks and flip that trade to the long side.

Of course the Fed will be in play in the week ahead with Fed Chair Yellen bringing the tablets down from on high on Wednesday afternoon to instruct everyone on how to trade so that is a wild card. Next week is OpEx week and in March that week is typically up about 80% of the time which reinforces the long side matching the CPC and CPCE prognostications. During OpEx week, a Tuesday low typically leads to a Wednesday high--more bullishness. Late in the week, early Friday morning at 5:36 AM EST, a new moon peaks for the month and markets are typically bearish moving through the new moon providing a sliver of hope for bears as the week draws to a close. Thus, the bulls may run higher through Thursday and if there is a high print then that would be a good candidate to short and weakness would be expected into the weekend but overall the week would be expected to finish higher.

This pattern is interesting since markets are constantly goosed higher with central banker easy money. Yellen is expected to remove the "patient" phrase from the Fed statement which means the first rate hike is on tap in a couple meetings which is the June-July time frame. The Fed is in a quandary, however, basically committing to the word change but knowing that the economy is weaker than anyone realizes and inflation is nowhere in sight; deflation and disinflation remains the order of the day in the US as last week's economic data verifies.

After six years of obscene Fed intervention with ZIRP and QE, the end game may be very near; and not the happy ending expected. The central bank intervention is a confidence game. As long as traders and investors believe in the Keynesian money-printing it will goose stocks higher; simply look at the upside orgy occurring in Europe now after ECB President Draghi is firing the QE money bazooka. When confidence is lost, all is lost.

If Yellen does not remove "patient," then stocks may launch with a rally since the easy money fun continues, but at the same time, since the removal of patient is expected, after a few hours or a day or so, traders may come to realize the Fed is clueless and making it up as they go along; confidence will be lost. If the Fed removes "patient," Yellen may change the rules again and say the two-meeting expectation for a rate hike may or may not occur. This would cause a loss of confidence since the Fed will be back pedaling from their own guidance. If the Fed removes "patient" and is on track for the June-July rate hike, confidence may be lost since the economy is simply in no shape to receive the rate hike.

Keep in mind that all the people touting a great economy are those that own stocks and see their quarterly statements rising for the last few years as they become wealthier due to the easy money and in their minds the economy is doing great. These are the folks buying iPhones and enjoying the American dream. The other one-half of the United States, that do not own stocks, are suffering daily through continuing high debt and lack of employment. All the commentators in the media and television are all part of the upper class that have benefited so in their minds all is well with the economy; none of these folks understand how ill the economy remains since they only see the US through the cloudy prism of their own joyful circumstances.

Thus, the put/calls and OpEx factors point to a mini upside rally early into mid week as Yellen takes the stage, however, perhaps after six long years of obscene Keynesianism, the end game is at hand and confidence will be lost in the money printing scheme that will eventually hurt America and likely send the country into years of social unrest. 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.

MSFT Microsoft Daily Chart Death Cross Lower Band Violation

Mr Softy prints a death cross (black circle) a few days ago so as often happens, price tends to recover higher once the death cross occurs but the pattern does point to weakness a couple months out. The bounce on Friday is due to the tiny two-day positive divergence with RSI and stochastics but the other indicators remain weak and bleak wanting lower prices. The thin green lines for the indicators show a positive slope over the last six weeks but this is not positive divergence since price did not print a lower low. Microsoft bulls would have been better off if price would have falllen to 37-40 since the indicators would be possie d and create a strong launch higher. The move higher now may not have much gusto.

The gap at 41.5-42.0 will need filled as well as the remaining gap at 44-45. The lower standard deviation band was violated so a move back to the middle band at 43.16, at a minimum, is on the table. Price is using the 40.0-41.5 level as support since this represents a strong congestion zone from last summer. MSFT has a sideways vibe in play through 38-45 for the weeks and months ahead. Microsoft should remain in a sideways malaise, perhaps choppy sideways, for a few weeks. There are far better places to invest money than Microsoft. Another concern is recent information provided by INTC about lackluster PC sales. Businesses are not hiring workers or expanding so the demand for computers is not occurring and if you do not need computers you do not need software. 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.

Thursday, March 12, 2015

BAC Bank of America Daily Chart Death Cross Sideways Triangle

The banks explode higher today after the stress test results with the exception of one skunk at the garden party; Bank of America. The 50 MA drops under the 200 MA creating a death cross pattern albeit by one penny. Seasoned technicians do not pay much attention to golden crosses (20-day MA up through 200-day MA) or death crosses since price typically reverses once the cross occurs, although in the longer run for the weeks or couple months forward price will typically obey the cross. The golden cross occurs in October to signal bull times ahead and look at how price falls like a stone, however, price recovers and does print a high to begin the year. This is what typically happens.

The death cross occurs now so price may break out up through the sideways triangle and run higher but if the death cross remains in play price would be expected to leak lower again and print a lower price than current price say out in April-June. The red lines show a rising wedge, overbot conditions and neggie d that create the spank down to begin the year. The green lines show the oversold conditions and possie d that create the launch in late January. The blue lines show the sideways nature of the indicators and the sideways symmetrical triangle for price. Note that a major decision will occur for BAC within the next one to three weeks where price should break one way or the other.

Considering the bank orgy today, some of that buoyancy should impact BAC and it did recover off the lows today so a guess would be a move higher to the 16.70 resistance then perhaps a roll over to perhaps print sub 15 out a couple-three months. The chart can be reassessed in a couple weeks or one month from now to see if the death cross is maintained. An alternate scenario is for price to simply leak lower here on out. At any rate the expectation is for a lower price a couple months out from now. 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.

NKE Nike Monthly Chart Overbot Negative Divergence Developing

Since the UA chart was posted a couple charts back it is prudent to post its kissin' cousin NKE. Under Armour and Nike are two phenomenal bull stocks over the last six years; big-time winners. But, there comes a time when the tent must be folded and everyone goes home. The red lines that lead to the peak at the end of last year clearly show neggie d wanting a spankdown, which occurs but the green line for the MACD wanted another higher high in price and that is what is attempting to occur now. A matching high is basically in place but you would expect a little bit higher. When this occurs the maroon line will be in play and create another spankdown but the MACD line remains long and strong wanting another higher high in price. When that occurs that will identify the top for NKE. Price is extended far above the moving averages requiring a mean reversion lower.

The money flow is already trailing lower which will act as a weight on price helping to pull it down. Thus, the expectation is for some additional loftiness in price this month, then down in April, then back up in May to a matching or higher high again and that will be the top with NKE likely trailing sideways to sideways lower there on out. Thus, if you enjoyed the long side take your money and look for other opportunities. You can stick around to try and eke out a bit more of upside but the upside should be limited and you may have to endure choppy trading now into June. Both NKE and UA will likely top out over the next one to three months. If you stay in the stock, by summer time when you are thinking of visiting the beach, you will be depressed for owning it. 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 Saturday, 3/14/15: On the Fox News Business Block, Charles Payne tells viewers to buy NKE with both hands. As discussed above, folks may be happy for a month of three but by summer time will be crying in their lemonade.